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The Tribunal's decision was to set aside two reviewable decisions made by Australia Post under s 62 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) ('the SRC Act') in which Australia Post had determined that it was not liable to pay Mr Sellick compensation for symptoms relating to injuries allegedly sustained while at work. One of those reviewable decisions concerned a claim for pain in the right shoulder. The other was for a claim for injury to the left and right groin. 2 Australia Post appeals under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ('the AAT Act'). It has also filed an application for review of the decision under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('the ADJR Act') and s 39B of the Judiciary Act 1903 (Cth) ('the Judiciary Act '); (together 'the ADJR Act application'). The grounds of appeal are the same in each application. That is, the grounds that particularise the questions of law under s 44 of the AAT Act and the grounds for review under the ADJR Act are identical. The applications were heard together and Australia Post seeks to have both applications dealt with together. 3 There is no dispute between the parties that the Court has jurisdiction under each of the AAT Act, s 39B of the Judiciary Act and the ADJR Act. Mr Sellick says, however, that the AAT Act is intended to cover the field. Accordingly, he says, only grounds that come within permissible grounds under that Act should be argued. That is, he says that only questions of law are available to set aside the decision of the Tribunal. I will address this issue further below. No other injury to any other part of the body was identified in that claim form. It is agreed that the form of claim for compensation which Mr Sellick filled out was the form of claim for compensation approved by Comcare at the time. 5 The medical diagnosis of 8 November 2002 was ' Right interscapular stabiliser strain/shoulder and upper back pain '. On 22 November 2002, this was presented in a medical report as a history of having sustained ' a soft tissue injury of the right shoulder girdle musculature ' ('the right shoulder injury') and, on examination, there was said to be tenderness in the upper thoracic area. Subsequent medical certificates and reports referred to upper back strain as well as shoulder pain. 6 Australia Post accepted liability under s 14(1) of the SRC Act for the right shoulder injury on 28 November 2002. By March 2003 Mr Sellick was pain and symptom-free and performing normal duties. On 7 September 2004 Australia Post wrote to Mr Sellick and referred to his claim in respect of the right shoulder injury. The letter then referred to a report of Dr Chew to the effect that the compensable condition had ceased in April 2004 and that on-going pain ' is more than likely to be the result of your pre-accident condition in the form of degenerative spinal disease '. The letter stated the intention to cease further payments of compensation. It provided the opportunity to provide evidence to refute that opinion and to explain the relationship between the condition and Mr Sellick's employment. Mr Sellick submitted a report by Dr Bills supporting his claim which was received by Australia Post on 11 October 2004. 7 On 15 October 2004 Australia Post decided that, based on medical evidence, the effects of the right shoulder injury had ceased and that Australia Post had no present liability in respect of that injury pursuant to the SRC Act ('the determination'). On 19 October 2004 Mr Sellick requested a reconsideration of the determination as being incorrect in fact and law. 8 On 27 October 2004, in the first reviewable decision, Australia Post reconsidered its liability for the right shoulder injury. The decision-maker considered that Mr Sellick was no longer suffering any effects of that injury, that he was not presently entitled to payment of compensation, and affirmed the determination. The first reviewable decision referred to the compensable injury of the right shoulder injury and the claimed injury of pain in the right shoulder. It made reference to the medical diagnosis of right shoulder/upper back pain as well as that of the right shoulder injury. It referred to Dr Chew's diagnosis of a "minor" soft tissue injury to the thoracic spine which had resolved, to an underlying constitutional degenerative thoracic spine disease and to a degenerative spinal disease which had not been caused, accelerated or aggravated by Mr Sellick's employment. Australia Post agrees that the decision-maker accepted that the medical evidence supported the existence of an underlying degenerative disease of the thoracic spine but confined herself to the claim with respect to the shoulder, which had resolved, in the absence of a separate claim for compensation for the degenerative condition. 9 Compensation for the right shoulder injury was therefore made from October 2002 to October 2004. He said that it occurred in relation to duties of ' delivery of mail on motorcycle and foot; sequencing of mail in V-sort frames; dispatching of articles ' while he was walking and delivering mail. By a determination of 26 July 2004, based on Dr Burke's examination and conclusion that there was no evidence that Mr Sellick's work contributed to any organic condition of the groin, liability for that injury was not accepted as work related. The second reviewable decision, dated 26 October 2004, affirmed the determination. The decision-maker stated that she was not satisfied that Mr Sellick had right and/or left inguinial herniae or that his duties could give rise to the development of herniae. 11 Mr Sellick appealed from both reviewable decisions to the Tribunal. On that day Mr Sellick gave evidence. On 2 December 2005 Drs Griffith, Cassar and Bills gave evidence in Mr Sellick's case. The hearing then resumed on 9 March 2006 when a supervisor, Ms Prykiel, gave evidence. On 10 March 2006, Drs McGill and Burke gave evidence. There was then a gap until submissions were made on 10 November 2006. The decision of the Tribunal was delivered on 1 March 2007. The Tribunal was satisfied that the proper interpretation of the claim made by Mr Sellick was a claim for an injury which caused pain in the upper back, which included pain in the area of the right scapula. That is, the Tribunal was satisfied that Mr Sellick continues to suffer from the effects of a work related injury which Australia Post had said had resolved. 14 The Tribunal cited the medical evidence in relation to the right shoulder/upper back. It referred to Drs Bills, Griffith, Cassar and McGill who were cross-examined. It also summarised the reports of doctors who were not cross-examined, Drs Shroot, Elder, Eaton and Chew, a physiotherapist Mr Wisdom and also the assessments of Drs Whittaker and Burke. 15 At [52], the Tribunal stated that it was satisfied on the basis of the evidence of Mr Sellick, all of the medical evidence and on the balance of probabilities that in the period of several months prior to and including October 2002 Mr Sellick suffered a soft tissue injury to his shoulder but that he no longer suffered the effects of this injury. However, the Tribunal was satisfied that as a result of his duties as a Postal Delivery Officer he suffered and, at the date of the Tribunal's decision continued to suffer, pain in the mid-upper back as a result of an aggravation of the condition of degenerative cervical spondylosis and/or a chronic sprained interspinous ligament ('the additional conditions'). 16 The Tribunal preferred the evidence of Drs Griffith and Cassar and noted that Dr Bills differed in his diagnosis but supported the view that Mr Sellick's ongoing problems are associated with the nature of his work duties (at [58]). 17 The Tribunal was satisfied that the injury to the right shoulder and the sprain of the interspinous ligament each constituted an "injury" within the definition in s 4 of the SRC Act and that the aggravation of the degenerative cervical spondylosis is a "disease" within the meaning of the SRC Act. Although Mr Sellick had only complained of pain in the right shoulder in the claim form, the Tribunal found that the injury was not so limited and that he continues to suffer the effects of the additional conditions. 18 Several issues arise in relation to the Tribunal's findings regarding the first reviewable decision. 2. in coming to its decision the Tribunal forgot or ignored evidence. 3. in coming to its conclusions, the Tribunal erred in its consideration of the totality of the medical evidence. 4. the Tribunal failed to consider submissions which could, if accepted, have affected the outcome of the case. 5. the Tribunal was entitled to find liability for an injury or disease because of particular work, where that work was not mentioned in a notice of injury or in a claim under the SRC Act and was not dealt with in a reviewable decision or the subject of an application under the SRC Act, contrary to the requirements of the SRC Act. 6. the additional conditions were properly considered the same injury as that notified by Mr Sellick. 7. the Tribunal gave sufficient reasons for its conclusion that injuries found to be compensable were related to the claimed injury. 19 Australia Post has put forward various and detailed particulars in support of each ground. Several of these particulars are repeated in relation to different issues. Accordingly, I shall deal with each particular only once. 20 Australia Post contends that, under the SRC Act, the only relevant injury is the injury for which a claim was made, namely the injury to the shoulder. The Tribunal accepted that, as at the date of its decision, Mr Sellick did not suffer the effects of this injury and accepted that the pain in the shoulder had resolved by the time of its decision. Australia Post says that the Tribunal addressed an injury to Mr Sellick's back, for which there was no claim. As to the question whether the injury that did occur could give rise to pain in the mid-upper back, Australia Post says that there is no evidence to support the Tribunal's conclusions. The medical evidence is to the effect that such a consequence of the injury was temporary. Further, Australia Post says that the delay between the evidence and the decision is relevant, as the Tribunal could not say that the consequences were still apparent at the time of its decision nearly a year after the evidence was complete. Australia Post refers to a number of evidentiary matters in support of its arguments. 23 Australia Post contends that the Tribunal forgot or overlooked the fact that Dr Burke and Dr McGill gave oral evidence, did not therefore deal with that evidence and accordingly failed to consider the case put by Australia Post. The evidence was referred to in submissions to the Tribunal. The Tribunal made no reference to the oral evidence of Dr Burke or Dr McGill. Australia Post submits that the Tribunal may have forgotten about the evidence in view of the time that elapsed between the evidence and the decision. Australia Post says that this gives rise to jurisdictional error or denial of natural justice because of the risk that the capacity of the Tribunal for competent evaluation of the evidence was diminished by the timeframe and the delay between the evidence and the decision ( NAIS v Minister for Immigration & Multicultural & Indigenous Affairs [2005] HCA 77 ; (2005) 228 CLR 470 at [10] - [11] per Gleeson CJ, [106] per Kirby J, [172] per Callinan and Heydon JJ). This would also give rise to an error of law. 24 In relation to these issues Australia Post also argues that there was no evidence to support one of the Tribunal's findings regarding the evidence of Dr Cassar. The evidence of Dr Cassar will be addressed in relation to issues 3 and 4. Australia Post refers to the observation at [50] of the Tribunal's reasons that Dr Burke was not required for cross-examination and did not give evidence. That was incorrect. Dr Burke was cross-examined and did give oral evidence. 26 Australia Post contends that the Tribunal forgot Dr Burke's evidence and failed to evaluate it. However, the Tribunal's observation was in respect of the claimed injury to the right shoulder. The Tribunal did refer to Dr Burke's disinclination to comment on possible causes of the shoulder injury. At [78], the Tribunal commented on Dr Burke's evidence in a context that connotes his oral evidence under the heading "Medical evidence in relation to bilateral hernias". 27 A Tribunal may be taken to have considered the whole of the evidence although its conclusions are stated shortly ( Minister for Immigration & Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30 ; (2003) 198 ALR 59 at [111] per Gleeson CJ, Repatriation Commission v Gosewinckel [1999] FCA 1273 ; (1999) 59 ALD 690 at [59] per Weinberg J). I am not prepared to conclude that the Tribunal forgot Dr Burke's oral evidence. I accept Mr Sellick's characterisation of the Tribunal's reasons at [50] as referring only to the absence of Dr Burke's oral evidence concerning the shoulder/upper back claim and not the hernia claim. This did not, in the Tribunal's view, explain why the symptoms would not persist if Mr Sellick continued to use the V-sort frame on a regular basis and continued to lift and deliver mail. 29 Australia Post takes issue with the Tribunal's statement at [56] to the effect that Dr McGill's evidence was the only evidence in support of this conclusion. Australia Post points out that Dr Cassar was also of the opinion that the symptoms were temporary. However, Dr Cassar recognised that the symptoms could persist if aggravated. He did not express the contrary view that the symptoms would resolve if the work continued. The Tribunal was not obliged to refer to Dr Cassar's opinion, even if it were supportive of Dr McGill's view. In context, it was not supportive but the Tribunal was under no obligation to refer to every possible fact or opinion of some relevance to a finding. 30 Australia Post then submits that the Tribunal overlooked the explanation given by Dr McGill as to why he allowed only a temporary aggravation. It points to Dr McGill's explanation that the work had not, in his opinion, caused any change in the underlying pathology. He was of the view that recurring symptoms of Mr Sellick's degenerative change fluctuate up and down and that Mr Sellick's work was of minor effect in causing the fluctuation. 31 The Tribunal clearly referred to the conclusion on the part of Dr McGill that Mr Sellick's work duties caused only a temporary increase in his symptoms for a few weeks at a time. It also referred to the view of Drs Chew and Whittaker that the effects of the incident in October 2002 had completely resolved and that the continuing pain experienced by Mr Sellick was more likely to be the result of this degenerative spinal disease. It referred to the lack of explanation of the link between the work and the underlying condition. That is, the Tribunal did refer to the explanations given by doctors of the same opinion as Dr McGill and rejected them. It then stated that it preferred the evidence of Drs Griffith and Cassar and that of Dr Bills, who differed in his diagnosis but supported the view that Mr Sellick's ongoing problems were associated with the nature of his work duties. It was entitled to do so. 32 It is not apparent that, had Dr McGill's explanation been taken into account, it would in any way have affected the preference on the part of the Tribunal for the evidence that it accepted. The Tribunal accepted that the effects of the shoulder injury had resolved. It expressed itself satisfied that Mr Sellick continued to suffer pain as a result of an aggravation of a pre-existing condition, which aggravation was a result of his duties. It did not elaborate on its acceptance of the evidence of Drs Griffith and Cassar in the face of a different diagnosis but that acceptance was open to it. Even if the Tribunal failed to explain or address the relevance of Dr Bills' evidence where his diagnosis was different, that evidence was only supportive of this particular conclusion. It did not provide the primary support for the finding and was not essential to it. Australia Post points to the fact that around 15 months elapsed between the time Mr Sellick and Drs Griffith and Cassar gave evidence and the Tribunal's decision. Australia Post says it was open to the Tribunal to set aside the reviewable decision. The Tribunal had then to determine whether the injury and its effects existed as at the time of the Tribunal decision. 34 Although some time elapsed between the evidence and the Tribunal's decision, it does not follow that there was no evidence on which to base the Tribunal's decision. Mr Sellick gave evidence to the Tribunal that he was continuing to suffer pain. It was open to the Tribunal to conclude that he would continue to suffer symptoms in the future. There was evidence from Dr Griffiths that the condition was continuing and permanent. I would not remit the matter to the Tribunal for this reason. Issues 3 & 4: Did the Tribunal err in its consideration of the totality of the medical evidence or fail to consider Australia Post's case? It submits, however, that the Tribunal failed to consider submissions of substance which, if accepted, were capable of affecting the outcome of the case. Such a failure constitutes an error of law, as does the failure to consider a claim or the integer of a claim ( Applicant WAEE v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 184 ; (2003) 75 ALD 630 ; Casarotto v Australian Postal Corporation [1989] FCA 116 ; (1989) 86 ALR 399 at 403 per Hill J citing Dennis Willcox Pty Ltd v FCT (1988) 79 ALR 267 at 276 per Jenkinson J). Australia Post relies on the silence of the Tribunal's reasons in respect of the various specific matters raised. A failure to advert to the content of submissions does not of itself necessarily mean that the matter was not considered ( Tobacco Institute of Australia Ltd v National Health and Medical Research Council (1996) 71 FCR 265 at 279 per Finn J). If the particular submission did not go to the substance of the decision or would not have affected the outcome, failure to advert to it in the reasons does not mean that the matter was not considered and does not give rise to error of law. This, it submits, was an important part of its case not dealt with by the Tribunal. 37 The Tribunal said that Dr Cassar agreed with the diagnosis of Dr Griffiths of musculo-ligamentous strain of the right shoulder girdles and cervical spondylosis. Dr Cassar changed his view of the site of the ongoing pain and concluded that whatever the site of the pain, it would not have been caused by an injury to the shoulder. He agreed that Mr Sellick had constitutional degeneration of the spine. This may have been temporarily aggravated by the injury and then, more likely than not, ended after a month off work unless further aggravated. Australia Post contends that there was no evidence to support this finding. 38 In cross-examination, Dr Cassar accepted that, on the basis of the history given to Dr Griffith, his opinion would be consistent with that of Dr Griffith. While this was not an unqualified agreement with Dr Griffith's diagnosis and nor was it Dr Cassar's expressed opinion, upon acceptance of Dr Griffith's diagnosis based upon the history given to him, it provides a basis for the Tribunal's statement. 39 Australia Post contends that the Tribunal did not deal with the submissions made to the effect that Dr Cassar supported no more than a temporary injury to the mid-thoracic spine and failed to support the on-going diagnoses accepted by the Tribunal as arising out of Mr Sellick's employment in October 2002. The Tribunal did note at [35] that Dr Cassar's view was that the strain injury would not be permanent. Australia Post contends that the Tribunal failed to appreciate that this view applied whether the injury was to the cervical spine or thoracic spine. However, Dr Cassar's view was said by the Tribunal to be not qualified by the site of the injury. 40 The Tribunal did deal with the medical view that the effect of the injury was temporary in nature and rejected it based on its view of the competing evidence. It did not fail to consider that aspect of Australia Post's case. It was entitled to accept a contrary view. I am not satisfied that the Tribunal failed to take account of this evidence or that it ignored Dr Cassar's opinion (as particularised by Australia Post in relation to issue 2). Those views were of one medical practitioner and were considered by the Tribunal in the context of the totality of the medical evidence. This, in turn, Australia Post says, supported the diagnosis of only temporary aggravation. If that diagnosis had been accepted, the Tribunal would have affirmed the first reviewable decision. 42 The Tribunal did consider and rejected Australia Post's case that the consequences of the injury were temporary. It did not fail to deal with that part of the case, even if it did not refer to every aspect of the evidence or the submissions which supported it. It was not obliged to do so. It does not mean that the Tribunal failed to take account of that evidence or those submissions. No error has been demonstrated in this regard. Australia Post points to the absence of a finding of whether the shoulder injury had ended by the time of the first reviewable decision. The Tribunal spoke of the diagnosis of shoulder sprain ' which has now resolved '. Australia Post concedes that the Tribunal did, at [55], refer to scans referable to the time of the reviewable decision which did not indicate an ongoing problem in the shoulder but says that there was no clear finding of whether the shoulder injury had resolved by the date of the first reviewable decision. 44 The Tribunal did not dispute that, as claimed by Mr Sellick, he had suffered from shoulder pain. The Tribunal noted that Mr Sellick referred to pain that he had experienced in both his shoulder and mid-thoracic spine region. It expressed itself satisfied at [52] that, at the time of the decision, he no longer suffered the effects of a soft tissue injury to the shoulder. The Tribunal did not specify whether it was of the view that the effects of the injury to the shoulder were present at the date of the reviewable decision or the determination which preceded it. On the Tribunal's reasoning the ongoing presence of pain or the effects of the injury to the shoulder were not relevant. It found injury to other parts of Mr Sellick's body which were not reflected in shoulder pain. They were, the Tribunal concluded, ongoing and therefore, had effect at the date of the reviewable decision. On this reasoning, it was not necessary for the Tribunal to consider the date by which the shoulder injury had ceased. However, whether the Tribunal was entitled to find liability for the additional conditions and injuries, other than the injury to the shoulder, is discussed below. The Tribunal addressed the evidence of Drs Burke, McGill and Cassar. It referred to all of the medical reports and came to a conclusion based on the medical evidence that it accepted. It says that the spinal injuries or conditions or the spine-related injuries or conditions are quite separate. Australia Post submits that if, contrary to its primary submission, the spinal injuries are separate and not properly the subject of the Tribunal's jurisdiction under the SRC Act, there is no explanation by the Tribunal of how those injuries were included in the claim form and in the first reviewable decision. The Tribunal's explanation, or lack thereof, will be discussed further below. It accepted the evidence of Drs Griffith and Cassar that all three conditions arose out of or were contributed to in a material degree by his employment with Australia Post. 48 The Tribunal noted that in accordance with s 7(4) of the SRC Act Mr Sellick is taken to have sustained his injury when he first sought medical advice from Dr Shroot on 25 October 2002. The Tribunal understood that it was necessary to determine whether the effects of the aggravation of the degenerative condition of the spine and the ligamentous strain could be taken into account in deciding whether Mr Sellick had ceased to suffer the effects of the claimed injury. Compensation is not payable to a person under the SRC Act unless a claim for compensation is made by or on behalf of the person under s 54 (s 54(1)). Section 54(2) provides that a claim shall be made by giving the relevant authority a written claim in accordance with the form approved by Comcare and by giving a certificate by a legally qualified medical practitioner in accordance with the correct form. 50 "Injury" is not defined in the SRC Act in terms of its cause but in terms of an injury suffered by an employee arising out of, or in the course of, the employee's employment. The Tribunal has authority to decide whether there was liability for a particular injury or an aggravation of a disease. The Tribunal is not bound by Australia Post's assessment of what constitutes the injury ( Hannaford v Telstra Corp Ltd (2005) 88 ALD 702). Section 7(4) of the SRC Act relevantly provides that an employee is taken to have sustained an injury, being a disease or an aggravation of a disease, on the day when he or she first sought medical treatment for the disease or aggravation. Mr Sellick does not suggest that anything turns on the difference in time between the date of the injury and the seeking of medical advice. Section 7(6) relevantly provides that incapacity for work or impairment of an employee shall be taken to have resulted from a disease or an aggravation of a disease if, but for that disease or aggravation, the incapacity or impairment would not have occurred or would have commenced at a significantly later time or would have been significantly less in extent. 51 The only claim made by Mr Sellick in the approved claim form in relation to the upper body was for shoulder pain. Mr Sellick described his injury as ' pain in right shoulder '. Australia Post accepted liability for soft tissue injury of the shoulder girdle musculature. The Tribunal considered whether it had jurisdiction to take into account the effects of aggravation of the degenerative condition of the spine and ligamentous strain in deciding whether Mr Sellick had ceased to suffer the effects of the injury suffered in October 2002 and the preceding months. It expressed itself satisfied that the injury in respect of which Mr Sellick claimed compensation was not limited to the soft tissue injury of the right shoulder. It noted at [17] that the medical certificates ' at the time, or very soon after, the claim form was lodged, referred to strained muscles of the right upper back, upper back pain and interscapular stabilizer strain ' (at [63]). 52 The Tribunal also referred to Mr Sellick's history of informing some of the medical practitioners who examined him, including Dr Chew, that he suffered pain in the upper back, including the area of the mid-thoracic spine. The medical evidence differed as to the cause of Mr Sellick's pain, the link between the pain and his work activities in 2002 and whether or not the symptoms were temporary or ongoing. 55 In Abrahams v Comcare [2006] FCA 1829 ; (2006) 93 ALD 147 , Madgwick J recognised that different descriptions can be given of the one injury and said at [18] that ' a broad, generous and practical interpretation ' should be made to recognise the understanding of the lay person making the claim and different levels of medical advice and to understand whether the lay person completing it was asserting a different injury to that notified. The Tribunal said that, in applying the principles in Abrahams , it was satisfied that the proper interpretation of the claim made by Mr Sellick was for ' an injury which caused pain in the upper back, which included, but was not limited to, pain in the area of the right scapula '. Accordingly, the Tribunal determined that although Mr Sellick did not then suffer the effects of the soft tissue injury to the right shoulder, it could proceed to consider whether he continued to suffer the effects of the aggravation of the degenerative condition of his spine and the sprain of the interspinous ligament. Based on the views of Drs Griffith and Cassar, the Tribunal found that his duties are likely to continue to aggravate those conditions and to make the conditions symptomatic. 56 The Tribunal accepted that the effects of the injury to the right shoulder had resolved by the date of its decision. While it did not specify whether it had resolved by the date of the reviewable decision, it is implicit from the reasoning that the Tribunal accepted that it had resolved by that time. The basis for the Tribunal's decision was that the use of the V-sort machine also caused the additional conditions. The effects of the additional conditions continued to be present at the date of the decision and, therefore, necessarily present at the date of the reviewable decision. While the Tribunal noted at [55] that Mr Sellick's description of his symptoms was referable to one or both of the additional conditions, it accepted on the basis of the medical evidence as a whole that he suffered from both injuries (at [59]). Contrary to the submissions of Australia Post, the Tribunal's reasons sufficiently explain why it accepted both diagnoses. 57 No accident report or claim was specifically made for the additional conditions as is required by ss 53 and 54 of the SRC Act. If the additional conditions had not been the subject of a notice of injury under s 53, a claim for compensation under s 54, a determination under s 60, a reviewable decision under s 62 and an application to the Tribunal under s 64 of the SRC Act, the Tribunal had no power or jurisdiction to make the decision that it did. Australia Post accepts that, as the Tribunal noted, the medical certificates provided in support of the shoulder claim referred to complaints referable to the upper back and not related to the shoulder. A medical assessment by Dr Chew of July 2004 noted that Mr Sellick suffered from mid thoracic spine pain in October 2002 with no specific injury to account for the onset of his pain. Dr Chew's diagnosis of his then current condition was of soft tissue injury to his mid thoracic spine while carrying out his postal delivery duties, superimposed on constitutional degenerative changes in his thoracic spine. Australia Post accepts that the reviewable decision addressed whether the problems were due to an underlying constitutional disorder not caused, aggravated or accelerated by his employment. However, a mere reference to the spine in some of the medical certificates is, Australia Post says, insufficient compliance with the SRC Act. 58 The Tribunal concluded that the proper interpretation of Mr Sellick's claim was that it extended to an injury which caused pain to the upper back and Australia Post says that this is not the case. It contends that the claim was for a right shoulder injury which had resolved and there is no explanation of how that injury led to injuries to different parts of the body. 59 The Tribunal was entitled to accept certain of the medical evidence and to reject other evidence. It was entitled to prefer, as it did, the evidence of Dr Griffith (who examined Mr Sellick in December 2004) and Dr Cassar (who examined Mr Sellick in September 2004). However, neither the references made to the various medical reports nor the Tribunal's conclusions drawn from them explain the connection between the symptoms described by Mr Sellick and accepted by the Tribunal, the additional conditions accepted by the Tribunal and the injury of October 2002. For example, Dr Griffith's report addressed the symptoms and conditions at the time of his examination of Mr Sellick. In his opinion the changes seen in 2003 would have taken at least eighteen months to two years to develop and therefore he expected the changes would have been present in October 2002. In his view at that time Mr Sellick suffered a temporary aggravation of the condition of his cervical spine which would have ended by the time Mr Sellick returned to work in May 2003. Even if the claim were for injury to another part of the body that resulted in right shoulder pain, the Tribunal accepted that the effects of that injury had resolved. Unlike Abrahams where the applicant for review described a wrist injury but did not state the correct diagnosis, the injury to Mr Sellick's shoulder had resolved and different injuries were accepted as a basis for liability. The injuries may have arisen out of Mr Sellick's employment with Australia Post (as accepted at [60]) but the Tribunal has not explained how they arose out of the claimed injury in 2002. It is noteworthy that the medical reports of 2002 summarised by the Tribunal were not the ones referred to as supporting the Tribunal's conclusions. 61 Mr Sellick accepts that the Tribunal characterised the additional conditions as injuries separate to the injury to the right shoulder and that it found three separate injuries, all suffered in 2002. He says that the Tribunal at [66] only accepted that Mr Sellick no longer suffered the effects of the soft tissue injury to the right shoulder but continued to suffer pain, including pain in the right shoulder, arising from the spinal injury and the sprain to the interspinous ligament. If that is the case, the Tribunal's reasoning is far from clear. At [52] the Tribunal expressed itself satisfied that ' at present he does not suffer the effects of ' a soft tissue injury to his shoulder but was satisfied that, at the date of its decision, he ' continues to suffer, pain in the mid-upper back as a result of an aggravation of the condition of degenerative cervical spondylosis and/or a chronic sprained interspinous ligament '. That is, the only ongoing pain as at the date of the Tribunal decision was in the mid-upper back and not in the shoulder. 62 Dr Cassar's report noted that the claimed injury was ' right shoulder girdle injury '. He referred to association with the cervical spine. Changes to a minor degree noted in the upper thoracic spine were, in his view, unrelated to employment but aggravated by ' persisting work necessitating constant above shoulder work...as well as work necessitating repeated lifting of full postal bags weighing in excess of 10kg '. Dr Griffith referred to cervical spondylosis which was not work related with "minimal changes" in the thoracic region and said that it was "likely" that the use of the V-sort ' aggravated the symptoms from which he now suffers '. Dr Griffith's prognosis was of cervical and thoracic spondylosis with periodic exacerbations and remissions ' irrespective of activities in the workplace '. He was also of the view that pre-existing degenerative changes would have been rendered symptomatic by activities in the workplace. While each report linked Mr Sellick's work activities and the pain in the mid-thoracic spine, they did not explain the connection with the claimed injury. Issue 7: Did the Tribunal give sufficient reasons for its conclusion that the compensable injuries were related to the claimed injury? Australia Post contends that the Tribunal therefore breached its duty under ss 43(2) and 43(2B) of the AAT Act. 64 The Tribunal has an obligation to give reasons that make it possible to understand its reasoning process. Failure to do so is an error of law ( Lang v Comcare (2007) 94 ALD 141 at [54]-[55] per Stone J citing TelePacific Pty Ltd v Commissioner of Taxation (2005) 218 ALR 85). This includes an obligation to give reasons for rejecting evidence that is plainly central to a party's claim and crucial to a medical report that supported that claim ( Lang at [54] per Stone J). As was pointed out by Stone J in Lang at [53]---[55], the Tribunal is entitled to accept or reject the respective pieces of evidence before it or to accord certain pieces of evidence different weight. It is under no obligation to refer to all of the evidence before it. There is no obligation to make a finding on every question of fact that may be regarded as objectively material. The Tribunal is entitled to refer to all the medical reports, as Mr Sellick says the Tribunal did and to accept and reject evidence as it sees fit. The Tribunal is entitled to reject medical evidence or simply to prefer contrary medical evidence. It is obliged, however, to include in its reasons findings on all material questions of fact. Where a failure to give reasons makes it impossible to understand the Tribunal's reasoning process, that is an error of law. 65 There was conflict in the medical evidence as to the cause of the pain in Mr Sellick's shoulder in 2002. The Tribunal set out a summary of the various medical reports and evidence. It did not refer to each relevant piece of medical evidence and was not required to. It accepted certain medical opinions and rejected others. It was entitled to do so. There was evidence to support the conclusion that pain in the right shoulder could result from aggravation to a pre-existing degenerative condition of cervical spondylosis. However, the pain in the right shoulder had resolved. Mr Sellick's complaint at the Tribunal hearing was of thoracic pain. The Tribunal did not explain how the current symptoms arose from the claimed injury or how the aggravation of the pre-existing condition that caused the pain in the right shoulder because of the claimed injury now caused pain in the thoracic spine but not pain in the right shoulder. The Tribunal appears to have considered the spinal injuries or spine-related injuries or conditions as separate from the injury to the shoulder, in which case it does not explain how they were connected to the claim. 66 Mr Sellick emphasises that the claim form was for pain in the right shoulder and not injury to the right shoulder and submits that ongoing pain in the right shoulder arose from each of the three injuries. He points out that early medical reports referred to the right shoulder and right upper back. Mr Sellick submits that the ultimate issue for the Tribunal was whether Mr Sellick suffered symptoms relating back to the claim form. The issue of pain in the right shoulder is relevant to the ultimate issue before the Tribunal as it was the subject of the notification of injury and the identifying symptom of the injury or disease for which compensation was being claimed. It was the symptom that the medical reports accepted. The Tribunal, without explanation, linked that now resolved symptom to the previously existing, not work-related non-symptomatic degenerative spinal condition. 67 The Tribunal failed to explain how, in those circumstances, Australia Post was liable for the additional conditions or the injuries that caused them. Australia Post has not established that the Tribunal forgot or ignored evidence or that, in coming to its conclusions, the Tribunal erred in its consideration of the totality of the evidence. I am not satisfied that the Tribunal failed to consider submissions which could, if accepted, have affected the outcome of the case. 69 Mr Sellick gave notice of and claimed pain in the right shoulder. The medical reports provided in support of that claim and in identifying the cause of that pain, referred to upper back pain and strained muscles of the right upper back. He gave a history of pain in the upper back, including the area of the mid-thoracic spine. Subsequent medical reports described degenerative spinal disease and the Tribunal accepted the evidence that aggravation of that disease was caused by Mr Sellick's work duties. At the time of his evidence to the Tribunal Mr Sellick had continuing pain in the mid-thoracic region. The pain in the right shoulder had ceased and the Tribunal accepted that the effects of the shoulder injury had resolved. It can be accepted that it had ceased by the time of the first reviewable decision. 70 In circumstances where all pain resulting from the injury ceased when Mr Sellick ceased duties and the claimed injury causing pain in the right shoulder had resolved, the Tribunal did not give reasons for its conclusion that the additional conditions, which it accepted to be different injuries but work-related, were caused by or connected with the claimed injury. This is not a case, like Abrahams , where the medical diagnoses differently described the same injury as that claimed. The way that Mr Sellick described the pain in his shoulder did not limit the relevant injury only to the right shoulder. However, the claim was for an injury that covered pain in the right shoulder. The Tribunal accepted that both the pain to the shoulder and injury to the shoulder had resolved. The Tribunal did not explain how the additional conditions that continued after the shoulder pain resolved were related to the claimed injury of shoulder pain. 71 Further, the Tribunal did not explain how Australia Post was liable under the SRC Act. The notice and the claim referred to right shoulder pain which had resolved. The first reviewable decision can, read beneficially to Mr Sellick, be said to have included reference to the additional conditions in that it included a reference to Dr Shroot's and Dr Chew's medical certificates of 2004 that diagnosed some upper back pain and minor soft tissue injury to his thoracic spine. However, those conditions were found to have resulted in pain in a different area to that the subject of the claim, the mid-thoracic spine. The degenerative spinal condition was a pre-existing condition. While injury or disease of the thoracic spine was referred to in the first reviewable decision, it was not the subject of that decision. It was referred to in the context of pre-existing conditions which were not relevant to the claimed injury. In finding liability under the SRC Act for the additional conditions which had not been the subject of a notice of injury (s 53), claim for compensation (s 54), a determination under s 60, the first reviewable decision (s 62) and an application to the Tribunal (s 64), the Tribunal failed to observe the limitations on its jurisdiction flowing from these sections of the SRC Act and the procedural prerequisites to entitlement to compensation under the SRC Act ( Lang at [41]---[43]; Lees at [35]). 72 The medical opinion accepted by the Tribunal, given some two years after the claimed injury, was that the additional conditions were aggravated by Mr Sellick's work duties. The Tribunal does not explain how the claimed pain and injury of 2002 which had resolved resulted in the additional conditions which, in turn, were the reason for Mr Sellick's ongoing pain. The 2004 diagnoses were made well after the injury he sustained in 2002. Mr Sellick has not demonstrated how they fulfil the claim requirements of the SRC Act. It is impossible to understand from the Tribunal's reasons the reasoning process that led it to conclude that Australia Post continued to be liable for a claimed injury that had resolved and where the claimed symptoms of that injury had resolved. The Tribunal accepted that the additional conditions were caused by or rendered symptomatic by Mr Sellick's work duties but did not explain the connection with the specific claim. Failure to consider issues critical to the validity of its decision is a failure to address the correct legal question which is an error of law ( Australian Postal Corporation v Barry [2006] 44 AAR 186 at [23]---[24]). There is an error of law where the Tribunal's reasoning is impossible to understand ( Lang at [55]). 73 The Tribunal failed to give reasons for its conclusion that Australia Post was liable under the SRC Act. The Tribunal is obliged to give reasons for its decision (s 43(2) of the AAT Act). While not obliged to make a finding on every question of fact that is objectively material to the Court conducting judicial review ( Minister for Immigration & Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at [87] ---[97] ; Lang at [53]), the Tribunal is obliged to include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based (s 43(2B) of the AAT Act). In considering whether the ailment was a disease within the meaning of the SRC Act, it must be shown that the employee's employment contributed to the ailment or aggravation ' in a material degree ' (s 4). The Tribunal was satisfied that Mr Sellick's employment with Australia Post contributed to the development and aggravation of the bilateral hernias. This was based on the evidence of Drs Bills, Tran, McMahon and in particular Dr Griffith and the evidence as to the lifting and other duties undertaken as part of his employment. The Tribunal decided that Australia Post is liable to pay compensation to Mr Sellick in respect of an injury being bilateral inguinal hernias suffered by him on 31 May 2004. 76 Australia Post says that there was no evidence to support the finding on which that conclusion was based. Although Dr Griffith noted in his report that lifting is a major feature of the duties of a Postal Officer he did not receive a precise history of lifting mail bags. There was some history of repetitive lifting of pannier bags which was described as ' not heavy lifting, but somewhat repetitive '. Dr Griffith's evidence at the hearing was that his understanding was that there was not a heavy lifting requirement but that there was a repetitive lifting of bundled mail. Such lifting was repetitive; not in the sense of process work but bundled mail was lifted on a number of occasions. Australia Post says that there was no evidence before the Tribunal that Mr Sellick regularly lifted weights of up to 25 kg. 77 Lifting had not been the subject of any claim. Mr Sellick claimed that the hernias resulted from the walking that he was required to do. He gave no evidence of the material fact. Nor did Ms Prykiel, a Postal Delivery Coordinator Grade 1, who was called to give evidence. She said that after sorting letters, which involved taking a handful of mail from trays in a trolley, the next task was to sort the large letters. Following this, Mr Sellick was required to lift a white bin holding up to about 15kg, but usually less. He was required to lift one, two or three of these bins each day. Ms Prykiel agreed that the white bins were ' sometimes regularly or occasionally ' overfull and would therefore weigh over 15 kg. She also accepted that ' there are cases out there ' where the bins did exceed 20 kg. In response to a question as to cases where the white bins would have weighed in excess of 25 kg, Ms Prykiel's response was ' I can't see them ever weighing over 25 kilos, unless --- I don't know '. She said that it was unlikely but conceded that it is possible. The questions to which these responses were given were in the abstract. They were not directed to Mr Sellick's activities. The evidence does not enable us to decide how often this happens. The finding of the material fact at [84] is also inconsistent with the general finding of fact at [13], based on Ms Prykiel's evidence, that as part of his mail sorting duties Mr Sellick was, in 2002, required to lift bins holding up to (but often less than) 15 kg of mail. He was required to lift two or three bins each day. He was also required in 2002 to lift depot bags which would hold up to 16 kg of mail, sometimes three or four bags daily, sometimes only one. 80 Mr Sellick could not point to any evidence to support the finding of the material fact, on which the Tribunal's conclusion was based. 81 Mr Sellick points out that the ultimate issue for the Tribunal was whether he suffered an injury at work, being a hernia condition. That being the case, he submits that he is under no obligation under the SRC Act to identify the cause of the injury. It matters not, he submits, whether he said that he had felt the pain while walking and not while lifting. The Tribunal accepted the medical evidence that the cause of the injury was Mr Sellick's employment. 82 The difficulty for Mr Sellick is that the Tribunal's finding was that the cause of the hernias was the material fact. There was no evidence to support that finding. The Tribunal did not otherwise determine a work-related cause of the injury. The Tribunal did not separately consider the possible differences between a hernia caused by walking and a hernia caused by lifting. The notice of injury under s 53 of the SRC Act that gave rise to the claim under s 54 was limited to injury from walking. The decision that Mr Sellick was entitled to compensation for the claimed injury was an error of law. Did the Tribunal fail to deal with Australia Post's case? That evidence and those submissions were to the effect that any symptoms said to be due to the alleged hernias, particularly pain on walking, were due to osteoarthritis of the hip that was not related to Mr Sellick's employment. There was evidence from a number of doctors, namely Drs McGill, Burke and Endrey-Walder, who saw osteoarthritis as the more likely explanation for the symptoms experienced by Mr Sellick when walking. There was evidence that, at the time that Mr Sellick made a claim against his Body Corporate in 1997, he had osteoarthritis in his hips that was said to have resulted in difficulty in walking. 84 Osteoarthritis was not clearly acknowledged by Mr Sellick, nor was it denied. The evidence was that osteoarthritic changes are consistent with difficulties in walking. Such difficulties are not consistent with a hernia where they are not associated, as they were not for Mr Sellick, with discomfort when coughing or straining. 85 Mr Sellick did not point to any part of the Tribunal's reasons where it considered the possibility of osteoarthritis or the medical opinion on that possibility. He submits that it is clear from the whole of the Tribunal's reasons that it heard evidence from the medical experts and decided, as a finding of fact, the condition from which Mr Sellick suffered. He submits that it is a matter of a finding of fact based on the weight of the evidence. Mr Sellick also submits that, even if the Tribunal did not deal with this submission, it did not relate to an essential element for the Tribunal to determine. 86 At [77] the Tribunal found, in relation to the hernia, that Dr Burke was ' unable to identify any other cause of Mr Sellick's symptoms '. However, the Tribunal did acknowledge that Dr Endrey-Walder had taken into account osteoarthritis as a possible alternative cause of the pain complained of. At [76] the Tribunal referred to Dr Endrey-Walder's diagnosis that Mr Sellick suffered ' fairly advanced osteoarthritic changes at the hip joints '. The Tribunal therefore accepted the fact of osteoarthritis but did not address or consider it in the context of the claimed injury. It did not address or consider Australia Post's contention that the claimed pain was not due to a work-related injury but due to osteoarthritis. 87 If the Tribunal had accepted the diagnosis that osteoarthritis was the cause of the pain on walking, it would have rejected the hernias as that cause and the work-related cause of the pain. This failure to consider this alternative explanation for Mr Sellick's symptoms was a failure to consider an aspect of Australia Post's case which, if accepted, would have denied compensation under the SRC Act. This amounts to jurisdictional error. This constituted a failure to consider an aspect of Australia Post's case which, if accepted, would have denied Mr Sellick compensation under the SRC Act. 89 The failure to consider at all the way in which a party puts its case is an error of law ( Ma v FCT (1992) 37 FCR 225 at 231 per Burchett J). The failure to consider submissions of substance which, if accepted, are capable of affecting the outcome of a case is an error of law ( Comcare Australia v Rowe [2002] FCA 1034 ; (2002) 35 AAR 410 at [12] per Merkel J; Casarotto at 403 per Hill J; Applicant WAEE ). 90 Further, the Tribunal made a finding that Mr Sellick regularly and over many years lifted tubs and bags of mail weighing up to 25 kg. There was no evidence to support that finding. The Tribunal was satisfied that this contributed in a material degree to the development and aggravation of his bilateral hernia condition. It therefore related directly to an ultimate issue for determination by the Tribunal. 91 A decision made under an enactment is invalid if there is a total absence of evidence to satisfy an essential element of the decision. The question whether there is any evidence of a particular fact is a question of law ( Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 355-356 per Mason CJ). 95 Section 5(1)(f) of the ADJR Act contains a stipulation in the word "involved" that the error be material in contributing to the decision so that but for the error, the decision might have been different ( Bond at 353---354 per Mason CJ, East Australia Pipeline Pty Ltd v ACCC [2007] HCA 44 ; (2007) 239 ALR 50 at [71] per Gummow & Hayne JJ). As discussed, the error of the Tribunal in respect of the second reviewable decision is such an error of law. 96 Mr Sellick argues that the ADJR Act application should be struck out as a matter of course because s 44 of the AAT Act covers the field when relief is sought under it. Mr Sellick argues that s 44 provides a suitable remedy and also reflects the intention of the legislature to restrict the type of appeals from decisions of the Tribunal. There are conflicting decisions in the Court as to whether this submission is correct. 97 In Comcare v Etheridge [2006] FCAFC 27 ; (2006) 149 FCR 522 , Branson J (Spender and Nicholson JJ agreeing) stated at [14] that the legislature, by creating a statutory right of appeal to a party to a proceeding before the Tribunal in the narrow terms of s 44(1) of the AAT Act, ' disclosed an intention to limit the capacity of the Court on an appeal under s 44(1) to review factual findings of the Tribunal '. An appeal under s 44 is therefore different to an appeal by way of rehearing under s 24 of the Federal Court of Australia Act 1976 (Cth). Rather, an appeal under s 44 is of the same character as the subject matter of a reference of a question of law under s 45 of the AAT Act. Justice Branson also summarised (and applied) Birdseye v Australian Securities and Investment Commission [2003] FCAFC 232 ; (2003) 76 ALD 321. 98 In Birdseye , the appeal was brought in reliance on s 44 of the AAT Act. Justices Branson and Stone expressed approval of comments made by Gummow J in TNT Skypack International (Aust) Pty Ltd v Federal Commissioner of Taxation [1988] FCA 119 ; (1988) 82 ALR 175 at 178 where his Honour pointed out that where an appeal lies "on a question of law" the subject matter of the appeal is the question or questions of law stated ( Birdseye at [11]; cf Etheridge at [13]). Their Honours also approved the comments of Ryan J in Australian Telecommunications Corp v Lambroglou (1990) 12 AAR 515 at 527 namely that ' If the question, properly analysed, is not a question of law no amount of formulary like "erred in law" or "was open as a matter of law" can make it into a question of law ' ( Birdseye at [13]---[15]; cf Etheridge at [15]). Accordingly, a mixed question of fact and law is not a question of law within s 44(1) of the AAT Act ( Birdseye at [18]). 99 Justice Branson pointed out at [27] and [30] in Etheridge that judicial review under s 5(1) of the ADJR Act is also available for Tribunal decisions under the SRC Act where such an application is made. In Brown v Repatriation Commission [2006] FCA 914 Branson J referred at [8] to the fact that the ADJR Act provided an alternative source of jurisdiction to the AAT Act. In Barry Branson J made orders under s 5 of the ADJR Act for errors of law when it was not clear that the Court's jurisdiction under s 44(1) of the AAT Act was properly invoked. Mr Sellick argues that her Honour's comments in Etheridge and Brown are obiter and that Ms Barry was unrepresented so that no submissions on jurisdiction under the ADJR Act were made. 100 In Minister for Immigration & Citizenship v Hassani (2007) 94 ALD 378 there was an objection to jurisdiction under the ADJR Act and the Judiciary Act in an appeal under s 44 of the AAT Act. Separate applications were filed. Justice Besanko considered that neither the AAT Act nor the ADJR Act provided the relief sought but made orders under s 39B of the Judiciary Act (at [29]---[30]; [32]). 101 Mr Sellick submits that where an appeal lies under s 44 of the AAT Act, applications brought under s 5 of the ADJR Act should be dismissed unless the subject of the appeal is a decision going to practice and procedure. He relies on Duong v Australian Postal Corporation (2005) 41 AAR 288 at [12] where Edmonds J dismissed an ADJR Act application where the Tribunal decision did not go to practice and procedure. His Honour followed Tuite v Administrative Appeals Tribunal [1993] FCA 71 ; (1993) 40 FCR 483 where Davies J had held that, as s 44 of the AAT Act provides a specific procedure for the granting of relief by the Court in respect of decisions of the AAT, that procedure should be adopted and applications brought under s 5 of the ADJR Act, where an appeal under s 44 of the AAT Act is available, should be dismissed as of course (at 484). Justice Davies expressed the view at 484 that questions of law as provided for in s 44 of the AAT Act encompass grounds enunciated in s 5 of the ADJR Act. Duong was decided prior to Etheridge , a decision of the Full Court and Tuite was decided prior to Birdseye, which discussed the difficulties in the framing of questions of law . Further, the ADJR Act is not only available for matters of practice and procedure ( Bond at 337 per Mason CJ; Griffith University v Tang [2005] HCA 7 ; (2005) 221 CLR 99 at [89] ---[90] per Gummow, Callinan and Heydon JJ). 102 Several decisions of the Court have followed Tuite (eg Peczalski v Comcare (1999) 58 ALD 697 per Finn J ; Chowdhary v Bayne [1999] FCA 41 ; (1999) 29 AAR 100 per Finn J ; Percerep v Minister for Immigration & Multicultural Affairs [1998] FCA 1088 ; (1998) 86 FCR 483 per Weinberg J) but Mr Sellick did not point to any case where that course was taken since Etheridge . 103 Australia Post submits that Duong and Tuite should not be followed. It submits that s 10 of the ADJR Act makes it plain that the rights conferred by that Act are in addition to the rights otherwise conferred to review decisions. Mr Sellick submits that, if there is concurrent jurisdiction, the Court should exercise in discretion so that the grounds of review under the ADJR Act are no more extensive than questions of law available under the AAT Act. 104 The ADJR Act and s 39B of the Judiciary Act were introduced after the AAT Act. Decisions of the Tribunal have not been excluded by the schedule to the ADJR Act. The question of jurisdiction under those Acts in addition to jurisdiction under the AAT Act was considered by a Full Court in Etheridge . I see no reason to strike out the ADJR Act application as a matter of course. I do not accept Mr Sellick's submission that the applications cannot be advanced and heard simultaneously on similar grounds. 105 The grounds advanced by Australia Post which I have found to be made out do not relate to grounds of review that would involve further evidence (as in Percerep ). I am not satisfied that I should strike out the ADJR Act application or exercise the discretion in s 10(2) of the ADJR Act to refuse relief under that Act. The fact that there are errors of law that found relief under the ADJR Act that are identical to the errors of law that found questions of law as set out in the application filed under the AAT Act goes to the practical outcome of the relief, a single remittal to the Tribunal. That failure constitutes an error of law. In relation to the second reviewable decision the Tribunal failed to consider an aspect of Australia Post's case. Further, the Tribunal made a factual finding which formed the basis for its conclusions for which there was no evidence. Accordingly, the Tribunal's decision is affected by error of law and jurisdictional error. The errors of law are of a kind that support an appeal under s 44 of the AAT Act on a question of law ( Repatriation Commission v Hill [2002] FCAFC 192 ; (2002) 69 ALD 581 at [59] ). 107 The Tribunal decision regarding each of the reviewable decisions should be remitted to the Tribunal to be decided according to law. I will hear the parties as to costs. I certify that the preceding one hundred and seven (107) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | decision of administrative appeals tribunal setting aside two reviewable decisions under safety, rehabilitation and compensation act 1988 (cth) whether tribunal made findings of fact in support of which there was no evidence or forgot or ignored evidence tribunal did not make findings of fact in support of which there was no evidence or forget evidence in relation to first reviewable decision whether tribunal failed to consider submissions of substance tribunal not obliged to refer to every aspect of evidence or submissions supporting its view whether compensable injuries found were properly the subject of a claim under the safety, rehabilitation and compensation act or properly considered to be the same injury as that originally notified tribunal did not explain how additional conditions arose out of claimed injury tribunal accepted respondent no longer suffered from effects of injury as originally notified and claimed tribunal did not give sufficient reasons for decision that compensable injuries were related to claimed injury tribunal failed to consider important alternative explanation in relation to second reviewable decision finding of material fact for which there was no evidence both reviewable decisions to be remitted to tribunal applicant appeals under s 44 of administrative appeals tribunal act 1975 (cth), s 5 of administrative decisions (judicial review) act 1977 (cth) and s 39b of judiciary act 1903 (cth) grounds of appeal same whether court has jurisdiction under both applications whether judicial review be limited to question of law whether court should exercise discretion to restrict to questions of law comcare v etheridge (2006) applied applications heard simultaneously administrative law administrative law |
It is common ground that notice of any appeal from this decision was required to be filed in the appropriate registry of this Court by 16 December 2008: s 44(2A)(a) of the Administration Appeals Tribunal Act 1975 (Cth) ('the AAT Act') and O 53 r 6(1) of the Rules; with a copy to be served on the Commissioner and the Registrar of the Tribunal within seven days after the filing: O 53 r 6(2) of the Rules. On 15 January 2009, the New South Wales registry of the Court received from Mr Mike Hua, a director and principal of the applicant, a number of documents including a notice of appeal dated 11 January 2009. On 15 January 2009, the Sydney registry of the Court wrote to Mr Hua informing him that it would be necessary for the applicant to file an application for an extension of time to file a notice of appeal together with a draft notice of appeal and, if he wanted the Court to take into account any matter in support of the application for an extension of time, evidence of such matter in the form of an affidavit. On 10 March 2009, an application for an extension of time to file and serve a notice of appeal from the Tribunal together with a draft notice of appeal and an affidavit sworn by Mr Hua on 9 March 2009 (Ex. 2) in support of the application for an extension of time were filed in the New South Wales registry of the Court. The matter came before me on 15 April 2009 when a Mr Zhang, solicitor, appeared on behalf of the applicant. I directed that by Friday, 22 May 2009, the applicant file and serve any amended draft notice of appeal upon which it intended to rely if an extension of time were granted and I stood the application over for hearing on Wednesday, 10 June 2009 at 9:30 am. When the matter came back before me on 10 June 2009, Mr Bevan of counsel appeared on behalf of the applicant. He handed up an amended draft notice of appeal upon which the applicant now proposed to rely if granted an extension of time (Annexure 'J' to Ex. 1). I directed that the applicant file and serve by close of business on Friday, 12 June 2009, an affidavit setting out the reasons why the applicant was unable to comply with the directions made on 15 April 2009. I further directed the respondent ('the Commissioner') to file and serve on the applicant by close of business on Monday, 15 June 2009, an outline setting out the basis upon which the Commissioner contended that the grounds of appeal in the amended draft notice of appeal could not be sustained. I directed that the applicant file and serve a response to the Commissioner's outline by Tuesday, 16 June 2009 and that the matter be stood over for hearing on Wednesday, 17 June 2009 at 10:15 am. I ordered that the applicant pay the Commissioner's costs of the 15 April 2009 directions hearing and the hearing that day. On 11 June 2009, the applicant filed an affidavit of Mr Yu Chen, solicitor, affirmed 10 June 2009 (Ex. 1), setting out reasons why the applicant failed to comply with the directions I made on 15 April 2009. These reasons went some, but certainly not all, of the way to explaining the non-compliance. The other directions made on 10 June 2009 were complied with by both parties although, in the applicant's case, only on the morning of the adjourned hearing. I heard the applicant's application for an extension of time on 17 June 2009. Frequently relied on are the criteria referred to by Wilcox J in Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176 ; (1984) 3 FCR 344 where his Honour was concerned with s 11 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('the AD(JR) Act') which, like O 53 r 7, does not set out any criteria by reference to which the court's discretion to extend time for an application for review under s 5 of the AD(JR) Act is to be exercised. It is a pre-condition to the exercise of discretion in his favour that the applicant for extension show an 'acceptable explanation of the delay' and that it is 'fair and equitable in the circumstances' to extend time. (2) A distinction is to be made between the case of a person who, by non-curial means, has continued to make the decision-maker aware that he contests the finality of the decision and a case where the decision-maker was allowed to believe the matter was finally concluded. (3) Any prejudice to the respondent occasioned by the delay is a material factor militating against the grant of an extension. (4) The mere absence of prejudice is not enough to justify the grant of an extension. (5) The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted. The Commissioner's opposition to the grant of an extension of time for the applicant to file a notice of appeal from the decision of the Tribunal was mainly, indeed wholly, grounded on the principle in (5), namely, the merits of the applicant's proposed appeal. In submissions, the Commissioner referred to the fact that in Federal Commissioner of Taxation v Brown [1999] FCA 1198 ; 99 ATC 4852 at [12] a Full Court of this Court referred to that matter as an 'important consideration'; an applicant should show that he or she has an 'arguable case' to warrant an extension of time: Brown , at first instance [1999] FCA 563 ; , 99 ATC 4516 at [56] per Hill J, accepting the view of von Doussa J in Windshuttle v Deputy Federal Commissioner of Taxation [1993] FCA 553 ; (1993) 46 FCR 235 at 243. More recently, however, the importance to be attached to the merits of the appeal has, arguably, been downgraded in its ranking among the criteria to be taken into account by the court in exercising its discretion as to whether or not an extension of time should be granted. Such an appeal is in the nature of a new proceeding in the original jurisdiction of the court. It is unnecessary for an applicant in such an appeal to have grounds of any particular strength or intrinsic merit (although I recognise, of course, the relevance of s 31A of the Federal Court of Australia Act 1976 (Cth) in these, as in all other, original proceedings). For this reason (and perhaps the more so because of the availability of s 31A) , I consider that the court should be slow to reject an application for an extension of time under s 44(2A) of the AAT Act, where otherwise the principles in Hunter are appropriately satisfied, for no reason other than that the appeal, if prosecuted, would be unlikely --- even very unlikely --- to succeed. I note that this was effectively the approach taken by the court in Mustafa v Chief Executive Officer, Centrelink [2000] FCA 1897 and in Wiegand v Comcare Australia [2005] FCA 1904. I consider that such an approach would be consistent with that taken by Fitzgerald J in Lucic [ v Nolan (1982) 45 ALR 411] and, because his Honour followed Lucic , by Wilcox J in Hunter . Before turning to that issue, it is necessary that I deal with the various bases upon which the Commissioner assailed the amended draft notice of appeal. THE AMENDED DRAFT NOTICE OF APPEAL (ANNEX 'J' TO EX. The lack of compliance was not articulated with any great precision or clarity. It was said that the grounds in the amended draft notice of appeal 'are little more than a duplication of the alleged question of law'. Grounds 4(a) to 4(j) differ only from the corresponding alleged questions of law in two ways: first, the word 'whether' is omitted from the opening words so that each paragraph is no longer prefaced as a question and; second, statutory references are inserted. But as the Commissioner acknowledges in his referral to various quotations from cases such as Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd [2003] FCAFC 244 ; (2003) 133 FCR 290 at [47] (Branson J); Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 at 523 (Ryan J); Young v Commissioner of Taxation [2008] FCA 1908 at [19] (Gilmour J); Price Street Professional Centre Pty Ltd v Commissioner of Taxation [2007] FCAFC 154 ; (2007) 243 ALR 728 at [75] (Greenwood J); and Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232 ; (2003) 38 AAR 55 at [18] (Branson and Stone JJ), because the existence of a question of law is not merely a qualifying condition to ground the appeal, but must be the subject matter of the appeal itself --- see TNT Skypak International (Aust. ) Pty Ltd v Federal Commissioner of Taxation [1988] FCA 119 ; (1988) 82 ALR 175 at 178 (Gummow J) --- there should be a link or symmetry between the question raised and the ground relied upon. Subject to the question raised being truly a pure question of law (see Birdseye at [18] (Branson and Stone JJ)), the applicant's articulation of the grounds in the manner assailed by the Commissioner may well provide the necessary link or symmetry. I would not exercise my discretion to refuse to extend time on the basis that the amended draft notice of appeal does not comply with 0 53 r 3(2)(d). Next, the Commissioner contended that paras 2(a) to 2(j) of the amended draft notice of appeal 'did not disclose questions of law', by which I understand him to mean that they are not pure questions of law, even though they may 'involve' questions of law which, it is conceded by the applicant, is not sufficient to ground an appeal under s 44(1) of the AAT Act. It is trite that prefacing each paragraph with the words: 'Whether the Tribunal erred in law ...' does not transform what would otherwise be a question of fact, or a question of mixed fact and law, into a question of law, but I do not think it is helpful to deal with this particular issue on a general or holistic basis. Each of the questions, or group of questions if the questions comprising the group substantively raise the same issue, needs to be considered against the requirement of s 44(1) of the AAT Act. In a real sense, it is related to the questions raised by paras (d) and (e) which, as I have indicated, do raise a question of law. So confined, this paragraph also raises a question of law. There will be cases where a question of law arises from a failure on the part of the Tribunal to deal with an issue not put to it: see Carpentaria Transport Pty Ltd v Federal Commissioner of Taxation 90 ATC 4590 at 4593 (Davies J), but generally this will not be so, and this case is no exception. There was no error of law on the part of the Tribunal in failing to consider and make findings as to whether the receipts by the applicant were properly to be characterised as consideration for financial supplies on which no GST was payable because they were input taxed supplies. This paragraph does not raise a question of law on which to ground the appeal: Commissioner of Taxation v Perkins 93 ATC 4524 at 4526 (Davies J, with whom French and Heerey JJ concurred); Commissioner of Taxation v Glennan [1999] FCA 297 ; (1999) 90 FCR 538 at [80] --- [83] (Hill, Sackville and Hely JJ). The only information which the applicant had already provided to the Commissioner concerning creditable acquisitions was the amount claimed in its BAS --- see [37] of the Tribunal's reasons where the Tribunal found that: 'The applicant has provided no further information to support the amount of creditable acquisitions claimed'. That can only mean: '... claimed in its BAS' having regard to the context in which the sentence appears, in particular, immediately following the first sentence of [37]. Paragraphs (i) and (j) do not raise questions of law. The fact that the Tribunal found that the penalty imposed on the applicant 'was correct for the reasons set out in the reasons for the objection decision' ([45]) and found that there should be no further remission of the penalty: 'For these reasons [those set out in [48]], taking into account gross carelessness and deliberate risk taking in relation to the failure to withhold ...' ([49]) do not constitute errors of law. They were findings that were open to the Tribunal on the material before it. During the course of the hearing of the application for an extension of time, I indicated to counsel for the applicant that I had serious reservations as to the underlying arguments upon which grounds 4(a) --- (c) and (k) were predicated. I still do. But now is not the time to ventilate them. The grounds themselves are arguable, involving as they do a statutory context which has not previously been the subject of judicial consideration and scrutiny in reference to such arguments, particularly where there is no authority in point, let alone binding precedent; and that is sufficient for present purposes. The fact that I am presently of the view that there is a difficulty in accepting such arguments, does not mean that my discretion should by exercised against an extension of time; on the contrary, for the foregoing reasons, time should be extended to the extent indicated in the orders I propose to make. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds. | application for an extension of time to file and serve a notice of appeal from a decision of the administrative appeals tribunal whether questions to be raised on appeal are questions of law whether grounds of appeal as articulated in the amended draft notice of appeal disclose an arguable case or whether they are so devoid of merit as to render prosecution of the appeal pointless. practice & procedure |
The Notice of Appeal recites that the document is in accordance with Form 55A and is filed pursuant to Order 53, r 2, Order 53B, r 2 and Order 59, r 1 of the Federal Court Rules . 2 The respondents to the proceeding filed a Notice of Motion on 3 August 2007 seeking to dismiss the proceeding as constituted by the purported Notice of Appeal dated 3 May 2007 and filed 8 May 2007, pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth) ('Federal Court Act') or alternatively pursuant to Order 53, r 18 of the Federal Court Rules , as incompetent; alternatively, an order that the proceeding be struck out pursuant to s 23 of the Federal Court Act or pursuant to Order 11, r 16 of the Federal Court Rules . 3 In the course of hearing the Notice of Motion, the solicitor for the applicant in the proceeding sought leave to amend the Notice of Appeal in terms of a document described as an Amended Application for an Order of Review filed on Friday, 24 August 2007. 4 The resolution of the Notice of Motion and the Application for Leave to Amend are dealt with in Mitchelson v Health Insurance Commission & Ors [2007] FCA 1372. 5 The remaining question is that of costs. 6 Dr Mitchelson filed the initiating document on 8 May 2007. That document was to be amended in proper form so as to formulate a competent initiating proceeding, by Monday, 30 July 2007. Nothing happened until the respondents filed their Notice of Motion returnable on Tuesday, 28 August 2007 with the result that on the preceding Friday, 24 August 2007, Dr Mitchelson filed the contended Amended Application for an Order of Review. As a result, nothing of any consequence has happened in the conduct of the matter throughout May, June, July and now August. Plainly, this matter needs to be and will be expedited. The applicant in the proceeding is ordered to pay the costs of the respondents of and incidental to the Notice of Motion filed by the respondents in the proceeding on 3 August 2007 on an indemnity basis. 2. The applicant in the proceeding is ordered pursuant to Order 62 of the Federal Court Rules to pay the costs forthwith upon determination of the quantum of the costs, by taxation or agreement, notwithstanding that the proceeding is not concluded. | resolution of the question of costs arising out of mitchelson v health insurance commission & ors [2007] fca 1372 practice and procedure |
If such a breach or breaches occurred, the question arises whether they resulted in the appointment being ineffective. If the appointment were ineffective, questions arise as to whether there were consequential breaches of other terms of the Certified Agreement, relating to procedures, staffing levels, uniforms and skills maintenance of firefighters. The proceeding was commenced pursuant to what was then s 178 of the WR Act, which has now been repealed. A provision bearing some similarities to the former s 178 is now found in s 719 of the WR Act. I can find no transitional provision requiring me to deal with the proceeding by reference to the amendments to the WR Act that were brought about by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth). The proceeding is therefore dealt with on the footing that the appropriate form of the legislation is that applying at the date of commencement of the proceeding. The same applies to other provisions of the WR Act invoked by the applicant. The applicant is an organisation of employees, registered pursuant to the WR Act. There is no issue about its standing to pursue the relief sought in this proceeding. The first respondent, Country Fire Authority, is established by s 6 of the Country Fire Authority Act 1958 (Vic) ('the CFA Act') as a body corporate, capable of being sued. The second respondent, Kristina ('Kris') Wilms, is employed by the first respondent. There is no issue that the applicant and the first respondent are parties to and bound by the Victorian Firefighting Industry Employees Interim Award 2000 ('the Award'), an Award made by the Australian Industrial Relations Commission. The provisions relating to the first respondent are found in Pt 2 of the Award. The applicant and the first respondent are also parties to and bound by the Country Fire Authority/United Firefighters Union of Australia Operational Staff Enterprise Agreement 2002 ('the Certified Agreement'), a collective agreement given statutory effect by its certification by the Australian Industrial Relations Commission, pursuant to what was then s 170LT of the WR Act. When the hearing of the proceeding began, counsel for the applicant indicated that the relief sought in paras 1, 2, 4, 10, 16, 17 and 18 of the further amended application, filed on 9 November 2004, would not be pressed. After I had heard the evidence on behalf of the applicant, with the cooperation of the applicant and the first respondent, I referred the proceeding to mediation by a Registrar of the Court and adjourned the further hearing. It seemed to me that there was more than simply the case of the second respondent in issue between the parties, and that the Award and the Certified Agreement as they then stood may not cover the dispute that really divided the parties. If they could agree upon how matters similar to those in controversy in this proceeding could be dealt with in the future, this would be of great assistance to all concerned. In addition, the second respondent was not at that stage a party to the proceeding. It seemed to me that I ought not to determine the validity of her appointment as a Leading Firefighter without giving her an opportunity to be heard. Unfortunately, mediation did not resolve the dispute between the applicant and the first respondent. When the hearing resumed, I ordered that the second respondent be joined as a party. Counsel already appearing for the first respondent also appeared for the second respondent. During this part of the hearing, the ambit of the proceeding was confined further, so that it concerned only cl 2.9 of the Award and cll 45.8.2.2, 53.9 and 53.10 of the Certified Agreement. Section 356 provided that a court that imposes a monetary penalty under the WR Act may order that the penalty, or a part of the penalty, be paid either into the Consolidated Revenue Fund or to a particular organisation or person. Section 413A of the WR Act provided that the Court may give an interpretation of a certified agreement on application by, among others, an organisation or person bound by the certified agreement. These are the provisions of the WR Act under which relief was sought in the present case. Clause 9.1 of Pt 2 of the Award specifies wage rates for the classifications referred to in cl 2.9. Other references in Pt 2 of the Award to those classifications, or some of them, occur in cl 11, dealing with hours of work; cl 12, dealing with rosters; cl 13, dealing with overtime and callback; cl 15, dealing with personal leave; and cl 18, dealing with annual and accrued leave. Prior to seeking external advertisement, CFA will consult with the UFU who will be provided with seven working days to offer suggested alternatives for consideration by CFA. A period of induction will be required to be undertaken on Station prior to the successful applicant being part of minimum staffing. Instructors skills and experience may be utilized to mentor career staff or volunteers. The instructors must have the requisite qualifications and endorsement by the Chief Officer. When considering the requirement to utilise Instructors in a functional or specialist role within an IMT , [ sic ] the Operations Manager should have regard for offering these operational opportunities to trained Firefighters and Fire Officers who require skills acquisition, skills maintenance, further experience and/or mentoring to become " endorsed " or maintain their skills. This wording is not to be departed from under any circumstances and it is irrelevant whether the person is a Senior Instructor or Instructor for helmet identification purposes. The exception to this is Fiskville staff who wear orange helmets to distinguish them from other Instructors at Fiskville. She was employed as an Instructor at the first respondent's training college at Fiskville. Her previous employment had been with a contractor responsible for firefighting duties at the military base at Puckapunyal. It is common ground in this proceeding that the second respondent's previous employment was not with "another recognised and Professional Career Fire Service", within the meaning of that expression in cl 45.11 of the Certified Agreement. The second respondent underwent assessment for the qualification of Leading Firefighter. By letter dated 12 April 2000, the chairman of the assessment panel congratulated the second respondent on passing that assessment, and stated that her preparation and experience had allowed her to demonstrate that she was competent to perform the role of a Leading Firefighter with the first respondent. There followed some confusion about the precise status of the second respondent. Others who had passed the assessment for Leading Firefighter qualifications at the same time as she had were promoted to the classification of Qualified Firefighter (with leading firefighter qualifications), to which cl 2.9.6 of the Award refers. By email communication dated 9 May 2000, the Senior Instructor at the training college at Fiskville informed the second respondent that she did not hold the qualification of Qualified Firefighter, that she was considered to be an Instructor who had undertaken a course of training and attained assessment as a Leading Firefighter, that this did not amount to a promotion, and that she was still regarded as an Instructor with qualifications as a Leading Firefighter. The email did advise the second respondent that there would be support for her if she should apply for a position as either a Firefighter or a Leading Firefighter. The second respondent complained about her position. At that time, because she was an Instructor, the terms and conditions of her employment were not regarded as being regulated by the Award or the Certified Agreement. The Union took up the case on her behalf, and on behalf of other Instructors. " CFA will provide every reasonable opportunity for you to successfully complete the qualification within this time frame. There followed a period of negotiations between the applicant and the first respondent on the one hand, and the first respondent and the second respondent on the other. CFA records indicate that Kris has successfully completed the CFA Leading Firefighter Assessment in April 2001. Kris will therefore be recognised as holding the rank of Leading Firefighter and will wear the appropriate rank insignia. This ensures that all Instructors at Fiskville are recognised equally for their operational qualifications. By letter dated 16 May 2002, the first respondent agreed not to implement the proposals immediately. The issues concern skills maintenance, the previous undertakings given to Ms Wilms and the potential financial disadvantage because Ms Wilms has not undertaken the Fire Officers Assessment. Accordingly, Ms Wilms will be permitted to wear Leading Firefighter insignia, be given access to the next Fire Officers Assessment and be provided an opportunity for skills maintenance on station as necessary. In the edition of this bulletin for 8 November 2002, the first respondent advertised a number of vacancies, including vacancies for Leading Firefighter and Leading Firefighter-Reliever at a station it was intending to establish at Point Cook. In People Moves on 3 January 2003, the first respondent described the second respondent as an Instructor at Fiskville Training College, and gave notice of her permanent transfer to the position of Leading Firefighter at Point Cook from a date to be advised. The applicant raised with the first respondent a grievance under the grievance procedure in the Certified Agreement, in an endeavour to prevent the transfer taking effect. This did not produce any resolution of the dispute. The first respondent was prohibited, either by cl 2.9 of the Award or by cl 45.8.2.2 of the Certified Agreement, or by a combination of them, from directing the second respondent to perform the work of a Leading Firefighter. For the first respondent to give such a direction to the second respondent was for it to act in breach of cl 2.9 of the Award or cl 45.8.2.2 of the Certified Agreement. Similarly, the direction to the second respondent to perform the work of a Leading Firefighter gave rise to a breach of cl 53.9.2 of the Certified Agreement. By permitting the second respondent to wear the uniform insignia of a Leading Firefighter, the first respondent was in breach of cll 53.10.3 and 53.10.4 of the Certified Agreement. Central to the applicant's case was the contention that the word "service" in cl 2.9 of the Award was to be construed as meaning service with the first respondent, and not service with any other firefighting organisation. The only exception to this related to lateral entry, pursuant to cl 45.11 of the Certified Agreement, which involved recruitment from a fire service recognised as a Professional Career Fire Service for the purposes of that clause. This did not include the second respondent's previous employer. Nor could recruitment from the position of Instructor within the first respondent's organisation be regarded as lateral entry for the purposes of cl 45.11. The word "service" was said to bear the restricted meaning attributed to it by the applicant on the basis of its ordinary and natural meaning in the context of the Award. Alternatively, the word was said to have acquired that meaning from the matrix of facts in which the Award and the Certified Agreement were made, or from the existence of a settled historical meaning understood by both the applicant and the first respondent. The matrix of facts upon which the applicant relied involved the exigencies of firefighting, and the necessity for anyone in a position such as Leading Firefighter to be familiar with the first respondent's procedures and requirements, so that they could be carried out instantly in a time of emergency, whilst fighting a fire. The historically accepted meaning was said to have been derived from a custom and practice whereby, subject to the exception of lateral entry under cl 45.11, persons appointed to the classification of Leading Firefighter had been required to have the necessary length of service with the first respondent. In substance, therefore, the applicant's case is that the second respondent, not having had the length of service required by cl 2.9.8 of the Award that would have entitled her to become a Leading Firefighter, was never validly appointed as a Leading Firefighter, and remains an Instructor. It follows from this that the first respondent has acted in breach of: cl 45.8.2.2 of the Certified Agreement, by requiring work covered by the classification of Leading Firefighter in the Award to be performed by an employee who is not engaged in that classification; cl 53.9.2(i), by requiring the second respondent to perform operational response duties normally undertaken by career firefighters; and cl 53.10 by requiring or allowing the second respondent to wear the insignia of a Leading Firefighter, rather than the insignia of an Instructor. The first is the nature of the relevant provisions of the Award and the Certified Agreement themselves. Clause 2.9 of the Award is not in its terms prescriptive. Its function is to define terms for the purposes of the Award. The definitions it contains are of significance in construing other provisions of the Award in which those terms are used, to which I have referred in [10]. Neither cl 2.9 nor any other provision of the Award (nor any provision of the Certified Agreement) is the source of the first respondent's power to appoint its employees to classifications. That power is to be found in s 17(c) of the CFA Act. Because the Award and the Certified Agreement have statutory force derived from the WR Act, an Act of the Parliament of the Commonwealth, they may restrict or regulate the exercise of the power, but the source of the power to appoint to classifications remains in the State legislation. Clause 2.9 of the Award does not contain in its terms any obligation upon the first respondent not to appoint any of its employees to a particular classification. In relation to each classification defined, the clause contains material descriptive of the experience and qualification that an employee appointed to the classification is expected to have. It is difficult to say, however, that any employee appointed to such a classification, who does not have both the qualifications and experience described, has been appointed in breach of cl 2.9 itself. Any obligation not to appoint such a person must be found in another provision. In this case, it is necessary to turn to the Certified Agreement to see if such a provision can be found, bearing in mind that the Certified Agreement effectively overrides the Award to the extent that the two are inconsistent. Neither cl 17 nor cl 45.8.2 of the Certified Agreement imposes on the first respondent an obligation not to appoint to any classification a person without the qualifications or experience found in the definition of that classification. The purpose of each of cll 17 and 45.8.2 is manifestly to ensure that the first respondent does not contract out the work to be performed by employees in the various classifications, by engaging to perform that work persons other than its own employees engaged in those classifications. Neither clause has anything to say about who should be an employee engaged in any of the classifications. Clause 45.11 relates to the filling of vacant positions otherwise than by promoting or appointing persons already employed by the first respondent. In its terms, it is an enabling provision, but it contains many provisions regulating the exercise of the power to appoint from outside which it purports to enable the first respondent to exercise. Clause 45.11 says nothing at all about who may be promoted or appointed from among the employees of the first respondent to a particular classification. Clause 53.9 of the Certified Agreement might be said to impose on the first respondent an obligation not to require or direct Instructors to perform duties normally undertaken by employees within the classifications to which it refers. The clause itself says nothing about who may, or may not, be appointed to any of those classifications. In particular, it does not say that a person who is employed by the first respondent cannot be appointed to one of those classifications, whether possessing requisite qualifications and experience or otherwise. Similarly, cl 53.10 of the Certified Agreement, to the extent to which it imposes any obligation on the first respondent, is silent on the question of who may, or may not, be appointed to any of the classifications. Only if it be assumed that, despite her formal appointment as a Leading Firefighter, the second respondent has never been appointed to that classification could any question of breach of cll 45.8.2.2, 53.9 or 53.10 of the Certified Agreement arise. The second difficulty encountered by the applicant's case is that it depends entirely upon the acceptance of a particular meaning of the word "service" in cl 2.9 of the Award. Unless it can be said, as counsel for the applicant attempted to argue, that "service" means service under the Award, the applicant's argument must fall. In the absence of a definition of the term "service" in the Award, it is necessary to find some aspect of the context in which the word is used that would suggest that the word has a meaning more restricted than its ordinary and natural meaning. The Macquarie Dictionary relevantly defines "service" as "employment in any duties or work for another, a government, etc." It can be accepted readily that the context in which the word "service" is used in the various classifications set out in cl 2.9 of the Award requires that the relevant service involves service in a firefighting capacity. It would be pointless for the definitions of the various classifications to refer to service in general, when what is contemplated is obviously service that will provide the experience fitting a person for the duties associated with a particular classification. Once that is accepted, however, the question becomes to what extent does the context suggest that the meaning of "service" should be narrowed further? A range of meanings remains possible. For instance, the relevant service could be restricted to service only with the first respondent, or could include, as counsel for the applicant suggested at one stage, service under the Award. This would include service with the Metropolitan Fire and Emergency Services Board, to which Pt 1 of the Award applies. It might equally well include service with any firefighting authority, the equivalent of those covered by the Award, in any other State or Territory of Australia, or in any other country. On the face of the Award, there is no particular reason why it should not be extended to include firefighting experience in the non-government sector if that were considered to equip a person with the requisite experience to undertake the duties attached to the particular classification. Nothing in the terms of the Award itself shows where the line ought to be drawn. It is at this point that the applicant must call in aid its arguments based on the factual matrix of the Award and the custom and practice of the first respondent and the applicant. As to the factual matrix, there can be no doubt that firefighting is a dangerous occupation, involving considerable skill and knowledge, requiring stringent training, and depending upon each person engaged in it having a clear understanding of the procedures required in a particular situation, and his or her role in the execution of those procedures. Familiarity with the ways in which a particular firefighting authority carried out its functions is undoubtedly very important, especially given the unpredictability of the emergencies likely to be encountered. The exacting nature of the service, and the importance of the specialist knowledge of the functions and procedures of a particular employer, are of the greatest importance. It is to be hoped that they would be at the forefront of the consideration of whether a particular person had the experience, as well as qualifications, that would justify appointment to a classification. That question will arise in the consideration of any potential appointment, however. One employee might be considered not to have the requisite experience, despite employment with the first respondent for a specified number of years. Another might be considered to have the requisite experience, based in part on his or her service in firefighting for another employer. Nothing about the nature of firefighting in general, or firefighting as an employee of the first respondent, provides a context that would enable the drawing of a line somewhere within the range of possible restricted meanings to be given to the word "service" in cl 2.9 of Pt 2 of the Award. Great caution must be exercised in attempting to rely upon the conduct of parties to an award or agreement as an aid in the interpretation of that award or agreement. Plainly, conduct subsequent to the making of an award or agreement is inadmissible as an aid to interpretation. See Seamen's Union of Australia v Adelaide Steamship Co Ltd (1976) 46 FLR 444 at 445 and Printing & Kindred Industries Union & Anor v Davies Bros Ltd (1986) 18 IR 444 at 452. Only if it can be shown that there is a history of the use of a particular term with a particular meaning, sufficient to demonstrate a common understanding between or among the parties to an award or agreement that the term has that meaning, is there any possibility that the conduct of the parties can be relied on. The evidence in the present case goes nowhere near establishing such a common understanding. It would be necessary to show that the word "service" had been used in the same context in a previous Award or agreement, now superseded by the Award, and for there to be clear evidence that both the applicant and the first respondent understood the word to have a particular restricted meaning in that context. There is no evidence of either of these kinds in the present case. Such evidence as there is about custom and practice in the appointment by the first respondent by employees to classifications seems to indicate that there is a recognition that it is not always possible, or advisable, to rely upon the experience levels specified in the definitions in cl 2.9 of the Award strictly. There have been cases of accelerated advancement, when there have been vacancies in positions requiring particular classifications, and shortages of employees with the length of experience designated for those classifications. There is evidence that the Union actively assisted in the promotion of one firefighter, who had emigrated from England, because of the high level of his skills as a result of his long service with a firefighting authority in England. Custom and practice provides no support for the proposition that the word "service" should be given a particular restricted meaning when it is used in cl 2.9 of the Award. Apart from the obvious requirement that the service contemplated by the use of the word "service" in the definitions of various classifications in cl 2.9 is to be service of a firefighting kind, there is no warrant for giving it any particular restricted meaning. Certainly, there is no warrant for giving the word "service" in that context a meaning restricted to a service in the employ of the first respondent, or service in employment the terms and conditions of which are regulated by the Award. The third major difficulty only confronts the applicant's case if it be assumed that the appointment of the second respondent to the classification of Leading Firefighter was in breach of the Award or the Certified Agreement. The difficulty is that of concluding that something done in breach of the relevant clauses of the Award and the Certified Agreement is to be treated as a nullity, in consequence of the breach. As I have said, none of the relevant provisions of the Award or the Certified Agreement appears to impose on the first respondent any obligation only to appoint to classifications persons with the required experience, much less any mandatory obligation. The question whether non-compliance with a statutory provision results in a particular act being treated as void no longer depends on the classification of the provision as mandatory or directory. Since Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1998) 194 CLR 355 at [91] - [94] , it has been recognised that it is necessary to gather from the statute, or statutory instrument, as a whole the intention that non-compliance should lead to invalidity, before a conclusion can be reached that a non-complying act is to be treated as void. It is certainly not the case that non-compliance with an award made under the WR Act would necessarily lead to the conclusion that an act was void. See Byrne v Australian Airlines Ltd [1995] HCA 24 ; (1995) 185 CLR 410 at 426-429 per Brennan CJ, Dawson, Toohey JJ and 453-457 per McHugh and Gummow JJ, and NTEIU v University of Wollongong [2002] FCA 31 at [38] - [39] . In the application of the approach favoured by Project Blue Sky , there are some guiding principles. One such guiding principle is that, where Parliament has chosen to make an act done in contravention of a statutory provision punishable by a specified penalty, it is unlikely that Parliament also intended other consequences, such as the invalidity of the act, to follow. See Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd [1978] HCA 42 ; (1978) 139 CLR 410 at 429 per Mason J, with whom Aickin J agreed. In the present context, Parliament has chosen in s 178 of the WR Act to enforce obligations in awards and certified agreements by means of the imposition of civil financial penalties. As a consequence, it is unlikely that it also intended that acts done in contravention of the provisions of awards and certified agreements should be treated as void. To the extent (if any) to which the particular terms of an award or a certified agreement might disclose an intention that contravention is to lead to invalidity, they certainly do not do so in the present case. It would be extremely difficult to argue that a failure to observe strictly the elements of a definition, in the appointment of a person to a particular classification, would result in the invalidity of that appointment. As I have said, only if the appointment of the second respondent as a Leading Firefighter were to be regarded as invalid would it follow that there were contraventions of any of the relevant clauses of the Certified Agreement. It has not been able to establish that the appointment of the second respondent as a Leading Firefighter involved a breach of either the Award or the Certified Agreement. Even if there were breaches, they would not lead to invalidity of the appointment, and much of the applicant's case would fall for that reason. The application must be dismissed. As the proceeding falls within what was formerly s 347 of the WR Act (see now s 824), and the proceeding cannot be said to have been instituted vexatiously or without reasonable cause, no question of an order for costs can arise. | award certified agreement interpretation whether appointment of person employed as instructor to rank of leading firefighter was in breach of term of award or certified agreement power to appoint found in state act whether award or certified agreement restricted or regulated that power whether specification of a period of "service" in definition of classification related only to service with particular employer, or with employer bound by award whether definition prohibited appointment of person without specified length of service to classification whether matrix of facts surrounding making of award and certified agreement, or custom and practice, gave "service" a meaning other than its ordinary meaning whether act done in contravention of term of award or certified agreement void or ineffective " service" industrial relations words and phrases |
The cargo was containerised. Transhipment took place in Hong Kong. The claim was in contract, breach of duty, including bailment and negligence and was one contemplated by the Admiralty Act 1988 (Cth), ss 4(3)(d)(e) and (f) and 9 (1). 2 It is not uncommon for small claims of this character to be brought in the Federal Court. Until recently, the Federal Magistrates Court had no in personam jurisdiction under the Admiralty Act . Therefore, there was no lower federal court with a lower fee structure in which parties could bring small cargo claims. Many parties therefore have historically brought such small claims in this Court, which operates a National Arrangement of nominated Admiralty and maritime Judges in each Registry. The Federal Magistrates Court since 2006 has had in personam jurisdiction under the Admiralty Act : see Jurisdiction of the Federal Magistrates Court Legislation Amendment Act 2006 (Cth). There are identified Federal Magistrates who deal with these kinds of proceedings. Both Courts are supported by a common group of nominated Registrars who assist with case management, mediation and other assisted dispute resolution ("ADR") of these kinds of matters. 3 Notwithstanding the facilities of both Courts to provide an integrated maritime dispute resolution capacity (court and ADR), significant difficulties stand in the way of plaintiffs in cargo claims (small and large). Australia is geographically distant from many parts of the world; transhipment often takes place in Europe or Asia for cargo (particularly containerised cargo) coming to Australia; the conduct of carriage by sea (leaving to one side additional difficulties existing in multi-modal transport) often involves multiple unrelated parties operating both sequentially and contemporaneously in the transport chain; documentation is often less than precise, sometimes opaque, as to fundamental questions such as who is the party to the contract; parties are often foreign with no place of business in Australia (sometimes necessitating the expense and delay involved in applications for service out of the jurisdiction); and the difficulty often encountered (in particular with containerised cargo) of identifying where and how damage occurred. 4 A further feature attending many cargo claims which exacerbates the above factors is that many individual claims are small. This is merely a reflection of the reality of carriage of general cargo, whether in containers or not. Nevertheless, the totality of all small claims to any particular cargo insurer's "book" may be considerable. 5 This Court and the Federal Magistrates Court have attempted to provide a forum equipped with specialised skill at all levels to deal with maritime claims, small, medium and large. Nevertheless, the reality is that sometimes parties must assess or re-assess actions to be brought or brought by reference not only to the commercial exigencies, but also the reality of the need in any forum, arbitral, curial or conciliatory, for proof of the claim. It is a rule common to most civilised legal systems that (subject to specific rules for specific reasons) ordinarily a party has the burden to prove all the material facts that are the basis of that party's case: see for example the ALI/UNIDROIT Principles of Transnational Civil Procedure adopted by the American Law Institute in May 2004 and by UNIDROIT in April 2004, Principle 21. 6 The international conventions that govern the carriage of goods by sea using bills of lading and similar documents in non-charterparty carriage deal variously with onus or burden of proof. The issues that can be raised in respect of the respective and related operation of Articles 3 and 4 of the Hague Rules and the Hague-Visby Rules are not straightforward (despite the passage of over 80 years from the conferences at London, The Hague and Brussels) and not finally settled: cf Shipping Corporation of India Ltd v Gamlen Chemical Co (A/Asia) Pty Ltd [1980] HCA 51 ; (1980) 147 CLR 142, Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad [1998] HCA 65 ; (1999) 196 CLR 161 and Davies M and Dickey A, Shipping Law (Lawbook Co, 2004) at 212-213 . The Hamburg Rules in Article 5 sought to remove the complexities of this onus question by substantially shifting the onus to the carrier. These rules have not received universal acclaim. With the exception of some aspects borrowed from them, they do not form the basis of Australian, Hong Kong or Chinese law, which were the alternatives governing this carriage. 7 The plaintiffs faced most, if not all, of these problems here. The container was loaded inland, carried by road to the port of loading, loaded, transhipped, carried to Sydney, unloaded and transported to the carrier's premises, stored there and, finally, transported to the consignee. The cargo was broken, cracked, chipped and scratched. Given that there is no suggestion that the container was opened after sealing until delivery to the plaintiff consignee, the plaintiff was faced with proving damage as the responsibility of someone in the carriage chain. The bill of lading was "clean", but by reason of the containerisation and the inability to inspect the cargo, only raised a presumption about the container, not its contents. The plaintiffs sued those seen to be responsible for the two legs of the sea-carriage (the first to fifth defendants), the freight forwarder (the sixth defendant ("Transtar")) and the transport company (who had been retained by Transtar) that delivered the cargo to the consignee after out-turn (the seventh defendant ("Bowport")). 8 In July 2006 the plaintiffs discontinued against Transtar. 9 The proceeding eventually settled in March 2007 in the circumstances that I will describe. It was put to me in submissions that "all parties have agreed that the proceedings should be discontinued for commercial reasons. " In a case management conference on 28 February 2007 conducted by me it was clear that the defendants were prepared to go to trial on the papers, but would make no admission about the state of the cargo (within the container) at the point of delivery to the sea carrier in China. Thus, the plaintiffs were faced with the likely need for evidence to prove the adequate packing of the cargo in the container and the safe transport of the container to the port of loading. 10 In the end, in March 2007, after negotiations, all parties withdrew without dispute, except Bowport, which was content for a discontinuance to occur against it, but wanted an order for costs, and on an indemnity basis. 11 It is necessary to examine the facts in some further detail. The carriage of the cargo from Port Botany to the first plaintiff's warehouse in Padstow was the responsibility of Transtar, which subcontracted the performance of that service to Bowport. Bowport collected the container on 8 July 2005, from Port Botany, stored it at its premises in Minto until 20 July 2005 and, on that date, delivered the container to the first plaintiff's warehouse in Padstow. There the container was opened and the cargo found to be damaged. 12 After the commencement of the proceedings, Piper Alderman ("PA") received instructions to act, and, later, filed an appearance on behalf of Bowport. 13 On 27 April 2006, Ms Lazarou of PA told Mr Keane, the solicitor then handling the matter for the plaintiffs' solicitors, Norman Waterhouse ("NW") that Bowport had told her that all their documentation had been sent to Transtar. 14 On 3 May 2006, PA wrote to NW asserting the benefit of a wide exclusion clause defence derived from Bowport's standard conditions and providing some evidence of the regularity of the incorporation of that exclusion in contracts with Transtar . 15 On 15 May 2006, Mr Keane of NW had a brief conversation with Ms Kean from PA who was handling the file during Ms Lazarou's absence. He gave an intimation that the plaintiffs might discontinue against Bowport. Nothing turns on this conversation. It reflects a commendable frankness of Mr Keane and an ease of communication which was plainly not intended to prejudice his client and should not be taken as having done so. 16 On 8 June 2006, PA sent a letter to NW offering to allow the plaintiffs to discontinue before Bowport filed an appearance and a defence. The assertion of lack of liability was based on the exclusion clause being incorporated into the contract between Bowport and Transtar . No explanation was given as to how this defeated any claim against Bowport in bailment by the plaintiffs. Nor was any evidence offered as to why it could be inferred that damage did not occur while the goods were in its custody or, if it did, why Bowport was not negligent. 17 On 27 June 2006, PA sent to NW its defence, an offer of compromise (open for 14 days) and various documents. In the defence, Bowport pleaded the exclusion in the contract with Transtar; in the alternative it pleaded that it had a contract with the first plaintiff (based on their prior course of dealing) that included the exclusion; it admitted that it was a bailee, but on terms that included the exclusion; and it denied any negligence. The offer of compromise was that the proceeding be dismissed with no order as to costs. The documents that were enclosed comprised copies of Bowport's standard delivery docket with standard conditions on the reverse, a schedule of "contracts of carriage undertaken by Bowport for WK Marble" from 9 March 2005 to 29 July 2005 (a statement was contained in the enclosed letter that "Bowport has been carrying WK Marble's good (sic) for at least 5 years prior to this incident"), the delivery receipt of the delivery in question, a sales invoice to Transtar and remittance advice for payment from Transtar. 18 It is unnecessary to descend into the detail of contending arguments as to what these documents showed. It can be concluded, however, that they did not prove with any clarity or certainty that the exclusion clause in Transtar's terms and conditions protected Bowport against the claim of the plaintiff. 19 During the second half of 2006, directions were made, though it can be said that there was a certain "drift" in compliance. Though notices for discovery were given to some defendants, none was given to Bowport. In December 2006, I made orders preparatory to sending the matter to mediation. 20 On 3 January 2007, a letter (marked without prejudice except as to costs) containing an offer was sent by PA to NW. The offer was joint, from the first, third, fourth and seventh defendants. No such evidence has been forthcoming to date. In addition, even the Applicants' surveyor was not able to attribute a precise cause of the damage and indicated that he was only able to "put forward theories". It seems that the consignment suffered damage due to the inherent vice of the cargo itself. We remind you that the onus rests with the Applicants to prove their case against each of the Respondents, which, at best, seems unlikely. They have a contractual defence to the claim, either because the WK Marble has signed Bowport's delivery dockets for the past 5 years and would have had notice of the existence of their Conditions of Cartage; or in the alternative, the invoices are sent to Transtar, with a copy of the Conditions of Cartage included. Consequently, we will be unable to have all our formal evidence in Chief served by tomorrow. We, therefore, seek consent of the parties to have the mediation heard on the papers without formal evidence being served at this stage. Most of our documentation, including survey reports(s), has been informally served already. This would not be in any parties' interest. In accordance with the recent practice note on the conduct of small cargo claims, we ask that the strict requirement to serve Evidence in Chief from China be dispensed with and a mediation be heard on the papers only. We undertake to obtain such an order by Consent through his Honour's Associate if you agree to this. 24 On 20 February 2007, the first, third, fourth and seventh defendants again offered a discontinuance without costs. The letter also contained a detailed and lucid exposition of the difficulties of the plaintiffs against the parties joining in the letter, which reflected those defendants' position that there was no evidence showing where the damage occurred, but that there was some expert evidence that the cargo was inadequately packed. The offer was open for seven days. It was later agreed to be extended for seven more days, though this extension was later still revoked and limited to the time of the commencement of a case management conference before me at 10.30 am on 28 February 2007. 25 That case management conference took place. Though I was not (naturally) shown the settlement correspondence, the positions of the parties exhibited at the conference are reflected in the correspondence. The defendants asserted that the plaintiffs had not produced evidence sufficient to discharge any onus about the state of the cargo or adequacy of packing. The possibility of a trial "on the papers" without evidence from witnesses resident in China was broached. 26 At this conference the plaintiffs sought further orders for documents, this time against Transtar (by subpoena) and Bowport (by verified discovery). 27 On 7 March 2007, Transtar produced various documents on subpoena. On the same day, PA sent a letter to NW. This letter described in detail what the lately issued subpoena and verified discovery had turned up. A copy of Transtar's terms and conditions. This documentation appeared to make, whatever the position was on the merits of the case, the plaintiffs' position against Bowport difficult to say the least, if not impossible. This letter still offered discontinuance, but now costs were sought. At least one of the documents came from the first plaintiff (consignee) itself. 29 The fact that one of these documents (and a crucial one) came from the consignee plaintiff might in some circumstances be critical. It is certainly important. I would infer that this reflects one aspect of the difficulties of subrogated litigation. But I set that aside and take into account that the consignee plaintiff should have provided all this information to its solicitors earlier and then permitted NW to assess the position of the plaintiffs on this basis. 32 After a decision was made to settle the case by way of discontinuance, it appears from the evidence of Mr Harb that negotiations took place between PA and NW as to Bowport's costs. The plaintiffs offered Bowport $2,000; this was increased to $3,400; this was increased $3,800. Bowport rejected these offers and asked for $4,800. Somewhat surprisingly, these negotiations failed ($1,000 apart). The parties then prepared and undertook an argument before me with written submissions, oral argument and affidavit material prepared for the argument. Counsel appeared on the argument. 33 There is force in the proposition of the plaintiffs that in circumstances such as these where the parties have argued to abandon the litigation because of the disproportionate burden of costs, the Court should be slow to order costs against the plaintiff: cf JJ Stratford & Son Ltd v Lindley (No 2) [1969] 1 WLR 1547 at 1553-54 and Australian Securities Commission v Aust-Home Investments Limited (1993) 116 ALR 523 at 530. Relevant of course is the default such that the party who discontinues often pays costs: O'Neill v Mann [2000] FCA 1650 at [13] . It is appropriate, however, to look at the whole of the circumstances including the kinds of considerations to which I earlier referred, the reasonableness and efficiency of the conduct of the proceedings by all parties, the extent to which parties who were asserting that they were not liable frankly informed the plaintiff with substantiating material of their position, and the contemporaneous views of the commercial parties as to an appropriate course. 34 Taking into account all the circumstances, I propose to exercise my discretion in accordance, in substance, with the contemporaneous and fully informed views of the parties in late 2006 and 2007. From 7 March 2007, it was tolerably clear that the plaintiffs had more than commercial difficulties against Bowport. 35 All the other defendants have been reconciled in some form to the discontinuance. Bowport was prepared to settle for $4,800 costs. The offer of $3,800 was reasonable. Not to settle as between $3,800 and $4,800 reflected, in my respectful view a failure of commercial judgment of the parties. This matter should not have gone to a hearing on costs. 36 I am not prepared to award indemnity costs. I am not prepared to award costs for the whole proceeding. I am entitled in commercial litigation such as this to deal with costs on a reasonable commonsense basis reflective of good sense amongst well-advised commercial parties. Until February 2007, the defendants, including Bowport, were prepared to settle without payment of costs. Bowport thereafter was prepared to take $4,800. Notwithstanding any deficiency in the plaintiff consignee in preparing its case, I propose to give real weight to how the parties approached the commercial settlement. 37 In coming to my conclusions, I have had careful regard to all the arguments put to me. I do not consider it necessary to lengthen these reasons with a discussion of other cases on costs. In a commercial jurisdiction such as this, the Court expects all parties to be reasonable and co-operative, both in the manner of conduct of the case and in any attempt to settle it. To a degree that occurred here. There was a certain thinness of evidence against Bowport, but a view was taken to join the whole transport chain. That had its risks. Nevertheless it was not an abuse and was not said to be. 38 I give weight to the failure of the consignee plaintiff adequately to assess the documents in its own possession. That is important. It should have done so. To the extent that a paid out insured might be responsible for that it may be responsible to its insurer. That is another issue. 39 It is fair, I think, to make the plaintiffs pay the costs from 28 February 2007. The costs discussed in March reflected that. The parties should have settled; to do so for the kinds of figures discussed in March would have reflected the hard fought, but ultimately reasonable, way in which the case had been approached by all parties. Not having settled on those figures was, in my respectful view, a failure of judgement of the parties for which they should jointly pay by bearing their own costs of the costs argument. To the extent that the plaintiffs need leave to discontinue against the seventh defendant such leave be granted. 2. Subject to order 3, the plaintiffs pay the costs of the seventh defendant on a party-party basis from and including 28 February 2007. 3. The parties bear their own costs of the argument as to costs and the preparation therefor. | practice and procedure discontinuance of small claim approach to costs. admiralty and maritime |
The appeal was heard by a single judge pursuant to a direction by the Chief Justice under s 25(1A) of the Federal Court of Australia Act 1976 (Cth). He arrived in Australia on 22 July 1998 as a holder of a Student (Temporary) (Class TU) visa, subclass 560. The appellant was enrolled in an Advanced Diploma of Computer Science at RMIT University ('RMIT') from July 1998. 3 The appellant's subclass 560 visa was valid until 15 August 2000. On that date, the appellant was granted a further subclass 560 visa which remained valid until 15 March 2002. On 15 March 2002, the appellant lodged an application for a Student (Temporary) (Class TU) visa, subclass 572. 4 The relevant legislative provisions for the subclass 572 visa can be briefly stated. The requirements for grant of a Student (Temporary) (Class TU) visa, subclass 572, are set out in Sch 2 of the Migration Regulations 1994 (Cth) ('the Regulations'). Clause 572.212 requires that if the application for a visa is made in Australia, the applicant must have complied substantially with the conditions to which the visa (if any) held, or last held, by the applicant is, or was, subject. Clause 572.226 requires that if the application was made in Australia, the visa applicant must continue to satisfy the criterion in cl 572.212. 5 At the time of his application, the last visa held by the appellant was a subclass 560 visa, which was valid for the period 15 August 2000 to 15 March 2002. It was a requirement of that visa that the appellant complied with condition 8202 under Sch 8 of the Regulations. The Tribunal heard the application on 23 June 2003. The appellant attended the hearing and gave oral evidence. 8 The Tribunal had before it a transcript of the appellant's academic results covering the periods from 1 February 2000 to 30 November 2000 and from 5 February 2001 to 30 November 2001, together with confirmation of his continued enrolment in 2002, which the appellant had submitted for the purposes of his visa application. The Tribunal found that the appellant achieved the following results. During that year, his academic results were very poor. Given more time, it might be possible for me to unearth [the appellant's] attendance records for 2000. Whilst he passed a number of courses in the program during 2001, overall his academic results remained well short of satisfactory. Our attendance records for [the appellant] for 2001 indicate that his attendance that year was unsatisfactory (significantly less than 80%). During this period, our records indicate that both his academic results and also his attendance at classes (approx 80%) were satisfactory. The appellant responded on 25 February 2003, stating that he believed RMIT's records was wrong in relation to his academic results because of problems with the university's new software. The appellant also claimed that some of his results may be missing. He informed the Tribunal that he believed he could obtain exemptions from many of the subjects which RMIT's records show him to have failed and that he was awaiting his original student results to be sent from Pakistan. The appellant requested an extension of time to be able to show the Tribunal that he had complied with his visa conditions. The Tribunal granted an extension of time until 3 April 2003 to provide further information and comments. The appellant did not do so. 11 The appellant applied for an adjournment of the Tribunal hearing due to ill health, and the hearing was consequently rescheduled for 17 June 2003. The appellant did not attend on that day but agreed to attend a hearing on 23 June 2003. 12 At the Tribunal hearing, the appellant lodged nine laminated documents which appeared to the Tribunal member to be upgraded RMIT Transcripts of Results. The appellant also lodged a letter dated 16 May 2003 purporting to be signed by Mr McCann of RMIT, which stated that the appellant's results for 2000 and 2001 are now found to be satisfactory, and two medical certificates purporting to be from the Royal Melbourne Hospital for the periods 30 July 2001 to 16 August 2001 and for 17 days from 17 July 2001. The Tribunal member perused these documents and found several indications that none of the documents were genuine. The appellant subsequently admitted that he had forged all the documents, although he contended that a friend had forged Mr McCann's signature on the letter. 13 In relation to the appellant's academic results, the Tribunal found that in Semester 2, 2000, the appellant passed no subjects and that during the 2001 academic year the appellant achieved a total of seven passes/exemptions out of the 17 subjects that he undertook (having withdrawn from 22). The Tribunal found that the appellant's education provider did not certify that the appellant had achieved an academic result that was at least satisfactory. 14 In relation to the appellant's attendance, the Tribunal did not make a finding as to the appellant's compliance with condition 8202. The Tribunal stated that RMIT did not provide the Tribunal with exact figures for the appellant's attendance throughout the relevant period, however the Tribunal noted that it was clear that the appellant's attendance was poor. 15 The Tribunal took into account that strict compliance with cls 572.212 and 572.226 is not required and that substantial compliance is sufficient to meet the criteria: Baidakova v Minister for Immigration and Multicultural Affairs [1998] FCA 1436 (' Baidakova' ). The Tribunal considered whether there were any circumstances beyond the control of the appellant, such as absence or failure due to illness, and whether the appellant was able to provide evidence in support of these circumstances. This accorded with the guidelines in the Department of Immigration and Multicultural and Indigenous Affairs' Procedures Advice Manual. In the Tribunal's view, the appellant had failed to provide any genuine information of such circumstances beyond his control, or any genuine information regarding his unsatisfactory academic results or attendance. Rather, the Tribunal found that the appellant had presented and relied upon forged documents to explain or excuse his breach of condition 8202. The Tribunal also noted that the appellant's breach was significant. 16 On the basis of the relevant material before it and applying the test in Baidakova , the Tribunal found that at the time of his application, the appellant had not complied substantially with the conditions of his Student (Temporary) (Class TU) visa, subclass 560, during the period 15 August 2000 to 15 March 2002. Therefore the Tribunal determined that the appellant failed to meet the requirements of cl 572.212 and affirmed the delegate's decision not to grant a subclass 572 visa. The application was dismissed by Hartnett FM on 17 August 2005. His Honour found that the Tribunal's reasons disclosed no error or law or principle and that there had been no breach of natural justice or unfairness in relation to the way in which the Tribunal had conducted its proceedings. 18 In the Federal Magistrates Court, the appellant contended that the Tribunal had ignored a relevant consideration, being the alleged practice that RMIT provided results without commenting upon whether they were satisfactory or not. She said that the Tribunal will need to work this out from his results. The applicant's Head of Department sent the Tribunal a facsimile on 13 December 2002, describing the academic results as "very poor" and "well short of satisfactory" for 2001. That is not what the Tribunal did. It found that RMIT had not certified the results to be at least satisfactory. There was no certificate provided and nor should there have been such a certificate based on the applicant's academic results. The Tribunal gave the appellant an opportunity to submit further information and comments in relation to these matters. In the circumstances, Hartnett FM was not persuaded that there had been any breach of natural justice or unfairness in relation to the way the Tribunal conducted its proceedings. The powers of the appellate court are to be exercised only where the appellant can demonstrate, having regard to all the evidence before the appellate court, that the order that is the subject of appeal is the result of some legal, factual or discretionary error: Abeyesinghe v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1558 at [4] . 22 On appeal, the appellant alleged a number of jurisdictional errors based on the purported practice of RMIT not to comment on whether results were satisfactory or not. The appellant contended that the Tribunal had been informed that RMIT had a policy of providing academic results without comment as to whether those results were satisfactory or not. In light of that policy, the appellant submitted that strict compliance with condition 8202 was not possible and it was open to the Tribunal to make its own finding as to whether the appellant had achieved substantial compliance with condition 8202: Gurung v Minister for Immigration & Multicultural and Indigenous Affairs [2002] FCA 772 (' Gurung '). The appellant submitted that the Tribunal did not properly make its own finding about whether the appellant's results were satisfactory, but rather relied on the opinions of RMIT staff whose statements about the appellant's academic performance were contrary to RMIT's established procedures. 23 These circumstances were said by the appellant to give rise to jurisdictional error on two bases. First, the appellant submitted that the Tribunal had relied upon opinions expressed by staff members of RMIT as to whether or not the appellant's results in the years 2000 and 2001 were or were not satisfactory, knowing that the giving of such opinions was contrary to RMIT's established procedure. This was said to be a jurisdictional error in several ways, including denial of procedural fairness and reliance upon irrelevant material. 24 There is no substance in these contentions, essentially for the reasons given by Hartnett FM. The basis for the contention that RMIT had an established procedure of not expressing opinions as to whether or not results were satisfactory seems to be flimsy, to say the least. It appears to be based entirely upon a telephone conversation between a Tribunal officer and an international student officer at RMIT. The suggestion is not consistent with formal advices sent to the Tribunal by the head of the relevant department at RMIT. But in any event, whatever the practice of RMIT might be, condition 8202 requires that the visa holder achieve an academic result that is certified by the education provider to be at least satisfactory. There was no such certificate. 25 The second alleged jurisdictional error is said to be based upon a misapplication of Gurung . In the present case there was no such certification and in making its finding, the Tribunal has not usurped or encroached upon the province of the educational institution. On its face, it was clearly open for the Tribunal to make a finding that the academic performance of the applicant was not satisfactory having regard to his high failure rate. Counsel asserted that in 2001 the appellant passed five out of the six subjects for which he sat, which was said to be a failure rate of 16.6 per cent. Counsel then submitted that this failure rate was better than the appellant's failure rate in the first semester of 2002 (26.3 per cent), for which period RMIT certified that the appellant had achieved a satisfactory result. On the basis of these calculations, it was submitted that RMIT's statements concerning the appellant's academic results were internally inconsistent, and that the Tribunal had misdirected itself by relying on those statements. 27 The factual basis for these submissions appears to be entirely misconceived. The failure rates calculated by counsel ignore the subjects where the appellant did not sit the examination, but did not withdraw. As the Tribunal rightly found, these subjects must be taken into account in considering whether the appellant achieved a satisfactory result. The Tribunal correctly found that the appellant only achieved seven passes/exemptions out of the 17 subjects that he undertook during the 2001 academic year. Those 17 subjects comprised the five passed, one failed, nine for which the appellant did not sit, and two exemptions. 28 The next step in the appellant's submissions is also misconceived. Counsel for the appellant contended that in considering the question whether there had been substantial compliance with condition 8202, the decision in Gurung requires that the Tribunal confine itself to an examination of the appellant's academic results rather than an assessment of the appellant's academic progress. In my opinion, this is a misreading of Gurung : Tamberlin J in that case held that it was open to the Tribunal to find that the applicant had not substantially complied with condition 8202, having regard to the applicant's high failure rate. His Honour did not suggest that the Tribunal must have regard solely to the applicant's failure rate, expressed as a percentage of the number of subjects for which the appellant sat, in assessing whether there has been substantial compliance with condition 8202: see Kim v Witton (1995) 59 FCR 258. RMIT did not certify that the appellant's results were at least satisfactory. As Hartnett FM stated, there was no certificate provided and nor should there have been having regard to the evidence of the appellant's academic results. There was ample evidence of the appellant's poor academic performance in the present case, and of RMIT's opinion that the appellant's results were unsatisfactory. 29 In my view, it was clearly open to the Tribunal to find that the appellant failed to substantially comply with condition 8202 during the relevant period. The Tribunal did not misdirect itself, and there is no error disclosed in Hartnett FM's acceptance of the Tribunal's findings. 30 I also agree with the reasons of Hartnett FM that there is no evidence that the appellant has been denied natural justice. The appellant was informed by the Tribunal that RMIT had indicated that his academic results and attendance were not satisfactory during the relevant period and he was given an opportunity to comment or provide further information to support his application. The appellant did not avail himself of that opportunity but instead attempted to rely on forged documents at the Tribunal hearing. In my view, the Tribunal conducted its proceedings appropriately and fairly. 31 I order that the appeal be dismissed with costs. | appeal from decision of federal magistrate student (temporary) (class tu) visa whether appellant failed to comply with condition 8202 where academic results not certified by education provider to be at least satisfactory whether substantial compliance no appellable error no denial of natural justice migration |
He has been receiving disability support pension since 24 December 1998. When he first received the disability support pension, he was to receive it for a lifetime. On 13 February 2003 he left Australia to live permanently with his parents in Macedonia. 2 In 2004 he decided to visit Australia for a short period. The length of time that most Australian payments, including Disability Support Pensions, can be paid whilst overseas will be shortened to 13 weeks. However, there are some exceptions to this, including if you go to a country with which Australia has an international social security agreement. In reliance on that advice, the appellant returned to Australia on 22 June 2004 not intending to live in Australia permanently. In September 2004, the appellant advised Centrelink of his intention to return to Macedonia and was told that his disability support pension would cease after 13 weeks. 4 On 7 January 2005 a Centrelink officer made a decision that the appellant would not be paid his disability support pension for more than 13 weeks if he left Australia. On 4 March 2005, an authorised review officer affirmed the decision. On 9 March 2005, the appellant appealed against that decision to the Social Security Appeals Tribunal ('SSAT') and on 5 April 2005, the SSAT affirmed the decision under review. 5 The appellant then appealed to the Administrative Appeals Tribunal ('the Tribunal') and by decision dated 12 December 2005 the Tribunal affirmed the decision under review. The appellant now appeals from the decision of the Tribunal. New legislation regarding the portability of payments was introduced by the Family and Community Services and Veterans' Affairs Legislation Amendment (2003 Budget and Other Measures) Act 2003 (Cth) amending, amongst other things, Division 2 of the Act. The first is whether the advice given by the Centrelink officer on 19 April 2004 was incorrect, and if so, given that the appellant relied on it in returning to Australia, whether the respondent is now estopped from refusing to determine that the appellant's maximum portability period for disability support pension is an unlimited period. 10 The second issue is a matter of statutory interpretation of cl 135 sch 1A of the Act. It is not in issue that s 1217 limits the portability period of the appellant's pension payment to 13 weeks. Furthermore, there is no doubt that s 1218AA does not apply to the appellant as the criteria in s 1218AA(1)(c) is not satisfied. The issue is whether the savings provision in cl 135 sch 1A to the Act applies to the appellant in the circumstances, in particular the meaning to be given to the words 'absent' and 'absence'. The Tribunal takes the view that Mr Rajcinoski's telephone contact with Centrelink on 19 April 2004, in which he queried the portability arrangements, was in response to that letter. Centrelink's record of the telephone conversation: "Advised customer that as long as he does not return to Australia to live new rules will not apply to him". In the context of providing information to a person who is already out of Australia, it is reasonable to conclude that the Centrelink officer may, in effect, have been advising Mr Rajcinoski not to return to Australia before 1 July 2004; particularly as the telephone enquiry seems to have been made in general terms, rather than a request for specific information about the applicant's situation. The Tribunal notes that Mr Rajcinoski did not contact Centrelink on his arrival in Australia or before 1 July 2004 to seek clarification of the new rules or the contents of the letter dated 5 April 2004. I do not find any error (of law or otherwise) in those two paragraphs. Having regard to the sequence of events described, namely, the appellant's receipt of the letter and the subsequent telephone conversation and the nature of the telephone inquiry, it seems to me that the conclusions reached by the Tribunal were correct. It may well be that the appellant misunderstood the terms of the information, and upon the basis of the communication did act in returning to Australia before 1 July 2004. Later on in its reasons, the Tribunal accepted that had the appellant realised that if he came back to Australia and was not absent on 1 July 2004, there would be a limitation of his disability support pension, he would not have returned to Australia on 22 June 2004. However, this does not mean the advice was incorrect, just that it may have been misunderstood, and upon that basis, it was acted upon. In any event, paragraphs [8] and [9] represent findings of fact of the Tribunal and are not reviewable by this Court (see s 44 of the Administrative Appeals Tribunal Act 1975 (Cth)). Even if the findings of fact were erroneous, it would not constitute an error of law: see Waterford v Commonwealth [1987] HCA 25 ; (1987) 163 CLR 54 at 77 per Brennan J. 13 The appellant contends that the respondent is now estopped from not exercising the discretion found in cl 135 in his favour. If I am wrong and the advice given to the appellant was incorrect, the respondent is not estopped from refusing to determine that the appellant's maximum portability period for disability support pension is for an unlimited period, where the Act now limits the portability period for disability support pension to 13 weeks. 14 Putting aside the question of whether the advice given to the appellant was not sufficiently clear and unambiguous so as to be capable of giving rise to an estoppel (see Minister for Immigration and Ethnic Affairs v Kurtovic (1990) 21 FCR 193 at 196, 200 and 207-8 (' Kurtovic ')) in my view, no estoppel can arise when the provisions of the Act are mandatory (see discussion in Kurtovic at 208-10 per Gummow J; Theo v Department of Family and Community Services [2005] FCAFC 239 at [20] per Kiefel, Jacobson and Greenwood JJ; Minister for Immigration and Ethnic Affairs v Polat (1995) 57 FCR 98 at 104-7 per Davies and Branson JJ ( 'Polat') ; and Formosa v Department of Social Security (1988) 46 FCR 117 at 125 per Davies and Gummow JJ). 15 Kurtovic was not a case where a party asserted that the public authority was estopped from asserting that a particular action, of which the other party sought performance, would be ultra vires as exceeding the powers given by or pursuant to a law of the Parliament. In my view, the authorities clearly provide that the doctrine of estoppel cannot be called on to aid the appellant in this case. 17 Any suggested exceptions or qualifications to the general rejection of estoppel in public law (see Kurtovic at 213 per Gummow J) have no application to the present case. Further, this is not a case dealing with the exercise of a statutory discretion that is capable of being exercised in favour of the appellant and certainly not at an operational level. It is true that cl 135(1) of sch 1A to the Act gives the respondent discretion to extend a person's maximum portability period, but the respondent can only exercise it in favour of a person who satisfies the criteria set out in subclauses (a), (b) and (c). 18 It was further argued by the appellant that the provision of incorrect advice involves a breach of duty on the part of the respondent. I do not accept that the findings of the Tribunal establish any such breach of duty, but any such breach would, in any event, not constitute an error of law such as to enable me to grant the relief sought in this proceeding ( Apthorpe v Repatriation Commission (1987) 77 ALR 42 at 52-3 per Davies, Lockhart and Gummow JJ; Polat at 103-4 per Davies and Branson JJ. 19 It was also argued that the words 'absent' and 'absence' in cl 135(1) sch 1A to the Act should be read in the context of the Act as a whole and should be interpreted as more than just not physically present. It was submitted that I should adopt a purposive approach to interpreting the legislation and take into account that if one construction will manifestly work an injustice and the other avoid it, the latter construction should be adopted. It was submitted that the appellant was absent from Australia in that while physically present, he was not a resident of Australia. Reference was made to Re Alderson; ex parte Jackson [1895] 1 QB 183, where Vaughan Williams J held that in order to come within s 4 of the Bankruptcy Act 1883, which constituted an act of bankruptcy where a debtor with certain intent 'absents himself' a debtor need not absent himself from any particular place by physical bodily absence. 20 In the context of the Act I am unable to accept that the word 'absent' or 'absence' has any other meaning than its ordinary meaning as found in the dictionary, namely: 'away, not present' ( Shorter Oxford English Dictionary ); 'being away: not present' ( Chambers English Dictionary ); and 'not in a certain place at a given time' ( Macquarie Dictionary ). It is clear that in the case of the appellant, he was not absent from Australia on, relevantly, 1 July 2004. 21 Reliance was placed by the appellant upon the second reading speech of the Family and Community Services and Veterans' Affairs Legislation Amendment (2003 Budget and Other Measures) Bill 2003 (Cth) ('the Bill'). In my view, the provisions of the Act are clear and unambiguous. Extrinsic material cannot be used to contradict the meaning of the legislation itself: see Deputy Commissioner of Taxation v Roger Crook & Associates Pty Ltd [2005] FCA 450 ; (2005) 142 FCR 273 at 277-8. In any event, nothing in the second reading speech deals specifically with the issue for determination here, particularly the requirement that as at 1 July 2004, the person is absent from Australia. | estoppel whether government department can be estopped from decision to limit portability of pension payments in accordance with legislation inapplicability of doctrine where statutory power is mandatory ordinary meaning extrinsic material cannot be used to contradict the meaning of the legislation administrative law statutory interpretation |
Jason Walter Bettles (of Worrells Solvency and Forensic Accountants, Level 6, 50 Cavill Avenue, Surfers Paradise in the State of Queensland) be appointed Receiver without security of that divisible property pending further or other order of this Honourable Court. In particular, Jason Walter Bettles is appointed Receiver without security of the Respondent's interest in land described as Lot 22 on SP 106487, County of Ward, Parish of Gilston, Title Reference 50262349 (46 Peach Drive, Robina in the State of Queensland) and Lot 21 on SP 406487, County of Ward, Parish of Gilston, Title Reference 50262348 (48 Peach Drive, Robina in the State of Queensland) (the "Respondent's Land") and the Receiver is entitled to lodge caveats with the Registrar of Titles over the titles of the Respondent's Land to protect and note the Receiver's interest in the Respondent's Land. There be served on the Respondent a sealed copy of these Interim Orders along with a copy of the Application and the Supporting Affidavits as soon as possible hereafter. Within 14 days of service of these Interim Orders (along with a copy of the Application and the Supporting Affidavits) and of notification to the Respondent by the Receiver of his appointment, the Respondent is to deliver to the Receiver a Statement of Affairs in respect of the Respondent's divisible property. The Respondent and any third party affected by this Order shall have liberty to apply on notice to the Applicant to discharge or vary this Order, or to seek directions hereunder. The Applicant's costs of and incidental to obtaining this Order be the Applicant's reserved costs. Further hearing in this matter be set down for.......................2009. The applicant deposes in an affidavit sworn 12 January 2009 that, following the presentation of a bankruptcy petition to the High Court of Justice of England and Wales and its service effected upon the respondent, the respondent was declared bankrupt at a hearing on 25 July 2008. The applicant deposes further (in summary) that: Annexed to the applicant's affidavit is a certified copy of a letter from a Registrar in Bankruptcy of the High Court of Justice in the United Kingdom reciting a number of facts also found in the applicant's affidavit, and requesting the assistance of the Court in relation to the application. Three additional affidavits have been filed supporting the application. They are: two affidavits sworn by Michael Anthony Coates, the solicitor of the applicant, on 21 January 2009 and 6 February 2009. Mr Coates has deposed, inter alia , that he has received instructions from the applicant (subsequent to the execution of the applicant's affidavit) seeking orders that Jason Walter Bettles of Worrells Solvency and Forensic Accountants, a registered trustee in Australia, be appointed interim receiver of the divisible property of the respondent situated in Australia; and an affidavit sworn by Jason Walter Bettles consenting to being appointed as a receiver of the divisible property of the respondent situated in Australia. At the hearing it became clear that orders sought by the applicant were pursuant to s 29 Bankruptcy Act 1966 (Cth). On the evidence before me a number of issues are clear. First, the respondent is a bankrupt in the United Kingdom pursuant to an order of the High Court of Justice of the United Kingdom. Second, the High Court of Justice is a court of a prescribed country for the purposes of s 29 Bankruptcy Act . Third, upon the commencement of the respondent's bankruptcy, the bankrupt's estate as defined in the Insolvency Act 1986 Act (UK) vested in the applicant immediately upon the appointment taking effect: s 306(1) Insolvency Act 1986 Act (UK). The bankrupt's property as defined by the Insolvency Act 1986 Act (UK) includes money, goods, things in action, land and every description of property wherever situated: s 436 Insolvency Act 1986 Act (UK). Real property of the respondent situated in Australia as described in the applicant's affidavit falls within this statutory definition and is potentially subject to the bankruptcy administration by the applicant. Fourth, prima facie there is evidence before me that the respondent has previously acted to the detriment of his creditors to dispose of property which was properly the subject of an insolvency administration. Fifth, although the orders made in respect of the respondent's property by the High Court of Justice in the United Kingdom are not recognised in this Court as operating as an assignment of the respondent's Australian lands ( Australian Mutual Provident Society v Gregory (1908) 5 CLR 615), the Court may act in aid of the foreign court under s 29 Bankruptcy Act to make property in Australia available to the trustee in bankruptcy to enable it to be realised for the benefit of the creditors in the foreign bankruptcy: Australian Mutual Provident Society v Gregory (1908) 5 CLR 615 at 623, 625, 628, 630; Radich v Bank of New Zealand [1993] FCA 450 ; (1993) 45 FCR 101 at 109, 115, 119; Dick as Trustee in Bankruptcy v McIntosh [2001] FCA 1008 at [7] . Indeed, s 29(1) requires this Court to give all assistance it can to a requesting Court if the conditions of the section are satisfied, leaving this Court with a discretion as to what assistance ought to be given (including discretion as to any conditions attach to the provision of assistance): Re Ayres; Ex parte Evans (1981) 51 FLR 395 at 405-407 esp at 407 per Lockhart J; Ayres v Evans (1981) 56 FLR 235 (FC) at 240, 247, 254-255; Radich v Bank of New Zealand at 105, 118; Dick as Trustee in Bankruptcy v McIntosh at [8]. Sixth, it is clear that under s 29 Bankruptcy Act the Court has power to appoint a receiver of the respondent's property in Australia in aid of the administration of the respondent's insolvent estate in the United Kingdom: Re Ayres; Ex parte Evans (1981) 51 FLR at 408-409; Ayres v Evans (1981) 56 FLR at 240, 247, 255; Radich v Bank of New Zealand at 121-122; Dick as Trustee in Bankruptcy v McIntosh at [19]. On the facts before me there is prima facie no inconsistency between s 29 and either the Model Law on Cross Border Insolvency or the Cross Border Insolvency Act 2008 (Cth) An order restraining a person from dealing with his or her own property is an extreme measure, particularly where the properties identified by the applicant are owned jointly with a third party, and the application is made ex parte . However in the circumstances I consider that: Were the respondent a bankrupt within the meaning of the Bankruptcy Act I consider that, on the evidence before me, the Court would have both jurisdiction and cause to make a freezing order to prevent frustration or abuse of the Court's process pursuant to O 25A Federal Court Rules . In my view, and in light of the facts and principles I have set out in this judgment, the Court has power pursuant to s 29 Bankruptcy Act to make the interim orders sought by the applicant, and should make those interim orders. In conclusion however, I understand that the original letter from the Registrar of the High Court of Justice in the United Kingdom requesting aid, a certified copy of which was annexed to the affidavit of the applicant, has not yet been produced to the District Registrar of Queensland Registry of the Federal Court. I am prepared for the purposes of today's application to make the orders sought on the basis of the certified copy of that letter, however I also direct the applicant's solicitors to ensure that letter be produced expeditiously and delivered to the District Registrar to whom it is addressed. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | bankruptcy act 1966 (cth) section 29 ex parte interlocutory application by trustee in bankruptcy appointed in united kingdom application to restrain bankrupt from disposing of or dealing with his divisible property in australia request from registrar of high court of justice of england and wales assets only partially owned by bankrupt appointment of receiver in australia bankruptcy and insolvency |
The remedies sought include declarations, injunctions and the imposition of pecuniary penalties. The respondents admit the contraventions alleged against them. They have joined with the ACCC in making submissions regarding the orders to be made. A thumbnail sketch of the facts is sufficient. WTT carries on business providing taxi-cab network services. It is the sole provider of taxi-cab network services in the Shepparton area. At relevant times 21 WTT taxi-cab operators were licensed under the Transport Act 1987 (Vic) to operate taxi-cabs in the Shepparton area. It was a condition of each license that the owner of the taxi-cab be a member of a network service. Hence each owner of each Shepparton taxi-cab became a member of WTT. The conduct said to contravene s 45(2) is the roster system established by WTT many years ago and implemented by the individual respondents. The roster system operated as follows. From time to time the directors of WTT published rosters that set out the shifts (including start and finish times) that each taxi-cab was to operate. The directors procured each operator to agree to operate his taxi-cab or cause his taxi-cab to be operated during the shifts allotted to their taxi-cab in the roster (roster-on provision) and would not operate his taxi-cab and cause their taxi-cab not to be operated during other times (roster-off provision). There were exceptions to this arrangement. Operators could be required to operate their taxi-cab or cause their taxi-cab to be operated at times outside their roster, to complete jobs commenced before the end of a shift allotted to their taxi-cab or to continue to operate in the operator's discretion for a period after the end of a shift allotted to their taxi-cab in the roster for so long as there were queues at taxi-cab ranks in Shepparton. The purpose of the roster-on provision was to ensure the presence of taxi-cabs available to supply taxi-cab services in the Shepparton area during times when WTT predicted there would be low demand and to distribute the burden of working at those times evenly in accordance with the roster, thereby attempting to share evenly between taxi-cab operators the burden of being available during those times over the period of the roster. The roster-on provision necessarily imposed a commercial and personal burden on each operator that complied with the provision in that the operator operated their taxi-cab at personally inconvenient hours of the day when there was low demand for taxi-cab services. The purpose of the roster-off provision was to restrict the number of taxi-cabs available during times when WTT predicted that there would be average and not high demand, thereby attempting to share evenly between operators the work available at those times over the period of the roster. The first question that arises is whether the roster system infringes s 45(2). That sub-section prohibits a person from making a contract or arrangement or arriving at an understanding if a provision of that contract, arrangement or understanding contained an exclusionary provision. The giving effect to such a provision is also prohibited. The term "exclusionary provision" is defined in s 4D of the Code. It provides that a provision is an exclusionary provision if it was between competitors and has the purpose of preventing, restricting or limiting the supply of goods or services to particular persons or classes of persons or particular persons or classes of persons in particular circumstances or on particular conditions. The issue here is whether the roster-off provision is an exclusionary provision. ACCC says that it is because it has the purpose of restricting the supply of taxi-cab services to passengers and potential passengers of taxi-cabs in the Shepparton area in particular circumstances or on particular conditions. The particular circumstances are the times under which WTT predicted there would be average and not high demand for taxi-cab services. ACCC contends that the passengers and potential passengers are classes of persons within the meaning of s 4D. In Rural Press Limited v Australian Competition and Consumer Commission [2003] HCA 75 ; (2003) 216 CLR 53 the High Court considered the meaning of s 4D(1) of the Trade Practices Act 1974 (Cth) (TPA), which is in the same terms as the Code. A regional newspaper, the "Murray Valley Standard", circulated in an area where few other newspapers were published. Another newspaper, the "River News", which had its own circulation area, moved into part of the Standard's circulation area. The publisher of the Standard informed the publisher of the River News that unless the River News was withdrawn from the Standard's area, the publisher of the Standard would distribute a new newspaper in the River News' original circulation area. The publisher of the River News then removed it from the Standard's area. ACCC alleged that each of the publishers had contravened s 45(2) of the TPA, in which s 45 of the Code is based. The High Court found that there had been a contravention on the basis that there was an arrangement or understanding the purpose of which was to prevent, restrict or limit the supply of goods or services to particular classes of persons, namely "the readers and advertisers of newspaper services": Rural Press [2003] HCA 75 ; (2003) 216 CLR 53 , 54. This is a compound concept involving a certain kind of purpose, having as its object particular persons or classes of persons. The particularity of the persons or classes of persons who are the objects of the purpose as defined and proscribed is essential to the concept of an exclusionary provision. The significance of a finding that a provision is an exclusionary provision within s 4D and s 45(2)(a)(i) and (b)(i) is that such a finding engages a per se legislative prohibition. It would be surprising if it were held, nevertheless, to contravene the Act. To the extent to which it had an anti-competitive purpose, that purpose would not be 'directed toward' particular persons or classes of persons. Section 4D speaks of "the purpose" of the contract, arrangement or understanding rather than any adverse effect which the arrangement might have on competition: News Limited v South Sydney [2003] HCA 45 ; (2003) 215 CLR 563 , 584. The purpose is to be determined by ascertaining the effect or effects the parties sought through the inclusion of the impugned provision: News Limited at 585. This requires an examination of the purposes of the individuals through whom the provision was included in the contract, arrangement, or understanding in question. An examination of the objective purpose will give undue significance to the substantive effect of the provision, as opposed to the effect that the parties sought to achieve through its inclusion: News Limited at 586. The issues to be determined in the instant case are: (1) what was the purpose of the exclusionary provision in the roster arrangement; specifically, did the arrangement have the subjective purpose of preventing, restricting or limiting the supply of goods or services; and (2) are the passengers of taxi-cabs in the Shepparton area; and passengers and potential passengers of taxi-cabs in the Shepparton area in particular circumstances or on particular conditions objects "on, or about whom" ( Rural Press at 84) the relevant purpose of the exclusionary provisions operated?. The facts here align well with those in Rural Press . The operators of taxi-cabs provide their services, by and large, to people who live in Shepparton. The roster-off provision had as its end the object of limiting or preventing the supply of taxi-cab services to passengers or potential passengers in the Shepparton area. The passengers and potential passengers were the objects "on, or about whom" the roster-off provision operated. It is clear, in my opinion, that there have been contraventions of s 45(2). It is appropriate that declarations to that effect be made substantially in the terms suggested by the parties. The parties also propose that injunctions issue forbidding the respondents for a period of three years from engaging in like conduct. Once again, it is reasonable that this relief be granted. The period that the injunctions are to continue is not unreasonable: compare Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd (2006) 157 FCR 162 at [233]-[234]. It is also proposed that there be an order that within three months WTT establish a corporate compliance program designed to ensure their awareness of their responsibilities and obligations pursuant to Pt IV of the Code. That has become a common order and should be made here. As regards pecuniary penalties what is proposed is that: (1) WTT pay $30,000 in three equal instalments over a period of three years; (2) the second, third and fourth respondents each pay $14,000 in three instalments over a period of three years; and (3) the fifth respondent pay $5,000 in three instalments over a period of three years. It is agreed that in addition to those amounts the respondents pay the ACCC's costs fixed in the sum of $15,000. The maximum pecuniary penalty for a contravention of s 45(2) is $10 million for a corporation and $500,000 for an individual: see ss 76(1A) and 76(1B) of the Code. The relevant principles governing the imposition of pecuniary penalties for a contravention of the Trade Practices Act are discussed in Australian Consumer and Competition Commission v Dataline.Net.AU Pty Ltd (2007) 161 FCR 513 , 527; Trade Practices Commission v CSR Ltd [1991] ATPR 41-076 , 52,151-152, 52,154; NW Frozen Foods Pty Ltd v Australian Consumer and Competition Commission [1996] FCA 1134 ; (1997) 71 FCR 285 , 290-295; J McPhee & Son (Aust) Pty Ltd v Australian Competition and Consumer Commission [2000] FCA 365 ; (2000) 172 ALR 532 ; and Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 ; [2004] ATPR 41-993 , 48,626. These principles should be applied to a contravention of the Code: see ACCC v Knight [2007] ATPR 42-165 , 47,605. In Trade Practices Commission v CSR Ltd [1991] ATPR 41-076 , 52,152---3, French J set out a checklist of factors to which judges have since frequently referred to when assessing penalties. They are: (1) the size of the contravening company; (2) the degree of power it has, as evidenced by its market share and ease of entry into the market; (3) the deliberateness of the contravention and the period over which it extended; (4) whether the contravention arose out of the conduct of senior management or at a lower level; (5) whether the company has a corporate culture conducive to compliance with the TPA, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention ; and (6) whether the company has shown a disposition to cooperate with the authorities responsible for the enforcement of the TPA in relation to the contravention. General sentencing principles are also relevant, including specific and general deterrence as well as the public interest in ensuring that competition laws are observed: Trade Practices Commission v Prestige Motors Pty Ltd [1994] ATPR 41-359 , 42,699; see also Trade Practices Commission v Mobil Oil Australia Ltd [1984] FCA 363 ; (1984) 4 FCR 296 , 297-8 . The proposed penalties fall well below those usually imposed for a contravention of s 45. But while low they are in this case justified for the following reasons. First, although the roster arrangement limited competition among the operators of taxi-cabs, which imposed a commercial and personal burden on each operator, the arrangement benefited the public to the extent that it ensured the presence of taxi-cabs available to supply taxi-cab services in the Shepparton area during times when WTT predicted that there would be low demand. Second, while the restriction affected taxi-cab operators, the public was not adversely affected. The nature of the taxi-cab industry is such that operators of taxi-cabs are unable to compete in respect of the prices that they may charge passengers for the supply of taxi-cab services as those prices are fixed by conditions attached to the licences applicable to those cabs: see the Transport Act 1983 (Vic), s 144(2)(d)(i). Third, the roster arrangement was an inherited system that had been in place for many years. It is an example of the cooperative environment that defines the taxi-cab industry. Moreover, all the participants believed what they were doing was legal. Certainly, the roster arrangement was well documented and operated quite openly. Fourth, the respondents have cooperated with the ACCC by making full and frank disclosure in the s 155 examinations, and acknowledging their liability for the contravening conduct at an early stage of the action. This has shortened the proceeding and saved substantial costs. Finally, there is the financial position of each respondent. The amount each individual earns is quite modest. On top of that the individuals, mostly family men, have few assets. It will be difficult for each of them to meet the small penalties that have been imposed. So far as WTT is concerned, it is not a large organisation. Its net profit in the financial year just ended was $7,336.99 on revenue of $206,224.23. As at 30 June 2008, its net assets are worth $33,359.51. It also will have difficulty meeting the penalty. There will be orders in accordance with the revised minutes submitted by the parties. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | exclusionary provision whether arrangement for a proscribed purpose class of persons excluded appropriate penalty determination of factors taken into account trade practices |
2 By s 200 of the Migration Act 1958 (Cth) the Minister has a discretionary power to order the deportation of a non-citizen in circumstances where the person has been convicted of an offence, if the person had been in Australia as a permanent resident for a period of less than ten years and the offence carries a sentence of imprisonment for a period of not less than one year. 3 The applicant's circumstances are as follows. He was born in North Vietnam on 10 March 1972. In 1988 he travelled to Hong Kong seeking refugee status, and until 1993 lived in detention in a refugee camp in Hong Kong and married a fellow refugee. In 1993 and 1994, he lived in a refugee camp in the Philippines and met a lady who is referred to in the material as Ms Thi Thuy Hang Le. On 29 June 1995, the applicant entered Australia sponsored by his wife, and he claims that his marriage was dissolved soon thereafter. No decree of dissolution was produced but he commenced living in a de facto relationship with Ms Le soon after his arrival in Australia. On 17 April 1997, the applicant and two other men committed an armed robbery during which a 67 year old man was severely assaulted and money was stolen from him. One offender was armed with a loaded pistol. The applicant was armed with an army style knife with which he assaulted the victim by striking him with the handle. On 13 October 1997 he pleaded guilty to one count of robbery being armed in company and wounding contrary to the Crimes Act 1900 (NSW) . He was sentenced on 13 February 1998 to five and a half years in prison with a minimum term of three years backdated to 17 April 1997. 4 On 22 June 1998, a letter was written to him by the Department stating that he may be liable for deportation under s 200 of the Migration Act 1958 (Cth) ("the Act ") . The applicant subsequently appealed against the severity of his sentence, but this was dismissed by the New South Wales Court of Criminal Appeal on 2 August 1988. On 18 January 2000, the applicant was interviewed by Departmental officers with respect to his liability for deportation. On 16 April 2000, he was released from prison on parole. On 1 May 2000, the Minister's delegate signed a Deportation Order in respect of the applicant. On 25 May 2000, the Department wrote to the applicant advising that a decision had been made as to his deportation and requesting that the applicant contact the relevant officer. A Departmental officer spoke to the applicant on 30 May 2000 and requested that the applicant attend the Departmental Office on 2 June 2000 to be detained. However, the applicant did not keep that appointment and was not detained. 5 Thereafter until 2003, the applicant remained at large living with Ms Le, who became pregnant in early 2003. On 22 February 2003, the applicant was arrested by New South Wales Police on one charge of shop lifting and a charge of parole violation. He was sentenced to imprisonment for one year, three months and twenty seven days in respect of the parole violation. He was also sentenced for one month, to be served concurrently, in respect of goods in custody suspected of being stolen. He was put in prison at Silverwater. He escaped from prison on 7 May 2003 and remained at large until February 2004. His son was born on 27 October 2003. On 14 February 2004, he was arrested in Victoria and later convicted and sentenced to four months imprisonment for theft. On 23 March 2004, he was served with the Deportation Order dated 1 May 2000 and on 13 June 2004 he was extradited to New South Wales for escape and breach of parole. On 15 June 2004, he was sentenced to eighteen months imprisonment for escaping from custody in the Sydney District Court. 6 Largely as a result of the applicant breaching his parole and failing to present himself to the Department in June 2000, he was not formally notified of the Department's original decision to issue a deportation order until 23 March 2004. The applicant did not seek review of the delegate's decision until 8 April 2004. 7 The Tribunal held a hearing in respect of the applicant's application for review on 15 and 23 February 2005, and on 9 June 2005 published its decision affirming the decision under review. The applicant has served his latest sentence and is now in Immigration detention at Villawood Detention Centre. However, he challenges the exercise of Ministerial discretion under s 200. The issue for the Tribunal therefore was whether applying the facts of the case to the terms of the Minister's decision there had been error by the Minister in exercise of his discretion. Under s 499 of the Act , the Minister may give written directions in relation to the performance of functions or exercise of powers assigned to a person or body under the Act . Such directions must not be inconsistent with the Act or its Regulations, and the person or body to whom directions are given must comply with them. Under s 500 of the Act , applications may be made to the Tribunal for review of the decisions of the Minister under s 200 because of the circumstances specified in s 201. 9 On 21 December 1998, the Minister made General Direction No. 9 in respect of Criminal Deportation pursuant to s 499 of the Act . This applies to the present decision and sets out a number of matters for consideration. 10 Paragraph 6 of the Direction states that there are two primary considerations to be evaluated by decision-makers in respect of decisions made under ss 200 and 201 of the Act . These include the expectations of the Australian community and the best interests of any child of the potential deportee. In addition, Paragraph 7 states that there may be other relevant considerations in individual cases, including the degree of hardship which may reasonably be expected to be suffered by the deportee, and the degree of hardship to Australian citizens or permanent residents that would reasonably be expected to flow from deportation. Paragraph 5 states that decision-makers should have due regard to the importance placed by the Government on these two primary considerations, and adopt a balancing process which takes into account all relevant factors to arrive at a final determination. 11 In relation to the first primary consideration, namely community expectations, the Tribunal had regard to the seriousness and nature of the harm, the risk of recidivism and deterrence. It concluded after considering the matters that Australian community expectations would be that the applicant should be deported subject to any other hardship. The robbery was regarded as extremely grave and serious and abhorrent to the community. 12 The second primary consideration is the best interests of the child. At the time of the hearing, the child was one and half years old and an Australian citizen. The Tribunal noted that the applicant was take into police custody on 14 February 2004 when the child was only three months old and had been in custody ever since. The child visited the applicant from time to time in prison. The applicant and Ms Lee contended that the applicant had been in a position to develop a close relationship with the child but the Tribunal expressed considerable doubt on this aspect. The respondent argued that that there would be no language or cultural problems if the child was relocated in Vietnam with his mother, and the Tribunal noted that there was no evidence to suggest that the child would require medical attention or other health services in Vietnam which are said to be of a lesser quality than those available in Australia. On balance, the Tribunal considered that the best interests of the child would be served if the applicant were to remain in Australia but that this opinion would have to be reviewed if the applicant committed any further offences or was sentenced to further periods of imprisonment. Other considerations were taken into account by the Tribunal, including the hardship to Ms Lee and the applicant if he were deported. 13 The applicant contended that he had suffered stress as a result of his experiences in Hong Kong and the Philippines and that this was supported by a psychological report from the Department of Corrective Services dated 23 July 1998. That report is about seven years old and was treated by the Tribunal at para [13] as an "historical" document and given little weight. The Tribunal also considered a second report dated 27 July 1999, but took the view that this report "did not take the matter much further. " In the view of the Tribunal, the July 1998 report provided only a limited correlation between the essentials of Post-Traumatic Stress Disorder and the symptoms presented by the applicant. The Tribunal observed that the psychologist had stated the applicant displayed appropriate responses to questions and emotional issues and his thought processes were ordered, and that there was no suggestion of thought or mood disorder. 14 One main concern of the applicant considered by the Tribunal was the deportation would separate him from his de facto wife and his son Andrew. In view of his conduct before he fled Vietnam and after he commenced living in the Hong Kong refugee camp, the applicant was also concerned that his repatriation to Vietnam would lead to persecution for a one of the reasons outlined in the 1951 Convention Relating to the Status of Refugees ("the Convention"). This was regarded as a matter which it was necessary to take into account under the heading of hardship to the applicant and Ms Le. However, the Tribunal concluded in the light of the reasons of the original decision-maker, and the information referred to, that the applicant did not engage any Australian protection obligation not to send him back under Article 33(1) of the Convention. Furthermore, country information indicated that his life and freedom would not be threatened on account of his race, religion, nationality or membership of a particular social group or political opinion, or that he would be subject to violation of any civil or political rights or subject to torture. The Tribunal recorded that this material had not been contradicted or exposed as unreliable by other material, and claimed that there was no real chance of persecution in the reasonable foreseeable future if the applicant was "refouled" to Vietnam. 15 On balance and weighing up all the issues presented and taking account of all the evidence, the Tribunal affirmed that the Deportation Order had been correctly and appropriately made. However, because the applicant is in detention and due to other matters raised in relation to the chronology by Mr Markus for the respondent, combined with the fact that it was made clear to Mr El-Hanamia on 10 June February 2006 that the matter would be heard on 15 February 2006, I refused the application for adjournment. Mr El-Hanamia then made the submissions referred to below. 17 Having regard to the sequence of events referred to above and the time limit imposed on an application for review, the application was not filed in the Magistrates Court until 13 October 2005, more than four months after the Tribunal decision of 9 June 2005. Thereafter the matter was transferred to the Federal Court. I propose to first examine the question whether the applicant has any prospect of success on the issue application. If I find against the applicant on this question the application will be dismissed. There is no evidence to support this conclusion. She is now an Australian citizen. It is not an assertion that she was not a refugee. Her claim was that since she became an Australian citizen as a result of being classified as a refugee therefore she would be persecuted for a Convention reason if returned to Vietnam. This does not follow and the Tribunal considered that on the material evidence this claim was not made out. I can see no error in the reasoning adopted by the Tribunal or the principles applied in determining this question. It was the case of both the applicant and the evidence of Ms Le that by reason of the fact they had been accepted into Australia as refugees they would be persecuted if returned. This is not a logical approach. 20 As Mr Markus for the respondent points out, there is nothing in the statement of Ms Le to the effect that she had any fears of being persecuted for a Convention reason if returned to Vietnam. However, she stated that she has no other relatives in Australia apart from her husband and that her two sisters currently reside in Vietnam. In a report by Dr Kaplan, a psychologist, dated 1 March 2004 Ms Le stated that she feared the applicant would be persecuted having left illegally but there is no reference to such a fear for herself. This is a matter of assertion. There is no claim in this document that she felt she would be persecuted. The question of whether either of them would be persecuted by reason of having refugee status in Australia was a question of fact for the Tribunal, and I am not persuaded that there is any obligation to further enquire or adduce evidence which would compel the conclusion that any real chance of such persecution exists. 21 The earlier psychological report in respect of the applicant and referred to above, was made on 23 July 1998 by two psychologists who concluded that the applicant had an extremely unusual and disturbing history of violence and drug abuse arising from his experiences in refugee camps in South East Asia. The conclusion was that the result of these experiences was Post-Traumatic Stress Disorder requiring prolonged psychological intervention, preferably with a Vietnamese speaking psychologist. On first presentation to the psychologists, the applicant stated he experienced difficulties because of atrocities experienced in refugee camps and had difficulty with sleeping. When not in custody, he would use heroin or alcohol to overcome nightmares. 22 The applicant submitted that the 1998 report was out of date and that a more recent report should have been obtained by the Tribunal. The difficulty with this submission is that he did not attempt to present or arrange any updated report. As noted above, a report of 1 March 2004 was obtained in relation to Ms Le and no reason was given why a more recent report was not obtained by the applicant at that time. There was no obligation on the Tribunal to seek out a final report. The Tribunal was entitled to take this lack of evidence into account and therefore the applicant has not made out any case of procedural unfairness in relation to the treatment of the earlier report or the absence of a more recent report. 23 In relation to the best interests of the child, I can see no basis for review in the reasoning of the Tribunal. A favourable finding was made for the applicant on this point but it was weighed in the balance with cogent considerations and was not seen to be determinative in itself. The Tribunal set out in its decision the view that it did not consider there had been a close relationship established by the appellant with the child, and this view was open on the evidence for the reasons given. This was a question of fact for the Tribunal. 24 It was also submitted that the applicant's prospects of rehabilitation had not been given sufficient weight. It is clear from the Tribunal decision that it examined the risk of recidivism and had doubts as to the applicant's remorse. The Tribunal considered that if the appellant were short of money, he may resort to violence in the future. This is an adverse finding against the applicant in relation to any suggestion of rehabilitation. 25 Finally, the applicant also argued that the Tribunal did not give adequate weight to particular considerations, namely the best interests of the child and his prospects for rehabilitation. However, the question of weight is one of fact and degree for the Tribunal in balancing the competing considerations and not for this Court to review. 26 For the above reasons, the application is dismissed with costs. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | deportation order non-citizen convicted of an offence serious criminal record decision affirmed by administrative appeals tribunal balancing competing considerations community expectations best interests of the child duty of tribunal to obtain current psychological report immigration |
The appeal to this Court is limited to an appeal on a question of law: s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth). The applicant, Mr Kazimir Kowalski, enlisted for National Service on 20 April 1972 and was discharged from the Army on 19 October 1973. On 6 March 2007, he lodged a claim for a disability pension under the Veterans' Entitlements Act 1986 (Cth) ("the Act"). The respondent, the Repatriation Commission, considered that the conditions the applicant was asserting were defence-caused were major depression with co-morbid anxiety, hypertension and ischaemic heart disease. The respondent rejected the applicant's claim. The applicant applied to the Veterans' Review Board for review of the respondent's decision. The Board decided to vary the decision under review by substituting diagnoses of depressive disorder and anxiety disorder for the previously diagnosed condition of major depression with co-morbid anxiety. The Board otherwise affirmed the decision under review. The applicant applied to the Tribunal for a review of the Board's decision. On 9 October 2008, Deputy President D G Jarvis affirmed the decision under review as varied by the Board. He noted that the applicant's service from 7 December 1972 until his discharge on 19 October 1973 was eligible defence service for the purposes of his claim. He noted that the parties were agreed that the diagnoses of depressive disorder and anxiety disorder were correct. The Deputy President then set out a summary of the background facts. He delayed the commencement of his National Service until he enlisted on 20 April 1972, by undertaking various courses of study. He undertook training at the Puckapunyal Army Camp, and remained in the Army until his discharge on 19 October 1973. He had worked as a draughtsman for Chrysler Australia before commencing his National Service. He was depressed and anxious when he enlisted in the Army, as he was then separated from his wife; he missed her, and was concerned that she might have been left as a widow if he had been sent to Vietnam and killed in action. He said that he was not a violent person and was also troubled by constant thoughts of being sent to Vietnam either to kill people or to be killed himself. In addition, he was older than the majority of the other National Servicemen at Puckapunyal and had difficulty in doing some of the physical exercises, and was the only married person in his group. He said he hated his time in the Army. He found this concerning, because he had come to Australia with his parents as a refugee from Nazi Germany when he was two years old, and they had lived at Bonegilla, and had told him about going there. He said that when he went there it was winter and freezing cold. He continued to miss his wife. After about six weeks at Bonegilla, he was told that he would be a draughtsman, and he was posted to the Amberley Air Force Base in Queensland. The newly elected government had given a commitment during the election campaign to abolish National Service and to withdraw Australian troops from Vietnam. Mr Kowalski said that a number of National Servicemen at Amberley resigned from the Army immediately after the election. He had been working as one of three draughtsmen, and the other two resigned. Although he had also wanted to leave the Army then, he was persuaded by a superior officer to stay on, because he would then become entitled to the benefit of a war-service loan. He did stay on, but there was then a very substantial increase in his work load; he found that he was doing the work of three people. He was given unrealistic deadlines, and had to work during his lunch breaks. He was frequently rostered to do weekend pickets, but when he reported for duty, he would be told to go to the drawing office to catch up on work that he was behind with from the previous week. He resented this, because ordinarily soldiers who had been confined to barracks for disciplinary reasons would have done weekend pickets. He was also faced with a number of superior personnel all asking him to give priority to their work, and also had to interrupt his regular work with requests from officers to prepare invitation cards which were unrelated to his Army work. In addition, his working conditions were difficult, because his drawing board was too small and the drawing office was not air-conditioned. He was also criticised for not being a good draughtsman by officers who, he said, had no idea of the work he was doing. According to an attendance and treatment card included in Mr Kowalski's service records, this occurred on 17 July 1973, and he complained of epigastric pain after food, and (apparently) that he had been experiencing this for the preceding four to five weeks. The card also indicates that his pain had been relieved by ant-acids, and that he was given Kolantyl Gel and Merbentyl.... The card records further relevant consultations on 30 July 1973, and on 1, 10, 20 and 24 August 1973. He had a barium meal, and this revealed that he was suffering from a duodenal ulcer. They also indicate that Kolantyl Gel was increased to 20 mls, and that he was prescribed Librax tablets three times daily and two at night. Mr Kowalski said that at the time of his discharge, he was given supplies of Librax which lasted until 1975. He could not remember whether he had been advised to increase his overall food intake. A report dated 7 August 1973 by his superior officer includes a statement that in that officer's opinion, the injury arose out of employment, because Mr Kowalski had been placed under 'great stress & over-employed since December 1972 when with the cessation of National Service he was performing mechanical drafting duties where previously three personnel were employed' , and the officer in charge, a Major Fenton, reported in August 1973 that the work program had been 'intense' since December 1972... In evidence, Mr Kowalski said that he could remember having night pain from his ulcer and having to regularly get up and have milk and cookies, but he could not be more precise as to when his night pain first started other than that it was in 1973. He was diagnosed with hypertension by his then GP, Dr Hughes, on 24 August 1984. He continued working at Chrysler/Mitsubishi until August 1991, when he had a nervous breakdown, and he has not worked since then. He suffered a heart attack in December 1997, and had open-heart surgery in January 1998. He was diagnosed with Type 2 diabetes on 30 June 2004. According to the history contained in a report from Dr Jagermann dated 23 August 1991, Mr Kowalski had an accident at work in May 1989 when he sustained a back injury and ongoing low back pain, and was absent from work for two and a half months. He claimed worker's compensation from his employer. His claim was disputed, and later he was accused by his employer of committing fraud by absenting himself from work when in fact he had been attending a WorkCover conference. Whereas he had 'had an anxiety problem years ago, it was brought under control' upsetting events of the immediate past proved it otherwise with Mr Kowalski falling victim to injury, antagonism, vicissitude and rejection, promoting tension and concern and 'distrust of everything'. He identified the relevant Statement of Principles ("SoP") for the purposes of s 120B(3). As to the first point, the Deputy President rejected the contention that the respondent had failed to carry out its obligations under the Act. As to the second point, the Deputy President outlined the extent to which the Tribunal initiated its own inquiries. It is not necessary for me to set out the details. As to the third point, the Deputy President dealt with the point later in his reasons. The Deputy President then set out certain propositions of law which were to guide his consideration of the matter. The Deputy President then turned to consider whether the applicant's duodenal ulcer arose out of or was attributable to his eligible defence service, or would not have occurred but for that service. Was the duodenal ulcer connected with the defence service? The Deputy President said that he was minded to accept the medical evidence to the effect that stress did not cause the applicant's duodenal ulcer, but said that he did not have to reach a final view because of his analysis of the SoP concerning the duodenal ulcer, and his conclusion on other aspects of the applicant's claim. The Deputy President said that he was not satisfied that the applicant had been infected with the bacteria, helicobacter pylori, during his Army service. He said that in any event, on the applicant's own case he was infected during his training at Puckapunyal and this preceded his eligible defence service. The Deputy President considered whether the applicant's duodenal ulcer was upheld by the SoP in respect of that condition. He referred to factor 6(a), namely, having the helicobacter pylori infection of the stomach or duodenum at the time of the clinical onset of the duodenal ulcer. He said that there was no doubt the clinical onset of the ulcer occurred during the applicant's eligible war service; but, he said for reasons previously given, he was not satisfied that the infection was relevantly connected with the circumstances of his service. The applicant relied on factor 6(m), namely, inability to obtain appropriate clinical management for duodenal ulcer. The Deputy President found that factor 6(m) did not support the applicant's contention. He found that the clinical management, medication and dietary advice were appropriate having regard to the medical knowledge at the time and that there was no reason for the Army doctor to refer the applicant to a psychiatrist or psychologist. The Deputy President concluded that the SoP did not uphold the contention that the ulcer was, on the balance of probabilities, connected with the applicant's service and he was not satisfied that the duodenal ulcer arose out of or was attributable to his eligible defence service, or that it would not have occurred but for that service. Clause 4 of the SoP provided, relevantly, that at least one of the factors set out in clause 5 must be related to the relevant service rendered by the person serving. Factor 5(a) referred to "being obese" at the time of the clinical onset of hypertension. The Deputy President referred to the definition of "hypertension" in clause 2(b) and the definition of the expression "being obese" in clause 8. He also referred to the meaning of "clinical onset" as articulated in the cases ( Lees v Repatriation Commission [2002] FCAFC 398 ; (2002) 125 FCR 331 ; Repatriation Commission v Cornelius [2002] FCA 750). The Deputy President said that he was not satisfied on the material before him that the clinical onset of hypertension occurred during the applicant's defence service. He found that the date of the clinical onset of hypertension was 24 August 1984 and he said that under factor 5(a), he was required to consider whether the applicant was obese at that time. The Deputy President said that he was not satisfied that the applicant was obese at the time of the clinical onset of hypertension. Even if he was, the Deputy President said that it was not clear that his obesity was "related to" or "connected with the circumstances" of his service within the meaning of clause 4 of the SoP or the preamble to clause 5. The applicant also relied on factors 5(b) and 5(k) but the Deputy President found that neither of these factors was engaged. The Deputy President referred to factors 6(a) and 6(b) in the SoP and the definition of the expression "depressive disorder" in clause 3(b). The Deputy President said that he was not satisfied that the applicant had symptoms prior to or during his service that would meet the relevant diagnostic criteria referred to in clause 3(b) of the SoP and he said that there was no evidence that the applicant was diagnosed with any depressive disorder prior to or during his defence service. The Deputy President found that the clinical onset of the applicant's depression occurred in or about August 1991. The Deputy President rejected a contention that the applicant experienced "a category 1A stressor" and "a category 1B stressor" (defined in clause 9) while stationed at Amberley. The applicant relied on factor 6(a)(v), but the Deputy President said that he was not satisfied that the applicant was suffering from an anxiety disorder prior to the clinical onset of his depressive disorder or, if he was, that either of the two relevant SoPs concerning anxiety disorder upheld his contention that that disorder was, on the balance of probabilities, connected with his eligible defence service. The Deputy President found that neither factor 6(a)(viii) or 6(a)(ix) or 6(t) was engaged on the facts. The Deputy President concluded that the SoPs in respect of depressive disorder did not uphold the applicant's contention that his depression was, on the balance of probabilities, connected with his eligible defence service. He went on to say that it also seemed unlikely that the applicant's depression was relevantly connected with his service, but in view of his conclusions as to the SoPs, it was not necessary for him to determine that issue. The Deputy President said that he was not satisfied on the evidence before him that the clinical onset of anxiety disorder occurred during the applicant's service as he contended. He found that the date of clinical onset of the applicant's anxiety disorder occurred at or about the time of his mental breakdown in August 1991. He concluded that the SoP concerning anxiety disorder did not uphold the applicant's contention that his anxiety was, on the balance of probabilities, connected with his eligible defence service. It was unnecessary for him to decide whether there was a relevant connection between the applicant's anxiety disorder and his service. He found that the clinical onset of ischaemic heart disease in the case of the applicant occurred in December 1997 and that he was suffering from hypertension at that time. However, the SoP in respect of hypertension did not uphold the applicant's contention that hypertension was connected with his eligible defence service. As a result, the applicant's claim for ischaemic heart disease was not upheld by factor 6(a). The Deputy President referred to factor 6(c) and said that he was not satisfied that the applicant was obese for at least two years within the 15 years immediately before the clinical onset of ischaemic heart disease. The Deputy President referred to factor 6(f) and in that context he found that there was no evidence that the applicant was suffering from dyslipidaemia as defined in the SoP prior to the clinical onset of ischaemic heart disease. The Deputy President says that neither factor 6(m), nor factor 6(o) were engaged on the facts. The Deputy President said that neither the current SoP, nor the revoked SoP concerning ischaemic heart disease upheld the contention that that disease was, on the balance of probabilities, connected with his eligible service. He said that in light of that finding it was unnecessary for him to consider whether the material before him raised a connection between the ischaemic heart disease and his eligible defence service within the meaning of s 120B(3)(a) of the Act. His general contention based on the changed classification from FE on enlistment to HO on discharge, to which I referred in paragraph 29 above, does not meet the evidentiary burden on him to adduce evidence sufficient to establish his claim. I have concluded that the conditions for which he is claiming a disability pension were not defence caused. The respondent submitted that of the 44 grounds of appeal in the notice of appeal only nine arguably raised questions of law (that is, grounds 1, 6, 9, 10, 11, 15, 17, 33 and 37). That submission is correct. The meaning of "a question of law" in s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) has been considered by this Court in a number of cases. In addition, the requirements in the Rules of Court as to the contents of a notice of appeal under s 44(1) (see O 53 rr 2, 3 and Form numbered 55A) have been considered. It is not necessary for me to discuss the cases: Birdseye v Australian Securities and Investments Commission (2003) 76 ALD 321; Repatriation Commission v Hill [2002] FCAFC 192 ; (2002) 69 ALD 581 ; Comcare v Etheridge [2006] FCAFC 27 ; (2006) 149 FCR 522 ; HBF Health Funds Inc v Minister for Health and Ageing [2006] FCAFC 34 ; (2006) 149 FCR 291. It will be seen that I reject the grounds of appeal which arguably raise questions of law. I also reject the grounds of appeal which raise questions of fact. In each case there was evidence from which the Deputy President could make the finding which he did. In the course of his submissions, the applicant referred to a large number of cases. Three in particular were cited in relation to many of his grounds of appeal. It is convenient for me to say something now about those cases. Oliver v Repatriation Commission [2002] AATA 408 (" Oliver ") was a decision of a senior member of the Tribunal. The issue was whether the death of a veteran was due to war service and, in particular, whether the veteran satisfied factor (d) of the relevant principles concerning ischaemic heart disease. The senior member had particular evidence before him and he made certain findings of fact. The circumstances and evidence before the Deputy President in this case were different and Oliver is therefore of no assistance to the resolution of the present matter. Repatriation Commission v Deledio [1998] FCA 391 ; (1998) 83 FCR 82 (" Deledio ") was a decision of the Full Court of this Court. The case concerned the proper approach to the application of s 120(1) and (3) of the Act. By contrast, this case involved the application of s 120(4) and s 120B(3) of the Act. Deledio is therefore of no direct assistance to the resolution of the issues in this case. Repatriation Commission v O'Brien [1985] HCA 10 ; (1985) 155 CLR 422 (" O'Brien ") was a decision of the High Court and it involved the interpretation of s 47(2) of the Repatriation Act 1920 (Cth) which subsection provided for a test of whether the determining body was satisfied beyond reasonable doubt that there were insufficient grounds for granting the claim. An observation by Gibbs CJ, Wilson and Dawson JJ (at 430) on the facts of that case (upon which the applicant relied) is of no assistance to the resolution of the issues in this case. The applicant claimed that his conditions were related to service through a connection with his duodenal ulcer and, in those circumstances, the Tribunal was required to determine whether his duodenal ulcer was relevantly related to his defence service: Langley v Repatriation Commission [1993] FCA 299 ; (1993) 43 FCR 194 at 201 per Lockhart and Beazley JJ; McKenna v Repatriation Commission [1999] FCA 323 ; (1999) 86 FCR 144 at 151 [20] per Branson, Sundberg and Kenny JJ. The previous acceptance of liability for the applicant's duodenal ulcer under the Compensation (Commonwealth Government Employees) Act 1971 (Cth) did not prevent the Tribunal from considering this matter. The cases to which the applicant referred do not support his argument ( Fitzmaurice v Repatriation Commission (1989) 19 ALD 297 and Power v Comcare (1998) 89 FCR 514). This ground does not raise a question of law. The Deputy President had said that as he was not satisfied that the applicant was obese at the relevant time (that is, 24 August 1984, being the date of the clinical onset of hypertension) it was not necessary to express a concluded view about the possible connection of obesity with service. I do not think the Deputy President erred. To link the applicant's hypertension with service through a service-related obesity there was a need to show that the applicant was obese at the time of the clinical onset of hypertension and the applicant had plainly not shown that. As I have said, the reference to Oliver does not assist the applicant. This ground does not raise a question of law. It is clear from the Deputy President's reasons that he was aware of the blood pressure reading in March 1973 and that he took it into account (at [67]-[68]). I also agree with the respondent's submission that the Deputy President's analysis of the authorities ( Lees v Repatriation Commission [2002] FCAFC 398 ; (2002) 125 FCR 331 ; Repatriation Commission v Cornelius [2002] FCA 750) was correct and it was open to him to find that the clinical onset of the applicant's hypertension was 24 August 1984. Neither of the matters identified in this ground of appeal are questions of law. The first matter (that is, down to the word "earlier") is a finding of fact which was open to the Deputy President on the evidence before him and the second matter is not a conclusive finding in any event. In this ground of appeal the applicant refers to a finding made by a review officer in a workers' compensation claim he made against Mitsubishi Motors and to a decision of the Workers' Compensation Appeal Tribunal. Neither of those decisions bound the Tribunal which was required to make a finding on the evidence before it. This ground of appeal does not raise a question of law. The Deputy President made a finding of fact and it was open to him to do so. The decisions made in relation to his workers' compensation claim do not assist the applicant for the reason given in relation to the previous ground of appeal. However, the diagnosis on which the delegate proceeded was that of major depression with co-morbid anxiety, and it was only later when the Commission's decision was reviewed by the VRB that the diagnosis was changed to depressive disorder and anxiety disorder. In any event, hearings in this tribunal are a hearing de novo ; the tribunal's function is to arrive at the correct or preferable decision, and not to consider the correctness or otherwise of the decision under review. This means that an applicant is entitled to seek to have the decision under review set aside on grounds that might be quite different from the grounds relied upon unsuccessfully before the original decision-maker, and the respondent is entitled to support the decision under review on a basis that is different from the grounds on which the primary decision was made. Deledio does not provide support for the applicant's submission. This ground of appeal does not raise a question of law. The Deputy President's findings were open to him on the evidence before him. Oliver does not support the applicant's submission for reasons previously given. This ground of appeal does not raise a question of law. The Deputy President was not required to consider the matter in s 120B(3)(a) in circumstances where he was satisfied that s 120B(3)(b) had not been met. Oliver and Deledio do not support the applicant's submission for reasons previously given. In order to explain this ground, it is necessary to set out the following passages from the Deputy President's reasons. To overcome my concern I suggested that Mr Kowalski should lodge a fresh application to review the decision of the Commission. He did this, and I made an order, with the consent of the Commission, to extend the time for making the new application. I then gave directions to the effect that the existing proceedings and the new proceedings should be heard together, with the evidence in each case being treated as evidence in the other. However, on reflection, I think that the original application was sufficient. The error he made in referring to the wrong decision was an obvious error, and should not render his application for review ineffective. In any event, the approach does not involve error. I have set out above the Deputy President's conclusions in the penultimate paragraph in his reasons (see [29]). Deledio and O'Brien do not support the applicant's submission. This ground of appeal does not raise a question of law. Again, Oliver , Deledio and O'Brien do not support the applicant's submissions. This ground of appeal is without content. No particulars are provided as to the test said to have been applied by the Tribunal, the reasons it was the wrong test, the details of the Tribunal's application of the SoPs and the statements made from the bar table. This ground of appeal does not raise a question of law. Reference was made to Oliver , Deledio and O'Brien but, for reasons previously given, those cases do not advance the applicant's submission. In those circumstances, it is difficult to arrive at any finding on that issue, but I think it unnecessary to do so in view of my analysis of the SoP concerning duodenal ulcer, and my conclusion on other aspects of Mr Kowalski's claim, to which I will refer below. I also agree with its submission that the applicant could have called these witnesses himself if he considered that that would have assisted his case, or he could have requested that the summonses be issued to them to give evidence and be cross-examined. This ground of appeal fails because the applicant's alcohol consumption was not a matter for judicial notice. Nothing was put which would make out this ground of appeal and it must be rejected. Deledio is not relevant for reasons previously given. There is no question of duplicity in the present proceeding and the case to which the applicant referred, Ettridge v TransAdelaide [1997] SASC 6753 , is not relevant to any issue before me. No doubt there were a number of issues before the Deputy President, but there is no reason to think that the proceeding miscarried because of the number of issues the parties were required to address. The applicant referred to various passages in the transcript of the hearing before the Tribunal (pages 194, 195, 197, 201, 202, 204, 205, 208, 209, 210, 214, 216, 217, 218, 219, 220 and 233-345). He also referred to the decision in Giannarelli v Wraith [1988] HCA 52 ; (1988) 165 CLR 543. I have considered the transcript and I am satisfied that the Deputy President did no more than control the proceeding before him in an appropriate manner. This ground seems to be formulated on the assumption that an applicant is entitled to ask whatever question he or she thinks is appropriate. That is not the case. The Deputy President has the power to disallow irrelevant, scandalous or oppressive questions. In my opinion, the Deputy President did no more than exercise appropriate control in respect of the conduct of the application for review. Nothing was put which supports this ground of appeal and it must be rejected. The applicant points to the fact that on 20 August 1973, a doctor had prescribed the anti-anxiety medication called Librax for the applicant and that therefore this was the date of the clinical onset of his anxiety disorder. This ground of appeal does not raise a question of law. There was evidence upon which the Deputy President could find as he did that the date of clinical onset of the applicant's anxiety disorder was at or about the time of his nervous breakdown in August 1991. The applicant claims that there was uncontested evidence before the Tribunal that in 1973, and as a result of his accepted compensable duodenal ulcer, he was suffering from chronic pain for at least six months duration at the time of the clinical onset of his anxiety disorder. The applicant claims that the time of the clinical onset of the applicant's anxiety disorder was 20 August 1973, being the date on which a doctor prescribed the anti-anxiety medication called Librax. Again, this ground of appeal does not raise a question of law, and I agree with the respondent's submission that the Deputy President did not find clinical onset of anxiety disorder in 1973 and therefore there is no proper basis for this contention. Again, Deledio does not support the applicant's submission for the reasons previously given. Again, the applicant makes reference to the fact that the applicant was prescribed Librax on 20 August 1973. This ground of appeal does not raise a question of law. I have previously dealt with the merits of the ground in relation to ground 22. The applicant claims that there was uncontested evidence before the Tribunal that as a result of the applicant's accepted compensable duodenal ulcer, the applicant was suffering from chronic pain for at least six months duration at the time of the clinical onset of his depressive disorder. This ground appears to refer to factor 6(a)(viii), which is having chronic pain of at least six months' duration at the time of the clinical onset of depressive disorder. In any event, there is no evidence that Mr Kowalski had chronic pain of at least six months duration prior to August 1991, being on my above finding the approximate date of the clinical onset of his major depression, or if he did, that any such chronic pain was connected with his defence service. Factor 6(h) does not support the contended connection with service. The applicant claims that there was uncontested evidence before the Tribunal that, as a result of the applicant's accepted compensable duodenal ulcer, the applicant was suffering from a sleep disorder at the time of the clinical onset of his depressive disorder. If he did, it appears from his evidence that it was related to his duodenal ulcer, but I have found above that his ulcer was not connected with his defence service in the relevant sense. It is said that four exhibits before the Tribunal all confirmed that as a result of a barium meal on 1 August 1973, the applicant was diagnosed with a duodenal ulcer on that day. It has referred to 31 August 1973, whereas the correct date is 1 August 1973. If that is the point, it is not a point which raises a question of law. It is a matter that had no effect on the Deputy President's findings and conclusions. In his written submissions the applicant adds the allegation that the Deputy President was "biased at law". No particulars are given of this additional allegation. I agree with the respondent that the ground of appeal does not raise a question of law and, in any event, the procedure to be adopted was a matter for the Tribunal. There was no breach of natural justice or procedural fairness. I also agree with the respondent's submission that in fact it was to the applicant's advantage that he was able to make his final submissions after he had heard the respondent's final submissions. The applicant referred to two New South Wales decisions. This ground of appeal does not raise a question of law. Nothing was put which supports the ground. This ground of appeal does not raise a question of law. Nothing was put which supports the ground. This ground of appeal must fail for the same reasons given in relation to ground 30. This ground of appeal must fail for the same reasons given in relation to ground 30. The respondent submitted, correctly in my view, that s 120(3) of the Act had no application to the applicant's case as he had not rendered operational service. This ground of appeal does not raise a question of law. In any event, there is no reason to doubt the conclusion of the Deputy President that there was no evidence that the applicant was suffering from dyslipidaemia as defined in the SoP prior to the clinical onset of ischaemic heart disease and that therefore his claim was not supported by factor 6(f). This ground of appeal does not raise a question of law. Furthermore, I agree with the respondent's submission that there was no evidence on which the Tribunal could have made any such finding and no material before it to suggest a course of investigation to determine who wrote those words. This ground of appeal does not raise a question of law. It follows that the relevant words would not have been written on the A4 copy, whether by a doctor or any other person, during Mr Kowalski's service with the Army, and are not of probative value. I think it unnecessary for this tribunal to make any further inquiries as to when the relevant words were written on the form, or by whom, or to direct the Commission to make any such further inquiries. I have read the paragraphs in the Tribunal's reasons to which the applicant referred ([123], [125], [127] and [128]). I do not think that the Tribunal placed the onus of proof on the applicant. Proceedings in this tribunal are administrative proceedings, and where (as in the present matter) the relevant legislation does not impose, expressly or by implication, an onus of proof, neither party bears such an onus: Bushell (supra) at 425. Nevertheless, it remains necessary for a party asserting facts to adduce evidence which would support a finding by the tribunal that those facts exist: McDonald v Director-General of Social Security [1984] FCA 57 ; (1984) 1 FCR 354 , at 358. This ground of appeal does not raise a question of law. In any event, nothing was put to support the ground of appeal. This ground of appeal does not raise a question of law. The respondent submitted, correctly, in my view, that s 120(3) of the Act had no application in the applicant's case and the concept of "reasonable hypothesis" was irrelevant and did not apply to the determination by the Tribunal of the applicant's case. This ground of appeal must fail for the same reasons given in relation to ground 39. This ground of appeal does not raise a question of law and must be rejected. This ground of appeal does not raise a question of law. The respondent submitted, correctly in my view, that the documents which the applicant sought to tender were irrelevant to the proceeding before the Tribunal and could not have affected the result of the case. This ground of appeal does not raise a question of law. Furthermore, the document was not relied on either by the respondent or by the Tribunal. This ground of appeal does not raise a question of law. Furthermore, the respondent submitted, correctly in my view, that the relevant factors set out in the applicable statement of principles do not merely require that the person has suffered from helicobacter pylori infection at the time of clinical onset, but require that the infection be related to the person's defence service, and that the Deputy President had explained clearly the reasons why he did not consider that the infection was related to the applicant's defence service. In my opinion, the appeal must be dismissed. I will hear the parties as to costs and any other orders. Before concluding these reasons, I record the fact that the applicant asked me to disqualify myself from hearing this appeal. I declined to do so: Kowalski v Repatriation Commission [2008] FCA 1970. Leave to appeal from my decision was refused: Kowalski v Repatriation Commission [2009] FCA 47. I certify that the preceding one hundred and twenty-eight (128) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | appeal from decision of administrative appeals tribunal refusal to grant disability pension under veterans' entitlements act 1986 (cth) in relation to depressive disorder, anxiety disorder, hypertension and ischaemic heart disease whether grounds of appeal relate to questions of law or questions of fact whether grounds of appeal relating to questions of law amount to errors of law administrative law |
The applicant seeks Constitutional writ relief in respect of a decision of the second respondent, the Administrative Appeals Tribunal (the Tribunal), given on 4 September 2007. By that decision, the Tribunal affirmed a decision of a delegate of the first respondent, the Minister for Immigration and Citizenship (the Minister), to cancel the visa then held by the applicant. 2 The applicant was born in Fiji, and came to Australia in 1999, at the age of 19. From 2002 onwards he incurred numerous criminal convictions, including terms of imprisonment totalling more than 10 years. On 30 May 2007, the Minister's delegate decided to cancel the applicant's visa pursuant to s 501. By application filed on 29 June 2007, the applicant sought review of the delegate's decision by the Tribunal. 3 Under s 501(2) , the Minister may cancel a visa in the circumstances that are there specified. It is common ground that the circumstances which are preconditions for the exercise of the power were satisfied in the present case. The applicant, however, contends that there are five grounds upon which the Court should interfere with the Tribunal's decision. In his application for an order of review filed on 4 October 2007, the applicant raised two grounds of review. Following directions given by the Court, the applicant filed written submissions which rely on five different grounds. In the course of the hearing today, I gave leave to the applicant to file an amended application raising the grounds that are referred to in the written submissions of 17 December 2007. (2) The Tribunal misconstrued its task under s 501 in so far as it considered whether it should exercise a discretion not to cancel the applicant's visa, rather than a discretion to cancel the applicant's visa. (3) The applicant was denied procedural fairness in so far as he was not provided with legal advice in connection with the hearing before the Tribunal. (4) Section 501 is unconstitutional in so far as it involves a determination by a non-judicial authority of whether an applicant is of bad character. (5) The Tribunal failed to take into account a relevant consideration in so far as it failed to have regard to the possibility that the applicant's human rights might be violated by reason of his being subjected to arbitrary detention. Ground 2 is of a different character. I shall deal first with the four grounds in respect of which I am firmly of the view that the application must fail. 5 Pursuant to s 499 of the Act, the Minister gave Direction Number 21 concerning the exercise of power under s 501 to cancel visas. To facilitate this object the Minister has been given discretion to refuse or cancel a visa where the visa applicant or visa holder does not pass the Character Test. In exercising this power, the Minister has a responsibility to the Parliament and to the Australian community to protect the community from criminal or other reprehensible conduct and to refuse to grant visas, or cancel visas, held by non-citizens whose actions are so abhorrent to the community that they should not be allowed to enter or remain within it. The powers conferred under section 499 enable directions to be given, in exercising discretions under section 501 for the protection of the Australian community. The Direction states that it consists of two parts. Part 1 provides directions on the application of the Character Test. Non-citizens who are being considered under s 501 must satisfy the decision-maker that they pass the Character Test. If the non-citizen does not pass the Character Test, the decision-maker must exercise a discretion to consider whether to refuse or cancel a visa, taking into account primary and other considerations. Part 2 then provides directions on what those considerations are and the weight to be given to them. 7 Paragraph 2.1 provides that, if a non-citizen does not pass the Character Test, a decision-maker must have regard to a number of considerations when exercising the relevant discretion. There are both primary considerations and other considerations. The applicant contends that, in failing to find that his actions were so abhorrent that he should not be allowed to remain with the community, the Tribunal failed to comply with Direction Number 21. He says that by so doing, the Tribunal failed to observe a procedure that was required by the Act to be observed, and that the Tribunal erred in law in making the decision. The error of law is said to be that the Tribunal did not have regard to all of the considerations that Direction Number 21 stipulate. 10 I do not consider that this ground has any substance. Direction Number 21 sets out in some detail, as I have said, the factors that are to be taken into account in relation to the protection of the Australian community and the expectations of the Australian community. The reference in the preamble to the fact that the Minister has a responsibility, to the Parliament and to the Australian community, to protect the community from criminal or other reprehensible conduct and to refuse to grant visas or to cancel visas held by non-citizens whose actions are so abhorrent to the community that they should not be allowed to enter or remain within it, does not, in my view, affect the specific considerations that are stipulated for in the body of Direction Number 21. 11 There is no requirement in the terms of the Direction for the decision-maker, be it the Minister, a delegate or the Tribunal, to reach a conclusion that particular conduct of the subject of a decision is abhorrent. The specific matters are those that I have briefly summarised, namely, the protection of the Australian community, being the seriousness and nature of the particular conduct, the likelihood that the conduct may be repeated, and a general deterrence. This ground is not made out. 12 The third ground asserts that the Minister allowed the matter to proceed before the Tribunal in circumstances where the applicant had been denied fairness because the Minister did not provide legal assistance to him. The applicant asserts that the Minister's practice of providing legal assistance for asylum seekers and not for people facing visa cancellation under s 501 amounts to unlawful discrimination in circumstances where no specific law sanctions such a practice. The applicant asserts that the fact that the Minister discriminates between asylum seekers and permanent residents facing visa cancellation is beyond anything that could reasonably be regarded as within his discretionary power. 13 I do not consider that there is any merit in that contention. The grant of legal assistance is an indulgence on the part of the Minister. There is no entitlement to legal assistance. The applicant relied on the proposition that there may be a denial of procedural fairness for a person in criminal detention if that person was not given adequate time to respond to a notice of intention to consider cancelling a visa. There can be no suggestion in the present case that the applicant did not have ample opportunity to obtain legal advice. The question is not whether the applicant was denied the opportunity of getting legal advice in relation to the delegate's decision. The question is whether there was a denial of procedural fairness in relation to the decision-making process of the Tribunal. 14 The applicant filed his application for review by the Tribunal on 29 June 2007. A hearing before the Tribunal took place on 23 August 2007. There was clearly ample time for the applicant to obtain legal advice if he wished. The applicant, in fact, attended the hearing before the Tribunal and was assisted by his father, who has also assisted him in connection with the hearing before me. Indeed, while the applicant's father indicated that he himself has no legal qualifications, he was able to furnish to the Court quite sophisticated written submissions outlining the five grounds that I have briefly mentioned. 15 Thus, one way or the other, it would have been open to the applicant to obtain legal assistance before the Tribunal if he wished. The mere failure on the part of the Minister to proffer legal assistance does not, in my view, constitute any denial of procedural fairness. This ground is not made out. 16 The fourth ground is that the combination of ss 501(6) and 501 (7) of the Act is unconstitutional in so far as those provisions combine to restrict unlawfully the common law meaning of the word " character " to the simple event of a prior 12-month sentence of imprisonment. The applicant contends that a finding that a sentence of imprisonment of 12 months or more, by itself, in absolute isolation from all other factors, leads prima facie to the conclusion that a person is of bad character, is so unreasonable that no reasonable decision-maker could have arrived at that conclusion. That contention appears to confuse the question of the reasonableness of a decision with the power of the Federal Parliament. Indeed, it also shows a misconception as to the structure of s 501. The effect of the provisions, taken as a whole, is that, whatever language is used, it is a precondition for the exercise of the discretion to cancel a visa that certain specified conditions exist, one of which is that the visa holder has been subjected to a sentence of imprisonment of 12 months or more. 17 There is no finding by a decision-maker that a visa holder has a bad character or is not of good character. The only finding is whether or not one of the preconditions set out in s 501(7) exists. I do not consider there is any basis upon which it could be said that the provisions are unconstitutional on that ground. 18 The applicant also says that only an independent judicial authority is the appropriate body to make any adverse finding with regard to the applicant's character, and that unless there is a specific determination by a court as to the actual character of the applicant, it is beyond the executive power of the Commonwealth to make such a finding. The observations that I have just made are an answer to that contention. That is to say, there is no finding by a decision-maker about the character of a visa holder. The decision-maker simply determines whether or not the preconditions set out in s 501(6) and (7) have been satisfied. 19 The applicant also advanced a contention that the possibility that cancellation of a visa and subsequent removal of a non-citizen may be punitive. However, the exercise of the discretion under s 501 is not directed to the punishment of a visa holder. The possible consequence of deterring other non-citizens from committing similar offences is not an irrelevant consideration in the exercise of the discretion conferred by s 501(2) of the Act, in deciding whether a visa holder should be permitted to remain in Australia, see Tuncok v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 172 at [44] . 20 Next, in relation to this ground, the applicant appears to advance a contention that having regard to the provisions of s 201 , the use of s 501 is for an improper use or an act of bad faith. The applicant says that, by slavishly following policy, and applying s 501 in matters where s 201 could apply, there has been an error in so far as discretionary power has been exercised in accordance with a rule or policy without regard to the merits of the applicant's case, and without availing the applicant of a process by which he could convince the decision-maker to consider his matter under s 201. I consider that this argument is precluded by the decision of the High Court in Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50 ; (2006) 230 ALR 370: see also Evans v Minister [2006] FCAFC 180. 21 Next, the applicant contends that the Tribunal erred in failing to take into account the possibility that the applicant's human rights could be violated. He says that the Tribunal failed to consider whether, in cancelling his visa, the applicant would be taken to a detention centre and would be subjected to arbitrary detention. He says that the Tribunal should have taken into account the possibility that cancellation of his visa would have exposed him to a violation of Australian domestic criminal law, namely, arbitrary detention. There is no substance in this ground, in my view. It is precluded by the decision of the High Court in Al-Kateb v Godwin [2004] HCA 37 ; (2004) 219 CLR 562. 22 That brings me to the second ground, namely, the question of whether or not the Tribunal misdirected itself in the approach that it took. In order to deal with this ground, it is necessary to say something more about the Tribunal's reasons. 23 The Tribunal began by describing the applicant briefly, and referring to the decision of the delegate and the hearing before the Tribunal. In a sense, that is unexceptionable in so far as the Tribunal, once it has made a decision, must either set aside, affirm, or vary the decision. However, the review of a delegate's decision by the Tribunal involves the Tribunal standing in the shoes of the Minister, so to speak, and exercising de novo the discretion that is conferred by section 501. The question, however, is whether the Tribunal did, in fact, approach the exercise of discretion from the right direction. Doubt is cast on that matter by that part of the Tribunal's reasons in which it deals with the application of the law and findings of fact. The Tribunal repeats that the first issue for it to decide is whether, pursuant to ss 501(6)(a) and 501 (7), the applicant passes the character test, having regard to his substantial criminal record. The Tribunal observes, citing authority of the Full Federal Court, that the character test requires an objective consideration of the applicant's enduring moral qualities, but that that does not require the applicant to meet the highest standards of integrity. This issue is whether any deficiencies in his character are such that it is in the public good to refuse the visa (see Goldie v Minister for Immigration and Multicultural Affairs 56 ALD 321 at [8] and [24]). The Tribunal then went on to say that, on the other hand, despite the many good qualities possessed by a person, those qualities can be outweighed by a single adverse incident if it is of sufficient weight and seriousness. If I decide that the applicant does not pass the character test, I must consider whether to exercise the discretion in s 501(1) not to cancel the applicant's visa, notwithstanding that the applicant does not pass the character test. In so doing, I must have regard to Part 2 of Direction No 21 as a guide to the exercise of its discretion. In exercising that discretion, the Tribunal has regard to Part 2 of Direction No 21. Paragraph 2.2 provides that a decision-maker should have regard to three primary considerations and a number of other considerations. Community expectations would clearly favour visa cancellation in this case. The decision under review is affirmed. Section 501(2) is permissive. It confers a power to cancel a visa in the exercise of the Minister's discretion, or, in the present case, the Tribunal's discretion. There is a difference between power and obligation. The question is whether the Tribunal considered that the section obliged it to cancel the applicant's visa, unless it was satisfied that it should not cancel the visa (see Ross v Minister for Immigration and Multicultural and Indigenous Affairs [2000] FCA 1716 ; 107 FCR 1 at [27] to [29], and Doukmak v Minister for Immigration and Multicultural Affairs [2001] FCA 1821 ; 114 FCR 432 at [50] and [51]). 31 It is important to remember that the reasons of the Tribunal are not to be construed minutely and finely, with an eye keenly attuned to the perception of error. If, on a fair reading of the Tribunal's reasons, it is clear that the Tribunal was exercising a discretion to cancel, rather than a discretion not to cancel, the decision should stand. My concern in the present case is that the Tribunal on two occasions referred to the discretion as one not to cancel, rather than a discretion to cancel. 32 Certainly, the Tribunal correctly stated the effect of s 501(2) as conferring a power to cancel if the holder does not satisfy the decision-maker that the person passes the character test. The other provisions of the reasons to which I have referred, however, are equivocal. Indeed, at no stage in the reasons does the Tribunal actually purport to exercise a discretion to do one thing or the other, other than to confirm the delegate's decision. The fact that the Tribunal expressed its function as being to affirm or set aside the delegate's decision, if anything, supports the construction that the Tribunal was indeed considering whether it should exercise a discretion not to cancel, rather than putting itself in the position of the primary decision-maker and deciding whether or not to exercise the discretion to cancel. 33 The matter is not without doubt. However, I consider that a fair reading of the reasons leads to the conclusion that the Tribunal did, in fact, misdirect itself and did not consider the exercise of a discretion to cancel. That was an error that would constitute a jurisdictional error on the part of the Tribunal such that the Court may grant relief in respect of the decision, notwithstanding the provisions of section 474 of the Act. 34 The Minister, however, says that there would be no utility in granting relief in respect of the Tribunal's decision, because even if the Tribunal had applied the discretion correctly, it could not possibly have produced a different result. The Minister says that it is clear from the reasons that the Tribunal was plainly and emphatically of the view that the applicant's visa should be cancelled based on his prior criminal convictions and sentencing, his conduct whilst on bail, his failure to avail himself of opportunities to rehabilitate himself, and the lack of strong mitigating factors. 35 There may be considerable substance in that contention. However, I am not persuaded that, properly directed, the Tribunal could not possibly have come to a different conclusion. Certainly, the Tribunal expressed its views firmly, but even then the observation of the Tribunal was that to set aside the decision would send entirely the wrong message to other non-citizens contemplating criminal behaviour. The Tribunal did not say that, unless it decided to cancel the visa, the wrong message would be sent. 36 As I have said, the matter is by no means clear. I am satisfied, however, that there was jurisdictional error on the part of the Tribunal, and that it cannot be said with the requisite degree of certainty that no other decision was open to the Tribunal. It follows, in my view, that the applicant is entitled to relief in respect of the Tribunal's decision. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. | cancellation of visa where decision of minister affirmed by administrative appeals tribunal whether exercising discretion "not to cancel" visa is proper interpretation of discretion conferred by statute. migration |
Before that Court, the appellant sought to set aside an order made in his absence on 6 October 2005, which dismissed an application for review of a decision of the Refugee Review Tribunal ("the Tribunal"). 2 The appellant is a citizen of Sri Lanka. He arrived in Australia on 20 October 1998 on a business visa valid until 20 January 1999. He lodged an application for a protection visa on 30 January 1998. That application was rejected by the Minister's delegate on 3 February 1999. On 25 February 1999, the appellant applied to the Tribunal for review of the delegate's decision. For reasons that are not apparent, the Tribunal did not finally determine that application until 2 March 2001, when it handed down its decision affirming the earlier refusal to grant the appellant a protection visa. 3 On 17 February 2004, the appellant sought an order nisi in the High Court in relation to the Tribunal's decision. The matter was subsequently remitted to the Federal Court, and then transferred to the Federal Magistrates Court. It was listed for hearing on 6 October 2005. On that day, the appellant failed to appear before the Federal Magistrate. Accordingly, his Honour dismissed the application, in default of appearance, pursuant to r 13.03A(c) of the Federal Magistrates Court Rules 2001 . On 7 October 2005, the appellant filed an application in the Federal Magistrates Court seeking orders, inter alia, that the judgment in default be set aside, and the matter be reinstated. That application was supported by an affidavit sworn by the appellant's solicitor, explaining that there had been an error on the part of the appellant's legal representatives who had assumed, wrongly, that the matter would be heard on 5 October 2005, rather than the following day. 4 On 28 October 2005, the Federal Magistrate adjourned the application to have the judgment in default set aside so that the appellant could file proper material explaining exactly what had occurred. A supplementary affidavit was filed on 28 November 2005. On 5 December 2005, the Federal Magistrate heard the application, and on 20 December 2005, he ordered that it be dismissed. In substance, his Honour found that the appellant had not attended the hearing on 6 October 2005 because of error on the part of his legal representatives. He proceeded on the basis that he would grant leave to set aside the default judgment if the appellant satisfied him that he had an arguable case, on the merits. He concluded that there was no arguable case. 5 It is important to appreciate that his Honour's decision to refuse leave was both interlocutory, and discretionary in nature: Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20 ; (1981) 147 CLR 246 and SZAZY v Minister for Immigration & Multicultural & Indigenous Affairs [2006] FCA 153 at [12] . Accordingly, leave to appeal is required pursuant to s 24(1A) of the Federal Court of Australia Act 1976 (Cth). The appellant, being by that stage self-represented, and obviously unaware of the technical requirements associated with his application, filed a notice of appeal pursuant to O 52 r 12 of the Federal Court Rules , rather than an application for leave to appeal. The appeal is plainly incompetent, and must be dismissed for that reason alone. However, I have treated the appeal as though it was an application for leave to appeal, and I am prepared to extend time within which to file such an application. That allows me to consider the substance of the proceeding, rather than decide this case by reference to matters of form. 6 Before the Tribunal, the appellant claimed a well-founded fear of persecution on the basis of his active membership of the United National Party (UNP) and, in particular, his relationship with certain senior party figures. He claimed that he had held the position of President of the Youth Council of that party in his constituency since 1985. 7 He said that after 1994, he had assisted a former UNP Minister, Mr Wijepala Mendis, to help organise the party, and that he had served the party in a variety of different ways. He said that he had worked for Mr Mendis' son, Mr Davindra Mendis, from 1986, and described his role as that of a private security officer. He claimed that in August 1996, a special mass had been held to mark the 50 th anniversary of the UNP. At that mass, Mr Davindra Mendis had shot and killed a member of the opposition party, the People's Alliance, which was a left wing coalition including members of the Sri Lanka Freedom Party ("the SLFP"), and various other political groups. He claimed that supporters of the People's Alliance had planned to kill supporters of Mr Mendis, and he referred to the murder of a particular UNP member on 23 September 1996. On 17 November 1996, Mr Davindra Mendis was said to have committed suicide. 8 The appellant claimed that in April 1998, SLFP supporters set fire to his sawmill. He also claimed that he received threats after Mr Mendis' death, and that two of his employees were told that they would be harmed if they continued to work for him. He said he received anonymous letters, and threatening telephone calls in the month preceding the fire. 9 It was after this that the appellant decided to leave Sri Lanka. However, he did not actually leave the country until six months later, in October 1998. That was a factor that the Tribunal considered significant in assessing his overall credibility. 10 The Tribunal found that the appellant had a local profile as a UNP supporter, but did not accept that he had a high profile among UNP leaders. It concluded that his evidence was unconvincing. It was particularly troubled by his claim that he had remained President of the Youth Council, even after his arrival in Australia. It did not accept his claim to have been a security adviser to Mr Mendis. Nor did it accept his claim that his sawmill had been destroyed by SLFP supporters, which it regarded as speculative. It concluded that there was no more than a remote chance that he would face harm of a type that might amount to persecution, in the relevant sense, by reason of his political opinions if required to return to Sri Lanka. It found that any fear of persecution that the appellant might have was not well-founded, and that he was not a person to whom Australia had protection obligations under the Refugees Convention. 11 The grounds of review in the amended application to the Federal Magistrates Court included, amongst others, a claim that the Tribunal had denied the appellant natural justice. He claimed that the Tribunal had failed to provide him with an opportunity to make submissions regarding its view of whether he had a subjective fear of persecution, and also its view of his role as President of the Youth Council. 12 The Federal Magistrate found that the Tribunal had thoroughly explored, by question and answer, all issues critical to the application. He considered that it would have been plain to the appellant that his profile within the UNP was a key issue, and that the Tribunal had not been required to provide further details regarding that matter because it would then simply be indicating its "thought processes". The Tribunal was not required to undertake this task. His Honour found that the Tribunal had arrived at a series of findings that were adverse to the appellant only after a detailed and thorough analysis of his claims, and that it had accorded the appellant adequate opportunity to respond to the doubts raised in its key findings of fact. He concluded that there was no information in the material before the Tribunal that attracted the operation of section 424A of the Migration Act 1958 (Cth). He therefore determined that the appellant did not have an arguable case, and dismissed the application to set aside the default judgment. 13 In a notice of appeal dated 3 January 2006, the appellant relies upon two grounds of appeal. He claims that the Federal Magistrate erred in law by failing to hold that the appellant was denied procedural fairness. The particulars provided in relation to that first ground assert that the Federal Magistrate erred in rejecting the appellant's claim that he was not given an opportunity by the Tribunal to be heard on the issue of his subjective fear of persecution. He referred to documents and affidavits from members of his family in Sri Lanka, and his past employees, who had been threatened to provide information as to his whereabouts after he left that country. The second ground of appeal also raises an allegation of denial of procedural fairness. The particulars provided are not altogether clear. However, they seem to attribute to his Honour a finding that the Tribunal's conclusions regarding the appellant's role "as a Youth Club President [sic]" were sufficient grounds to warrant the dismissal of his claim to protection. 14 At the hearing this application, the appellant was unrepresented. However, he filed written submissions that were prepared with the assistance of a friend. Those submissions did not advance his case. His oral submissions were essentially confined to challenging the findings of fact made by the Tribunal. In effect, he sought to have this Court engage in merits review. 15 I have read the judgment of the Federal Magistrates Court with some care. I have also read the Tribunal's reasons for decision. There is nothing to suggest that his Honour acted upon any erroneous principle. His Honour was satisfied that the Tribunal afforded the appellant an adequate opportunity to be heard in relation to both the question of the appellant's subjective fear of persecution, and his role as President of the Youth Council. I can discern no error on his Honour's part in arriving at that conclusion. The Tribunal's findings were purely findings of fact, and its conclusions regarding the appellant's credibility were open on the material before it. The Tribunal made plain to the appellant the areas that it had concerns about, and he was given an adequate opportunity to respond to those concerns. 16 One example will suffice to illustrate this. I found this surprising given that the applicant is now thirty-seven and he explained that one did not need to be a young person to have such a role in the Youth League. He had been content to remain in the youth branch because it left him time to manage his business affairs. I asked the applicant that if he was last elected in 1997 and elections appeared to have been held every two years how he knew that he was still the President. He said that the branch receives letters and that these are addressed to him as President and that he was asked to do things because he was the President. I asked the applicant how he could be President when he had lived in Australia for more than two years and he said that it was not known that he was here although it was known that he was away from Sri Lanka. I said to the applicant that I found it difficult to accept that he had [a] meaningful and active role in the UNP given that he lived here and he responded by telling me that a person who was a Minister and another person who was a police inspector had lived outside Sri Lanka and no-one knew and that only recently the President of Sri Lanka had gone away and no-one had known. The applicant said too that at present his branch of the Party is powerless and that even if a letter comes there is no-one to respond to it. Indeed, it directly contradicts that claim. The Tribunal signalled to the appellant, in clear and unmistakable terms, its doubts regarding this aspect of his claim. There was no denial of procedural fairness. 18 In my opinion, the Federal Magistrate correctly declined to set aside the default judgment. I would refuse leave to appeal from that decision. The application for leave to appeal must be dismissed, with costs. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg. | application for leave to appeal from judgment of federal magistrate dismissing application to set aside judgment made in default of appearance federal magistrate rejected claim that refugee review tribunal failed to accord procedural fairness no error disclosed in federal magistrate's judgment migration |
Most residential premises in Australia have a wall socket allowing for a telephone to be plugged into the socket and thus connected to the PSTN. Many forms of residential development have more than one dwelling, such as apartment or home unit buildings, and town houses. Telephony providers refer to these as "multi-dwelling units" or "MDUs". Because a number of the terms necessary to resolve these proceedings are acronyms, I will include a glossary as a schedule to this judgment for ease of reference. 2 Many MDUs have a main distribution frame ("MDF"). The MDF is used to connect the telephony wires of dwellings within the MDU to appropriate wires that, in turn, connect to a telephone exchange. A form of connection is by use of a copper or aluminium wire, which, as explained below, is defined as a "communications wire". One, but by no means the exclusive, means of connection between the exchange side of the MDF and the exchange itself is through an unconditioned communications wire. This form of communication is called an unconditioned local loop service ("ULLS"). Telstra Corporation Limited owns and maintains those local loops. It also owns over 5,000 local exchanges as explained in Telstra Corporation Ltd v The Commonwealth [2008] HCA 7 ; (2008) 243 ALR 1 at 3-4 [1] - [8] per Gleeson CJ, Gummow, Kirby, Hayne, Heydon, Crennan and Kiefel JJ. 3 The essential and defining characteristics of the ULLS are that it consists of an unconditioned communications wire (usually a twisted pair of copper or aluminium wires) between, in substance, the exchange side of the MDF and the telephone exchange itself. However, there are other means of connecting between the exchange side of the MDF and the telephone exchange, including using fibre optic cable. Thus, the mere fact that there may be wires physically present at the exchange side of the MDU does not mean that the whole path to the exchange from that wire will always be physically along a copper or aluminium communications wire or wires. 4 Other telecommunications providers than Telstra are able to offer telephony services to, among others, residents of MDUs. In September 2006, Optus Networks Pty Limited was such a provider. At that time, Optus notified a dispute to the Australian Competition and Consumer Commission concerning access to the ULLS provided by Telstra in MDUs under s 152CM(1) of the Trade Practices Act 1974 (Cth). Part XIC of the Act regulates, among other things, access to parts of the PSTN, and requires the Commission to act as an arbitrator of disputes between participants in the telecommunications industry concerning access to services. 5 The Commission conducted an arbitration of the access dispute to the ULLS between Optus and Telstra. Optus claimed that unnecessary costs were incurred by both Optus directly and through the charges it had to pay Telstra. This was because technicians from each of them had to attend at an MDF to connect the wires from the exchange side to the wires on the dwelling side of the frame in order to provide the subscriber with a link to the telephone exchange. Optus contended that often no attendances were necessary. The parties used the description "truck roll" to describe the visit by a technician in a vehicle to make the physical inspection of the wires. Telstra's technician would identify a pair of wires on the exchange side of the MDF as being connected to the ULLS and available for use by Optus' subscriber. Optus would then send a technician to connect the two wires identified by Telstra to wires on the dwelling side of the MDF linked to Optus' subscriber's dwelling. This occurred even where the previous occupant of the dwelling had had a telephone line connected. 6 Optus contended that it was unnecessary in those circumstances for either Telstra or Optus technicians to attend at the MDF, since a physical link had already existed for the previous subscriber who had lived in the dwelling. Thus Optus argued that an unnecessary expense was incurred in having two technicians redo or check something that already existed. Optus suggested that there must be a simpler and more efficient means of giving access. 7 When the Commission conducted the arbitration it raised a suggestion that if there were a "soft dial tone" on the telephone in the subscriber's dwelling, that would indicate that there was already a continuous link to an exchange. A soft dial tone indicates that the line from the subscriber's dwelling has a physical connection to an exchange but that line is not then being used to provide any services to a subscriber. The line can be used only to make emergency calls and calls to a number provided by Telstra in order to indicate the previous telephone number used on the PSTN to reach that address. The Commission suggested that ascertaining the presence of a soft dial tone would indicate the existence of an ULLS and thus make attendances by technicians at the MDF unnecessary. 8 The fallacy in this suggestion is, of course, that the existence of the soft dial tone does not indicate whether the connection is by way only of an unconditioned communications wire (i.e. an ULLS), or, by way in whole or part of some other means, e.g. fibre optic cable or other connection not being an ULLS. Moreover, while the soft dial tone indicates the existence of a connection it also is present only when no actual service is being provided over that connection (i.e. the connection is not in use and is vacant). In its final determination following the arbitration, the Commission proposed a novel regime using the presence of a soft dial tone for the ordering of ULLS by Optus from Telstra. This regime was intended to adapt existing processes in the Australian Communications Industry Forum ("ACIF") industry code C569:2005 Unconditioned Local Loop Service --- Ordering, Provisioning and Customer Transfer (Code 569). I will explain what this involved later (see Ch 6). However, Code 569 did not use the term "soft dial tone" at all. (b) On receipt of a ULLS Request from Optus, Telstra must validate that the Service Number corresponds to the address specified in the request, based on Telstra's cabling records in Telstra exchanges. (c) If this information is incorrect, Telstra must follow the ULLS Rejection process for ULLS Transfers specified in the ACIF C569:2005 Unconditioned Local Loop Service --- Ordering, Provisioning and Customer Transfer industry code. (d) For the purposes of the ULLS Transfer Request and in accordance with the definition of Losing Access Seeker stated in the ACIF C569:2005 Unconditioned Local Loop Service --- Ordering, Provisioning and Customer Transfer industry code, where Telstra has been supplying the service immediately prior to the transfer, Telstra is to be considered the Losing Access Seeker. (e) Where there is no Communications Wire between the Telstra exchange and the end-user customer's premises i.e., there is no soft dial tone and Optus submits a Vacant ULLS Request, Telstra must follow the Vacant ULLS process specified in the ACIF C569:2005 Unconditioned Local Loop Service --- Ordering, Provisioning and Customer Transfer industry code. (f) If Optus submits a ULLS Transfer Request to Telstra that meets the requirements in paragraph (a), Optus must accept any risk to the quality of, connectivity of and suitability for providing voice and/or data services on the existing copper path between the Telstra exchange and the end-user premises. (g) For the avoidance of doubt, where there is an existing Communications Wire between the Telstra exchange and the end-user customer's premises which has a soft dial tone but Optus is not prepared to accept any risk to the quality of, connectivity of and suitability for providing voice and/or data services on the existing copper path between the Telstra exchange and the end-user premises, Optus must submit a Vacant ULLS Request. During the course of the arbitration Telstra contended that it would cost Telstra about $1.7 million to redesign its computer system to accommodate the proposal that the Commission had in mind. Optus argued that it would only cost it, Optus, about $360,000 to implement the proposals. (Grounds 1 and 2 were not pressed. The object of the Part is to promote the long-term interests of end-users of telecommunications carriage services and services provided by means of carriage services governed by the Telecommunications Act 1997 (Cth) ( Trade Practices Act , s 152AB(1)). 13 The Parliament identified the matters to which a decision-maker must have regard in determining whether some proposal, activity or requirement promotes the long-term interests of end-users of carriage services. These include the objectives of promoting competition in markets for listed services and encouraging the economically efficient use of infrastructure by which listed services are supplied (s 152AB(2)(c) and (e)). This promotion of competition requires the decision-maker to have regard to the extent to which obstacles to end-users in gaining access to listed services can be removed (s 152AB(4)). The ULLS is a declared service under the Act (see Ch 5 below). Under s 152AQA(1), the Commission must determine in writing principles relating to the price of access to a declared service. And, the Commission must have regard to any such pricing principles if it arbitrates an access dispute under Div 8 in relation to a declared service (s 152AQA(6)). 15 By force of s 152AQB(1)(c) the ULLS is also defined to be a "core service". When it arbitrates an access dispute the Commission must have regard to a determination under s 152AQB in relation to a core service covered by such a determination (s 152AQB(9)). "Ordering" involves an access seeker submitting a request to Telstra and Telstra responding to the request by either confirming its validity and the availability of a suitable communications wire (ULLS) or rejecting the request (Code 569, cl 11). "Provisioning" involves Telstra acting on a confirmed request by connecting the identified and available communications wire to the access seeker's equipment in the local exchange and recording the new status of that wire in its own records (Code 569, cll 12.1, 12.2). Telstra was required to comply with all of the standard access obligations in relation to the ULLS service by force of s 152AY, including any obligations imposed by the Commission in accordance with an arbitration determination made by it under Div 8 of Pt XIC (s 152AY(2)(b)(iii)). In exercising its powers under Div 8 the Commission must have regard to the desirability of access disputes being resolved in a timely manner (s 152CLA (1)). Under s 152CM(1) an access seeker in the position of Optus was entitled to notify the Commission in writing that an access dispute existed where, first, a declared service, such as the ULLS, was supplied by a carrier (here, Telstra), secondly, one or more standard access obligations applied and, thirdly, the access seeker and carrier were unable to agree about the terms and conditions on which the carrier was to comply with those obligations. The scope of s 152CM(1) is illustrated in s 152CM(5) which gives examples of the subject matter of access disputes. Those examples include the price, or method for ascertaining the price, for which access is to be provided and whether a previous determination ought to be varied. 19 By force of s 152CP(1) the Commission was required to make a written determination on access by Optus, as an access seeker, to the ULLS service as a declared service. And, when the Commission made a determination, it had to give its reasons for making the determination to the parties to the arbitration (s 152CP(5)). 21 Although the Commission had power to make an interim determination (pursuant to s 152CPA(1); see s 152CL where the term is defined) it in fact proceeded to make a final determination of this access dispute. An arbitration hearing in respect of an access dispute was to be conducted in private unless the parties otherwise agreed (s 152CZ(1) and (2)). And, in conducting an arbitration about an access dispute, the Commission was not bound by legal technicalities, legal forms or rules of evidence and was required to act as speedily as proper consideration of the dispute allowed, having regard to the need carefully and quickly to enquire into and investigate the dispute and all matters affecting the merits, and fair settlement, of it. The Commission was also authorised to inform itself of any matter relevant to the dispute in any way thought appropriate (s 152DB(1)). 24 Additionally, the Commission had power under s 152DBA to use information provided to it by a party to another arbitration in the arbitration which it was determining, if it considered that that would be likely to result in the current arbitration being conducted in a more efficient and timely manner. But, if it wished to do so, it had to give notice to the person from the other arbitration whose information or document it proposed to use (s 152DBA(3)). 25 Where a party to a determination applies to enforce a determination, s 152DU is expressed to confer jurisdiction on this Court to make orders, including granting an injunction restraining a contravention of the determination, or requiring the party alleged to be in breach to comply with it, or alternatively for compensation. There is no issue in this matter under s 152DU, except that Telstra has pointed to that section and the consequences of any contravention of the Act which might expose it to potential liability, if the determination be valid. 3. For the purpose of making a final determination in an access dispute, s 152AQB(9) required the Commission to have regard to any (earlier) final determination of terms and conditions it had made in relation to a core service, such as the ULLS. Optus argued that the Commission's October 2003 determination had adopted very limited parts of Code 569 as model terms and conditions dealing with ordering and provisioning. Broadly speaking, Telstra argued that, in substance, the October 2003 determination had adopted Code 569 in its entirety. In this Determination, the Commission has chosen to deal with only with the key contentious terms and conditions as raised by industry participants. It recognised that there was a formal process of industry self-regulation that had determined how particular matters should be dealt with between access seekers and providers. And, the Commission recognised the desirability of constraint in its promulgation of other terms and conditions which might conflict or be inconsistent with what the industry had already developed. In Part 2 of that determination the Commission expressly adopted particular ACIF codes where it considered that their provisions dealt adequately with a point of contention in the industry. And, the Commission identified particular areas as "key contentious" non-price terms and conditions requiring its specific attention. Finally, in a general comment at the conclusion of Part 2 of the determination, the Commission said that it would expect access agreements to reflect all applicable ACIF code obligations unless there was an agreement between the parties to adopt another standard. As a consequence, access agreements that fail to incorporate ACIF codes standards will fail to meet the Commission's model non-price terms and conditions. The Commission expressly adopted cl 8.1 of the 2001 version which required access providers (i.e. Telstra) to treat ordering and provisioning of ULLS in a non-discriminatory manner. 31 The determination then referred to s 152AR(3)(b) which required that an access provider must, if required to do so by a service provider, take all reasonable steps to ensure that the technical and operational quality of the active declared service supplied to the service provider was equivalent to that which the access provider provided to itself. Since the Act expressly provided these requirements, it is difficult to understand how the Commission regarded such a term as "contentious". Optus argued that this model term also had the effect of expressly incorporating what became cll 11.6.2 and 11.7.2 in Code 569 (these provided that an access provider had to take all reasonable steps to ensure that the technical and operational quality of the information supplied to an access seeker as part of the service qualification process was equivalent to that which the access provider provided to itself and also had to provide, similarly, appropriate connections). The service qualification process involved the access provider checking its office records as to the suitability of the proposed ULLS. Optus argued that because the Commission made these specific provisions of Code 569 as model terms it could not have made the balance of the Code as model terms. 32 In addition, the Commission expressly adopted as model terms and conditions cl 11.10 of the 2001 version of Code 569 which provided for "cutover notification", (this required the access provider to notify the access seeker when the provisioning of the ULLS would be complete) "together with all related provisions". 34 The Commission noted that the 2001 version of Code 569 outlined the agreed industry processes for ordering and provisioning ULLS. It gave, as an example, cl 11.6, which detailed the process of service qualification as part of ordering and provisioning ULLS. The Commission said that any change in this process should be developed through the industry body (ACIF) and the relevant code. The section required the Commission to make a written determination setting out model terms and conditions relating to access to the ULLS and to take all reasonable steps to ensure that such a declaration was made within six months after the commencement of the section on 19 December 2002. 36 The subject matter, scope and purpose of that statutory requirement was directed to providing commercial certainty as to the material contractual rights and obligations of industry participants that would apply in any contract for access to ULLS as a declared service, absent agreement or a determination by the Commission. There would be little point in requiring the Commission to act by declaring model terms and conditions within six months of the commencement of this legislation which regulated access to declared services, if it had the choice of leaving out of a determination made under s 152AQB(2) and (3) some or all material terms and conditions relating to access to the ULLS, such as those in Code 569. 37 The language of the sections does not support the suggestion that the Commission could refrain from setting out some or all model terms and conditions relating to access to the ULLS. The absence of the definite and indefinite article ("the" and "a") before the expression "model terms and conditions" in s 152AQB(2) does not create any ambiguity. This is also evident when that provision is read with the remainder of s 152AQB as a whole. If the Parliament had intended that the Commission need not make all appropriate model terms and conditions relating to access to a core service like the ULLS then it had to say so, rather than use the clear language that it did. 38 This raises an important aspect of the rule of law. The Parliament expressed itself by requiring the Commission to make a specific determination and to take all reasonable steps to achieve that end within a time frame set down in unambiguous terms in its legislation. While s 152AQB contemplated that the Commission might not have been able to complete the task in six months' time, it still obliged the Commission to continue thereafter to take all reasonable steps to promulgate model terms and conditions relating to access to the ULLS service. 39 "All reasonable steps" are not "some" step or steps which the Commission thinks are reasonable: cf: George v Rockett [1990] HCA 26 ; (1990) 170 CLR 104 at 112. The ULLS service was a core service described in the Act. The Act provided specifically for the regulation of access to that service. It imposed liabilities on Telstra, among others, to ensure that access was given in accordance with the model terms and conditions (if they were applicable) that the Parliament required be promulgated by the Commission acting with an appropriate degree of urgency and attention to the terms of the Act. The explanatory memorandum was not the law and its stated intention was not reflected in the statutory language. This is particularly important since the Act provides for heavy penalties on those who contravene its requirements. 40 Mason CJ, Wilson and Dawson JJ observed in Re Bolton; Ex parte Beane [1987] HCA 12 ; (1987) 162 CLR 514 at 518 that the words of a Minister must not be substituted for the text of the law, particularly when the intention stated by the Minister was unexpressed in a law restrictive of the liberty of an individual. I am of opinion that this canon of construction also applies in circumstances where the text of the law imposes responsibilities and liabilities on persons, including corporations, who contravene it. However unfortunate it may be when that happens, the task of the Court remains clear. The function of the Court is to give effect to the will of Parliament as expressed in the law. When legislative power is used to create rights or impose liabilities and obligations, one consequence is that the freedom of those affected by the legislation is constrained or expanded by what the law provides. Where the law requires the executive branch of government, such as the Commission, to do something to give effect to the intention of the Parliament, the executive must obey the law, just like every other member of the community, be it a corporation or individual. This is because it is the duty of the executive branch of government to obey the law as laid down by the Parliament and the Courts, even if the executive does not agree with those decisions: The Commonwealth v New South Wales [1923] HCA 23 ; (1923) 32 CLR 200 at 214 per Isaacs, Rich and Starke JJ applying Eastern Trust Co v McKenzie, Mann & Co [1915] AC 750 at 759; see also Tran v Minister for Immigration [2006] FCA 1229 ; (2006) 154 FCR 536 at 540 [9] per myself. 42 Those responsible for drafting legislation should not use explanatory memoranda to suggest the existence of some unexpressed restriction in the unambiguous terms of the bill before the Parliament. Such legislative drafting or elision is to be deprecated. It fundamentally undermines the right of persons to know what their freedoms and obligations are as provided by the law in the words enacted by the Parliament. It is one thing to read the (clear) words and text of an Act of the Parliament, but it is another thing to require people to look beyond these to the raft of secondary materials to which s 15AB of the Acts Interpretation Act 1901 (Cth) and its analogues suggest the Court may have resort, for the purposes of divining the intention of Parliament. 43 The non-comprehensive approach of the Commission in its October 2003 determination treated the words of the Act as if they were not obligatory. The requirement to take all reasonable steps to make a determination, setting out model terms and conditions relating to access to the core service of the ULLS within six months of the enactment of s 152AQB could not have been intended to leave unexpressed important terms and conditions for the provision of access to those services. How would anyone know what the terms and conditions were on which such services would be provided? If the construction put by the Commission were correct, that the uncontentious parts of the terms and conditions used by industry participants in the industry codes were not treated by it as being model terms and conditions within the meaning of s 152AQB, then there would be a significant gap in the model terms and conditions for access to the declared service in contravention of the command of the Parliament. That would lead to uncertainty. 44 The purpose of a model is to ensure that everyone is aware of the usual terms and conditions applicable in the relevant situation. Of course, in a particular arbitration or dispute, where the parties have not been able to agree on other terms and conditions to replace those model terms and conditions, the Commission is entitled to impose a solution, but in doing so it must have regard to the model terms and conditions, as s 152AQB(9) clearly requires. 45 Notwithstanding the way in which the Commission expressed itself, first, in its determination under s 152AQB, and secondly, in submissions it made (and Optus adopted) before me, I am of opinion that the October 2003 determination can and should be read consistently with the Act. I find that the then existing industry codes relating to the ordering and provisioning of the ULLS were determined by the Commission to be model terms and conditions (except to the extent that there were any different or inconsistent "contentious" terms expressly specified) in the October 2003 determination. 4. Mr McAinsh was Telstra's business processes and systems manager in its wholesale customer transfer group. Some of the material in those affidavits was not objected to, while other portions were relied on as evidence of facts to support Telstra's arguments going to the validity of the final determination. 47 Optus objected that several other passages in the affidavits were inadmissible because they were in the nature of submissions. Optus argued that, by including detailed submissions in Mr McAinsh's affidavits, Telstra was seeing to adduce further evidence in addition to what was before the Commission and, in some cases, to vary its position in respect of certain matters. Optus argued that, in light of the evidence before the Commission, no further explanation of the various technical matters was admissible in these proceedings. However, it also relied on an affidavit of Haris Khaliqi, one of its business program managers, in relation to certain matters dealt with by Mr McAinsh. 48 In my opinion, some of the contentious material was admissible to prove the meaning of technical terms used in the final determination, Code 569 and Guideline 587 (discussed below at Ch 7) in the context of the telecommunications industry: Collector of Customs v Agfa Gevaert Ltd [1996] HCA 36 ; (1996) 186 CLR 389 at 398-399 per Brennan CJ, Dawson, Toohey, Gaudron and McHugh JJ. Evidence as to the meaning of technical terms used in an administrative decision is admissible so that the Court is placed in the context of understanding the natural and ordinary meaning of those words as they would be understood by persons familiar with their use: see also Australian Retailers Association v Reserve Bank of Australia [2005] FCA 1707 ; (2005) 148 FCR 446 at 566 [458] . Such evidence is capable of establishing that the decision-maker erred in its understanding of the technical matters with which its decision dealt. In Australian Retailers Association 148 FCR at 566 [458], Weinberg J held that such evidence is admissible where an administrative decision is challenged on the ground that the decision-maker lacked jurisdiction to make it because that was dependent on an actual state of facts that did not exist, or the decision-maker based the decision on a finding of a particular fact that did not exist. In that case, the Court held that evidence was admissible in judicial review proceedings to assist in the determination of a jurisdictional fact, namely, whether a development fell within a statutory description "special industry": see Enfield 199 CLR at 147 [24], 155-156 [50]. 50 In Visa International Service Association v Reserve Bank of Australia [2003] FCA 977 ; (2003) 131 FCR 300 at 437-439 [659] - [666] , Tamberlin J admitted evidence of this kind in judicial review proceedings so that the Court was in the position to understand the particular meaning of words used in the specialised area concerned. He applied what Street J had earlier held in Ancher, Mortlock, Murray & Woolley Pty Ltd v Hooker Homes Pty Ltd 2 [1971] NSWLR 278 at 286 that an argumentative process between experts enables the Court to proceed more readily and thus appreciate the relevant issue for decision. It can also illuminate the application of a specialised usage of words in the context. 51 In my opinion, here, the evidence was admissible to explain the meaning and signification of terms used in the proceedings before and by the Commission and in these proceedings. In the end, the expert evidence from both sides was useful to elucidate and understand how concepts such as a soft dial tone, a communications wire, and other network paths operated. 52 On the other hand, I have treated Mr McAinsh's explanations, in his affidavit evidence in these proceedings, of the way in which par 10 of the final determination operated, as being in the nature of submissions and not as evidence before me. 5. Definitions Where words or phrases used in this declaration are defined in the Trade Practices Act 1974 or the Telecommunications Act 1997 , they have the meaning given in the relevant Act. In this Appendix: boundary of a telecommunications network is the point ascertained in accordance with section 22 of the Telecommunications Act 1977; communications wire is a copper based wire forming part of a public switched telephone network; customer access module is a device that provides ring tone, ring current and battery feed to customers' equipment. Examples are Remote Subscriber Stages, Remote Subscriber Units, Integrated Remote Integrated Multiplexers, Non-integrated Remote Integrated Multiplexers and the customer line module of a Local Access Switch; public switched telephone network is a telephone network accessible by the public providing switching and transmission facilities utilising analogue and digital technologies. " 6. The Code defined a communications wire as "a copper or aluminium based wire, forming part of a [PSTN]". This incorporated part of the definition of the ULLS in the declaration made by the Commission under s 152AL(3). For the avoidance of doubt, Code 569 noted that a communications wire generally meant a copper or aluminium cable pair. (Nothing turns here on the Code referring to aluminium wire in addition to the copper wire used in the Commission's declaration of the ULLS. ) The communications wire, however, had to be unconditioned if it were to meet the definition of the ULLS in the s 152AC(3) declaration. industry participant] to supply services to a Customer. ULLS Identifier means a unique number allocated by the [access provider] to an individual ULLS. ULLS Request means a specific request from the [access seeker which will gain the customer] to the [access provider] for a Vacant or In Use ULLS or ULLS Transfer Request. ULLS Request Identification Number is a request from the [gaining access seeker] to the [losing access seeker] to determine what Service Number [defined as the Customer's fixed network billing service number identifiable by full national number --- i.e. the telephone number of the Customer] or Service Numbers are associated with an In Use ULLS. ULLS Transfer Request is a request from the [gaining access seeker] to the [access provider] to process a ULLS Transfer [defined as the successful transfer of a ULLS between the losing access seeker and gaining access seeker]. Vacant ULLS means a ULLS that is not an In Use ULLS. Importantly, cl 8.6 provided that Code 569 applied "... only to existing Communications Wires available in an [access provider's] network at the time of request" (emphasis added). This immediately creates a conflict with par 10(e) of the final determination. The latter purported to apply where there is no communications wire existing between the Telstra exchange and the customer's dwelling. 56 Notably, the Code did not use or define the term "soft dial tone". That term was introduced into the ordering and provisioning process by the Commission inserting it into the final determination. A soft dial tone as understood by industry participants, indicated only that a connection was present but not in use . The presence of a soft dial tone did not indicate whether that connection was in fact by a communications wire (i.e. a copper or aluminium wire) or whether it was conditioned or unconditional. Because a soft dial tone is a characteristic of a connection not then in use, such a connection could only be considered in respect of a Vacant ULLS Request under Code 569. The definitions and usage of the terms In-Use ULLS or ULLS Transfer Requests exclude lines or connections not then in use; i.e. these lines never have soft dial tones. Under cl 9.4.1, a gaining access seeker (such as Optus) for "each proposed ULLS Transfer" had to forward to a losing access seeker (such as Telstra) by email a spreadsheet containing the customer's ULLS identifier, name and any other relevant information, unless they had otherwise agreed a transfer regime. 58 Thus, when Optus seeks to obtain the transfer of an existing ULLS under Code 569, it must identify the actual communications wire using the number (the ULLS Identifier) which Telstra allocated to the ULLS line. That number is distinct from the telephone number (or Full National Number ("FNN")). By Optus using the procedure in cl 9.4 of Code 569, Telstra will be able to verify that what is sought to be transferred is, in fact, an ULLS: i.e. first, a communications wire currently in use and secondly, that the wire is unconditioned. So, when a customer seeks to transfer an existing ULLS service that he or she is using (by changing from one service provider to another) the customer seeks to retain the use of that existing communications wire but change its service provider. The transfer processes for an existing service in Code 569 do not involve any change of wiring at the MDF or MDU. The transfer will occur at some other point, like a telephone exchange, where responsibility for providing the existing identified communications wire to the customer (and hence the ULLS) will be transferred between the service providers. If Telstra is the existing customer's provider the process is called an "In Use ULLS Request". On the other hand, if another access seeker (i.e. industry participant) is supplying the existing service, and the customer wishes to change to a different access seeker, the process is called a "Transfer ULLS Request". In the latter case, Telstra's role is to transfer an existing ULLS service between two third parties where it has no direct relationship to the customer or end-user. 59 Under cl 9.6 of Code 569, an access provider had to notify the gaining access seeker of any rejection, including details of the reasons for the rejection, within three clear business days after receiving an ULLS Transfer Request. The gaining access seeker was only entitled to resubmit the original ULLS Transfer Request if it had rectified any incorrect, incomplete or inconsistent information or any incorrect electronic format (cl 9.6.2). First, an access seeker had to specify one of six types of access request. Three of those types are relevant here: Vacant ULLS Request, In-Use ULLS Request and ULLS Transfer Request (to be distinguished from an "ULLS Transfer" discussed above): see cl 11.1.1(a), (b) and (c). The final determination referred in par 10(a) generically to Optus submitting "... a ULLS Request to Telstra" rather than to one of the six types of ULLS request specified by cl 11.1 of Code 569. 61 But par 10(a) of the final determination required Telstra to follow the ULLS transfer process in Code 569 by stating that, if Optus made a request which simply supplied a service or full national number and address "associated with the Communications Wire, Telstra must treat the request as if it was a ULLS Transfer Request following the ULLS Transfer process specified in [Code 569]" (emphasis added). The succeeding provisions of par 10 of the final determination refer to other specific procedures in Code 569 dealing with, among other things, a "Vacant ULLS Request". Hence, the concepts used in Code 569 are essential to understanding how the final determination operates. Notably, because the request was for a Vacant ULLS, there was no need to identify any particular communications wire connecting the Telstra exchange to the MDF at the MDU. It would be up to Telstra to find any available communications wire to satisfy that request. There are two specific types with the ULLS Request detailing whether the Service Number associated with the In-Use ULLS is cancelled by the [access provider] or ULLS Call Diversion is provided as well as the ULLS Transfer Request. Each involved the cancellation by the access provider (i.e. Telstra) of the Service Number (i.e. telephone number) associated with the line. The second type of In-Use ULLS request would also involve the diversion of calls made to the old telephone number to the new one. The Code referred to the two types of In-Use ULLS Request respectively as "Request for In-Use ULLS --- Cancellation of Service Number required" (cl 11.3.1) and "Request for In-Use ULLS --- Cancellation of Service Number and ULLS Call Diversion required" (cl 11.3.2). Oddly, the Commission said in its reasons at [168], that first of those types of In-Use ULLS was applicable to the final determination. However, the final determination did not mention either type of In-Use ULLS request; rather it referred only to ULLS transfer and Vacant ULLS requests. 67 As a minimum, an access seeker had to provide the access provider with, among other things, the existing telephone number (the service number) of the subscriber, the subject of the request. Telstra's computer software could link an existing ULLS communications wire to the existing, and in use, telephone number. [access provider] to jumper nominated cable pair to [point of interconnection] cable pair). An access seeker (Optus) in making an ULLS Transfer Request must provide the access provider (Telstra) with, among other things, the original ULLS Identifier, pursuant to cl 11.4.2(e)(vi). 71 Thus, cl 11.4 of Code 569 requires an ULLS Transfer Request to be for not just an existing connection, but to include, relevantly, the original ULLS Identifier (defined as the unique number allocated by the access provider (Telstra) to an individual ULLS) together with the point of interconnection cable pair details (cl 11.4.2(e)(vi) and (iv) respectively). With that information, as required in the mechanism in Code 569, the access provider (Telstra) will be able to identify the requested line as already having had a designated ULLS identification number, and thus that line will be identified as, in fact, being an existing unconditioned communications wire. 72 Next, on receipt of a request from the access seeker under cl 11.5 Telstra, as the access provider, had to check and validate the details of the access seeker's request. If that request were in the correct format Telstra had to accept it and provide a receipt to Optus within one business day (cl 11.5.2). If the relevant request were in an incorrect format, Telstra had to reject it, and provide Optus with both notice of the rejection and the reason(s) for it. 73 In addition, cl 11.6 provided that when the access provider (Telstra) had given a receipt to the access seeker for the ULLS request, the access provider had to perform a service qualification for the purposes of determining the availability of the ULLS and ensuring the compliance with the network's deployment rules (cl 11.6.1). The access provider, in conformity with the model terms and the intention of s 152AR(3)(b), had to take all reasonable steps to ensure that the technical and operational quality of the information supplied to the access seeker as part of the service qualification results was equivalent to those which the access provider provided to itself (cl 11.6.2). The service qualification process was defined as a "desktop process" to determine availability and appropriateness of the ULLS requested. 74 Under cl 11.8.1 the access provider (Telstra) had to provide an access seeker with a minimum amount of information in response to an ULLS Request under cl 11 regardless of the type of ULLS service sought in the request. This information included, under cl 11.8.1(b), the ULLS identifier, unless the request were rejected. Thus, Telstra did not have to give Optus an ULLS identifier if, for example, there were no ULLS available or the request was rejected for any other reason. Of course, if Optus made an ULLS transfer request, it would have known the ULLS identifier and have given it to Telstra under cl 11.4.2(e)(vi). An access provider was required to process an ULLS order in its provisioning system (cl 12.1). This involved, unless otherwise agreed, the access seeker (here, Optus) providing an identification tone to facilitate testing by the access provider (cl 12.2.1(c)). That is, under cl 12.2.1(c) Optus had to provide an identification tone so that Telstra could test the connection once a communications wire was identified to supply the requested ULLS. 7. Clause 13 of this guideline described the physical record formats for each intended order or request transaction access seekers and access providers would generate. 77 Different formats were prescribed by Guideline 587 for each stage of the individual ULLS orders or request in cl 11.1.1 of Code 569. The completion of some fields in those formats was mandatory while for others it was optional. Those formats were adopted and used in the computer systems of industry members including Telstra and Optus. 78 Because an In-Use ULLS request is made to the existing customer's current service provider, in the case of Telstra, Telstra's computer system already associates the service (or full national) number and the ULLS identifier for the ULLS service it is providing. Thus, cl 13.4.1 of Guideline 587 does not require the gaining access seeker (here Optus) to provide the ULLS identifier to Telstra. Rather, cl 13.4.3 provides that in its IULL confirmation advice, Telstra must provide the access seeker with the ULLS identifier. 79 Thus, in an ULLS transfer request, Telstra's role is to permit the customer to change from one third party access seeker to another. Telstra is the supplier of the communications wire, but two third parties deal directly with the customer and provide him, her or it with their service or full national number. This is reflected in cl 13.5.1 of Guideline 587 which is the TULL notification format. That, like cl 11.4.2 of Code 569, includes as a mandatory field the ULLS identifier but does not include the service or full national number. 8. Optus complained that, where the previous occupier of a dwelling in an MDU had cancelled their telephone service, there were two possible scenarios depending on whether the new occupier chose to become a Telstra customer (via a PSTN connection) or an Optus one (via the ULLS). In those circumstances potentially Telstra could allocate a different copper pair to that pair currently serving the premises. Optus argued that Telstra's provisioning service system for ULLS simply searched for a vacant copper pair to the address at the MDF for the MDU, rather than identifying the pair previously allocated to that particular service. Optus argued that Telstra would then send a technician to the apartment building to examine the MDF to ensure that the copper pair selected displayed correct electrical characteristics but only up to the exchange side of the MDF. It claimed that Telstra refused to connect, or, to use the jargon, "jumper", the line from the exchange side of the MDF to the building side so as to establish a new path to the subscriber's dwelling. Thus, Optus claimed it was forced to send a second technician out to the MDF to make the physical connection. On this basis Optus argued that two "truck rolls" (one for each technician) were involved leading to unnecessary costs and a delay of 7 to 10 business days which occurred before the new service was activated. During the Site Visits the discussion turned away from jumpering at the building MDF in MDUs to circumstances where a continuous copper path exists (as there is a soft dial tone) between the customer premise and the Telstra exchange and therefore jumpering could be performed at the Telstra exchange to provide a ULLS. In formulating the Proposal that was sent to the parties, the Commission understood from the discussions that took place at the Site Visits that where a customer vacates premises in a MDU, with a MDF in the building, the copper path between the customer premises and the Telstra exchange may still be intact and able to be identified by the presence of a soft dial tone . As such, it may be possible to provision a ULLS to an Access Seeker using that same copper pair. The Commission has since verified that the full national number (FNN) can be obtained where either a dial tone or a soft dial tone exists by dialling 1800 801 920 at the customer premises. This number is publicly available on the Internet. On the basis of this understanding , it was the Commission's view that in this situation, a ULLS could be provisioned with jumpering taking place only in the Telstra exchange. This would avoid two truck-rolls (one by the Access Provider and one by the Access Seeker) to the customer premises. The Commission also took the view that it was fair and reasonable for the Access Seeker to accept any risk that the copper pair may not be suitable for broadband services. It differed from the final determination. The Commission's initial proposal had the significant features that it referred, first, to "an existing line " not "communications wire" with a soft dial tone and, secondly, to a situation where "... there is no line between the exchange and the end-user customer's premise (i.e., there is no soft dial tone)" (bold emphasis added). The detail of these two concepts ultimately changed, but their structure remained in pars 10(a) and (e) respectively of the final determination, with the distinction that the "line" changed in the latter instrument to a "communications wire". 83 It was conceptually correct to describe the existence of a line between the customer's premises and the Telstra exchange as being evidenced by a soft dial tone, because that did in fact demonstrate that there was a pathway in Telstra's PSTN for communications to pass between those two points. But, this fact said nothing about whether that pathway was an unconditioned communications wire, and hence an ULLS, or some other communications pathway, including a conditioned communications wire or one which partially utilised some other connection. Such an approach concurs with current practice and does not require the parties to implement change. It recorded the purport of these submissions in its reasons. It then prepared a draft final determination and draft statement of reasons. This resulted in yet further submissions and counter-submissions to the Commission from the parties. The draft final determination in par 9 contained, in substance, what became pars 10(a), (d), (e), (f) and (g) of the final determination. But the latter had, in addition, two new sub-paragraphs, 10(b) and (c). 85 Telstra made a number of criticisms to the Commission concerning the draft final determination. First, it asserted that the Commission did not have regard to the incorporation of Code 569 and Guideline 587 into the model non-price terms and conditions determination of October 2003 and that their provisions were relevant considerations for the purposes of s 152CP(1). 86 Secondly, Telstra said that draft par 9(a) (which became pars 10(a) and (b) in the final determination) did not correctly reflect the provisioning processes in Code 569 and Guideline 587 "because the Commission has misunderstood the nature of soft dial tone and misconstrued the terminology and intent of [Code 569]". 87 In addition, Telstra criticised the draft final determination for failing to take into account the matters in s 152CR(1). It noted that par 9(b) (which became par 10(e) of the final determination) suggested that Telstra should provision ULLS to access seekers even when Telstra's communications wire did not service the end-user's premises. Telstra submitted that, if the Commission were minded to proceed with a final determination in accordance with the draft, there would be lengthy and costly system changes and Optus ought be required to bear those costs because it was the only access seeker asking for the changes. Telstra's submissions elaborated why the Commission misconstrued the nature of a soft dial tone. Telstra provided the Commission with IBM Australia Limited's pre-feasibility assessment of the changes that would need to be implemented by Telstra to support the draft final determination. IBM suggested that three new Telstra interfaces would need to be created in its computer systems to provide validation of a transfer request of the kind referred to in the draft final determination. Telstra also provided a report by Infosys Tech Limited of its pre-feasibility analysis and assessment of the costs involved in designing and implementing other software and system changes which were required by the draft final determination. 88 Telstra's Mr McAinsh, provided a statement to the Commission explaining these matters and attaching both of the supplier's estimates. He estimated that the cost to Telstra of installing and testing the proposed changes was about $1.7 million. Mr McAinsh explained to the Commission the actual processes that Telstra used to order and provision ULLS in response to requests for Vacant ULLS, In-Use ULLS and Transfer ULLS between access seekers in accordance with cl 11 of Code 569. He explained that a soft dial tone indicated that no carried services were being provided over the line. He said that a soft dial tone was only present where a previous Telstra PSTN service had been disconnected, but not when a previous ULLS had been disconnected. Thus, if the previous customer in an MDU had been an Optus or non-Telstra customer, whose service had been disconnected, there would be no soft dial tone. And, where the previous customer had been a Telstra customer before the cancellation of the earlier service, the soft dial tone would indicate that there was a path, but it would not indicate whether the path was an ULLS path (i.e. an unconditioned communications wire) or some other connection using the PSTN. Mr McAinsh pointed out, logically enough, an In-Use ULLS, as defined in Code 569, was one that was currently being used, hence no soft dial tone would be present on such a service, because it was fully functioning. 89 Mr McAinsh explained in his statement to the Commission that a number of system requirements, some of which appeared to be substantive, needed to be met before Telstra could process a Vacant ULLS request or a Transfer ULLS request in the manner contemplated in the draft final determination. He noted that the provisions of the draft were not consistent with those required under Code 569 and Guideline 587. He said that, on the basis of his previous experience, it would take over two years to implement the changes in the draft final determination. He said that it would take over seven months to build and deploy the solution needed to implement the draft final determination. He assumed that there would be no negotiations within the industry to change the requirements of the current versions of codes and guidelines. Mr McAinsh explained that a prior attempt by Optus and Telstra to implement a number of changes of lesser significance to another industry code, had taken about 16 months to make the required amendments. He estimated that it would take longer for the industry to assess and endorse the Commission's proposed changes. 90 Optus responded saying that the Commission's proposal in the draft sought to minimise any systems or process changes by utilising the existing provisioning processes for ULLS transfer requests pursuant to Code 569, and "[a]ccordingly, changes to systems and costs incurred would be minimal" for the purposes of s 152CR(1)(d). It also submitted that the Commission's pricing principles for ULLS would protect Telstra's interest in earning a commercial return by enabling it to recover costs associated with implementing the proposed determination. Optus asserted that it would take three months to implement the changes necessary. 91 Telstra responded arguing that Optus did not analyse its assertions of consistency between the draft final determination and the existing ULLS provisioning process. Telstra also argued that if the Commission made a final determination as proposed, its ability to recoup costs would need to be considered in the ULLS price disputes currently being considered by the Commission in other arbitrations. 92 This provoked yet another response from Optus. It addressed Telstra's submissions concerning the costs and time frame to implement the Commission's proposal. Optus acknowledged that there were some system changes associated with implementing the information technology aspects of the proposal but that they were neither complex nor excessively costly. It acknowledged Mr McAinsh's description of a number of sub-processes to provision ULLS associated with an inactive FNN (full national number), saying that all those processes "... will be duplicates of the processes that exist for an active FNN and therefore should not represent a major IT build". Optus said that it would also need to build and test "the transaction set for TULL" under the proposal as well as a provisioning process in its own systems. Optus estimated that its total cost for this work would be $360,000 and require three months of IT development. It submitted that the Commission should conclude that Telstra's claimed costs were not credible. 93 Telstra's final submissions responded, among other things, to Optus' costs claims and noted that Telstra's costs were based upon independent outside contractor's quotes. 94 Lastly, Optus responded providing a statement from Leon Ho, manager of its consumer customer care systems in the Optus IT group, who supported its claims that Optus' costs would be approximately $360,000 and the changes to its (Optus') systems would take approximately 12 weeks to implement. Optus said that Mr Ho's statement showed that the changes were relatively simple and could be accommodated at a modest cost within a short time frame. 9. GROUND 3: DID THE COMMISSION TAKE INTO ACCOUNT THE DIRECT COSTS OF TELSTRA PROVIDING ACCESS TO THE ULLS? Telstra argued that, by virtue of its failure to comply with the requirements of s 152CR(1)(d), the Commission had therefore failed to follow procedures required by law: Administrative Decisions (Judicial Review) Act 1977 (Cth) ( ADJR Act ), s 5(1)(b)) and exercised its power improperly by failing to take a relevant consideration into account ( ADJR Act , sub-ss 5(1)(e), (2(b)). 96 In its reasons, the Commission acknowledged that Telstra incurred costs in supplying the ULLS, but concluded that its costs in implementing the final determination would be minimised as Telstra was required to utilise existing provisioning processes for ULLS transfer requests pursuant to Code 569. The Commission asserted that any benefits to end-users would outweigh the costs of any necessary changes to Telstra's current systems and that the regulatory regime permitted Telstra to recover the efficient costs of supplying and charging for the ULLS (Reasons [130]-[131]). The Commission made these statements in arriving at its conclusion in respect of the considerations raised by s 152CR(1)(d). It is the Commission's view that implementation of the final determination involves some change to the existing TULL procedures which should not prevent Telstra from earning a normal commercial return. 98 Those assertions by the Commission did not express or follow any reasoning process. They amounted to statements of its ultimate conclusions. 99 Later, the Commission expressed its conclusion for the purposes of s 152CQ(1)(f) that the final determination would not have the effect of requiring Telstra to bear an unreasonable amount of the costs of extending or enhancing the capability of a facility or maintaining extensions to or enhancements of that capability. The Commission noted Telstra's submission that it would be required to develop and implement a new process involving significant system change at substantial cost both to Telstra and the industry as a whole for the purposes of s 152CQ(1)(f) (Reasons [196]). In this regard the Commission referred to Mr McAinsh's statement and his estimate that Telstra's costs would be about $1.7 million. Optus in its response submission to the draft final determination stated that the sub-processes described in Craig McAinsh's statement that are required to provision the ULL associated with the inactive FNN will be duplicates of processes that exist for an active FNN and therefore should not represent a major IT build. It estimated that the cost of implementing the Commission's final determination would be approximately $360,000 . While the Commission recognises that there will be a need to change processes and IT systems to comply with the final determination, it is satisfied that the specified ULLS provisioning processes it has determined will not be burdensome on Telstra and that by using the current provisions of [Code 569], the cost of implementation should be negligible but will enhance the capability of access seekers in the take-up of the ULLS. 200. The Commission has concluded that this final determination will not have any of the prescribed effects specified in section 152CQ of the Act. For the reasons outlined under "Other Relevant Matters", the Commission is satisfied that the specified ULLS provisioning processes it has determined will not be burdensome on Telstra. By using the current provisions of the ACIF Code, the cost of implementation should be negligible but will ultimately enhance the capability of access seekers in the take-up of the ULLS. In my opinion the Commission either failed to have any regard to those costs or to express any reasoning process by reference to the evidence before it to justify its assertions. In its submissions before me, Optus eschewed any suggestion that the Commission had adopted as Telstra's costs the estimate of $360,000 in respect of its, Optus', costs. However, the Commission's statement of reasons contains no reasoning process on this issue. The reasons referred only to "negligible" costs of implementing the final determination. It may be that "negligible" could describe the $360,000 cost Optus claimed would be needed to change its systems, depending on the reasoning process used to justify this categorisation. 102 But, the Commission did not explain, even briefly, what Telstra had to do to change its systems so as to achieve, at "negligible cost", the changes required to comply with the final determination. If I accepted Optus' argument that the reference to $360,000 in the Commission's reasons at [198] was not a finding by the Commission of Telstra's costs, the Commission gave no explanation of why it rejected Telstra's estimate of $1.7 million supported by estimates from independent consultants, and Mr McAinsh's evidence to the Commission. Mason J said that the expression "have regard to" required the decision-maker to take the costs into account and give them weight "... as a fundamental element in making his determination": Sean Investments 180 CLR at 329. He explained that in that case there were two reasons for such a construction, first, that the costs were the only matter explicitly mentioned as a matter to be taken into account and, secondly, the scheme of the provisions was that once an approval were given, the proprietor of the nursing home was not permitted to exceed the scale of fees fixed by the decision-maker. 104 As Mason J pointed out the section did not require the decision-maker there to fix the scale of fees exclusively by reference to particular costs. The decision-maker was entitled to have regard, he said, to other relevant considerations. But, the function of the decision-maker was to determine a scale of fees for the particular nursing home, not all nursing homes. Thus the Act directed that regard be had to the costs incurred in providing care in that nursing home: Sean Investments 180 CLR at 329. 105 I am of opinion that when s 152CR(1)(d) required the Commission, in making a final determination, to take into account Telstra's direct costs of providing access to the ULLS in the manner the Commission proposed, it was required to take that matter into account, together with the other matters referred to in the section, and to give weight to them as a fundamental element in making its decision: The Queen v Toohey; Ex parte Meneling Station Pty Limited [1982] HCA 69 ; (1982) 158 CLR 327 at 333 per Gibbs CJ applying what Mason J had said in Sean Investments 180 CLR at 329 to a section requiring a decision-maker to take a variety of matters into account. Mason J said that the requirement to have regard to a matter meant that it would become a central element for the decision-maker in his considerations: Meneling Station 158 CLR at 338. And, as he later explained in his classic judgment in Minister for Aboriginal Affairs v Peko Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 41, in the absence of any statutory indication of the weight to be given to various considerations, it is generally for the decision-maker and not the Court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising a statutory power. Mason J said that the Court could set aside an administrative decision which had failed to give adequate weight to a relevant factor of great importance, or had given excessive weight to a relevant factor of no great importance, but the preferred ground on which that power was to be exercised was that the decision was "manifestly unreasonable". In Tickner v Chapman (1995) 57 FCR 451 at 462C-D, Black CJ said that where a decision-maker was required to consider material, the process of consideration "... involves an active intellectual process" directed at the nominated subject-matter: see too per Burchett J at 476F-477E, per Kiefel J at 495F-G and Tobacco Institute of Australia v National Health & Medical Research Council (1996) 71 FCR 265 at 277G per Finn J; Australian Retailers Association 148 FCR at 577 [526] per Weinberg J. 107 Where a decision-maker must consider matters prescribed by law, generally, he or she cannot jettison or ignore some of those factors or give them cursory consideration only in order to put them to one side: East Australian Pipeline Pty Ltd v Australian Competition and Consumer Commission [2007] HCA 44 ; (2007) 233 CLR 229 at 244 [52] per Gleeson CJ, Heydon and Crennan JJ. The number and variety of factors which a statute requires a decision-maker to take into account or to have regard to in arriving at a decision necessarily affects the weight any one of those factors must be given in the deliberative process. In Sean Investments [1979] HCA 32 ; 180 CLR 322 , the costs were fundamental - or foundational - because they were the only matter which the statute prescribed. The subject matter, scope and purpose of the statutory power provide a context in which to assess the duties it imposes on the decision-maker in any particular situation: cf: Foster v Minister for Customs [2000] HCA 38 ; (2000) 200 CLR 442 at 452 [22] - [23] per Gleeson CJ and McHugh J, Gaudron and Hayne JJ agreeing with their Honours at 454 [32]. 109 Here, s 152CR(1) prescribes a number of matters for consideration. This is a sure legislative indication that these matters must be central matters for the Commission. But, because s 152CR(2) expressly widens the range of matters which the Commission may consider, it is authorised to arrive at a final determination, after due consideration, which accords more weight to some other factor or factors than those in s 152CR(1). Indeed, the factors in s 152CR(1) itself tend in different directions. The interests of a carrier (s 152CR(1)(b)) and those of all persons who have a right to use a declared service (s 152CR(1)(c)) more often than not will be opposed. If the Commission were to give fundamental weight to each in the sense which Telstra argued, how could it arrive at a decision favouring one at the expense of the other? cf Telstra Corporation Limited v Australian Competition and Consumer Commission [2008] FCA 1436 at [311] - [312] per Lindgren J. 110 I am of opinion that the sense in which the High Court used the expression "fundamental weight" in this context is to require the decision-maker to treat the consideration of the factors, as opposed to the factors themselves, as a central element in the deliberative process: Meneling Station 158 CLR at 338 per Mason J. In this way the decision-maker will give appropriate weight to those factors. The Parliament sought to ensure that the Commission would give proper, genuine and realistic consideration to each of the factors it specified in s 152CR(1) but without confining it to those matters, as s 152CR(2) showed. Such consideration must be reflected in the Commission's reasons for its decision. 111 In Telstra [2008] FCA 1436 at [122] Lindgren J held that s 152CR(1)(a) is the factor which should be given fundamental weight, namely, whether the determination will promote the long-term interests of end-users of services supplied by means of carriage services. This was because, he held, that factor reflected the sole object of Part XIC of the Act as expressed in s 152AB(1): see Telstra [2008] FCA 1436 at [17] . Of course, s 152AB(2)(e) supplements this concept by identifying an objective of encouraging the economically efficient use of, and economically efficient investment in, the infrastructure by which listed services are supplied. Often that objective may not be attained if an infrastructure investment is not economically feasible for the service provider to make or support. So, by dint of s 152AB(2)(e) the interests of end-users may well include that the service provider is not forced to act in a way which for it is economically unjustifiable. Possibly, a monopolist may be able to be forced to lower prices or make way for competition under s 152AB(2)(e), but not to run the business as a charitable exercise or at a loss. 112 Therefore, depending on the facts of a particular arbitration, one or more of the matters in s 152CR(1) may become of greater or lesser weight in the decision-making process. However, as a matter of law, none of the factors, including s 152CR(1)(d), is entitled to a fixed weighting in that process regardless of the subject matter of any arbitration and all other relevant factors: Peko-Wallsend 162 CLR at 41 per Mason J; Foster 200 CLR at 452 [22]-[24] per Gleeson CJ and McHugh J; cf: Telstra [2008] FCA 1436 at [118] per Lindgren J. 113 Optus argued before the Commission that Telstra's costs of providing the new form of access should be recovered from all access seekers rather than solely from Optus, as Telstra had contended. Optus argued, and the Commission accepted, that Telstra would be able to recover those costs through the application of the Commission's pricing principles in separate arbitrations which were being conducted concurrently by the Commission (Reasons [106], [131]). 114 Telstra argued that the Commission was not entitled to defer consideration of Telstra's costs of compliance with the final determination by asserting that the regulatory regime permitted Telstra to recover the efficient costs of supplying and charging for the ULLS (Reasons [131]). It relied on Commonwealth v Pharmacy Guild of Australia (1989) 91 ALR 65 at 86 per Sheppard J, 89 per Ryan J. 115 Optus responded that Telstra had not asked the Commission to consider a price as part of the final determination. It argued that the Commission was entitled to have regard to the existence of a separate mechanism by which Telstra could recover its costs of provisioning for the ULLS caused by implementing the final determination. 116 Optus argued that s 152CR(1)(d) was concerned with the direct costs of provision of the ULLS rather than the particular costs of complying with the Commission's determination. It contended that the Commission approached s 152CR(1)(d) on the basis that Telstra's direct costs of providing access to the ULLS included costs incurred or caused by the provision of access occasioned by the terms of the final determination, as the Commission had stated in its reasons at [118]. 117 I am of opinion that the mere fact that Telstra might seek to recover its costs, whatever they may be, under a separate process is beside the point. The existence of that fact did not elucidate what s 152CR(1)(d) required the Commission to do, namely to take Telstra's direct costs of compliance into account in making the final determination. The incurring of a cost is different from its possible recovery. The Act in s 152CR(1)(d) required the Commission to give real consideration to what Telstra would be required to incur directly as the cost of implementing what the Commission was considering. But the Commission did not do so. In the passages of its reasons which dealt with costs, all the Commission did was assert that Telstra would in fact incur costs and, without identifying or quantifying those costs, it asserted that they would be "minimised" (Reasons [130]), "negligible" (Reasons [199]) or "recoverable" (Reasons [131]). And the Commission referred to Telstra's ability, in separate arbitrations, to recoup costs that it incurred in implementing the final determination. 118 Those mere references did not amount to the Commission having regard to Telstra's direct costs of providing access in any genuine, proper or realistic manner as required by s 152CR(1)(d). The Commission made no finding of what direct costs Telstra would incur in providing its proposed new form of access to ULLS. Telstra had contended, with substantive corroborating evidence, that its direct costs would be about $1.7 million. If the Commission's approach, supported by Optus in its submissions, were correct, the Commission did not need to consider any particular cost or costs, let alone identify what direct costs Telstra would incur in providing access. Any consideration of such costs resulting in these descriptions required the Commission to give reasons analysing what Telstra claimed were its direct costs of implementing the final determination and how the Commission came to its significantly different conclusion. 119 Section 152CP(5) required the Commission to give its reasons for making the final determination. And pursuant to s 25D of the Acts Interpretation Act 1901 , that obligation extended to setting out its findings on material questions of fact including references to the evidence or other material on which those findings were based. Those requirements focus on the subjective thought processes of the decision-maker. It must set out its findings on those questions of fact which it considers to be material to the decision it has made and the reasons it had for reaching that decision as explained by McHugh, Gummow and Hayne JJ in Yusuf (2001) 206 CLR at 346 [68]. 120 The purpose of the arbitration was to determine whether Optus should be granted access to the ULLS in a manner different to its then current access. The subject matter, scope and purpose of ss 152CP(2) and 152CR(1)(d) required the Commission, in making a final determination about the subject matter of the arbitration concerning access by Optus to the declared ULLS service to have regard to the actual direct costs which Telstra would incur in providing the access to Optus as required by the final determination. 121 The Commission accepted that there were already direct costs incurred by Telstra in providing the existing access. But, the Commission, as decision-maker, had to have regard in addition to the direct cost to Telstra of effecting what it was considering as a final determination. This view is reinforced by the prohibition imposed by s 152CQ(1)(f). That directs the Commission not to make a final determination for access if in doing so Telstra would be required to bear an unreasonable amount of the costs of extending or enhancing the capability of a facility. Thus, not only was the Commission required to have regard to Telstra's actual direct costs for the purposes of arriving at a final determination, it was prohibited, if the costs of doing so were unreasonable, from making a final determination. 122 In Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 29 ; (1998) 194 CLR 355 at 381 [69] McHugh, Gummow, Kirby and Hayne JJ said that the primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. 123 I am of opinion that the requirement in s 152CR(1)(d) that the Commission take into account the direct costs of providing access to the declared service in making a final determination must be read consistently with its obligation to refrain from making such a determination if, in doing so, a party would be required to bear an unreasonable amount of the costs of extending or enhancing the capability of a facility. 124 The Commission did not set out any findings as to the direct costs of Telstra providing access to the ULLS either generally (see Reasons at [118]) or specifically those which would be incurred by Telstra in providing the service required in the final determination. The Act required the Commission to have regard to those costs by giving them proper, genuine and realistic consideration in arriving at its final determination. A mere recitation of submissions to it and then the expression of an unreasoned conclusion, could not suffice to comply with the Commission's obligation, within the meaning of s 152CR(1)(d), to have regard to Telstra's direct costs of providing access and its claim that they would be about $1.7 million. It did not have regard to Telstra's direct costs of providing the access it required under its final determination. 125 Whether the Commission used $360,000 as Telstra's costs or not, it gave no reasons for its finding that Telstra's costs would be negligible. The Commission either made a mistake about what Optus submitted or it had no reasons for rejecting Telstra's estimate of $1.7 million. Optus' submission that the Commission had not used the $360,000 as Telstra's costs recognised at least implicitly, that such a use would be a failure by the Commission to have regard to Telstra's direct costs under s 152CR(1)(d). While I think that it is likely that the Commission was confused about Optus' estimate of $360,000 as being an estimate of Telstra's costs, it is not possible to decide one way or the other whether it did because of the Commission's lack of reasons on this matter: Palme 216 CLR at 223-224 [39] per Gleeson CJ, Gummow and Heydon JJ. 126 I am of opinion that the deficiencies in the Commission's reasons which I have just discussed show that it had no reasons for rejecting Telstra's estimate of $1.7 million and that it did not comply with the requirement of s 152CR(1)(d). 10. GROUND 4: DID S 152AQB(9) REQUIRE THE COMMISSION TO HAVE REGARD TO CODE 569 AS A MODEL NON-PRICE TERM AND CONDITION? 128 In essence, Telstra contended that, because of the October 2003 determination, substantially all the provisions of Code 569 were model terms and conditions and that the Commission failed to have regard to them in accordance with s 152AQB(9). It argued that the Commission did not have regard to the whole of cl 11, in particular, as model terms and conditions made under the Act but rather merely had regard to it as an industry code. Optus argued that the Commission made no error in the way it applied and had regard to the provisions of Code 569 and that none of the important provisions in cl 11 relied on by Telstra was a model term or condition. 129 The Commission said in its reasons that it had carefully considered Telstra's submissions that its systems had been designed and built to carry out the transfer process in accordance with the agreed provisions in Code 569. It did not regard the October 2003 determination as including the whole of Code 569. It stated that in the final determination it was utilising the existing ULLS provisioning process to resolve the current issues in dispute by determining a specific process to apply in the limited set of circumstances (Reasons [172-173]). In its reasons the Commission also asserted that a soft dial tone was an identification tone for the purposes of cl 12.2.1(c) which assisted in identifying the service (or full national) number associated with an inactive Telstra PSTN service ([176]). ... The presence of a soft dial tone together with the provision of a full national number (supplied by the Gaining Access Seeker) will enable Telstra to identify the Communications Wire at the Telstra exchange and carry out any subsequent Transfer ULLS Request process. If there is no such identifier the request would need to be treated as a Vacant ULLS Request. The onus will be on the Gaining Access Seeker to deal with the consequences of both processes and not Telstra. The Commission notes the concerns that have been raised that not all inactive services with a soft dial tone will be ULLS serviceable but is satisfied that Telstra's service qualification testing processes could be used to identify whether this is the case. 132 The process contemplated by cl 11 of Code 569 required the access provider to check and validate each ULLS request (cl 11.5.1). If the request were in a correct format (i.e. it complied with the minimum requirements for the relevant type of request in one of cll 11.2, 11.3 or 11.4) then cl 11.5.2 required Telstra to accept it and provide Optus with a receipt. However, cl 11.5.3 provided that if the request were "... incorrect in format, the [access provider] will reject the request". Accordingly, Telstra would have to perform a service qualification in accordance with cl 11.6.1 only if it had first issued a receipt (i.e. by issuing a receipt under cl 11.5.2 Telstra would accept that it had received a valid request complying with the requirements in cl 11 for the relevant type of service). 133 In this regard it is important to recall that the October 2003 determination expressly adopted, as model terms and conditions, all relevant clauses in Code 569 concerned with acknowledging ordered services, updating their progress and confirming the completion of the order (see [33] above). 134 The final determination and the Commission's reasons (in [176] and [177]) appear to proceed on the assumptions that a request made under par 10(a) would be an ULLS transfer request under cl 11.4 of Code 569 and that such a request would nonetheless be valid even though it did not comply with the requirement of cl 11.4.2(e)(vi) to provide the original ULLS identifier. Yet, cl 11 of Code 569 was structured on the basis, and the only evidence before the Commission showed, that Telstra's (or the access provider's) existing computer system would reject an ULLS transfer request which omitted the original ULLS identifier. This was because that field of information (the original ULLS identifier) was the industry's accepted means of verifying and locating the communications wire currently being used by the customer that was to be transferred. The Commission, however, introduced a concept in par 10(a) which was foreign to this (cl 11.4) process, namely the association between the soft dial tone and the former service number for an inactive Telstra PSTN service (which may or may not have been an ULLS). 135 How did the Commission have regard to the provisions of cl 11 which were inconsistent with its new concept? The Commission's reasons stated that the October 2003 determination was silent on the ordering and provisioning dispute which it was then arbitrating. It said that it had had regard to that determination but "... is not satisfied [that] the ordering and provisioning issues in this access dispute are adequately dealt with in the determination" (Reasons [74]). It "reiterated" that those model terms had dealt "... with only the key contentious terms and conditions" and were not required to be comprehensive (Reasons [73]). It said that it had to take Code 569 into account "... and is satisfied that it has done so in this access dispute" (Reasons [76] see too [179]). The Commission reasoned that the October 2003 determination had "... not adopt[ed] any clause from an ACIF code dealing specifically with the provisioning of the ULLS in MDUs" (Reasons [75], emphasis added). The Commission's reasons were wrong. They showed that it had misunderstood the effect of its October 2003 determination. A rejection of an ULLS transfer request is an acknowledgement of the making of the request and a contemporaneous communication that there would be no further processing of it. 136 It follows that the Commission did not regard Code 569 as a whole, and in particular cl 11, (apart from some provisions of no present relevance, such as cll 11.6.2, 11.7.3 and 11.10) as having been included in or forming part of the October 2003 determination for the purposes of s 152AQB(9). That section required the Commission to have regard to its earlier determination "... if it is required to arbitrate an access dispute under Division 8 in relation to a core service covered by the determination" (emphasis added). Importantly, s 152AQB(9) emphasised it was the core service (here ULLS), which was covered by the earlier determination of model terms and conditions. And the section dealt with an access dispute "in relation to" such a core service (i.e. one covered by model terms and conditions). 137 The Commission correctly observed that it was not bound by any model terms and conditions since 152AQB(9) operated to require it only to "have regard to" them. The Commission reasoned that it was adapting or building on Code 569 to resolve the access dispute (Reasons [106]-[107], [165], [173]). The Commission rejected Telstra's submission that it had to adhere strictly to Code 569, saying that the Code did not limit its arbitral powers (Reasons [178]). It concluded that the most effective and efficient resolution of the dispute was to adopt the final determination "... which is based (as far as possible) on provisions of [Code 569])" (Reasons [179]). 138 I am of opinion that while the Commission had taken the provisions of Code 569 and Guideline 587 into account (Reasons [202]), it did not treat Code 569 as providing model terms and conditions covering the ULLS for the purposes of s 152AQB(9). This was because it did not consider that the October 2003 determination included, relevantly, the whole of cl 11 of Code 569 as model terms and conditions. That was a misconstruction or misunderstanding of the purposes of Code 569 and its October 2003 determination in the sense that the Commission did not have regard the whole of to cl 11 as being a determination under s 152AQB(9) but rather had regard to it as a provision of lesser importance. This resulted in the Commission failing to exercise its powers in accordance with s 152AQB(9): cf: Minister for Immigration v Gray [1994] FCA 1052 ; (1994) 50 FCR 189 at 208B-D per French and Drummond JJ; Elliott v Minister for Immigration [2007] FCAFC 22 ; (2007) 156 FCR 559 at 572 [40] - [42] per Ryan, Tamberlin and Middleton JJ. The weight which the Commission accorded Code 569, and in particular cl 11, may have been different and more significant had it had regard to the Code in accordance with s 152AQB(9). 11. GROUND 5: DID THE COMMISSION'S FINAL DETERMINATION MISCONSTRUE AND MISUNDERSTAND CODE 569? It contended that this was variously: an error of law ( ADJR Act , s 5(1)(f)); a failure to follow procedures required by law (s 5(1)(b)); a failure to take the Code into account as a relevant consideration or to give it "fundamental weight" and therefore an improper exercise of power (s 5(1)(e), s 5(2)(b)); or an abuse of power, and therefore an improper exercise of power (s 5(1)(e), s 5(2)(j)). 140 Optus contended that Telstra's argument gave a significance to Code 569 which it did not have. It said that the Commission had no legal obligation to have regard to any relevant part of Code 569 under s 152CR(1). Optus argued that the Commission could have regard to Code 569 under s 152CR(2) and that it did so unobjectionably in arriving at the final determination. 141 For the reasons which follow, I am of opinion that the Commission misunderstood and misapplied Code 569 in arriving at its final determination. Most significantly, par 10(a) began with a presumption that a communications wire between the Telstra exchange and the end-user's premises actually existed and was the means of carrying the soft dial tone. However, as I have sought to make clear above, not only is that presumption unfounded, but also the provisions of Code 569 and Guideline 587 do not proceed on such a basis. Since both In-Use ULLS Requests and ULLS Transfer Requests relate to an actual functioning service, no soft dial tone will be present on a line the subject of either type of those requests. The Commission then permitted Optus to provide an ULLS request to Telstra with only the service number (i.e. telephone number) and address "associated with the communications wire". It did so because of its presumption in par 10(a) that there already was a communications wire, the subject of the request which had somehow been identified by a soft dial tone. 143 There was no basis upon which the Commission could have made such a presumption as is made further evident by considering the operation of par 10(e) to which I will come. Next, the Commission required Telstra to treat such a request (i.e. one where the Commission had already assumed a communications wire existed, as identified by a soft dial tone, an associated telephone number and the subscriber's address) as if it were an ULLS transfer request by following the ULLS Transfer process in Code 569: i.e. that the hypothesised communications wire both existed and was unconditioned since only such a wire could be an ULLS. 144 Telstra made submissions to the Commission indicating the fallacies upon which par 10(a) was based. Telstra put expert evidence to the Commission from Mr McAinsh, who was responsible for determining Telstra's requirements for process or system changes to support activities, including ULLS ordering and provisioning. Mr McAinsh said that Telstra's existing computer software was designed to be compliant with Code 569 and Guideline 587, among others. 145 A fundamental requirement of cl 11.4.2(e)(vi) of Code 569 for an ULLS transfer request (between access seekers) is the provision of the original ULLS identifier for the existing and In-Use ULLS. The ULLS identifier is the internal number assigned by Telstra to enable it to locate and identify the communications wire actually being used by the losing access seeker (not Telstra) which is the subject of the transfer request. In contrast, par 10(a), without any apparent basis, assumes that a communications wire already exists which is the subject of Optus' request. The assumption is based on no more than the fact that there is a connection between the end-user's (i.e. Optus' customer) and a Telstra exchange premises indicated by a soft dial tone. The evidence before the Commission demonstrated that even if Telstra were provided with the telephone number (or FNN) previously associated with the connection indicated by the soft dial tone, it had no records from which it could identify whether that telephone number was associated with an ULLS or other connection. So the fundamental premise on which par 10(a) was structured, namely that there was in fact a communications wire or ULLS over which the soft dial tone passed, was a fiction. 146 Next, par 10(a) required Telstra to treat a request to transfer the ULLS service to Optus, hypothesised already by the terms of par 10(a), as if it were an ULLS transfer request in accordance with Code 569. But, Telstra could not do that without an ULLS identifier being provided because cl 11.4.2(e)(vi) would not be satisfied, to the extent that the Code applied. Paragraph 10(a) did not explain how Telstra was to locate and identify the postulated communications wire. Instead, par 10(a) operated on the premise of the existence of a particular communications wire which was to be transferred. However, the industry, including Telstra, operated on the basis that an ULLS transfer request would specify an ULLS identifier and an existing service. Code 569 is structured to effect such a transfer. Thus, an ULLS transfer request under cl 11.4 of Code 569 requires the existence of a communications wire, a currently operating service and an original ULLS identifier. A soft dial tone has nothing to do with any of these matters. 147 If it were to comply with the novel regime imposed by the final determination, Telstra had to undertake considerable work at an estimated cost of $1.7 million. Telstra said that this work would take longer than two years to assess and implement. It submitted to the Commission that it would have to reconfigure its computer systems to identify whether or not, were such a request made (by reference to only the telephone number and address of the proposed subscriber), the soft dial tone was in fact carried by an unconditioned communications wire rather than simply by its PSTN. The latter, of course, could use a variety of connecting paths between the end-user's MDF and Telstra's exchange. The final determination made no provision for any needed changes to Telstra's infrastructure to process the new form of request in par 10(a). 148 Since Code 569 required the provision of the ULLS identifier for a transfer request, one or two alternative constructions of par 10(a) is available. First, as Telstra contended, the making of such a request would be an exercise in futility because Telstra would be entitled to reject it because it did not supply the ULLS identifier, as required by cl 11.4(2)(e)(vi). The second alternative, posited by Optus, and presumably supported by the Commission, is to somehow rewrite Code 569 so as to make it work in a practical way. That might be possible if par 10(a) were founded on reality. It also argued that the Commission was incorrect to regard assertions that a soft dial tone as either relevant to the existence of an ULLS or as being "an identification tone" for the purposes of cl 12.2.1(c). That clause showed that the purpose of an identification tone was to facilitate testing after the provisioning of an ULLS by the access provider. Telstra contended that these matters showed that the Commission did not understand how Code 569 operated and had confused these concepts in the final determination. Telstra argued that the dispute before involved ordering and provisioning in respect only of Vacant ULLS requests: i.e. requests by Optus to be allocated a currently unused ULLS. 150 Optus argued that, even if the Commission erred in construing certain terms and categories in Code 569, that did not give rise to any judicially reviewable error in the final determination. It argued that, properly understood, pars 10(a) and (d) effectively required the parties to adapt and use the existing Transfer ULLS processes. And, Optus said that the Commission's characterisation of the soft tone did not affect the validity of the final determination. I reject Optus' argument. 151 The process in par 10(a) did not use the existing ULLS provisioning process contained in Code 569, despite what the Commission asserted in its reasons ([170]-[178]). The provisions of the Code did not mention or use the concept of a soft dial tone at all in connection with identifying whether an ULLS existed. And, an identification tone was used to test the quality of an ULLS after it had been identified (cl 12.2.1(c)). 152 The Code operated in two relevantly and conceptually distinct ways. First, it contemplated that an existing, currently used ULLS could be transferred either, where Telstra was the existing supplier of the ULLS, by using an In-Use ULLS request (cl 11.3) or, where there was another existing supplier of the ULLS, by using an ULLS transfer request (cl 11.4). Secondly, if neither of those situations applied, as when Optus sought to supply a new occupant of a unit in an MDU, cl 11.2 provided for Optus to make a Vacant ULLS request - i.e. to ask Telstra to find an ULLS so as to connect the end-user's premises to Optus' network. 153 The final determination did not utilise any of those processes, each of which depended on there being an identified actually existing ULLS, either because it was being used (for both the In-Use and Transfer ULLS requests) or because Telstra would look for it and then identify it (for the Vacant ULLS request). Instead par 10(a), as reinforced by par 10(e), used the criterion of a soft dial tone conveyed by the particular connection. But, that criterion existed only where there was no ULLS then being used --- i.e. there was no current end-user or customer of any access seeker or access provider, including Telstra and Optus, using the telecommunications pathway over which that soft dial tone was carried. The soft dial tone did not indicate the nature of that pathway beyond that it was part of the PSTN. There the Commission, first, equated the presence of a soft dial tone with an existing communications wire (or ULLS) between the end-user's premises and Telstra's exchange. In par 10(e) of the final determination the Commission used the Code's defined term "Vacant ULLS Request" as applicable to a situation "[w]here there is no Communications Wire between the Telstra exchange and the end-user customer's premises i.e., there is no soft dial tone". That was a misconception on the Commission's part for three reasons. First, a request for a Vacant ULLS under the Code is a procedure under which the access seeker (Optus) requests the access provider (Telstra) to look for an existing unconditioned communications wire between the exchange and the end-user's premises, albeit, one which is not then being used. Contrary to the wording of par 10(e) the presence of a soft dial tone indicates an existing vacant line but does not indicate whether it is an ULLS, although it may be. Secondly, par 10(e) conflicts with par 10(g) of the final determination, by which the Commission required Optus to submit a Vacant ULLS request where there was an existing unconditioned communications wire but Optus was not prepared to accept any risk as to quality of that existing connection: i.e. in such a case, Telstra would be requested to find another unused wire. Thirdly, having said that this meant that there was no ULLS between those two points (which as I have found is an error), the Commission required Telstra to engage in a Vacant ULLS process, which was (had it understood what it was doing) pointless. That permitted Optus to submit a futile Vacant ULLS request that Telstra search for and transfer what par 10(e) had already said did not exist between the two points, namely, a communications wire. As such, Telstra may be able to re-use the existing Communications Wire (assuming it passes its service qualification tests) enabling it to gain efficiencies in provisioning the service(s) that are not available to other Access Seekers. In staff's opinion this situation does not seem to be within the spirit or intent of the legislation in its attempt to achieve non-discriminatory outcomes. A Vacant ULLS request is a request to Telstra to search for and, if it finds it, provide an access seeker with an unconditioned communications wire between Telstra's exchange and the end-user's premises. If the Commission understood how Code 569 operated it could not have made these basic errors and imposed a regime which did not work. The Commission's assertion that "the process may be different" if a soft dial tone were present was not explained in the Commission's reasons other than its misconception that such a dial tone was demonstrative that an ULLS existed. 157 In my opinion, Optus' submission and the Commission's supposition are unworkable. The Commission misunderstood and misapplied Code 569 in arriving at its final determination. As a number of other matters were fully argued I will set out below my findings in the event that the conclusion above is wrong. 12. GROUND 6: WAS THE FINAL DETERMINATION UNCERTAIN? . Telstra contended that par 10 was "... so vaguely expressed that either its meaning or its application is a matter of real uncertainty ..." and so was not "... reasonably certain", using the words of Kitto J in Television Corporation Ltd v The Commonwealth [1963] HCA 30 ; (1963) 109 CLR 59 at 70. Kitto J said there that the latter concept included both certainty of expression and certainty in operation. 160 Optus argued that par 10 of the final determination had to be construed in accordance with the principle explained by Dixon J in King Gee Clothing Company Pty Limited v The Commonwealth [1945] HCA 23 ; (1945) 71 CLR 184 at 195 and Cann's Pty Limited v The Commonwealth [1946] HCA 5 ; (1946) 71 CLR 210 at 227-228. Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ in Westfield Management Limited v Perpetual Trustee Company Limited [2007] HCA Trans 367 applied that principle to hold that where it was asserted that one of its terms was uncertain, an instrument or decision made under a statute was not construed as if it were a contract: cp Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd [1968] HCA 8 ; (1968) 118 CLR 429 at 436-437. 161 Dixon J said that uncertainty as a test of validity arises from the nature of the power: King Gee 71 CLR at 195-196. He distinguished between ambiguities and uncertainties bound to arise from forms of expression and intricacies of subject matter on the one hand, which could be resolved by construing and interpreting the instrument (here final determination). Dixon J pointed out that, on the other hand, when what is described in the instrument, however clearly, involves a matter which is not an ascertainable fact or figure but a matter of estimate, assessment, discretionary allocation or apportionment resulting in the attribution of an amount or figure as a matter of judgment, then no certain objective standard is prescribed and the power has not been exercised in accordance with the statute: King Gee 71 CLR at 197; see also Racecourse Co-operative Sugar Association Ltd v Attorney-General (Qld) [1979] HCA 50 ; (1979) 142 CLR 460 at 480-481 per Gibbs J with whom Stephen, Mason and Wilson JJ agreed. 162 What is the meaning of par 10(a) of the final determination? First, there is the problem that it refers to an existing communications wire which has a soft dial tone in the context of par 10(e) which says that the absence of a soft dial tone is equivalent to there being no communications wire. In fact, the soft dial tone is not an indication of there being a communications wire or ULLS connection. Rather, it is an indication only that there is a connection using an available means (which may but need not be an ULLS) on the PSTN. Secondly, par 10(a) requires Telstra to treat Optus' request as if it was an ULLS transfer request in accordance with Code 569. But if Telstra followed cl 11 in Code 569 it would have to reject an ULLS transfer request which did not comply with cl 11.4.2(e)(vi) of Code 569, and in particular did not specify the original ULLS identifier. Likewise, there is no gaining and losing access provider in this situation, because the soft dial tone indicates an inactive service. 163 Telstra argued that if that material alone were provided in an ULLS transfer request under cl 11.4 of the Code it would be rejected immediately for failure to comply with the requirements at cl 11.4.2. In addition, par 10(b) requires Telstra to validate that the service number (telephone number) corresponds to the address specified in the request based on Telstra cabling records in its exchanges. Then, par 10(c) states "if this information is incorrect", Telstra had to follow the ULLS rejection process for ULLS transfers specified in Code 569. It is not clear whether par 10(c) refers to the information in par 10(b) alone or together with that in par 10(a). If the former, then even if there is in fact no existing communications wire which is an ULLS service, Telstra is somehow obliged to provide one even though it will not be over the path on which the soft dial tone is present. How Telstra would do that was not addressed by the final determination or the Commission's reasons. If the second view of the operation of par 10(c) is correct that, again, does not appear to accommodate itself to the opening words of par 10(a). 164 Optus argued that the proper construction of par 10(a) required an assumption that the requirements of cl 11.4 of Code 569 were satisfied once the conditions set out in par 10(a) were met. In other words Optus argued that the final determination required Telstra to treat the provision of the information specified in par 10(a) by itself, as an ULLS transfer request with the necessary consequence that Telstra would then process it as if it were valid under cl 11.5 of Code 569. It contended that the final determination should be construed in a practical manner which required "... Telstra to modify its existing procedures to exclude the kind of validation processes that are specific to transfers between access seekers". It referred to the practical approach in construction of instruments enunciated by Lord Reid in Gill v Donald Humberstone & Co Ltd [1963] 1 WLR 929 at 933-934 and applied by Stone J in Australian Tea Tree Oil Research Institute v Industry Research and Development Board [2002] FCA 1127 ; (2002) 124 FCR 316 at 328-329 [37] - [38] ; see too per Stein and Giles JJA in Langton v Independent Commission against Corruption (2000) 49 NSWLR 164 at 167-168 [12]-[13]. Lord Reid had said that instruments which were addressed to practical people skilled in a particular trade or industry ought be construed in light of practical considerations rather than by a meticulous comparison of the language of their various provisions of the kind appropriate for the construction of a statute. 165 Optus pointed to Telstra's submissions and Mr McAinsh's evidence to the Commission that Telstra would have "... to modify its provisioning system [sic] to remove the requirement for a ULL[S] identifier which the system is ordinarily configured to look for when assessing a ULLS Transfer Request". It also argued that even if there were an inconsistency between the final determination and Code 569, cl 16 of the Code and the statutory force of a determination under s 152CP, operate to make the final determination prevail. 166 The Commission's procedure in the final determination in par 10(a) presupposes the existence of an ULLS which is actually being transferred. Where there is an active in use line which is being transferred between access seekers (including Telstra as required by par 10(d)) it will be easy to determine whether an ULLS or unconditioned communications wire provides the service, because there will or will not be an original ULLS identifier (see cl 11.4.2(e)(vi)). But that critical piece of information is missing in the Commission's hypothesis under par 10(a). The Commission did not specify in the final determination or its reasons that the original ULLS identifier need not be provided, although Optus submitted that that is how par 10 ought to be understood. 12.2 What is the meaning of par 10 of the final determination? Is it really to be supposed that the Parliament intended that he might prescribe conditions in words of such dubious import that no one but himself would be sure how far he meant them to go? The Parliament did not give the Minister power to suspend or revoke licences at will. The course it took was to require him to describe in advance, by the formal method of imposing conditions upon a licence, what conduct of the licensee would expose the licence to suspension or revocation. I can see no justification for so loose an interpretation of the Act that a form of words which by reason of vagueness fails to perform that function may be held a condition within the intended scope of the authority. This is because the whole of par 10 purports to specify what Telstra must do to order and provision so as to provide access. Thus, in pars 10(a) and (e), the Commission equated the presence of a soft dial tone as the signification that an ULLS exists that provides the connection over which the soft dial tone is transmitted. For the reasons that I have given, that is fallacious. And because it is fallacious, but fundamental to the requirement for Telstra under par 10(a) to treat the request as a valid ULLS transfer request, if Optus' construction is correct, I am of opinion that the final determination is uncertain and unworkable. 169 This view is reinforced by consideration of par 10(f) and (g). These deal with the situation where Optus has submitted an ULLS transfer request that meets the requirements in par 10(a). In the first case, Optus must accept any risk as to quality of connection "... on the existing copper path between the Telstra exchange and the end-user premises" (emphasis added). Again, this demonstrates the Commission presupposed that in every case the presence of a soft dial tone identified the existence of a copper path. What is Telstra to do if that assumption is, as it can be, incorrect? It cannot supply the service the subject of the request as an ULLS service because, even though the soft dial tone is transmitted by the path that exists, that path is not an ULLS path. And, if Optus and the Commission are correct, Telstra cannot reject the transfer request but must treat it as valid even though it does not relate to an ULLS. That is, the final determination commits Telstra to processing as an ULLS transfer request, a request based on no more than the existence of a soft dial tone and the provision of a telephone number to Optus' new subscriber's address. 170 Pars 10(f) and (g) do not address the possibility that the soft dial tone runs across a non-ULLS connection. Rather, pars 10(f) and (g) deal with the possibility that the ULLS connection may or may not be of good quality (as opposed to not existing at all as an ULLS connection). And, par 10(e) only operates on the assumption that the absence of a soft dial tone established that there is no communications wire connecting the Telstra exchange and the end-user customer's premises. In that situation, as was the case before the final determination was made, Optus could then make a Vacant ULLS request. 171 The Commission attempted to adapt the existing ULLS transfer request process in Code 569 on the premise that the presence of a soft dial tone meant that it is carried by an unconditioned communications wire. The Commission recognised this in its reasons at [176]-[177]. But it avoided the real possibility that an inactive service with a soft dial tone might not be an ULLS service at all. Serviceability is one thing, existence another. A power to make a proclamation carrying legal consequences with respect to a lighthouse is one thing: a power to make a similar proclamation with respect to anything which in the opinion of the Governor-General is a lighthouse is another thing. This created a fundamental uncertainty both as to how the final determination should be construed and the methodology for Telstra to follow postulated in par 10. If the presupposition is wrong in respect of a request made by Optus, will Telstra be in breach of the final determination since it can never supply the service over the identified pathway used by the soft dial tone? Alternatively, will Telstra be entitled to reject the request in any event because the omission of essential information in the ULLS transfer request process in cl 11 of Code 569 and or cl 13 of Guideline 587 (namely the ULLS identifier) entitled it to do so? 174 Neither scenario makes the final determination certain. The presupposition takes the place of the processes in cl 11 of Code 569 without establishing that the process in par 10(a) can be applied to a particular line with a soft dial which is not, in fact, an ULLS. And, notwithstanding that par 10(a) treats every request where a soft dial tone is present as an ULLS transfer request, if Telstra can reject each such request because it does not give an ULLS identifier, the process stipulated in the final determination is pointless. 175 For these reasons, I am of opinion that the final determination was uncertain both in expression and in operation. It was therefore unlawfully made: Project Blue Sky Inc (1998) 194 CLR at 393 [99]-[101]. 13. GROUND 7: WAS THE FINAL DETERMINATION ILLOGICAL OR UNREASONABLE? Telstra argued that the final determination was illogical in the sense that it did not depend upon the Commission's evaluation of evidence or the drawing of factual inferences. It also contended that the final determination was illogical because it required the parties to the arbitration to comply with rules that were inconsistent internally with one another. This, in essence, was another way of arguing the same issues as have been discussed above. 177 Optus argued that Telstra understood the practical implications of the proposed determination communicated by the Commission during the arbitration as indicating that it was not illogical. It contended that the result of the final determination was a reasonable outcome in the circumstances. 178 In Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30 ; (2003) 198 ALR 59 at 76 [73] McHugh and Gummow JJ said that one species of what is known as Wednesbury unreasonableness ( Wednesbury [1948] 1 KB at 230) was identified by Dixon CJ in Klein v Domus Pty Ltd [1963] HCA 54 ; (1963) 109 CLR 467 at 473. There, Dixon CJ said that if it appeared that the dominating or actuating reason for a decision was outside the scope of the purpose of the enactment, that vitiated the supposed exercise of a discretion. Dixon CJ said that the Court looks to the scope and purpose of a provision and what its real object is to determine whether a decision-maker has exercised a discretion in accordance with the purpose of the enactment. However, the Court must approach the exercise from the perspective that the real object of the legislature is to leave the scope for judicial or other officer who is investigating the facts and considering the purpose of the enactment to give effect to his or her view of the justice of the case: see too S20/2002 198 ALR at 75-76 [67]-[70]; Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme [2003] HCA 56 ; (2003) 216 CLR 212 at 221 [30] per Gleeson CJ, Gummow and Heydon JJ. A decision which is so unreasonable that it might almost be described as being done in bad faith or so absurd that no sensible person could dream that it lay within the powers of the decision-maker is affected by jurisdictional error: Palme 216 CLR at 221 [30]. 179 There is a danger, of course, in proceedings for judicial review that the reasons of a decision-maker can be over-zealously scrutinised. The reasons are meant to inform. They are the reasons of persons who are familiar with the subject matter, and who need not be lawyers. They are intended to provide an explanation of the reasoning processes of the decision-maker himself or herself. The Court must not turn a review of the administrative decision-making into a review of the merits of the decision: 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. 180 In Avon Downs Pty Limited v Commissioner for Taxation [1949] HCA 26 ; (1949) 78 CLR 353 at 360 Dixon J discussed judicial review of an administrative decision for which the decision-maker did not have to give reasons. If the result appears to be unreasonable on the supposition that he addressed himself to the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant considerations, then it may be a proper inference that it is a false supposition. It is not necessary that you should be sure of the precise particular in which he has gone wrong. It is enough that you can see that in some way he must have failed in the discharge of his exact function according to law. There, Dixon CJ, Williams, Webb and Fullagar JJ referred to the important distinction between a mere insufficiency of evidence or other materials to support a conclusion of fact when the function of finding the fact has been committed to a person or body by the Parliament and, on the other hand, the absence of any foundation in fact for the fulfilment of the conditions upon which, in point of law, the existence of the power depends. The inadequacy of the material is not in itself a ground for prohibition. But it is a circumstance which may support the inference that the tribunal is applying the wrong test or is not in reality satisfied of the requisite matters. If there are other indications that this is so or that the purpose of the function committed to the tribunal is misconceived it is but a short step to the conclusion that in truth the power has not arisen because the conditions for its exercise do not exist in law and in fact. They distinguished it from a situation where a decision-maker did not give any reason for his or her decision, when the Court may be able to infer that he had no good reason (cf: per Gibbs CJ in Public Service Board (NSW) v Osmond [1986] HCA 7 ; (1986) 159 CLR 656 at 663-664). 183 As McHugh and Gummow JJ identified in S20/2002 198 ALR at 76 [73] the principle in Melbourne Stevedoring 88 CLR at 120 does not depend upon unreasonableness but upon the absence of a factual basis in which the power could be exercised. For the reasons that I have given above, in reality, the Commission was not satisfied of the requisite matters upon which its power to make the final determination depended, namely, it acted on the misconception that the presence of a soft dial tone demonstrated the existence of an unconditioned communications wire or ULLS. This was because of its misunderstandings of the subject matter with which it purported to deal, that I have described. The Commission's determination was therefore unreasonable and an improper exercise of power. 14. GROUND 8: WAS THE FINAL DETERMINATION INVALID BECAUSE IT INCLUDED PAR 10(E)? Telstra then added a further ground to its application claiming that the Commission acted in excess of the power conferred upon it by s 152CP by including par 10(e). In essence, Telstra argued that the Commission was not authorised to impose on it a requirement to act where there was no declared service. Telstra argued that by its very terms, par 10(e) presupposes that there is no communications wire, that is an ULLS, but then proceeds to impose requirements on Telstra as if there were such a wire. It contended that the Commission had had no power under the Act to impose terms and conditions on Telstra, where there was no declared service (i.e. in the situation addressed by the commencing words of par 10(e) that there was no communications wire) since this was outside the scope of any reasonable construction of s 152CP. Telstra argued that the Commission had power to make a determination under s 152CP(1) "... on access by the access seeker ' to the declared service' " but that the Commission had exceeded its powers by making a written determination on access to something which, in the hypotheses addressed by par 10(e), was not a declared service (original emphasis). Telstra argued that the determination was therefore invalid or liable to be set aside on the grounds stated in sub-ss 5(1)(c) or (d) of the ADJR Act . 185 Optus responded that the declared service in respect of ULLS involved the provision of a service over existing wires, rather than the installation of new communications wire to facilitate the provision of that service. It pointed to cl 8.6 of Code 569 as confirmatory of that position. It also accepted that the Commission's power under s 152CP(1) was limited to making a determination by the access seeker to the declared service. Optus, however, contended that the final determination was concerned only with access to the ULLS as declared under s 152AL(3) of the Act. It contended that there was nothing in par 10(e) or otherwise which required Telstra to install any new communications wire to facilitate any service request by Optus. All that par 10(e) required, Optus contended, was to require Telstra to follow the Vacant ULLS request procedure in Code 569 by rejecting the request following the standard service qualification process. 186 Optus pointed out that Telstra's construction would render par 10(e) effectively useless because it proceeded upon a known unavailability of any communications wire, and the Commission could not be presumed to have so proceeded. Optus also argued that the requirement in par 10(e) that it should request ULLS in a particular way was a determination about an aspect of how Telstra had to provide Optus with access to the ULLS. Optus recognised that might be redundant, "... since its application will not result in successful request for provision of the ULLS, but it does not suffer the vice alleged by Telstra of being a determination about access to a different type of service" (original emphasis). 187 Optus argued that the Commission should not be taken to have required the parties to engage in a pointless exercise of submitting a Vacant ULLS request in circumstances where it was already known that they should be rejected. It pointed to the necessity to construe the words of par 10(e) in a way that gave them a practical operation consistent with the intention of the Commission: Gill [1963] 1 WLR at 933-934 per Lord Reid. 188 Optus argued that the Commission was concerned to specify a practical means of identifying and connecting a particular line to a customer's premises. It said that that par 10(e) read together with par 10(a) showed that the existence of a soft dial tone indicated an existing continuous connection on a particular line from the customer's apartment with an MDU to the exchange. It contended that the practical utility of this was to enable Telstra, when provided with the other information in par 10(a), to identify the particular line in place and allow for connecting (jumpering) Optus' equipment to occur at the exchange without the need for technicians to visit the apartment building to connect a different pair of copper wires to the customer's premises. Optus argued that par 10(e) applied to situations other than those in par 10(a), namely that there was no soft dial tone so that it was not possible to identify an existing continuous connection. 189 While these submissions of Optus recognised the practical operation of the final determination, they pointed to the fact that it did not operate on an ULLS connection, but rather in respect of a presupposed situation where there either was an ULLS (par 10(a)) or there was no ULLS (par 10(e)). That was the very difficulty of which Telstra complained. The drafting of par 10 was inapt to specify terms and conditions for ordering and provisioning a communications wire or ULLS in a practical or intelligible fashion. The Commission's power was conferred to enable it to regulate a declared service, such as the ULLS, not to regulate something else. The Commission's powers under Part XIC of the Act to determine access to the declared service, being the ULLS, did not extend to determining matters where no ULLS existed as contemplated in par 10(e). I am of opinion that the Commission exceeded its jurisdiction by including par 10(e) in its final determination. 191 I am of opinion that par 10(e) could be severed because the rest of the final determination would not operate differently without it: Bank of New South Wales v The Commonwealth [1948] HCA 7 ; (1948) 76 CLR 1 at 371 per Dixon J; Victoria v The Commonwealth (Industrial Relations Act Case) [1996] HCA 56 ; (1996) 187 CLR 416 at 502 per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ. The relevance of par 10(e) is that it confirms the incorrect approach which the Commission took as to the significance of a soft dial tone in par 10(a). Severance of par 10(e) would not make the final determination any more meaningful or give it validity. 15. I certify that the preceding one hundred and ninety-two (192) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Defined by Code 569 as "a copper or aluminium based wire, forming part of a [PSTN]. For the avoidance of doubt, Communications Wire generally means a copper or aluminium cable pair". (Nothing here turns on the Code referring to aluminium wire in addition to the copper wire used in the Commission's declaration of the ULLS. industry participant] to supply services to a Customer". ULLS Transfer Defined by Code 569 as "the successful transfer of a ULLS between the [losing access seeker] and the [gaining access seeker]". ULLS Transfer Request Defined by Code 569 as "a request from the [gaining access seeker] to the [access provider] to process a ULLS Transfer. ULLS Request Defined by Code 569 as "a specific request from the [access seeker which will gain the customer] to the [access provider] for a Vacant or In Use ULLS or ULLS Transfer Request. " ULLS Request Identification Number Defined by Code 569 as "a request from the [gaining access seeker] to the [losing access seeker] to determine what Service Number or Service Numbers are associated with an In Use ULLS. Vacant ULLS Defined by Code 569 as "a ULLS that is not an In Use ULLS". | trade practices act 1974 (cth), part xic , telecommunications industry and access regime dispute between telstra and optus regarding access to unconditioned local loop service (ulls) in multi-dwelling units (mdus) resolution of access dispute by australian competition and consumer commission (accc) final determination made by accc establishing regime for ordering and provisioning of ulls whether final determination lawfully made judicial review grounds of review appeal under administrative decisions (judicial review) (adjr) act 1977 (cth), s 5 whether final determination unlawfully made on grounds that, in making final determination, accc: (1) did not take into account telstra's direct costs of providing access to the ulls (s 152cr(1)(d)); or (2) did not properly have regard to industry code as model terms and conditions (152aqb(9)) or otherwise (s 152cr(2)); or (3) failed to specify with reasonable precision or certainty terms and conditions relating access (s 152cp(2)); or (4) was so unreasonable that no reasonable person could have so exercised the power ( wednesbury unreasonableness); or (5) exceeded its jurisdiction by incorrectly assuming a matter upon which the exercise of its jurisdiction depended (s 152cp(1)) trade practices act , part xic , div 8 extent to which accc's earlier determination adopted industry code standards regarding ordering and provisioning of ulls mandatory terms of s 152aqb(1)(b) and (3) which stated respectively that accc "must make a written determination setting out model terms and conditions relating to access to each core service" and that accc "must take all reasonable steps to ensure that" such a determination is made within six months after commencement of section whether accc had discretion to declare some but not all model terms and conditions relating to core service clear words used by parliament requiring accc to make written determination to set out model terms and conditions relating to ulls and to take all reasonable steps to do so within six months explanatory memorandum qualifying clear words in bill trade and commerce administrative law trade and commerce statutory interpretation |
I ordered the parties to file draft orders reflecting the reasons for judgment for the applicant (including with respect to interest and costs). The parties agreed to the orders save as to costs. The applicant seeks an order for party-party costs up to and including 28 May 2008 and costs on an indemnity basis as from 29 May 2008, subject to one matter arising under Order 62 rule 36A(2) of the Federal Court Rules . The debate between the parties has been limited to the question whether there should be an indemnity costs order. The applicant relies on the affidavit of Mark Kingsley Hughes sworn 17 July 2009 which, amongst other things, annexes three offers made by the applicant to the respondents to settle the proceedings. None of these offers were made pursuant to Order 23 of the Federal Court Rules . Accordingly, the procedures for awarding costs under that Order do not automatically apply. The first offer was made on 27 May 2008. The letter making the offer on a "without prejudice save as to costs" basis was open for acceptance until 4.30 pm on the same day. The alternative offers contained in the letter are related to a loan arrangement between the second respondent and the parent company of the applicant. There was another offer made on 30 January 2009, again, without prejudice save as to costs. That offer did not refer to any monies owing under the loan agreement and was in a standard form for the respondents to pay the applicant the sum of $50,000, each party to pay its own costs, and the proceedings otherwise to be dismissed. That offer was open again until 4.30 pm on the same day, 30 January 2009. The third offer was made on 11 February 2009 on the same without prejudice save as to costs basis. This offer was effectively in the same substantial terms as the offer of 30 January 2009. By 11 February 2009 the hearing had commenced and been adjourned part-heard after three days for further hearing thereafter. All of the offers were rejected by the respondents and the matter proceeded to judgment. The applicant has helpfully provided written submissions setting out the relevant principles which are well known. Costs are in the discretion of the Court under s 43 of the Federal Court of Australia Act 1976 (Cth). The applicant accepts that although it has achieved a substantially more favourable judgment than the terms of its offer of 27 May 2008, this is not sufficient in order to obtain the special costs order it seeks. The applicant must satisfy the Court that the conduct of the respondents in rejecting the offer was unreasonable or imprudent. The applicant submits that the respondents' conduct was unreasonable or imprudent having regard to: - (i) the ultimate findings I made in the principal decision, (ii) the substantial level of compromise which the 27 May 2008 offer represents, (iii) the almost immediate rejection of that offer, (iv) the rejection of or failure to respond to the other offers, and (v) the failure by the respondents to make any written offer of settlement or offer of compromise at all. I accept that it is clear that the offers by the applicant were far more favourable to the respondents than the ultimate result in the judgment of the Court. I also accept the applicant's submission that hindsight shows that it would have been a prudent choice for the respondents to have accepted one or other of the offers. Nevertheless, I am not persuaded on the evidence that any conduct of the respondents in this matter should be characterised as unreasonable or imprudent, in the sense necessary so as to justify the making of an indemnity costs order. The first offer was tied up with the loan agreement (referred to at [11] of my principal reasons) and, as the respondents pointed out, there was always an obligation for MediVac Limited to repay the loan. In those circumstances, it is difficult to understand why the offer would be put in those terms. There was also a very short time for acceptance of the settlement offer. The second and third offers stand alone. In each case there was a short time for acceptance and they were made relatively late in the day. It does not seem to me that there is any conduct of the respondents in this matter that would justify the making of an indemnity costs order. I therefore order the respondents/cross-claimants pay the applicant/cross-respondent's costs of the proceedings as agreed or taxed. The remaining issue is the respondents' reference to Order 62 rule 36A(2) of the Federal Court Rules . That provides that if the Court is of the opinion that a proceeding brought in the Court could more suitably have been brought in another court and so declares that any costs will be reduced by one-third of the amount otherwise allowable. I accept the applicant's submissions that there is no room for the formation of any such opinion in the context of these proceedings brought under the Corporations Act 2001 (Cth) and having regard to the jurisdiction of this Court. The costs order will remain as I have said. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | whether indemnity costs order warranted whether respondents' conduct in rejecting offers of settlement by the applicant amounted to conduct unreasonable or imprudent whether proceeding should have been more suitably brought in another court whether order 62 rule 36a(2) of the federal court rules operates to reduce costs payable costs costs |
The applicant seeks from the respondents further particular discovery of certain documents which are described in the schedule to these reasons. The first respondent, Mr Kowalewski, was previously employed by the applicant, Ferguson Corporation Pty Ltd (Ferguson Corporation). Ferguson Corporation manufactures and sells amongst other things stainless steel outdoor cooking equipment which it markets under the trade name 'Alfrescostyle'. Mr Kowalewski was employed by Ferguson Corporation from 3 May 2004 until 31 October 2006 as a technical consultant engaged in the production and sales of stainless steel outdoor kitchen equipment. 3 In its further re-amended statement of claim, Ferguson Corporation relies upon implied terms of Mr Kowalewski's contract of employment that he would act in good faith in the interest of Ferguson Corporation and would not place himself in a position where his duties to Ferguson Corporation and his self interests conflicted or where there was a real sensible possibility of conflict. In three respects, it is said that he has breached the implied terms of his employment. Those three alleged breaches are set out in par 5 of the pleading. Additional breaches are pleaded as against Mr Kowalewski and the knowing concern of the second and third respondents, Jophiel Pty Ltd (Jophiel) and Alfresco Concepts Pty Ltd (Alfresco), is also pleaded. 5 As against Jophiel, it is alleged that it knowingly procured the manufacture of stainless steel outdoor kitchen equipment with the use of the drawings obtained by Mr Kowalewski; it sold that outdoor equipment and used quotations and other information in its business. 7 The material knowledge of Jophiel is, again on the pleading, to be inferred from the fact that between about August 2006 and October 2006, Mr Kowalewski and Mr Meakins were in frequent contact by telephone and otherwise. Details of Mr Kowalewski's mobile phone records are relied upon by Ferguson Corporation. Similar allegations are raised as against Alfresco. 8 There are claims for damages for breach of contract, that is, breach of an implied term or alternatively, an account for profits and various other forms of relief. 9 The respondents complain that the case against them is almost entirely inferential and therefore weak. They say that the discovery which is sought, in the circumstances, is far too broad. It is clear that r 8 provides a right of a different and additional kind from that right available by way of general discovery as it is now understood under the Federal Court Rules . 11 In Seven Network Ltd v New Ltd (No 5) (2005) 216 ALR 147 Sackville J held that the test to be applied in determining whether r 8 particular discovery should be ordered was whether the documents sought were 'reasonably likely to add, in the end, in some way or other, to the relevant evidence in the case'. However it is also then stressed by Gray J in Independent Cement & Lime Pty Ltd v Australian Cement Ltd & Ors [1988] FCA 749 that pure speculation that the documents might exist is not a sufficient ground for the making of an order of the kind contemplated by r 8. 12 In Spyer v Cuddles 'N' Mum (Franchise) Pty Ltd (No 3) [2002] FCA 1563 , Lindgren J outlined the developments which have occurred in the Federal Court Rules providing a more restricted ambit of discovery in relation to a notice of discovery required by O 15 r 2. However, he then pointed to the fact that the expression 'relating to any matter in question in the proceeding' under r 8 did, import the Peruvian Guano test. It followed that there was a disconformity between the narrower and more demanding test of discoverability under O 15 r 2(3) and the Peruvian Guano test. Indeed as his Honour described it, the test under r 8 was much broader than under the prescribed notice for discovery Form 21. Notwithstanding that the threshold is not high, his Honour observed that the word 'may' where it appears for the second time in that rule gives the court an overriding discretion not to make an order even if the power given by the rule to make one is enlivened. 13 Foremost in the exercise of a discretion in this case will be the question of whether part or all of the additional specific discovery sought by Ferguson Corporation can be said to be a fishing expedition. Is it merely speculative that such documents exist which may assist its case and the case of the respondents? Ferguson Corporation contends that as Mr Kowalewski has already attempted but failed on a motion to strike out the Ferguson Corporation pleadings, there is a strong indication that Ferguson Corporation has established sufficient a case on its pleading (and which is supplemented by affidavit material supporting the pleading) that it would be difficult to conclude that the documents it seeks are within the category of documents which are necessary to establish a case in the first place. It has often been said to be a ground on which discovery (and interrogatories) will not be ordered, that the purpose is to carry out a "fishing expedition": see, for example, Hennessy v Wright (No 2) (1890) 24 QBD 445n at 448n; Russell v Stubbs Ltd [1913] 2 KB 200n at 204n; Rofe v Kevorkian [1936] 2 All ER 1334 at 1337-1338; Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1952) 72 WN (NSW) 250 at 254; Latec Finance Pty Ltd v Jury [1960] NSWR 321 at 323; Melbourne Home of Ford Pty Ltd v Trade Practices Commission (1979) 36 FLR 450 at 459-460; WA Pines Pty Ltd v Bannerman (1980) 41 FLR 175 at 181-182, 190-191; Lloyd v Costigan (1983) 62 ALR 284 at 292; Australian Securities Commission v Dalleagles Pty Ltd (unreported, Federal Court, French J, 27 February 1992) at p 14; and cf E Bray, The Principles and Practice of Discovery (1885), p 13. What does the reference to a "fishing expedition" mean? After all, ex hypothesi, the giving of discovery will often, if not always, reveal documents of which the other party was not previously aware (similarly, the administering of interrogatories will often, if not always, reveal information of which the other party was not previously aware). What is meant is that discovery must not be used for the purpose of ascertaining whether a case exists, as distinct from the purpose of compelling the production of documents where there is already some evidence that a case exists: see, for example, Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 575; Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd; WA Pines Pty Ltd v Bannerman; Barbarian Motor Cycle Club Inc v Koithan (1984) 35 SASR 481 at 486; Nestle Australia Ltd v Commissioner of Taxation (1986) 10 FCR 78 at 82-83; Mobex Pty Ltd v Comptroller-General of Customs (unreported, Federal Court, Foster J, 18 May 1994), at p 18. In WA Pines Pty Ltd v Bannerman at 181, Brennan J said that what is required is that "sufficient is shown to ground a suspicion that the party applying for discovery has a good case proof of which is likely to be aided by discovery". On the facts of particular cases, the application of the distinction between "fishing" and "non-fishing" may well be difficult. In Hennessy v. Wright (No. 2) (1888) 24 Q.B.D. 445 (reported as a note to Parnell v. Walter (1890) 24 Q.B.D. 441) Lord Esher M.R. said: "In other words, the plaintiff wishes to maintain his questions, and to insist upon answers to them, in order that he may find out something of which he knows nothing now, which might enable him to make a case of which he has no knowledge at present. If that is the effect of the interrogatories, it seems to me that they come within the description of 'fishing' interrogatories, and on that ground cannot be allowed. The moment it appears that questions are asked and answers insisted upon in order to enable the party to see if he can find a case, either of complaint or defence, of which at present he knows nothing, and which will be a different case from that which he now makes, the rule against 'fishing' interrogatories applies" [(1888) 24 Q.B.D., at p. 448.]. In Lane v. Gray (1873) L.R. 16 Eq. Cas. 552 Sir Richard Malins V.C. held that the court's power to make an order for discovery was a discretionary power to order production when it shall appear to the court to be right to do so. His Lordship refused the application until the case had proceeded further and the plaintiff made out a prima facie case in support of her claim. The plaintiff had brought a suit claiming to be entitled to a share in the estate of an intestate as an alleged next of kin. It appears that discovery was refused because all that the plaintiff had done at that stage of the case was to allege that she was next of kin of the intestate and there was no evidence to support her assertion. The estate of intestates were frequently claimed by persons of whom many had no foundation for their claims; but by obtaining on discovery production of documents belonging to the intestate they obtained information by means of which fresh fictitious cases were in many instances manufactured. In Associated Dominions Assurance Society Pty. Ltd. v. John Fairfax & Sons Pty. Ltd. (1952) 72 W.N. (N.S.W. ) 250 , Owen J. said: "A 'fishing expedition', in the sense in which the phrase has been used in the law, means, as I understand it, that a person who has no evidence that fish of a particular kind are in a pool desires to be at liberty to drag it for the purpose of finding out whether there are any there or not" [(1952) 72 W.N. (N.S.W. ), at p. 254]. See also Bray on Discovery (1885), pp. 13, 16, 98 and 461. 16 The respondents rely heavily on the vagueness of the allegations in the re-amended statement of claim. When these issues were considered on the strike out motion ( Ferguson Corporation Pty Ltd v Kowalewski [2007] FCA 789) , Nicholson J held that the pleading should stand. His Honour held at [13] that the respondents did not complain about any difficulty responding to the pleading in respect of the quotations and the drawings. Those documents were particularised, that is, they were described with sufficient particularity in the pleadings. There was a further complaint about par 5.3 and the reference to 'other information' to which the complaints of the respondents were directed. In relation to the other information, his Honour held that it was importantly constrained by the words that the documents were taken by the employee. It was not a case in which there was a completely opened ended pleading even by reference to the 'other information' in par 5.3. Unless that fact appears prima facie on the discovery, then there can be no 'other information'. If it does appear on the discovery, then the issue is at large in relation to it. In my view, reading par 5 as a whole and viewing par 5.3 in the context of pars 5.1 and 5.2 referring to 'the quotations' and 'the drawings', this is a pleading which is not embarrassing even if care and sensitivity would be required ultimately to the application of par 5.3. First, as a general proposition the courts are reluctant to permit a previous employer to use a generally worded claim to stifle the right of an employee to use the skill and experience of that employee sometimes called "know-how" as distinct from an ex-employer's "secrets". Second, confidential information and competition cases call for specificity in the pleading of material facts to overcome the bringing of actions that are speculative in character. The latter view was expressed by Templeman J in John Zinc & Co Limited v Lloyds Bank Limited (1975) RPC 385 ; also, by Whitford J in Reinforced Plastics Applications (Swansea) Limited v Swanswea Plastics & Engineering Co Limited (1979) FSR 182 ; and by Mummery J in Ixora Trading Incorporated and anor v Jones and anor (1990) FSR 251. 17 In Ixora Trading Mummery J cited the remarks of Whitford J in Reinforced Plastics . It is altogether too easy when employees leave and are employed by a rival firm to harass that rival firm upon the basis that the employees who have left the plaintiffs and joined them have taken away trade secrets of great value, and to bring an action which may involve the expenditure of an enormous amount of time and money and include disclosure of information which is going to be alleged to be confidential on either side with consequent troubles and worries. It is not really to be contemplated that proceedings of this kind should be allowed to go forward on nothing more than a speculative basis; and, unless the plaintiff can show that he has some basis for a reasonable believe (sic) in his assertion that the defendants are making use of his confidential information, then the action can only be characterised as speculative and fishing, and ought not, in my judgment, to be allowed to proceed. There must be something more than a mere assertion. In that case there were allegations both of breach of confidence after termination of employment and breach of duty of good faith whilst still in employment. Technologically based industries abound. All have what they regard as secrets. Employees, particularly those employed on the scientific or technical side of the manufacturing business, necessarily acquire knowledge of the relevant technology. They become associated with technological advances and innovations. Their experience, built up during their years of employment, naturally equips them to be dangerous competitors if and when their employment ceases. The use of confidential information restrictions in order to fetter the ability of these employees to use their skills and experience after determination of their employment to compete with their ex-employer is, in my view, potentially harmful. It would be capable of imposing a new form of servitude or serfdom, to use Cumming-Bruce LJ's words, on technologically qualified employees. It would render them unable to practice to leave their employment for want of an ability to use their skills and experience after leaving. Employers who want to impose fetters of this sort on their employees ought in my view to be expected to do so by express covenant. The reasonableness of the covenant can then be subjected to the rigorous attention to which all employee covenants in restraint of trade are subject. In the absence of an express covenant, the ability of an ex-employee to compete can be restricted by means of an implied term against use of disclosure of trade secrets. But the case must, in my view, be a clear one. An employee does not have the chance to reject an implied term. It is formulated and imposed on him subsequently to his initial entry into employment. To fetter his freedom to compete by means of an implied term can only be justified, in my view, by a very clear case. The present is, to my mind, a long way from that. Rather, the plaintiffs submitted that at trial they will, if discovery is properly made, demonstrate that by comparison with the first plaintiff's modus operandi in 1999 against the second defendant's modus operandi when it first commenced business and in the two years thereafter, one will be able to see such similarities as to infer that confidential information was passed by the first defendant to the second defendant. 7 If I have accurately described the submissions of the plaintiffs on this point, then their position is that they have no evidence at present to substantiate what they anticipate will be the proper inference to draw from a comparison of the several modus operandi of respectively the first plaintiff and the second defendant. They suspect that discovery, if properly made, will disclose that the comparison they seek to make can be made and, when made, will lead to the inference to which I have referred. 8 If that, again, is an accurate summary of the plaintiffs' argument on this point, then it seems to me that the plaintiffs are essentially engaged in a fishing expedition. The rules concerning discovery do not permit discovery for the purposes of creating a case. There are of course special rules concerning discovery before action is commenced, where the plaintiff or putative plaintiff can demonstrate a real likelihood that a suspected case will be substantiated by inspection of documents not available without resort to that rule. That is not this case. Again, with the caveat that I have accurately summarised the plaintiffs' submissions, it seems to me that this application is one that can be properly described as fishing in the pure sense. In the context of these applications for further specific discovery, it is essential to resolve the question of whether or not the primary claim is just based on a suspicion with little or no support - in which case further specific discovery may be an unjustifiably intrusive fishing expedition. Or does common sense suggest that there is enough on the face of matters in the material supporting the claim to entitle the orders sought? It is not possible to form a view on that topic unless the evidence in support of the claim as well as that in response is examined. While it is not appropriate to attempt to reach any clear view as to the ultimate quality of the evidence at this stage, it may be that if the claim is no more than speculation, so much would be clear. Each party has filed several affidavits. I will refer to some of the material without recording it all at this interlocutory stage. Some of those affidavits had also been read in earlier interlocutory proceedings. 21 Mr Ferguson swore an affidavit on 12 December 2006. He deposed to the fact that in or about May 2004, Ferguson Corporation purchased a business known as HA TEC --- Aroma Catering Appliances from Mr Kowalewski. At the time it was acquired by Ferguson Corporation, it specialised in gas cooking equipment and, in particular, in barbeques and wok cookers. As part of the purchase of the business, Ferguson Corporation agreed to employ Mr Kowalewski. His employment with Ferguson Corporation commenced in May 2004 as a technical consultant. He was the most senior production sales employee involved with its range of outdoor kitchen products. His business was absorbed into the existing stainless steel division of Ferguson Corporation. That division manufactured exhaust hoods, refrigerators and other custom made architectural stainless steel products. The first twelve months or so after acquiring the business was spent streamlining the business product range to ensure that Ferguson Corporation capitalised on its competitive advantage in the market place. He described the extensive work involved in that activity. 22 In the middle of 2005, Ferguson Corporation embarked on an extensive promotional campaign to expand the brand awareness of the outdoor kitchen barbeque equipment marketed under the name of Alfrescostyle. Ferguson Corporation did not in fact manufacture or sell outdoor kitchens or barbeque equipment until after it acquired Mr Kowalewski's business. He gives details of the promotional campaign and the steps taken to market the products. 23 Mr Kowalewski was intimately involved in that activity and directed subject to the supervision of Mr Ferguson the development of Ferguson Corporation's Alfrescostyle range of products. He had a close involvement with Ferguson Corporation's customers and a detailed knowledge of its selling prices because he personally handled 90% of the quotations provided by it. Ninety percent of Ferguson Corporation's customers for the Alfrescostyle range are one-off retail customers and the other 10% come from sources such as builders and interior designers. In that source there is often a lead time of up to 18 months between a quote being provided and the order being confirmed. As at the date of swearing his affidavit there were approximately 35 quotations submitted to Ferguson Corporation customers for Alfrescostyle range of products between April and October 2006 that had not then resulted in orders. The quotations ranged in dollar value between $3,000 and $90,000 with an average value of $18,000. He describes the processes involved in developing and fabricating Alfrescostyle equipment including the concepts and configuration stage, the drawing, designing, prototyping and testing. The first stage takes some eight weeks and the second stage some 16 weeks. 24 On 11 September 2006, Mr Kowaleski gave Mr Ferguson his written notice of resignation. There was a meeting. Mr Ferguson persuaded him to stay. Mr Kowalewski was due to go on annual leave for 13 working days which he did on 11 October 2006. When he returned to work on 31 October 2006 he said he had changed his mind and he intended to finish up that day. Mr Kowalewski gave Mr Ferguson his keys to the company car and his mobile phone and left. The memory on the mobile phone had been deleted. Although Mr Ferguson discovered that Mr Kowalewski was competing with Ferguson Corporation after his employment had ceased, Mr Ferguson believed that he was entitled to do so as there was no restraint provision in Mr Kowalewski's contract of employment. However, on or about 8 November 2006 he had a meeting with Mrs Victoria Miller-Wise who is an interior designer. Ferguson Corporation had previously provided a quotation to her on behalf of one of her clients. He received information from her in the course of that meeting to the effect that she had declined the request from Mr Kowalewski to provide quotations to her and to her clients for the manufacture and installation of outdoor kitchens. 25 There was also hearsay evidence that Mr Kowalewski had been provided with copies of quotations from 'Action Laser Cutting' in relation to 14 items manufactured by Ferguson Corporation. Those items constituted the vast majority of the Alfrescostyle products sold by Ferguson Corporation both in terms of number and price. The quotations were originally provided to Mr Daryl Taylor by Action Laser Cutting on the various dates shown on the quotations. Action Laser Cutting was used by Ferguson Corporation to cut the stainless steel pieces which were then worked into the items sold by it. The cutting diagram or list is supplied to the laser cutters electronically. The cutting lists are created by a computer program from the information which is set out in the drawings. The information is entered into the cutting machine. Stainless steel sheets are cut in accordance with the information contained in the cutting diagram and are then fabricated in accordance with the drawings. 26 Ferguson Corporation has prepared drawings in relation to each of its products. Those drawings show how each product is constructed. Accordingly, access to the drawings, according to Mr Ferguson, would provide a person with all the information required at a highly technical level to manufacture Ferguson Corporation's Alfrescostyle range of products. Such drawings and cutting lists were stored electronically on the Ferguson Corporation's server. Mr Kowalewski had access to all of that information from his computer in his office at Ferguson Corporation's offices. He also had access to all quotations provided by Ferguson Corporation to its customers both in hard copy and electronically. 27 Mr Ferguson says there is no reason why Mr Kowalewski would have been required to obtain the quotations. Those quotations provided to the cost of manufacturing the majority of Ferguson Corporation's products. 28 Also, on a hearsay basis, Mr Ferguson refers to communications between Mr Keogh, a company consultant and Mr Daryl Taylor a former employee of Ferguson Corporation during which Mr Keogh learnt from Mr Taylor that the day before he left employment with Ferguson Corporation on 22 September 2006 he gave Mr Kowalewski two diskettes to give to Mr Ferguson. Those diskettes contained a full set of drawings prepared by Mr Taylor in relation to each of the Alfrescostyle products sold by Ferguson Corporation. The two diskettes were not given to Mr Ferguson by Mr Kowalewski. He directed Ferguson Corporation employees to conduct a search of the offices to find the two diskettes. At the stage of swearing his affidavit they had not been found. Again, the information on those diskettes, if the information from Mr Taylor and Mr Keogh was reliable, were to provide all that was required to manufacture Ferguson Corporation's Alfrescostyle range of products. There was similar evidence from Mr Ferguson about information conveyed to him by Mr Piil. 29 Mr Ferguson also swore a further affidavit in reply shortly prior to the hearing. In relation to Mr Kowalewski he repeated the point that there was no reason of which he was aware why Mr Kowalewski should have requested and obtained copies of the quotations. The Pricing file referred to by Mr Kowalewski is kept in Mr Ferguson's office and is a file to which he frequently refers. The quotations were not kept in that file. The originals of the quotations were initially forwarded to Mr Daryl Taylor (one of Ferguson Corporation's employees) and those originals were kept in Mr Taylor's company computer at the office of Ferguson Corporation. He says he does not know why Mr Kowalewski would have returned the diskettes to Mr Taylor given that Mr Taylor's employment with Ferguson Corporation had ceased in September 2006 and the information contained on the diskettes belonged to Ferguson Corporation not to Mr Taylor. He rejects the statement by Mr Kowalewski that the information contained on the diskettes and the quotations would have been of no assistance to the respondents. He says that the 14 quotations relate to the majority of the stainless steel components which are part of the Ferguson Corporation's range of outdoor kitchen equipment products known as Alfresco Style. He says this information would be (and I feel would have been) of valuable assistance to a competitive business. He repeats the breadth of information contained on the diskettes. 30 There is also an affidavit of Richard Piil, sworn on 12 December 2006. He is the proprietor of Alfresco Kitchens. Mr Piil makes the point that the products which are designed and sold by Alfresco Kitchens are kitchens which are custom made to clients particular requirements, however, they do consist of a number of standard modules. Those modules include, for example, one, two and three door cabinets and various barbeque units. He says that in April 2005 he approached Ferguson Corporation with a view to engaging it to manufacture and install the barbeque and cabinet components of the outdoor kitchen sold by Alfresco Kitchens. His contact point was Mr Kowalewski and from time to time he and Mr Kowalewski developed a number of barbeque component designs which were used by Alfresco Kitchens. The process culminated in Alfresco Kitchens developing a standardised product list of barbeque and associated components which were manufactured by Ferguson Corporation for sale by Alfresco Kitchens. 31 In or about early September 2006, Mr Piil had placed an order with Ferguson Corporation for the manufacture and supply of some barbeque components. There were some delays in the order being filled and he telephoned Mr Kowalewski to discuss the matter. During this conversation he said, in effect, that Mr Piil should put a 'drop dead date' on the order for the end of September so that if Ferguson Corporation could not deliver then he could cancel the order. In fact, Mr Piil did not do that. 32 On 11 or 12 September, Mr Kowalewski telephoned Mr Piil and told him that he had resigned from Ferguson Corporation saying that he was talking to some other people and that he would contact him when it happened. Within a day or so, Mr Kowalewski phoned Mr Piil and told him in effect that he had not resigned and that he was staying on at Ferguson Corporation. He said that he was going on holidays. On 1 or 2 November 2006, Mr Kowalewski telephoned Mr Piil again saying in effect that he had a new business and he wanted Mr Piil to and come have a look at the business and his new premises so that Mr Kowalewski could give Mr Piil a pricelist for the components used by Alfresco Kitchens. Mr Kowalewski indicated that the premises were located at Canningvale. A day or so later, Mr Piil went to the address that had been provided. There was a factory unit with a big sign out the front saying Alfresco. There was also a flat tray vehicle with Alfresco written on the side. On entering the premises, Mr Piil observed a gas-fired pizza oven and various barbeque shelves with other components in various stages of construction. Mr Kowalewski said to Mr Piil 'you look stunned' and Mr Piil said 'why wouldn't I be? Have you been doing this on the side? ' He said 'we've been working at it'. Mr Piil said 'you obviously have'. 33 Mr Piil said that while his experience had largely been in sales, he had a general knowledge in relation to design and production of barbeques. He considered it would normally take months to get a business to the stage of where Alfresco appeared to be. The design and fabrication of the barbeques and pizza ovens that he saw, if done from scratch, he says would have taken months to complete. Mr Kowalewski took him into the office and gave him a pricelist which he produced and said 'this is what your barbeques will cost'. Mr Piil thought that the diagrams looked substantially the same as the products supplied to him by Ferguson Corporation. Mr Kowalewski then said to Mr Piil that it would be fine to start with him once Mr Piil had used up his current stock. Mr Kowalewski told Mr Piil he could deliver immediately and that installation turnaround would be much quicker than Ferguson Corporation. On looking at some of the specific items, Mr Piil concluded that the gas fired pizza oven looked visually almost identical to those manufactured by Ferguson Corporation but a little bit taller. The pizza ovens manufactured by Ferguson Corporation had been the only product of that type then manufactured in Western Australia. Mr Kowalewski also showed Mr Piil another barbeque which Mr Piil says he recognised from the Ferguson Corporation product list but it was not a barbeque that he and Mr Piil had actually used. He duly placed an order and subsequently met with Mr Ferguson, informing him of these facts. He said he did have in his possession a file containing advertising literature, photographs, plans and designs. He says that file belongs to him. It was never kept at Ferguson Corporation's premises and had always been maintained by him at his home. 36 In a subsequent affidavit sworn 18 March 2008, he says that as far as he is aware Ferguson Corporation does not manufacture or market various products as outlined by Mr Steven Meakins even though Ferguson Corporation has recently introduced some form of a 'Kegerator'. He says as far as he knows, no such products were manufactured or marketed by Ferguson Corporation at the time that he and Mr Kowalewski joined Alfresco and no such products were manufactured or marketed or even contemplated by Ferguson Corporation at that time. He denies that the respondents have made any use at all of any information from Ferguson Corporation. As to the quotations referred to at par 5.1 of the further re-amended statement of claim, he confirmed that he did receive those on his Ferguson Corporation email address while still in the employ of Ferguson Corporation. He then printed them off and filed them in the Pricing file at the offices of Ferguson Corporation. He denies keeping the copies and says he had no access to that email account after he left Ferguson Corporation's employ. Nor, he said, did he forward the email to any other account. As to the diskettes, he confirms that he had those at home because he would often work at home. As soon as he left the employment of Ferguson Corporation he returned the diskettes to Daryl Taylor and did not keep a copy. He says that although most of the work is custom made, Alfresco has four items which might be regarded as standard that come within the range of outdoor kitchen equipment and contain stainless steel components. The standard items are the standard barbeque, the standard barbeque exhaust hood, the standard pizza oven and the standard cabinet. He says that these four items were all designed afresh by Alfresco in consultation with Jarrahdale Heating and Cooling. He also referred to different products such as the Kegerator, cabinet drawers with special timber and glass infill and a jarrah barbeque with a no 'flame failure' (safety) device. None of those devices are manufactured by Ferguson Corporation as far as he knows. He printed them off and filed them in the Pricing file at the Applicant's offices. He did not keep a copy and he had no access to that email account after he left the Applicant's employ. Nor did he forward the email to any other account. In relation to the discs referred to at paragraph 5.2 of the Further Re-Amended Statement of Claim, I am advised by the First Respondent and verily believe that he received those discs from Daryl Taylor and had them at his home because he would often work at home. As soon as he left the employment of the Applicant he gave the discs back to Daryl Taylor and did not retain a copy. I also believe that the information referred to in paragraphs 5.1 and 5.2of the Further Re-Amended Statement of Claim would have been of no use to the Respondents. All designs and details regarding Al Fresco Concepts' products are confidential to Al Fresco Concepts. The Applicant is a competitor of Al Fresco Concepts. 38 He denies that Jophiel or Alfresco have used the drawings, quotations or other information and until he saw the affidavit of Mr Ferguson, he had never seen the email and its alleged attachment or any Ferguson Corporation drawing such as those annexed to the affidavit of Mr Ferguson. 39 Relevant substantially to the cross-claim which is raised by Mr Kowalewski is his denial of Mr Ferguson's statement that in or about May 2003 (sic), Ferguson Corporation purchased Mr Kowalewski's business. To that Mr Kowalewski said that in fact Ferguson Corporation purported to purchase some of the assets of his business which did not include any intellectual property. He had not, at that stage, been paid in full for the purchase price which had been agreed for those assets. The Ferguson Corporation defence to the cross-claim refers to an oral agreement reached on 19 April 2004 with Mr Kowalewski by which Ferguson Corporation agreed to buy on ongoing basis the business including the intellectual property and good will for an amount of $40,000. Ferguson Corporation alleged that it was an express term of the purchase agreement that the purchase consideration would be paid by offsetting the amount owed by Mr Kowalewski to Ferguson Corporation at the time of the formation of the purchase agreement. This was an amount equal to deposits collected by Mr Kowalewski prior to the formation of the purchase agreement and retained by him in relation to orders subsequently completed by Ferguson Corporation. Ferguson Corporation contends that the purchase price has been paid first by offsetting an amount of $10,222.69 owed by Mr Kowalewski to Ferguson Corporation at the time of the purchase agreement; secondly by offsetting the amount of $13,690 for deposits collected by Mr Kowalewski prior to the formation of the purchase agreement and retained by him in relation to orders subsequently completed by Ferguson Corporation; and thirdly by the payment of $20,000 made by Ferguson Corporation to Mr Kowalewski on or about 19 July 2005. There is a deal of evidence from both within Ferguson Corporation itself and externally which is consistent with the claim. No conclusion can presently be reached as to whether or not the evidence will be accepted. The articulation of the claim in the pleading has been upheld in a previous strike out application and it follows, in my view, that certain additional specific discovery should be given but not in categories as broad as those which are sought by Ferguson Corporation. 42 In my view Ferguson Corporation is entitled to discovery in all of the six categories in the attached schedule but subject to qualification. The first qualification is that the discovery should not include any product which does not bear a close resemblance to a product sold by Ferguson Corporation --- the 'kegerator' is an obvious example but there may well be others. The second qualification is that as discussed in the course of the hearing, terms will have to be reached between counsel (and, if not, I will resolve them) as to confidentiality as there are obvious benefits for a competitor examining drawings, quotations and financial records of products which are the same as those which it sells. 43 Equally, and for similar reasons, in my view, it is appropriate that Ferguson Corporation give discovery of those documents sought by Mr Kowalewski which go to the question of the manner in which Ferguson Corporation treated the payment of the consideration for the acquisition of Mr Kowalewski's business. The four categories are qualified by the description of taxation records and advice received relating to the sale agreement, the subject of the cross-claim and defence and in particular, but not limited to, the various four items set out in the first paragraph of these reasons. As with discovery to be given by Mr Kowalewski, terms should be reached in relation to the confidentiality of that potentially highly sensitive discovery. 44 I propose leaving the finalisation of the precise terms upon which discovery should be given to be reached between counsel in accordance with the conclusions I have expressed in these reasons. 45 If agreement cannot be reached, the matter can be re-listed before me for determination. 46 As each of the parties has had substantial success in discovery being ordered by the other, I would take the view that costs should follow the event or that there should be no order as to costs as each of the orders would negate the other. Again, I will leave the precise orders in relation to costs for counsel to endeavour to agree in light of this statement of principle. Again, if agreement cannot be reached, the matter can be re-listed before me. I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. Drawings or other documents which evidence the exact dimensions and specifications of each of the pieces of stainless steel outdoor kitchen equipment manufactured by the Second Respondent (Jophiel) and the Third Respondent (Alfresco Concepts). 2. Documents which evidence the design or product development process of each of the pieces of stainless steel outdoor kitchen equipment manufactured by Jophiel and Alfresco Concepts. 3. All quotations issued by Alfresco Concepts. 4. All telephone records for the Respondents and their directors for the months of August, September and October 2006. 6. Any correspondence, note, minute, memorandum or other document evidencing any meeting, conversation or other communication between the First Respondent and any director of Alfresco Concepts or Jophiel for the months of August, September and October 2006. | particular discovery whether fishing expedition practice and procedure |
The appeal succeeded, and it was ordered that the appellants bring in short minutes of order reflecting the Full Court's reasons for judgment. On 20 September 2006 the Full Court ordered that the appeal be allowed and that there be judgment in favour of the appellants against Lane Moller Partners Pty Limited trading as Lane Moller Partners and against Robert Young, the third and fourth respondents to the appeal respectively, in the sum of $200,135, together with interest in the sum of $121,876.31. The parties were given further time to file submissions relating to costs. 2 On 5 October 2006 liquidators were appointed to Lane Moller Partners Pty Limited on a creditors' voluntary winding up. 3 The appellants, by notice of motion, seek leave to proceed against the third respondent, now described as Lane Moller Partners Pty Limited, trading as Lane Moller Partners (in liquidation), pursuant to s 500(2) of the Corporations Act 2001 (Cth). The liquidators, though on notice, neither appeared, nor opposed the grant of leave. 6 It is a vexed question whether leave is required to proceed against a company in liquidation in the context of an appeal. In Humber & Co v John Griffiths Cycle Company (1901) 85 LT 141, Lord Davey, the only member of the House of Lords to address the point, held that where a company was being wound up under the direction of the court, an appeal in which the company was a respondent, brought in an action in which the company was originally the plaintiff, was not a "proceeding against the company" within s 87 of the Companies Act 1862 (UK). Accordingly, leave to proceed was not required. 7 However, in Skinner v Jeogla Pty Ltd (2001) 37 ACSR 106, which arose out of an application to the court for leave to proceed against a company in liquidation brought under s 471B of the Corporations Law , the New South Wales Court of Appeal doubted the correctness of Humber . It noted that the language of s 471B differed significantly from that of the provision under consideration in Humber . Spigelman CJ observed (at [16]) that Lord Davey's reasoning was "redolent of the language of waiver". He concluded that there were two points of distinction between Humber and the case before the Court of Appeal. The more important of these was that in 1901, when Humber was decided, the position was that leave to proceed against a company in liquidation had to be obtained from the court that had made the winding up order, and not the appellate court. The practice under the 1862 Act was said to have been set out by Jessell MR in Re International Pulp and Paper Co (1876) 3 Ch D 594. Given the jurisdictional limits upon the statutory power that then existed, Spigelman CJ considered it hardly surprising that the word "proceedings" would be read down so as not to encompass an appeal. 8 Spigelman CJ noted that there is authority for the proposition that an application for security for costs against a company in liquidation is not a "proceeding" for which leave of the court is required: Pasdale Pty Ltd v Concrete Constructions (1995) 59 FCR 446; and BPM Pty Ltd v HPM Pty Ltd (1996) 131 FLR 339. However, his Honour observed that an application for security for costs can readily be distinguished from the continuation of a proceeding within the meaning of s 471B and therefore, I interpolate, s 500(2) as well. 9 Ipp AJA agreed with Spigelman CJ that BPM was readily distinguishable. In his Honour's view an appeal was a "proceeding" within s 471B whereas an application for security for costs was not. In addition, the application for security for costs in BPM was regarded as a "defensive proceeding" and it was "open to argument" that the appeal in Skinner could not be so categorised. 10 Powell JA, the third member of the Court of Appeal, though he did not express a concluded view upon the matter, was inclined to think leave to proceed was not required in the context of an appeal. He added that unless convinced that BPM was plainly wrong, which he was not, the object of uniformity in interpreting national legislation would suggest that the Court of Appeal should follow the interpretation of s 471B by the Full Court of the Supreme Court of Western Australia in BPM . By implication, he regarded BPM as supporting the conclusion that, in the case of an appeal, leave to proceed was not required. 11 Ultimately, in Skinner , the Court of Appeal did not find it necessary to determine whether, in the context of an appeal, leave to proceed was required. That was because the appellant in that case was prepared to proceed upon the assumption that such leave was necessary. In the event, leave was refused. 12 In the present case, Mr Cawthorn, who appeared on behalf of the appellants, submitted that if leave to proceed were required, it should be granted. 13 Sections 471B and 500 are silent as to the principles under which leave to proceed will be granted. In McPherson's Law of Company Liquidation (2006, 5 th ed), it is said (at [7.970]) that the courts have an absolute discretion in deciding whether or not they will grant leave to proceed: Re Aro Co Ltd [1980] Ch 196. It is also said that there is a presumption in favour of leaving those with claims against companies in liquidation to the ordinary proof of debt procedure which is, generally speaking, a cheaper and more efficient way of resolving their claims: Re Gordon Grant and Grant Pty Ltd [1983] 2 Qd R 314. The reason given is that the liquidator's attention and resources should not be diverted into expending substantial funds on defending proceedings by those with claims against the company when there is a simpler procedure available, namely calling for and adjudicating upon creditors' proofs of debt, with a right of appeal under s 1321: Re Gordon Grant and Grant . 14 Other factors said to be important in determining whether leave to proceed should be granted are the amount and seriousness of the claim, the degree of complexity of the legal and factual issues involved, and the stage to which the proceedings, if already commenced, may have progressed: Re Gordon Grant and Grant Pty Ltd at 317 (per McPherson J, with whom WB Campbell CJ and Sheahan J agreed). 15 Plainly, this proceeding has now progressed to a very advanced stage. It is all but complete. I accept Mr Cawthorn's submission that it would now be inappropriate to require the proceeding to be the subject of a proof of debt in the winding up. Although there is a judgment debt in favour of the appellants, there remains outstanding an issue as to costs which the liquidators cannot resolve. In addition, it is unlikely that the liquidators will be distracted or diverted from their task by allowing this matter to proceed to finality before the Full Court, rather than having it stayed because the company is now in liquidation. 16 It follows that, if leave to proceed against Lane Moller Partners is in fact required (a matter upon which I express no concluded view), such leave is granted. | application for leave to proceed against company in liquidation whether leave required in context of an appeal principles under which leave to be granted. corporations |
It is clear from the evidence that the order should not have been made because the evidence for the plaintiff was deficient as it did not take into account events concerning the payment of outstanding liabilities. This lead to the affidavit upon which the order was made being incorrect. If the correct facts had been known then, no doubt, an order would not have been made. I should note that no creditor attended the hearing to support or oppose the order. It also appears that the company did not become aware of the proceedings because of an error concerning its registered office so there was, in fact, a series of errors. I am satisfied from the evidence that, in any event, there is no reason to believe that the company is insolvent and, indeed, the evidence is to the contrary. 2 That being so, I have no doubt that the liquidation should be reversed. It was put to me that one mechanism for doing this is for there to be a review of the Registrar's orders rather than for there to be an order terminating the winding up pursuant to s 482 of the Corporations Act 2001 (Cth). On reflection, it seems to me that in this matter a review can properly lead to a discharge of the orders in question. I have set out the facts. They are unusual, and an order made upon an incorrect footing such as this should not be allowed to remain. There may be consequences in having an order made which is later terminated. 3 There is no practical difficulty in the present case because the liquidator's costs and legal costs are being paid and there are no other intervening third parties' interests at stake. Therefore, I make the orders set out in the short minutes of order which I will place with the papers. I certify that the preceding three (3) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | insolvency application for termination of winding up order corporations |
In September 2008, the Respondent's employees, upon it being put to them for a second time, voted for the MaxiTRANS Australia Collective Agreement 2008 ("the 2008 Agreement"), which replaced the MaxiTRANS Australia Pty Ltd Collective Agreement 2006 ("the 2006 Agreement"). The question raised by the amended statement of claim is whether consultation with the union representatives of two of the respondent's employees, the applicants in this case, complied with the requirements of the 2006 Agreement with respect to consultation. Contingently on a negative answer to that question, the applicants seek the imposition of a penalty pursuant to s 719 of the Workplace Relations Act 1996 (Cth) ("the WR Act "). Its primary factory site is at Ballarat in Victoria. Each of the applicants was, at all relevant times, an employee of MaxiTRANS. Each was also a member of the Automotive, Food, Metals Engineering, Printing and Kindred Industries Union ("the AMWU"), and had indicated a desire to be represented by the AMWU in negotiations in relation to collective agreements. When the dispute now before the Court first arose, the 2006 Agreement was in force. Employees elect their own Employee Committee representative to consult with management on issues and are encouraged to use this system of representation. The company also recognizes "freedom of association". Therefore regardless of who an employee chooses as a representative they will be treated equally and without prejudice. The evidence of an officer of the AMWU, Mr Nunns, was that, during a notified bargaining period, he sought meetings between May and August 2008 with the MaxiTRANS Human Resources manager, Mr Archon, and he sought to have incorporated in the proposed 2008 Agreement certain provisions, including, specifically, one ordaining a particular dispute resolution procedure. Those approaches, he said in evidence, were rebuffed. In his evidence, Mr Archon did not dispute that he had been unreceptive to the AMWU's approaches. He regarded it, he said, as unnecessary to respond at the time because MaxiTRANS was negotiating directly with its employees through the Committee. On 18 August 2008, without any meeting having occurred between representatives of MaxiTRANS management and any officers of the AMWU, the 2008 Agreement was put to a vote of MaxiTRANS employees. It was not approved by the requisite majority. The Company recognises freedom of association. Therefore regardless of who an employee chooses as a representative they will be treated equally and without prejudice. We ask that you do this as a matter of urgency as we understand that you may be seeking to put a proposed further agreement to another vote of employees in a great hurry. We are concerned that you are doing this so as to avoid involving the Union in negotiations for a new agreement. I did not understand the clause to provide an alternative avenue for representation in the negotiation of collective agreements. On 8 September, Mr Archon informed Mr Nunns that the proposed draft 2008 Agreement had been provided to employees, and offered, at that point, to meet with representatives of the AMWU. On 15 September 2008, that meeting took place. There were differing perceptions of how useful or productive that meeting was. Mr Archon said that it involved a "detailed" discussion lasting for some hours, and listed ten discrete matters which had been discussed. Mr Nunns agreed that the meeting occurred and occupied some hours during which the topics identified in Mr Archon's affidavit sworn 13 March 2009 were discussed. However, he characterised the discussion as unproductive, and deposed that the representatives of MaxiTRANS management who participated had been variously unresponsive, hostile and evasive. Notwithstanding the meeting of 15 September, a second vote on the 2008 Agreement took place on 18 September 2008, when it was approved by the requisite majority of employees. It is reasonably clear, then, that officers of the AMWU did not have the degree of input into the negotiations for the 2008 Agreement or the influence over its content that they wished. Counsel for the applicants contended that the AMWU representatives had been accorded "diminished treatment" which resulted in prejudice to the applicants because their views had not been put to MaxiTRANS by their "chosen representatives". Whether or not those criticisms reflect a departure by MaxiTRANS from good industrial relations, the question of the imposition of a penalty turns essentially on a construction of cl 12 and Appendix 1 of the 2006 Agreement. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning. at 475. The essential proposition which emerges from the competing contentions of Counsel for the applicants and MaxiTRANS and the authorities to which they have referred is that, in construing an industrial instrument, weight is to be given to the intentions of the parties making the agreement, and what the Court infers that those parties would have understood themselves to have agreed. That task is to be performed with an eye to the "nature and purpose of certified agreements" ( National Tertiary Education Industry Union v University of Wollongong [2002] FCA 31 , per Branson J at [28]), and with the general, rather than any particular individual, in mind: Ambulance Service Victoria (South Western Region) v Australian Liquor, Hospitality and Miscellaneous Workers Union (1998) 80 IR 275 , per Northrop J at 280; see also Soliman v University of Technology, Sydney (2008) 176 IR 183 , per Jagot J at [202]-[203]. Canons of construction applicable to a statute or a commercial agreement are not always, or completely, available in the interpretation of an industrial agreement. That is a reflection of the function of documents of that kind and the fact that they frequently embody the outcome of negotiations between lay persons unfamiliar or uncomfortable with legal drafting techniques or modes of expression. Although there was no essential difference in the approach contended for on each side, Counsel for the applicants and MaxiTRANS respectively argued that the application of that approach to the present facts led to a different result. Secondly, whomsoever is chosen by an employee as his or her representative is to be treated "equally and without prejudice", in accordance with the final sentence of cl 12. The third proposition, to be erected on the two preceding propositions, is that whatever representative is chosen by an employee that representative is entitled to be treated in the same way as a member of the Committee. That submission was premised on the contention that it would be unworkable to allow each and every employee to choose his or her own representative, and then for each such representative to be treated with complete equality in the process of negotiating an enterprise agreement. I accept that the use of the word "encouraged" in cl 12 of the 2006 Agreement was an acknowledgement that employees might have represented their views or interests to management otherwise than through "their own Employee Committee representative" or the Committee as a whole. The clause, I consider, did not preclude employees, either individually or as a group, from approaching management directly or through a representative, including a union organiser or delegate, who was not an Employee Committee representative or other member of the Committee. The weight to be accorded to such alternative forms of representation would, however, have been a matter for MaxiTRANS management and may well have varied according to the circumstances and the nature of the matter in issue. The effect which, in my view, should be given to the word "encouraged" in cl 12 does not entail that precisely the same treatment is to be accorded to each representative of an employee who has been chosen to represent that employee in relation to a particular issue. The phrase "equally and without prejudice" in cl 12 is a compound one and gains colour from its proximity to the recognition in the same clause of "freedom of association. " Understood in this way the phrase does not qualify an Employee Committee representative "elected" by employees to the Consultative Committee as contemplated by the first part of the cl 12. Rather, it refers to the representative "chosen" by one or more employees to represent him, her or them in respect of a particular issue. As suggested at [16] above, MaxiTRANS was obliged to entertain representations from such a representative without adverse discrimination or "prejudice" referable to, for example, the union affiliation, or lack of it, of the chosen representative or the fact that he or she had been chosen in preference to the Employee Committee representative on the Consultative Committee. However, that obligation was, I consider, not so extensive as to require MaxiTRANS to accord equal, or any particular, weight to the submissions on a specific issue of such a chosen representative. As already indicated, that weight might reasonably depend on a multitude of factors, including the inherent cogency of the submission, the number of employees represented and the nature of the issue to which the submission was directed. The principal feature of the applicants' third proposition identified at [14] above which militates against its acceptance in all circumstances is that its universal application would render cl 12 practically unworkable in many situations. The preamble to Appendix 1 expressly provided that the Consultative Committee was to have "the central role" in "the development, implementation and monitoring of Enterprise Agreements. " The centrality of the Committee's role would clearly have been destroyed if MaxiTRANS had been obliged to accord equal, or similar, time and weight to a consultation about a proposed Enterprise Agreement with each other representative (not being a Committee member) of a group of employees or even a single employee. This objection gains added force when it is remembered that the Committee for which cl 12 and Appendix 1 made provision was not itself entrusted with the making of a collective agreement. As its name, "the Consultative Committee" suggested, it was only required to be consulted about the content of a proposed agreement before the agreement was put to a vote pursuant to s 340(2) of the WR Act. That suggestion is reinforced by the composition of the Committee on which MaxiTRANS management had only three representatives whereas nine members were to be elected by rank-and-file employees and one by team leaders, whom I have taken to be equivalent to foremen and leading hands. It is to be borne in mind that an industrial agreement is the product of negotiation and often of compromise on each side. Not every provision in such a document is to be taken as intended to impose an enforceable obligation on one party or another so as to expose that party to the imposition of a penalty in the event of non-compliance with the provision. Some provisions may be characterised as "hortatory" or merely reflective of a desirable policy or end which the parties have agreed to implement or attempt to achieve but without attracting penal consequences if the efforts of either party towards that end are later seen to be lacking in some respect. A helpful analogy is afforded by Ventana Pty Ltd v Federal Airports Corp and Fairways Group Pty Ltd and Fairways Leisure Market Pty Ltd [1997] FCA 538 (unreported, Federal Court of Australia, 20 June 1997). That case concerned a provision of the Federal Airports Corporation Act 1986 (Cth), which required that a statutory body "endeavour to perform its functions" in a certain manner. Hortatory words of that kind, I consider, are inapt to import an enforceable obligation. Ventana concerned a section of a statute, not a consensual industrial instrument. Nevertheless, the interpretative technique to the be applied is similar. This point has been made, in the context of a rostering system operating in "a practical industrial relations context", by Marshall J in Bell v Minister for Health [2006] FCA 134 ; see esp. at [20]. However, at this stage, we are prepared to include in an award a requirement that consultation take place with employees and their representatives as soon as a firm decision has been taken about major changes in production, program, organization, structure or technology which are likely to have significant effects on employees. These reflections have led me to conclude that, if the instrument read as a whole in its industrial context contains a hortatory or aspirational provision or one reflecting some philosophy which the parties intend should inform their industrial relations, it is not to be taken as imposing a positive obligation enforceable by the imposition of a penalty. Except to the extent that it requires MaxiTRANS to have some consultation of an appropriate kind with the chosen representative of each employee, I regard cl 12 of the 2006 Agreement as attracting the less Draconian interpretation which I have endeavoured to describe. In proceedings before this Court the moving party bears the onus of establishing a breach of a certified agreement. In the present case that required the applicants to persuade the Court that the interpretation of the 2006 Agreement for which they contended was preferable to that advanced by MaxiTRANS; see Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Qantas Airways Limited (2001) 106 IR 307 , per North J at 326. There, the applicants did not establish that their interpretation was correct, so the application for imposition of a penalty was dismissed. Subject to the qualification noted below, the present applicants have similarly failed to demonstrate that the construction for which they have contended is the preferable one. I am not persuaded that the consultation with AMWU representatives which clearly did occur before the second vote by employees on a collective agreement was insufficient to satisfy the requirements of cl 12. There was, on the evidence, no consultation at all with AMWU representatives before the first version of the collective agreement was put to a vote on 18 August 2008. That may have been because MaxiTRANS management had not been notified until 29 August 2008 that some employees had "chosen" Mr Nunns or any other officer of the AMWU as a representative for the purpose of negotiations or consultations about a proposed 2008 collective agreement. In any event, the negative vote on 18 August 2008 on a 2008 collective agreement meant that the agreement then put to the vote was effectively nugatory. For that reason, I would regard it as an inappropriate exercise of the discretion conferred by s 719 of the WR Act to impose a penalty for any failure by MaxiTRANS, before 18 August 2008, to consult with an AMWU representative. For all of the reasons outlined above, the application must be dismissed. In accordance with s 824 of the WR Act there will be no order as to costs. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan. | collective agreement interpretation requirement for consultation with employee's chosen representative extent to which provision merely hortatory or aspirational whether enforceable obligation imposed industrial law |
Subject to the conditions of that licence, including compliance with the applicable financial services laws and regulations, Ross Investments is licensed to deal in (issue, acquire and dispose of) securities and retirement savings accounts to retail clients. The second defendant, Robert Douglas Ross, is the sole director of Ross Investments and is identified as the "key person" for the purposes of Ross Investments' financial services licence. Mr Ross holds a majority of the ordinary shares in Ross Investments. 2 Cambridge Credit Corporation Ltd was a significant property developer and financier. It was placed in receivership in 1974, following a period of high interest rates and falling property prices. At the time, Cambridge Credit owed substantial sums to debenture holders under instruments not traded on the Australian Stock Exchange. For the past 33 years, the receivers have been developing and selling the company's significant land holdings. During the course of the receivership property prices increased and the sale of Cambridge Credit's property has enabled debenture holders to be repaid their principal in full. Debenture holders do, however, remain entitled to interest. 3 There are two types of debenture holders: ordinary debenture holders who hold debentures with various coupon rates which are calculated and paid quarterly; and cumulative debenture holders who hold debentures with various coupon rates which are calculated quarterly and accumulate until maturity. Given the nature of the debentures, the interest entitlement of ordinary debenture holders does not continue to grow whereas the interest entitlement of cumulative debenture holders continues to accrue. 4 In November 2005, and again on several occasions in January 2007, Ross Investments made unsolicited offers to purchase from retail debenture holders ordinary and cumulative debentures in Cambridge Credit. The offers were contained in offer documents sent to ordinary debenture holders on 9 November 2005 and 16 and 29 January 2007 and to cumulative debenture holders on 8 and 23 November 2005 and 22 January 2007. 5 The plaintiff, Australian Securities and Investments Commission, alleges that the offers did not comply with Division 5A of Part 7.9 of the Corporations Act 2001 (Cth). Division 5A regulates unsolicited off-market offers to purchase financial products. Specifically, ASIC contends that Ross Investments did not comply with the requirements of s 1019I of the Corporations Act . That section relevantly provides that where there is an unsolicited offer to purchase a financial product off-market and there is no market value for the financial product on a licensed market, an offer document must contain "a fair estimate of the value of the product as at the date of offer, and an explanation of the basis on which that estimate was made": s 1019I(2)(c). 6 ASIC seeks declarations that by sending the Cambridge offer documents to retail investors Ross Investments contravened s 1019I(2)(c) and that by causing the offer documents to be sent Mr Ross aided, abetted, counselled, procured or was knowingly concerned in, or party to, that contravention. ASIC also seeks an order, in the form of a mandatory injunction, that Ross Investments post to each debenture holder who accepted an offer a notice advising them of the market value of their debenture and informing them that, should they wish to terminate their agreement with Ross Investments and recover the debentures sold by them, they should do so within 30 days of receiving the notice. The final order sought is that Ross Investments return or re-transfer the debentures, along with any distribution it may have received from the receivers, to any debenture holder who elects to terminate their agreement to sell within the stipulated period. 7 It is common ground that Ross Investments made unsolicited offers to purchase ordinary and cumulative debentures in Cambridge Credit from retail debenture holders by way of the offer documents sent to debenture holders. The only issues in dispute are whether the offer documents contained "a fair estimate of the value of the [debentures] as at the date of offer" and an explanation of the basis upon which each estimate was made, as required by s 1019I(2)(c). 8 The offer price for ordinary debentures was 2.15c, 3.05c and 3.05c respectively. The offer documents did not include, as a separate figure to the offer price, a fair estimate of the value of the ordinary debentures. However each offer document contained the following statement: "This fair estimate of value of the ordinary debentures is made by Robert D Ross on behalf of Ross Investments (Aust) Pty Ltd and is not the product of other independent research". 9 The offer price for cumulative debentures was 35.05c, 35.05c and 36.05c respectively. The offer document sent to holders of cumulative debentures differed from the offer document sent to holders of ordinary debentures in that it referred to a circular issued by Permanent Trustee Company, the trustee organisation for the debenture stock. On 1 December 2003, a circular to Cumulative Debenture holders was issued by Permanent Trustee Company Limited stating that "Debenture holders' entitlements as at 1 December 2003 exceed $116 million and accordingly, debenture holders may ultimately receive a further 18 to 20 cents in the dollar on your entitlement of outstanding accrued interest" (See enclosed "Background to this offer). The background document extracted a paragraph from a circular issued by the trustee. However, it must be stressed that this indication of worth is based on present circumstances and information which may be effected by future market and economic conditions. It should not be taken as a valuation of debenture stock'. 10 The defendants filed an affidavit of Kevin Young, a chartered accountant, which provided an opinion as to the fair value of each ordinary debenture on each of the dates the offer was sent. Mr Young said that in his opinion, after discounting for delays in payment, the fair value of each ordinary debenture was 9.725c. As regards the cumulative debentures, Mr Young said that, after discounting, the fair value of each cumulative debenture on each of the dates those offers were sent was $1.195. 11 ASIC obtained a report from Anthony McGrath of McGrathNicol, a chartered accountant, setting out his estimate of the value of the Cambridge Credit cumulative and ordinary debentures at the time each offer was sent. Mr McGrath said that a fair estimate of the Cambridge ordinary debentures at the relevant dates was between 7.2 and 8.8 cents (on 9 November 2005) and between 7.1 and 8.7 cents (on each of 16 January and 29 January 2007). As regards the cumulative debentures, Mr McGrath said that a fair estimate of their value was between 99.2 and 120.8 cents (on each of 8 November 2005 and 23 November 2005) and between 100.9 and 123.0 cents on 22 January 2007. These estimates, as was the case with Mr Young's, are well in excess of the amounts offered by Ross Investments. 12 The requirement in s 1019I(2)(c) can be broken into three components: did the offer document contain an estimate of the value of the product as at the date of the offer; was that estimate a "fair" estimate of the value of the product; and did the offer document explain the basis upon which the estimate was made? 13 The defendants' case is that the offer documents included an estimate of the value of the relevant debentures, either by reference to the "indication of worth" given by the trustee or by reference to the amount being offered by Ross Investments which should be taken to be its estimated value. I am prepared to accept that the offer documents for cumulative debentures included an estimate of value, albeit by reference to the trustee's statements. The case is less clear in relation to the offer documents for ordinary debentures. In my view, however, a reasonable debenture holder would take the statement "this fair estimate of value" to refer to the offer price for each debenture, there being no other figure to which the comment could relate. In my view, therefore, the offer documents did contain an estimate of the value of the debentures. The question remains, however, whether those estimates were "fair" estimates of the value of the debentures. 14 The defendants submit that "if a measure of value is the amount that a person is willing to pay for something, then the offer documents themselves are key components in assessing the value of the Cambridge debentures". I do not accept that the amount one offeror is willing to pay for a debenture is, by itself, a proper measure of the value of that debenture. Rather, the value of a debenture would be its exchange value or the price that it would bring when exposed to competition. (I put to one side the situation, that sometimes arises, where it is necessary to value an item that is not marketable). The cases say that value is to be determined by reference to the amount that an hypothetical ordinary purchaser who is willing but not anxious to buy would be prepared to pay for the debenture, and an hypothetical ordinary seller who is also willing but not anxious to sell would be prepared to accept for it, assuming both parties were fully informed and had regard to all the circumstances which might affect value: see Spencer v Commonwealth [1907] HCA 70 ; (1907) 5 CLR 418, 432 and 440-441; Marks v GIO Australia Holdings Ltd [1998] HCA 69 ; (1998) 196 CLR 494, 514; Holt v Cox (1994) 15 ACSR 313, 333-334; Gregory v Federal Commissioner of Taxation [1971] HCA 2 ; (1971) 123 CLR 547. Where there is a regular market for a product, the market price should reflect the exchange value of a product. Where, as here, there is no regular market for a product, it is necessary to estimate the (exchange) value. 15 Proceeding on the basis that the offer documents do contain an estimate of the value of the debenture, it is necessary to decide whether this estimate is a "fair estimate" for the purposes of s 1019I(2)(c). The defendants submit that the fairness (or otherwise) of an estimate of the value of a debenture refers not to whether the estimate is "accurate" or "precise", but rather whether the estimate has been given in the absence of bias, dishonesty or injustice, and whether it has legitimately been arrived at. They rely on the definition of "fair" in the Macquarie Dictionary, being "free from bias, dishonesty or injustice" or "that which is legitimately sought, pursued, done or given". If by their argument the defendants mean that any estimate will be fair provided it is not arrived at dishonestly or for an improper purpose then I disagree. However, if the defendants mean that an estimate will be fair if it is honestly obtained using of an appropriate or suitable valuation method, then they are obviously right. The word "fair" in s 1019I(2)(c) , in my view, refers to the method by which the estimate is arrived at; it means reasonable, proper or satisfactory. An estimate of the value of a product will be "fair" if it is obtained by a proper method of valuation that attempts to determine, or at least closely reflect, the underlying (or exchange) value of the product. 16 Mr McGrath's report outlines the valuation methodology he adopted in order to arrive at his estimates of the value of the debentures. His preferred method of valuation was the discounted cash flow method. This method estimates the value of a debenture as the net present value of expected cash flows arising from the debenture, discounted at a rate that reflects the time value of money and the risk of the cash flows. According to Mr McGrath this method is appropriate as it "allows assumptions to be drawn regarding the future cashflows arising from distributions from the receivership, the timing of those cashflows, and the risks associated with these two elements..." For context, Mr McGrath also applied the net asset value methodology which takes a balance sheet assessment of the realisable value of the underlying assets less outstanding liabilities. These methods of valuation are widely accepted in the marketplace. Plainly, the estimates provided by Mr McGrath are a "fair estimate of the value" of the debentures. 17 The defendants attacked Mr McGrath's report on several bases. One was that it ignored the fact that Ross Investments' offer had been accepted by some debenture holders and those acceptances showed that the offer price was fair value. This is not a logical argument. The defendants' second complaint was that some aspects of the annual reports for Cambridge Credit, particularly the net realisable values of inventories, cannot be verified. While not ideal, this is to be expected. In the absence of any evidence to the contrary (and none was available) it was proper for Mr McGrath to have regard to the information in the Cambridge Credit annual reports for the purpose of his valuation. The defendants' final complaint with the report was that the costs incurred by Ross Investments in making the offers and the actual positions of the offerors or offerees (age, preferences) had not been properly taken into account. They submit, for example, that "it is reasonable to assume that tens of thousands of dollars were spent... in order to make the offers contained in the offer documents" and that "it is reasonable to assume that a significant proportion of such a class of debenture holders is likely to value immediate cash payments substantially more favourably than uncertain and irregular distributions in the future". However, to take those matters into account would amount to speculation and Mr McGrath cannot be criticised for refusing to do that. 18 While it is less clear how Mr Young arrived at his estimates of the value of the debentures, it may be inferred from the fact that his estimates were broadly comparable to those of Mr McGrath that Mr Young's methodology (briefly outlined in his report) also resulted in a "fair estimate of the value" of the debentures. The same cannot be said of the defendants' estimates. Not only did the offer documents not adequately explain to debenture holders the method by which the estimates of value were determined, but the estimates themselves, when compared to the estimates given by Mr McGrath and Mr Young, strongly point to the conclusion, which I think must inevitably be reached, that the estimates were not "fair estimates" of the value of the debentures. 19 Even if this were not the case, it is apparent that each of the offer documents failed to provide an explanation of the basis upon which the estimates were made. The defendants' argument was that the obligation was discharged because the offers for the cumulative debentures expressly referred to the indication of worth given by the trustee and the offers for ordinary debentures stated that the amount being offered was "a purely subjective matter of judgment". This cannot be regarded as an appropriate explanation. Not only did the circulars issued by the trustee expressly state that "this indication of worth... should not be taken as a valuation of the debenture stock", but even if, contrary to the trustee's express statement, the indication was to be taken as an estimate of the value of the cumulative debentures, there is no further explanation of how the valuation was arrived at. Likewise, even if the amount offered by Ross Investments for the ordinary Cambridge debentures was to be taken as its estimate of their value, the mere statement that the amount was a "purely subjective matter of judgment" does not disclose the basis upon which that estimate was made. Were statements such as these sufficient to discharge Ross Investments' obligations, the requirement to explain the basis of each estimate imposed by s 1019I(2) would, for all practical purposes, be illusory. At a minimum, in order to satisfy the statutory requirement, any explanation must disclose the key factors and assumptions upon which the estimate is based. 20 The result is that Ross Investments contravened s 1019I(2)(c). There will be declarations to that effect and orders made as sought against Ross Investments. 21 I note in passing the defendants' submission that, as a holder of an Australian Financial Services Licence, Ross Investments is required, as a condition of its licence, to include in any offer a statement to the effect that "the licensee is not recommending that the offeree should accept the offer". The defendants contend that "in this context" Ross Investments is "constrained by the nature and detail of information which it can properly set out in any offer document to purchase off-market financial products". I must admit I do not fully understand this submission. Not only is the condition referred to by the defendants not inconsistent in its terms with the obligations imposed by s1019I(2) , but it is an express condition of Ross Investments' financial services licence that it establish and maintain compliance measures that ensure, as far as is reasonably practicable, that it complies with the provisions of the financial services laws: condition 4. In any event, the conditions of a financial services licence cannot modify the operation of an Act of Parliament so as to relieve Ross Investments of its obligations under Division 5A of Part 7.9. 22 The second defendant, Mr Ross, was the sole director of Ross Investments at the time each offer was sent out. It was not contested that Mr Ross was aware of the contents and approved and authorised the sending of the offer documents. Each offer document bears his signature. According to the offer documents, Mr Ross personally provided the estimate of value contained in the offer documents sent to ordinary debenture holders. As the key officer of Ross Investments Mr Ross was well aware, or should have been, of the obligations imposed on Ross Investments by the Corporations Act . It is clear that Mr Ross was the conscious moving force behind the infringing act, the knowing aider or abettor. I will therefore make the orders sought against Mr Ross. 23 As regards costs, I see no reason why they should not follow the event. There will be an order that the defendants pay ASIC's 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 Finkelstein. | unsolicited offers to purchase debentures off-market estimate of value in offer documents significantly below real value meaning of "fair estimate of the value of the product" whether adequate explanation of the basis on which estimates were made single director of company liability of director for aiding and abetting corporations |
The application has been brought by the District Registrar as a result of a direction I gave on 16 May 2008 directing the District Registrar to commence a proceeding against Mr Athanasas for contempt of court for his failure to comply with his statutory obligations to produce documents and for his failure to comply with an undertaking given to the Court by his then solicitor on 18 April 2008. When the matter was called on this morning, Mr Athanasas, through his counsel, Mr Telfer, indicated that he would plead guilty to the two charges in the statement of charge. The statement of charge was read to Mr Athanasas and he pleaded guilty. The matter then falls for consideration of penalty. The penalty which has to be imposed must be understood in the light of the history of the proceeding. 2 This matter has a long history. 3 On 22 June 2007 Mr Athanasas' trustee in bankruptcy, Mr Colin Ambrose, sought the issue of a summons pursuant to s 81 of the Bankruptcy Act 1966 (Cth) (the Act) directed to Mr Athanasas to give evidence and to produce documents. The summons was served personally on Mr Athanasas on 24 August 2007. On 17 September 2007 Mr Athanasas sent a statutory declaration to the Court by facsimile advising that he would not be able to attend court on 18 September 2007 because the documents to be produced would not be available until 26 September 2007, but that he would be available to attend the Court after that date. 5 On 18 September 2007 the Registrar adjourned the examination until 23 October 2007. Written notice was given to Mr Athanasas of the date to which the examination was adjourned. Mr Athanasas failed to attend on 23 October 2007 and the examination was further adjourned by the Registrar to 27 November 2007. Again, written notice was given to Mr Athanasas. 6 On the adjourned date, 27 November 2007, the examinee attended represented by a solicitor. He was examined by Mr Ambrose's solicitor. In the examination he refused to answer questions. He said that he could produce certain documents but needed more time to do so. 7 During the examination the Registrar advised Mr Athanasas of the provisions of s 264C of the Act. That section provides for a penalty if a person appearing before the Registrar, for the purpose of being examined under the Act, either refuses or fails to answer a question which the person is required to answer by the Registrar, or refuses or fails to produce any documents that the person is required by a summons to produce. 8 Mr Athanasas' examination was adjourned until 19 December 2007 when he produced some documents to the Court. On that occasion he told the Registrar that he would need until early January to produce the balance of the documents. 9 The documents which he produced were his passport, which had expired on 5 June 2005; a bundle of documents, being his tax returns for 2005 and 2006; a copy of a motor vehicle insurance policy for the period 6 May 2005 to 6 May 2006 which related to the motor vehicle identified in the summons; four bank statements from the ANZ Bank over the period 31 December 2004 to 29 April 2005; a written contract dated 11 May 2005 between Mr Athanasas and Sean Allwood concerning an investment of $100,000 in a business Rhodes Cellular; a copy of bankruptcy notice number 308 of 2006; a letter from the trustee dated 15 August 2006 advising of the trustee's appointment and attaching a copy of the certificate of appointment; two copies of the form of the statement of affairs; an information booklet; and an income questionnaire. 10 The Registrar adjourned the examination until 5 February 2008. 11 On that day, when the matter was called on, Mr Athanasas' solicitor said that Mr Athanasas was in the vicinity of the Court but did not propose to attend because he did not feel well. He also told the Court that the documents which were to be produced in early January were not yet able to be produced, but would be produced by 21 February 2008. 12 The Registrar adjourned for a short time to allow Mr Athanasas' solicitor to speak with him, as a result of which Mr Athanasas presented himself to the Court for further examination. The examination proceeded for a short time but could not be concluded because of the absence of the necessary documents. The matter was further adjourned to 6 March 2008. 13 On that occasion, Mr Athanasas did not attend, although his solicitor did. Mr Ambrose's solicitor applied to the Court to have the matter referred to a judge of the Court. Mr Athanasas' solicitor advised the Court that it remained Mr Athanasas' intention to produce the documents but production was taking longer than expected. 14 The Registrar adjourned the examination for hearing before me on 12 March 2008. 15 On that day, Mr Athanasas' solicitor applied for an adjournment so that his client could put a proposal to the trustee pursuant to s 73 of the Act and because of his client's ill-health. He said that his client had a benefactor and his client wanted to bring this matter to a head. Mr Athanasas' solicitor said that he did not have instructions in relation to his client's compliance with production of documents. The party to whom the summons is directed is not a volunteer. He or she must comply with the summons in every respect. The evidence would suggest that your client has provided the Registrar on previous occasions with undertakings that he would comply with the summons, but had failed to do so. In the last examination on 5 February, he would have led the court to believe that he would comply with the summons in respect to the production of documents. He has not done that. He ought to understand that under section 264C his failure to comply with the summons is a criminal offence for which he can be fined or imprisoned, but it's more than that. If this court takes a view that he has failed to comply with an order of the court, this court has power of its own motion to commit him to prison as a contempt of the court and that power is given to the court by Order 40 of the Federal Court Rules . Now, the court does that --- imposes penalties of that kind reluctantly and only in the most serious cases --- but if the court concluded that he has been given a number of opportunities and he has failed to comply with his obligations under the summons and he has failed to comply with undertakings given to the court and to the Registrar of the court in relation to those matters, the court may have to take such a step. Sometimes the court orders the person to be imprisoned until such time as they comply with the order. 17 I adjourned the matter until Friday, 28 March 2008. On that occasion, neither the trustee's solicitor nor Mr Athanasas' solicitor attended when the matter was called on. Apparently, they had agreed between themselves that the matter would be adjourned. I required their attendance. Eventually, Mr Athanasas' solicitor attended. He advised me that his client was under the misapprehension that he need not attend. He referred me to a psychologist's report of Mr Homer Zeitz. Mr Athanasas' solicitor said he had no instructions in relation to the production of documents. The matter was further adjourned until 18 April 2008. 18 On 18 April 2008, both Mr Athanasas and his solicitor attended late. Mr Athanasas applied for an adjournment for a period of 16 weeks so that Mr Athanasas could undergo medical treatment. For that application he relied upon the report of Mr Zeitz dated March 2008. 19 Mr Zeitz is a psychologist who had interviewed Mr Athanasas for the purpose of providing a report. Mr Zeitz gave an opinion in writing that Mr Athanasas was experiencing very severe levels of anxiety, a moderate level of depression and a mild level of physical stress. His sense of hopelessness was consistent with severe rage. He said, in his report, that Mr Athanasas was an individual who was at significant risk of suicide. 20 He made a number of recommendations, one of which was that Mr Athanasas' obligation to give evidence concerning his bankruptcy be delayed for 16 to 29 weeks so that he could undergo a number of sessions in consultation with Mr Zeitz. The total number of sessions which Mr Zeitz said Mr Athanasas required was 26 at a cost of $4,992. 21 Mr Zeitz gave oral evidence. He had never given evidence in a court before. He said that he assumed that Mr Athanasas' bankruptcy was a triggering stress event. He said that he had suggested that Mr Athanasas' general practitioner refer Mr Athanasas to a psychiatrist. He expected to continue with the treatment process. 22 I was not impressed by Mr Zeitz as a witness. He was prone to exaggerate the extent of Mr Athanasas' condition. A striking illustration was during a long answer to Mr Athanasas' solicitor when he said that Mr Athanasas was unable to handle stress very well and was the type of person who would look for a short term solution. He said Mr Athanasas had a strong tendency to dissociate. He said that he was likely to have a psychotic-type episode. 23 He agreed that there is a real difference between anxiety and psychosis, the latter being much more serious than the former. 24 I asked him why he was introducing the concept of a psychosis. He was unable to explain why he had introduced the concept, except to say he was trying to explain the extent or nature of a disassociative condition. He said that Mr Athanasas might, because of his condition, consent to something that he would not intentionally mean to consent to without thinking of the consequences. He has to produce them?---Oh, sorry, my apologies. I used the wrong term. I think he would --- he would consent, but I think the problem is that with a disassociation and the barriers he would produce he, in a sense, would start running a --- he would consent but then he would be unable to - - - No. Please. I'll ask you to assume what this procedure is all about. Part of the procedure before me is that Mr Athanasas must produce certain documents to the court?---Yes. What about his state would prevent him doing that?---Okay. Well, I would be saying, initially, because he has memory problems which is quite consistent with his depression --- so he may consent --- he may agree to do something and then forget that he's done it. Also, with his level of disassociation, I don't know whether he would fully understand or even know what --- what he's actually agreed to doing. Why do you say that?---Because when he's challenged or when he's frightened - - - He's not being challenged. He's simply being asked to give the documents to the court?---But as your Honour has just said, he would also be informed of what would happen if he didn't do that, and I would be saying the disassociation is likely to create a barrier, a psychological --- he was finding that stressful because - - - But what about his condition would prevent him presenting the documents to the court?---Well, in summary he would forget. He would forget, your Honour. Well, have you discussed that with him?---No, your Honour. 26 Later Mr Zeitz was asked whether he had any understanding of the proceedings in which Mr Athanasas was involved. He did not know that Mr Athanasas had previously been examined in these proceedings and was surprised to hear that. He thought Mr Athanasas in subjecting himself to examination of that kind acted in a way inconsistent with his diagnosis. It was put to him that Mr Athanasas had been examined before a Registrar and had submitted to the examination. Again, he thought that was inconsistent with his diagnosis. 27 Mr Zeitz was asked whether Mr Athanasas could continue to undergo an examination and he accepted there would be some questions he would be able to remember and answer. However, Mr Zeitz said there may be an exacerbation of his clinical state. 28 In particular, he was asked whether there was any reason why Mr Athanasas could not produce the documents and his answer was there was no physical reason. Nor was Mr Athanasas unable to sit down with his solicitor and prepare and swear an affidavit. 29 As I say, I was not impressed by his evidence or by his report. I am prepared to accept that Mr Athanasas has found these proceedings stressful and no doubt he feels challenged by the procedure and, in particular, by his obligation to produce documents to the Court. However, I am not prepared to accept that his medical condition in any way prevents him from producing the documents which are the subject matter of the summons to the Court. 30 Mr Athanasas has promised on a number of occasions to produce the documents required under the summons. He has never suggested that his medical condition meant he could not comply. He has never suggested that his reason for failing to comply with his obligations is that he forgot. He has given many excuses but none involve his medical condition. 31 Moreover, there is no evidence before me to support or prove the assumptions upon which Mr Zeitz relied for the purpose of his opinion. I pointed out at the hearing I had not heard Mr Athanasas. I recognise, of course, that Mr Zeitz says that Mr Athanasas cannot, in his opinion, give evidence because he may be forgetful. But there is no reason why he could not give evidence to at least describe his medical condition. 32 I reject Mr Zeitz's opinion. Indeed, his opinion of Mr Athanasas is not consistent with Mr Athanasas' presentation in this Court. I have heard and seen Mr Athanasas. He does not present as Mr Zeitz's evidence would have the Court expect. 33 Shortly after Mr Zeitz finished his evidence, Mr Kayal, Mr Athanasas' then solicitor, obtained an adjournment to obtain instructions to give an undertaking from his client to produce the documents to the Court. It was suggested that Mr Athanasas might produce the documents and the examination be adjourned until Mr Athanasas had had an opportunity of undergoing any treatment that might assist him. I explained in open court the effect of an undertaking. An undertaking given to the court is one of the most serious things that a party may be called upon to do and to do and, once given, must be complied with unless forces outside the party's control prevent it occurring. 34 Mr Kayal then gave an undertaking on behalf of his client to produce those documents within three weeks. The transcript does not actually record Mr Kayal saying the undertaking was given but it records my accepting it. There is no doubt that an undertaking was given and was accepted by me on that day. There has been no suggestion that an undertaking was not given. 35 A short time later, Mr Kayal asked that Mr Athanasas be given four weeks in which to produce the documents and I extended the time in answer to that request. The matter was adjourned to 16 May 2008. 36 On that day, Mr Athanasas appeared with his solicitor. His solicitor produced an affidavit. In that affidavit he said that his client had made bona fide attempts to obtain the documents by travelling to Sydney to meet with a Mr Ripamonte. In that affidavit Mr Kayal said that he had spoken to Mr Ripamonte on 30 April 2008 to ascertain whether he had any of Mr Athanasas' documents in his possession. Mr Kayal formed the opinion that Mr Ripamonte did. He asked for a further adjournment so that Mr Kayal could travel to Sydney to investigate the matter first hand. 37 The affidavit discloses a failure on the part of Mr Athanasas to obtain his documents within the time which he had undertaken to do. There was no explanation as to why nothing had happened after 30 April 2008 to obtain the documents which were thought to be in Mr Ripamonte's custody, possession or control. 38 However, it is not only the documents which are said to be in Mr Ripamonte's control that should have been produced to the Court. There are other documents about which Mr Athanasas gave evidence in his examination on 5 February 2008 which were in South Australia in the control of a Mr Vellacchio and which also have not been produced. On 16 May 2008 his solicitor said Mr Vellacchio did not hold any documents. That statement might be contrary to his client's evidence. 39 I took the view that the continuing failures by Mr Athanasas to produce any documents apart from those to which I have referred, which were produced on 19 December 2007, in answer to the summons raised for consideration the question of his contempt. For that reason, I gave the directions to which I have already referred. 40 I adjourned the matter to 30 May 2008 to allow further time for Mr Athanasas to comply with the summons. When the matter resumed on 30 May 2008 Mr Athanasas' solicitor sought leave to withdraw because his instructions had been terminated. I gave him leave. 41 In the meantime, the Registrar had, in accordance with the direction given her, commenced this proceeding by notice of motion which was filed on 23 May 2008 together with a statement of charge. The said Peter Athanasas has failed to comply with his statutory obligations under sections 81 and 264C (1)(c) of the Bankruptcy Act 1966 (Cth) to produce documents pursuant to the summons issued by this Court on 5 July 2007. He told me that he would definitely be producing documents. 44 He also told me at that time that he would be instructing other solicitors. I told him that if he were to instruct other solicitors that he ought to tell them that the Registrar's summons would be heard on 13 June 2008 and that any affidavit upon which Mr Athanasas intended to rely should be filed by 11 June 2008. 46 The matter came on for hearing on 13 June 2008. Mr Athanasas was not present when the matter was called on, but attended shortly after. 47 I asked him if he was producing any documents. He answered by saying that he had a lawyer but his lawyer could not see him until 19 June 2008 when he would be retained. He asked for an adjournment. He said he had spoken to his solicitor first a week ago and, as I understood his answer, had not told him that the matter would proceed that day. 48 He was asked whether he had the documents and he said that he was getting them all done and they were going to be forwarded to his solicitor. He said he would have them within a fortnight. He repeated that he would definitely have them within two weeks. 49 Counsel for the District Registrar then took me through the documents. Reference was made to the transcripts of 18 April 2008 and 30 May 2008. I adjourned so that Mr Athanasas could read those transcripts. 50 On the resumption, I was advised by Mr Athanasas that he had phoned his solicitor and his solicitor was on his way. He asked me to delay until such time as his solicitor appeared. I acceded to that request and adjourned until his solicitor appeared. His solicitor, Mr Sanders, appeared and advised that he had not been retained and had a very limited knowledge of the proceedings. He asked that the matter be adjourned for two weeks to enable him to obtain Mr Athanasas' file, provide him with some advice and instruct counsel to represent Mr Athanasas on the contempt application. 51 I asked the District Registrar's counsel to take the Court through the evidence upon which he relied for the purpose of not only educating the Court but also Mr Athanasas' solicitor, which he did. 52 At the conclusion, I acceded to Mr Athanasas' application to adjourn the matter for a fortnight to enable Mr Athanasas to instruct his solicitor, obtain advice, retain counsel and obtain the documents which earlier that day he said he would be able to obtain within a fortnight. 53 The matter was adjourned until 27 June 2008. 54 On that day, Mr Athanasas again did not appear but he was represented by counsel, Mr Algie. Mr Algie told me that Mr Athanasas was in Sydney endeavouring to obtain funds from a third party. He told me that it was imperative that Mr Athanasas be in Sydney to obtain funds. I was told that it was not known when he would return. I was also told that he had paid $40,000 into his solicitor's trust account to demonstrate his bona fides. The money would be used to meet, in part, his obligations to his trustee. 55 Of course, Mr Athanasas' obligation was to be in Adelaide and in Court. He again failed to comply with his obligations. He again failed to produce the documents which, on the previous occasions, he had promised he would produce. 56 The matter was called on again this morning. The statement of charge was read. Mr Athanasas pleaded guilty to both charges. Today he was represented by counsel, Mr Telfer, who informed the Court that he had read the District Registrar's affidavit and the relevant transcripts of proceedings. 57 Mr Telfer did not require the District Registrar's counsel to take the Court through the facts and circumstances leading up to the charge of contempt. He said his client acknowledged that he was guilty of the contempt. He informed the Court that he had no instructions to offer any explanation as to why his client had not complied with the orders and the undertaking. 58 I am satisfied, as Mr Athanasas' guilty plea demonstrates and his counsel's submission acknowledges, that no good reason exists for Mr Athanasas to have failed to comply with both his statutory obligations and his undertaking to the Court. In particular, I am satisfied that there is no medical reason which would have interfered with Mr Athanasas' ability to produce the documents which he promised the Registrar and me on a number of occasions he would produce. 59 I am satisfied that his conduct has been wilful and contumacious in the sense described in Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd [1986] HCA 46 ; (1986) 161 CLR 98. In those circumstances, I am satisfied that the contempt to which he has pleaded guilty was deliberately wilful and contumacious rather than casual, accidental or unintentional. 60 In those circumstances, the only matter left is to determine the appropriate penalty for such a contempt. The District Registrar's counsel took me to the authorities which set out the penalties which may be imposed. 61 This Court has the same power to punish contempts as is possessed by the High Court of Australia in respect of contempts of that Court: s 31 of the Federal Court of Australia Act 1976 (Cth). The High Court of Australia, in turn, has the same power to punish contempts as was possessed in 1903 by the Supreme Court of Judicature in England: s 24 of the Judiciary Act 1903 (Cth). 62 This Court has the power to impose a prison sentence, a fine, costs orders, or a combination of all those orders in relation to any contempt of the Court. 63 It is accepted that a sentence of imprisonment is a punishment of last resort. However, it is a punishment which must be imposed if it is necessary for the purpose of vindicating the Court's authority. 64 In this case, Mr Athanasas is a bankrupt and it would seem to me that a fine would be inappropriate. Notwithstanding that imprisonment is a sentence of last resort, it seems to me, having regard to the conduct of Mr Athanasas over a very long period since the matter first came before the Registrar and since he first informed the Registrar he would comply with the summons, a sentence of imprisonment is necessary. 65 The question remains as to whether or not that sentence ought to be suspended. Mr Telfer urged me to suspend the sentence on condition that Mr Athanasas produce the documents within a period specified in the condition. The difficulty with that submission is that he has no instructions that his client will produce the documents. I specifically asked him whether he was in a position to tell the Court whether Mr Athanasas would produce the documents to the Court at any time in the future. His instructions were that he had no such instructions. 66 It is necessary, in my opinion, to reassert the Court's authority and, in those circumstances, I am not prepared to suspend the sentence of imprisonment. 67 I sentence Mr Athanasas to three months' imprisonment. I certify that the preceding sixty-seven (67) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | where bankrupt did not produce documents pursuant to a summons issued by the court where bankrupt failed to comply with undertaking where bankrupt failed to comply with statutory obligations under ss 81 and 264c (1)(c) of the bankruptcy act 1966 (cth) whether his contempt was wilful and contumacious penalty whether sentence of imprisonment was appropriate where such a sentence is a punishment of last resort whether that sentence ought to be suspended sentenced to three months' imprisonment. contempt |
The application was filed by the applicant on 24 October 2006. 2 It seeks to challenge a decision of the AAT made on 11 September 2006. The application for an extension of time is opposed. 3 Mr Lever attempted to initiate an appeal against the decision of the AAT on 9 October 2006; that is, on the 28 th day permitted for an appeal to be brought. Had he used the right procedures on that day, no extension of time would have been necessary. As it happened, he used the wrong form and failed to sign the initiating process. 4 This matter was brought to his attention by the Registry of this Court and in due course he filed his present application. The period of delay thereby occasioned is only a matter of two weeks. I see no real difficulty in excusing him this oversight, particularly as there can be no question of any real prejudice arising to the respondent. 5 Ms Dinnen who appeared for the respondent before me today, however, in opposing the application for extension of time, drew my attention to a judgment of Wilcox J in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344. In that judgment his Honour distils a number of matters to which attention should be given in evaluating whether an extension of time should be granted. Six matters were referred to by his Honour, including the necessity to be satisfied that it is proper to grant the application, whether an acceptable explanation for the delay has been furnished, whether any prejudice will be occasioned to the respondent and consideration of fairness. In addition, and this was the point which was particularly relied upon to oppose the application for extension, his Honour observed that the merits of the substantial application are properly to be taken into account. It is upon this issue that the respondent focussed the burden of its attention. 6 The criticism made of Mr Lever's process is that it fails to identify with precision the question of law which he seeks to agitate on the appeal. The questions of law said to be raised by the appeal include the proper application of principles stated by this Court in two decisions, Hart v Comcare [2005] FCAFC 16 ; (2005) 145 FCR 29 and Comcare v Mooi (1996) 69 FCR 439. The way in which the application of those cases arises for consideration is not stated. I accept that there is a lack of precision about the issues which are said to arise from a consideration of these two cases and that is a matter to which attention should be given by the applicant and his legal advisers before the matter proceeds much further. 7 Those two cases proceed upon different lines of reasoning. In Hart v Comcare a Full Court disagreed with the approach taken by the judge in Comcare v Mooi . In the circumstances I am not prepared to conclude that there is not a question of law which might not arise from a consideration of the application of those cases to Mr Lever's circumstances as addressed by the decision of the Administrative Appeals Tribunal. 8 Should it become clear that in fact the appeal which he desires to bring raises no question of law for consideration by this Court, then that is a matter which can be dealt with in connection with the hearing of the appeal, whether by motion challenging the competency of the appeal or at the hearing of the appeal itself. 9 In the circumstances I am satisfied that it is proper to grant an extension of time in which to appeal and I so order. | application for extension of time from tribunal criteria to consider when evaluating grant for extension. administrative law |
I was satisfied that leave should be granted under O 8 r 3(2) of the Federal Court Rules and that it was appropriate to do so on the conditions I set out. The matter was of some urgency because the other parties to the proceedings have been working towards a final hearing commencing on 2 February 2009. These are my reasons for those orders. That cross-claim essentially involves allegations against Mr Bangad who was, at relevant times earlier this year, an officer of one or more of the Suzlon companies. Mr Bangad's address is in Pune, India. The Suzlon companies sought leave to serve him in India pursuant to O 8 r 2. 3 The Suzlon companies allege that Mr Bangad acted in breach of his fiduciary duty owed to one or more of them not to act in his own interests when he purported to assert that he had authority to enter into contractual arrangements binding the Suzlon companies to the central contractual documents in issue in these proceedings. 4 The Headway companies claim they are owed over USD 12,900,000 in unpaid freight for a number of cargoes carried to the United States of America and Australia under the impugned contracts of affreightment. The Suzlon companies challenge the validity of those documents. 5 The Suzlon companies also allege that Mr Bangad fraudulently obtained benefits without their knowledge by representing that he had authority to cause the Suzlon companies to enter into the documents impugned and that he failed to disclose that he was obtaining secret or undisclosed benefits as a result of his alleged association with the Headway companies. The website of the Attorney-General's Department notes that India permits private agents to serve Australian court process in that country and that, in general, such service through an agent will not be in breach of any Indian law or otherwise a breach of its sovereignty. The Attorney-General's website indicates that India will not assist, through diplomatic channels, in the service of Australian court process. 7 I was satisfied by the affidavit of Amy Beaumont that the requirements of O 8 r 3(3) had been met. I inferred that the proposed method of service was to be by private agent in accordance with the material contained on the Attorney-General's website. The proceedings were commenced by the ship owner of the MV Beluga Fantastic seeking to interplead by delivering the cargo at Port Kembla into the custody of the Sheriff. This was a consequence of the dispute between the Headway companies and some of the Suzlon companies as to the circumstances in which that cargo ought to be discharged in light of the Headway companies' claims for unpaid freight on this and earlier cargoes. 9 The Suzlon companies argued that the Court's jurisdiction was attracted under s 4(3)(f) of the Admiralty Act 1988 (Cth) by the existence of a general maritime claim arising out of an agreement that relates to the carriage of goods on a ship (namely the wind turbine generating equipment delivered to the Sheriff under the Court's orders) or the use or hire of a ship (namely the MV Beluga Fantastic time charter or the contracts of affreightment). They contend that if the claim against Mr Bangad is not directly within s 4(3)(f) it will fall within the Court's associated jurisdiction within the meaning of ss 12 and 13 of the Act. 10 As Allsop J pointed out in Heilbrunn v Lightwood plc (2007) 164 FCR 1 at 6-9 ([30]-[40]) s 4(3)(f) is to be given a wide and liberal construction in accordance with a similar view expressed by the House of Lords in The Antonis P Lemos [1985] AC 711 and Gatoil International Ltd v Arkwright-Boston Manufacturers Mutual Insurance Company [1985] AC 255. The Australian Law Reform Commission had referred to their Lordships' decisions in its Civil Admiralty Jurisdiction, Report No 33 (1986) (the ALRC report). Earlier, Foster J observed in Port of Geelong Authority v The "Bass Reefer" [1992] FCA 378 ; (1992) 37 FCR 374 at 380-382 showed the words of s 4(3)(f) are also similar to Article 1(1)(d) of the International Convention for the Unification of Certain Rules Relating to the Arrest of Seagoing Ships 1952 . In The St Elefterio [1957] P 179 at 183, Willmer J held that the English analogue to s 4(3)(f) encompassed a claim whether in contract or tort "arising out of any agreement relating to the carriage of goods in a ship" (emphasis added). In that case, he held that it gave the Court jurisdiction where a person allegedly made a fraudulent ante-dating of bills of lading. 11 At the heart of the conduct alleged against Mr Bangad, is his activity relating to the carriage of the wind turbine generating equipment of the Suzlon parties from India to various ports, including the shipment delivered to the sheriff. The Suzlon companies relied on evidence that Mr Bangad had executed letters of indemnity as general manager of Headway Shipping in April 2008, while he was working as an employee of one of the Suzlon companies. The letters of indemnity related to cargoes carried under the contract of affreightment between Headway Shipping and one of the Suzlon companies. He ceased to be employed by the Suzlon companies on discovery of his alleged fraud in late September 2008. They also relied on the evidence from Mr den Hartog's emails. The Suzlon companies argue that this material gives rise to the inference that some explanation will be needed to establish any innocent association of Mr Sridhar in the execution of the contracts of affreightment and the Suzlon companies' dealings with the Headway companies, and also to establish how Mr Bangad was able to sign in his capacity as an officer of Headway Shipping, while contemporaneously employed by the Suzlon companies. A MARITIME CLAIM? That claim arose out of the existence of each of the contracts of affreightment, the time charter, the guarantee and the bills of lading for the MV Beluga Fantastic to carry the cargo to Port Kembla, and also out of the Suzlon companies' challenge to those transactions based on the allegations that they made against the Headway companies and Mr Bangad. The words "arising out of" and "relates to" in s 4(3)(f) are of wide import. They should not be read down: see Owners of "Shin Kobe Maru" v Empire Shipping Co Inc [1994] HCA 5 ; (1994) 181 CLR 404 at 420-421 per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ. The claims made against Mr Bangad had the legal character of maritime claims within s 4(3)(f): Shin Kobe Maru 181 CLR at 426. 13 The Suzlon companies also relied on their claims against Mr Bangad being within the associated jurisdiction of the Court conferred by s 12 of the Admiralty Act as matters of Admiralty and maritime jurisdiction. That jurisdiction is "... concerned with the resolution of controversies relating to marine commerce and navigation": Shin Kobe Maru 181 CLR at 424. Contractual or business arrangements of a party to proceedings with third parties are capable of attracting the Court's Admiralty and maritime jurisdiction: Shin Kobe Maru 181 CLR at 425. I was of the opinion that, on the present materials, the claims which the Suzlon companies seek to bring against Mr Bangad were substantive rather than appearing to be remotely or tenuously related to matters of Admiralty or maritime jurisdiction pleaded by and against them: cf: The "Bass Reefer" 37 FCR at 381 per Foster J. I was satisfied that those claims raised a real controversy relating to marine commerce and navigation in which Mr Bangad occupied a central role. ARE THE PROCEEDINGS PROPOSED TO BE SERVED OF A KIND MENTIONED IN ORDER 8 RULE 2? 15 During the course of argument on this application, I suggested that it would be appropriate for the Suzlon companies to identify the substantive claims to be pleaded against Mr Bangad in a document to be served on him. Shortly afterwards, on 12 November 2008, the Suzlon companies produced a document entitled "Pleading of Second Cross Applicants against Third Second Cross Defendant" (being Mr Bangad). They did this on the basis that their investigation into the circumstances of the alleged fraudulent activity was still continuing and that it would be better to defer a complete formal pleading of the allegations against the Headway companies and Mr Bangad until those investigations had been finalised. 16 In pleading their claim against Mr Bangad, the Suzlon companies asserted that Mr Bangad held a position of employment in charge of freight and chartering for Suzlon Energy Limited. And, the Suzlon companies relied on the inference which would ordinarily be drawn by an employer in their position that when a senior and trusted employee advised his employer to enter into those arrangements, they were proper ones for the company to make. It was alleged that each of the representations was false to Mr Bangad's knowledge. The particulars of his knowledge included: that he knew that he had no authority to execute the documents; that he had not disclosed any benefits he would obtain under them; that he had signed guarantees as general manager of Headway Shipping; that he had concealed the nature of the impugned documents and transactions to which they gave effect, and when asked to explain them, he had not only failed to do so, but had fled from his employment. The particulars also relied on what were alleged to be uncommercial terms of the transactions. These were based on the Suzlon companies having given guarantees, the uncommercial rates of freight and the lack of proper negotiation for the terms of the impugned transactions. 18 The pleading then alleged that the Suzlon companies had been induced to pay some of the invoices rendered by the Headway companies, permitted cargo to be loaded and shipped on the vessels, did not examine whether the transactions entered into by Mr Bangad, in their name or on their behalf, exceeded his authorities, and did not investigate their propriety or the potential of Mr Bangad obtaining secret benefits and commissions. The Suzlon companies alleged that they had suffered loss or damage, including payments that they had already made, together with the payments of USD 7 million into Court and USD 6.5 million to Headway Shipping in Australia pursuant to the orders made by the Court on 4 November 2008 to secure the release of the cargo in the custody of the Sheriff here. They also relied on the detention of the cargo in Australia and the incurring of demurrage here, the payment of discharge costs here as well as the Marshall's costs and expenses and the freight, hire and outgoings made by them to Mr Bangad or to entities he controls, owns or in which he has a beneficial interest. 19 The Suzlon companies also claimed that Mr Bangad breached his fiduciary duties of loyalty and of not to act in his own interests in the course of his employment. 20 The Suzlon companies' claims were not fully pleaded and particularised. However, there was a considerable amount of evidence before me relating to the overall dispute. The Suzlon companies relied on the affidavit evidence read on 4 November 2008, together with the oral evidence I took on that occasion from an agent of theirs, Gaurav Bansal, and some additional emails tendered on the hearing of this application. The Suzlon companies claimed that this evidence provided a sufficient basis for me to be satisfied of the matters in O 8 r 3(2)(b) and (c). This evidence together with the prior pleadings provided a sufficient background for the claims now pleaded against Mr Bangad to be understood. 21 It is not necessary to set out extensively the material on which the Suzlon companies relied. As noted above, they impugn the time charter dated 19 August 2008 for the MV Beluga Fantastic's voyage to Port Kembla. The time charter is in the 1946 New York Produce Exchange form. The addendum purported to be given by Suzlon Infrastructure on 29 July 2008 (i.e. about three weeks before the time charter was actually made). It guaranteed to the owner performance of the terms of the time charter dated 19 August 2008 by Headway Shipping. The master of the MV Beluga Fantastic issued charterers bills of lading naming Suzlon Energy Limited, an Indian company, as consignor and Suzlon Energy Australia Pty Limited as the notifying party. 22 When the MV Beluga Fantastic arrived at Port Kembla there was a dispute between Headway and the Suzlon companies as to the amount of freight due under that time charter and a number of other time charters between Headway companies and Suzlon companies for the delivery of wind turbine generating equipment shipped from India to both the United States of America and Australia. Since no-one would produce bills of lading to the Master authorising discharge of this cargo, and since the vessel was due elsewhere, the owners interpleaded so that the cargo could be discharged. 23 Mr Bangad was appointed as the general manager of logistics of Suzlon Energy Limited in India in October 2005. While working for the Suzlon companies, he executed a number of letters of indemnity in late April 2008 on behalf of Headway Shipping addressed to the owner of the MV S Fighter . In those letters of indemnity, Mr Bangad described himself as general manager of Headway Shipping in his handwriting under his signature on behalf of Headway Shipping. 24 Earlier in April 2008, it appears that Suzlon Energy entered into the first contract of affreightment with Headway Shipping for carriage of wind turbine generating equipment by sea to the United States, Europe, South America and Australia. Mr Bangad and his superior, Mr Sridhar, both appear to have signed the contract of affreightment on behalf of Suzlon Energy. The Suzlon companies say that Mr Sridhar now is under investigation in respect of his role in these dealings. On 17 June 2008 an amended or further contract of affreightment was entered into between the same two parties and Headway Chartering. Mr Bangad alone appears to have signed the latter document for Suzlon Energy. It contains different terms in certain respects to the earlier one. 25 I infer that the equipment shipped under the contracts of affreightment was even more valuable than the total freight now in dispute which exceeds USD 12,900,000. 26 In essence, the Suzlon companies allege that Mr Bangad caused them to enter into contracts with the Headway companies for the shipment of Suzlon goods from India to other parts of the world. The Suzlon companies allege that the arrangements had no proper commercial basis and were, in effect, a fraud on them. This is because first, they allege that Mr Bangad had an undisclosed association with the Headway companies or stood, through his association with those companies, to reap an undisclosed benefit by causing the Suzlon companies to enter into arrangements with the Headway companies. Secondly, the Suzlon companies allege that they received no benefit from the guarantee of the time charter which Suzlon Infrastructure purportedly gave of Headway Shipping's performance. Suzlon Infrastructure, in effect, was guaranteeing Headway Shipping's performance to the ship owner for no apparent commercial purpose. This would permit the Headway companies, or one of them, both to fulfil their obligations to, and earn a reward from, the Suzlon companies where the Suzlon companies were bearing the ultimate commercial risk for the charter of the vessel and the Headway companies' profits in shipping their own cargo. 27 The Suzlon companies also relied on an email from Mr Bangad dated 13 October 2008, after he ceased to be their employee, which stated that he was now associated with the Headway companies. He also said, in the email, that Mr Sridhar "is professionally a banker and is indirectly associated with the company" (meaning Headway Shipping). On the evidence before me, Mr Sridhar was still an employee of the Suzlon companies at the time of this email, so that his "indirect" association with Headway Shipping asserted by Mr Bangad may be of importance. 28 There is also evidence, in the form of emails, from Japp den Hartog, an officer of the Beluga companies, that Mr Bangad and his superior, Mr Sridhar, approached Mr den Hartog in August 2008 and induced him to agree to become a director of Headway Shipping. Mr den Hartog has subsequently sent a number of emails asserting that he was the victim of misrepresentation in signing a consent to act as a director and did not appreciate that he was not assisting the Suzlon companies, as he thought, but was furthering the interests of those associated with the Headway companies. In emails with Mr Bangard of 2 and 3 November 2008, Mr den Hartog asserted that, in May 2008, Mr Bangad represented to Beluga that Headway Shipping was, in effect, a Suzlon subsidiary which had been created to take care of Suzlon's in-house international transport needs. Mr den Hartog asserted that, subsequently, Mr Bangad inserted a date of October 2007, about six months before Headway Shipping was incorporated, as the date of his consent to act as one of its directors. Mr den Hartog claimed in the email that he had been the subject of a misrepresentation and fraud through Mr Bangad's conduct in this regard. While I not to comment on the rest at this moment and would reply in due course. The emails involved Mr Bangad and were addressed to him at his Suzlon email address. They indicated that substantial sums of money were to be paid to Genus Shipping by third parties who were proposing to enter into contracts for shipment of goods with a Suzlon company. The Suzlon companies argued that this was prima facie evidence of other fraudulent activity engaged in by Mr Bangad for his own benefit and to the detriment of them. However, those materials provided no relevant evidence against Mr Bangad of any of his alleged activities in relation to the Headway companies. At best they were potentially admissible as propensity evidence. I had no regard to them for the purposes of forming my view that an order under O 8 r 2 should be made for service of the Suzlon parties' cross-claim on Mr Bangad in India. Merpro Montassa Ltd v Conoco Specialty Products Inc [1991] FCA 70 ; (1991) 28 FCR 387 at 390. It "should not call for a substantial inquiry": WSGAL Pty Ltd v Trade Practices Commission (1992) 39 FCR 472 at 476; see also Sydbank Soenderjylland A/S v Bannerton Holdings Pty Ltd (1996) 68 FCR 539 at 549. For present purposes it is sufficient to say that a prima facie case for relief is made out if, on the material before the court, inferences are open which, if translated into findings of fact, would support the relief claimed: Western Australia v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102 at 110. That is because it is only necessary that a prima facie case be established for any one of the causes of action relied on for the relief sought: Bray 130 FCR at [47]-[55] per Carr J, [176]-[191] per Branson J: Ho [2006] FCAFC 159 ; (2006) 24 ACLC 1526 at [45] - [46] . 35 The Suzlon companies also faintly pressed assertions that their proceedings were based on a tort committed on Australia (item 4), sought the execution of a trust governed by a law of the Commonwealth, a State or a Territory (item 7) and, last, were proceedings in which the person to be served had submitted to the jurisdiction of the Court (item 17). 36 None of these last three bases has any substance and I rejected them. There is no evidence that any tort or other conduct of Mr Bangad occurred in Australia. There is no evidence of any trust governed by any Australian law. To the extent that Mr Bangad is alleged to have entered into arrangements in breach of any of his fiduciary or other obligations, any relevant trust would arise pursuant to the law of India or the other place in which he caused the Suzlon companies to act. There is no evidence that any relevant activity occurred in Australia. Last, there is no evidence that Mr Bangad has submitted to the jurisdiction of the Court. This leaves for consideration, the first three matters. They contended that Mr Bangad may be served in India because first, the Headway companies have been served and accepted the Court's jurisdiction and, secondly, Mr Bangad is a proper or necessary party to the proceedings, having regard to the nature of the allegations against him. 38 I am satisfied that the allegations of fraud against Mr Bangad in the Suzlon companies' cross-claim, as well as the centrality of his role in the events on which the Suzlon companies rely to seek relief from the Headway companies' claims, make Mr Bangad a proper and necessary party to the proceedings: see News Ltd v Australian Rugby Football League Ltd [1996] FCA 1256 ; (1996) 64 FCR 410 at 523G-524F per Lockhart, von Doussa and Sackville JJ; see too Victoria v Sutton [1998] HCA 56 ; (1998) 195 CLR 291 at 316-317, [77] - [78] per McHugh J; Commonwealth Bank of Australia v Peto (No 2) [2006] FCA 516 ; (2006) 152 FCR 362 at 370-372 [27] , [30]-[33] per myself. The allegations of deceit by Mr Bangad practised on one or more of the Suzlon companies causing their entry into one or more of the impugned transactions articulated a cause of action based on a tortious act within the meaning of item 5. The relevant acts and omissions involved in the alleged tort of deceit occurred, on the evidence before me, principally in India, although there may have been communications that occurred in other places including, potentially, Canada (where some emails in evidence suggest that the Headway companies have an association). 40 However, because the Suzlon companies paid USD 13.5 million in Australia pursuant to the orders made on 4 November 2008, they have a prima facie case that they suffered damage here (by paying some or all of that amount), in order to secure the release of their cargo. Moreover, they had to pay the Marshall's costs and expenses of holding the cargo at Port Kembla after Emmett J made orders on 24 October 2008 for it to be discharged into the Sheriff's custody. Those costs would not have been incurred, if the cargo had been delivered in the ordinary course. 41 I was satisfied that the allegations in the Suzlon companies' cross-claim against Mr Bangad fell within item 5. That proceeding is based on or seeks the recovery of damage suffered partly in Australia, being costs and expenses paid to secure the release of the cargo caused by a tortious act or omission of Mr Bangad, namely his alleged deceit of one or more of the Suzlon companies. They argued that the cargo delivered at Port Kembla was property affected in Australia and that each impugned document was a contract which they sought be set aside. 43 I was satisfied that the allegations made in the proceedings in respect of each of the impugned documents satisfied the requirements of item 6 and that they affected the cargo which is property in Australia. 45 On the material before me, the inference was available that Mr Bangad was unable to explain to his employer, or to Mr den Hartog, the commercial justification for the impugned documents and the relationship they evidenced between the Suzlon and Headway companies. If Mr den Hartog gave evidence to the effect of the material in his emails, an inference could be drawn that he, on behalf of Beluga, had been misled into entering into the transactions for the carriage of goods to Port Kembla on the basis that he understood that the Headway companies were associated with, rather than independent and at arms length from, the Suzlon companies. That inference would be supported, in the absence of explanation, by the fact that Suzlon Infrastructure guaranteed Headway Shipping's performance of the time charter, apparently before it was even made. If the transactions were at arms length, an explanation would be needed, which is not presently before me, as to why Suzlon Infrastructure would guarantee a time charter entered into by Headway Shipping with Beluga for the time charter of the Beluga Fantastic . There was no evidence of any reward or benefit passing to Suzlon Infrastructure or any other Suzlon company for this guarantee. The inference was also open that the Headway companies would earn a profit from performing the time charter and carrying the Suzlon companies' goods. 46 It was difficult to see, in the absence of an explanation, the commercial rationale for the related company of the shipper and consignee (both Suzlon companies) guaranteeing the owners under a time charter of the vessel for its performance by the party (Headway Shipping) contracting with the shipper for the carriage of its goods to Australia. 47 Of course, one story is good until another is told: Pontifical Society for the Propogation of Faith v Scales [1962] HCA 19 ; (1962) 107 CLR 9 at 20 per Dixon CJ. There may well be explanations for this state of affairs. But, I was satisfied, prima facie, that it was appropriate to permit service on Mr Bangad in India. This was because of the present absence of any explanation of the apparently uncommercial nature of the guarantee of the time charter and Mr Bangad's apparent involvement with the Headway companies when the impugned documents and the transactions, which they evidenced, were made. The prima facie case asserted by the Suzlon companies was further strengthened by the material indicating Mr Bangad's inability to explain to his employer his purposes for his entering into the impugned transactions and his inability, when confronted by Mr den Hartog, to explain why he had told Mr den Hartog that the Suzlon and Headway companies were associated, rather than at arms length, and why Mr den Hartog's letter accepting appointment as a director of Headway Shipping had been backdated. 48 Of course, much of the material currently in evidence had been presented in circumstances of urgency and would not necessarily be admissible in its current form at a final hearing. However, I was satisfied that there was sufficient in the material before me to warrant drawing an inference that they were sufficient to support the exercise of the Court's power to permit service out of the jurisdiction on Mr Bangad. 49 I was fortified in this view because the Headway had accepted that, whatever the strengths and weaknesses of the allegations made by the Suzlon companies, they raised a tribal issue which ought be determined at a five day hearing early next year. That is not to suggest that the Headway companies have not vigorously denied the allegations, as they have. Rather, it revealed the underlying litigious reality that the Suzlon companies had raised a case to be answered against the Headway companies, which have appeared, raising their involvement in the serious claims against Mr Bangad that would, if their case were accepted, translate into findings of fact that would support the grant of the relief they claim. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | procedure and evidence ex parte application for service of originating process on person in foreign country outside commonwealth jurisdiction whether court has jurisdiction under order 8 rule 2 of federal court rules or admiralty act 1988 (cth), ss 4(3)(f) or 12 and 13 whether proceedings were of kind mentioned in o 8 r 2 whether there was prima facie case for relief claimed in proceedings whether evidence established sufficient case for service outside jurisdiction alleged breach of fiduciary duty whether employee had authority to enter into contractual arrangements binding companies alleged fraud and misrepresentation by employee claim not fully pleaded or particularised on basis that investigations continuing admiralty |
The search warrant had been issued by a Magistrate in this State on 5 May 2008. At the time his Honour made that order, he made a further order staying that order for inspection until hearing a determination of an appeal on SAD 138 of 2008. The issue before his Honour in relation to the application by the Deputy Commissioner of Taxation to inspect documents was whether or not the documents were subject to legal professional privilege. It was Mr Nicholls' contention that the application for inspection should be refused because all of the documents were subject to legal professional privilege. Mr Nicholls failed to make out his claim for legal professional privilege and so the order was made by his Honour. The appeal, which was the reason for the making of the stay order on 23 July 2009, was an appeal to the Full Court of the Federal Court from orders made by Mansfield J on 15 January 2009. The issues with which he was concerned at that stage related to an application by Mr Nicholls to review decisions made by the Commissioner of Police and the Deputy Commissioner of Taxation, in relation to the issue of the search warrant on 5 May 2008 and its execution on 6 May 2008. On 15 January 2009, Mansfield J dismissed Mr Nicholls' application for review, both because it was incompetent and on the merits. Mr Nicholls appealed from those orders and that was the appeal which came before the Full Court of the Federal Court and which was the reason why the stay order was made by his Honour on 23 July 2009. That was determined on 11 August 2009 and was dismissed. The Full Court dismissed the appeal giving ex tempore reasons upholding the reasons for judgment for the orders made by Mansfield J on 15 January 2009. Because that appeal has now been determined, the stay order which was made by Mansfield J on 23 July 2009 is no longer in force. That means, of course, that the Deputy Commissioner of Taxation is free to make the inspection which was the subject matter of the order made on 23 July 2009, unless there is some other impediment to the operation of his Honour's order. On 21 August 2009 the applicant applied for a further stay of the orders made on 23 July 2009. The grounds of the application are to enable the respondent to file a notice of appeal from the orders of 23 July 2009, and for leave to file a notice of appeal out of time in relation to those orders. They were the only grounds identified in the notice of motion seeking a stay issued on 21 August 2009. Earlier today I heard the application for an extension of time within which to file and serve a notice of appeal from the orders made by Mansfield J and, for reasons given, dismissed that application. The application for the stay, therefore, based upon Mr Nicholls bringing an appeal from his Honour's orders of 23 July 2009, must be dismissed. Mr Nicholls has said in other proceedings that he intends to seek special leave to appeal from the Full Court's decision given on 11 August 2009 from the High Court. However, he has not relied upon the fact of that application as a ground for a stay of the orders of 23 July 2009, nor could he in my opinion have done so, because he could not, I think, on any understanding identify a special leave point which would allow for the stay to be granted. During the hearing of this application, Mr Nicholls sought to rely upon a further ground for the stay. In SAD 138 of 2008, Mr Nicholls made an application on 20 August 2009 for the stay of the orders made by Mansfield J on 15 January 2009. That application was accompanied by an affidavit in which he exhibited an application which he had made to the Federal Magistrates Court on or about 20 August 2009 seeking a further review of a number of decisions, including the decisions which were the subject matter of the proceeding before Mansfield J on 15 January 2009. He abandoned that application for a stay (rightly, in my opinion) because there was no order in fact to be stayed. The order made by Mansfield J on 15 January 2009 simply dismissed the application, so there was no point in seeking a stay. However, he now purports to rely upon the fact that he issued proceedings in the Federal Magistrates Court as a reason for staying the orders made by Mansfield J on 23 July 2009. I have allowed him to refer to the affidavit in SAD 138 of 2008, in order to finally deal with all of the interlocutory matters surrounding the two decisions of Mansfield J and the decision of the Full Court, and I allowed him to make reference to the proceeding which he has issued in the Federal Magistrates Court. However in my opinion, the issue of that proceeding does not support the application for a stay, because the proceeding in the Federal Magistrates Court purports to have the Court review the decisions of the Deputy Commissioner of Taxation and the Commissioner of Police which were the subject matter of the proceeding before Mansfield J and disposed of by him on 15 January 2009. In my opinion, it would not be appropriate to stay the orders of 23 July 2009 made by Mansfield J, on the basis that the applicant wished to re-agitate in the Federal Magistrates Court the same issues which his Honour had disposed of on 15 January 2009. Mr Nicholls said that the evidence which would support the application for a review of the decisions, which had been impugned in the proceedings before Mansfield J was different than that which had been adduced before his Honour in the proceeding disposed of on 15 January 2009. He said he had obtained information during the currency of those proceedings and the proceedings disposed of by Mansfield J on 23 July 2009 and under the Freedom of Information Act , which would allow him to challenge those decisions on other evidential bases. In my opinion, that also is not a good reason to stay the orders of 23 July 2009 made by Mansfield J. The time for Mr Nicholls to adduce evidence in relation to the decisions in which he complained was in the proceeding brought before Mansfield J which was disposed of in his orders of 15 January 2009. It is not appropriate for the applicant to split his case or split his applications and rely upon different evidence for a review of the same decisions: Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45 ; (1981) 147 CLR 589. In my opinion, the fact of the issue of the proceedings in the Federal Magistrates Court does not support the application for a stay. The application then for a stay of Mansfield J's orders of 23 July 2009 is refused. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | search warrants application for the further stay of orders allowing the inspection of documents by filing a notice of appeal federal court rules ) 52 r 15(2) extension of time to file notice of appeal not granted therefore no notice of appeal further ground of stay being that similar matter is before the federal magistrates court practice and procedure |
In October 2002 she was suffering from pneumonia and sought treatment at the Calvary Hospital. The appellant claimed she asked to be treated at home and this was refused because of her history of intravenous drug use. This, the appellant claimed, involved conduct in contravention of the Disability Discrimination Act 1992 ("DD Act"). She said that the intravenous drug use was a disability and in refusing to provide the service of home treatment, the hospital discriminated against her because of that disability. She complained about the hospital's conduct to the Human Rights and Equal Opportunity Commission The complaint was terminated on the basis that it was unable to be resolved by conciliation, and the appellant then commenced proceedings in the Federal Magistrates Court. That application was dismissed with costs. The Federal Magistrate published his reasons on 16 June 2005: Wood v Calvary Hospital [2005] FMCA 799. The appellant appeals against the Federal Magistrate's decision. Generally, in October 2002, the hospital offered a nursing program called Calvary at Home ("CAH scheme"). The CAH scheme enabled a patient to be treated by the hospital without having to be admitted to a ward as an inpatient. The program could be run in one of two ways. Either a nurse visited the patient at home for treatment ("home visits program"), which was the usual course, or the patient lived at home but attended the hospital for treatment as an outpatient. 3 On 1 October 2002, the appellant presented at the hospital's emergency department. She had previously been admitted to the hospital on a number of occasions and was generally known to staff. The medical registrar diagnosed her as having pneumonia and prescribed treatment of intravenous antibiotics to be followed by a course of oral antibiotics. The appellant received intravenous antibiotics while at the hospital. The treating doctor wanted the appellant to be admitted as an inpatient for treatment. The appellant told the doctor that she did not wish to be admitted as an inpatient because she suffered from agoraphobia and was looking after her granddaughter. 4 The CAH nurse on duty at the time, Ms Gillian Hazleton, came to speak with the appellant. Ms Hazleton explained the CAH program and took a history from the appellant. The appellant told Ms Hazleton that she was a past intravenous drug user. The appellant had also told this to a treating nurse, Ms Phillippa Uren, who had been instructed to take blood from her and to insert a cannula. Ms Hazleton left the room to discuss the proposed admission with the nursing manager of the CAH program, Ms Janet Watts. When Ms Hazleton returned, she told the appellant that she could not be treated at home due to her history of intravenous drug use and the occupational health and safety risks presented to nurses. The appellant became very upset. Ms Watts then came out to talk to the appellant and explained further why the appellant could not be treated at home. The appellant told Ms Watts how she had previously been treated at home under the CAH scheme in 1997. Ms Watts told the appellant that her options were to be treated at the hospital by a CAH nurse or be treated as a new presentation each time in the emergency department. The appellant signed a consent form indicating that she would come to the hospital for the daily intravenous antibiotic treatment. She elected instead, however, to receive treatment from her general practitioner at his surgery. 5 In September 2003, the appellant made a complaint to the Commission alleging that the hospital had unlawfully discriminated against her on the ground of her disability (her past drug addiction) in relation to the CAH program. On 30 June 2004, a notice of termination of the complaint was issued by the Commission under s 46PH of the Human Rights and Equal Opportunity Commission Act 1986 (Cth) ("HREOC ACT"), on the basis that there was no reasonable prospect of the matter being resolved by conciliation. 6 On 27 July 2004, the appellant filed an application in the ACT Registry of the Federal Magistrates Court, under s 46PO of the HREOC Act . As noted earlier, this appeal is from the decision of the Federal Magistrates Court dismissing that application. Both parties were represented by counsel at the hearing in the Federal Magistrates Court. There was no issue before the Federal Magistrate that the appellant had a "disability" as defined in s 4 of the DD Act . His Honour noted at [20] that the hospital had accepted that she suffered from a disability by reason of past intravenous drug use and morphine dependency. 8 The Federal Magistrate dealt with the application before him as an allegation of a refusal to provide a service contrary to s 24(1)(a). His Honour understood the relevant service to be the provision of home visits under the CAH program. Ms Hazelton's evidence was that the appellant had asked not to be admitted as an inpatient but to attend the hospital each day for treatment. There could be no unlawful discrimination because she had never requested the service which she claimed was denied due to discrimination. Of some significance was that the appellant's evidence was not only that she told Ms Hazleton that she wanted to be treated at home (contrary to the evidence of Ms Hazleton) but also that Ms Hazleton indicated to the appellant that she would not be able to be treated at home and the reason given was that "we cannot offer you home visits because of your past history of drug abuse". These facts appear to be part of the appellant's version of events accepted by his Honour. The hospital did not take issue with this finding in this appeal. 11 However, the issue of fact central to this appeal was whether the home visits program was closed at the time the appellant sought to be included in it. She said that she was familiar with the applicant. The applicant had been admitted to hospital on a number of occasions in the past and had a history of aggressive behaviour. The hospital's records concerning past admissions corroborate this. She says that she assessed the applicant as being unsuitable for the Calvary at Home program involving home visits for three reasons. It is the policy of the hospital to refuse home visits in such circumstances because of the potential risk to visiting nurses. She believed this also posed a risk to any nurse visiting her. This was both in relation to her past intravenous drug use and also her morphine dependency. This was because, as I indicated, the home visits program was not accepting new entrants. He cited the example of two blind children seeking to gain admission to an under six years of age football team. In the example one of the children was under six and the other was aged ten. It was submitted the ten-year-old could not bring himself within the terms of the Act because he was ineligible for the selection on the grounds of age irrespective of his disability. He submitted that what was involved was a refusal to provide a service for two or more reasons one of which was his client's disability. In my opinion, the applicant's case is not saved by section 10. In my view, it is meaningless to speak of the hospital refusing to provide its services for two or more reasons. It did not have a service that it could offer the applicant and therefore did not have a service which it could refuse to provide to her. Telling the applicant that it could not provide home visits because of her disability was an unfortunate, gratuitous and hurtful statement. But in effect what it was saying to the applicant was that if it had had a service available it would have refused to provide it to her. In this example I will assume the aggrieved child was under six years of age and blind. In this example I will postulate the spokesman for the club telling the child that (a) there were insufficient children under six interested in playing for the club and so the club was not fielding an under six team that season and (b) that in any event, even if it had been fielding a team, it would not have allowed the child to participate because of his disability. It would not, in my opinion, affect the legal situation had it not informed the child that it was not fielding an under six team but simply gave his blindness as the reason for its decision. That is in essence what happened in the present case. The hospital did not inform the applicant that it had no service to provide but told her that it was refusing the service because of her disability. In my opinion that omission does not affect the legal situation. His Honour found that the appellant had not received less favourable treatment because the hospital would have treated any person, disabled or not, who sought the home visits program at the time, exactly the same way. His Honour did not consider the defence of unjustifiable hardship, noting that it was unnecessary to do so. In substance, three issues were raised, namely whether his Honour erred in concluding that s 24 did not apply, whether his Honour erred in concluding that s 5 did not apply, and whether his Honour erred in concluding that the hospital's omission to tell the appellant that it had no service to provide her did not affect "the legal situation". 14 The first and second issues both centred on his Honour's finding that the service was unavailable. In relation to the first issue, the appellant submitted that the Federal Magistrate erred in three respects. First, the conclusion that the home visits program was unavailable was wrong and contrary to the weight of evidence. Secondly, even if it was unavailable, it did not follow that there was no refusal to supply that service, and thirdly, even if there was no refusal to supply the service, it did not follow that s 24 did not apply. 15 The hospital filed a notice of contention. It contended that his Honour's judgment should be affirmed on two bases additional to the primary reason relied on by his Honour,namely that s 24 did not apply. These were, first, that the appellant was not treated less favourably for the purpose of s 5 of the DD Act , and, secondly, that the defence of unjustifiable hardship could be made out. The appellant challenged both the legal and factual bases for his Honour's conclusion that s 24 did not apply. 17 At the hearing, the appellant's position on the factual findings made by his Honour was clarified. By the time Gilliam Hazleton came to my office I had already spent the morning arranging alternative treatment options for patients currently on the program for the evening and morning shifts in question. Counsel for the appellant did not cavil with the fact that staff may not have been available for the next two shifts. However, counsel submitted there was no evidence of any general closure or unavailability. Counsel submitted that the evidence could not found a conclusion that the hospital did not have a service to offer the appellant and was not accepting new entrants. In particular, it was submitted that the evidence did not demonstrate that the service was not available to be provided to the appellant when she would have required it. Counsel pointed to the evidence of medical notes made by the medical registrar that the appellant was prescribed daily intravenous antibiotics for three days, which was the treatment she was seeking to receive in her home. It was submitted that having already been given intravenous antibiotics at the hospital on 1 October 2006, the next treatment could have taken place the following afternoon, and there was no evidence to suggest that the service was unavailable at that time. 19 In relation to the construction of s 24 , counsel for the appellant did not accept that it was necessary for a service to be available in order for s 24 to apply. It was submitted that the focus of discrimination legislation such as the DD Act was on acts which discriminated or improperly penalised complainants, but that the act of discrimination under s 24(1)(a) did not require a service to be available. The availability of the service, at least where it was established that the service generally exists and the would-be service provider holds itself out as providing that service, was an issue relevant to the reasons for the act, to which s 10 applied. It was submitted that if the ability to refuse to provide a service depended upon the availability of that service at a particular time then there would be no protection in relation to the sort of conduct proscribed, whether or not the service was available. 20 Counsel for the hospital defended the Federal Magistrate's finding that the service was not available. The essential question in the appeal was said to be whether the hospital discriminated against the appellant contrary to s 5 of the DD Act , and the operation of that section in light of the High Court's decision in Purvis v New South Wales (Department of Education and Training) [2003] HCA 62 ; (2003) 217 CLR 92. The hospital's submissions were largely focused on this issue. Counsel submitted that his Honour's conclusion on s 5 , which was that because the service was not available, the appellant was treated in exactly the same way anyone else would have been treated, must be correct. Although the appellant had been assessed as unsuitable for various reasons by Ms Watts, and would in any event have been refused the service even if it had been available, this had been immaterial for the purpose of s 5 because it had not resulted in less favourable treatment since the service was not available to be provided. 21 Counsel for the hospital also submitted that it had never been put to any of the hospital's witnesses that the appellant's treatment could have been delayed until the afternoon of 2 October 2002 when staff might be available. The appellant in the Court below had not disputed the evidence that the service was closed, and the issue before his Honour was understood as being the relevance to the operation of s 10 of the unavailability of staff. His Honour therefore could not be criticised for not having considered the issue about delayed treatment because it was never raised. Counsel further submitted that the suggestion of delaying treatment was contradicted by the evidence in the Court below which showed that within the first 24 hours, treatment for pneumonia was critical and that it was not suitable for treatment at home for that period. 22 In terms of the relevance of the availability of a service under the DD Act , counsel for the hospital submitted that the issue was dealt with by s 5. His Honour had been correct to simply conclude that because the service was not available, there was no need to construct a hypothetical comparator to determine whether the appellant was treated less favourably. Even so, his Honour could equally have looked at the other reasons why the appellant was treated the way she was, unrelated to the fact that the hospital was closed, and reach the same conclusion. Those other factors included the occupational health and safety risks to nurses and the appellant's poor intravenous access. Counsel for the appellant challenged this finding on the basis just discussed. 24 It is conceivable, on the evidence, that a nurse may have been available to visit and treat the appellant at her home on the afternoon following the appellant's initial visit to the hospital. The basis on which such a finding might be made is the amalgam of facts now advanced by the appellant's counsel in this appeal. However, the difficulty with this proposition is that Ms Watts was not cross examined to establish whether there would have been a nurse available on the afternoon following the appellant's initial visit to the hospital. This, in my opinion, is significant. The finding of the Federal Magistrate appeared to be that the home visits program was closed. That may have meant one of two things. It may have been a finding that on the day the appellant first attended the hospital, no new patients were being accepted for the home visits program because of staff shortages irrespective of whether a member of staff might have been, in fact, available on following days to provide the service. While it is now a matter for speculation, that position might have been adopted by the hospital because of the uncertainty about the availability of staff. It may also have been a finding that, on the balance of probabilities, a nurse would not have been available on the afternoon following the appellant's initial visit to the hospital. It is unlikely that the Federal Magistrate's finding went that far. It is more likely that the finding of the Federal Magistrate was as I first described it. 25 The significance of the failure of the appellant's counsel to explore these factual issues at the trial is that evidence was not adduced below to support the hypothesis now advanced on appeal. The evidence was that the program was closed, at least as to home visits. Counsel for the appellant at the trial did not seek to establish that the "closure" was qualified or limited. Counsel could have sought to establish, but did not, that the staff shortages impacted only on the evening of the day the appellant initially visited the hospital and the morning shift the following day. Nor did counsel seek to establish that staff were likely to have been available to attend the appellant's home the following afternoon. Because these issues were not explored, I do not think it is possible to say that his Honour erred in making the findings he did. 26 In many cases where it is alleged that a service was not provided and the refusal to provide it was for proscribed grounds, it may be unnecessary for the applicant to do any more than establish the availability of the service generally to prove that the service would have been available to the applicant. However, in the present case, there was evidence which pointed to the service not being made available to anyone at the time the appellant sought the provision of the service. In those circumstances it was necessary, in my opinion, for the appellant to lay the evidentiary foundation for a finding that the service could have been provided to the appellant notwithstanding that it might not have been able to be provided to others at the time she requested it. I am not satisfied that the Federal Magistrate erred in finding that the home visit program was closed due to staff shortages. 27 Having regard to the finding just referred to, the Federal Magistrate did not err in dismissing the appellant's application. However, for my part, a surer foundation for dismissing the application is found in s 5 and not s 24. The DD Act is beneficial legislation. For this reason, the provisions of the Act concerned with discrimination in the provision of goods or services, including s 66K(1), should be construed as widely as their terms permit. There do not appear to be any authorities considering the meaning of that paragraph in the context of an intermittent inability to provide goods or services. Although s 24(1) requires that the putative discriminator be a person who provides goods or services, this may simply be directed at whether the person holds him or herself out as providing such goods or services, in the ordinary course. The word "refusing" may reflect a requirement that a request for the provision of the goods or services has been made apparent by the complainant, for example. This was accepted as being a precondition to the ability to refuse a service in Kowalski v Domestic Violence Crisis Service [2005] FCA 12. Similarly, in the present case, the Federal Magistrate accepted the need for some request to have been made by the appellant for treatment at home. In my opinion, s 24(1)(a) does not cease to apply where a putative discriminator is for some reason temporarily unable to provide the goods or services. 29 Section 10 provides that discrimination can occur even where a number of factors operate to control or determine the conduct of the discriminator. This is because such reasons can infect that conduct with prejudice and irrelevant and irrational considerations which the Act is designed to prevent. Because persons, faced with allegations of discrimination, genuinely or otherwise, assert multiple and complex reasons - and because affirmative proof of an unlawful reason is often difficult - the Act has simplified the task for the decision-maker. It is enough that it be shown that the doing of the Act was "by reason" of or "on the ground" of the particular matter in the sense that the unlawful consideration was included in the alleged discriminator's reasons or grounds. It must be a real "reason" or "ground". It is not enough to show that it was a trivial or insubstantial one. But once it is shown that the unlawful consideration truly played a causative part in the decision of the alleged discriminator, that is sufficient to attract a remedy under the Act. This appeared to involve an acceptance that Ms Hazleton said to the appellant that the hospital could not offer her home visits because of her past history of drug abuse. I should add that Ms Hazelton had gone on to explain to the appellant that nurses might be at risk when visiting such people, on the version of events which his Honour accepted. If Ms Hazleton had said this about the reason why the appellant was not being offered her home visits, then it may well be that the identification of the appellant's prior drug use as a reason for not offering her treatment at home was, to use the language of Kirby J, an "unlawful consideration". That characterisation is, of course, conditional because of the issues raised by the hospital under s 24(2) , which were not dealt with by the Federal Magistrate and no relevant findings of fact were made. 31 The Federal Magistrate's finding that the home visits program was closed seems to lead, inevitably, to the conclusion that the appellant was treated no differently than a person without the disability would have been treated. Neither would have been provided with the service. It is therefore unnecessary to consider the construction of a comparator for the purpose of s 5. The Federal Magistrate was correct in reaching the conclusion that the hospital did not contravene s 5. 32 The appeal should be dismissed with costs. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. | disability discrimination in provision of services where disability constituted by drug addiction where appellant requested to be treated at home for pneumonia as part of hospital's "calvary at home" program appeal from decision of federal magistrate where federal magistrate found s 24 of the disability discrimination act 1992 (cth) did not apply because service not available whether federal magistrate erred in finding that hospital had no service to provide operation of ss 24 and 5 of the act where service not available human rights |
Mr Conde was served with a bankruptcy notice, which he unsuccessfully sought to have set aside in the Federal Magistrates Court. Mr Hunter now seeks an order striking out Mr Conde's appeal on the basis that the appeal constitutes an abuse of process. The notice of motion is heard by me as a single judge in the Court's appellate jurisdiction: s 25(2B)(aa) of the Federal Court of Australia Act 1976 (Cth)) ("Federal Court Act"). In deciding whether Mr Conde's appeal constitutes an abuse of process such that it should be struck out pursuant to s 25(2B)(aa) of the Federal Court Act it is necessary to consider: Before determining the issues I will outline the background to the notice of motion. It appears from the bankruptcy notice that the person who applied for the bankruptcy notice to be issued was Mr Anthony Macklin, the solicitor for Mr Hunter and who appeared for Mr Hunter in the proceedings before me. The bankruptcy notice relied upon a costs order of Searles DCJ in the District Court of Queensland dated 14 November 2008. From the bar table in an explanation which was not contested, Mr Conde explained the context in which the judgment of Searles DCJ was delivered, namely that Mr Conde had commenced defamation proceedings against Mr Hunter in the District Court of Queensland and Searles DCJ had made interlocutory orders in the course of those proceedings. The Amended Statement of Claim be struck out. That the Plaintiff be given leave to replead within twenty-one (21) days. Order that proceedings be stayed pending payment of the Defendant's costs of today's application by the Plaintiff. The key order for the purposes of these proceedings was Order 3 with respect to costs. It is also not in dispute that on 1 July 2009 Mr Conde filed an application in the Court of Appeal of Queensland seeking to contest Orders 3 and 4 of Searles DCJ. The bankruptcy notice, a copy of which was annexed to the application before the Federal Magistrate filed on 14 July 2009, stated that Mr Conde owed Mr Hunter a debt of $7,980.87. The Schedule to the bankruptcy notice identified the amount of $7,980.87 as "Legal costs if ordered to be paid and a specific amount was not included in the judgments or orders". I was appointed to assess the costs in this matter pursuant to the Order made 12 February 2009. The party entitled to be paid the costs of the assessment is the Defendant. Those costs are assessed at $393.00 and have been included as a disbursement. The matter came before Wilson FM, who dismissed the application to set aside the bankruptcy notice ( Conde v Hunter [2009] FMCA 751). In his reasons for decision, his Honour found in summary as follows: Mr Conde made no attack on the form of the bankruptcy notice itself. Although Mr Conde contended that Mr Hunter did not have a final judgment or final order (the execution of which had not been stayed in terms of s 40(1)(g) of the Bankruptcy Act 1966 (Cth) (" Bankruptcy Act ")) the argument was misconceived. The concept of what is a final order is discussed in cases such as Hall v Nominal Defendant [1966] HCA 36 ; (1966) 117 CLR 423. In this case, the issue was who should pay the costs of the application to set aside the applicant's pleading. The order made by Judge Searles was a final order, insofar as it concerned that issue. His Honour ordered that the applicant pay the respondent's costs. There is no merit in the first ground sought to be advanced by the applicant. The Federal Magistrate noted that no contest had been made against the Orders 1 and 2 made by Searles DCJ, namely to strike out Mr Conde's amended statement of claim and give leave to Mr Conde to replead in that Court. The Federal Magistrate considered that, in those circumstances and having read Mr Conde's application to the Court of Appeal and supporting affidavit, that application to the Court of Appeal has no prospects of success. It followed that no good reason was shown for either setting aside the bankruptcy notice or extending time for compliance with it to await the outcome in the Queensland Court of Appeal. Accordingly the Federal Magistrate dismissed the application to set aside the bankruptcy notice. The grounds of appeal are as follows: The Learned Federal Magistrate Wilson erred by dismissing the Applicant/Appellant's Application in contravention of the Bankruptcy Act 1966 . The Learned Federal Magistrate Wilson failed to justify in which sections of the Act and Rules he relied to dismiss the Appellant/Applicant's Application. The Learned Federal Magistrate Wilson failed to take into account the Act , Rules the Appellant's Application and Affidavit filed on 14 July 2009, to make his decision or order. The Learned Federal Magistrate Wilson erred in taking into account to make his decision or order, only the Respondent's Outline of Submissions served on 23 July 2009, at the hearing prepared by Anthony James Macklin, Solicitor for the Respondent and totally ignored the Applicant or Appellant's Application and Affidavit. Anthony James Macklin, Solicitor for the Respondent, failed to comply with the Federal Court ( Bankruptcy Rules 2005, rr 2.05(1), 2.06(1)(2)(a)(b)(c)(d) . Sections 40(1)(g) of the Act, was wrongly used by Anthony James Macklin, Solicitor's for the Respondent and Federal Magistrate Wilson. Section 40(1)(g) of the Act does not apply to the Applicant/Appellant. Section 41(1)(a)(i), (3) does not apply to the Appellant/Applicant and was wrongly and unlawfully used by Anthony James Macklin, Solicitor's for the Respondent to obtain the Bankruptcy Notice and issued by A. Carder, Official Receiver for the Bankruptcy District of Queensland, Insolvency and Trustee Service Australia (ITSA), on the 30th June 2009. Anthony James Macklin, Solicitor's for the Respondent, to obtain the Bankruptcy Notice, Order or Decision committed offences to the administration of justice and the Criminal Code 1899 , Fraud --- s 408C(1)(d)(e) and mislead the Court. The Respondent's Bankruptcy Notice has a tendency to prejudice or delay the fair trial of the Proceedings Numbers: BD 395 of 2008 and CA 7008 of 2009. The Respondent's Notice of Bankruptcy is unnecessary, scandalous, vexatious, frivolous, an abuse of the process of the Court, discriminatory, malicious and should be set aside or dismissed by this Honourable Court and award costs in favour of the Appellant. His Honour Wilson failed to take into account section 41(1)(a)(i), (3)(a), (6A)(a)(b)(6C) of the Act. There were clear errors of law in the proceedings that could have materially affected his Honour's decision. The Learned Federal Magistrate Wilson's decision and order are biased against the Applicant or Appellant. The Appellant pleads no valid ground of appeal, and each of the Grounds of Appeal 1 to 14 ought to be summarily struck out. The several allegations of unlawful and unprofessional conduct by Anthony James Macklin are vexatious, oppressive and an abuse of process, are wrong, have no proper or pleaded basis in law or fact, and Grounds 8 and 9 ought to be struck out on this basis as well. There is no basis for the allegation of bias pleaded in Ground of Appeal 14; the allegation is wrong in law and fact, is vexatious and oppressive, and is an abuse of process and ought to be struck out on that basis. An order, if necessary and required, that the time and date for the Directions Hearing set out in respect of the Appellant's Notice of Appeal be abridged, and that the date of Tuesday 22 September 2009 be vacated and a time and date for a Directions Hearing be allocated at an earlier time on the grounds of urgency, and on the further grounds that the Notice of Appeal is filed for the purposes of delay only, and is an abuse of process. An order that the Respondent, JOHN LAWRENCE HUNTER be at liberty to file and serve a Creditor's Petition forthwith upon MILTON ARNOLDO CONDE as Judgment Creditor, and further that the hearing and determination of the Creditor's Petition be heard and determined with, after or at the same time as, this Notice of Motion is heard and determined. An order that the Appellant pay the Respondent's costs of and incidental to the appeal on the full indemnity basis, and that such costs be fixed at the hearing of this Notice of Motion. An order that the Appellant be restrained and prevented from instituting any appeal against the dismissal of his appeal in these proceedings without first applying for and obtaining leave of this Honourable Court to bring such an appeal. Such further or other adjournments, enquiries, directions and other orders as to this Honourable Court seem appropriate. That a single judge may give judgment summarily dismissing an appeal from a decision of the Court is clear from decisions applying the section: Druett v Department of Families, Community Services & Indigenous Affairs [2007] FCA 995 , Bishop v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1118. In this case however Mr Hunter has sought an order striking out Mr Conde's notice of appeal. As a general proposition the Court may strike out a notice of appeal if the notice does not disclose any arguable basis for granting the appeal: cf Patten v New Holland Credit Australia Pty Ltd [2006] FCA 1724. Such an order is clearly by way of summary judgment. In my view the jurisdiction of the Court under s 25(2B)(aa) contemplates an order striking out a notice of appeal. At the hearing before me Mr Macklin on behalf of Mr Hunter stated that he also relied on s 31A of the Federal Court Act. Section 31A provides that the Court may give judgment if, inter alia , the Court is satisfied that a party has no reasonable prospect of successfully prosecuting a proceeding (s 31A(2)(b)). For the purposes of that section, a proceeding need not be hopeless or bound to fail for it to have no reasonable prospect of success: s 31A(3). A question arises whether, in considering s 25(2B)(aa), it is necessary for the Court to also have recourse to s 31A. In a number of cases the Court has exercised power pursuant to s 25(2B)(aa) and given summary judgment without reference to s 31A: Druett v Department of Families, Community Services & Indigenous Affairs [2007] FCA 995 , Zambini v Secretary, Department of Employment and Workplace Relations [2006] FCA 1773 , Dunstan v Human Rights and Equal Opportunity Commission [2007] FCA 1326 , Rana v University of Adelaide (No 2) [2008] FCA 941. However in other cases the Court has linked the power under s 25(2B)(aa) to the jurisdiction of the Court under s 31A and summarily dismissed an appeal on the basis that the appellant had no reasonable prospect of success in prosecuting its grounds of appeal: Genovese v BGC Construction Pty Ltd [2007] FCA 923 , Bishop v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1118. In the context of this case no issue turns on the application of s 31A. Mr Hunter has pleaded that Mr Conde's notice of appeal should be struck out as an abuse of process because, inter alia , it does not disclose arguable grounds of appeal. In my view s 25(2B)(aa) provides the Court with a separate head of power to give summary judgment in an appellate matter on the basis submitted by Mr Hunter. (The Court does not need to have specific recourse to s 31A in delivering summary judgment pursuant to s 25(2B)(aa). ) In circumstances where a notice of appeal does not disclose any arguable basis for granting the appeal, the Court may in appropriate circumstances strike out the appeal pursuant to s25(2B)(aa). Issue 2 - does Mr Conde's notice of appeal disclose any grounds of appeal which are arguable? Mr Conde's grounds of appeal are lengthy, with considerable overlap. Mr Conde, who was self-represented, made written as well as oral submissions, which are helpful in considering his grounds of appeal. Grounds 1, 6, 7, 11: Was the costs order of Searles DCJ a "final order" for the purposes of section 40(1)(g) of the Bankruptcy Act ? Although Mr Conde did not specifically frame these grounds of appeal in terms of whether the basis of the bankruptcy notice was a "final order" for the purposes of s 40(1)(g) , it is clear from both his written and oral submissions that this is a key issue in his grounds of appeal. Grounds 1, 6, 7 and 11 relate to this issue. In particular, Mr Conde submitted that: Mr Conde raises an interesting point. So far as concerned the defamation proceedings before Searles DCJ, Orders 1 and 2 of 14 November 2008 did not finally dispose of that matter and to that extent were interlocutory orders. However, was the costs order of 14 November 2008 a "final order" for the purposes of s 40(1)(g)? In this context a "final order" is an order which "finally disposes of the rights of the parties": Bozson v Altrincham Urban District Council [1903] 1 KB 547 at 548-549, Hall v Nominal Defendant [1966] HCA 36 ; (1966) 117 CLR 423 per Taylor J at 439-440 (Owen J concurring), Windeyer J at 443-444; Licul v Corney [1976] HCA 6 ; (1976) 50 ALJR 439 at 444; Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20 ; (1981) 147 CLR 246 at 253-254. It is clear however that an order may in one sense be interlocutory but in another sense final: re Black ex parte Jeffery (1932) 4 ABC 157 at 161. There is long-standing authority that a costs order made at an interlocutory stage during proceedings is nonetheless a final order for the purposes of the Bankruptcy Act : re Black ex parte Jeffery (1932) 4 ABC 157 , re McAlister ex parte McAlister (1936) 8 ABC 283 , Kayo Contractors v Fernandez (1984) 71 FLR 34 and Re Gibbs; Ex parte Triscott (1995) 65 FCR 80. This will be the case only if a certificate of taxation has been issued: Stec v Orfanos [1999] FCA 457 at [18] , Franks v Warringah Council, in the matter of Franks [2003] FCA 1047. In this case the order for costs made by Searles DCJ's on 14 November 2008 was made in respect of the interlocutory issue before his Honour --- namely whether Mr Conde's amended statement of claim in the District Court proceedings should be struck out and Mr Conde given leave to replead. In respect of that issue the costs order of 14 November 2008 was a final order disposing of the liabilities of the parties, precluding any further application for costs in respect of the striking out of Mr Conde's amended statement of claim, and was enforceable by execution. Subsequently, as is clear from the evidence, a certificate of taxation was issued in respect of the relevant costs amount. A helpful comparison may be drawn between the facts of the case before me, and those in an English case Re a Debtor (No 5982 of 1979) (1981) 78 Law Society Gazette Reports 631 (Brightman and O'Connor LJJ and Fox J, 30 January 1981). In Re a Debtor bankruptcy notices issued by petitioning creditors were based, inter alia , on orders for costs granted to them following successful summonses to strike out an application brought against them by the debtor. Certificates had been issued by the taxing officer in respect of the costs awarded. The debtor started with the proposition that the order striking out his cause of action was interlocutory for the purposes of s.31 of the Supreme Court of Judicature (Consolidation) Act 1925 . But it did not follow, as the debtor contended, that the orders for costs contained in the master's order and the judge's order must also be interlocutory. In his Lordship's view, in each case the order for taxation and payment of costs read with the taxing officer's certificate was a final order. It follows that there was no error in the decision of the Federal Magistrate in respect of this finding, and accordingly there is no merit in Mr Conde's grounds of appeal in respect of this issue. In his judgment the Federal Magistrate specifically referred to the Bankruptcy Act and s 40(1)(g) upon which his Honour relied. His Honour's reasons for dismissing Mr Conde's application were clear, and identified relevant principles. It is clear from reviewing the decision of the Federal Magistrate ( Conde v Hunter [2009] FMCA 751) that his Honour: The fact that his Honour found against Mr Conde does not mean that his Honour failed to take into consideration Mr Conde's submissions. In my view this ground of appeal has no merit. Mr Conde has not particularised why, if there has been failure by Mr Hunter's solicitor to comply with these regulations, such failure forms the basis for an appeal against the decision of the Federal Magistrate. I am unable to identify any reasons why a failure to comply with these regulations would justify an order setting aside the bankruptcy notice in this case. In my view this ground of appeal has no merit. Section 41(1)(a)(i) and s 41(3)(a) supplement s 40(1)(g) with respect to the requirement for a final order to support the issue of a bankruptcy notice. Mr Conde's claims that s 41(1)(a)(i) and s 41(3) do not apply to him have no merit because these sections clearly do apply to him. Similarly, Mr Conde's claims that the Federal Magistrate failed to take those sections into account are not supported by any material before the Court. Mr Conde's reliance on s 41(6A) and (6C) raise other issues. Both provisions relate to the possibility of a debtor receiving an extension of time for compliance with the relevant bankruptcy notice. However the exercise of the Court's power under s 41(6A) to extend time for compliance with the bankruptcy notice is discretionary: Conway v Jackson [2001] FCA 230 ; (2001) 107 FCR 201. In this case the Federal Magistrate refused to grant an order extending time to Mr Conde to comply with the bankruptcy notice. This is because, after consideration of the nature of the prospective application to the Court of Appeal of Queensland, the Federal Magistrate was satisfied that Mr Conde had no prospects of success in relation to either his application for an extension of time to apply for leave to appeal from the orders of Searles DCJ, or the actual application for leave to appeal. 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. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is reasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. It is clear that his Honour considered whether he should make an order extending time for Mr Conde to comply with the bankruptcy notice, and concluded that an application for an extension of time was unmerited in the circumstances. In light of the principles articulated in House v The King [1936] HCA 40 ; (1936) 55 CLR 499 I am unable to find that his Honour failed to properly exercise the discretion vested in him by s 41(6A). Section 41(6C) was of no apparent relevance in relation to Mr Conde's application before his Honour. In my view Mr Conde's grounds of appeal with respect to s 41(6A) and (6C) have no merit. In my view they are scandalous and vexatious as claimed by Mr Hunter. I also do not see the relevance of the allegations to the question whether the bankruptcy notice served on Mr Conde should be set aside. In my view this ground of appeal has no merit. First, I see no error in the view taken by the Federal Magistrate of the prospects of success of Mr Conde in his application for leave to appeal to the Court of Appeal of Queensland in respect of the orders of Searles DCJ. In my view the Federal Magistrate accurately identified likely difficulties Mr Conde will experience in respect of his appeal to that Court. Second, as was observed in Re a Debtor (No 5982 of 1979) at 631 the mere fact that an order is subject to a pending appeal is not a reason for treating it as other than a final order and did not prevent the issue of a bankruptcy notice. Third, the Bankruptcy Act allows a petitioning creditor to apply for the issue of a bankruptcy notice based on a final judgment or final order. As I have already observed, it is clear on the material before the Court that the bankruptcy notice served on Mr Conde was founded on a final order of the District Court of Queensland, and properly issued. The fact that there may be related proceedings in other Courts does not prevent the proper issue of a bankruptcy notice and steps taken in pursuance of that notice. In my view it has no merit. Mr Conde correctly submitted that a judge may be disqualified in the event of either actual bias or the reasonable apprehension of bias. However bias is a very serious allegation which must be clearly articulated and proved by admissible evidence. Without more, the fact that a decision records findings adverse to the complainant is insufficient to establish bias: SBBS v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 361 ; (2002) 194 ALR 749 at 756, VFAB v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 872 ; (2003) 131 FCR 102. This is particularly so where the Court's findings were open on the material before it: Minister for Immigration and Multicultural and Indigenous Affairs v Jia Legeng [2001] HCA 17 ; (2001) 205 CLR 507 at 519 and 531-532. In this case, Mr Conde's bare allegation of bias in the Federal Magistrate is without merit. No material is produced from which bias may be inferred. It follows that this ground of appeal is without merit. The appropriate order is that the notice of appeal filed 3 August 2009 be struck out forthwith as an abuse of process. In light of that order I do not consider it necessary to make the order sought by Mr Hunter with respect to future directions hearings in relation to the appeal. Further, at the hearing Mr Macklin did not press for an order that Mr Conde be restrained and prevented from further litigation in respect of these particular proceedings (TS p 7 ll 29-31) and I make no such order. The usual rule is that costs follow the event; accordingly the appropriate order is that Mr Conde bear Mr Hunter's costs in respect of this notice of motion. Mr Hunter has sought an order that the costs be awarded on an indemnity basis, however I am not prepared to make an order to that effect. The purpose of an order for costs is to indemnify or compensate the person in whose favour it is made, not to punish the person against whom it is made: Latoudis v Casey [1990] HCA 59 ; (1990) 170 CLR 534. A well-known summary of the principles relevant to the exercise of judicial discretion to award indemnity costs can be found in Colgate-Palmolive v Cussons [1993] FCA 536 ; (1993) 46 FCR 225 at 231-234 and InterTAN Inc v DSE (Holdings) Pty Ltd [2005] FCAFC 54 at [11] . Circumstances in which an award of indemnity costs may be warranted include commencement of proceedings where the litigant properly advised should have known there was no chance of success, allegations of fraud by the litigant knowing them to be false, evidence of particular misconduct in the litigant, and where the justice of the case justifies such an order. In this case, while I have found that Mr Conde's grounds of appeal have no arguable basis, it does not automatically follow that he should be liable to Mr Hunter for indemnity costs. The fact that a number of his claims required some consideration, and the absence of any apparent delinquency or extraneous or improper purpose in Mr Conde, in my view warrant an order for party-party costs only. Finally, Mr Hunter has sought an order that he be at liberty to file and serve a creditor's petition forthwith upon Mr Conde as judgment creditor, and that the hearing and determination of the creditor's petition be heard and determined with, after or at the same time as, this notice of motion is heard and determined. No submissions were made by Mr Macklin on Mr Hunter's behalf in relation to this order --- indeed Mr Macklin stated during the hearing that a creditor's petition had in fact been filed (TS p 10 l 45-46). In such circumstances I am not persuaded of the utility of making this order. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | application to strike out notice of appeal from decision of federal magistrate for abuse of process bankruptcy notice issued in respect of unpaid costs order made by district court judge at interlocutory hearing application by respondent to set aside bankruptcy notice dismissed by federal magistrate court's jurisdiction to strike out a notice of appeal under s 25(2b)(aa) of the federal court of australia act 1976 (cth) relevance of s 31a of the federal court of australia act 1976 (cth) whether costs order of district court a "final order" for the purposes of s 40(1)(g) of the bankruptcy act 1966 (cth) whether federal magistrate failed to take into account issues, affidavits or relevant legislation whether failure by the applicant's solicitor to comply with r 2.05 and r 2.06 of the federal court (bankruptcy) rules 2005 and whether relevant application of s 41 of the bankruptcy act 1966 (cth) and exercise of judicial discretion allegation of bias on part of federal magistrate whether notice of appeal raises arguable issues whether indemnity costs warranted practice and procedure |
The Tribunal had affirmed a decision on 9 March 2004 of a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs under the Migration Act 1958 (Cth) ("the Act ") to refuse to grant a protection visa to the appellant. On 23 January 2004 the appellant lodged an application for a protection visa with the then Department of Immigration and Multicultural and Indigenous Affairs. 3 On 10 May 2003 a delegate of the first respondent refused the application for a protection visa and on 29 June 2005, the appellant made an application under the Judiciary Act 1903 (Cth) and the Act , applying to the Tribunal for a review of that decision. The Tribunal invited the appellant to attend a hearing. The hearing, which occurred on 25 April 2005 was attended by the appellant who was assisted by a Mandarin interpreter. After discovering that the managers of the real estate company that he was working for had offered a bribe to the local government to get a construction contract in 2001, the appellant claimed that he reported this to the local Construction Bureau. 5 The appellant then stated that he was consequently "targeted" by local authorities by being denied employment opportunities, was fired by the company and was unable to find other jobs. He claimed that he was also threatened in anonymous letters and telephone calls from time to time. The appellant further claimed that he was required to pay higher school fees for his child and that when he tried to seek help from "higher authorities" they "stood by the local government". 6 He claimed that he was afraid that he would be unable to obtain employment and so be unable to support his family. He claimed that the government's persecution might jeopardise his family members and he was afraid for his safety. 7 The appellant added a further statement in his application for review to the Tribunal, which contained further elements of alleged persecution. 8 In the submissions to the Tribunal, the appellant stated that he had been a soldier in the People's Liberation Army (PLA) and had been in military service from 1987 to 1991. He claimed to have developed an anti-government political opinion during the 1989 pro-democracy movement. He claimed that on 30 April 2002 a large protest was held by construction workers (with many who were also demobilised soldiers) demanding the authorities withdraw their unfair treatment of the appellant and that the appellant was seen as a key leader in the anti-government gathering. The appellant asserted that on 10 September 2003 he had organised a public sit-in protest asking for the protection of basic human rights. He claimed to have been arrested and tortured and that a bribe was paid for his release. These particular claims became quite central to the Tribunal's findings. 10 The Tribunal ultimately found that the appellant was not a credible witness. The Tribunal did not accept the appellant's explanation for the substantial differences between the claims in his statement in his protection visa application and his written statement to the Tribunal. It held that it was not plausible that the appellant's agent would by mistake omit crucial elements such as the claimed protests, the arrest, detention and assault while in detention as well as his release upon payment of a bribe --- the differences between the two documents were not details but were significant claims. Further, it found that the appellant's evidence was inconsistent with regard to what he claimed he had told the migration agent. At first he stated that he trusted his agent but did not give him a detailed account and then later at the hearing he claimed that he did not know the agent, found him through an advertisement but that he did tell him about his arrest, detention and assault. The Tribunal additionally found the appellant's evidence regarding his departure from China legally and without difficulty was vague and lacking in detail. It found that the fact that the appellant had been able to leave China legally without difficulties was strong evidence that he was not of any adverse interest to the authorities at the time of his departure. The Tribunal concluded the appellant had not been truthful and had fabricated his claims of being politically outspoken, organising protests, being arrested, detained and assaulted by authorities. It did not accept the appellant was of any adverse interest to the Chinese authorities including for any membership of a particular social group such as that of demobilised soldiers. 11 The appellant was not found to have a well founded fear of being persecuted for reasons of his political opinion, actual or imputed, or his membership of a particular social group, being demobilised soldiers, or for any other Convention reason should he return to China now or in the reasonably foreseeable future. As a consequence of this, the Tribunal found that the appellant did not satisfy the required criteria for a protection visa, as set out in s 36(2) of the Act and subsequently affirmed the decision not to grant a protection visa. Before the Federal Magistrate, the appellant claimed that there was an error of law in the Tribunal's decision constituting jurisdictional error, and that there was procedural error in the Tribunal's decision constituting an absence of natural justice. Detailed particulars of these grounds were also provided. The Tribunal failed to comply with its obligation pursuant to s 424A of the Migration Act 1958 ("the Act "). 2. The Tribunal failed to comply with its obligation under s 424 of the Act . 3. The Tribunal did not take into account the reputation of his migration agent, who he claimed was Jack Meng, in rejecting the applicant's explanation for inconsistencies in his account of his claims. 4. The Tribunal was in breach of s 424A in relation to country information that it relied on. 5. The Tribunal failed to comply with s 425 of the Act because of the way the hearing was conducted. 6. In considering the issue of the applicant's departure from China, the Tribunal relied on independent country information. Presumably, it should not have done so. However, his Honour held that as the appellant had adopted the statement attached to his protection visa application for consideration by the Tribunal the information in that statement was information given by the appellant to the Tribunal and was accordingly exempted by s 424A(3)(b) of the Act . 14 In relation to the claims of breach of s 424 of the Act his Honour correctly held that there was no mandatory obligation upon the Tribunal to obtain further information under that provision. 15 His Honour then turned to the grounds relating to the appellant's migration agent. As his Honour correctly noted, the Tribunal did not accept the applicant's explanation that his migration agent had not included significant information which the appellant had given him, in the application to the Department. It found this explanation to be "simply not plausible". 16 His Honour also dealt with the alternative argument that the 'very bad reputation' of the migration agent, Mr Meng, whose registration as an agent had been cancelled gave rise to the plausible inference that he would have omitted crucial elements of the appellant's claims in his written statement. His Honour treated that as a ground of complaint that the Tribunal had failed to take into account a relevant consideration in making an assessment on the plausibility of the appellant's explanation. 17 However as his Honour identified there was no evidence before him that Mr Meng was the migration agent for the appellant at the time of his application for a protection visa or during the period in which that application was processed in the Minister's Department. Furthermore the relevant part of the application document disclosed that the appellant did not authorise anyone to act for him or to receive communications on his behalf. 18 When the appellant did finally appoint a migration agent to act for him, well after he had filed his application for review, it was not Mr Meng whom he appointed. Nor, when he changed agents, did he appoint Mr Meng. Before the Tribunal the appellant made no reference to Mr Meng. In any event, at its highest, the complaint of the appellant before the Tribunal concerning an unnamed migration agent was that he 'may not [be] as accurate and detailed as they should be'. Later he said he only suspected that his agent did not give enough information. 19 The Federal Magistrate considered the second claimed breach of s 424A(1) of the Act that country information was not put to the appellant. He held, correctly, that the country information fell within the exception set out in s 424A(3)(b). His Honour accepted that the Tribunal relied in part on the information that the appellant left China legally, that the information was provided in the protection visa application and that the appellant's reference in his review application to the statement in the protection visa application did not refer to that information. However, his Honour found the appellant did provide the information that he left China legally at the hearing before the Tribunal. The Tribunal had asked specific questions about the appellant leaving China legally and the appellant had answered those questions. He held that the appellant would have clearly understood the nature and importance of what he was saying and that he had not only acknowledged the information in his protection visa application but "volunteered" that information as to how he left legally. Accordingly he found that the information was excepted by s 424A(3)(b) of the Act . In so finding he considered relevant authority including particularly: NAZY v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 87 ALD 357; SZDPY v Minister for Immigration and Multicultural Affairs [2006] FCA 627 ; SZEEU v Minister for Immigration and Multicultural Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214. 20 The Federal Magistrate turned to the grounds regarding the conduct of the hearing. With reference to the transcript of the hearing, his Honour found that it did not provide any basis for the appellant's complaint that he was prevented from giving information nor was he interrupted and stopped by the Tribunal member. The appellant had claimed that the Tribunal member was ill which prevented the appellant from answering questions. Although his Honour noted that the Tribunal member had an ear infection at the time, his Honour found there was no medical condition which affected the Tribunal member and which caused the appellant to be reluctant in answering. 21 The Federal Magistrate had regard to a particular in the amended application which appeared to raise a ground that the Tribunal placed greater reliance on particular country information. However, reliance on country information was no error in itself and it was the role of the Tribunal to assign the weight of the evidence. 22 The Federal Magistrate found that the appellant's claim that the Tribunal did not assess his application "fairly and carefully" was not made out. The Federal Magistrate further found that the grounds and complaints which were set out in the appellant's application, the subsequent written submissions and the complaints made at the hearing did not reveal that the Tribunal had made any jurisdictional error. There was nothing, in the opinion of the Federal Magistrate, which indicated that the Tribunal did not give "a careful consideration to the (appellant's) claims and circumstances", against relevant standards of fairness or at general law. The Federal Magistrate ordered the application dismissed pursuant to r 44.12(1)(a) of the Federal Magistrates Court Rules 2001 (Cth) ("the Rules "). The appellant addressed the Federal Magistrate's finding that the information in the statement attached to the protection visa application was adopted by the review application. The appellant claimed that he did not give the information to the Tribunal but rather it was his migration agent and therefore fell outside of the exception in s 424A(3)(b) of the Act . The learned Federal Magistrate erred in law. The learned Federal Magistrate was wrong in finding that the Refugee Review Tribunal acted properly in its findings. Again, the key issue in my case, according to the Tribunal's decision, is regarding to my credibility, based on "substantial difference between claims made by" me in my original application to DIMIA and "those made to the Refugee Review Tribunal following DIMIA's refusal of" my application. The Tribunal believed that "It is simply not plausible that the Applicant's agent would omit the most crucial elements of his claims...". The Tribunal failed to comply with its obligation under s 424 and s 424A of the Act . As a matter of fact, the Tribunal should realize the substantial difference between claims in my original application to DIMIA and those made to the Refugee Review Tribunal as early as before the hearing. According to s 424 of the Act , the Tribunal may get any information that it considers relevant; particularly while the Tribunal has regarded to that information in making the decision on the review. If the Tribunal indeed cared about the "substantial difference", it should give me a chance to provide further information before the hearing. The Tribunal failed to comply with its obligation under Section 424A of the Act . The question is that my original application was prepared by Mr Jack MENG who was a migration agent with a very bad reputation and whose registration as a migration agent had even been cancelled by the MARA. Therefore, the issue that we are talking about in my case is definitely NOT the one that the applicant gave for the purpose of the application; but the one that Mr Meng gave for the purpose of the application! So, it is definitely the case that the Tribunal failed to comply with its obligations under s 424 and s 424A of the Act . Mr Meng was the person who acted on my behalf as a migration agent to prepare and lodge my protection visa application to the Department and to the Tribunal, which could be easily be evidenced. He emphasised that the adverse finding of credibility against him was the result of the failings of his migration agent Mr Jack Meng. 26 Because the appellant said that he had only received a copy of the first respondent's outline of submissions the night before the hearing I granted him an adjournment at the end of the hearing on 2 May in order, if he so wished, to make further submissions the following day. At the resumed hearing on 3 May the appellant made further submissions but these were merely argumentative concerning his disagreement with the Tribunal's findings of fact. These are generally taken from the filed written outline of submissions subject to amendments made by counsel during the hearing. It was open to the Tribunal to reach findings as to the appellant's credibility, this being a function of the primary decision-maker, for which detailed reasons need not be given. In fact reasons were given as to why the appellant was not believed on these matters. No error is apparent in these findings of the Tribunal. 30 Nicholls FM correctly held that s 424 did not impose upon the Tribunal a duty to obtain further information, evidence, argument or comment from the appellant. 31 Section 424(1) vests in the Tribunal a discretion as to whether in conducting the review it will get any information it considers relevant. The discretion may be exercised by inviting the applicant pursuant to s 424(2) and (3) to give additional information. The Tribunal only has a duty under s 424(1) to take into account additional information given by the applicant if it exercises its discretion in favour of getting information, and also decides to invite the applicant to give it. Further, the Tribunal has no duty under s 426(3) of the Act to obtain evidence upon receipt of a request by an applicant, nor any duty to issue a summons under s 427(3) of the Act . Whether evidence, argument or comment, as described by the appellant, would constitute "information" which would be capable of giving rise to the duty under s 424(1) does not in the circumstances arise. The information was that there was a substantial difference between the claims he made in his original application for a protection visa and those made to the Tribunal, and that it was not plausible that his agent would omit the most crucial elements of his claims. In his application for the protection visa the appellant claimed that after he reported corrupt dealings between his company and local government he was targeted by the local authorities, dismissed, denied employment opportunities, threatened anonymously and required to pay a higher school fee for his child. In his written submissions and oral evidence to the Tribunal he claimed that he was a key leader of an anti-government movement, spoke at protest meetings, organised other demobilised soldiers, was arrested after participating in a public sit-in protest, and was beaten and injured by police and released after 10 days. 33 Inferences which the Tribunal drew from the incompleteness of the information contained in the statement in the protection visa application were part of the subjective appraisals, thought processes and evaluative processes of the Tribunal. Since such processes do not amount to "information" for the purposes of s 424A , the duty of disclosure is not enlivened. 34 The first respondent accepts that the material in the protection visa application was "information" for the purposes of s 424A. The issue under s 424A in the present case is whether the appellant "gave" the information in his protection visa application to the Tribunal for the purposes of the review. 35 Nicholls FM was correct to conclude that the Tribunal did not breach s 424A of the Act . I submitted to the RRT the documents that I think would help to clarify things. . . It was information excluded from the duty under s 424A(1) because it fell within the exception in s 424A(3)(b). 37 The present case is on all fours with NBKT v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 195. The appellant in NBKT provided written submissions to the Tribunal in support of her application for review (which consisted in a letter from her advisers and a statement by herself), expanding upon the claims stated in her protection visa application and introducing further claims. In NBKT Young J (with whom Gyles and Stone JJ concurred) held that by filing written submissions with the Tribunal that expressly referred to and incorporated the statement of grounds which were attached to her visa application, the appellant invited the Tribunal to refer to her protection visa application. There was therefore little doubt that she intended the Tribunal to look at the visa application and its attachments. Young J held that this was a sufficient basis for the conclusion that the information was given by the appellant in that case for the purposes of the review and was excepted by s 424A(3)(b) from the duty of disclosure. 38 The appellant's statement in his application for review and in his written submissions indicate he intended the Tribunal to look at the visa application and the statement in it and to supplement that statement by reference to the application for review and written submissions. 39 Although it is not necessary in the present case in order to establish the application of s 424A(3)(b) , the answers given by the appellant in the course of the oral hearing before the Tribunal also rendered the protection visa application information which the appellant "gave" the Tribunal for the purposes of the review. The appellant gave oral testimony that the statement in the visa application might be inaccurate as well as incomplete. He said he had not read that statement. However he relied on his written submissions to correct the statement if it was inconsistent with the written submissions, and also sought to supplement the statement generally. This testimony also supports the inference that the appellant intended the written submissions to be read with the statement in the protection visa application. In SZDXA v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FMCA 842 an appeal determined in SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214 the appellant submitted that his statement, but not the balance of the visa application form or the copied pages of the passport, had been incorporated into the application for review by the Tribunal. The information critical to succeeding on the basis of non-compliance with s 424A was contained in the copied pages of the passport rather than in the statement. Moore J, with whom Weinberg J and Allsop J agreed, held that the appellant had not established the fact that the copies pages were not incorporated by having been enclosed with the application for review. Moore J also held that information about the appellant having a business visa and travelling for work interests fell within s 424A(3)(b) when that was information given by the appellant in evidence before the Tribunal. 40 The approach taken in SZEEU to the SZEEU appeal itself could be regarded as inconsistent, indicating that Moore J considered that an applicant's adoption at a Tribunal hearing of what is contained in his protection visa application does not transform its contents into information provided by the applicant in his application for review. In VWBF v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 851 Heerey J considered the SZDXA and SZEEU appeals and concluded that information is given for the purposes of s 424A(3)(b) if the application conveys to the Tribunal, whether in answer to a question posed by the Tribunal, or by volunteering the information to the Tribunal. Where an applicant says at the hearing that he relies on what was said in his protection visa application then what is in the protection visa application is information given for the purposes of the application for review, within s 424A(3)(b). 41 In NBKT Young J considered in obiter whether testimony at the Tribunal hearing was given by an applicant for the purposes of s 424A(3)(b) in circumstances where it consisted in responses to questions asked by the Tribunal member. Young J agreed with the approach taken by Heerey J in VWBF . 42 NBKT is Full Court authority that where an applicant adopts a protection visa application at a Tribunal hearing, whether by volunteering such adoption, or in answer to a question, the applicant gives the information in the protection visa application to the Tribunal. 44 For the reasons set out above the Tribunal did not have a duty to obtain evidence. There could be no non-compliance with s 424 of the Act in respect of the Tribunal's failure to obtain evidence from or about Mr Meng. The Tribunal found that the agent did not make a mistake, and in this context made an adverse finding as to the appellant's credibility. 46 Nicholls FM correctly held that if the appellant were claiming that the Tribunal failed to take into account a relevant consideration namely Mr Meng's notoriety, then that ground was not established. There was no evidence the appellant had authorised or otherwise appointed Mr Meng as his agent. Nor had the appellant put to the Tribunal that it should not take into account his statement in the protection visa application because Mr Meng included incorrect material. 47 The appellant now puts the case relating to Mr Meng as non-compliance with s 424A of the Act . Mr Meng's name does not appear in the transcript of the hearing before the Tribunal or in the Tribunal's reasons. There is no factual finding by the Federal Magistrates Court that Mr Meng was his agent when he completed the protection visa application. Indeed Nicholls FM noted that there was no evidence before him to support such a finding. Even if that fact had been established on the evidence, it was not information the Tribunal considered was a reason or a part of the reason for its decision to affirm the decision under review. The Tribunal concluded that the appellant was not credible for a number of reasons. The Tribunal was not prepared to accept that in the circumstances of the case any migration agent would have omitted the most crucial elements of a claim. 49 I am of the opinion that the appellant's express invitation to the Tribunal, in his application for review ("Section D --- Your reasons for making the application") to "Please read my statement submitted to the Immigration Department" constituted that statement in its entirety as "information" which the appellant "gave" for the purpose of his application. Accordingly s 424A(3)(b) of the Act had application: NBKT v Minister for Immigration and Multicultural and Indigenous Affairs at [63]. Furthermore his statement in his written submissions to the Tribunal, referred to above that he would like to provide further information, underlined his intention that the Tribunal should consider his earlier statement for the purposes of his application. 50 However, I am, in any event, of the opinion that the answers given by the appellant to the Tribunal concerning clarification of information given to the Minister in the course of its hearing, and to which the first respondent has pointed also enlivens the exception under s 424A(3)(b) of the Act : see NBKT v Minister for Immigration and Multicultural Affairs at [54]-[59]. These answers, in my opinion, disclose by inference that the appellant intended that the Tribunal should have regard to his statement in its entirety for the purposes of his application for a protection visa. 51 It may be that particulars numbers 4-10 in the appellant's notice of appeal amount to a contention that the exception under s 424A(3)(b) had no application because the information in his statement accompanying his application for a protection visa was not his information but that of Mr Jack Meng and therefore could not be information which he the appellant "gave" for the purposes of s 424A(3)(b). 52 Assuming that to be the force of those particulars I nonetheless reject that contention. It was not established in evidence that the visa application statement was not in effect the appellant's statement. Further and in any event for the reasons I have stated the appellant "gave" that statement to the Tribunal thus enlivening s 424A(3)(b) of the Act . In my opinion, even accepting, which I do not, that the statement was not the appellant's in the sense that it was incomplete, incorrect or both in whole or in part, is beside the point. Information which an applicant may give for the purposes of s 424A(3)(b) of the Act is not confined, in my opinion, to documents of which the applicant is the author. I am satisfied that no jurisdictional error has been established. I would dismiss the appeal. I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | appeal from decision of the federal magistrates court application for a protection visa whether breach of ss 424, 424a of migration act 1958 (cth) no point of principle. migration |
The respondents have done so, and these reasons deal with their application for costs. (b) An application pursuant to s 46PO(1) of the Human Rights and Equal Opportunity Act 1996 (Cth) ("the HREOC Act") alleging unlawful discrimination under the Racial Discrimination Act 1975 (Cth) ("the RD Act "). In their submissions on costs, the respondents assumed that the court still had before it two proceedings, one commenced under the WR Act , and the other commenced under the HREOC Act. With respect to the former, they sought to bring themselves within one or other, or both, of the exceptions for which s 170CS(1) of the WR Act provides. With respect to the latter, they submitted that, in the absence of statutory provision to the contrary, costs should follow the event in accordance with normal practice. 4 I accept that, before it was consolidated with the proceeding under the WR Act , the proceeding under the HREOC Act was a separate proceeding to which s 170CS(1) had no application. The respondents were wholly successful in their defence to the applicant's claims under the HREOC Act, and nothing has been put to me by the applicant in opposition to the respondents' submission that costs should follow the event. At least until the consolidation of the two proceedings, therefore, the respondents should have their costs of the proceeding under the HREOC Act (save, of course, to the extent that I decide otherwise in particular respects dealt with below). 5 The position subsequent to consolidation is more problematic. Once the two proceedings were consolidated, there was one proceeding only before the court. Was that a proceeding "under s 170CP" within the meaning of s 170CS(1) of the WR Act ? On one view, the proceeding, after consolidation, was "under" the WR Act and also "under" the HREOC Act. The fact that the proceeding was under both Acts would seem to mean, at least grammatically, that it was under each. If this approach is correct, s 170CS of the WR Act would apply to the proceeding after consolidation. But is this approach correct? 6 Where a proceeding involves claims in the accrued jurisdiction of the court, as well as claims under s 170CP of the WR Act , s 170CS will apply to the whole proceeding, including to claims of the former kind: Goldman Sachs JBWere Services Pty Ltd v Nikolich [2007] FCAFC 120. However, Goldman Sachs stands on a line of jurisprudence which, at least on one view of the matter, depends substantially upon the conclusion that claims in the accrued jurisdiction are properly brought before the court because they fall within the same "matter" (in the Chapter III sense) as the claims arising under the WR Act . Relevantly to the question of costs, Goldman Sachs was not concerned with claims brought under different federal statutes, where the jurisdiction of the court to hear each of them did not depend upon the existence of jurisdiction to hear the other. 7 The question of costs where separate federal statutory claims, including claims arising under the WR Act , are combined in a single proceeding was considered by Gyles J in Seven Network (Operations) Limited v Media Entertainment and Arts Alliance [2004] FCA 637 ; (2004) 148 FCR 145. A proceeding was commenced under the WR Act , and was subsequently amended to allege also contraventions of the Privacy Act 1988 (Cth) and of the Copyright Act 1968 (Cth). The claims under the WR Act were dismissed, but those under the other legislation were upheld. The unsuccessful respondents submitted that they were protected from the making of any costs order because of the operation of s 347 of the WR Act . Gyles J rejected that submission. His Honour thought it difficult to see why a discrete federal claim that was pursued in the same proceeding as a claim under the WR Act should be affected by being caught up with that latter claim, even if arising out of the same "general course of events" (148 FCR at 169). I am not concerned with the accrued or associated jurisdiction. Thus, the claims for breach of the Copyright Act and breach of the Privacy Act are not caught by s 347. As I mentioned in my judgment in Goldman Sachs ([2007] FCAFC 120 at [375]), Moore J drew attention to the significance of the reference to "a proceeding" in s 347. There is an argument that, by reason of that reference, s 170CS operates in the same way as s 347, notwithstanding the absence of any reference to "a matter arising" in the former. Indeed, in Goldman Sachs itself, the Chief Justice concluded that s 170CS should be given the same operation as s 347 (at [94]). My own conclusion was effectively the same (at [380]). Marshall J decided the question without the need to consider the jurisprudence which had developed under s 347 (see [164]). 8 Accepting as I do that there is no presently relevant distinction between the approach to be taken under s 170CS and that which has been taken under s 347, it is, I consider, significant that Seven Network is, so far as my researches have disclosed, the only occasion upon which the court has decided a costs application by reference to the fact that the proceeding involved claims arising under different federal statutes, one of which was the WR Act . For that reason, Seven Network is specifically on point in the present circumstances. I should follow the judgment of Gyles J unless I am persuaded that it was plainly wrong: see Cooper v Commissioner of Taxation [2004] FCA 1063 ; (2004) 139 FCR 205, [46]; Minister for Immigration and Multicultural and Indigenous Affairs v SZANS [2005] FCAFC 41 ; (2005) 141 FCR 586, [38]. It suggests that the error must be manifest or, if it does not rise to that level, at least capable of being easily demonstrated. In a sense, the error must be so clear as to enable a later court to say that the point is not reasonably arguable. If there is to be a departure from the approach taken by Gyles J in that case, that step must, in my view, be taken by a Full Court. 9 It follows that, as successful parties, the respondents are entitled to their costs, to the extent that they relate to so much of the proceeding as involved claims under the HREOC Act, for the period subsequent to, no less than for the period before, the consolidation of the two original proceedings. That conclusion gives rise to the problem of identifying which part of the respondents' costs subsequent to consolidation was referable to the proceeding originally commenced under the HREOC Act. That problem presents itself in two ways. First, there were two Notices of Motion given by the applicant before, but dealt with by the court after, the consolidation. Secondly, there is the question of the allocation of the respondents' costs where those costs have not obviously been incurred in connection with one or other of the original proceedings. That Justice Gray resigns from this case. 2. That new parties be added to the proceedings. 3. That these proceedings be joined with proceedings under the HREOCA 1986 [sic --- should be a reference to the WR Act ]. 4. That Defendants produce all documents (including computer records from 2005) and reveal their Advisers and informants before the date for trial can be set up. By then, the proceeding which commenced before Gray J under the WR Act had been re-allocated within the court, for reasons unconnected with the applicant's Notice of Motion. Further, the proceeding commenced under the HREOC Act had been consolidated with that commenced under the WR Act . In the circumstances, of the claims set out in the Notice of Motion, those in pars 2 and 4 only were dealt with by the court on 23 February 2007. Those claims were dismissed, with costs reserved. 11 Following Seven Network as I do, I should treat the applicant's Notice of Motion of 22 September 2006 as a proceeding within the four corners of the original proceeding under the HREOC Act. I shall proceed to consider the respondents' entitlement to costs according to ordinary principles. 12 The relief sought in par 4 of the Notice of Motion dated 22 September 2006 was dealt with as follows. First, the claim that the respondents produce all their documents was resolved upon the respondents' undertaking to deliver to the registry of the court each of the documents referred to in Part 1 of Schedule 1 in their List of Documents in the week before the commencement of the trial. The respondents had intended to bring their discovered documents to court on the first day of the trial, and they readily accepted a proposal whereby they would deliver the documents to the registry slightly in advance of the trial. Secondly, the applicant's claims (insofar as they related to documents) also became, in effect, objections to the adequacy of the respondents' discovery, to the integrity of their conduct of the inspection of documents, and to the respondents' claims for privilege in various respects. I ruled against each of these claims. In essence, I was unable to discern any legitimate ground upon which the respondents' discovery had been deficient, their offering of documents for inspection had involved misconduct, or their claims for privilege were misconceived. However, one of the documents which the applicant identified as not having been discovered was what she described as a "daily record book". On 23 February 2007, there was no evidence before the court such as would cast doubt upon the respondents' verified list in this respect. But at trial it emerged that there was such a book, described by the respondents as an "observation book". Counsel for the respondents then offered no resistance to the suggestion that this book ought to have been discovered. In the circumstances, and with the benefit of hindsight, it seems that there was substance in this aspect of the applicant's Notice of Motion dated 22 September 2006. Thirdly, it appeared that the "computer records" to which the applicant referred were documents of a technical nature, the existence and contents of which (if they existed at all) were unrevealed by any evidence which the applicant placed before the court. As a result, I did not grant that aspect of her motion. Fourthly, save as a dimension of her claim for better discovery, the applicant did not make any intelligible submission in support of her claim that the respondents "reveal their advisers and informants". I dealt with that claim as though it was part of the discovery aspect of the motion, and dismissed it. 13 Although the applicant was unsuccessful under par 4 of her Notice of Motion dated 22 September 2006, in one quite significant respect subsequent events established that the applicant had a point of substance about the respondents' discovery which should have prevailed when the Notice of Motion came on for hearing. I consider it appropriate to make some allowance for that circumstance when considering the respondents' application for their costs of this Notice of Motion. I think that the costs to which the respondents would otherwise be entitled in relation to their success under par 4 of the notice should be reduced by one-half. 14 Turning to par 2 of the Notice of Motion of 22 September 2006, the parties whom the applicant then sought to be added were the Commonwealth Minister for Employment and Workplace Relations, the Commonwealth Department of Employment and Workplace Relations, and the Victorian Minister for Human Services. I held that none of those parties could have been joined to the proceeding as a direct respondent to the claims made by the applicant. That left the question arising under O 6 r 8(1)(a) of the Federal Court Rules , namely, whether any or all of those parties was, or were, necessary to be joined to ensure that all matters in dispute might be effectually and completely determined and adjudicated upon. Manifestly, propositions of this kind would not sustain the joinder of a Minister of the Crown to the consolidated proceeding, in either or both of its aspects. Indeed, had the Minister originally been joined for these reasons only (and ignoring for the moment the technical incompetence of any such joinder) the joinder would, I consider, most probably have been set aside as an abuse of process. The first related to the Minister's general responsibility for publicly funded child care centres, and to the prospect that the Minister might have documents which were relevant in the proceeding. As to that ground, I said that an attempt to introduce such matters as the policies and practices followed by the Minister "could have a tendency diametrically opposed to that referred to in par (b) of r 8(1) of O 6". I also pointed out that the joinder of the Minister would be unnecessary for the applicant to exercise such rights as she had as a party to the proceeding to require the Minister to produce documents under subpoena. I also rejected the applicant's suggestion that the Minister's joinder was necessary because of what was said to be her capacity to give directions for the supervision of employees. I was not persuaded that any issue raised in the proceeding would require the investigation of such matters. That is to say, no relief could have been sought against her (and, as it happens, none was). I accept that this consideration may not always be dispositive in an application under par (b) of r 8(1) of O 6, but it would, I consider, be a most unusual case in which the court took the view that it was necessary to join a new party as a respondent in order to determine, effectively and completely, the matters in dispute when no relief could have been, or could now be, sought against that party. In my view the present is a long way from being such an unusual case. Unrepresented though she was, it should have been obvious to the applicant that the addition of those parties would have made no contribution to the fair and efficient hearing and determination of her claims. She was quite unable to propound any intelligible basis upon which it could be otherwise. It follows that the respondents should have their costs to the extent that they were referable to par 2 of the Notice of Motion. 16 Taking into account each of the matters I have decided in relation to the applicant's Notice of Motion dated 22 September 2006, I propose to order that the applicant pay three-quarters of the respondents' costs of that notice. It transpired that there may have been, perhaps, some confusion in the mind of the applicant as to the necessity for this Notice of Motion. As she explained to the court on 7 February 2007, the notice was intended to address a circumstance in which additional parties had been added to the proceeding. When the Notice of Motion came before the court, there had been no such parties added, and I took the view that it was appropriate to dismiss the Motion, upon the basis that, if subsequently new parties were added to the proceeding, the applicant, as with any party, was at liberty to seek leave to issue subpoenas to improve her evidentiary case. In the circumstances, the appropriate course would be to give the respondents their costs of the motion. 18 That leaves the allocation of the respondents' post-consolidation costs, to the extent that those costs are not otherwise specifically dealt with below. 19 I could take the course of making a costs order which would leave it to the taxing officer to identify what costs the respondents incurred in relation to the HREOC Act claims, as distinct from the WR Act claims. However, given the relatively narrow compass of the facts of the case, I am reluctant to oblige the parties to undertake further, potentially costly, procedures, where a simpler, if less precise, formula would be adequate. From my observation, the issues which occupied the parties both at trial and during the interlocutory stages of the proceeding were either wholly undifferentiated as between the two statutory bases of jurisdiction, or about equally referable to each. In all the circumstances, I think that justice would be done, and that the true costs of the respondents with respect to the HREOC Act claims would be reflected, fairly albeit approximately, if I were to give them half their costs incurred subsequent to the consolidation of the proceedings. 20 As I mentioned at the outset, the respondents also seek to avail themselves of the exceptions for which s 170CS(1) of the WR Act provides. They say first that the whole proceeding under the WR Act was commenced vexatiously or without reasonable cause. I cannot accept that submission. Most obviously, the applicant succeeded on her claim for defamation, being one of the matters referred to in her application in the original WR Act proceeding. As I understand the operation of ss 170CS and 347 of the WR Act , it is only where a whole proceeding is commenced vexatiously or without reasonable cause that the embargo on costs for which they provide may be lifted. It is not sufficient that one, some, or even most, of the claims in such a proceeding are made vexatiously or without reasonable cause. Once it is accepted that s 170CS applies to claims in the accrued jurisdiction, it necessarily follows that the success of any such claim makes it impossible to contend that the proceeding as a whole was brought vexatiously or without reasonable cause. 21 The respondents rely also on par (b) of a 170CS(1) of the WR Act . In this respect they seek to identify a number of aspects of the applicant's conduct of the proceeding which constituted, or involved, unreasonable acts or omissions on her part. Counsel for the respondents M.G. McKenney stand down from representing respondents in this matter due to a conflict of interest. 2. The respondents are given warning in relation to the contempt of the court. 3. The jurisdiction of the court be extended to include criminal jurisdiction and defamation law. I shall not elaborate upon the matters covered by those reasons, since I take the view that this Notice of Motion was an obvious instance of an unreasonable act on the part of the applicant. The bases upon which the applicant sought to achieve the relief set out in her Notice of Motion were misconceived in point of principle and without merit in point of fact. Lest there be any misunderstanding, I make it clear that there was nothing in the circumstances of the present case, or of the defence of the applicant's claims by the practitioners engaged by the respondents, which would even remotely justify the unusual, serious and almost bizarre forms of relief which the applicant sought in this Notice of Motion. From my observation, there was nothing that would suggest that the respondents' legal representatives were conducting themselves other than in accordance with their professional responsibilities. It was, in my view, quite inappropriate for the applicant to have made serious accusations of the kind which were implicit in this Notice of Motion. The Notice of Motion was, I consider, an unreasonable act within the terms of s 170CS(1)(b) of the WR Act . I note that, while claiming their costs in relation to this Notice of Motion, the respondents did not submit that those costs should be taxed other than as between party and party. Direction Hearing scheduled for 23 February 2006 is adjourned to a date to be fixed. 2. Justice Jessup stands down from hearing the matter No: VID 114/2006. I have already dealt with the costs of that Notice of Motion, and I am not disposed to treat the applicant's (unsuccessful) application for an adjournment as though it were a separate, free-standing, event within the proceeding. The matter was listed for 23 February in any event, and there is no basis upon which I should infer, and the respondents have not asserted, that their costs were increased only as a result of the applicant's application for an adjournment. 24 I am disposed to take the same approach to the second paragraph in the Notice of Motion of 22 February 2007. On the question whether I should stand down from further hearing the matter, counsel for the respondents said no more (on 23 February) than that he had heard nothing from the applicant by way of evidentiary support for the assertion implicit in that paragraph. He submitted that the court ought not to be deterred from proceeding to deal with the Notice of Motion (of 22 September) merely on the basis of such an assertion. The hearing on 23 February ran from 9.14am until 1.29pm, and, although it is possible that the respondents' costs were somewhat inflated by the need to consider the applicant's Notice of Motion dated on 22 February, they have put nothing before me in that respect. In the circumstances, I do not propose to exercise a separate discretion on the matter of costs referable specifically to the applicant's Notice of Motion of 22 February 2007. 25 The respondents also submitted that certain steps taken by the applicant towards the end of the trial amounted to unreasonable acts on her part. After the closure of the respondents' evidentiary case, the applicant indicated that she desired to reopen her case for the purpose of calling a witness whom she had anticipated would be called, but who was not called, by the respondents, Ms Aileen Brown. It appeared that the applicant did not then know the whereabouts of Ms Brown, but sought an opportunity to attempt to locate her, and then to lead evidence from her. The applicant also informed me that she had, and proposed to call if given leave, evidence which would show beyond doubt that important evidence given on behalf of the respondents had been false. In the circumstances, I gave the applicant leave to re-open her evidentiary case for the purpose only of leading evidence from Ms Brown, I made certain directions for the filing and service of a summary of the evidence which would be given by Ms Brown, and I required the applicant to file a further affidavit, or affidavits, setting out her "direct and admissible evidence demonstrating the manifest falsity of any evidence heretofore given in this proceeding" as a condition to my preparedness to entertain an application from her to re-open her evidentiary case for the purpose of leading such direct and admissible evidence. 26 On the resumption of the trial about four weeks later, the applicant sought to rely upon a lengthy affidavit as containing direct and admissible evidence of the manifest falsity of evidence previously given on behalf of the respondents. The affidavit did no such thing, and I declined the applicant leave to re-open her case upon that ground. At that time, it was also apparent that the applicant had been unable to contact Ms Brown, and had no way of calling her to give evidence in the case. However, the respondents had filed an affidavit, sworn by the first respondent, deposing as to his attempts to find Ms Brown at the address previously known to the fourth respondent (as to which see par 16 of my judgment given on 15 August 2007). Counsel for the respondents subsequently relied upon that affidavit for the purposes of avoiding the application of the so-called rule in Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298. In consequence of the filing and service of that affidavit, I made directions the effect of which was to give the applicant a further opportunity, using the information disclosed in the affidavit, to contact Ms Brown. As events transpired, however, the applicant was not able to contact Ms Brown, and there was no further hearing of the proceeding before the date fixed for final submissions. 27 As I set out in my reasons for judgment of 24 May 2007, the applicant used the listing of the matter on that day to attempt to have the court deal with a wide range of matters which were outside the limited purposes for which, pursuant to directions given on 27 April 2007, the proceeding was listed on that day. Those matters were not the subject of any Notice of Motion served on the respondents. Although I dealt with those matters on 24 May, the respondents and their legal representatives were, in effect, spectators to the applicant's application in relevant respects. 28 The respondents have sought to rely upon steps taken, or attempted to be taken, by the applicant on 24 May 2007 as constituting unreasonable acts for the purposes of s 170CS(1)(b) of the WR Act . I do not accept the respondents' submissions in relevant respects. Although one might have grounds for scepticism, I am prepared to take the applicant's indication that she expected Ms Brown to be called by the respondents at face value (notwithstanding that that circumstance became apparent to her as early as about 17 April 2007). I think I should treat the applicant's indication that she desired to make further attempts to contact Ms Brown as given in good faith. To that extent, I could not hold that the necessity to list the trial for hearing on 24 May 2007 resulted from an unreasonable act or omission on the part of the applicant. I would be somewhat more critical of the applicant in relation to her ostensible attempts to demonstrate the falsity of the respondents' evidence, but the nature of her affidavit was such as to require no response from the respondents, and the hearing was listed on 24 May (against the possibility that Ms Brown might become available) in any event. Although I would have little hesitation in describing the applicant's attempts to make a range of other applications on 24 May as unreasonable, the only relevant impact upon the respondents was that their legal representatives were obliged to listen patiently in court while the applicant sought unsuccessfully to prevail upon me to entertain those applications. 29 For the reasons given above, I take the view that the acts and omissions of the applicant, to the extent that they related to the hearing on 24 May 2007, were either not unreasonable or were not such as would have visited any additional costs upon the respondents. For that reason, I propose to make no order with respect to the respondents' costs of that day under the exception for which s 170CS(1)(b) of the WR Act provides. 30 Finally, the respondents submitted that the way in which the applicant conducted her case in court was generally such as involved a prolongation of the proceedings, and caused the respondents to incur costs as a result. They pointed particularly to the applicant's cross-examination of their own witnesses. In these respects, the respondents are, in my view, entering rather murky waters. Only in a very clear case should the court be astute to characterise the general conduct of a witness trial as involving unreasonable acts on the part of a party. I agree that the applicant's conduct of her own case was inefficient, and that she devoted considerable time to pressing the respondents' witnesses for answers to questions which, if barely relevant, were not obviously calculated to advance her own case or to destroy that of the respondents. As against that, however, as will be apparent from my reasons for judgment given on 15 August 2007, there were very substantial gaps in the applicant's evidentiary case, and many areas with which she could have, probably should have, but did not, deal in cross-examination of the respondents' witnesses. That is to say, although I would accept that, objectively, a deal of time might have been wasted by the applicant in the conduct of her own evidentiary case, and in the testing of the respondents' case, I think it probable that a competently conducted, thorough, case on behalf of the applicant would have taken about the same time. That is because of the very wide range of issues which the applicant sought to agitate in the consolidated proceeding. In all the circumstances, I am not persuaded that I should delve into the day-by-day and hour-by-hour conduct of the trial with a view to ascertaining the extent, if any, to which the respondents' costs were increased as a result of unreasonable acts or omissions on the part of the applicant. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup. | consolidated proceeding involving claims under different federal statutes one statute containing prohibition upon award of costs whether costs available to extent of claims made under other statute. statute containing prohibition upon costs unless proceeding instituted vexatiously or without reasonable cause proceeding included claims in accrued jurisdiction judgment for applicant on one only of many claims in accrued jurisdiction whether proceeding instituted vexatiously or without reasonable cause. whether party's costs incurred because of unreasonable act or omission of other party. costs costs costs |
By a decision dated 2 February 2004 the Tribunal had affirmed a decision of a delegate of the first respondent to refuse to grant the appellant a protection visa. 2 The appellant is a Jordanian citizen. He claimed to have been socially and economically disadvantaged in Jordan because he comes from a small tribe. He undertook tertiary study in Iraq and claimed that whilst there he developed his political consciousness through involvement with a union for Jordanian and Arab students and spoke out against the Jordanian government. As a consequence, as he asserted, he had been questioned by Jordanian intelligence officers on a number of occasions and ultimately detained for a week and beaten during interrogation. 3 Additionally the appellant claimed that after completing his tertiary studies he was unable to find a job in Jordan. He obtained work in Saudi Arabia but returned to Jordan after 10 months because of seriously adverse working conditions. Thereafter he applied for, and was granted, as he claimed with the help of a high ranking intelligence officer, a student visa to study in Australia. After being unable to continue his studies in Australia he applied for a protection visa. He did so and had the assistance of an interpreter at the hearing. The Tribunal considered that the appellant's fundamental claims were credible but considered that the appellant had invented or exaggerated some aspects of his claims. 5 In relation to the appellant's claim that he had been questioned each time he returned to Jordan from Iraq, and during the time he was looking for work, the Tribunal considered that whilst repeated questioning may amount to serious harassment, the Jordanian authorities had a legitimate interest in the appellant's activities because he had spent time in Iraq and Saudi Arabia. However, the Tribunal found that the conduct of the Jordanian authorities constituted persecution for reason of imputed political opinion when they detained the appellant for several days in 1996 and subjected him to physical mistreatment. 6 The Tribunal did not accept the appellant's claim that the intelligence services obstructed his attempts to obtain employment. The Tribunal noted that during the hearing, the appellant had confirmed country information that the employment situation was difficult generally in Jordan, and noted that the appellant did manage to find employment both in Jordan and Saudi Arabia. 7 The Tribunal concluded that there was not a real chance of the appellant being persecuted if he returned to Jordan. It noted that the evidence indicated that the Jordanian authorities had showed decreasing interest in him after his detention in 1996. It observed that the appellant had returned to Jordan of his own accord after working in Saudi Arabia. The Tribunal rejected the appellant's evidence that he had obtained his passport and visa illegally and noted that the appellant had not lodged his protection visa application for two years after arriving in Australia. 8 As noted above, the Tribunal affirmed the decision not to grant the appellant a protection visa. The appellant also claimed that there was a failure to comply with s 424A of the Migration Act 1958 (Cth). At the hearing the appellant further claimed that the Tribunal's decision was unfair because it was made 'too early' , and that the Tribunal had therefore not fully listened to nor appreciated various points he had raised. 10 The Federal Magistrate was not satisfied that the appellant had not been given an opportunity to provide details about his employment in Jordan and Saudi Arabia, nor that the Tribunal ignored the appellant's claim that the employment he was able to get was not commensurate with his qualifications. His Honour concluded that the findings the Tribunal made in relation to the appellant's employment were open to it on the evidence. The Federal Magistrate noted that there was nothing in the Tribunal's reasons to indicate how s 424A might have been enlivened. His Honour treated the appellant's complaint that the Tribunal had reached a decision too early as a complaint that the Tribunal had a closed mind. His Honour held that an objective bystander observing the Tribunal proceeding would not have 'formed any such apprehension' , and that the Tribunal's reasons do not provide any evidence that the Tribunal had a closed mind. The appellant did not comply with a direction made by a Registrar that he file and serve a draft notice of appeal setting out particularised grounds of appeal. 12 When the appeal was first called for hearing the appellant handed to the Court written submissions which he said had been prepared for him by a lawyer. The content and language of the written submissions are consistent with their having been prepared by a lawyer notwithstanding that they contain the assertion 'I have been unable to obtain legal assistance' and are signed by the appellant personally. For the reason which I gave in NADG of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCA 893 at [8] - [11] , I consider that if the written submissions were prepared by a lawyer they should have been signed by that lawyer. 13 The written submissions identify three purported errors said to affect the judgment of the Federal Magistrates Court. As the first respondent's legal representative had received no notice of the appellant's intention to rely on these purported errors it was necessary to adjourn the appeal hearing. The first respondent's solicitors thereafter filed written submissions in response to those handed to the Court by the appellant. 14 When the hearing of the appeal resumed the appellant was represented by counsel --- but his counsel was not the person who had prepared his written submissions. 15 While not abandoning reliance on the written submissions, the appellant's counsel did not seek to address the Court in support of them. Rather he indicated that he had only shortly before the resumed hearing received instructions from the appellant which, if substantiated, might suggest that the appellant ought to have advanced a sur place claim to be entitled to a protection visa before the Tribunal. He sought leave to read an affidavit sworn by the appellant on 29 August 2006. The first respondent opposed the grant of leave. I deferred ruling on the admissibility of the evidence set out in the affidavit. In approximately August 2003 (ie well before the Tribunal hearing) the appellant approached the Jordanian Embassy in Canberra to seek the renewal of his passport which had expired on 25 July 2003. An embassy official noted that his student visa had expired and asked what sort of visa he was on. The appellant feared that if he disclosed that he held a bridging visa pending determination of his claim to be entitled to a protection visa he might experience persecution for his presumed political affiliations if he were required to return to Jordan. The appellant's fear was at least partly based on his belief that one of his friends who unsuccessfully applied for an Australian protection visa had been arrested and detained when he returned to Jordan for having criticised the Jordanian government while he was in Australia. The appellant thereafter asked a friend who was travelling to Jordan to take his passport to his brother in Jordan. He contacted his brother and asked him to arrange for the issue of a replacement passport. His brother did as requested with the result that the appellant's original passport, which shows his departure from Jordan and entry into Australia, was cancelled and his new passport contains no indication that he ever left Jordan or lawfully entered Australia. 17 While counsel for the appellant invited the Court to allow the appeal for the purpose of allowing the appellant to advance a sur place claim to the Tribunal based on his unwise conduct with respect to his passport, he was unable to support the invitation by reference to authority. The appellant was granted leave to file supplementary written submissions. It was at the heart of the appellant's claim to be entitled to a protection visa that he was unable or, owing to a well-founded fear of being persecuted, was unwilling to avail himself of diplomatic or consular protection extended by Jordan to its nationals in Australia ( Minister for Immigration & Multicultural Affairs v Khawar [2002] HCA 14 ; (2002) 210 CLR 1 at [17] - [21] ). In the circumstances, unless advised to the contrary, the Tribunal might reasonably regard it as unlikely that the appellant had approached or would approach the Jordanian Embassy for any reason. 20 It is also understandable that the appellant's supplementary submissions do not suggest that the Tribunal knew, or ought to have known, that he had arranged, or would arrange, to obtain a new Jordanian passport issued in Jordan at a time when he was in Australia. The appellant accepts that it was unwise and foolish for him to have taken this step. 21 The fresh grounds of appeal upon which the appellant's supplementary submissions indicate that he wishes to rely are all dependent on the contention that the decision of the Tribunal is affected by error because it failed of its own motion to investigate whether the expiry of the appellant's travel documents meant that the appellant had a well-founded fear of persecution for reason of political opinion in Jordan. 22 The first obstacle in the way of the appellant relying on these fresh grounds of appeal is that he did not rely on them before the Federal Magistrates Court. Leave is required to argue on appeal an issue not raised below. The Court must be satisfied that it is expedient in the interests of justice for the issue to be raised for the first time on appeal ( SLMB v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 129). Neither the supplementary submissions of the appellant nor his affidavit address this issue. In particular they provide no explanation of why the appellant did not tell either the Tribunal or the Federal Magistrates Court of his belief concerning the experience of his friend on return to Jordan and of his own fear of experiencing persecution in Jordan because of his claim for a protection visa (see [16] above). His contention that a Jordanian citizen who returns to that country after unsuccessfully seeking an Australian protection visa faces a real risk of persecution for reason of imputed political belief does not, it seems, depend upon the expiry of travel documentation. He has not suggested that his friend's passport had expired. Revelation of what the appellant believes happened to his friend would not have required disclosure of the appellant's unwise conduct concerning his own passport. 23 An important aspect of the inquiry as to whether it would be expedient in the interests of justice to allow the appellant to raise before this Court an issue not raised before the Federal Magistrates Court is the apparent merit of the issue. The appellant placed reliance on the High Court decisions in Pyrenees Shire Council v Day [1998] HCA 3 ; (1998) 192 CLR 330 and Crimmins v Stevedoring Industry Finance Committee [1999] HCA 59 ; (1999) 167 ALR 1. These cases concerned the law of negligence; it was in that private law context that the High Court gave consideration in each case to whether an affirmative common law duty of care required a statutory or public authority to exercise a power. The present case by contrast concerns public law principles of judicial review. 24 The authorities reveal that an applicant for a protection visa must advance whatever evidence or arguments he or she wishes to rely on in support of his or her claim for a protection visa ( Abebe v The Commonwealth [1999] HCA 14 ; (1999) 197 CLR 510 at [189] ; NARE of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 135 at [15] ). It is no part of the duty of the decision-maker to make the applicant's case for him. It is not enough that the court find that the sounder course would have been to make inquiries. If he feared that he would be persecuted in Jordan for reasons of imputed political belief because he had sought asylum in Australia, he was required to place the Tribunal on notice of this. The Tribunal was not under a duty to make a case for him. 26 It would not be appropriate to grant the appellant leave to raise the issue simply because, as he contended, it would be just to allow him to do so (see NARE of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs at [16]). The decision of the Tribunal may only be set aside for jurisdictional error. The Tribunal did not make a jurisdictional error by failing to consider a claim which the appellant did not make. 27 In all of the circumstances I conclude that the appellant should not be granted leave to raise before this Court the issue of whether the Tribunal was under a duty to make enquiries about whether the expiry of the appellant's passport was likely to lead to a chain of events resulting in his being persecuted for reasons of imputed political opinion should he return to Jordan. The affidavit of the appellant is therefore not admissible as its contents are irrelevant to any issue to be determined on this appeal (see [15] above). 28 I turn, then, to the original written submissions of the appellant. The Minister has submitted that the appellant did not advance a claim to fear persecution on the basis of membership of any relevant social group and thus the Tribunal was not required to consider any such claim. Certainly the appellant did little more than hint at such a claim; he made no real effort to substantiate it. 30 However, it seems to me that on a fair reading of the Tribunal's reasons for decision, the Tribunal did in fact rule out the possibility of the appellant having a well-founded fear of persecution in Jordan for any Convention reason, including his membership of a small tribe. The Tribunal noted that the appellant had not experienced persecution since 1996, that he had returned to Jordan from Saudi Arabia of his own accord because of poor wages and working conditions there and that he did not lodge a claim for a protection visa for two years after his arrival in Australia. The Tribunal further noted that much of the appellant's evidence suggested that his purpose in coming to Australia was to obtain a better (I interpolate, as opposed to a safer) life for himself. I infer that the Tribunal concluded that the appellant does not have a well-founded, or indeed any, fear of being persecuted in Jordan because of his membership of a small tribe. The appellant has not identified the information which he claims that the Tribunal considered would be the reason, or a part of the reason, for affirming the decision under review of which he should have been provided particulars. His written submissions refer to the Tribunal's finding that he exaggerated his claims. The appellant gave detailed answers to the Tribunal concerning virtually all material aspects of his claim. I am not satisfied that the Tribunal's reference to 'exaggeration' is not a reflection on that evidence. If I am wrong in this regard, I note that the appellant expressly requested the Tribunal to refer to his original statement. While I doubt that every reference by an appellant to his or her original statement gives that statement the character of information that the appellant gave for the purpose of the application within the meaning of s 424A(3)(b) of the Act, in this case I consider that the appellant did provide to the Tribunal the information in his original statement within the meaning of the subsection, with the consequence that the Tribunal was relieved of its obligations under s 424A(1). I accept the submission of the first respondent that the Tribunal did consider the risk that the appellant might be persecuted in the future if he returned to Jordan. The appellant did not claim that he would engage in political activity in Jordan or that he feared being imputed with a political opinion as a result of his residence in Australia. I am not satisfied that any error attends this aspect of the reasons for decision of the Tribunal. | whether tribunal failed to consider aspect of appellant's claim whether tribunal failed to comply with obligations under s 424a of the act whether exception in s 424a(3)(b) applied where appellant referred tribunal to his original statement whether tribunal erred in failing to consider risk of renewed persecution if appellant resumed political opposition should he return to jordan held: no error on part of tribunal appellant seeking to raise new issue not relied on before court below so as to advance sur place claim to the tribunal expiry of appellant's passport while in australia awaiting determination of application for protection visa whether tribunal had a duty to investigate whether expiry of passport would lead to chain of events resulting in persecution of appellant should he return to jordan held: leave to raise this ground of appeal not granted as not relied on before court below grounds of appeal not relied on before court below whether leave to raise new grounds of appeal should be granted whether expedient in the interests of justice consideration of merits of new grounds of appeal held: leave to raise new grounds of appeal refused migration migration practice and procedure |
With the consent of the parties, these two proceedings have been heard together. By agreement, evidence in one is taken to be evidence in the other. 2 VID 439 of 2003 ("the Pharmacia Proceeding") concerns the scope of the final injunction to be granted and, in particular, its duration, in a matter that was heard by Crennan J: Pharmacia Italia SpA v Mayne Pharma Pty Ltd (2005) 222 ALR 552 ("the Pharmacia Infringement Proceeding"). Her Honour found that Mayne Pharma Pty Ltd and the Faulding Co respondents ("Mayne") had infringed Pharmacia Italia SpA's ("Pharmacia") patent, Australian patent no. 598197 ("the Patent"). The injunction that she granted on 8 September 2005 restrains Mayne from infringing certain claims of the Patent until 19 June 2006, the end of the original term of the Patent, or until "such later date as the Court may hereafter order". Mayne objects to any further order being made that would extend the term of that injunction, namely to cover the period of the Patent's extension from 19 June 2006 to 19 June 2011. Interpharma has also applied to the Court for rectification of the Register of Patents pursuant to s 192 of the Patents Act 1990 (Cth) ("the Patents Act "). The basis of that claim is that the Register erroneously records the Patent as having been extended to 19 June 2011. 5 In addition to the substantive matters raised by the application for judicial review, there is an issue regarding Interpharma's delay in having commenced that proceeding. 6 The Pharmacia Infringement Proceeding raises the issue of what rights a patentee has during the term of an extension, pursuant to s 78(1)(b)(i) of the Patents Act , and therefore what timeframe the final injunction in that proceeding should have. The Interpharma Review Proceeding raises the issue of whether the decisions leading up to, and including, the decision to grant an extension, were lawfully made under s 70(2)(a) of the Patents Act . 7 Both these issues are to be resolved by answering the same question: is claim 1 of the claims of the Patent correctly characterised as a "pharmaceutical substance per se "? Or does claim 1 involve elements of process or method that take it outside the scope of that expression? 8 The answer to this question will determine whether Mayne's plans regarding its own product, a competitor to that of Pharmacia, can go forward. It will also affect Interpharma's planning in relation to the products that it intends to market. The Patent is titled "Injectable ready-to-use solutions containing an antitumor anthracycline glycoside". Since 1 June 2003, it has had an exclusive licence in this country in respect of the invention described in the Patent in relation to a product known as "epirubicin hydrochloride". The first respondent in the Pharmacia Proceeding, Mayne Pharma Pty Ltd is a manufacturer, distributor and exporter of pharmaceutical products. The second and third respondents, F H Faulding & Co Ltd and Faulding Healthcare Pty Ltd are related entities and form part of the Mayne Pharma group of companies. 11 The Patent commenced on 19 June 1986, with a priority date of 2 August 1985. The original term of the Patent was 20 years, ending on 19 June 2006. On 14 March 2001, Pharmacia applied to the Commissioner to extend the Patent, and on 24 October 2001, the Commissioner accepted the extension application. The effect of that acceptance was to trigger the operation of various procedures under the Patents Act enabling the application to be considered. 12 On 6 April 2002, the Commissioner granted Pharmacia a five year extension of the term of the Patent to 19 June 2011. There was no opposition at that stage to the grant of the extension. 13 As previously indicated, Pharmacia and Pfizer subsequently brought the Pharmacia Infringement Proceeding against Mayne, under ss 117 and 120 of the Patents Act , alleging that Mayne had infringed certain claims of the Patent by "manufacturing, selling, using and keeping a ready-to-use antitumor anthracycline glycoside solution as claimed in the Patent". The only question resolved in that proceeding was whether Mayne had infringed certain claims of the Patent by making and selling epirubicin hydrochloride in injectable ready-to-use solutions. Liability was dealt with separately from any question of damages, or account of profits, which issues remain unresolved. 14 According to Crennan J, at [4] of her reasons for judgment, the primary issue in relation to infringement was whether Mayne's product had "not been reconstituted from a lyophilizate", as that phrase appeared in claim 1 of the Patent. A secondary issue identified by her Honour was whether Mayne avoided infringement on the specific occasions on which they used sodium hydroxide, in addition to hydrochloric acid, to adjust the pH of the solution, given that claim 1 of the Patent refers to the pH being adjusted "solely with a physiologically acceptable acid". 15 On 5 August 2005, Crennan J delivered judgment. Aspects of the dispute between the parties that were dealt with by Crennan J provide relevant background to the proceedings currently before me. Her Honour found that the Patent had been infringed. However, she did not make final orders on that day. daunorubicin hydrochloride injection. However, they gave rise to the further issue that is now the subject of the two proceedings presently before this Court. In the Pharmacia Proceeding, Mayne contends that the term of the injunction granted by Crennan J should not be extended to 19 June 2011 to cover the extension of patent granted by the Commissioner, but rather should end on 19 June 2006. In the Interpharma Review Proceeding, Interpharma challenges the validity of the extension itself. Using the language adopted by Crennan J in her judgment at [19], Pharmacia submits that there are 20 product ("solution") claims, four "process" claims and two "method" claims. Of course, whether that is in fact a wholly accurate characterisation of the claims is the very point in issue in the proceedings before me. 20 The parties do not contend that all the claims are in issue. Relevantly, claims 3 to 19, and claim 22 (described by Crennan J as the "solution" claims), are dependent on claim 1. If claim 1 is not properly to be characterised as a "solution" claim, but does, in fact, incorporate significant elements of "process", Pharmacia acknowledges that none of the remaining "solution" claims can lawfully be the subject of an extension. The parties are agreed that resolution of the construction of claim 1 will resolve the controversy between them. It is convenient therefore, to deal with each of the alleged "process" features in the context of claim 1. A sterile, pyrogen-free, anthracycline glycoside solution which comprises a physiologically acceptable salt of an anthracycline glycoside dissolved in a physiologically acceptable aqueous solvent therefor at an anthracycline glycoside concentration of from 0.1 to 50 mg/ml, which has not been reconstituted from a lyophilizate and the pH of which has been adjusted [to] from 2.5 to 5.0 solely with a physiologically acceptable acid. I should interpolate that it was common ground between the parties that the word "to", which appears in square brackets in claim 1, as set out above, but does not appear in the claim as it actually stands, should be read into it. It does not matter, for present purposes, whether that is because the word was excluded inadvertently, or whether it is necessary to insert it in order to give sensible meaning to the claim. 23 In the Interpharma Review Proceeding exactly the same issue arises. The applicant, Interpharma, is a company incorporated in Australia. On 22 May 2003 it signed an exclusive Supply and Distribution Agreement with EBEWE Pharma for two products known as "doxorubicin EBEWE" and "epirubicin EBEWE". In that proceeding, it is accepted that at least from 22 May 2003, Interpharma was a "person aggrieved" within the meaning of s 5(1) of the ADJR Act . It should be noted that, in accordance with the usual practice, the Commissioner did not seek to be heard in relation to the challenge to the extension decision. However, the Commissioner's decision was supported by Pharmacia, the second respondent in the Interpharma Review Proceeding. Section 70(2)(b) is of no relevance. 30 It is accepted by the parties that the Patent satisfies the requirements set out in ss 70(3) and (4). The only issue that must be resolved is whether it also satisfies the requirements set out in s 70(2)(a). 31 Section 74(1) provides that if the Commissioner is satisfied that the requirements of ss 70 and 71 (form and timing of an application) are satisfied, then the Commissioner must accept the application for an extension. Section 74(2)(a) provides that if the Commissioner accepts the application, the applicant must be notified in writing of the acceptance, and s 74(2)(b) requires the Commissioner, in that event, to publish a notice of the acceptance in the Official Journal , as that publication is defined in s 222. 32 Section 76(1)(a) provides that the Commissioner must grant an extension of the term of a standard patent if there is no opposition to that grant. Of course, that presupposes that the requirements for an extension set out in ss 70 and 71 are satisfied. 33 Section 78 sets out the exclusive rights of the patentee during the term of the extension. The effect of this section is to limit the scope of the patentee's monopoly on the patent so that the exclusive right to exploit the invention is limited to a pharmaceutical substance which has satisfied the extension criteria in s 70(2)(a). It is that potential that is of central importance to the resolution of the issues raised in the Pharmacia Proceeding. Self evidently, an injunction should not go to prevent a person from engaging in conduct during the term of any extension that is entirely lawful, as Mayne's proposed exploitation of its product would be if the Patent does not involve a pharmaceutical substance per se . 37 Mr Macaw submitted that claim 1 (and therefore the dependent claims as well) was a "product by process" claim, because of the various process elements that were included in the claim, as formulated. He contended that the introduction of "process elements" as part of the description of the product prevented claim 1 from being a claim to a "pharmaceutical substance per se ". 38 According to Mr Macaw, it followed that any infringing activity on Mayne's part was, and is, by way of exploitation of a form of the invention other than a "pharmaceutical substance per se ". As a result, by reason of section 78(1)(b)(i) , the final injunction to be granted should not continue for the extended period of the Patent but, rather, should end at the expiry of the original patent period, on 19 June 2006. 39 Mr Macaw referred to the judgment of a Full Court of this Court in Boehringer Ingelheim International GmbH v Commissioner of Patents [2001] FCA 647 ; (2001) 112 FCR 595 (" Boehringer "). He submitted that Boehringer was authority for the proposition that the requirement that a patent involve a claim to a "pharmaceutical substance per se " requires more than that a pharmaceutical substance simply forms some element of the claim or claims. Mr Macaw also relied upon Boehringer as authority for the proposition that, in order to satisfy the requirements of s 70(2)(a) , the pharmaceutical substance must fall within the scope of the claim, that is, it must be included among the things claimed. 40 In addition, Mr Macaw referred to the later judgment of a Full Court of this Court in Prejay Holdings Ltd v Commissioner of Patents (2003) 57 IPR 424 (" Prejay "), where the decision in Boehringer was expressly approved. The Court in Prejay held that s 70(2)(a) requires a pharmaceutical substance itself to be an integer of a claim in the relevant patent. It is not enough that the substance appears in a claim in combination with other integers, or as part of the description of a method (or process) that is the subject of a claim. The Court noted at [24] that "[t]he policy adopted in s 70 was to confine extensions to patents that claim invention of the substance itself". He referred to a series of amendments that Pharmacia had made to the form in which claim 1 was drafted at various stages. He contended that by adding "pH adjustment integers", for example, Pharmacia appeared to have made a conscious decision to include a process element in the claim, thereby widening the scope of the protection sought for its product. It was in part for this reason that Mr Macaw contended that the product of claim 1 was defined by the process by which it was obtained. Mr Macaw contended that the scope of the injunction should therefore be limited, on a permanent basis, to include only the epirubicin hydrochloride solution that was found to infringe, and not the other anthracycline glycoside solutions, such as doxorubicin hydrochloride and daunorubicin hydrochloride, that Mayne produces. 45 It seems that the position regarding these other anthracycline glycoside solutions remains somewhat uncertain. Order 1 of the orders made by Crennan J on 8 September 2005 reflected an agreement between the parties, on an interim basis, that doxorubicin hydrochloride and daunorubicin hydrochloride should be excluded from the scope of the injunction. There was also an agreement that they be excluded from any order for damages, or an account of profits, again on an interim basis only, pending Pharmacia having further time to consider its position in relation to them. Mr Macaw submitted that given that Pharmacia had now had that opportunity, but was unprepared to commit itself to a stance, the interim position should be made permanent. 46 In the course of oral submissions Mr Macaw referred to Mayne's licence to produce doxorubicin hydrochloride and daunorubicin hydrochloride and the question of "the appropriate formulation of the injunction". It may be, therefore, that the form of the injunction granted by Crennan J will have to be varied irrespective of the outcome of this proceeding, in order to make it clear that Mayne's entitlement to manufacture its non-infringing products is not in any way impaired by that injunction. 48 Finally, Mr Macaw referred to order 2 of Crennan J's orders of 8 September 2005. We'll hand your Honour a form of the order which incorporates those --- which accommodates those matters... in due course, but we apprehend to say that that's not an issue. Accordingly, it may be necessary, once again, to vary the terms of the injunction to reflect any agreement that is reached between the parties regarding this issue. He agreed that the claims in issue were limited to claim 1, and claims 3 to 19. Claim 22, though not regarded as a "process" or "method" claim, was expressly abandoned by Mr Caine during the course of the hearing. 52 Mr Caine submitted that the solution that was the subject of the Patent was plainly a "pharmaceutical substance" within the meaning of Schedule 1 of the Patents Act . He further submitted that claim 1 involved a claim in relation to a pharmaceutical substance per se. In simple terms, he argued that the injectable ready-to-use solution was a mixture of substances which had particular characteristics. Those characteristics were what I referred to in argument as "descriptors", enabling the substance to be readily defined, and differentiated from other pharmaceutical substances that were not within the protection of the Patent. 53 Mr Caine submitted that the characteristics identified in claim 1 were, in broad terms, as follows. The substance was a solution which was administered to a patient for the purpose of curing or alleviating a disease, and which had a chemical or physico-chemical effect on the physiological system of the patient. 54 In his submissions, Mr Caine distinguished claim 1 from the claims considered in Boehringer, and in Prejay . He noted that in Boehringer the claim had not been limited to a pharmaceutical substance alone, but included a container with a nozzle designed to deliver that substance. He also noted that in Prejay the claim had been expressed in terms of a method for treating menopausal women using a transdermal patch to provide continuous dosages of progesterone and estrogen. He submitted that in each case, whilst the invention claimed was patentable, the claim related to a known substance coupled with a novel delivery system. He contended that this was in marked contrast to the invention the subject of the Patent, which claimed a new and inventive pharmaceutical substance, on its own. 55 Mr Caine next referred to the requirement under s 70(2)(a) that a patent disclose and include within the scope of the claims a pharmaceutical substance per se . He rejected Mayne's submission that the Patent did not disclose or claim a pharmaceutical substance per se , but rather a pharmaceutical substance produced by a defined process or method. He submitted that the question whether claim 1, as currently formulated, identified a pharmaceutical substance per se , or extended into the realms of process or method, had to be approached as a matter of substance, and not form. That is, it was a question to be resolved by considering the scope of the claim "broadly, that is to say in a general sense": Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 81 ALR 79 at 95 per Gummow J, cited with approval by the High Court in Lockwood Security Products Pty Ltd v Doric Products Pty Limited [2004] HCA 58 ; (2004) 217 CLR 274 at [69] . Accordingly, the exclusionary integer did no more than identify the scope of the monopoly claimed. It described the fact that the physiologically acceptable salt of anthracycline glycoside was in solution, the solvent being a physiologically acceptable aqueous liquid. The reference to pH was a reference to the acidity/alkalinity of the solution. This integer described a characteristic of the sterile, pyrogen-free anthracycline glycoside solution identified in claim 1. The claim, as formulated, did not limit the time at which, or the manner in which, the acid was to be added. The elements of that claim described attributes of the solution which was a mixture of substances that could be administered to the body so as to cause a therapeutic effect. It was the solution in its final ready-to-use form that was administered to patients which had the required physico-chemical interaction with the patient's physiological system. It was the properties of that solution which provided advantages over the prior art formulations of anthracycline glycosides. 59 Finally, Mr Caine referred to the judgment of Crennan J in the Pharmacia Infringement Proceeding. He noted that her Honour had found Mayne liable for infringing Pharmacia's patent rights, and submitted that it was at least implicit in her Honour's reasoning that Mayne had been seeking to exploit a form of the invention that was a pharmaceutical substance per se . It was equally implicit in that reasoning that the product was in substance disclosed in the complete specification of the Patent and that its product fell within the scope of the relevant claims of that specification, as Boehringer required. Accordingly, he submitted, Mayne would not be able to avoid infringement by reason of s 78(1)(b)(i). It followed that the term of the injunction granted by Crennan J should extend to 19 June 2011. Pharmacia did not take issue with these contentions. 62 Ms Strong submitted, as did Mr Macaw, that the Patent does not disclose or claim a pharmaceutical substance per se . Her arguments on this issue largely mirror those made by Mr Macaw in the Pharmacia Proceeding. However, in one respect they go further. 63 Interpharma called as an expert witness in this proceeding Dr Geraldine Anne Elliott. Dr Elliott is currently employed by Imaginot Pty Ltd in Brisbane as its Director of Research and Development. That company engages in the development of orally administered drug delivery systems. Dr Elliott has a PhD from the University of London, an MBA from the University of Melbourne and has for many years been a registered pharmacist in the United Kingdom, and elsewhere. From 1997 to 2004 she was employed by Mayne, and was responsible for its injectable product development program which included a number of projects on anthracycline glycosides. Those projects involved the development of stable formulations of lyophilizates. 64 Dr Elliott was asked by Interpharma to prepare an expert report dealing with the major issue in these proceedings. In particular, she was asked to consider whether one or more "pharmaceutical substances" as defined in Schedule 1 of the Patents Act "in substance" fell within the scope of claim 1 of the Patent. 65 Dr Elliott was provided with a copy of Schedule 1, with its definition of "pharmaceutical substance", set out above at [ 26 ]. She focussed upon the following words of that definition: "a substance (including a mixture or compound of substances) for therapeutic use...". She said that she understood this definition, when considered in its proper context, to mean a specific chemical compound which, when administered, will exert a pharmacological effect in the body as a direct result of the interaction between that compound, and the physiological system. She accepted that anthracycline glycosides are therapeutic agents used in the treatment of cancers, and are administered by injection as they are not absorbed when administered orally. 66 Dr Elliott then turned to claim 1 as currently formulated. Her opinion was that the "physiologically acceptable salt of an anthracycline glycoside" described in claim 1 was a pharmaceutical substance as this was "the compound that exerts a therapeutic effect in the body, in this case a cytotoxic effect against cancer cells". However, neither the "physiologically acceptable aqueous solvent" nor the "physiologically acceptable acid" for pH adjustment described in claim 1 had any cytotoxic pharmacological action. They were pharmacologically inert ingredients in the solution, necessary to stabilise the product, and prevent degradation of the anthracycline glycoside, but were not themselves "pharmaceutical substances". 67 Dr Elliott was cross-examined at some length by Mr Caine. It is unnecessary for present purposes to set out in any great detail the nature of the cross-examination. Put simply, Mr Caine suggested to Dr Elliott that her opinion was idiosyncratic, and failed to reflect the authoritative interpretation that had been accorded to the definition of "pharmaceutical substance" by both Heerey J at first instance ( Boehringer Ingelheim International v Commissioner of Patents (2001) AIPC |P91-670), and by the Full Court in Boehringer . Would you be good enough to go to paragraph 18 of that decision where his Honour sets out an extract from the Patent Office Manual of Practice and Procedure?---Yes, I have it. In this situation the pharmaceutical substance is the active ingredient in the carrier or excipient, not the active ingredient alone. That is at odds, is it not, with what is set out in those two paragraphs in the Patent Office Manual?---I don't believe so and as far as the active ingredient is the pharmaceutical substance that is going to interact with the body and regardless of what the other components are, that is the product that is going to be exerting its pharmacological effect. Do you see that?---For clarification I would read that saying it is the pharmaceutical substance is the active ingredient in the carrier or excipient so that they go together and that is those components are being put in the body but in fact it will be only the pharmaceutical substance that is having an effect so you can have multiple products with the same active ingredient. MS STRONG: I don't think Dr Elliott can really answer that question, your Honour. I doubt that she would know why. What I am simply putting to you, Dr Elliott, is I understand that the view you have expressed in the report is that the pharmaceutical substance defined in the Act is to be confined to the active ingredient alone and all I am putting to you is that the Manual, the Australian Patent Office Manual, does not share your view. She regarded the Manual as leading to "confusion in terms of understanding what is the active component", and rejected its essential tenor. 70 In closing submissions, Mr Caine invited me to disregard the opinion expressed by Dr Elliott. He submitted that if her interpretation of "pharmaceutical substance" were correct, it would be impossible to obtain an extension of a patent involving any invented solution, of which only one component was of direct therapeutic use. That would be so even if the product as a whole, including inert compounds designed to achieve stability for the actual substance that exerts a therapeutic effect, had a therapeutic effect in the body (in this case a cytotoxic effect against cancer cells). 71 It is important to note that Mr Macaw expressly declined to adopt Ms Strong's submission that Pharmacia's product was not, relevantly, a "pharmaceutical substance". He confined his submission to contending that the product was not a "pharmaceutical substance per se ", essentially because it encompassed elements of process. 72 Ms Strong also made a number of submissions regarding the timing of Interpharma's application for review. She noted that s 11(4) of the ADJR Act provides this Court with the discretion to refuse to entertain an application for an order of review if "the court is of the opinion that the application was not made within a reasonable time after the decision was made " (emphasis added). She also noted that when forming its opinion, s 11(5) of that Act provides that the Court "shall have regard to the time when the applicant became aware of the making of the decision; and...may have regard to such other matters as it considers relevant. " Ms Strong then sought to explain, and to justify, Interpharma's delay. 73 On this point, Ms Strong submitted that there was nothing in the evidence led on behalf of Pharmacia to suggest that it would, in any way, be prejudiced if time were extended to allow the application for review to proceed. She described that evidence as "broadbrush" and speculative. She further submitted that Interpharma had acted reasonably in assuming that the processes by which EBEWE Pharma proposed to manufacture doxorubicin EBEWE and epirubicin EBEWE for the Australian market did not come within the claims specified in the Patent. 74 Ms Strong argued that it was not until Interpharma was in a position to market doxorubicin EBEWE, in about August 2005, after the judgment of Crennan J in the Pharmacia Infringement Proceeding had been delivered, that it was reasonable to expect Interpharma to challenge the extension of the Patent. Interpharma had filed its application for review of the Commissioner's decisions on 11 October 2005, not long after her Honour's judgment had become available. According to Ms Strong, "[f]rom August 2005, Interpharma moved with great expedition". 75 It should be remembered that Interpharma also relied upon s 39B of the Judiciary Act in challenging the validity of the Commissioner's decision to grant the extension of the Patent. Ms Strong noted that there was no specific time limit, under the Federal Court Rules , for the grant of certiorari, which was the principal remedy sought. It was only necessary, as a matter of discretion, to persuade the Court that relief should not be withheld by reason of excessive delay. She submitted that in context, the delay was adequately explained. 76 Finally, Ms Strong sought to invoke s 192 of the Patents Act , as a separate basis upon which relief should be granted. That section allows for rectification of the Register. She submitted that the need to ensure that the Register was properly maintained justified the relief sought, no matter how long, or how unjustified, the delay might be. 78 For the reasons outlined in his submissions in the Pharmacia Proceeding, Mr Caine contended that the Commissioner had been justified in extending the term of the Patent. He therefore submitted that the substantive merits of Interpharma's application were conspicuously weak, a matter that was relevant when considering whether to grant an extension of time for the application for review. 79 However, in the event that Interpharma's application for review was thought to have some arguable basis, Mr Caine submitted that the Court should nonetheless refuse to entertain it because of the delay that had ensued, and the prejudice that would be occasioned to Pharmacia if the decision to extend the Patent were now to be set aside. He submitted that Interpharma had been aware, at least from 30 July 2003, that the Patent had been extended. As regards the ADJR Act , the application was not made within a reasonable time. With regard to the Judiciary Act application, he submitted that the Court should decline to grant the prerogative relief sought. 81 In relation to Interpharma's claim for relief under s 192 of the Patents Act , Mr Caine noted that the section formed part of Ch 19 which was directed to "the Register and official documents". He submitted that s 192 was intended merely to allow for the correction of clerical errors, or other mistakes of that type, in the Register. He submitted that if the section were given the broad interpretation for which Ms Strong contended, and applied generally to challenges of various types to the validity of patents, the suitability of applications for grant, and the extension of patents, the effect would be to undermine the proper working of the Patents Act . 82 Mr Caine submitted that s 192 was a general provision, and did not limit the time in which an application could be made for an order rectifying the Register, whereas s 75 of the Patents Act specifically prescribes the circumstances within which a person may oppose the grant of an extension. Mr Caine noted that reg 5 of the Patents Regulations 1991 (Cth), which applies if a notice of opposition has been filed for the purposes of s 75 of the Act, strictly prescribes a three month time limitation within which a person may oppose the grant of an extension. He contended that the broad construction of s 192 contended for by Ms Strong would also conflict with the specific requirements of s 75 (and reg 5). Accordingly, he submitted, s 192 should be construed more narrowly, and not as permitting a wholesale review of the exercise of statutory powers by the Commissioner. 84 Unlike Interpharma, in the Interpharma Review Proceeding, Mayne does not contend that Pharmacia's product is not relevantly a "pharmaceutical substance". It focuses upon the Latin words " per se ", and their effect upon the requirements of s 70(2)(a). 85 The meaning of the expression "pharmaceutical substance per se " in s 70(2)(a) has been authoritatively considered by a Full Court of this Court in Boehringer . The facts of that case were set out succinctly by Heerey J, at first instance . Claim 4 is for a container claimed in any one of the preceding claims having a metering device. Claim 5 is for the container of claim 4 wherein the metering device is adapted to deliver specified quantities of the Substance. Claims 6 to 9 are directed to methods of treatment of nasal hypersecretion comprising the nasal administration of an effective amount of a pharmaceutical composition comprising as active ingredient the Substance or particular forms or quantities of the Substance. Claims 10 to 12 are omnibus claims. Claim 13 is for a method of treatment as claimed in claim 6 with reference to any one of the Examples. Claims 14 to 16 are directed to an aerosol or spray composition as claimed in claim 1 when used in the container of claim 1. Section 93 directed the court to have regard to the nature and merits of the invention, the profits made by the patentee and all the circumstances of the case. In practice patentees produced substantial accounting evidence endeavouring to show great expenditure on research and development and only modest sales. However extension applications were frequently brought in the case of pharmaceutical patents because regulatory approval requirements often meant that the product could not enter the marketplace until a substantial part of the patent protection period had already passed. By the Patents Amendment Act 1989 (Cth) a new s 90 was inserted in the 1952 Act. Section 70 and related sections in their present form were introduced by the Intellectual Property Laws Amendment Act 1998 (Cth). For the first time, provision was made for the extension of not just of a "pharmaceutical patent", but a "pharmaceutical patent per se ". The specific exception to the latter (an exception which proves the rule) is the provision for recombinant DNA technology in s 70(2)(b). So far as a new process is concerned, it is only when the new process answers the particular description in s 70(2)(b) (recombinant DNA process) that it can be the subject of an extension. As counsel for the Commissioner submitted, the policy to be deduced in the light of the legislative history is that Parliament has decided that what is intended to be fostered is primary research and development in inventive substances, not the way they are made or the way they are used, with the sole (and important) exception of recombinant DNA techniques, this being an area particularly worthy of assistance for research and development. Section 70(2)(a) is only to make extension rights available when the claim is for a pharmaceutical substance as such, as opposed to a substance forming part of a method or process. Claims which limit the use of a known substance to a particular environment, for example claims to pharmaceutical substances when used in a new and inventive method of treatment, are not considered to be claims to pharmaceutical substances per se . The use of the word ' per se ' requires the claim to the substance to be unqualified by process, temporal, or environmental, components. In such circumstances, a claim which defines the substance by reference to such method steps would be a claim to the substance per se . In the case of such mixtures or compounds, the test of whether or not a substance is a pharmaceutical substance applies to the mixture or compound as a whole, not to an individual component of the mixture or compound. In this situation, the pharmaceutical substance is the active ingredient in the carrier or excipient --- not the active ingredient alone. Similarly, a collocation of known integers with no working interrelationship is not patentable. Consequently, while the ARTG may contain many entries involving an active substance with different carriers or excipients, separate patents corresponding to the differing ARTG entries are unlikely to have been granted. The phrase 'in substance fall within the scope' has been the subject of judicial interpretation in the context of amendments. In The Distillers Co. Ld. On appeal to the Federal Court in Astra Lakemedal AG 31 IPR 1, the Commissioner's decision was overturned, having regard to the words 'to which the application relates' as present in the then s. 70 (and which are not present in the present legislation). Importantly, he implicitly approved of the examples set out at [25.2.2] as aiding in the interpretation of the expression "pharmaceutical substance per se " considered in the light of the history of the relevant section, and its evident purpose. 92 Not surprisingly, having regard to the nature of the claims relied upon in that case, Heerey J concluded that all of them were for "modes of treatment involving the Substance, not for the Substance in itself". Accordingly, the application to review the Commissioner's refusal to grant the extension was dismissed. 93 On appeal, the Full Court in Boehringer (Wilcox, Whitlam and Gyles JJ) held that the decision at first instance was correct. The Court noted that it had been conceded by counsel for the appellant that a container was fundamental to each of the claims, in the sense that, absent a container as described claim 1, there would be no infringement of the patent. However, it had been submitted that the requirements of s 70(2)(a) were met, and that Heerey J had erroneously interpreted paragraph (a) "as requiring the claim or claims of the patent to exclusively define a pharmaceutical substance per se or to be limited or confined to a pharmaceutical substance per se ". It had been further submitted that the paragraph required "no more than that a pharmaceutical substance... be included in one or more of those claims as an essential feature", and that all the relevant claims in that case had specifically included as an essential feature a pharmaceutical substance per se . The appellant submitted that it did not matter that each claim also included one or more other elements. 94 The Full Court regarded these submissions as being tantamount to an argument that the words " per se " made no substantial contribution to, and provided no limitation upon, the statutory provisions of s 70(2)(a). The Court rejected that argument. It referred with approval, at [34] and [37], to the submission of the respondent that the introduction of the words " per se " by the 1998 amendments indicated a clear intention, on the part of the legislature, to limit the operation of s 70 to patents disclosing and claiming a pharmaceutical substance "by or in itself, intrinsically, essentially" ( New Shorter Oxford English Dictionary ), or "taken alone; essentially; without reference to anything else" ( Butterworth's Australian Legal Dictionary ). 95 The Full Court noted that the appellant's argument, if accepted, would have the effect of reading out of s 70(2)(a) the words " per se ". In addition, the Court regarded the second reading speech and the explanatory memorandum as providing no support to the appellant's argument; quite the contrary. The emphasis in those materials was upon the development of new drugs, not drugs in combination with other elements. The explanatory memorandum, in particular, excluded the application of the new provisions to "new processes of making pharmaceutical substances or new methods of using pharmaceutical substances, where the substances themselves are known". 96 Boehringer is of some assistance to Mayne in limiting the scope of extensions that can be granted to pharmaceutical substances. If a claim, properly understood, is, in effect intended to protect some novel process or method, no extension can be granted. The claim, when read sensibly, and as a whole, must be to a "pharmaceutical substance per se ". At least in circumstances where the substance itself is known, the claim must not be, in essence, to a new process of making that substance, or a new method of using it. 97 The issue to be resolved is how the principles laid down in Boehringer are to be applied to the facts of the present case. Is claim 1, when read sensibly, and as a whole, properly to be understood as a claim to a new and inventive substance, or are the various references to process elements in that claim, upon which Mayne relied, sufficient to take it outside the ambit of a "pharmaceutical substance per se "? 98 The matter must largely be one of impression, and degree. Reasonable minds may differ as to whether the legitimate boundaries of a "pharmaceutical substance per se " have been crossed. 99 In my view, when claim 1 is read fairly, and not perversely, and when it is read as a whole, it states a claim to a new and inventive substance, and not to a novel process or method. In identifying that substance, claim 1 refers to a "sterile, pyrogen-free, anthracycline glycoside solution". That is nothing more than a description of the broad characteristics of the solution in question. The claim next stipulates that the solution "comprises a physiologically acceptable salt of an anthracycline glycoside dissolved in a physiologically acceptable aqueous solvent". The use of the verb "dissolved" does not, in context, describe a process that is said to be new and inventive, but merely links the therapeutically significant substance (or active ingredient) with the solvent which, when taken together, go to make up the overall product. 100 The further references in claim 1 to the concentration to be achieved, the fact that the substance has not been reconstituted from a lyophilizate, and the fact that the pH has been adjusted [to] from 2.5 to 5.0 solely with a physiologically acceptable acid, though certainly having elements of process about them, are not, when understood in context, to be regarded as seeking to protect "process". They simply mark out the basis upon which the new and inventive substance can be distinguished from other prior art, and enable the scope of the protection to be more accurately understood. 101 Patent rights, and in particular the right to an extension, are very much dependent upon the language of the claim which defines the invention. When construing a claim, in order to determine whether the requirements set out in s 70(2)(a) are satisfied, it is appropriate to have regard to the reason why any reference to process has been included in the claim as formulated. There is a difference between seeking to protect a process (which can be the subject of a patent, but cannot be the subject of an extension), and merely referring incidentally to some elements of process, that are not themselves novel, in order to better describe the new and inventive substance. Section 70(2)(a) provides that a new and inventive substance that is a "pharmaceutical substance per se " can be the subject of an extension. The approach for which both Mayne and Interpharma contended would deprive the section of much of its force. It would deny a patentee of a pharmaceutical substance the right to have the protection afforded by its patent extended, in the face of sound economic and policy reasons embodied in the legislation as to why, in the limited cases therein set out, such extension ought to be possible. 102 It follows that, in my view, the injunction granted by Crennan J, with some minor modifications, should continue over the life of the extension of the Patent, until 19 June 2011. I will order that the parties file proposed minutes of orders giving effect to these reasons for decision. The proposed minutes of orders should also deal with any other matters the parties consider appropriate, such as the resolution of the issues discussed above at [43]-[50]. 103 That takes me to the Interpharma Review Proceeding. The first issue to be determined in that proceeding is whether claim 1 relevantly describes a "pharmaceutical substance", putting to one side any additional requirements imposed by the words " per se ". 104 In that regard, I reject the evidence given by Dr Elliott. I accept that she is a highly qualified expert, and that she genuinely holds the opinions that she expressed in her report. However, she was cross-examined to very good effect by Mr Caine who demonstrated, to my satisfaction, that Dr Elliott's view of s 70(2)(a), and the meaning of the expression "pharmaceutical substance" in the context of that section, did not accord with the law as authoritatively determined in Boehringer . 105 As extracted at [88] and [89] of these reasons for judgment, in Boehringer , Heerey J at first instance distinguished a pharmaceutical substance that is the subject of a patent claim from a pharmaceutical substance that forms part of a method or process claim. 106 It is important to note that Heerey J did not distinguish between the "active ingredients" in a compound, and other components of that compound, in the way that Dr Elliott did. Nor did the Full Court. 107 His Honour's approval of the Manual, and its analysis of the concept of a pharmaceutical substance which was generally accepted as correct by the Full Court, cannot be reconciled with Dr Elliott's view that the introduction of any non-active ingredient into a product prevents it from being a pharmaceutical substance. For one thing, her approach would effectively mean that s 70 had almost no function to perform. Almost every pharmaceutical product will consist of a combination of individual substances, some of which may be intrinsically therapeutic (active ingredients), while others serve different, albeit essential, roles. To restrict the capacity to extend a patent to those unlikely cases where every component of the compound is itself therapeutically useful would be to deprive the section of any real utility, and largely defeat the purpose of its enactment. 108 For the reasons already given in the Pharmacia Proceeding, I reject Interpharma's alternative contention that claim 1 does not, by reason of any reference that it makes to process elements, disclose a "pharmaceutical substance per se ". 109 This makes it unnecessary for me to consider whether to grant Interpharma an extension of time within which to bring its application for review under the ADJR Act . It also makes it unnecessary to consider whether, as a matter of discretion, I would refuse relief to Interpharma, under the Judiciary Act , because of the lengthy delay that took place between the time the Commissioner granted the extension, and the institution of the Interpharma Review Proceeding. The simple fact is that, as in the case of Mayne, Interpharma cannot make good its contention that claim 1 does not involve a "pharmaceutical substance per se". For that reason, Interpharma's application must be dismissed, with costs. I certify that the preceding one hundred and nine (109) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg. Macaw QC with Mr A.J. | infringement of pharmaceutical patent existing injunction restrains respondents until conclusion of initial term of patent extension of term of pharmaceutical patent granted prior to infringement proceedings whether injunction restraining respondents should also apply to period of extension basis upon which patent capable of extension whether claim in respect of pharmaceutical substance per se whether references in patent specifications to elements of "process" or "method" prevent claim from being a claim in respect of a pharmaceutical substance per se rectification of register whether s 192 of patents act 1990 (cth) allows only for the correction of clerical and like errors application for judicial review decision by commissioner of patents to accept an application, and to fail to refuse to accept an application, for extension of term of patent decision by commissioner of patents to grant an extension of term of patent whether compound consisting of both therapeutic substance and inert substances is a "pharmaceutical substance" whether patent for a pharmaceutical substance per se effect of delay in bringing application for review "pharmaceutical substance per se ", "pharmaceutical substance" patents administrative law words and phrases |
Prior to September 2008, through, Lehman Brothers Australia Limited ( Lehman Australia ), they invested in securities known as collateralised debt obligations, commonly known as "CDOs". These are complex investments that it is not necessary to describe or explain in this judgment. On 28 May 2009 Lehman Australia's creditors passed a resolution that it enter into a deed of company arrangement. On 12 June 2009, Lehman Australia executed the deed of company arrangement ( the deed) . Neil Singleton and Stephen Parbery are the administrators of the deed. Lehman Brothers Asia Holdings Limited (in liq) ( Lehman Asia ), the fourth defendant, was the principal proponent of the deed and is a party to it. The parent company of both Lehman Australia and Lehman Asia is Lehman Brothers Holdings Inc ( Lehman Bros ). Its affairs are being administered under Chapter 11 of the Bankruptcy Code of the United States of America by the United States Bankruptcy Court for the Southern District of New York. Each of Lehman Australia and the administrators, Lehman Asia and Lehman Bros has filed a substantive defence, and the latter two also seek substantive relief. Each of the latter two lines of the plaintiffs' challenges is likely to involve considerable, complex and expensive investigation of: The plaintiffs have proposed that a number of separate questions be answered as to the power of Lehman Australia to enter into the deed containing three impugned clauses (cll 7.1, 9 and 11.5). I will set out the questions shortly. Below is a broad outline and not a precise analysis of these provisions. I have not intended to embark on the task of analysing their proper construction. There will be significant issues as to construction of these provisions which this brief summary may have overlooked. cl 7.1 : This provides that the deed administrators shall have the sole conduct and control of any insurance claim and an absolute discretion regarding the prosecution and resolution of any such claim and that they will pay any proceeds into the litigation creditors' fund established by cl 6 of the deed. 2. cl 9: This provides for a moratorium in favour of Lehman Australia and the Lehman entities that remains operative until the deed terminates, preventing any creditor (whether or not its claim is admitted or established under the deed) proceeding or taking any steps to proceed to obtain the winding up of, or prosecution of proceedings, enforcement of judgment debts or arbitral awards, set-offs or cross-claims or the participation in any arbitration proceedings against, Lehman Australia or Lehman entities (cl 9.1). The moratorium also prevents litigation creditors seeking leave to proceed against Lehman Australia from proceeding to enforce a charge in respect of an insurance claim for a period of 24 months (cl 9.2(b)). Only after which time, if the deed administrators give written consent or, failing that, a court grants leave, can a litigation creditor commence or prosecute legal or arbitral proceedings against Lehman Australia for the purposes of establishing its entitlement to relief for an insurance claim (cl 9.2(c)). 3. cl 11.5 : This provides that on payment in full of the final dividend for litigation creditors, all Claims by them against Lehman Australia or Lehman entities and all insurance claims, except for preserved contractual rights, are released, discharged or extinguished. In addition, cl 11.6 provides that litigation creditors must accept their distribution under the deed in full satisfaction and complete discharge of all Claims and all insurance claims, with the exception of their preserved contractual rights and a litigation creditor must, if called on, execute and deliver to the deed administrators a form of release of any such Claim or insurance claim as they may require. The Lehman companies and the administrators dispute that view. The Australian Securities and Investments Commission has indicated support for the plaintiffs' contentions of law concerning the scope of Pt 5.3A. The plaintiffs say that, as a matter of law under Pt 5.3A , the deed cannot: The plaintiffs contend that because the deed contains one or more of cll 7.1, 9 and 11.5 it is not a valid deed and that, if this is correct, the ability of the Court to bring the proceedings to quick final determination will be enhanced. The proposed questions address two principal topics; first, the proper construction of the impugned provisions and, secondly, whether Pt 5.3A authorises the impugned provisions. There is a substantive dispute on the pleadings concerning both. The plaintiffs propose to tender the deed and the material before the creditors for the purposes of voting on the challenged resolution to provide the factual matrix by reference to which the deed was made. The plaintiffs accepted in argument that if it is necessary for the Court to consider any other evidence for the purpose of ascertaining whether Pt 5.3A contained power, in the circumstances, for the impugned provisions to be included in the deed, then the questions relevant to the existence of that power could not be answered outside a full trial on all issues. A major issue of construction will be the meaning of the word "Claims" when used in the impugned provisions. If it is limited to the defined meaning in the deed, of a claim against only Lehman Australia, then some of the plaintiffs' arguments will be attenuated. On the other hand, if the word "Claims" is used in its ordinary meaning (and so ignoring the limitation to Lehman Australia in the definition) then those arguments will gain support. Each of the three Lehman company defendants and the administrators opposes the questions being resolved as separate issues under O 29 r 2. They contend that the questions, if answered, will not shorten the proceedings and are likely to lead to the very kinds of forensic inefficiencies and interruptions that are, unhappily, often associated with separate questions. And the defendants point out that, even on the plaintiffs' arguments, the answers to the questions will not determine the whole of the proceedings, although they may be answered in a way which shortens them. The defendants also have some differences between them as to the consequences of the answers sought by the plaintiffs. In its defence and cross-claim, Lehman Asia claims that the Court retains a discretion to declare certain provisions of the deed void, but then to remove or vary the terms of the impugned provisions or to order amendments so as to give effect to the intention of the persons voting in favour of the deed. Lehman Asia also claims rectification or an order that the impugned provisions be amended or varied so that they confer the benefits of the impugned clauses only on Lehman entities that are creditors of Lehman Australia that have agreed to subordinate their debts pursuant to the deed. Both Lehman Asia and Lehman Bros seek variations of the deed to expand the scope of the impugned provisions to include claims against Lehman entities, in the event that some of the construction arguments made by the plaintiffs are correct. In addition, Lehman Bros seeks orders under ss 445D(1)(g), 445G(3) or 447A(1) of the Act that if the releases in cll 11.5 and 11.6 do not extend to all Lehman entities they should be varied to do so. Alternatively, if the plaintiffs succeed in establishing that the deed is void, Lehman Bros seeks an order validating it and giving cll 11.5 and 11.6 the extended operation for which it contends. Lehman Bros seeks, in the alternative, an amendment to the deed substituting a new cl 11.6 that would require litigation creditors to accept their distribution under the deed in full satisfaction and complete discharge of all Claims and insurance claims except those arising out of preserved contractual rights and irrevocably to appoint and authorise the deed administrators to be their agent to execute such forms of release that may be required by Lehman Australia or any Lehman entity. If the answer to question 1 is 'yes', is clause 7.1 of the DOCA, in so far as it confers on the Deed Administrators the sole conduct and control of any Insurance Claim and an absolute discretion regarding the prosecution and resolution of any Insurance Claim, valid and binding on the creditors of the Company, having regard to sections 435A , 444A , 444D , 444H and Part 5.3A of the Act? Whether clause 9 of the DOCA, on its proper construction, operates so as to provide for a moratorium against a General Creditor and/or a Litigation Creditor in respect of a claim or an Insurance Claim, in favour of a Lehman Entity? If the answer to question 3 is 'yes', are the provisions of clause 9 of the DOCA, in so far as they provide for a moratorium in favour of each Lehman Entity in respect of a claim or the Insurance Claims, binding on the creditors of the Company, having regard to sections 435A , 444A , 444D , 444H and Part 5.3[A] of the Act? Whether clause 11 of the DOCA, on its proper construction, operates such that, upon payment in full of the Litigation Creditors' Final Dividend, all claims and Insurance Claims of a General Creditor and/or a Litigation Creditor against a Lehman Entity are forever released, discharged and extinguished, in favour of a Lehman Entity (except the Preserved Contractual Rights)? If the answer to question 5 is 'yes', are the provisions of clause 11 of the DOCA, in so far as they forever release, discharge and extinguish a claim and Insurance Claims of a General Creditor and/or a Litigation Creditor against a Lehman Entity (upon payment in full of the Litigation Creditors' Final Dividend and except the Preserved Contractual Rights), valid and binding on the creditors of the first defendant, having regard to sections 435A , 444A , 444D , 444H and Part 5.3A of the Act? That appears correct to accept the absence of any restriction in the deed (including in cl 9) on a creditor from filing a proof of claim. The Bankruptcy Court has required each person or entity to file a proof of claim based on rights existing prior to the filing of the bankruptcy petition against, among others, Lehman Bros, by 22 September 2009 at 5.00pm. The order provided that a person with a claim based on a derivative contract, including a CDO, was bound by that "bar date". The plaintiffs argued that there was an interest of all the other creditors of Lehman Australia to know what the true position was so that they will be able to take steps to preserve their rights against Lehman Bros by filing their proofs of claims prior to the bar date, without being misled by the provisions of the deed. I do not regard that as a satisfactory or sufficient reason, of itself, to order a separate question. The position of the defendants was made clear in open court that they did not submit that such a filing would be a breach of the deed. But, when the deed is construed, the fate of such proofs of claim may be determined by the construction given later in these proceedings. Lehman Australia and the administrators argued that questions 1 and 2 were founded on the false assumption that apart from cl 7.1, the plaintiffs had an unqualified right, superior to Lehman Australia itself, to conduct, prosecute or resolve litigation with that company's insurers. It argued that the construction of cl 11.5 was not a matter of controversy and that it related only to claims against Lehman Australia being released. It argued that this construction would defeat the plaintiffs' contention that cl 11.5 was wider than its apparent terms. (As appears above, Lehman Bros disputes this construction. ) Lehman Australia also argued that if the impugned provisions could not be supported by Pt 5.3A of the Act, then the deed would still be valid but those clauses would not be an operative part of the deed. Lehman Australia argued that if question 6 were answered "no", it would not follow that the deed would then become ineffective or void. Accordingly it argued that question 6 was of no utility to resolve any issue. Lehman Australia referred to the dangers of separate issues discussed in Tepko Pty Ltd v Water Board [2001] HCA 19 ; (2001) 206 CLR 1 and Bass v Permanent Trustee Co Ltd [1999] HCA 9 ; (1999) 198 CLR 334. Lehman Asia adopted the position of Lehman Australia. Lehman Asia also argued that the plaintiffs, and those they had classed as dissenting creditors, amounted to a little over 20% of the creditors who were bound by the deed. It complained that the plaintiffs had already had over six weeks to formulate its entire case. It also opposed a hearing of separate questions and urged the prompt setting of a timetable for the matter so that the matter could be brought to a speedy final hearing and that this would best serve the objects of Pt 5.3A. It argued that answers to the separate questions could not be determinative in any event because of the discretions reposed in the Court under ss 445G and 447A , to avoid the consequences of any invalid provision in the deed. Lehman Asia argued that s 445G(3) specifically provided that the Court may declare a deed or one of its provisions to be valid despite a contravention of a provision of Pt 5.3A , if the Court were satisfied that the provision was substantially complied with and no injustice would result for anyone bound by the deed if the contravention were disregarded. And, it also noted, if the administrator consents, that under s 445G(4) the Court may order that a deed be varied after it has declared a provision of the deed to be void. Thus, Lehman Asia argued that answers to the separate questions would not necessarily conclude any issue in the litigation because the Court had power to vary or validate the deed in certain circumstances. Lehman Asia argued that a separation of issues will lead to delay and will not remove the need for a substantive hearing on all issues at a later time whatever the answers to the questions. It also asserted that it was unlikely that there would be any claims against the Lehman entities because prior to early 2007 Lehman Australia was not a subsidiary of Lehman Bros and had traded under the name of Grange Securities Limited. I find that argument unpersuasive. The plaintiffs allege that the CDOs, in effect, were financial products devised by one or more Lehman entities and were marketed by Lehman Australia (when known as Grange Securities, including but not limited to the period prior to it having any relationship with Lehman Bros) as well as by Lehman Asia. They also allege that Lehman entities arranged the issue of the CDOs, marketed and sold them to the dissenting creditors. The plaintiffs also allege that Lehman entities engaged in misleading or deceptive conduct to purchasers of CDOs including the dissenting creditors in contravention of s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth). Lehman Asia did not put forward any basis to suggest that these allegations did not raise genuine triable issues. Indeed, as the plaintiffs' retorted, its propounding of the deed, containing as it did the impugned provisions, suggested that Lehman Asia had a good reason for including them in the deed. Lehman Bros was joined as the fifth defendant at its request on 16 July 2009. It argued that it wished to lead unspecified further evidence as to the surrounding circumstances of the making of the deed, as well as evidence that would support its rectification claim. It did not elaborate how this evidence could go beyond the evidence of the factual matrix on which the parties to the proceedings may rely on issues of construction, in order to establish the relevant common intention of the parties, being the creditors (including Lehman Asia), Lehman Australia and the administrators: cf Pukallus v Cameron [1982] HCA 63 ; (1982) 180 CLR 447 per Wilson J at 452, with whom Gibbs CJ agreed at 448, per Brennan J at 456. Lehman Bros argued that if the questions were answered favourably to the plaintiffs then one of two results followed, either the deed was not a deed of company arrangement and fell outside the scope of Pt 5.3A or, it fell within the scope of the Part but was void. In the latter case remedial options in Pt 5.3A were available and there would be substantial arguments that the Court should exercise a discretion to give effect to the wish of the majority of creditors by value and number voting at the meetings. On the other hand, Lehman Bros accepted that if the plaintiffs were correct and the Court could not make any orders remedying the deed, it would seek termination of the deed, as well as the plaintiffs, since its rights were prejudiced. Lehman Bros argued that it had only agreed to subordinate its debt in the proposed arrangement in order to obtain the releases. Lehman Bros argued that a number of judgments tended to suggest that, in analogous statutory contexts, courts had allowed companies involved in re-organisations or arrangements to stipulate that their creditors give releases to third parties. Lehman Bros argued that it will be necessary to consider the whole factual context in order to be able to come to a conclusion about whether, in the circumstances established at a trial, the impugned provisions could have been included in the deed. It referred to the caution expressed about separate questions by Gleeson CJ, Gummow, Hayne and Heydon JJ in Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16 ; (2004) 216 CLR 515 at 524-525 [7] , noting that those remarks were made where all the parties had agreed to the use of the separate question, unlike the present case. Lehman Bros argued that there may be relevant facts, such as the existence of joint or joint and several liability on the part of one or more of the Lehman companies with Lehman Australia, that could affect how the Court would determine the extent of the power under Pt 5.3A to authorise the making of a deed to bind creditors in respect of their rights against third parties. Lehman Bros argued that because of the need to have regard to a variety of potential factual contexts, it was impractical to order a separation of issues concerning the ambit of the power in Pt 5.3A for a deed to bind creditors, in the absence of the full context of all of the circumstances. It contended that it wished to advance evidence to show a connection between, and justifying, the exercise of the power to make the impugned clauses and the circumstances of the case. Lehman Bros argued that that would involve a factual investigation into the degree of connection between the impugned provisions and the source of power in Pt 5.3A , not suitable for investigation in a separate question. It also contended that evidence could support the inclusion of the impugned provisions in relation to potential claims for contribution or indemnity that it or other Lehman entities might have against Lehman Australia were they sued by one of the plaintiffs or another dissenting creditor. The plaintiffs emphasised in reply that the only beneficiaries of the wider release in cl 11.5 were Lehman companies. They contended that the separate questions still had utility. They argued that the issue whether there was power under Pt 5.3A to give effect to the impugned clauses in the deed should be determined on the basis that if the Court came to the conclusion that further evidence than the deed itself and the relevant matrix of fact in which the creditors' meeting came to resolve that it be executed could affect the outcome, then those questions should not be answered. Nonetheless, the plaintiffs argued that the issue of power under Pt 5.3A was a stark one and that the questions were capable of receiving an affirmative answer. They argued that if there were no power, the onus to demonstrate that there was no prejudice would then be on any defendants who sought to uphold a validation of the deed or its amendment under the provisions in Pt 5.3A of the Act on which they had relied. They noted that common experience demonstrated that saving in time and expense were often illusory, particularly when they overlapped within parties' preparation for other factual matters. They said that a party might feel aggrieved if their case were knocked out on the trial of a preliminary or single issue, and might suspect that the abbreviated course had been adopted to meet the court's, rather than the parties', interests. And they noted that there was a potential for further appeals, particularly if the separate issue having been decided one way initially were reversed on appeal and the matter sent back for a full trial of the whole of the issues. (2) A party seeking the determination of separate questions must satisfy the Court that it is "just and convenient" for the order to be made. The order must be made on concrete facts, either established or agreed, for the purpose of quelling a controversy between the parties so as to produce a conclusive or final judicial decision on the issue, which is of a real, not hypothetical, importance to the determination of the controversy. (3) There are special problems where the separate issue involves a mixed question of fact and law, although it may still be able to be decided as a separate issue. However, care must be taken in precisely formulating the question and specifying the facts upon which it is to be decided. (4) The Court must have all relevant matters before it as a precondition of it being asked to exercise its discretion if the separate question involves the grant or refusal of declaratory relief. (5) It may still be appropriate to determine a separate question even if it will not resolve all the issues, provided that there is a strong prospect that the parties will agree upon the result when the core of the dispute has been decided or if the decision will obviate unnecessary and expensive hearings of other questions. (6) Generally speaking an issue will not be appropriate for separate determination if it is simply one of two or more alternative ways in which an applicant or plaintiff frames its case and its determination would leave other significant issues unresolved. That is why, in some cases, even if the parties join in asking a court to determine a question separate from trial of the facts, it may be prudent for the court to decline to answer the question presented as being one which it is inappropriate to answer ( Bass v Permanent Trustee Co Ltd [1999] HCA 9 ; (1999) 198 CLR 334 at 357-358 [51] - [53] ). Indeed, as Bass v Permanent Trustee Co Ltd illustrates ( Bass [1999] HCA 9 ; (1999) 198 CLR 334 at 359 [56] . See also Malika Holdings Pty Ltd v Stretton [2001] HCA 14 ; (2001) 204 CLR 290 at 308-309 [61] . ), in some circumstances to answer a question may be contrary to the judicial process. If the question is answered, it is important to identify any limitations which the procedure adopted may impose on the breadth of any principle that is to be identified as having been established or applied. The task of construing the application of Pt 5.3A and its provisions in this matter must be undertaken in the factual context presented by the evidence. Some of the defendants argued that that material should include antecedent material circulated by the administrators or others to the creditors so as to provide the relevant background. I am satisfied that evidence of the factual matrix is properly admissible, readily identifiable and discreet. The only relevant evidence will be that bearing on the construction of the deed and it will provide a sufficient, and indeed the only, factual matrix. Thus, the questions of construction can be determined within this narrow factual compass. Essentially, the evidence will be relevant to whether the meaning of the expression "Claims" when used in the impugned clauses extends to any claims that might be made against Lehman companies other than Lehman Australia, notwithstanding the definition of "Claims" in the deed. While, no doubt, substantial arguments will be used to illuminate the rival constructions, little evidence will be relevant to placing the Court into the position that a reasonable person in the position of the parties would have occupied so as to be able to understand the genesis of the transaction, the background, context and circumstances by reference to which the deed was resolved to be made: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 ; (2004) 219 CLR 165 at 178-180 [36] , [41] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ; Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5 ; (2002) 186 ALR 289 at 292-293 [9] - [12] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ; Bowen Investments Pty Ltd v Tabcorp Holdings Ltd [2008] FCAFC 38 ; (2008) 166 FCR 494 at 510-512 [50] - [53] where I considered the authorities. Once the construction of the deed, so far as it affects the impugned clauses, has been clarified it will be possible to determine whether, as the plaintiffs contend, there is no power at all in Pt 5.3A of the Act, regardless of the circumstances of the creditors and the company, the subject of a proposed deed of company arrangement, to make provisions having the effect of causing those creditors to release or compromise their rights to proceed against third parties, including those who are also existing creditors of that company or may have claims for contribution or indemnity if the third party is sued by a "releasing" creditor. The separate questions will produce a definitive answer to the questions of power in the event that the Court accepts the plaintiffs' argument. However, it may prove not to be possible to answer those questions in the event that it becomes necessary to consider further facts beyond the evidence needed to construe the deed, to decide the issue of statutory construction under Pt 5.3A relating to power to include the impugned provisions. The defendants did not identify any material fact in their pleadings that would make additional evidence, beyond that relating to the factual matrix discussed above, admissible on the issue of power to include the impugned provisions in the deed. Indeed, a claim by a Lehman entity for contribution or indemnity against Lehman Australia in respect of a right which the plaintiffs or other dissenting creditors may have, but has not yet brought against that Lehman entity, can only be hypothetical. And, if they are effective, the impugned provisions would have the practical effect of keeping this possibility hypothetical. That does not necessarily preclude the issue of law being considered. The objects of Pt 5.3A , specified in s 435A, identify that the essential question for creditors is for them to hypothesise on whether a deed of company arrangement "maximises the chances of the company, or as much as possible of its business, continuing in existence" or if that is not possible, results in a better return for the company's creditors and members than would result from an immediate winding up. Thus, when the creditors vote on whether to proceed with a deed of company arrangement, in general, they will be considering various hypothesised outcomes. In general, at that time, they will not be in a position to consider the issues with the benefit of completed examinations of persons about the company's examinable affairs under Pt 5.9 of the Act to assess, more precisely, the strengths and weaknesses of existing or possible litigation, rights or liabilities that could better inform their evaluation of which hypothesised outcome ought command their vote. Because Pt 5.3A of the Act provides that creditors must vote to decide on a company's fate in this uncertain context, in the usual course of administrations, they necessarily will be examining hypotheses, not facts and voting on this basis whether to resolve that the company execute a deed of company arrangement. It is reasonable to expect that the question of the extent of the power to bind persons to the provisions in a deed of company arrangement under Pt 5.3A may (but need not necessarily) be capable of being answered in the context of the facts necessary to decide the construction of the impugned provisions. Of course, I accept that there may well be facts or scenarios that will be developed in argument which demonstrate that this expectation is not appropriate and the matter will require a full final hearing in order to decide the questions going to the power of a deed under Pt 5.3A to bind creditors to give up rights against third parties. Thus, it is unlikely that evidence would be led at a trial directly on this topic (other than a statement of intention that the Lehman entities may wish to protect their position if the hypothesis is fulfilled). On the other hand, some evidence of the interrelation of business dealings in the Lehman companies' group giving rise to such a possibility is likely to appear in the material used to establish the matrix of fact in which the resolution approving entry into the deed occurred. After all, this is the context in which the present controversy arose and the deed came to be made. The existence of the plaintiffs' and dissenting creditors' legal rights to bring proceedings against one or more Lehman entities (however strong or weak the claim to be asserted may be) is a fact implicit in the impugned provisions themselves, as is the ordinary incidents of litigation once commenced, including, cross-claims. The nature of prophylactic clauses, such as cll 7.1, 9 and 11.5 of the deed, is to foreclose the possibility of a person benefited by the clauses being sued, or further proceeded against, in the circumstances the provisions address. Accordingly, mindful of all of the principles suggesting the constraints on ordering separate issues to be heard before a full trial, I am satisfied that: The deed appears to deal with releases and inhibitions on the exercise of presumed rights of the plaintiffs and dissenting creditors against, at least, Lehman Australia and, depending on the construction of the impugned provisions, other Lehman entities. The clarification of the construction of the deed will focus the preparation of the parties for trial. It may dispose of a raft of alternative cases. In addition, depending on the answer to the questions of construction, the questions relating to the power to provide for creditors to give up or be restrained in their capacity to exercise their legal rights to proceed against third parties may not arise at all. If they do arise, then I am satisfied they will do so in the context of a real controversy that is capable of being resolved by answers to the questions on power. If during the argument, as some of the defendants' submissions assert, it appears that some further evidence could be relevant to the issue of power to include the impugned provisions in the deed that will assist in the construction of the provisions of Pt 5.3A , then the court will need to consider the course to be taken. Evidence would not be relevant to the construction of the Act itself but rather to its application of. But, Lehman Bros argued that in some way it might show a sufficient connection between the use of the power and the purposes of Pt 5.3A. However, I am not satisfied that such a possibility is likely to occur, given that the Court will have before it the factual matrix in which the impugned provisions were made, pursuant to the resolution of the creditors, and will be able to address the exercise, in making the deed, of the powers under Pt 5.3A in that context. In arriving at this conclusion, I have anxiously considered the difficult and somewhat competing demands of justice that confront the parties. It is in all their interests to have a final resolution as quickly as possible with the least expense. A separate question often gives rise to more litigation, appeals, expense and delay than is the intention the moving party, or of the Court, in ordering them. On the other hand, it is a procedure that is a valuable tool in reducing the time and expense of litigation. It is the duty of the parties and the Court to find the most efficient and sensible way of getting to the heart of a controversy as quickly as possible. Modern litigation, has become more and more complex, especially with the plethora of documents and legislative rights and defences that are created constantly in our society. Here, the proposed separate questions could be heard in a day, with the assistance of written submissions, by a single judge or a Full Court in the original jurisdiction. It may be that, in the course of the hearing, some questions will be shown to be unsuitable to be answered separately from a full trial. But, based on the directions hearings I have had with the assistance of experienced counsel, a full trial on all pleaded issues is likely to be highly complex, lengthy and expensive. It will take several months to prepare the evidence, including expert evidence. Indeed, depending on the degree to which the plaintiffs may decide or need to prove their current allegations of prejudice, they may have to prove their underlying cases against Lehman Australia, and possibly one or more Lehman entities. Having managed the separate proceedings brought by Wingecarribee against Lehman Australia before it went into administration last September, I am cognisant of the real complexity of the substantive claims. If some or all of the separate questions can be answered they may prove decisive and, in any event, will clarify the future extent of the controversy so as to facilitate its efficient management. As Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ pointed out in Bass 198 CLR at 356 [48], a crucial difference between an advisory opinion and a declaratory judgment "... is the fact that an advisory opinion is not based on a concrete situation and does not amount to a binding decision raising a res judicata between parties". What the plaintiffs seek will lead to a binding decision on a concrete situation, at least on the issues of construction and, if the questions as to power or any of them are answered in their favour, will be likely further to narrow the controversy considerably. For these reasons, I am satisfied that I should order a hearing under O 29 r 2 that the separate questions be heard before the rest of the proceedings. In my opinion, the questions of construction and (if possible) power should be decided by a Full Court exercising the original jurisdiction so that, the balance of the proceedings can be tried more efficiently and expeditiously. I propose to reserve the separate questions for hearing by a Full Court pursuant to s 25(6) of the Federal Court of Australia Act 1976 (Cth). The power of a single judge sitting in the Court's original jurisdiction to reserve a question for consideration by a Full Court can only be exercised in a matter where an appeal would lie to a Full Court: s 25(6). An appeal, by leave, from an order answering the separate questions, would lie to a Full Court under s 24(1) and (1A) of the Federal Court of Australia Act . Therefore, under s 25(6) of the Act, a single judge has power to reserve for consideration and determination by a Full Court, those questions and the question of whether any amendment or addition to those questions is necessary and, if so ought be made, so as to enable the Full Court to determine the proper construction of cll 7, 9 and 11 of the deed and their validity: Henderson v Pioneer Homes Pty Ltd [1979] HCA 55 ; (1979) 142 CLR 294 at 298-299 per Stephen, Mason and Wilson JJ. There is an important public interest in the prompt determination of these proceedings so that the administrators and the creditors know their positions, particularly if the deed is invalid or the impugned provisions are found to be void or are varied. In addition, the administration of Lehman companies in other jurisdictions and the positions of insurers may be affected by the final decision of this Court. Answers to these questions will provide a suitable means of moving more promptly and efficiently to the final resolution of this complex matter. The parties should prepare an agreed bundle of documents constituting the factual matrix together with the deed and prepare a timetable for submissions. I will direct the parties to bring in short minutes to give effect to these reasons. I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | order for separate questions federal court rules o 29 r 2 separate questions voluntary administration deed of company arrangement questions of construction, validity and power to provide for releases by creditors of third parties in deed under corporations act 2001 (cth) factors to consider in ordering separate questions whether questions would be hypothetical nature of evidence to be led by parties importance of the court ensuring efficient use of time and minimising costs in litigation full hearing of all issues at trial including those associated with the separate questions would involve substantial costs that may be avoided by ordering separate determination public interest in the prompt determination of questions of administrators' and creditors' rights and obligations separate questions are self-contained questions of construction and statutory interpretation not calling for extensive evidence answers to questions may provide definitive answer to one substantial element of controversy federal court of australia act 1976 (cth) s 25(6) separate questions whether separate questions should be reserved for consideration by a full court sitting in the original jurisdiction importance of minimising potential for delay and expense utility of separate questions public interest in the prompt determination of questions concerning administrators' and creditors' rights and obligations reserving questions for consideration by a full court will ensure expeditious resolution of separate questions voluntary administration deeds of company arrangement pt 5.3a corporations act 2001 (cth) questions of construction and validity of deed under pt 5.3a to be decided on a separate question clause providing that upon payment under deed creditors release third parties and other creditors from liability clauses prohibiting, or providing moratorium inhibiting, creditors from pursuing rights against third parties including statutory rights to enforce charges over insurance money payable in respect of company power under pt 5.3a for deed of company arrangement to provide for creditors to release third parties high court and federal court high court and federal court corporations |
The delegate's decision was affirmed by the Refugee Review Tribunal (the Tribunal). An application for judicial review was allowed in the Federal Magistrates Court and the matter remitted to the Tribunal. Upon rehearing by a differently constituted Tribunal the delegate's decision was again affirmed. A further judicial review application in the Federal Magistrates Court was dismissed. The appellant now appeals against that decision. For the reasons that follow his appeal will be dismissed. He is married with two daughters aged 8 and 3. He is of the Burgher ethnic group. He arrived in Australia on 12 May 2005 on a visitors visa. He had applied for a visa in Colombo and stated that he wanted to visit Australia on a holiday. 3 On 10 June 2005, the appellant lodged an application for a protection visa. The application was refused by a delegate of the Minister on 6 September 2005. the applicant believes he will not have any protection whatsoever if he was to return to Sri Lanka. On 1 May 2006 the Tribunal affirmed the delegate's decision not to grant him a protection visa under the Refugees Convention. The appellant then sought judicial review of the Tribunal's decision in the Federal Magistrates Court. On 16 August 2006 his Honour, Driver FM, made orders by consent granting the application for judicial review. A writ of certiorari issued quashing the decision of the Tribunal made on 1 May 2006 and a writ of mandamus issued requiring the Tribunal to redetermine the matter according to law. The application for review was considered afresh by a Tribunal differently constituted and on 12 December 2006 that Tribunal affirmed the decision not to grant a protection visa. The appellant then sought judicial review of the second Tribunal's decision. On 17 May 2007 the judicial review application was dismissed with costs by her Honour Emmett FM in the Federal Magistrates Court. The appellant has now appealed to this Court against that decision. He was represented by a registered migration agent who attended the hearing. 6 The Tribunal referred to the appellant's 10 years of education between 1974 and 1984 at Catholic schools. It noted that he travelled to Australia on a passport "issued legally and without difficulties by the government of Sri Lanka on 16 March 2005 and valid until 16 November 2010". It set out his claims for protection which were contained in his original application for a protection visa and then undertook a detailed review of his evidence at the hearing. 7 Following its review of evidence at the hearing the Tribunal referred to "EVIDENCE FROM OTHER SOURCES". This related to the position of Burghers in Sri Lanka and military service in Sri Lanka. It cited a Country Information Report dated 12 June 1996 which said that Burghers are not a particular group in which the Sri Lankan government is interested. There are very few Burghers in Sri Lanka today because most migrated after the national language policy was reformed in the 1950s and English ceased to be their official language. It was said that they do not suffer discrimination in Sri Lanka. 8 The Tribunal referred to a report from the Research Directorate, Immigration and Refugee Board in Ottawa dated 26 May 2000 which quoted, inter alia, a telephone interview with the Executive Director of the Asia Pacific Centre for Justice and Peace in Washington, DC. In that telephone interview, which was said to have occurred on 26 May 2000, the Executive Director said that she understood Burghers to be persons of mixed Dutch heritage. They typically had English as a mother tongue and were predominantly Christian. They were not a privileged group in Sri Lanka but neither were they generally poor. It was not likely that a Burgher could be a landowner. When asked what their treatment might be by government authorities if they were thought to be supporting the Liberation Tigers of Tamil Eelam (LTTE) she said it would not differ from the treatment of any other person thought to be supporting the LTTE. The Tribunal's reasons then set out the views of an unnamed Professor of Anthropology at Columbia University said to have "... provided additional detail" to that provided by the Executive Director of the Asia Pacific Centre for Justice and Peace. It was not made very clear from the way that the Tribunal's reasons were set out that the views of the Professor of Anthropology were part of the 26 May 2000 report of the Research Directorate of the Immigration and Refugee Board in Ottawa. This appears from a Directorate document which was in the papers before the Tribunal and was included in the appeal book. As such the term "Eurasian" refers to a section of Burghers who "would rather call themselves Eurasian". He said these persons would most likely be descendants of mixed marriages of Sri Lankans with persons of British descent. However, he also stated that a person identifying their Burgher ethnicity outside of Sri Lanka could use the term "Eurasian" because it would be more easily understood by non-Sri Lankans. The professor said that most Burghers live in Colombo, Kandy and the southern part of the country in regions outside of LTTE activity . However, he said there are a few poor Burghers known as "shoemakers" in the eastern part of the country. He said that most Burghers would be middle-class and often work in areas where they can serve as "intermediaries" between Europeans and Sri Lankans. He gave hotel manager as an example. He also stated that while it was possible for Burghers to be landowners, historically, as well as at the present time, it would be much more likely for them to be working as a manager of farm estates, rather than as the estates' owners. When asked if Burghers would be treated differently by government authorities if they were thought to be supporting the LTTE, the professor said they would not be treated any worse than others. He said that a Burgher could be treated "possibly better. " He explained that "Burghers generally do not do this" (support the LTTE) and, as such, if they were suspected of doing so they could be treated "like someone gone astray". He said that Sinhalese aggression is directed mainly against the Tamils and that that out of all the different ethnic groups in Sir Lanka, the Burghers are "the least touched by inter-ethnic strife". The report referred, inter alia, to an amnesty extended to deserters from the armed forces in February 1998. This is a punishable offence under the army act. Deserters are court-marshalled, summarily tried and face prison term of 3 to more than 36 months depending on the circumstances of the case and the reasons for desertion. 10 In its "FINDINGS AND REASONS" the Tribunal found the appellant to be a citizen of Sri Lanka. It was satisfied that he was a member of the military but regarded his claims and evidence as implausible, contradictory, internally inconsistent and "... inconsistent with the independent evidence". It did not accept as credible or plausible his claims to have written letters criticising the military and its tactics, or that he was targeted by the military because of those letters and that he was assaulted or abducted. 11 The Tribunal considered whether or not the appellant would face harm for reasons of his race in the reasonably foreseeable future in Sri Lanka. This was not a matter he had raised as a claim. The independent evidence suggested Burghers were not a particular group in which the government is interested. There were very few of them in Sri Lanka and they did not suffer discrimination beyond the fact that English was no longer the official language. In light of the independent evidence, the Tribunal could not be satisfied that the appellant would face harm in Sri Lanka on account of his ethnicity or race as a Burgher. 12 Under the sub heading " The applicant, the military and the letters" , the Tribunal accepted that the appellant enlisted in the army as a Private in August 1996. It referred to his claims that in January 2002, having become deeply disillusioned with the military, he wrote a letter to a newspaper criticising its conduct. He gave evidence at the hearing that he wrote a second letter in May 2002 following which his wife started receiving threatening letters. He also claimed that he had been assaulted in April 2001 and again in December 2002 and was "mocked and sidelined". He said he had gone into hiding and fled the country in 2005. The Tribunal did not find those claims to be plausible or credible. It analysed the evidence, particularly that given at the hearing. It noted that the appellant had sought promotion in the military in March 2000 and had been promoted to Lance Corporal. He sought promotion again in July 2001. The Tribunal finds it implausible that a soldier who was disillusioned with the military and its conduct in the manner described by the applicant would seek promotion, and then re-enlist in the very organisation for which he feels such antipathy. The Tribunal therefore finds the applicant's claims to have been disillusioned with the military to lack credibility. 13 With respect to the appellant's alleged desertion from the army, the Tribunal referred to the independent country evidence about the punishment for desertion. This information had been made available at the hearing. The Tribunal found that he would not face persecution arising from his desertion, but rather prosecution for a criminal act. There was no evidence to suggest that he would face punishment disproportionately harsh for any of the Refugees Convention reasons. 14 The Tribunal was not satisfied that the appellant was a person to whom Australia had protection obligations under the Convention. The Tribunal erred in law by failing to comply with s 424A(1) of the Migration Act 1958 (the Act) in relation to the provision of information made pursuant to the Act. Further or in the alternative, the Tribunal erred in law in making a finding of fact that in the absence of evidence that could reasonably support such finding. Further, or in the alternative, the Tribunal erred in law and thereby acted without jurisdiction in failing to consider or determine relevant matters or substantive issues arising on the evidence before the Tribunal. The member was bias [sic] (at least ostensibly) against the applicant. The Tribunal member disregarded the evidence that supported applicant's claims. The tribunal member acted beyond jurisdiction. Consequently the applicant suffered denial of procedural fairness. The Tribunal was said to have identified and to have relied upon discrepancies between information provided by the appellant and information collected by the Tribunal from the Internet. The Tribunal was also said to have relied upon "... information or evidence collected (apparently in an informal meeting with the member) from an un-named person "a professor". " It was said to be the Tribunal's duty to invite the appellant to comment on, or respond to, such information. She dismissed the complaint in ground 1 that the Tribunal had relied upon independent evidence rather than on the appellant's evidence as a complaint which effectively invited the Court to conduct merits review. The Tribunal had given "no weight" to the appellant's claim and found that because of his lack of reliability as a witness, it could not rely on any of the documents he provided in relation to his Convention claims. Her Honour found that the Tribunal had identified with particularity the reasons why it found the appellant to be untruthful in relation to specific claims. Those findings and conclusions were open to it on the evidence. 18 In relation to the appellant's complaint about the failure of the Tribunal to provide him with the name of the Professor from whom it obtained information to which it had regard, the Court said there was no such obligation on the Tribunal. The learned magistrate may have misunderstood the Tribunal's reasons at this point. The information relied upon by the Tribunal obtained from the Professor was largely the same as that obtained by the Tribunal from " The Executive Director of the Asia Pacific Centre for Justice and Peace in Washington DC, who is also Coordinator of the Centre's US NGO Forum on Sri Lanka". The substance of the information relied upon from those sources was that Burghers, of which the Applicant claimed to be one, who supported the LTTE would not be treated any differently by the government authorities than any other person supporting the LTTE. The unnamed Professor went a little further by stating that a Burgher could be treated "possibly better". In fact, as examination of those reasons and the documentation in the Appeal Book indicate, the information provided by that Professor was provided to the Research Directorate of the Immigration and Refugee Board in Ottawa in May 2000. It was part of the independent country information obtained from the Research Directorate. Counsel for the Minister on the hearing of the appeal also seemed to be under the impression that the Tribunal had conducted an independent interview with the Professor. 19 The learned Federal Magistrate went on to say that the Professor's evidence was only relevant to the possibility of the persecution of the appellant on account of his ethnic origins as a Burgher. This did not relate to any claim directly raised. Rather, as her Honour put it, the Tribunal sought to ensure that it considered every possible reason why the appellant might face harm were he to return to Sri Lanka and therefore gave him the benefit of considering the issue of race. The information obtained from the Professor was information about a class of persons and not about the appellant specifically. In such a case the obligations of the Tribunal under s 424A(1) were not enlivened. This was because of the operation of s 424A(3)(a). She held the complaint to be misconceived. The Tribunal had identified the independent information to which it had regard and the source of that information. It was not confined to material obtained from Wikipedia but included information from various other human rights sources. There was therefore no failure to comply with the requirements of s 424A(1) of the Act simply because the Tribunal had regard to independent information. 21 The Court went on to consider ground 2 which it characterised as a complaint about the finding made by the Tribunal that it was not satisfied that the appellant would face harm in Sri Lanka because of his ethnicity or race as a Burgher. Rejecting the appellant's contention that this was a finding of fact made in the absence of evidence, the learned Federal Magistrate said it was open on the evidence and material before the Tribunal. 22 The third ground was an alleged failure by the Tribunal to consider State protection. Given that the Tribunal had rejected all factual claims made by the appellant, other than that he was a member of the military and had subsequently deserted, there was no requirement for the Tribunal to proceed to consider whether or not State protection was available. 23 In relation to the claim of bias or ostensible bias, which was the fourth ground of review, the Court held that there was nothing on the face of the Tribunal's decision that would suggest that it had approached its decision making task with a mind not open to persuasion. 24 The fifth ground related to alleged disregard of the appellant's evidence. The Court again said there was no evidence before it to support that contention. On the face of it the Tribunal had regard to his evidence and made findings open to it on the evidence and provided reasons. 25 The sixth and final ground of review before the Federal Magistrates Court was an alleged denial of procedural fairness in regard to "meeting with unnamed Professor". The Court said that ground was misconceived and had been addressed earlier in its reasons. It was open to the Tribunal to obtain evidence from whatever sources it chose. Where the information was about a class of persons of which the appellant was a member and not about him or a particular person, then s 424A(1) was not enlivened. (2) Sections 416, 437 and 438 and Division 7A, in so far as they relate to this Division, are taken to be an exhaustive statement of the requirements of the natural justice hearing rule in relation to the matters they deal with. Federal Magistrate grossly breached the rules procedural fairness (and also appellant's fundamental right to be heard) by refusing to consider the written submission made by the appellant on the date of final hearing while taking oral submissions made by the legal representatives for the first respondent. Federal Magistrate erred in law by rejecting to apply the law created by the High Court in Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 and instead applying a Federal Court cases MIMA v Lay Lat [2006] FCAFC 61 and SZCIJ v MIMA [2006] FCAFC 62. This is contrary to the fact that the High Court applied " Kioa" in recent refugee cases in 2006 and 2005. Federal Magistrate erred in law by ignoring the submission that the tribunal breached the s 441A thus the tribunal committed an jurisdictional error. Federal Magistrate erred in law in her finding that the appellant is entitled to "limited" rules of procedural fairness. Appellant says that this is contrary to the findings of High Court in cases such as VEAL v MIMA [2005] HCA 72 , SAAP v MIMA [2005] HCA 24 , SZBEL v MIMA [2006] HCA 63 , and NAFF v MIMA [2004] HCA 62. 5. Federal Magistrate erred in law by ignoring an important procedural fairness issue raised in the application to the court; in particular the appellant complained that "the tribunal member while taking evidence did not allow the appellant to refer to his written notes and still regarded appellant's changed memory of date of assault (April 2001 and later April 2002) was a serious mistake". Federal Magistrate erred in law by finding that the tribunal is entitled to obtain the independent information from whatever the sources it chooses. [sic] This is a serious misreading of s 424(1) of the Migration Act 1958 . I will now deal with each of the grounds of appeal in turn. He asserted that it was not considered by the learned magistrate. He was able to point to no evidence to support the contention that the learned magistrate had failed to consider his written submissions. The hearing was completed on 2 May 2007 and judgment was given on 17 May 2007. In her reasons the learned magistrate noted that the appellant had filed further submissions on 2 May 2007. The factual premise upon which the first ground of appeal relies is not made out. Section 422B of the Act has the effect that all that is required of the Tribunal in so far as procedural fairness is concerned is to comply with the provisions of the Act ( Minister for Immigration and Multicultural Affairs v Lay Lat [(2006) [2006] FCAFC 61 ; 151 FCR 214] and SZCIJ v Minister for Immigration and Multicultural Affairs [2006] FCAFC 62). Accordingly, the Applicant's written submissions referring to the common law rule of procedural fairness are misconceived in so-far as they relate to the matter before this Court. Section 51A relates to ministerial grants of visas to non-citizens. Its effect is similar to that of s 422B in its application to Tribunal hearings. Similar provision is made by s 357A in relation to Migration Review Tribunal hearings. The operation of these sections has been considered in a large number of authorities which were referred to by the Full Court in its judgment. What was intended was that Subdiv AB provide comprehensive procedural codes which contain detailed provisions for procedural fairness but which exclude the common law natural justice hearing rule. Other aspects of the common law of natural justice, such as the bias rule are not excluded: see ( VXDC v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1388 ; (2005) 146 FCR 562 at [27] ). 68. The intention to exclude the common law rules in the present case is especially plain when s 51A(1) is read with s 57(3). The legislature could hardly have intended to provide the full panoply of common law natural justice to visa applicants who are required to be outside Australia when the visa is granted, while conferring a more limited form of statutory protection upon onshore applicants. 32 The second ground of appeal therefore fails. The section is facultative. The written submissions filed on behalf of the appellant referred to s 424 of the Act under which the Tribunal is empowered to invite a person to give additional information and prescribes the way in which the invitation to give additional information must be given. The premise upon which the ground of appeal is based is wrong. No other argument was advanced in support of it. This ground therefore fails. It appears to be a revisiting of the Kioa [1985] HCA 81 ; 159 CLR 550 point. The scope of the hearing rule aspect of the rules of procedural fairness is limited by s 422B as already discussed. This ground therefore fails. No factual basis for it was identified. This ground fails. He contended that this did not authorise the Tribunal to get any information from any source. In this respect there is no basis for the contention that the Tribunal or the learned magistrate erred. In so saying I would express my concern about the quality of some of the information on which the Tribunal acted. A six year old report of a telephone conversation between somebody unknown in a Canadian agency, with somebody unknown in an American University, might not be thought to provide a particularly solid foundation for an important administrative decision which could affect the life or liberty of the person concerned. In fairness however, it must be acknowledged that the independent evidence relating to the treatment of Burghers in Sri Lanka was peripheral to the case and relevant to a matter which the Tribunal raised as a possible basis for the grant of a protection visa. The matter of persecution on the grounds of ethnicity had not been raised by the appellant. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | judicial review protection visa procedural fairness whether breach of procedural fairness reference to independent country evidence scope of fair hearing requirements application of s 422b and s 424a of the migration act 1958 (cth) appeal against federal magistrate's decision dismissed migration |
It had written reinsurance in Australia and overseas. Cavell is itself a foreign corporation but is registered in Australia. It has applied for confirmation of a scheme under Div 3A of Part III of the Insurance Act 1973 (Cth). Cavell has a number of long-tail risks including exposures to asbestosis claims and potential claims of abuse of pupils at schools which may only be the subject of a claim made on the insurer which Cavell reinsured in years to come. To the extent that it had Australian business, it also has assets in Australia within the meaning of the Act. Those assets total a little over $14 million and the evidence before me indicates that its liabilities, as currently understood, are in the order of $3 million, leaving net assets of about $11 million. The terms of the scheme are conditional on a delegate of the Treasurer making what the Insurance Acquisitions and Takeovers Act 1991 (Cth) describes as a "go-ahead decision" under s 41 (which has occurred) and the Court confirming the scheme under s 17F of the Insurance Act . Once confirmation occurs, the scheme proposes that all the assets in Australia and all of the liabilities in Australia of Cavell will be transferred to Gordian, with the exception of any reinsurance contracts entered into for Australian liability risks by Cavell. Sandra O'Sullivan, the chief financial officer of Enstar Australia Holdings Pty Limited, which manages the business of Cavell, gave evidence that the reason for this proposed exception is that investigations have been made but no reinsurance policies have been located which would respond to the current Australian risks of Cavell and that this has been the position throughout the period of the runoff of Cavell's business. Accordingly, she said that it was considered unnecessary to transfer these policies expressly since none was thought to exist. I am of opinion that there will be no commercial benefit to Cavell from any such policy, if one is later discovered. Subject to any argument to the contrary I am of opinion that I should make an order that if any reinsurance is later discovered it ought be included in the scheme to the extent that it responds to Australian risks, or a proportion of it should be included, having regard to the overall exposures of Cavell to other insurance risks overseas. Effectively, under the rest of the scheme, Gordian assumes all liabilities of the Australian Cavell business and accepts responsibility to pay claims to Cavell's Australian policy holders, which are other insurers. The effect of the scheme is much like a scheme of arrangement under s 411 of the Corporations Act 2001 (Cth). The provisions set out in the scheme proposed appear to be appropriate and adapted to affecting an orderly transfer of the relevant assets and liabilities. A deed of transfer insurance business entered into between Cavell and Gordian forms part of the scheme. The copy in evidence is not dated but is executed by officers of each company and is therefore effective subject to the scheme coming into operation. Again, the deed recognises, in a practical way, the assumption of responsibilities and the acquisition of assets by Gordian from Cavell. On 14 November 2008, Tamberlin J made an order dispensing, in part, with compliance with s 17C(2)(c). That section provides that an application for confirmation of a scheme may not to be made unless an approved summary of the scheme had been given to every affected policy holder. As I have mentioned, because the policies issued by Cavell had been in runoff for many years, a number of the insurers who are the reinsured under those policies, have gone out of business and indeed some have become deregistered. Tamberlin J was asked to make an order on the basis of an affidavit of Steven Given affirmed on 3 October 2008. That attached a list of the names and addresses of policy holders whom Mr Given had said he researched and had identified as the remaining policy holders of Cavell. He confirmed the names and addresses for 150 of the 156 identified existing insured on Cavell's books. The Applicant before the Scheme is released for public inspection under order 4 below, cause a copy of a summary of the Scheme approved by APRA to be sent by pre-paid post to all policyholders of the Applicant whose policies were underwritten by or assumed by the Applicant in Australia that the Applicant has identified from its records and from the publicly available sources consulted by it, as described in the affidavit of Steven Given affirmed on 3 October 2008, for which the Applicant has an address. This was possibly due to the document to which Mr Given referred being printed on two sides of the paper but only having one side photocopied in the exhibit. Whatever be the reason, the evidence before me consisted of the list actually used by Cavell for the purposes of complying with his Honour's order. I am assured by counsel for Cavell that the latter list contained all of the names and addresses of policy holders on the list in evidence before Tamberlin J and referred to in order 2 made by him on 14 November 2008 as well as the balance of the 150 identified insureds to which Mr Given referred in that affidavit. Cavell argued that his Honour's order was satisfied because Cavell followed the methodology which the order propounded. I am of opinion that it is not necessary to determine the correctness of Cavell's argument because it does not affect the ultimate outcome of the application. I am satisfied that the policyholders Tamberlin J intended to be notified were, in fact, notified by the mechanism of sending notices of the proposal to enter into the scheme to the persons as named at the addresses in exhibit A. In those circumstances I am of opinion that I can make an order under s 17C(5) today dispensing with the giving of notices under s 17C(2)(c) to the extent that there is a disconformity between the manner in which his Honour ordered a notice be given s 17C(5) and the material before him in Mr Given's affidavit which erroneously identified a lesser number of policy holders than, in fact, he deposed to having identified himself. The power to grant a dispensation from the need to comply with the requirement that an approved summary of the scheme has been given to every effected policy holder under s 17C(5) is not conditioned to occur at any particular time prior to the actual order for the making of the confirmation of the scheme. The conditions in s 17C(2) and its analogues under the Act are not preconditions to the power to order confirmation of a scheme and a failure to comply strictly with them will not prevent the Court confirming a scheme: Re Armstrong Jones Life Assurance Ltd (1997) 74 FCR 160 at 162C per Emmett J; Re Royal & Sun Alliance Life Assurance Ltd [2000] FCA 1259 ; (2000) 104 FCR 37 at 40 [16] - [18] per Katz J; Re Insurance Australia Ltd [2004] FCA 524 ; (2004) 139 FCR 450 at 458-459 [31] - [37] , 463 [62]-[63] per Lindgren J. In substance, the section confers a broad discretion on the Court to dispense with the need for such compliance because of the nature of the scheme or the circumstances attending its preparation. No doubt, the Parliament had in mind the fact that insurance companies often have thousands, if not tens or hundreds of thousands, of policy holders who may or may not be affected by a scheme propounded under Division 3A. The discretion which the Court is given is a wide one because of the indefinite and varied nature of the particular circumstances which insurance companies may be in when schemes are propounded. They can be solvent or insolvent. They can have many or few policy holders. And, the identity and nature of the policy holders may also affect the necessity to give approved summaries to every one of them. Here, the evidence is that all of the policy holders possibly affected by the scheme are themselves insurance companies. Many of them will be aware of the scheme because other companies with which they deal or to which they are related have themselves received such notice and because the proposal to apply for the scheme has been advertised broadly, in accordance with Tamberlin J's orders. While it is unfortunate that Tamberlin J was given inaccurate information in Mr Given's affidavit, I am satisfied that, as a matter of substance, there has been no substantive prejudice occasioned by what has occurred. The evidence of Vu Pham is that all of the policy holders whose names and addresses appear on exhibit A were sent letters enclosing the summary of the scheme. He identified 12 envelopes which were returned, marked "Return to Sender". He caused one of those, addressed to AssetInsure Pty Limited, to be delivered by hand to the correct address. For three others, he identified that the addresses which had previously been recorded were incorrect and he was able to readdress the envelopes and send them to correct addresses. In the case of two other addressees, he discovered that they had been companies which had been deregistered. He was not able to identify any other addresses for three of the addressees and was, therefore, not able to do any more to notify them. Two envelopes that had been addressed to companies care of Suncorp Pty Limited, namely GIO Australia Limited and State Insurance Office (Victoria), were returned to Mr Pham's office. However, other copies of the scheme addressed to Suncorp or companies associated with it at the same postal address were not so returned. I am satisfied that Suncorp was aware of the nature of the scheme from the number of letters addressed to it containing the summary of the scheme which it did receive. In those circumstances, the fact the two envelopes were returned does not suggest that Suncorp suffered any prejudice by not receiving them. Had Suncorp any reason for concern at the proposed scheme, it would have been able to apply to the Court or make inquiries of the scheme's proponents because it had received actual notice in the various other copies of the summary of the scheme it did receive. The evidence before me is that no such inquiries have been made by Suncorp. Lastly, an envelope addressed to Royal & Sun Alliance Group plc care of Suncorp was returned. Mr Pham realised that that envelope had been wrongly addressed and sent it to the United Kingdom address of that company which he located on the internet and he has not received that back. I am satisfied that there has been a sufficient compliance with the orders for notification directed by Tamberlin J on 14 November 2008 and that I should dispense with the need to give every affected policy holder an approved summary of the scheme under s 17C(5) of the Act, beyond notifying those persons set out in exhibit A in the matter which has, in fact, occurred (including the notifications undertaken by Mr Pham after he received back the letters marked "Return to Sender"). I have been assisted today by the solicitor for Australian Prudential Regulation Authority (APRA). APRA has examined the scheme and associated materials, including the evidence before me, and has no objection to the proposal in the scheme. I am satisfied that the formalities required under s 17E(2) of the Act have been satisfied. Those are that the application for confirmation has been made in accordance with Prudential Standard GPS 410, and that the orders made by Tamberlin J for the notification of the scheme on 14 November 2008 have been complied with, other than in two respects, first, that of the inaccuracy in the list attached to Mr Given's affidavit, and secondly in relation to the availability of the scheme for inspection in London. The business of both Cavell and Gordian has recently been acquired by the Enstar Group Limited of the United Kingdom, whose Australian subsidiary manages the Australian businesses of those companies. Tamberlin J ordered that Cavell make a copy of the scheme, and any actuarial report on which it was based, available for inspection for a period of at least 15 business days prior to today between the hours of 9.00 am and 5.00 pm on Monday to Friday at two offices of Enstar Group Limited in the United Kingdom. There were two such two offices, one at Guildford in Surrey, where the scheme was on display from 27 November 2008 and one in London where it was only put on display from 2 December 2008. Thus, 15 days from the latter date will expire tomorrow at 5.00 pm Greenwich Mean Time. Originally, Cavell asked that, in some way, I should vary or dispense with further compliance with order 4 made by Tamberlin J. But Cavell now is content to accept that the order for confirmation of the scheme be made subject to a condition that it not be entered until 29 December 2008. That will allow sufficient time for any person who gives notice or makes an inquiry to the Enstar Group, or any of the other proponents of the scheme, on or before 23 December, to make any application to the Court in the event that there is a difficulty perceived by any such affected policy holder. Jefferson Gibbs is an actuary. He prepared an actuarial report on the proposed transfer. His report was approved by APRA and was made available for inspection with the scheme itself in accordance with Tamberlin J's orders. That report, coupled with Ms O'Sullivan's evidence, demonstrated that in substance the gross assets of Cavell were either government bonds or cash or their equivalent. As I have mentioned, the net assets of Cavell were approximately $11 million after allowing for all claims at their valuation. Prudential Standard GPS 110 requires all insurers to maintain a minimum capital requirement. Under its licence granted by APRA, Cavell is required to have a minimum capital requirement of $2 million but it has in fact reported to APRA using the sum of $5 million, which corresponds with the amount of the minimum capital requirement set in par 16(a) of GPS 110. The minimum capital requirement, in substance, is a surplus of assets after an insurer has allowed for payment from its assets of all known claims valued at a probability of sufficiency of 75%. Mr Gibbs said that based on a minimum capital requirement of $2 million, Cavell's APRA returns to 31 December 2007 show a solvency coverage of 5.373. If a minimum capital requirement of $5 million were used for Cavell the former figure changes to a solvency coverage of 2.149. Cavell and Enstar proposed that, if the scheme is confirmed, the balance of Cavell's assets retained, after the transfer of its liabilities and the payment by Cavell of $3 million to Gordian to assume those liabilities, will be transferred to other purposes outside Australia. That may or may not require APRA's approval but the overall intention of the scheme has been approved by it. Thus, at the moment, policy holders in Cavell can look to assets represented by government bonds or cash of $14 million to meet any possible future claims, based on the valuation of its liabilities at about $3 million as at 31 December 2007. Ms O'Sullivan has said that there has been no material change to that value. Because these policies are long-tail policies of reinsurance, claims by Cavell's reinsureds may not be made on it for many years. Also, claims may not be made until the layer of cover accepted by Cavell has been reached for the purposes of triggering its liability to indemnify its reinsured. Mr Gibbs made an assessment of reasonableness of the outstanding claims liabilities based on his understanding of claims development in open claims known to Cavell for the purposes of his report. He concluded that it was appropriate to use the 31 December 2007 valuation as a basis for comparison because of the similar, but not identical, positions of those policies. Since then, a number of changes have occurred. First, in March 2008 Enstar and another entity, JCF Fund 2 Limited Partnership, acquired, respectively, 70% and 30% of the beneficial ownership of Gordian from companies associated with the AMP group of companies in Australia. Secondly, also earlier this year, APRA approved a capital distribution of $147 million by Gordian (which has occurred) and APRA has subsequently approved, but Gordian has not yet given effect to, a further capital distribution of $86 million. For the purposes of satisfying himself as to Gordian's ability to meet any claims, for which it is liable, Mr Gibbs did a stress test in his actuarial report relating to the proposed scheme. This test identified the classes of asset held by Gordian as at 30 September 2008. Mr Gibbs found that about 28% of its assets were in bonds issued by sovereign governments, about 53% were represented by cash at bank, and about 19% were in the category non-sovereign bonds --- that is, bonds issued by corporations and similar securities. He concluded that, even allowing for the capital distribution of $147 million and the proposed $86 million distribution, Gordian would still retain a solvency coverage of approximately 2.5, as at 30 June 2008, based on its most recent minimum capital requirement of $81 million. One of the concerns which was addressed at today's hearing is that the way in which policy holders might consider their interests to be affected by the proposed scheme in light of the recent crisis in world financial markets. The stress test analysis that Mr Gibbs undertook has satisfied me that although Gordian's cash assets and sovereign bonds taken alone would result in it having a solvency ratio less than that permitted to it under its license, Gordian has a very large sum of secure liquid assets available to satisfy claims. That sum is well in excess of the value of Gordian's liabilities at a 75% probability of sufficiency calculated for the purposes of its compliance with APRA's requirements. The area in which there may be a risk as to the realisability of Gordian's assets lies in those assets that are in the class of non-sovereign bonds. These constitute 19% of Gordian's assets. Even allowing for those not being available at all to meet Gordian's liabilities, there is a substantial cushion of cash and government backed securities which would enable Gordian to meet its liabilities at their full valuation for APRA's purposes on the evidence before me. Of course, it is not the Court's function to assess commercial or insurance risks and I must act only on the material in evidence before me. It is the responsibility of APRA to ensure that insurance companies, whether actively operating or in run-off, are solvent and maintain a sufficient and solvent financial position. APRA has no objection to the scheme and, accordingly, I must accept its assessment of the commercial and insurance outcome were the scheme confirmed. That reveals a position in which policy holders of Cavell are likely not to be adversely affected if the scheme is confirmed by the Court. Mr Gibbs opined that there would be a number of advantages to Cavell's Australian policy holders from the proposed transfer of its assets and liabilities to Gordian. First, Gordian's net assets were over 30 times greater than those of Cavell and, depending on which minimum capital requirement figure was adopted, Gordian's solvency might be seen to be greater than Cavell's in the sense that I have explained. Secondly, he said that because Gordian was also in run-off, both Cavell and its policy holders after any transfer would continue to be protected by the provision in par 40(b) of Prudential Standard GPS 110. That provides that before an insurer is authorised by APRA to reduce its capital, it must demonstrate that its tangible assets in Australia will be sufficient to cover its insurance liabilities to a 99.5% level of sufficiency, plus any liabilities as calculated by its appointed actuary. Mr Gibbs' evidence is that after taking into account the currently proposed $86 million reduction of capital by Gordian, on the latest figures available to him (being as at 30 June 2008), Gordian would meet the requirement set by par 40(b) in respect of its remaining assets. Again, it will be a matter for APRA to decide whether or not to approve, at any particular point of time, a reduction of Gordian's capital. Mr Gibbs also identified a number of synergies achievable by the combination of Cavell's Australian assets and liabilities into Gordian's business, now that the Enstar Group has acquired both of them. The staff managing each insurer here are substantially the same. Additionally, the operational and administration costs relating to audit and regulatory compliance for Cavell and Gordian will be reduced if the two can be merged together. I have been informed that it is also proposed that a further scheme be confirmed. This is currently listed before Emmett J next year. It involves two further insurers in run-off, Sphere Drake Insurance and Municipal Mutual Insurance, which have been acquired by the Enstar Group. They are intended to be merged into the Gordian business. Based on the 30 June 2008 accounts of Gordian filed with APRA, Mr Gibbs examined the possible position of Gordian after the Australian businesses of Cavell, Sphere Drake and Municipal Mutual had been merged into Gordian and the proposed $86 million reduction of capital has occurred. He formed the view that the solvency coverage for Gordian based on its acquisition of Cavell alone would be 4.508 but that if the other two companies were also included as part of Gordian it would be 4.193. While this indicates that there may well be some reduction in the solvency ratio it is not one which Mr Gibbs or APRA considers at the moment to be a matter which should cause the Court not to approve the current scheme. It may well be that by the time the subsequent scheme is before the Court for confirmation the position with respect to Gordian's assets and liabilities and those of the two other insurers will be different from the hypothesis upon which Mr Gibbs formed his present opinion. Those are matters which will need to be considered by APRA, Gordian, and the Court on a later occasion. The evidence before me is that no similar application is known to have been put to or approved by APRA in the past. It would certainly be a matter of concern for APRA to examine why, at a time when the world's financial markets are in the parlous condition they are in today, the level of protection offered to policy holders by the prudential standards should be reduced, but there may well be considerations that make such an application appropriate. As I understand it, this matter is being disclosed as a proposal which Enstar wishes to pursue, having regard to its ownership and control of both Cavell and Gordian, so that I may take it into account in considering confirmation of the scheme. In my opinion it will be a matter for APRA to assess for itself whether such a departure from its published prudential standards should be allowed on the merits of whatever application is made. However, if such an application were made and granted it would reduce the level of comfort and protection available to policy holders for any claims later made, which exceed the current valuations based on adverse development in the future. Both Mr Gibbs and Ms O'Sullivan gave evidence about the impact of the recent reductions in interest rates by the Reserve Bank of Australia. Mr Gibbs' written report addressed the reductions up to 8 October 2008. In his oral evidence, he observed that there had been two more recent reductions. As he said, all else being equal, those reductions would have the effect of increasing the outstanding claims liabilities of Gordian and Cavell because they would affect the discount rate applied in valuing the liabilities expected to develop over the longer term. Mr Gibbs was not able to conduct a detailed review of whether Gordian had matched to its assets the potential liabilities under the policies it had written. There will be a potential for matching assets, particularly bonds or secure interest earning assets, because bonds with a higher coupon rate or interest bearing securities become more valuable as current interest rates decline. Ms O'Sullivan said that although some of the long-tail business extended out for many years into the future, the longest term securities which Gordian had would expire in approximately 2018, so that there was not an exact matching for the whole of the future potential development of the tail. I am satisfied on the evidence before me that what Gordian has done by way of matching does not adversely affect the substantive position of the policy holders in either Cavell or Gordian. Each company has a preponderance of its assets in sovereign bonds or cash at bank. Again, it will be a matter for APRA and Gordian to ensure that a sufficient investment policy is maintained by Gordian to meet potential future liabilities. On Ms O'Sullivan's evidence, this is an investment entry controlled, but not beneficially owned, at least entirely, by a Mr Flowers, who is a director of Enstar's holding company. However, Ms O'Sullivan was not aware whether the Enstar board had been informed of this proposal for a scheme, or whether Mr Flowers otherwise had notice of it. She discussed the way in which Enstar proposed to deal with protecting Gordian's minority owner, JCF Fund 2, from the consequence of Enstar causing Gordian to acquire an entity controlled by Enstar, namely Cavell. It is proposed that Gordian will effect a reinsurance policy with a related Enstar company, Fitzwilliam. Under that policy Fitzwilliam would bear between nought and 150% of the claims incurred by Cavell, once the scheme is given effect. That is, if any of the claims were less than 150% of their current value, totalling $3 million, Fitzwilliam would pay reinsurance to Gordian of the full value of each claim. Ms O'Sullivan said that it was proposed that the premium for this reinsurance would be about $2.1 million, which would effectively be defrayed from the $3 million paid by Cavell to Gordian for the acquisition of its liabilities. The remaining $0.9 million would be utilised in claims administration by Gordian and, to some extent, contribute to, it is hoped, its profitability. In the event that a claim exceeded 150% of its current estimate of value, then Gordian would bear that excess and, to that extent, the interests of JCF Fund 2 would be affected in its overall return from and the interest it owned in Gordian. Ms O'Sullivan's evidence was that one of the purposes of the joint acquisition of Gordian by Enstar and JCF Fund 2 was to use Gordian to take up opportunities to acquire and manage risks of other insurers in run-off, such as Sphere Drake and Municipal Mutual. She said that this particular business purpose was known to Mr Flowers, albeit that it had not been contemplated that Gordian might acquire businesses such as Cavell already owned by Enstar. Cavell argued that JCF Fund 2 is not a person entitled to notice under Div 3A of Pt III of the Act. It contended that the purpose of Div 3A is to give affected policy holders notice of proposed schemes, so that they may protect themselves against the consequences. The effect of implementing a scheme under Div 3A is to change the nature of the assets and liabilities of the companies which are covered by the scheme. Under s 411 of the Corporations Act 2001 , generally, statutory attention is given to the position of both shareholders and creditors of companies the subject of proposed schemes. But the operation of Div 3A of Pt III of the Insurance Act concentrates on the position of affected policy holders and their being given information about the consequences as a result of a proposed scheme. However, s 17G(a) of the Act provides that when a scheme is confirmed, it becomes binding on all persons so that, in effect, it operates in rem and affects not merely policy holders of the different insurers but also their shareholders, debtors and creditors. The purpose of advertising the proposal to apply to the Court for confirmation of a scheme is to give notice to not merely that the scheme might affect policy holders of one or other of the insurers involved but also their members, debtors and creditors. Insurance companies entering into schemes under the Act will generally have members, debtors and creditors whose interests may be affected by their implementation. Indeed s 17G(b) reinforces this by providing that, despite anything in the constitution of a body corporate affected by the scheme, confirmation by the Court has effect. Subject to hearing from Cavell or APRA to the contrary, I would propose a condition of the confirmation of the scheme that notice be given immediately to JCF Fund 2 of the scheme by serving it with a copy of Mr Gibbs' second affidavit of 19 December 2008, the scheme and deed between Cavell and Gordian and the orders that I will make and that it have until 29 December 2008 to apply to the Court that the orders not be entered. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | application to court for confirmation of scheme pt iii div 3a, insurance act 1973 (cth) compliance with regulations transfer of one reinsurer's liabilities to another reinsurer, both in runoff requirements of insurance act , s 17c(2)(c) , condition that application for confirmation of scheme may not be made unless approved summary of scheme given to every affected policy holder court's discretion to dispense with need for compliance with condition nature of assets and liabilities of companies involved and impact of scheme on each insurance |
In that proceeding, SETL seeks a declaration that the issue of shares in SETL to London Partners was invalid and orders for the delivery up and cancellation of the relevant share certificate or certificates and rectification of the SETL share register by expunging London Partners therefrom. 2 Section 444E of the Act provides that until a deed of company arrangement is terminated a person bound by the deed cannot, except with the leave of the Court, begin or proceed with a proceeding against the company that is subject to the deed. 3 Section 444D(1) of the Act provides that a deed of company arrangement binds all creditors of the company so far as concerns claims arising before the date of commencement of the administration or a prior date fixed by the deed. 4 SETL operates a business which carries out research, development, manufacture and distribution of braking systems. SETL was incorporated in Western Australia in December 2001 and in May 2002 its securities were admitted to the official list of the Australian Stock Exchange ("ASX") for trading. SETL securities were traded on the ASX from 28 May 2002 to 5 August 2003. Since 5 August 2003 trading in SETL securities has been suspended. 5 London Partners is incorporated in Western Australia and at relevant times carried on a business as a finance broker. 6 In about December 2001 SETL and London Partners executed an underwriting agreement under which London Partners agreed to fully underwrite the subscription of shares and options to be offered to the public by a prospectus under which SETL would undertake to make application to the ASX to have the securities admitted to the official list of the ASX. The prospectus was issued to the public on 21 February 2002. 7 In the proceeding brought by SETL against London Partners it is alleged, in effect, that certain directors of SETL, acting in concert with London Partners, caused SETL to issue 10,000,000 SETL securities to London Partners on 18 February 2002 for the improper purposes of providing an undisclosed benefit to London Partners and to enable London Partners to use those securities to induce persons to subscribe to SETL securities pursuant to the prospectus. 8 SETL pleads that to the knowledge of London Partners the directors in so acting breached their fiduciary duties to SETL and contravened s 181(1)(b) of the Act by failing to exercise their powers for a proper purpose. 9 On 31 October 2003 London Partners entered a Deed of Company Arrangement pursuant to Pt 5.3A of the Corporations Act 2001 (Cth) the arrangement being varied by further deeds executed on 31 October, 2003, 20 April 2004 and 8 November 2004. 10 London Partners remains the registered owner of the SETL securities issued to it on 18 February 2002. 11 The primary submission made by SETL is that it is not a creditor of London Partners and, therefore, leave of the Court is not required for SETL to proceed with a proceeding that seeks declaratory orders binding London Partners in respect of the securities issued to it. 14 However, the width of the meaning of the term creditor in the Deed is likely to bring SETL within the class of creditors to which s 444D(1) and 444E apply. (See: Smith v Carr (1993) 10 ACSR 427 per Debelle J at 432). The material facts recited in the pleading show that notwithstanding the limited relief sought by SETL against London Partners in this proceeding, it is plainly arguable that SETL may be a person who has a cause of action against London Partners at law or in equity that sounds in damages albeit at this point it may be of uncertain measure. It may be a claim for equitable compensation or compensation under s 1317H of the Act for involvement in a contravention of s 181 that exists independently of rectification of the register, or it may be a contingent claim that, for example, may arise in the event that it is the fact that London Partners holds the securities on trust for a bona fide purchaser for value without notice and is unable to deliver up the securities. In either circumstance it would follow that SETL would be a creditor of London Partners in respect of an unliquidated sum. (See: Re: R L Child & Co Pty Ltd (1986) 10 ACLR 673, per McLelland J at 674; FCT v Simionato Holdings Pty Ltd (1997) 15 ACLC 477 per Mansfield J at 481; Re McLean (1992) 108 ALR 360; Forshaw v Thompson (1992) 35 FCR 329; Petrochemical Industries Ltd v Dempster Nominees Pty Ltd (1994) 15 ACSR 468 per Murray J at 475-476). 15 The fact that at this point SETL does not pursue such a claim in the proceeding does not remove the claim from the scope of the proceeding. Given that the proceeding may include such a pecuniary claim and is brought against London Partners, or in relation to the property of London Partners, by a creditor bound by the Deed it follows that the proceeding is a proceeding in respect of which SETL must obtain leave to proceed. 16 It is now necessary to consider whether leave should be granted. In that regard it is clear that the issue raised by the proceeding cannot be resolved under the terms of the Deed of Company Arrangement and is a matter properly brought to the Court. 17 Counsel for London Partners opposed leave on two grounds. First it was submitted that SETL has, by a Deed of Release executed in May 2002, released London Partners from liability to an order of the type sought in the application. That may be an arguable point but it involves an issue of construction that is not clear-cut and is a question to be determined at trial if the point is raised in any defence filed. 18 It is, however, a point that may be taken into consideration with other matters to ascertain whether there is a preponderant balance against the grant of leave. 19 The second point of opposition is the contention that SETL has unduly delayed the commencement of this proceeding to the prejudice of other creditors of London Partners. The prejudice appears to be the delay that would ensue in the realising of the asset the subject of the proceeding and the consequent postponement of any distribution to creditors. If, however, London Partners possesses property that has been obtained by its participation in conduct that breached the Act there will be a substantial public interest in exposing that conduct and in examining the entitlement of London Partners to hold the property so obtained. The creditors will have to stand by and await that determination if that is the case. 20 As to the delay in bringing the proceeding it can be said there has been a period of several months since change occurred in the control of the board of directors of the applicant by replacement of allegedly delinquent directors but that delay is consistent with the obtaining of appropriate legal advice and is not such as to deny a right to bring this proceeding having regard to the degree of public interest therein. I would not deny the grant of leave on that basis and nor do I consider the combination of that issue with a claimed defence under a Deed of Release to be sufficient to justify refusing the leave sought. Therefore, leave will be granted to SETL to proceed with the proceeding brought against London Partners. The costs of the application will be reserved. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee. | a pplication for leave to proceed against a company subject to a deed of company arrangement whether applicant a creditor bound by the deed. corporations |
The lien is for unpaid management services (the provision of the crew and technical management for the vessel's operation and maintenance) provided by ASP's agent to Pan Australia Shipping Pty Ltd, the demise charterer. The amount claimed is $910,872.26, but Pan Australia says much less is due. Pursuant to leave granted on 6 October 2006, ASP filed an action in rem against the vessel to execute the lien. The owner, Jaymont Shipping Company Limited, has entered a conditional appearance and moves to set aside the action for want of jurisdiction. Section 18 of the Admiralty Act 1988 (Cth) imposes two conditions for the right to proceed in rem on liabilities incurred by a demise charterer. The first is that when the cause of action arose, the person personally liable on the claim was the owner or charterer or the person in possession or control of the ship. It is common ground that this condition is satisfied. The second condition is that when the action is commenced that person is the demise charterer. The contest is whether this condition is met. 2 There is also an application by Pan Australia, which is in voluntary administration, that the leave granted to bring the action in rem be revoked. It was said, correctly, that this application need only be considered if I were to find there is jurisdiction to bring the action in rem . 3 The essential facts are these. By a bareboat charter dated 17 February 2006 Jaymont demised the vessel, then named "Sea Beta", to Pan Australia for thirty-six months with an option for a further twelve months. The charterparty was on the revised Baltic and International Marine Council form --- Barcom 2001 --- which I am told is in common use. The charter hire was $US15,000 per day pro rata for the initial term and $US16,200 per day pro rata for the option period. 4 Several provisions in the charterparty are important for the purposes of this case. Clause 11(a) provided that: "(a) The charterer shall pay hire due to the Owners punctually in accordance with the terms of this Charter in respect of which time shall be of the essence. " Paragraph (b) went on to state that the hire was payable 30 running days in advance. Provision was made in cl 28 for the owners to "withdraw the Vessel from the service of the Charterers and terminate the Charter with immediate effect by a written notice to the Charterers" upon the occurrence of certain specific events. One such event was where: "(i) the Charterers fail to pay hire in accordance with Clause 11. " If this were all, the owner would have an immediate right to withdraw the vessel on the failure to pay any instalment of hire. But cl 28 contained what is commonly, but misleadingly, referred to as an "anti-technicality" proviso. The proviso was in these terms: "[W]here there is a failure to make punctual payment of hire due to oversight, negligence, errors or omissions on the part of the Charterers or their bankers, the Owners shall give the Charterers written notice [that they have ten days] in which to rectify the failure, and when so rectified within [ten] days following the Owners' notice, the payment shall stand as regular and punctual. Failure by the Charterers to pay hire within [that period] shall entitle the Owners to withdraw the Vessel from the service of the Charterers and terminate the Charter without further notice. " 5 Clause 29 dealt with repossession in the event of termination. It provided that on termination of the charter: "[T]he Owners shall have the right to repossess the Vessel from the Charterers at the current or next port of call, or at a port or place convenient to them ... Pending physical repossession of the Vessel ... the Charterers shall hold the Vessel as gratuitous bailee only to the Owners. " The clause also required the owners to arrange for an authorised representative to board the vessel as soon as reasonably practical following the termination and that the vessel would "be deemed to be repossessed by the Owners" upon its boarding by the owners' representative. 6 An instalment of hire was due on 2 October 2006 but was not paid. The instalment was not paid because Pan Australia was insolvent. Indeed on 2 October 2006 the directors had appointed voluntary administrators to take control of the company's affairs. The following day one of the directors, Mr McLachlan, telephoned Mr Smith the general manager of Frontline Management (Bermuda) Ltd --- Frontline managed the vessel on behalf of Jaymont --- and told him of the appointment. Mr McLachlan explained that the hire due on 2 October had not been paid because his company did not have the funds and also because administrators had been appointed. During the conversation Mr McLachlan acknowledged that the failure to pay was not for a reason covered by the "anti-technicality" proviso. This concession could not bind the company in any way as the directors' powers had been suspended upon the appointment of administrators. 7 By letter dated 4 October 2006, Frontline attempted to terminate the charter on the owner's behalf. The dispute between the parties is whether the attempt was effective. The outcome of this dispute turns upon the answer to two questions. First, was the owner entitled to terminate the charter while Pan Australia was in administration? The answer to that question depends upon the proper construction to be given to several statutory provisions. Secondly, if the owner was entitled to terminate, did the 4 October letter effect termination?. 8 On the first question I must refer to several sections in Pt 5.3A of the Corporations Act 2001 (Cth), the division dealing with voluntary administrations. The appointment of an administrator establishes a moratorium on actions against the company and its property. Secured creditors cannot take steps to enforce their security: s 440B. Owners or lessors of property in the company's possession cannot take steps to take or recover possession of their property: s 440C. Unsecured creditors cannot bring or proceed with a claim against the company or its property: s 440D. There are exceptions, but only one need be mentioned. Section 441J provides that: "Nothing in s 437C [it is likely that the reference should have been to s 437D] or s 440C prevents a person from giving a notice to a company under an agreement relating to property that is used or occupied by, or is in the possession of, the company. " 9 With these sections in mind Mr Horgan for ASP argued that the owner was forbidden from giving a notice that would determine the charter as that was prohibited by s 440C. He referred me to Barclays Mercantile Business Finance Ltd v Sibec Developments Ltd [1992] 1 WLR 1253 to support the view that this was a reasonably arguable proposition. 10 I do not feel able to accept Mr Horgan's argument. The effect of s 440C is to prevent possession (actual or constructive) being taken of property in the hands of the administrators: Cinema Plus Ltd (Administrators Appointed) v Australia & New Zealand Banking Group Ltd [2000] NSWCA 195 ; (2000) 49 NSWLR 513, 545. The notice determining the charter, even if it were effective, did not remove possession of the vessel from Pan Australia. In any event, it is plain that s 441J permits the giving of a notice of termination. In Re Java 452 Pty Ltd (Administrators Appointed) (1999) 32 ACSR 507, 515 Byrne J said in relation to a notice to determine a tenancy that the result of ss 440C and 441J was that "although the lessor may not recover possession, it may take steps to perfect its right to possession which right might be exercisable, if available, at the end of the administration". This reasoning applies a fortiori to a charterparty. The English legislation considered in Barclays Mercantile, the Insolvency Act 1986 (UK), is in different terms. There is in any case nothing like s 441J in that statute. 11 The answer to the first question, then, is that the owner was entitled to terminate the charterparty despite Pan being in administration. 12 The second question, whether termination was effected, gives rise to several difficult issues. The first is whether a notice of termination will bring the charter to an end or whether the charter remains on foot until the vessel is repossessed. Unfortunately this is still a controversial topic. In The Turakina (1998) 154 ALR 666, Tamberlin J held that a demise charter, under which possession and control of the ship had been given to the charterer, could not be terminated by notice alone. He said termination would only occur when the owner retook possession of the ship. In The Rangiora [2000] 1 Lloyd's Rep 36, the New Zealand High Court followed that decision, stating that the principle was a rule of the common law. Nonetheless, there is a view that the rule established in The Turakina may be avoided by careful drafting. In CMC (Australia) Pty Ltd v Ship 'Socofl Stream' [1999] FCA 1419 ; (1999) 95 FCR 403 it was held that the question whether a demise charter could be terminated without repossession depended upon the terms of the charterparty. Clause 28 provides for termination by notice and cl 29 says that when the charter is at an end the charterer is the "gratuitous bailee" of the vessel. 14 If I may say so, this is a troubling conclusion. It is troubling because until the owner actually withdraws the vessel not only does the charterer retain possession it still mans and supplies her. The problem becomes acute if the notice of termination is served while the vessel is at sea. Applying The Socofl Stream, she is not under demise while returning to port. If that be true it may surprise the owner to learn that the master now has ostensible authority to bind it. There is also the possibility that the owner may decide to retake possession at the next port of call or at a convenient port or place as contemplated by cl 29. The result of the application of The Socofl Stream is that the owner has control of the vessel during the voyage. The true position is probably different. 15 I prefer the view that it is not until the vessel has been withdrawn that the demise comes to an end for it is only then that the charterer has lost exclusive possession of the vessel. That the charterparty describes the charterer's possession before delivery as that of "gratuitous bailment" is not to the point. The real relation between the charterer and the vessel cannot be disguised by the use of an inapposite label or description. I appreciate, however, that others take a different view. 16 The next issue is whether the 4 October letter effected termination. At first this seemed to be comparatively simple but, on reflection, it does raise a difficult point of principle on which there appears to be no authority directly in point. To understand the problem that has arisen it is necessary to set out the letter. This payment was due to be received by Owners on 2 October 2006. We further note that you have today gone into administration and that you expect to be in a position to give us further information as to the company's plans in the next 48 hours. 17 October 2006. If you do not the Charter will terminate. The first paragraph refers to the conversation during which Mr Smith was advised that the October hire had not been paid because of the lack of funds and of the appointment of the administrators. Mr Smith was also told that the "anti-technicality" proviso did not apply. In those circumstances it is difficult to understand why it was necessary to include the third paragraph. My guess is that Frontline wanted to guard against even the remotest possibility that the owner would be accused of repudiating the charterparty. 18 The owner contends that the fourth paragraph constitutes the notice of termination. ASP says that when regard is had to the entirety of the letter that paragraph could not stand as a notice of termination for it is neither clear nor unequivocal. In this regard the parties accept that under English law, which is the governing law, a notice of termination must clearly and unambiguously indicate that the owner has decided to terminate the charter. In The Aegnoussiotis [1977] 1 Lloyd's Rep 268, Donaldson J said (at 275): "No particular form of words or notice is required [to terminate a charter], but the charterers must be informed that the owner is treating the non-payment of hire as having terminated the charterparty. " Although notice of termination may be informal, what is required is "an unequivocal act or statement [by the owner] communicated to [the charterer] showing that [the owner intends to terminate the charter]": The Mihalios Xilas [1979] 2 Lloyd's Rep 303, 307 per Lord Diplock. Put rather more simply, the owner must make plain his decision to terminate the charter, not to lawyers but to the person who is to act on the notice. 19 Frontline's letter is plainly equivocal. It purports to cover two options but commits to neither. On one hand, it demands payment within ten days under threat of termination. On the other hand, it seeks to terminate the charter with immediate effect. The charterer is required to determine which of the options applies by reference to the application of the "anti-technicality" proviso. 20 On reading the letter my initial impression was that it was ineffective for lack of clarity. It also read as if the owner was uncertain whether it was entitled to terminate the charter and was putting the onus on the charterer to make that decision. This seemed to me to offend against a principle of primary importance in all commercial transactions, namely that the parties must know where they stand. This could hardly be achieved by a conditional termination of the kind employed here. 21 I have reflected further on the letter, reviewing it in the light of several cases that I came across since reserving my decision. They are cases in which it had been held that a notice to quit was not invalid simply because an aspect was uncertain, provided it could be presumed that the tenant knew the facts, and sometimes the relevant law, which would render the notice certain. These cases are not on all fours with the present case. In each the landlord expressed a clear intention to terminate the tenancy. The lack of clarity concerned the date on which the termination was to take effect. The date was not specified in the notice, but a formula to ascertain the date was provided. In some cases the formula was deficient and others it was not. The cases are of assistance here as regards whether, and if so in what circumstances, a termination notice may legitimately require the recipient to have regard to facts and circumstances outside the four corners of the notice to clear up any uncertainty. I need only mention three of the cases to illustrate the principle. 22 The first case is P Phipps and Company (Northampton and Towcester Breweries) Ltd v Rogers [1925] 1 KB 14 which, if I may say so, is the high watermark of this line of authority. The case concerned a yearly tenancy of a public house. Either party could determine the tenancy "upon giving to the other of three months' previous notice in writing of his or her intention to do so expiring on any one of the days appointed as special transfer sessions by the justices for the district in which the premises are situate..." The landlord gave the tenant a notice to quit which read: "We do hereby give you notice to quit and deliver up to us (or such other person as we may appoint) on the earliest day your tenancy can legally be terminated by valid notice to quit given to you by us at the date of the service hereof ...". The notice was declared invalid. Bankes LJ said (at 20) that: "It is not necessary that a notice should be clear and unambiguous in expressed terms provided it can be rendered clear and unambiguous by the application of the maxim 'Id certum est quod certum reddi potest'. ['That is sufficiently certain which can be made certain'. ] There are many decided cases in the books where the Courts have imputed to the tenant knowledge which, when applied to the notice to quit served upon him, renders clear what would without that knowledge have been neither clear nor unambiguous. " Bankes LJ, however, said that he was not prepared to impute or attribute to the tenant the knowledge of the facts or of the law that was required to enable the tenant to determine the day upon which the tenancy would come to an end. The situation was that several difficult construction questions and questions of fact had to be sorted out before the notice could be rendered certain. Among the points that needed to be resolved was whether the reference to "three months" meant three calendar months or three lunar months; whether an annual licensing meeting was or was not a special transfer session; and when the special transfer sessions were in fact going to be "held". Bankes LJ was unwilling to extend the maxim to embrace such a complex enquiry. Atkin LJ rejected the notice on similar grounds. He said (at 28): "But it appears to me to defeat the whole object of notice to leave the date to be ascertained by the tenant as a problem not of fact but of law ... A tenant receiving such a notice might have to consult his solicitor, who might have to consult counsel, who might have to advise an application to the Court for a declaration by action or summons. " Scrutton LJ was in dissent. He was of opinion that a long-settled line of authorities had treated landlords and tenants as both knowing the law and had assumed that the tenant must know the necessary facts. This, he said, bound him to conclude that the notice was valid. 23 The second case is Addis v Burrows [1948] 1 KB 444. There premises were let on a yearly tenancy "until the tenancy be determined at the end of the first or any subsequent year by one of the parties giving to the other of them six calendar months previous notice in writing. " On the face of the tenancy agreement the period of the tenancy was from 1 January 1944 to 30 June 1945, not a term of one year. The lessors served a notice to quit on 28 June 1945. The notice required the tenant to quit "at the expiration of the year of your tenancy which will expire next after the end of one half year from the service of this notice". The Court of Appeal decided that the tenancy granted was for eighteen months and thereafter on a yearly tenancy. It also held that the notice to quit was valid. Evershed LJ dealt with the sufficiency of the notice in a lengthy passage between pages 452-456. He said (at 453) that that notice "puts plainly on the tenant the obligation of ascertaining the date meant by the form of words used. Prima facie, the problem is not very difficult. As [Lord Greene MR] observed during the argument, the tenant requires for its solution two things only, a modern calendar and the tenancy agreement. Armed with those two things he asks himself first: When was this notice served on me? ... [H]e is next required to find out when one half year ends after the service of the notice. ... [T]hen only remains the question: when does the year of his tenancy current on December 29, 1945, come to an end? It is true that involves the interpretation of the tenancy agreement. But, if I am right in the view which I have expressed, he should have no great difficulty in answering that question. " Evershed LJ distinguished Phipps v Rogers . He said (at 455) of that case that there was "an accumulation of difficulties provided by the joint effect of the language of the tenancy agreement and the very unusual form of the notice to quit. " Later (also at 455) he pointed out that the court had come "to the conclusion that the tenant was involved in so many difficulties that there was a failure on the landlord's part either to give a certain date or to supply the tenant with a formula from which certainty could be ascertained and that, therefore, the notice was not good. " By way of contrast, as regards the case before the court the judge said that any ambiguity was capable of a clear answer. 24 Asquith LJ delivered a short judgment in which he pointed out, at 457, that in Phipps v Rogers it was observed that "each case must be decided on its own facts and circumstances" and that "the circumstances there were that the tenant was forced by the form of notice to answer questions both of law and fact interlocked with each other and calling for a much more complex calculus than anything involved in the [instant] case. " The other judge, Lord Greene MR, also put Phipps v Rogers to one side as being a difficult case to understand, observing, at 458, that the difficulties presented to the tenant in that case were difficulties of construction and difficulties of fact. He rejected the suggestion that a termination notice giving rise to a difficult question of construction was necessarily invalid. 25 The last case is Allam & Co Ltd v Europa Poster Services Ltd [1968] 1 WLR 638. I need not go into the facts. I cite the case for the observation by Buckley J who looked closely at Phipps v Rogers and Addis v Burrows and (at 652) said this: "No doubt if those cases are both good law, as I must assume that they are, the question of the validity of the notice, the interpretation of which involves some question of law, must become a question of degree. There must be cases which, because of the difficulty or complexity of the case, fall within the principle of Phipps v Rogers . There must be others which, notwithstanding that some question of law arises, because of the simplicity or comparative simplicity of the problem fall within Addis v Burrows . " 26 The cases appear to me to establish the following propositions. A notice to quit will not necessarily be invalid if the date upon which the tenancy is to determine is not specified in terms but the tenant is informed of the means by which the date can be ascertained. If the means is a reference to facts which the tenant is deemed to know that will make good the deficiency. If the facts cannot be imputed, in very limited circumstances it may be possible to have regard to facts which the tenant can easily discover. Even if some interpretation of a document is required that may suffice, provided the construction does not raise any difficult point. 27 Unfortunately there is no bright line test by reference to which a notice can be held good or bad. It is a question of degree in each case. On any view, however, there must be some measure of restraint regarding the extent to which the tenant can be asked to travel outside the notice. I mean by this that an uncertain notice could not be made good by some open-ended enquiry. Further, in each case the enquiry must be objective; regard is to be had to external facts which the tenant is deemed to know (constructive knowledge) or to facts which he is required to discover. The court does not enquire into a tenant's actual knowledge of the material facts. I note that in none of the notice to quit cases was the judge interested in discovering what the tenant actually knew or what he thought of any of the construction questions that arose. The focus of attention, correctly in my view, was the notice itself: was it good or bad in an objective sense. Anyway, if a subjective enquiry were permissible there would be no end to the litigation that would ensue. Moreover, if the validity of a notice depended upon the actual state of knowledge of a particular tenant the consequence would be startling. The clever tenant with the knowledge of an amateur lawyer would always be evicted but his average neighbour would not. 28 In my opinion the foregoing principles can be applied to other kinds of notices, including those that determine charters. Nothing said in the cases suggests that the principles are confined to notices to quit. 29 I am now in a position where I can deal with the validity of Frontline's notice. The view I have come to is that it is not an effective notice to terminate the charter. First, it does not state that it is the owner's intention to bring the charter to an end. The letter indicates that when written the owner did not know whether the charter could be terminated. It had not formed the view --- or at last not had stated that it was of the view --- that there had been a breach of the charterparty which gave rise to a right to terminate under cl 28. The reality is that the owner was hedging his bets. Second, and this is perhaps no more than an expansion of the first point, with this letter the owner left it to the charterer to determine whether the owner could bring the charter to an end. That is the only sense I can give to the fifth paragraph --- "Please confirm your [the charterer's] position by return". The charterer was being asked to advise whether in its opinion the "anti-technicality" proviso applied and its decision would then dictate whether the charter was over. This is an impermissible reversal of roles. It was for the owner to decide whether there had been a breach that entitled it to terminate the charter. Third, even if the letter did constitute a statement that the owner elected to terminate the charter and the only issue was whether the decision had been conveyed with sufficient clarity, the owner is in difficulty. That is, it is impossible to avoid the conclusion that the notice is uncertain. Often times it will be impossible for the charterer to determine whether the "anti-technicality" proviso applied. For one thing, difficult questions of construction can arise. What precisely is meant by "oversight", "negligence", "errors" or "omissions"? By way of example, is the word "negligence" used in its common law meaning or does it mean "careless"; is "error" confined to errors of fact or does it include errors of law? For another thing, it is easy to imagine circumstances in which the application of the proviso to the facts of a particular case will yield no clear answer to the question --- Does the proviso apply? To my mind it is clear that this is not a form of notice where the equivocation can be cured by what a charterer is deemed to know or is required to find out. The letter is clever but it is a bad notice. 30 For completeness I should say that even if it were permissible to look beyond the form of the notice and the presumed knowledge of the charterer and test the validity of the notice by reference to its actual knowledge, there is still a problem. Frontline had been told by Pan Australia that the reason for the non-payment was lack of funds and that it was not due to any oversight, negligence, error or omission. Despite this, the notice from Frontline left open the possibility that the proviso applied. This would indicate to Pan Australia that some doubt remained in the mind of the owner. That is, the form of the notice was likely to create doubt, if none already existed, in the mind of the charterer as to whether the proviso applied. This unsatisfactory state of affairs is sufficient to hold the notice bad. 31 The result is that the charterparty was on foot when the action in rem was commenced and so there was jurisdiction to bring the action. It is therefore necessary to decide whether I should revoke the order by which leave was granted to bring the action. For this purpose I need to recount some procedural history. On 6 October 2006 the plaintiff applied under s 440D(1)(b) of the Corporations Act for leave to commence the action against the vessel and to apply in that action for its arrest. The application was brought on without notice to Pan Australia. There was evidence that if notice of the application were given the owner might take steps to determine the charter if it were still on foot. In that event an action in rem could not be brought and ASP would be left without security for its debt. 32 In those circumstances I granted leave to commence the action but on ASP's undertaking that if the order granting leave was revoked ASP would discontinue the action. I reserved to Pan Australia, its administrators and any other person that may be affected, liberty to apply to vary or revoke the order. This is how Pan Australia comes before me on its present application. 33 The general purpose of the moratorium provisions to which I have referred is to prevent outside intervention that could jeopardise the continuation of the company's business during its administration: National Australia Bank Ltd v King (2003) 45 ACSR 413. By keeping outsiders at bay there is greater likelihood that the objects of Pt 5.3A will be achieved: Re Ansett; Intrepid Aviation Partners VII LLC v Ansett Australia Ltd [2001] FCA 1360 ; (2001) 115 FCR 175. Those objects are to maximise the chances of the company or as much as possible of its business continuing in existence and, if that is not possible, to achieve a better return for the company's creditors and members than would result from an immediate winding up of the company: see s 435A. 34 Holding those objects in mind, I am nonetheless of the view that the leave order should not be revoked. Shortly after their appointment the administrators decided that they did not wish to retain the vessel and wrote to the owner advising that the vessel would be redelivered. Thus, the administrator cannot say --- indeed they do not say --- that the removal of the vessel from their control by its arrest will impede the administration. 35 The administrators seek the revocation because they have a potential buyer for the business and the sale may not go ahead unless the buyer is able to charter the vessel. They also say that if the action in rem remains on foot the owner will incur legal costs that will be passed on to the company in administration. I think there is little substance in the first point. If the vessel is arrested the owner will put up security and obtain its release. That will happen quickly, as it always does with a vessel that can easily be demised. There is some substance to the second point. I accept the owner will incur some costs in sorting out the quantum of ASP's claim and a portion of the costs will be payable by Pan Australia, leaving less for the other unsecured creditors. But the costs will not be excessive, in my opinion. Anyway, I am of opinion that the interests of the general body of unsecured creditors should be subordinated to those of ASP whose claim over the vessel is proprietary in nature. See also in relation to a similar application: Morris v Ship Kiama (Mubum) (1998) 16 ACLC 945. 36 For the foregoing reasons, I will make orders that Jaymont's motion be dismissed with costs and Pan Australia's application be dismissed but with no order as to costs. There will also be an order that ASP have leave to apply in proceeding no. VID 1099 of 2006 for the arrest of the vessel. | demise charterer notice of termination notice uncertain termination conditional whether redelivery required leave to commence action in rem against ship admiralty corporations |
The Second Applicant is to prosecute the application only in accordance with Order 4 rule 14 of the Federal Court Rules . 2. The Applicants' claims for interlocutory relief be dismissed. 3 Considerable reservation has been expressed as to whether or not it is appropriate to revisit Order 2 as made by Spender J on 21 November, but in the interests of the administration of justice, it has been considered desirable to do so. 4 On that occasion, his Honour did not have the benefit of the evidence now adduced in support of the Application that leave be granted for Mr Robert Smith to appear for the Second Applicant. This afternoon, the evidence relied upon has been an Affidavit of Robert Arthur Smith, sworn on 28 November 2007; an Affidavit of Paul Hennelly, sworn on 11 December 2007; an Affidavit of Terry Patrick Sharples, sworn on 20 November 2007; and the Application as made on 15 November 2007 for exemption or waiver made to this Court. Subject to subrule (2) and order 43 (which relates to disability), any person may proceed in the court by a solicitor or in person. 2. Except as provided by or under any Act, a corporation may not, without the leave of the court, commence or carry on any proceeding otherwise than by a solicitor. The term " organisation " is defined as having the meaning given by subs 4(1) of the Workplace Relations Act 1996 (Cth). 6 The circumstances in which the present Motion was attempted to be filed in the ACT Registry has only permitted a cursory review of the authorities as to the manner in which the discretion conferred by O 4 r 14 is to be exercised. Even though the Second Applicant has now been given the opportunity to adduce such evidence upon which it now wishes to rely, it is not considered that leave as sought should be granted or that the orders made by Spender J should be varied. This will be coupled with the rationale for the restriction which in large part is related to the proposition that persons should not be represented in superior courts other than by legally qualified agents who not only possess the relevant skills to conduct litigation but also are bound to observe certain duties to the court itself. Of course, any natural person may represent himself or herself. But a company being a fictitious legal person must always be represented by another. And that attracts the application of the principle that representation by an agent should be limited to legally qualified persons subject to the inherent and residual discretion of the court to waive the requirement in appropriate circumstances. The position under the Federal Court Rules is not as restrictive as that which applies under the English and various of the State Supreme Court Rules . While the rationale of the restriction is basically the same, the power of the court to give leave to a corporation to carry on a proceeding otherwise than by a solicitor is expressly conferred as an integral part of the rule. The English cases and those in other jurisdictions with similar rules, invoke a general dispensing power whose application is ambulatory and to be construed in particular cases by reference to the content and significance of the rule under consideration. The terms of O 4 r 14 itself contemplate that leave may be granted and raise no express threshold requirement of special or exceptional circumstances. ... Factors relevant to the exercise of the discretion to give leave would include the class of company involved, the nature of its undertaking, its financial structure, its ability to retain and pay its staff, the identity of its shareholders and the spread of the shareholding. Such additional material as is now available indicates that the Fishing Party has branches in New South Wales, Queensland, and Victoria, and has a national membership of approximately 2400 members. The evidence further indicates that Mr Smith, who seeks to represent the Second Applicant, has made available to the Fishing Party approximately $40,000. Exhibit 1, namely, the " Application for Waiver ", suggests that the finances of the Fishing Party may be more constrained. That exhibit records, in the bank account to which it refers, a balance of $677.64. 9 In rejecting the Application for leave that Mr Smith be permitted to represent the Second Applicant, consideration has been given to the fact that none of the evidence sets forth the qualifications, expertise or experience of Mr Smith which may be of benefit to the Court. Consideration has also been given to the fact that the Application as drafted raises serious allegations for which there is at present little, if any, support in the Affidavit . The Application , for example, seeks a " declaration that the decision to registrar [sic] the second respondent party (AFLP) was induced or procured by fraud or misleading information ". The seriousness of allegations raised is relevant to a decision as to whether or not to grant leave: see Slack v Bottoms English Solicitors [2003] FCA 1337. The nature of those allegations are such that they are more likely to be made by an unrepresented party and may not survive the scrutiny of a legally qualified practitioner. 10 Also relevant to the question as to whether leave should be given is the nature of the proceeding sought to be pursued and whether legal representation is needed. The conduct of litigation in terms of presenting the contentions of the parties in a concise and logical form, deploying and testing the evidence and examining the relevant law demands professional skills of a high order. Failure to display these skills will inevitably extend the time needed to reach a decision, thereby adversely affecting other members of the public who need to have their disputes resolved by the court and adding to the cost of the litigation concerned. It may also, in an extreme case, lead to the court reaching a wrong decision. 11 A reading of the Application alone is sufficient to indicate the desirability of the present proceedings being prosecuted by those with legal qualifications. 12 The First and Seventh Respondents seek their costs, invoking the normal approach that costs follow the event. Notwithstanding the assertion of public interest relied upon by Mr Smith on behalf of the Second Applicant, it is considered that costs should follow the event. The Second Applicant, before filing its Motion , was confronted with Order 2 as made by Spender J on 21 November 2007. It unsuccessfully sought to revisit that order. There is no reason that costs should not follow the event. That leave as sought in paragraph 1 of the Notice of Motion as filed on 29 November 2007 be dismissed. 2. The Second Applicant to pay the costs of the First and Seventh Respondents of and incidental to the hearing of that part of the Motion . | commencement of proceedings by corporation leave refused for corporation to be represented by non-lawyer practice and procedure |
2 The application is not opposed by the first and second respondents but is opposed in part by the third and fourth respondents. 3 The applicant is a financier which provided finance to its clients by way of invoice, purchase and debt factoring. The second respondent was an executive director and shareholder of the first respondent and had the responsibility of the preparation, drafting and submission of a finance application on behalf of Gartner Wines Marketing (SA) Pty Ltd (GWM). 4 It is pleaded that GWM was 'financially dependent on the worth of the Gartner Group' and 'was dependent on the liquidity of the associated companies'. Mr Michael Gartner is pleaded to be the 'controlling mind' of GWM. He was also a partner in M & AW Gartner. The associated companies are identified in the statement of claim and are said collectively to comprise the Gartner Group. 5 The fourth respondent was the sole director and shareholder of the third respondent, and is alleged to have been the person responsible for the preparation of financial accounts (including the financial documents) for the associated companies, the Gartner Group, GWM, M J & A W Gartner and Gartner Wines Pty Ltd. He was also the company secretary of GWM. 6 The applicant claims that in about February 2002 the second respondent provided financial information relating to GWM and the Gartner Group to the applicant for the purpose of obtaining finance 'for the GWM business'. 7 It is claimed that in March 2002 the first respondent, at the instigation of the second respondent, submitted a business referrer application to the applicant which had been executed by the second respondent. It is pleaded that it was a condition of that agreement that the first respondent indemnify the applicant against any loss or damage that the applicant might suffer arising directly or indirectly out of any breach by the first respondent of its obligations as a result of any statement or information concerning a customer provided to the applicant being false or misleading. 8 It is pleaded that certain representations were made by the first and second respondents to the applicant which were false and that thereby the first and second respondents contravened ss 52 and 53 of the Trade Practices Act 1974 (Cth) and the corresponding sections of the Fair Trading Act 1987 (SA). 9 The claim against the third and fourth respondents is in tort. In paragraph 48 of the statement of claim it is pleaded that the third and fourth respondents owed the applicant a duty to take reasonable care 'in the production of the financial statements of GWM and the Gartner Group'. 12 The third and fourth respondents did not take any issue about the particulars which are given in that paragraph. In breach of their duty to take reasonable care GDA and D'Arrigo produced the financial statements which was not true and correct. CCH (the applicant) repeats the particulars set out under paragraphs 25.6 above. Further particulars will be provided on receipt of a report from an expert accountant. The further particulars of the insolvency of GWM and the Gartner Group will be provided on receipt of a report from an expert accountant. CCH repeats the particulars set out in paragraph 25.2 above. Further particulars will be provided on receipt of a report from an expert accountant. 16 The financial statement which is referred to in paragraph 25.6 is defined in paragraph 9.5 as a document: 'Statement of financial position for M J & A W Gartner dated 6 March 2002'. The financial statement is exhibited to an affidavit of the applicant's solicitors sworn on 25 August 2005. That document sets out various assets which are said to be owned by M J & A W Gartner and ascribes a value to each of those assets. 17 The assets include land holdings totalling $19,658,000; other assets including livestock of $5,600,000; and investments including investments in associated companies totalling $31,567,000. The assets total $56,825,000. Liabilities are disclosed in the statement of financial position at $7,500,000. The net asset position is represented to be $49,325,000. 18 The investments, as I have said, include shares in associated companies. The document includes a schedule of the assets of those associated companies, no doubt for the purpose of establishing the value of the shareholding in those associated companies. 19 The third and fourth respondents complain that the proposed pleading in paragraph 49 fails to identify with sufficient particularity why it is said that the financial statements are not true and correct. All of the particulars, say the third and fourth respondents, are contained in paragraph 25.6.1 and paragraph 25.6.2. Because of that lack of particularity, it is submitted, the Court should refuse the applicant leave to amend the statement of claim. 20 The third and fourth respondents' argument is superficially attractive. The only particularity which is given by the applicant is that the Gartner Group did not have surplus assets of $49,325,000 and that GWM was insolvent without the support of the Gartner Group. 21 As I understand the pleadings, the applicant's case is that the GWM was balance sheet insolvent. The GWM could not have been balance sheet insolvent unless its liabilities exceeded its assets. 22 It follows, therefore, that if the applicant is to make out its plea either the assets disclosed in the financial statement did not have the value represented in the financial statement or there were other liabilities not disclosed in that document. 23 Because the applicant has pleaded that GWM was insolvent, it must be necessary to ascertain the value of each of the assets within the Gartner Group at the relevant time. 24 In my opinion, the statement of claim does give the third and fourth respondents sufficient particularity of the claim made against them. 25 No doubt in an evidential sense, the applicant will provide better particulars when it provides its expert report. 26 However, insofar as a pleading must state the material facts upon which the claim is based, in my opinion, this pleading is adequate. 27 In those circumstances, I give leave to the applicant to amend its statement of claim in accordance with the draft statement of claim exhibited to the affidavit of Samara Jane Bell sworn on 3 March 2006. I certify that the preceding twenty seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | application to amend statement of claim whether proposed statement of claim lacked particularity application allowed. practice and procedure |
The methods by which AAE diagnoses and treats allergies include testing for and identifying a person's specific allergies using a muscle strength indicator technique and treating allergies by using a technique based on positive and negative conditioning. In the ordinary course of its operations AEE publishes information about those services on an internet website. It also advertises its services on the radio, in newspapers and in brochures given to clients, prospective clients and other interested persons. The Australian Competition and Consumer Commission (ACCC) alleges that certain statements published on the website and contained in the advertisements are in breach of the Trade Practices Act 1974 (Cth). The impugned statements can be grouped into several categories. The first are statements by which AAE represents that it can test for and identify a substance to which a person is reacting and which is therefore an allergen for that person or a substance to which that person is allergic. The second are statements by which AAE represents that it can cure or eliminate virtually all allergies or allergic reactions. The third comprise statements by which AAE represents that it can successfully treat a person's allergies or allergic reactions. The fourth are statements by which AAE represents that its treatment is safe or involves low risk. The fifth group are statements by which AAE represents that following its treatment it is safe to have contact with the substance or allergen to which the person was having an adverse reaction. There are quite a number of statements said to be infringing and for convenience they are set out in an annexure to these reasons, grouped according to the category into which they fall. The ACCC's specific allegation is that these statements are in breach ss 52 , 53 (aa), 53 (c) and 55A of the Trade Practices Act . In summary, those sections provide that a corporation shall not in trade or commence: engage in misleading or deceptive conduct (s 52) ; falsely represent that services are of a particular standard or quality (s 53(aa)) ; represent that services have benefits they do not have (s 53(c)) ; and engage in conduct that is liable to mislead the public (s 55A). To establish that each statement is in breach of the Trade Practices Act the ACCC tendered a report by Professor Douglass, the Head of the Allergy, Asthma and Clinical Immunology Service at the Alfred Hospital. Professor Douglass is a specialist in allergy and respiratory medicine. Her report is lengthy and technical. These guidelines have been produced by the Nomenclature Review Committee World Allergy Organization. The Authors of this report are representatives of national Allergy and Clinical Immunology organizations and include internationally recognized experts ... In these guidelines a hypersensitivity is defined as: 'objectively reproducible symptoms or signs initiated by exposure to a defined stimulus at a dose tolerated by normal persons'. Furthermore allergy is defined as a 'hypersensitivity reaction initiated by specific immunological mechanisms. These allergic conditions are usually mediated by the antibody IgE: thereby being designated 'IgE mediated allergy', and these conditions are those most commonly attributed to allergy in the community. Generally, IgE-mediated allergy is the most commonly recognized form of allergy and the one responsible for the increasing prevalence of inhalant and food allergies in the community. In these instances, exposure to a small amount of allergen leads to a cascade of release of cellular mediators, in particular histamine, causing the manifestations of anaphylaxis, or a severe generalized allergic reaction. In the conventional medical literature, fatalities have been reported due to immunotherapy for both inhalant and food allergies. The statement that patients with true allergies can initiate contact with the substance that had previously caused the allergic reaction will, in my opinion if followed, expose some individuals to the risk of severe allergic reaction or even death. The first is a clinical history of symptoms and/or signs on exposure to the putative allergen which are characteristic of an allergic disease. The diagnosis of an allergic disease is then confirmed by the demonstration of an immunological basis of the allergy. In the most well-recognised allergic conditions, that is IgE-medicated allergy, this is determined by detection of allergen specific IgE. This can be performed by either skin prick testing or blood-specific IgE testing. The medical practitioner should order the tests to be performed in order to ensure the correct allergens are tested for. Because of the small but nevertheless evident risk of adverse reactions it is required that appropriate medical expertise and equipment to deal with a severe generalized allergic reaction is in attendance at the site of testing. The ASCIA guideline states that a medical practitioner should be on site at the time of testing. The specialty of Allergy and Clinical Immunology is a specialist training program for medical practitioners under the auspices of the Royal Australasian College of Physicians and the Royal College of Pathologists, involving a minimum of 7 years post-graduate training and examinations for medical graduates. Other medical practitioners may also gain experience in the field of clinical allergy practice, including general practitioners and other specialist physicians with specific training and experience in this area. These are frequently drug treatments and include such drugs as antihistamines for allergic rhinitis and allergic conjunctivitis, inhaled bronchodilators for allergic asthma and topical nasal corticosteroid preparations for persistent allergic rhinitis. Such treatments are often prescribed by a medical practitioner, although some, such as oral antihistamines are available from a pharmacist without a prescription. In the first instance, this can involve allergen avoidance. By this I mean that the natural progression of allergic diseases appear to be altered by the administration of allergen immunotherapy. For example there is good evidence that the risk of severe allergic reactions to insect stings can be reduced by immunotherapy. If components of allergens are not cleared the items containing those compounds will remain allergenic. The use of these treatments is described in evidence-based guidelines such as the ARIA consensus document (Allergic Rhinitis and its Impact on Asthma), the Global Initiative in Asthma (GINA) consensus document and guidelines on immunotherapy. During the course of my practice, I have not been made aware of a medically validated therapeutic process of 'positive conditioning' or 'negative conditioning' with regard to allergies. I am therefore unaware of 'positive conditioning' and 'negative conditioning' as an effective form of allergy treatment. I am aware that 'positive conditioning' and 'negative treatment' does not form part of the body of authoritative treatment guidelines for allergic diseases. In my opinion I do not believe the scientific literature has information to support 'positive conditioning' or 'negative conditioning' treatments to cure or eliminate allergies. I am not aware of effective strategies of allergen immunotherapy for contactant allergies. I have stated previously the difficulties in treating ingestant allergies. I do not believe there is published scientific evidence to support these claims. Many of the symptoms claimed to be relieved in the AAE publicity brochures, such as irritable bowel syndrome, diarrhoea and attention deficit disorder are unlikely due to an allergic process and therefore unlikely to have an immunological basis. However the brochures do state that 'ingestant' allergies can be eliminated. I take this to mean food allergies. At the current time to my knowledge, there is no safe, scientifically-based treatment for food allergies. In my own and international experience, there is currently no known cure for asthma, which still carries a very substantial burden of illness which includes mortality. The parties have therefore been able to reach agreement as to the orders they ask be made. In summary, the orders seek: (a) a declaration that AAE's publication of the impugned statements contravenes a number of provisions in the Trade Practices Act 1974 (Cth) and that the second respondent, Mr Kier, a director of AAE, was knowingly concerned in or a party to the contraventions; (b) an order requiring AAE to publish corrective advertising; (c) the establishment by AAE of a compliance program to avoid further contraventions; and (d) that Mr Kier attend practical training regarding Div 1 of Pt V of the Trade Practices Act . Rather than an injunction (which was originally sought) the respondents will undertake to not cause the impugned statements to be published. I consider it appropriate for the orders to be made and the undertaking received. It is, I think, particularly important that the respondents publish corrective information. The impugned statements have the potential to cause real harm. Persons with allergies are best treated by medical practitioners. Further, clients suffering from allergies and taking the treatment provided by AAE may wrongly believe the treatment is effective when it is not. Some treatments may even be dangerous to a client. This state of affairs must be remedied and the provision of corrective advertising is an appropriate means to achieve that result. This leaves one matter of procedure to be dealt with. The issue comes about in this way. At that time the orders were provided to the court, the ACCC had filed Professor Douglass' report but, because it had only recently been served, the respondents objected to it being read. The ACCC was prepared to go along with this. In the result there was no evidence to support the declaratory relief sought in the orders, the parties asking that the court proceed on their agreement that the declarations were justified. On this aspect I was referred to Thompson Australian Holdings Pty Ltd v The Trade Practices Commission (1981) 148 CLR 150. In that case the Trade Practices Commission (the predecessor of the ACCC) brought an action against a group of liquor retailers alleging they had entered into a price fixing agreement in breach of what was then s 45 of the Trade Practices Act . Pecuniary penalties and injunctions were sought. Several defendants entered into a settlement agreement with the Commission consenting to orders imposing injunctions and agreeing to give undertakings that they would not in the future engage in like conduct. The question raised by the appellant, who had been given leave to intervene, was whether the Federal Court had power to grant the agreed injunctions. The Federal Court found it had power, but the High Court held that there was no power to grant the injunctions. In the course of its reasons the plurality said (at 163-164): "In the ordinary case ... the Court will be justified in making consent orders, if it has jurisdiction and power so to do and the orders are such as to be capable of enforcement ... In deciding whether consent orders sought are in conformity with legal principle the Court is entitled to treat the defendants' consent as involving an admission of all facts necessary or appropriate to the granting of the relief sought". Based on this reasoning the parties submitted I should make the declarations. I declined to do so. In due course the respondents withdrew their objection to the tender of Professor Douglass' report, save for certain portions which were said to be irrelevant. Thus there is evidence that justifies the declaratory relief. In the absence of that evidence I would not have made the declarations. It has for a long time been the position in England that a court will not grant a declaration "on admissions of the parties or on consent, but only if the Court was satisfied by evidence": Williams v Powell [1894] WN 141, 141 per Kekewich J. This rule was confirmed in an early design infringement case, Gramophone Company Ld v Magazine Holder Company (1911) 28 RPC 221. The defendant was sued for infringement. It admitted that the design was new and original but denied infringement. The House of Lords refused to act on the concession. No doubt Courts of Law allow and indeed encourage parties to simplify litigation by making admissions and to a certain extent by waiving their rights, because, when there is a real controversy depending upon real facts, everyone ought to facilitate its authoritative settlement. But that is a very different thing from allowing people to obtain an adjudication upon the footing that something exists or has happened which in truth does not exist, or has never happened ... A Court of Justice can never be bound to accept as true any fact, merely because it is admitted between the parties. When the issue of making a declaration by consent comes up the case usually referred to is Wallersteiner v Moir [1974] 1 WLR 991. The defendant by way of counter-claim sought a declaration that the plaintiff had been guilty of fraud. No defence to the counter-claim having been delivered, the defendant moved for judgment in default. The trial judge entered judgment but the Court of Appeal set the judgment aside. A statement on this subject of respectable antiquity is to be found in Williams v. Powell [1894] W.N. 141, where Kekewich J., whose views on the practice of the Chancery Division have always been regarded with much respect, said that a declaration by the court was a judicial act, and ought not to be made on admissions of the parties or on consent, but only if the court was satisfied by evidence. If declarations ought not to be made on admissions or by consent, a fortiori they should not be made in default of defence, and a fortissimo, if I may be allowed the expression, not where the declaration is that the defendant in default of defence has acted fraudulently. Where relief is to be granted without trial, whether on admissions or by agreement or in default of pleading, and it is necessary to make clear upon what footing the relief is to be granted, the right course, in my opinion, is not to make a declaration but to state that the relief shall be upon such and such a footing without any declaration to the effect that that footing in fact reflects the legal situation. The power of the court to give declaratory relief upon a default of pleading, of course, exists, but, for the reasons crystallised by Horace in those four words of his, should be exercised only in cases in which to deny it would be to impose injustice upon the claimant. The court declares what it has found to be the law after proper argument, not merely after admissions by the parties. There are no declarations without arguments: that is quite plain. He explained that the rule was justified by the fact that a declaration of right may affect third parties who are not bound by the declaration. Notwithstanding that the rule is only one of practice, it has been said the court will only depart from the practice in a "rare case" and then only when it is necessary "to do justice between the parties": Animatrix Ltd v O'Kelly [2008] EWCA Civ 1415 at [54] . In recent times it has been suggested that the court may move away from the strictness of the rule. With the introduction in 1999 of the Civil Procedure Rules in the United Kingdom a statement of case and a response must be verified by a statement of truth (r 22.1) - ie a statement by the party putting forward the document that he believes the facts stated in the document are true. This led to a suggestion that "the reluctance of the court to grant declarations without full investigation of the facts is less strong now that the allegations have to be verified by a statement of truth than was formally the case": Lever Faberg é Ltd v Colgate-Palmolive Co [2005] EWHC 2655 (Pat) at [4] per Lewison J. See also Hayim v Couch [2009] EWHC 1040 (Ch). Cases in Australia follow the orthodox English approach. The leading Federal Court decision is BMI Ltd v Federated Clerks Union of Australia (1983) 51 ALR 401. The case involved an application for a declaration that an industrial award was invalid. If the matter were merely one of private right between particular parties, for example, a question as to the respective rights of parties under a contract, it may well be appropriate for a court to make a declaration as to those rights by consent. In such a case, the public and other parties cannot be affected, let alone bound, by such a declaration. If a declaration were made, even in the terms sought, its practical operation may well extend beyond the activities of the first applicant. Cases in that court acknowledge that a declaration on a matter relating to a public or an analogous right should not be made by consent. However, while the cases have said that a declaration can only be made when the court is satisfied by evidence that it ought be made, the "evidence" to which regard may be had include "facts" admitted to be true but about which there is no evidence (eg facts contained in a statement of agreed facts). By way of example, see Australian Securities and Investments Commission v Rich [2004] NSWSC 836 ; (2004) 50 ACSR 500. See also Re One.Tel Ltd (in liq); Australian Securities and Investments Commission v Rich [2003] NSWSC 186 ; (2003) 44 ACSR 682 ; Australian Securities and Investments Commission v Elm Financial Services Pty Ltd (2005) 55 ACSR 411; Australian Securities and Investments Commission v Edwards (2004) 51 ACSR 320. This approach has also been applied by one Federal Court judge: see Australian Securities and Investments Commission v Cash King Pty Ltd [2005] FCA 1429. None of the New South Wales cases have explained why there should be a departure from the established rule. In Rich (50 ACSR 500) White J said (at [15]) that the new approach was consistent with the decision in Dean-Willcocks Pty Ltd v Commissioner of Taxation (No 2) (2004) 49 ACSR 325. There Austin J was dealing with a statutory requirement that the court must be "satisfied" of the existence of a certain state of affairs before it could make a particular order. Usually, the word "satisfied" is taken to mean "established by proof". Austin J said, however, that in the context of the particular provision under consideration, it was permissible for the court to rely on the parties' admissions. He justified this approach (at [28]) on the basis that it would promote the "just, quick and cheap resolution of ... dispute[s]". The declaration cases, however, require proof by way of evidence. An assurance by parties (whether by admission or agreed statement) that asserted facts are true will not suffice. Moreover, the House of Lords did not think a departure from this rule was justified because of administrative expediency. For the time being, at least until a Full Court holds otherwise, it is, in my view, incumbent upon a single judge of the Federal Court to follow BMI and therefore not grant a declaration involving a public right in the absence of evidence that supports the declaration. I will make orders in the form submitted by the parties. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. At Advanced Allergy Elimination we can also test for what you are reacting to. Our practitioners employ a muscle strength indicator technique in testing. To do this the practitioner isolates the triceps muscle in the arm whilst exposing you to an allergen. The integrity of the muscle indicates whether or not a substance is an allergen. Muscle testing is a testing technique widely used by natural health practitioners such as naturopaths, chiropractors and kinesiologists. " "It is not just a treatment. At Advanced Allergy Elimination we can also test for what you are reacting to. Our practitioners are qualified naturopaths and/or acupuncturists who employ a muscle strength indicator technique in testing. To do this the practitioner isolates the triceps muscle in the arm whilst exposing you to an allergen. The integrity of the muscle indicates whether or not a substance is an allergen. Muscle testing is a testing technique widely used by natural health practitioners such as naturopaths, chiropractors and kinesiologists. " "In the initial consultation the practitioner makes a clinical assessment using your patient history, a muscle response test and any previous allergy test results. The muscle response test involves the practitioner isolating and testing the integrity of the triceps muscle in the arm whilst you are exposed to a safe level of allergen, giving a response as to whether or not a substance is an allergen. " "At AAE we use a muscle strength indicator technique to test what you react to. We test against a wide range of food and airborne allergens" "Our practitioners are trained to take a detailed patient history and have protocols to determine unknown sources of allergic reactions. " "A muscle response test will be used to determine what you are reacting to" "The initial appointment is $115 which includes identifying your allergies and the treatment of one allergen family. We can treat one allergen family per treatment. " "Treat allergies at their source for results that really work. " "AAE offers a real alternative for people with allergies, treating allergies at the source using a non-invasive, drug-free treatment based on positive conditioning. " "At AAE we offer a treatment option for allergy sufferers. We do not diagnose whether you have an allergy, sensitivity or intolerance as we think of each as a negative reaction. AAE test and treat all negative reactions* in the same way. " "Advances in knowledge about allergies and allergens are incorporated into our testing and treatments to ensure Advanced Allergy Elimination treatment is as specific, simple and successful as possible. " "Advanced Allergy Elimination has been operating in Australia for the past 5 years working to successfully treat allergies. " "AAE is a treatment for allergies. We don't just treat the symptom; we retrain your body so it no longer reacts. " "At Advanced Allergy Elimination (AAE) we treat allergies... Through the use of a positive conditioning effect we recondition your body to no longer react adversely" "Once treated patients can usually recommence contact with the substance that had previously caused the reaction. " "Advanced Allergy Elimination addresses the specific organ systems affected by the allergen or offending substance. This stimulation relaxes the body and temporarily strengthens each of the major organ systems. " "The treatment involves gentle pressure to stimulate points on the back while you are exposed to a safe level of the Allergen. This stimulation relaxes your body and temporarily strengthens your organ systems. Your body makes the positive association between the strengthening effect and the exposure to the allergen so it no longer perceives the allergen as harmful. " "The treatment strengthens the major organ systems while the body is exposed to an allergen. The body associates the positive stimulus with the exposure to the allergen and no longer perceives it as harmful. " "Advanced Allergy Elimination uses gentle pressure to stimulate points on the back which correspond with the major organ systems, while you are exposed to a safe level of the Allergen. This stimulation temporarily strengthens your system. The body associates the positive stimulus with the exposure to the allergen and no longer perceives it as harmful. " "AAE treatment stimulates point along the back, with gentle pressure. The stimulation is relaxing and strengthening to the organ systems. " "Through Advanced Allergy Elimination treatment the body alters its perception, correcting its own erroneous response. " "Successful elimination of allergies/sensitivities may require clearing preliminary allergens first. If components of allergens are not cleared the items containing those components will remain allergenic. Once we know what you are reacting to we can treat one allergen group per treatment. " "Once the allergy is cleared and the symptoms alleviated, the benefits from the treatment are generally long term. " "The initial appointment is $115 which includes identifying your allergies and the treatment of one allergen family. We can treat one allergen family per treatment . " "Advanced Allergy Elimination is able to eliminate allergies and/or sensitivities, allowing patients to be exposed to substances without experiencing the allergic reactions they previously suffered" "Advanced Allergy Elimination (AAE) significantly improves, if not eliminates, most forms of allergies & sensitivities with one treatment per allergen family . " "Once treated, patients can recommence contact with the substances that had previously caused the adverse reaction. " "Once treated, patients can start or recommence contact with the substances that had previously caused the adverse reaction. " "Treatment means you can usually recommence contact with the substance you were reacting to" "Most patients only need one treatment per allergen" "Your body associates the positive experience with the allergen and no longer sees it as something to react to" "Advanced Allergy Elimination (AAE) is an advanced technology that significantly improves, if not eliminates most forms of allergies and sensitivities with one treatment per allergen family. " "All the major organs can be stimulated through acupressure points along the back which temporarily strengthens each system. The patient holds a glass tube containing an allergen during the stimulation creating a positive conditioning effect. The conditioning is immediate with associated symptoms diminishing usually within a 24 hour period. There may also be other ways to create a positive stimulus and reverse an allergic error; the key is to convince the immune system that the substance is harmless or beneficial. " "While allergic reactions may now be successfully eliminated or significantly diminished, former food allergy sufferers are advised to minimise their intake of processed foods" "By safely exposing a patient to an allergen ... while simultaneously creating a positive stimulus, thousands of allergy sufferers have been able to be successfully treated. " "We find that approximately 80% of cases require only one treatment per allergen family, while 20% of cases require more than one treatment. " "The initial appointment is $115 which includes identifying your allergies and the treatment of one allergen family. We can treat one allergen family per treatment. " "Once the allergy is cleared and the symptoms alleviated, the benefits from the treatment are generally long term. " "Advanced Allergy Elimination is an effective treatment that improves or resolves allergies in most cases. So the body no longer reacts to substances like pollen, dust, grass, pets and food. " "The allergy is eliminated. " "AAE is a treatment available to all age groups, including infants and the elderly. " "Advanced Allergy Elimination uses gentle pressure to stimulate points on the back which correspond with the major organ systems, while you are exposed to a safe level of the Allergen. This stimulation temporarily strengthens your system. The body associates the positive stimulus with the exposure to the allergen and no longer perceives it as harmful. " "Advanced Allergy Elimination uses gentle pressure to stimulate points on the back, which correspond with the major organ systems. ... this stimulation relaxes the body and temporarily strengthens each of the major organ systems. The stimulation is done while the patient is exposed to a safe level of allergen" "Once treated patients can usually recommence contact with the substance that had previously caused the reaction. " "Advanced Allergy Elimination uses gentle pressure to stimulate points on the back which correspond with the major organ systems, while you are exposed to a safe level of the Allergen. This stimulation temporarily strengthens your system. The body associates the positive stimulus with the exposure to the allergen and no longer perceives it as harmful. " "Advanced Allergy Elimination is able to eliminate allergies and/or sensitivities, allowing patients to be exposed to substances without experiencing the allergic reactions they previously suffered" "The treatment uses gentle stimulation down your back while you are exposed to a safe level of the allergen" "The treatment is safe, painless and available to all ages including infants. " "By safely exposing a patient to an allergen ... while simultaneously creating a positive stimulus, thousands of allergy sufferers have been able to be successfully treated. " "Once treated, patients can recommence contact with the substances that had previously caused the adverse reaction. " "Treatment means you can usually recommence contact with the substance you were reacting to" "Once treated, patients can start or recommence contact with the substances that had previously caused the adverse reaction. " "By safely exposing a patient to an allergen ... while simultaneously creating a positive stimulus, thousands of allergy sufferers have been able to be successfully treated. | declaration evidence declaration not to be made on admissions or consent misleading or deceptive conduct in relation to medical services practice and procedure trade practices |
I concluded in effect that, subject only to proof as to the law of the foreign country, it would be appropriate to grant leave to serve the examination summons out of the jurisdiction on the examinee in Monaco. 2 The plaintiff subsequently adduced additional evidence which I described briefly in my supplementary reasons of 19 June 2008. On the basis of that evidence I granted the order sought and also made orders for several forms of substituted service. 5 There were various procedural objections to the examinee's application. In light of the conclusion I have reached and in view of the urgency of the matter, it is unnecessary to resolve those matters. It may also be convenient to correct the statement that the examinee was a director of Wainter Pty Ltd --- see [9] of my reasons of 26 May 2008. That statement arose from a misunderstanding of the following submission --- 'he is not being examined in his capacity as a director of Wainter, he is being examined in his capacity as a director of another company'. In those circumstances the merits of the challenge, when other avenues of review may be open, may assume greater significance. 7 In Dexcam Australia Pty Ltd v Deputy Commissioner of Taxation [1999] FCA 1784 Heerey J decided not to reserve a matter to the Full Court as there was already a closely analogous Full Court authority on the matter. His Honour also discussed the framework of the Act, ie that issues of fact and law are to be decided by a single judge at first instance and are then subject to appeal. That was a case of a prosecution under the Trade Practices Act . The prosecution did not have a right of appeal and asked Sheppard J to state a case or reserve a question for consideration by a Full Court. 11 His Honour considered that a guide to the application of s 25(6) was provided by the decision of the High Court in Point v Federal Commissioner of Taxation (1970) 2 ATR 119. That case concerned the statement of a case pursuant to s 198 of the Income Tax Assessment Act . In Sheppard J's view ss 158 and 25(6) were relevantly indistinguishable. The majority of these will be civil and not criminal. Appeals will therefore lie by either party in most cases. It will only be if the judge considers that it is convenient to refer a question, perhaps because it raises unusual difficulties or perhaps because there are conflicting decisions - the list is not exhaustive --- that a judge will normally accede to an application. Sometimes he will act of his own motion and not at the behest of the parties. Furthermore, if the request for the reservation of a question is by the parties, or of one of them, the judge will have an obligation to decide whether the question is proper to be referred to a Full Court. In a number of cases I have known the judge has considered it inappropriate to refer a question and has thought it preferable to decide the case himself, leaving it to the appellate processes to correct any error that has been made. These various considerations establish that under section 25(6) of the court's Act the judge has a wide discretion. Issues of fact and law are to be decided at first instance by a single judge. Generally speaking, in the case of a final order, such as would be made in the present case, the losing party has an appeal as of right to a Full Court. Considerations of orderly administration of the Court and efficient application of its resources indicate that this framework should not be lightly departed from. 13 Although I accept the present case is important not only for the parties, but for the general administration of the Income Tax Assessment Act , it is essentially no different from any case that this Court hears and in which a single judge has to resolve a question of law. There is a Full Court authority at least closely analogous. I will have to decide whether the principle in that case is binding on me. This is a familiar, indeed routine, judicial task and one which it is not appropriate in my opinion to refer to a Full Court. From my brief acquaintance with the matter, I would agree with this assessment. The point appears to be a short one and one of impression. In Barton Sheppard J., in the passage to which I have referred, mentions the possibility that notwithstanding a request to reserve a question for a Full Court made by one of the parties or even both of them, the Judge may, nonetheless, consider it inappropriate to refer the question and preferable to decide the case at first instance, leaving the matter to the appellant processes to correct any error that may be made. This possibility emphasises the width of the discretion involved. In the present case, I have come to the conclusion that it is appropriate and, indeed, desirable that the matter go forthwith to the Full Court. I take into account, in this connection, the circumstances that I have mentioned, in particular, the fact that the dispute is within a narrow compass in terms of the facts and of the law. 9 There is no Full Court decision in point in this instance. There are several single judge decisions which I have followed. There is one decision which the examinee submits is in conflict with those decisions. He submits it is correct. The decisions have been reached in most instances following ex parte applications. 10 Section 25(6) of the Act provides a wide discretion for a single Judge to determine whether a matter should be reserved to the Full Court. In exercising that discretion considerations may include - whether the Judge considers that it is convenient to reserve the question, eg having regard to the point at which it arises, the strength of the point, because it raises unusual difficulties or because there are conflicting decisions; whether there are any similar authorities on the question of law; whether they have been determined with the benefit of full argument; the nature of the point of law to be decided, ie whether confined to a specific point of statutory interpretation; costs and delay; and administration of the court to mention a few. Those cases are Fiorentino v Irons (1997) 79 FCR 327 and In the matter of Strarch International Limited (ACN 004 779 677 (In Liquidation) [2005] FCA 829. Additionally, to the extent to which Carnegie Corporation Ltd v Pursuit Dynamics plc (2007) 162 FCR 375 followed those cases rather than Re Austral Oil Estate Ltd (in liquidation) (1986) 86 FLR 247 and Re Deposit and Investment Company Ltd (1991) 30 FCR 463 , counsel also argues that Carnegie was wrongly decided. 12 For the examinee it is argued that the summons does not originate any process. It is said that the preferable decision of this Court is that of Re Deposit 30 FCR 463 which in turn followed Re Austral 86 FLR 247. Re Austral is a decision of McLelland J in the Equity Division of the Supreme Court of New South Wales. His Honour did not extensively develop the reasons in that case as to why he concluded that an examination order was not 'an originating process' other than to rely on the definition within the Supreme Court Rules , Pt 10 (see the definition in Pt 1 , r 8). The definition of 'originating process' in Pt 1 r 8 of those Rules is, relevantly, a statement of claim or a summons. There is no challenge to his Honour's conclusion. But as subsequently observed, the very narrow definition of originating process under the Supreme Court Rules meant that it was not surprising that an examination summons could not fall within the definition contained within those Rules. Insofar as that aspect of the matter is concerned, Re Deposit 30 FCR 463 simply followed the decision of McLelland J in Re Austral 86 FLR 247 without considering the differences between the rules and legislation in the respective courts. However as I will observe below, Lockhart J also went further to explain other jurisdictional reasons why an examination summons (or in fact orders to attend for an examination) were not within the scope of O 8 r 3 FCR as those Rules then stood. 13 The essential reasoning given by Foster J in Fiorentino 79 FCR 327 is that the description given to the originating process by s 4 of the Act is substantially wider than that appearing in the New South Wales Supreme Court Rules . 14 His Honour considered that the passage in Re Deposit 30 FCR 463 (discussed below) that an order to attend for examination pursuant to s 597 was 'a document other than originating process' within the meaning of O 8 r 3 FCR should properly be regarded as obiter: at 229-330; the decisions in Re Austral 86 FLR 247 and BP Exploration Co (Libya) Ltd v Hunt [1980] 1 NSWLR 496, being based upon the precise wording of the Supreme Court Rules of New South Wales. Although there was no definition of 'originating process' in the Act or FCR, the word 'proceeding' was to be found in the definition section of the Act (s 4): at 330; the definition of 'proceeding' was 'a very wide definition indeed ': at 330 (see also National Australia Bank Ltd v Stern [2000] FCA 588 at [6] and Re Interchase Corporation Ltd (1996) 68 FCR 481. One can also regard the contemplated examination of [...] as a proceeding incidental to or connected with the original application. Indeed, I am persuaded that one need not look to these aspects of the definition in order to characterise a current proceedings for the obtaining of leave or the contemplated proceedings for examination as being proceedings of an ancillary kind. The definition is sufficiently wide, in my view, to confer upon them the title of proceeding in their own right. 17 The second limb of the argument advanced for the examinee, (like the first) was not ventilated in earlier argument before me on the ex parte application. In relation to this argument, senior counsel relies upon the following observations of Lockhart J in Re Deposit 30 FCR 463 at 465-466. (Lockhart J was construing what is now O 8 r 4. " Counsel for the applicant relies entirely on r 3 as the statutory source of the court's jurisdiction to authorise the service of the s 597 examination orders on persons resident in Hong Kong and Japan. A s 597 examination order has frequently been called the exercise of an extraordinary power: see Re North Australian Territory Co (1890) 45 Ch D 87 at 93; Re Rolls Razor Ltd (No 2) [1970] 1 Ch 576 at 591---2. However, I am satisfied that an order to attend for examination before this court pursuant to s 597 is "a document other than originating process" within the meaning of r 3: see Re Austral Oil Estates Ltd (in liq) (1986) 7 NSWLR 440 at 441, a decision of McLelland J of the Supreme Court of New South Wales to the same effect with respect to an examination order under s 541 of the Companies (New South Wales) Code, the predecessor of the present s 597: See also B P Exploration Co (Libya) Ltd v Hunt [1980] 1 NSWLR 496 at 501-504, a decision of Hunt J of the Supreme Court of New South Wales. Rule 3 of O 8 of this Court's Rules relates to matters of procedure, not jurisdiction. The present question is one of jurisdiction, not procedure. Rule 3 is a very different provision to rr 1 and 2. The extensions found in r 1 to the common law rule that jurisdiction is based on presence within the geographical jurisdiction of the court provide significant connecting factors sufficient to justify the court exercising jurisdiction in relation to persons outside the jurisdiction. The connecting factors are necessary to respect the sovereignty of foreign jurisdiction. However, once they are shown, the court has power to assume jurisdiction. Rule 3 is couched in very wide terms and would include an examination order, but it must be read as a procedural provision and not as an extension of the court's jurisdiction to those served persons. To invade the sovereignty of another country's jurisdiction and interfere with its sole power over persons present within it, stronger and clearer language is needed than appears from r 3: see for example, ss 32 g and 32 l of the Federal Court of Australia Act 1976 (Cth). There is therefore no statutory authority to authorise the making of the examination order in this case. But his Honour's conclusion also depended on characterising an examination summons as not being an originating process such that the application fell under what was then r 3, now r 4. The difference between the rules was stressed. It was an ex parte application and seemingly the differences in the definitions were not raised. It may of course be that for his Honour's part they would have made no difference in which case the approach taken concerning jurisdiction would still be pertinent. That seems unlikely as even in the comments on jurisdiction, his Honour appears to acknowledge that the connecting factors, if proven, do establish jurisdiction. Whether he did so may depend on precisely what his Honour meant in saying 'Once they are shown the court has power to assume jurisdiction'. 19 The 'connecting factors' to which his Honour referred under the former r 1 were broad. Equally, the items now listed under (the current) O 8 r 2 FCR are also broad. But either way, the question is whether an examination summons is an originating process as that term was used in both the former O 8 and the current O 8. With the current version there is a definition of the term. If an examination summons falls within the definition of 'originating process' (as the cases other than Re Deposit 30 FCR 463 conclude) and is also within r 2 (which has not been challenged), then the question is whether one needs to go any further to consider the jurisdictional point addressed by Lockhart J. That jurisdictional point may have only fallen for consideration in Re Deposit because his Honour followed the decision of McLelland J in the Supreme Court of New South Wales to conclude that an examination summons was not an originating process. 20 Senior counsel observes that the jurisdictional consideration was not evaluated in Fiorentino 79 FCR 327 or in the other decisions which have followed Fiorentino . That is correct. It may be that the reason this is so is because once an examination summons is classified as an originating process (consistent with the approach of Foster J) and the other 'connecting factors' are established, (which is not challenged), even on the approach taken in Re Deposit 30 FCR 463 , the jurisdictional question falls away. 21 It follows that the question comes back to whether an examination summons falls within the definition now set out in O 8 r 1 FCR. 22 In my view that definition of 'originating process' is as wide as the definition considered by Foster J and which has been followed in subsequent cases. I also accept that it would be desirable if it is possible, for the issue to be determined by the Full Court. 24 I am less persuaded that the appropriate mechanism for the matter coming before the Full Court is by a reserving of a question pursuant to s 25(6) of the Act (as to whether an examination summons is an originating process). The preferable course would be for that step to occur before a decision has been made so as to facilitate the making of the decision. In this instance, the decision has already been made and acted upon. 25 My view is that the appropriate course for the examinee, given that the decision has already been made and acted upon, is to apply for leave to appeal from that decision if the examinee wishes to press the Full Court to set aside the order permitting leave to serve the examination summons outside of Australia. That application may raise some different considerations on which I presently express no views. 26 It follows that I decline the examinee's request to reserve the matter to the Full Court under s 25(6) of the Act. 27 For the reasons outlined above, the application must be dismissed. The application be dismissed. 2. The parties file and serve within 7 days written submissions not exceeding two pages in length in relation to costs. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | application to set aside ex parte order granting leave to serve examination summons outside australia challenge to finding that an examination summons is an 'originating process' for the purposes of o 8 previous consistent decisions said to be in error request that single judge reserve the application to set aside the order as a question for the consideration of the full court pursuant to s 25(6) of the federal court of australia act judge's discretion to reserve a question decision already made and acted upon reservation to full court declined practice & procedure |
The University asserts that Dr Gray and a public company, Sirtex Medical Limited (Sirtex) which it also sues, hold rights and entitlements deriving from the inventions on trust for the University. The inventions are said to involve methods for the production of hollow microspheres for the delivery of ionising agents to cancerous sites in the human body (SIRT-Spheres), microspheres to deliver pharmaceutically active compounds to such sites (DOX-Spheres) and microspheres incorporating ferromagnetic particles which, by application of an external magnetic field, can provide localised hysteresis heating in cancerous tissue (Thermo-Spheres). 2 The proceedings are set down for trial commencing on 12 March 2007. The University seeks an order for inspection of documents which have been the subject of Dr Gray's discovery. The documents include records of patients allegedly treated with the disputed technology. The application is resisted, essentially on grounds relating to the necessity for such an order. It is said that the documents are voluminous and are mixed up with unsorted, irrelevant material which would require two weeks of fulltime work by Dr Gray to sort. This raises a question about the basis upon which Dr Gray's solicitors certified that the documents enumerated in the discovery list could be inspected at their offices by appointment. For the reasons that follow I am satisfied that inspection should be ordered and will allow 14 days for that to occur subject to directions to protect the privacy of patients named in the documents. His discovery list included an item numbered 1804 described as "Various miscellaneous patient files". The solicitors for the University wrote to Dr Gray's solicitors on 12 October 2006 following a meeting of a Discovery Committee comprising representatives of the parties which had been held on 21 September 2006. In their letter of 12 October 2006 the University's solicitors attached a list of documents from Dr Gray's discovery for which they had not received electronic images or for which the electronic images were incomplete or illegible. They required Dr Gray to provide complete and legible images for each document identified in the annexure as soon as possible. Among the documents listed as "Missing" was a document labelled "BNG.001.1804". It is not in dispute that this referred to the documents in item 1804 in Dr Gray's list. These documents were made available to Mr (sic) at the time of his inspection of the client's documents. As advised to Mr Cox previously, these have not been scanned. We are instructed that the clinical data material is voluminous and mixed up with all sorts of hospital notes and various other irrelevant data. Our client has discovered patient data which is relevant to the matters in issue, which your solicitors have inspected. Our client does not concede any further material is relevant. Further, given the volume of material the request is oppressive. Please also explain why clinical data of patients is relevant. 5 On 23 November 2006 I directed that the Discovery Committee meet on the following day to endeavour to resolve issues raised by an application made by Dr Gray for further discovery and the University's outstanding issues in relation to discovery. Subsequently, and pursuant to directions, written submissions together with a minute of proposed orders and an affidavit of Marjorie Hodgson sworn 29 November 2006 were filed by the University in support of claims for further discovery from Dr Gray. I declined to make the order. 6 The decision refusing the University's application was given on 1 December 2006: The University of Western Australia v Gray (No 6) [2006] FCA 1656. I noted in the reasons that Dr Gray did not contend that the material sought was irrelevant. He argued rather that it was of "tangential" relevance. It was not in issue that he treated patients during the relevant period but no issue about that treatment was raised on the pleadings. He maintained through his solicitors that it would be oppressive to require that he sort out and produce from the large number of documents in existence those which fell within the class the subject of the proposed order. I found the case advanced by the University for access to those records to be less than convincing. The class sought by its minute overreached in seeking a range of clinical data relevant to patients treated with an invention the subject of the proceedings. It was not limited to data flowing from such treatment. The description of records by reference to records of treatment with an "invention" would require judgments about what was meant by "invention". I also expressed reluctance about having the clinical data of individuals put in play in the proceedings without good reason. 7 The University has now adverted to discovery item 1804 which it had not previously raised in Court and seeks inspection of those documents. They may fall within, although they are not necessarily congruent with, the class of documents for which the University in effect sought additional discovery in October 2006. The question therefore is whether, clinical records having been discovered, the University is entitled to inspect them. Order 15 r 6(7) requires that a list of documents appoint a time within seven days after service of the list when, and a place where, the documents in the list may be inspected. The documents enumerated in Part 1 of Schedule 1 may be inspected at Lavan Legal, Level 19, 1 William Street, Perth by appointment between the hours of 9.00am and 5.00pm. In the first respondent's list of documents filed 7 July 2006, item 1804 in Schedule 1, part 1 (page 220) is described as "various miscellaneous patient files". The applicant has sought inspection of the files contained in item 1804. I refer to "MFH6" and "MFH7" to the affidavit of Marjorie Frances Hodgson sworn 19 January 2007, which are copies of letters of Jackson McDonald and Lavan Legal in relation to the request for inspection. I am informed by the first respondent and believe that the documents comprising those described in item 1804 are patient files containing clinical data, constituted by individuals' patient files from Royal Perth Hospital. As such they comprise patient records, nurse observation notes, administration documents and medical notes of patient treatment and conditions in respect of patients that the first respondent has treated. The task of recovering the clinical notes could not be undertaken by clerks or para-legals and would require the first respondent personally to come to Perth for that purpose. The files described in item 1804 of which the applicant seeks inspection, contain the same files that the applicant sought inspection of pursuant to an application heard by His Honour in these proceedings on 1 December 2006. Moreover, they appear to replicate the statements made in the solicitor's letter of 14 November 2006 which was a response to the University's request for "Further documents" contained in its letter of 12 October 2006. It is apparent from the text of the affidavit that Dr Gray's solicitors have not seen the documents in item 1804 for themselves or advised, or been in a position to properly advise, on their relevance. Nor apparently are they in a position to specify or even estimate the number of such documents falling within item 1804. If, as suggested in the affidavit, the documents have not been sorted from irrelevant materials and if it would require two weeks of fulltime work to do that, it is difficult to see on what basis the assurance contained in the certificate appearing at the end of the list of documents was given. It is also difficult to see how, given the certificate, the solicitors could claim to have discharged their duty to their client or to the Court in respect of this discovery. 12 The discovery of documents and the certification of their availability for inspection are obligations to be taken seriously by the parties and by their advisors. While the discovery was complex and voluminous, and while it may be accepted that mistakes can occur, it does not appear that at the time the list was certified the necessary checks had been done to ensure the certificated assurance could be honoured. While on the subject of mistakes, it may be noted that in its earlier application for access to "Further documents" in December 2006, the University made no reference to the fact that clinical records, probably falling within the class for which it was, in effect, seeking additional discovery had already been discovered. 13 Order 15 r 15 requires that the Court not make an order under Order 15 for the production of any document "unless satisfied that the order is necessary at the time when the order is made". It is arguable that there is a free standing obligation under O 15 r 10, the existence of which is assumed by O 15 r 6(7), to produce for inspection documents set out in a discovery list. In addition, it is almost too obvious to mention that this formulation includes the affidavit of documents. In Bray's Principles and Practice of Discovery (Reeves and Turner, 1885) it was pointed out that cases under the old English equivalent of O 15 r 10 drew a clear distinction between an application for production of documents referred to in affidavits and pleadings and documents referred to in the affidavit of documents: at 242-243 citing Quilter v Heatly (1883) 23 Ch D 42; Roberts v Oppenheim (1884) 26 Ch D 724. In relation to inspection, the general rule involved the same test, but (in the High Court) it reversed the burden of proof, ie that no order for production, or for the supply of a copy, of any document is to be made unless the Court was satisfied that the order was necessary either for disposing fairly of the cause or matter or for saving costs. Thus the burden was on the inspecting party to show why he should have inspection or supply, and not on the disclosing party to show why he should not. The position now is that a person to whom disclosure of a document has been given has, subject to exceptions, an automatic right to inspect it. This appears from CPR r 31.3. In Kimberley Mineral Holdings Pty Ltd (In Liq) v McEwan [1980] 1 NSWLR 210 the Court of Appeal of New South Wales considered the operation of Pt 23 r 10(1) of the Supreme Court Rules (NSW). That conferred upon the Supreme Court a discretion to order the production of documents set out in the list of documents filed by a party save for those privileged from production. Without suggesting that that is the only purpose for the use of the word "may" in r 10, it would, nonetheless seem to provide one basis for that use. He cited Percy v General Motors-Holden's Pty Ltd [1975] 1 NSWLR 289 at 292. He also referred to Boyle v Downes [1979] 1 NSWLR 192 dealing with a similarly expressed constraint in the Supreme Court Rules 1970 (NSW) relating to interrogatories. The criterion adopted in the latter case was whether the order sought was "reasonably necessary for the disposing fairly of the cause or matter". Nevertheless, O 15 r 15 applies the same criterion to orders for production of documents. It referred also to a letter dated 14 October 1998 from Dr Gray on University letterhead requesting Royal Perth Hospital to transfer patient files in relation to patients treated with Yttrium 90 to the Centre for Applied Cancer Studies for safe keeping. According to the University there was no disclosure that this request was made on behalf of Sirtex. 20 A Phase III trial used to support an application to the Federal Drug Administration of the United States began at Royal Perth in 1991. The University said that it is to be inferred that the period between the first human treatment in 1986 and the commencement of the Phase III trial was spent developing SIRT 1. On that basis it submitted that the medical records were "plainly relevant" to the issue between the parties. 21 Sirtex has discovered original patient files for the period 1991 to 1996 which form part of the Phase III study. So, it is said, claims by counsel for Dr Gray at a directions hearing on 23 January 2007 that the documents held by Dr Gray comprise patient records in relation to that trial cannot be accepted. 22 The University's submissions referred to objections raised on behalf of Dr Gray in connection with its earlier application for further discovery of patient records. By their letter dated 14 November 2006, Dr Gray's solicitors referred to having discovered relevant patient data. (d) To the extent that some irrelevant material may have been discovered by Dr Gray as part of the bundle comprising item 1804, its disclosure is not a basis for refusing to permit inspection of relevant material. 23 The reasons advanced on behalf of Dr Gray against production of the documents relate almost entirely to his failure to have those documents sorted and conveniently available for inspection. The relevance of at least some of them is not in dispute. The difficulties of identification and definition which attended the University's prior application for what amounted to further discovery do not apply in this case as the documents have been identified for the purposes of discovery albeit there may be difficulties in separating relevant from irrelevant material. I am persuaded, on the basis of the University's submissions, that it is necessary that they see the discovered documents, less irrelevant material, subject to appropriate directions to protect patient confidentiality. I propose therefore to order inspection. That inspection may be affected by the University's solicitors being given direct access to the documents at Bentley. I will allow 14 days for inspection to be provided so that Dr Gray and/or his advisors may separate out relevant from irrelevant material. Dr Gray will be required to pay the costs of the application for inspection. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | discovery inspection obligation to produce discovered documents power of court to order production of documents discovered discretion criterion "necessary" whether inspection necessary solicitors duty in provision of discovery certificate of availability for inspection duty of solicitor in so certifying discovery of single item comprising voluminous unsorted records including irrelevant material practice and procedure |
The bankruptcy of Mr and Mrs Maxwell-Smith has been annulled. However, Mr and Mrs Maxwell-Smith have pressed for an inquiry as to the conduct of the trustee in circumstances which I will recount. The inquiry comes before me pursuant to orders made by a Full Court (Moore, Nicholson and Conti JJ) which allowed, in part, an appeal from orders made by Wilcox J dismissing the application before him for the undertaking of an inquiry. The Respondent M.C. Donnelly did not avoid unnecessary expenses while acting as the trustee in our estate caused in the Creditor's petition N-7192 of 2003. The Respondent M.C. Donnelly abused his power as the trustee to examine vexatiously and oppressive [sic] and also refused to give his approval for a reasonable request made by the Federal Police on behalf of the Applicant Inge Maxwell-Smith to make a coastal cruise with her sick grandchild. M.C. The Applicant Inge Maxwell-Smith claims compensation for $300,000.00 for aggravated damages caused by the actions of M.C. Donnelly to her and to her family. They included the circumstances surrounding the inability of Mrs Maxwell-Smith on 20 May 2004 to take a cruise to Noumea with her grandchildren (the children of her son) including one grandchild who was physically disabled. 5 Wilcox J dismissed the application, being of the view that there was no matter appropriate for inquiry. Although she saw Mr Donnelly on that day, she omitted to do so. She saw him again on 19 May, but again failed to raise the matter with him. She then apparently assumed there would not be a problem, because of something said to her by Ms Gallucci. So she presented herself and her grandson to the ship on 20 May but was denied entry. Despite an attempt by the captain of the ship to resolve the matter, Mrs Maxwell-Smith eventually had to be excluded from the ship because of the fact that she was on a Portwatch list maintained by the Australian Federal Police. Perhaps it could have been better handled by Mr Donnelly, but I have to say it seems to me the fault lay at least as much on the side of Mrs Maxwell-Smith, as on the trustee. She ought to have taken up the matter with Mr Donnelly well before the cruise was due to depart. In any event, this particular complaint has no financial aspect. There would be no point in having an inquiry in relation to that matter. One of the difficulties perceived by the Full Court was that there had been little evidence filed by the trustee. I should add that there was evidence from Mrs Maxwell-Smith before his Honour. The only affidavit of Ms Gallucci before his Honour was an affidavit of 7 April 2004 sworn in the annulment proceedings. She gave very brief oral evidence in chief but did not address events surrounding the cruise. While the submission of Mrs Maxwell-Smith is a mixture of both submission and assertions of fact, in the absence of a denial by Ms Gallucci and any evidence from Mr Donnelly explaining why he refused permission (there was none), the evidence of Mrs Maxwell-Smith together with the submission raised, in our opinion, a serious issue concerning the conduct of the trustee in refusing his consent to her travelling. His Honour does not deal with whether an inquiry might be warranted in which the basis on which the trustee refused to grant consent can be investigated. It is not true to say that Mrs Maxwell-Smith had to be excluded from the ship because of the fact that she was on a Portwatch list maintained by the Australian Federal Police. She was excluded from the ship because it would have been an offence for her to travel without the consent in writing of the trustee: s 272(1)(c) and the trustee, on Mrs Maxwell-Smith's version of events, had the opportunity to give that consent but did not in a context where the captain of the vessel gave certain assurances designed to have Mrs Maxwell-Smith return to Australia. Bankruptcy does not, of itself, involve any criminal offence. A citizen should be free to travel if and when his commercial activities or personal desires prompt him so to do. Restrictions upon such travel under the bankruptcy legislation must be seen as being aimed at insuring the proper administration of the bankruptcy laws and of bankrupt estates under such laws and not as a penalty imposed upon a citizen as a consequence of inability to pay debts leading to the making of a sequestration order. In some cases, the possibility that the bankrupt has committed offences under the Act and is seeking to abscond from possible prosecution will be extremely relevant. There has not, however, in this case been any suggestion that the bankrupt is endeavouring to abscond to avoid possible prosecution. In some cases the financial rewards to be derived by the bankrupt's estate from such overseas travel will clearly outweigh [sic] any inconvenience in the administration of that estate resulting from the bankrupt's departure from the jurisdiction. In the present case it is not apparent why the trustee refused to grant permission to Mrs Maxwell-Smith to travel. There may be a number of reasons having regard to the circumstances. However, if he was aware of various matters to which Mrs Maxwell-Smith referred in her material (her affidavit and her submissions) then a real issue arises about whether it was appropriate for him to have refused permission. To use the language of the High Court in House v King set out at [54], his Honour did not take into account a material consideration, namely that the trustee may have misconceived his powers in refusing Mrs Maxwell-Smith permission to travel. The trustee's refusal is a matter, in our opinion, which warrants further investigation and it is appropriate that an inquiry be ordered to investigate that specific matter. It is, with respect, not enough to say, as Wilcox J did, that there was no financial aspect to this complaint. It was characterised by the appellants as an abuse of power. Whether that characterisation is apt or even relevant is a matter that should not be addressed at this stage. It is a matter for the judge who conducts the inquiry. In our opinion, there should be an inquiry into whether the trustee refused Mrs Maxwell-Smith permission to travel on or about 20 May 2005 [sic: 2004] and, if so, was that refusal appropriate in all circumstances. At the hearing before me Mr Donnelly swore to the truth of a comprehensive statement and was cross-examined. There was no objection taken to any part of his statement. Mrs Gallucci, his manager on the file, prepared a statement. She attended court. She was not required for cross-examination and no objection was taken to any part of her statement. I was informed by Mr Skinner, without any objection by counsel for Mr and Mrs Maxwell-Smith, and apparently accepting what Mr Skinner said without the need for evidence, that Mrs Gallucci was very ill. I think it appropriate to identify the nature of her condition. In many instances, I would not do so, but I think in the circumstances of the seriousness of the matter, Mrs Gallucci will understand my desire to ensure the completeness of these reasons. Mrs Gallucci is under medical treatment by the application of steroids for a spinal problem which is contributing to a condition of deafness. She has also recently had a stroke. In circumstances where counsel for Mr and Mrs Maxwell-Smith indicated that he had no questions for Mrs Gallucci in cross-examination, I raised the question as to whether counsel would agree to Mrs Gallucci's statement being tendered without formally being sworn. Counsel agreed and in those circumstances the trial proceeded on the basis of Mrs Gallucci's statement being tendered without being sworn to or affirmed as if that had occurred. 9 Given Mrs Gallucci's ill health, I permitted this somewhat unusual course because I did not think it appropriate to take any risk in relation to her health that was unnecessary, and no doubt, that is what prompted counsel for Mr and Mrs Maxwell-Smith to take the entirely proper course that he did in this respect. I rejected another statement from an employee of the trustee dealing with two aspects of the administration of the estate because I thought that the bounds of relevance were being stretched to a point where it was unnecessary. 10 Mrs Maxwell-Smith gave evidence by affidavit. One of those affidavits dealt with her background, but is not really relevant. Mr Skinner took no objection to that affidavit. In all the circumstances, in particular the matters that I propose to discuss later in these reasons, Mr Skinner's failure to object to the totality of the second affidavit was a course that was proper in all the circumstances. Mrs Maxwell-Smith was cross-examined. From the earliest part of her cross-examination, it was apparent that she was extremely emotionally involved in the case, was upset and had difficulty in focusing on and limiting herself to answers to questions. The transcript will disclose the extent of this tendency. I do not say this by way of criticism of Mrs Maxwell-Smith; however, it is necessary to explain that in relation to her evidence a special course was also taken. Mr Skinner had a number of questions which he thought it was his obligation to put to Mrs Maxwell-Smith. I apprehended after the first couple of these that if he persisted we would need the two days that had been set aside for this matter which seemed to me to be an unnecessary expenditure of time and money for the parties and probably an unnecessary strain on Mrs Maxwell-Smith. To resolve this, I requested Mr Skinner and Mr Brennan to consult with each other to identify the matters that were simply being put formally out of fairness and that if agreement could be reached, this trial of the emotions of Mrs Maxwell-Smith could be cut short. That was done and for that reason only limited cross-examination took place of Mrs Maxwell-Smith. The transcript reveals the issues which the parties reached agreement about and that were unnecessary to put to her. 11 Before I continue, may I say that I have been assisted by both counsel on this case, in particular counsel who appeared for Mr and Mrs Maxwell-Smith who have been prepared to appear for Mr and Mrs Maxwell-Smith at the request of the Court. I have no doubt that the approach of counsel for both sides (to the disadvantage of no client) has enabled the matter to be resolved by way of evidence in one day. The Court expresses its gratitude to all counsel for that endeavour, but in particular, in the circumstances, without disrespect to Mr Skinner, to Mr Brennan and Ms Orman-Hales counsel for Mr and Mrs Maxwell-Smith. 12 I should also add that only Mrs Maxwell-Smith sought to give evidence. Only she was involved in the events of 20 May 2004, although both Mr and Mrs Maxwell-Smith are applicants seeking the inquiry. Counsel appeared for both and although the reasons today deal with events that concern only Mrs Maxwell-Smith, Mr Maxwell-Smith has not removed himself from the application. 13 Serious allegations have been made about Mr Donnelly. It was asserted that he acted with mala fides, that he was motivated by a personal dislike of Mrs Maxwell-Smith and that he failed to comply with his obligations as a trustee in relation to the making of a decision in the administration of the estate. Given the seriousness of the allegations made about Mr Donnelly, it is appropriate to put 20 May 2004 and the relevant events which occurred on that day in its and their context. 14 On 15 September 2003, Mr Donnelly was appointed the trustee of the bankrupt estate of Mr Eugene and Mrs Inge Maxwell-Smith by this Court. Whilst it is not appropriate to examine in minute detail every aspect of the conduct of the administration, some points are worthy of note. The first matter that is worthy of note, in fairness to the Maxwell-Smiths, is that the bankruptcy arose from an acrimonious building dispute in relation to premises which were a home of the Maxwell-Smiths. It is unnecessary to detail the travails of the Maxwell-Smiths in that regard, but it explains, I think, in human terms, the genesis of their sense of grievance in relation to this bankruptcy. It may be that that sense of grievance, which has been, to a degree, vindicated by the annulment, has been transferred to the trustee. I also at this point need to highlight that the reasons for the annulment do not reflect in any way upon Mr Donnelly or his firm. 15 From the first contact of the trustee's office with the former bankrupts, there was some difficulty in cooperation. On 17 September 2003, Mrs Gallucci telephoned the Maxwell-Smiths' home and spoke to Mr Maxwell-Smith. The evidence is that Mr Maxwell-Smith asked for a complete listing of the claim against him and that he stated that until this was provided to him he and his wife would do nothing. That expression of doing nothing was in the context of the manager in Mr Donnelly's firm perfectly properly beginning to make inquiries in relation to conduct of the bankruptcy which the trustee was by law then undertaking. 16 On that day, 17 September 2003, a letter was sent to the Maxwell-Smiths asking for completion of the usual documentation in relation to a bankruptcy and the handing over of the Maxwell-Smiths' passports, if they existed. I should add that at no point from the receipt of that letter did the Maxwell-Smiths give their passports to Mr Donnelly or anyone in his office. The significance of the failure to provide the passports can be seen by the terms of s 77 of the Act which was introduced into the legislation in 2002. There was no assertion that either Mr or Mrs Maxwell-Smith was prevented by illness or other sufficient cause from providing the passport. Passports were asked for. It is not clear whether Mr Maxwell-Smith had a passport. Mrs Maxwell-Smith on the evidence certainly did. If the bankrupt is liable to make a contribution to the trustee under section 139P or 139Q, the conditions may include conditions regarding the payment of that contribution. That latter prohibition was in the nature of an offence punishable on conviction by imprisonment for a period not exceeding three years. 19 In the evidence before me, Mrs Maxwell-Smith indicated that she became aware in September or October 2003 that she was obliged to deliver her passport to the trustee. As I have said, it was never delivered to the trustee, and no satisfactory reason for that has ever been given or even proffered. To the extent it is relevant, I can find with some confidence that from October 2003 Mrs Maxwell-Smith knew that she was required to give her passport to the trustee and thus from that fact that she knew or ought to have known that at least without some further step from the trustee she was not allowed to travel overseas. 20 The administration proceeded. Exhibit C is a bundle of documents tendered on behalf of Mr Donnelly, the contents of which Mr Donnelly and Mrs Gallucci made reference in their statements. It contains documentation revealing the significant difficulty in the running of the administration. On one occasion, on the evidence, Mr Maxwell-Smith made threats which became the subject of a report to the Inspector-General. The Maxwell-Smiths did not attend a s 81 examination. Warrants were issued for the arrest of the Maxwell-Smiths because of that. Orders were made for the issue of the warrants pursuant to s 263B of the Act, which warrants were to lie in the office of the Registrar and not be executed until after 13 April 2004 and be discharged if the person summonsed appeared before the Registrar. The warrants were never executed. (Moving forward for a moment, the Federal Police who attended Darling Harbour on 20 May 2004 were under instructions not to execute them. ) Nevertheless, they had been issued. The point of referring to the warrants at this point is to indicate the difficulty of the administration. 21 I think it appropriate at this point to say again something that I said at the beginning that for a number of reasons which it is unnecessary to discuss, the Maxwell-Smiths felt aggrieved at their bankruptcy and ultimately the bankruptcy was annulled. 22 It is also clear from the papers, in particular contents of exhibit C, that there was a degree of tension between the Maxwell-Smiths and Mr Donnelly and the officers of Ferrier Hodgson in the undertaking of the bankruptcy administration. That is not said as a criticism of anyone. It is a comment which I think is obvious from the papers. 23 Neither counsel --- and if I may say, perfectly properly --- asked me to investigate the rights and wrongs of every aspect of the administration. Mr Brennan said that exhibit C was irrelevant. I do not think that that is correct. Whoever, if anyone, was at fault for the tension in the administration, Mr Donnelly has had serious issues raised about his conduct on 20 May 2004 and an understanding of his position and his perspective leading up to 20 May 2004 is essential in fairness to him and to the proper administration of justice to understand his conduct. It was not put as relevant to that to ascertain whether it was Mr Donnelly's fault or Mrs Gallucci's fault for the difficulties of communication and co-operation that had occurred and thus it is quite unnecessary for me to express a view as to who may or may not have been, if anyone, at fault for what was the evident tension and lack of co-operation in the administration. 24 Mrs Maxwell-Smith became aware in April 2004 that her son proposed to pay for a cruise for her and his children. No doubt this was a matter of significant anticipation, indeed joyful anticipation, for not only Mrs Maxwell-Smith but for the three children and Mrs Maxwell-Smith's son perhaps. However, from this time Mrs Maxwell-Smith knew or should have known that she should speak to the trustee about that matter. She knew that her passport was required to be handed in. She must have known that some communication should be made to the trustee about the travel. If I may say so, at this point without the slightest disrespect intended to Mrs Maxwell-Smith by my saying it, she is an intelligent person, and as I have earlier said, deeply upset by the bankruptcy, and for that reason one assumes prone to a degree of emotional outbursts about what she feels she has suffered unjustly in relation to the bankruptcy. 25 It does not matter whether or not she knew that she should have contacted the trustee about permission to travel. As I said, I think it can be inferred that she did because in fact she did intend to speak to the trustee about it. Ultimately, this controversy is about the propriety of Mr Donnelly's conduct, not the wisdom or lack of it displayed by for Mrs Maxwell-Smith in this regard. 26 At no time up to or on 20 May 2004 did Mrs Maxwell-Smith seek any permission to travel overseas from Mr Donnelly. On 18 May 2004, Mrs Maxwell-Smith attended the offices of Ferrier Hodgson. It is unfortunately necessary to set out the whole of the conversation which took place between Mrs Maxwell-Smith and Mrs Gallucci as recalled by Mrs Gallucci. As is evident from what I have earlier said there was no contest about Mrs Gallucci's statement. Do you have papers to serve on me or do you wish to discuss any aspect of your (or your husband's) bankruptcy administration as I wish to return to my previous business". Unless you have papers to serve on me or you wish to discuss any aspect of your (or your husband's) bankruptcy administration I wish to return to my previous business. By buying this book it helps me because I am helping other people like myself. I am sick through people like you. You have made me sick. I want to sell you the book as I want to heal myself". If you want to see me again you should telephone to make an appointment and not just turn up". This is too much for me. Yesterday I did thirteen hours travel on public transport". You only write down what you say and not what my husband says to you. You make false affidavits". I did not meet with your husband. You are confusing me with Maria Psomas. Please stop screaming". My husband is not a terrorist. I was not present at the time of the discussions but Maria has not written the truth. It is ridiculous that you should have my husband investigated for terrorist acts". The Trustee has caused me to have a breakdown. I have been very ill. He has caused us to be investigated and has spent so much money. It is criminal. We have provided the information". When I spoke to the Australian Federal Police about the arrest Warrants they instructed me to arrange a Portswatch. There was a problem with the execution of the arrest Warrants and we will be arranging for the Court to cancel them". You know we will get our annulment. You are not interested in justice or truth but you should know that Justice Moore will be giving us our annulment because he knows the truth of this and he will definitely be giving us our annulment". This conversation is at an end. I am going back to my office. That is, that she would be stopped by officials from leaving the country at any air or sea port. I also wanted to sell him a book that my husband created, which tells the true story leading up to the bankruptcy. Donnelly said; "I am not interested in the book and I am not interested how you become bankrupt. " I said; "We are being treated like criminals" and "and why is my husband being investigated as a terrorist, why spend all this money unnecessarily? " Donnelly replied; "You are wasting my time and I am only interested in your and your husband's bankruptcy administration and I don't' want you to wast any more of my time. You can see I only wanted you to be informed that we are of good character and I am selling this book as a healing process. " I than had to get away quickly because I was getting a panic attack. I left Donnelly's office before I realised that I had not even served him with the documents that I had with me. Nothing was said by IMS [Mrs Maxwell-Smith] with regard to her forthcoming departure from Australia. I did not even give you the documents, which are important for the annulment hearing in June. " Donnelly said; "Mrs Maxwell-Smith, you have been informed in the past to make an appointment if you would like to see me. " I said; "I don't have a mobile telephone. " He replied; "Use a public phone, there are phones everywhere. " His manner was short and business-like and I tried very hard not to get emotional. I than said to Donnelly; "Can you think of any other documents you might need? " Donenlly replied; "Unless you have any more papers to serve me or anything to discuss about the annulment application, I don't want to talk to you any more. " He then turned and walked away and I was left alone with Gallucci. " Gallucci replied; "I am the Manager. " I said to her; "I hope you are also writing down the rude treatment I am getting" and asked her; "why was the public examination scheduled five days before the direction hearing I do have to travel for ten hours on public transport to attend these hearings. " Gallucci replied; "These dates are fixed by the Federal Court. " I than ask her; "Did the Federal Court Registrar not inform you that I had send a fax one day before the hearing that due to my husbands illness I had to return home and would not be able to attend the hearing? As we were walking towards the lift I must have been speaking loudly because of my distressed state and ask Gallucci; "Do you know that there is a warrant for our arrest and a Port-watch taken out? " Gallucci said; "Keep your voice down, I am aware of this. " This upset me even more and I said; "How would you feel if you got treated like a criminal and that a request is made to the Court for an order of a Port-watch and a warrant for our arrest, especially as we have applied to have the bankruptcy annulled? " Gallucci said; "I told you to keep your voice down. The Port-watch and the warrant for arrest have been taken out but they have not yet been executed. It tried to forget the whole episode and put my mind to thinking about the past. On the same day 19 th May 1961, I gave birth to my first son. I felt assured, everything would be alright for me to take my grandchildren on the cruise the following day. I did not mention the meeting with Donnelly to my sons. This is the explanation proffered by her for not seeking consent on, at the latest, 19 May 2004. 31 I am not prepared to conclude that Mrs Gallucci said what Mrs Maxwell-Smith says she said. I think it more likely that Mrs Gallucci said in effect what she had stated on 18 May that there would be no problem with the warrant. There is no reason logically why Mrs Gallucci would have said anything that was incorrect in this regard. There was no occasion logically for her to be discussing Portwatch because Mrs Maxwell-Smith had given not the slightest indication to Mrs Gallucci or Mr Donnelly that she was intending, at any time, let alone the very next day, to travel overseas. 32 However, I am prepared to accept the honesty of Mrs Maxwell-Smith's recollection. I have no doubt whatsoever from having seen and heard her in the witness box that she was upset and angry on that day for reasons which need not be gone over. To that extent, and for that reason, I am prepared to accept that she was being honest in the swearing of this affidavit and giving her evidence, but I would conclude that there was a degree of confusion on day, no doubt brought about by her emotional state, and I am prepared to accept that she thought she need not ask because she thought the Portwatch would not prevent her leaving. 33 As I have said, more than once this morning, and as Mr Brennan on a number of occasions said to me in address at various points yesterday, this inquiry is not about Mrs Maxwell-Smith. It is about Mr Donnelly. And what is clear is that Mrs Maxwell-Smith gave not the slightest indication to Mr Donnelly or his manager that she was to leave the country the following day. 34 I should at this point say that Mrs Gallucci in [8] of her statement dealt with a conversation between Mrs Maxwell-Smith, the trustee and Mrs Gallucci which, on all the evidence in particular that of Mrs Maxwell-Smith and Mr Donnelly, probably occurred on 19 May 2004. No particular importance need be attached to any lack of recollection of the precise day by Mrs Gallucci of that second conversation which I think was the conversation that occurred on 19 May. Thus the sequence of events that I find occurred, in particular relying on the evidence of Mrs Maxwell-Smith and Mr Donnelly, was that Mrs Maxwell-Smith attended Ferrier Hodgson's offices on the 18th and on the 19th and conversations took place on both those days rather than as Mrs Gallucci seemed to recall at the time of making her statement of the second occurring on the morning of the 20th. 35 The Portwatch process had been activated. The Federal Police were therefore in due course on the following day called to Darling Harbour where the ship Pacific Sky was boarding with Mrs Maxwell-Smith and her three grandchildren as passengers. Federal Agent Nagy and Federal Agent Pavlov were instructed by their superior officer to attend and prevent Mrs Maxwell-Smith from travelling. It is worth recalling at this point that s 272(1)(c) made an act preparatory to leaving Australia and the leaving of Australia of Mrs Maxwell-Smith without the consent in writing of the Trustee an offence. It is unnecessary to discuss any relevant mental state that was required for that Commonwealth offence under the Criminal Code or the general law and my point in saying this again is not to conclude that Mrs Maxwell-Smith was guilty of a criminal offence but to identify what the Federal Police must have understood their task to be, as was plain from the evidence of Federal Agent Nagy. 36 When Federal Agent Nagy attended the ship, she found a grandmother, no doubt in some state of emotional agitation, and her three grandchildren, one of whom was disabled, wishing to take a cruise. I propose now to discuss the conduct of Federal Agent Nagy. It should be understood that I make no criticism of her conduct. On her own initiative and without, on her evidence, discussing the matter with Mrs Maxwell-Smith, she sought a compromise. She rang Mrs Gallucci. She says Mrs Gallucci was rude to her on the telephone; her note also stated that Mr Donnelly was rude to her. It is unnecessary for me to conclude one way or the other whether this was the case or whether the tone of voice of Mrs Gallucci and Mr Donnelly should be the subject of any comment. 37 I think I have indicated enough of the background facts for the reader of these reasons to understand what may have been the surprise of both Mrs Gallucci and Mr Donnelly to the news that Mrs Maxwell-Smith was seeking to board a ship to leave the country. In any event, Federal Agent Nagy sought to broker a compromise. I have the benefit in exhibit 1 of Federal Agent Nagy's notes made shortly after the events in question. In those notes she recounts her direction by her superior to attend the ship, that she came upon Mrs Maxwell-Smith with three children, two girls and one boy in a wheelchair. She ascertained that the ship was going to New Caledonia. She rang her superior who said that Mrs Maxwell-Smith was not to travel unless written confirmation could be obtained from the captain (as suggested by ship's crew) that Mrs Maxwell-Smith could hand in her passport and it be maintained on board the ship. 38 I need not pass upon the disconformity of this view with s 272 of the Act, but no doubt the superior was, like Federal Agent Nagy, doing his best to resolve a situation which he perceived might be resolved. However, Federal Agent Nagy's notes then proceed to say that the captain could not provide in writing any such assurance as he was concerned about repercussions if Mrs Maxwell-Smith did manage to leave the ship at port. 39 At this point, the note recites that Federal Agent Nagy called Mrs Gallucci who told her to call Mr Donnelly. The note then states that Federal Agent Nagy called Mr Donnelly. Mrs Gallucci's statement is slightly different in its chronology. In [9] and following of her statement Mrs Gallucci deals with the events of 20 May 2004. She recounts receiving a call from the federal agent who asked whether Mrs Maxwell-Smith was allowed to leave the country. Mrs Gallucci says she said that she would have to talk to the trustee and call her back. Mrs Gallucci then says that she attempted to locate Mr Donnelly and eventually contacted him, telling him that a federal agent had telephoned and told him of the conversation and asked whether Mrs Maxwell-Smith was allowed to travel. She has not asked for my permission and the Federal Police should seize her passport. Do you want me to arrest Mrs Maxwell-Smith? Mr Donnelly said that Mrs Maxwell-Smith should not be arrested, but her passport should be seized. Mrs Gallucci then telephoned the federal agent, telling the federal agent that Mrs Maxwell-Smith was not to be arrested but her passport was to be seized. Mrs Gallucci then recalls that later on she received a call from another federal agent. Thus Mrs Gallucci's recollection is that the earlier conversations were with Federal Agent Pavlov, not Federal Agent Nagy. The difference between the recollection of Mrs Gallucci and the contemporaneous summarised note of Federal Agent Nagy is not of any real consequence. By this later stage in the afternoon Mrs Gallucci was speaking to Federal Agent Nagy and it was in this conversation that Federal Agent Nagy asked whether some compromise was not possible, telling Mrs Gallucci that Mrs Maxwell-Smith was boarding with her grandchildren in effect for a holiday, although these precise words were not used. 41 At this point, one can take up the chronology with the recognition from the note of Federal Agent Nagy that she spoke to Mr Donnelly. Mr Donnelly said that she, Mrs Maxwell-Smith, was not to travel. Mr Donnelly dealt with the matter at [27], [28] and [29] of his affidavit. I told Mrs Gallucci to inform the Federal Police that Mrs Maxwell-Smith should not be allowed to leave Australia as she had not obtained my permission, and the Federal Police should seize her passport. I said "No. Tell them not to arrest her just seize the passport. I rang Rebecca (on [mobile number provided]) at 4.30 pm that day. Rebecca advised me that she was trying to seek a compromise regarding the departure of IMS overseas, apparently with her three grand children. I said to Rebecca that IMS had been in my office on the previous two days and that there had been absolutely no mention of any trip overseas by her, EMS or any of her family members. Rebecca said that she was not aware of that but was trying to seek some resolution. I said that as far as I was aware, there was actually a warrant out for IMS's arrest regarding her non-attendance at a public examination. As soon as I mentioned that, the phone went dead and the screen on my mobile phone said "opposite hang up". The call ended at approximately 4.33 pm. What is important is that Mrs Maxwell-Smith attended, at least twice, the offices of Ferrier Hodgson two days and one day prior to travelling overseas and took no opportunity given to her to inform the trustee or his staff that she was intending to travel. It is clear that Mr Donnelly was approaching the matter on the basis that a third party was asking him whether Mrs Maxwell-Smith could travel in circumstances where: (a) Mrs Maxwell-Smith had not asked for that permission; and (b) that third party was a Federal Police Agent whose obligation at the time was to prevent Mrs Maxwell-Smith from leaving the country. I did this because I had not previously granted permission for IMS to travel overseas, nor had IMS sought it. I did consider whether I should grant permission at that time but decided that it was not appropriate for me to do so because the request had not come form IMS (as the bankrupt in question), IMS had not provided me with any reasons why I should grant permission for her to travel overseas and I was not otherwise aware of any reason why I should grant that permission. This decision was made against a background of non-cooperation by IMS. If I had been informed of these circumstances, I may have considered them to be an appropriate compassionate reason for a bankrupt to travel. Nor did I know the itinerary of the cruise ship or who was paying for the trip. Nor did she seek to do so. Bankruptcy does not, of itself, involve any criminal offence. A citizen should be free to travel if and when his commercial activities or personal desires prompt him so to do. Restrictions upon such travel under the bankruptcy legislation must be seen as being aimed at insuring the proper administration of the bankruptcy laws and of bankrupt estates under such laws and not as a penalty imposed upon a citizen as a consequence of inability to pay debts leading to the making of a sequestration order. In some cases, the possibility that the bankrupt has committed offences under the Act and is seeking to abscond from possible prosecution will be extremely relevant. There has not, however, in this case been any suggestion that the bankrupt is endeavouring to abscond to avoid possible prosecution. In some cases the financial reward to be derived by the bankrupt's estate from such overseas travel will clearly outweigh any inconvenience in in the administration of that estate resulting form the bankrupt's departure from the jurisdiction. This is not, however, such a case for the reason that , as I haved said, I am unconvinced that the bankrupt estate of the applicant could be expected to benefit over and beyond the $40 per month which the bankrupt has currently undertaken to pay to the trustee. In some cases, the requirements of the prompt and efficient administration of the estate of the bankrupt and the administration of the Act will justify the refusal to grant leave to travel overseas. This, in my view, such a case. The provisions of s 77(a) and s 272 of the Act recognize that a bankrupt's legitimate desires to travel overseas must, in an appropriate case, be subordinated to what is necessary for the proper and efficient administration of his estate in bankruptcy and the administration of the bankruptcy law. All in all, the circumstances of the present case are such as to make that subordination necessary. To say that that is what occurred on 20 May 2004 misunderstands and misconceives the position Mr Donnelly found himself in. He was called upon, without notice, in circumstances where he is entitled to say that the matter came as a surprise to him, to consider a conversation with a Federal Police Officer (who had been sent to the wharf to prevent Mrs Maxwell-Smith travelling) about allowing Mrs Maxwell-Smith to travel in circumstances where what Mr Donnelly knew was set out in [44] of his statement and in circumstances where it was not, nor could be understood as being, a request by the bankrupt herself. 46 Given the irregularity of the behaviour, the failure of the Maxwell-Smiths to give any notice whatsoever that Mrs Maxwell-Smith would be travelling, despite the apparent clear opportunity of the previous days, given the failure to attend the s 81 examination, whatever might be the explanation for that, given the taking out of the warrants whatever might be the status of those and the circumstances of lack of notice and surprise in which Mr Donnelly found himself, his decision was not one, in my view, that is open to the kind of criticism that is made of it. In particular, I think what is said in [47] of Mr Donnelly's statement is legitimate. 47 The kinds of consideration discussed by Deane J in Re Tyndall presuppose a request, otherwise regular, to travel. The circumstances here were highly irregular. As I have said, there was no application by Mrs Maxwell-Smith. She had given no notice. She could be seen as having possibly committed an offence in failing to deliver her passport and to have acted in an attempt to board the ship. In all the circumstances identified by Mr Donnelly in [42] to [47] of his statement, I think it is a misunderstanding of the position to say that he breached his obligation as a trustee by failing to only turn his mind to the question of the due administration of the estate. 48 Even assuming that one can somehow construct some agency between Federal Agent Nagy and Mrs Maxwell-Smith, such that Mrs Maxwell-Smith can be seen to have been making an application through Federal Agent Nagy, I do not think that the conduct of Mr Donnelly is made any more liable to criticism. At the risk of repetition, it is quite unrealistic in my view, in the circumstances in which Mrs Gallucci and Mr Donnelly found themselves, to require them, on pain of criticism for breach of duty, to turn their minds only to the kinds of consideration identified by Deane J. Mrs Maxwell-Smith had failed to give up her passport. She had apparently, to their eyes, not given them any notice of the intended travel, had given no warning as to why she wanted to leave her country and even in the circumstances where there was an annulment application on foot and the estate on the current understanding of the facts was probably solvent, these matters did not mandate Mr Donnelly taking a course other than that which he took on pain of criticism that he was somehow abusing his position. 49 In my view, in all the circumstances, there was no miscarriage of discretion of the kind posited in address, there was no abuse of power, there was no act of mala fides, Mr Donnelly's actions in all the circumstances that he was placed in by others is not the subject of legitimate criticism. Of course he could have said, yes, it is all right for you to go, but he did not. If there is any responsibility for the most unfortunate events of 20 May 2004, they rest with others and not with Mr Donnelly or Mrs Gallucci. They should have been warned and told that overseas travel was desired. I have already expressed my view that I am prepared to accept Mrs Maxwell-Smith's evidence as honest as to why she thought she did not have to, but from Mr Donnelly's position, to attempt to criticise him in the serious way that has been done, in circumstances where he was given no notice whatsoever of the travel and in the other circumstances that I have described is, I think, somewhat unfair. 50 If Mr Donnelly had been given adequate notice for the decision, if the nature of the family trip had been explained to him, I have little doubt that with appropriate conditions of the kind imposed by Moore J in July, he would have consented to the travel. 51 This inquiry and its attendant costs have been made necessary by the application for the inquiry and the view by the Full Court that Wilcox J dealt with the matter inadequately. I have had the benefit of full evidence from all parties as to the subject of the inquiry required by the Full Court and, in my view, the conduct of Mr Donnelly and Mrs Gallucci does not warrant the criticism that has been made of it and in those circumstances the question of a proper order arises. 52 The inquiry has been pressed. The Maxwell-Smiths have demanded it. The Full Court disagreed with Wilcox J as to the conclusions that could be drawn at least from Mrs Maxwell-Smith's evidence and Mr Donnelly was thereby, for those reasons, put to the expense, of justifying the decision he took as the responsible officer and trustee dealing with the Maxwell-Smiths' estate. I see no reason whatsoever why Mr Donnelly should personally bear those costs of defending himself against the accusations made against him. In those circumstances, given my view that it would be most unjust for Mr Donnelly to personally bear the costs of justifying his conduct, that leaves only one conclusion as to who and what should bear the costs of the inquiry. 53 Therefore, in all the circumstances, the order of the Court will be as follows, though I will give the parties a period of time after my settled reasons to put submissions about the terms of the orders if they think it appropriate in writing. 54 The Court so orders. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. | inquiry under s 179 of the bankruptcy act as to the conduct of the trustee bankruptcy |
The parties have invited me to treat this minute as the substantive pleading of the applicant which is Racing and Wagering Western Australia ("Racing and Wagering"). 2 In order to formalise that position, I propose to order that the Minute of Proposed Re-amended Statement of Claim dated 3 April 2007 stand as the Re-amended Statement of Claim. Software is in the business of selling and installing proprietary software systems. Racing and Wagering is the regulatory body and betting totalisator for the racing and wagering industry in this State. As pleaded in paragraph 3 of the Statement of Claim, as it now stands, by an agreement dated 16 June 2005, and in consideration of licence fees paid by the applicant, Software agreed to grant the applicant a non-transferable and non-exclusive licence, numbered 13900099, to use various software systems known as "RWWAs/Natural/ADABAS Environment". 3 I will refer to the agreement as the "Licence Agreement" and to the software as the "System", which is how it is described in the pleading. It is common ground between the parties that Software is the owner of copyright in the System, the subject of the Licence Agreement. It is also common ground that Racing and Wagering has copied the System. It pleads relevantly in paragraph 6 of the Statement of Claim that it was authorised to do so by clause 13.3 of the Licence Agreement. That is disputed by Software and is a core issue in the proceeding. (I take that to be an error and I will read that as 12 September 2006). However, I do not require to resolve that issue, as the parties have agreed that I should consider the contents of the letters, but only for the purpose of this motion, and only on the limited question which is before me, whether they or any of them arguably constitute a threat of action or proceedings for the purposes of s 202 of the Copyright Act 1968 (Cth) ("the Act "). 5 The letters contain express references to the Licence Agreement and in particular, the proper construction of clause 12.3. In the letter of 12 September 2006, Software proposes resolution of the dispute by an extension of the Licence Agreement with an associated increase in the applicable licence fee. The high water mark, as counsel for Racing and Wagering put it, on the issue of a threat for the purposes of s 202 of the Act , is contained in that letter. It is written by Mr Dan Martin, an account executive with Software, and addressed to Mr Glenn Fee, the Chief Information Officer of Racing and Wagering. 8 Counsel for Racing and Wagering submitted that, because the asserted breach of the licence agreement is at its heart referable to copying, that the language in the letters to which I have referred and in particular the passage from the letter of 12 September 2006, which I have set out above, can arguably, reasonably be read as embracing a threat for the purposes of s 202 of the Act . Racing and Wagering referred to the judgment of Mansfield J in Australian Consulting and Training Pty Ltd v Tiltform Pty Ltd [2001] FCA 1072. His Honour was there considering amongst other things and relevantly for the purposes of the motion before me, the question of whether a pleading was capable of making out threats of infringement within the meaning of s 128(1) of the Patents Act 1990 (Cth) (' Patents Act ' ). 9 It is accordingly relevant, by analogy, to the present case. It may not be necessary for there to be an explicit reference to enforcement proceedings : Lunar Advertising Co v Burnham and Co (1928) 45 RPC 258. He went on to say, in effect, that no explicit reference to enforcement under the Patents Act was necessarily required. He was therefore, in my view, pointing, and sensibly so, to the need to look at substance over form. 11 In this case, there is no reference express or, in my view, implicitly, to any proceedings under the Act . To the contrary, there is, in the correspondence, quite specific and detailed reference to the contractual dispute concerning the Licence Agreement and in particular clause 12.3 of the Licence Agreement. The words to which counsel for Racing and Wagering pointed include these words "and will pursue this matter further. " Those words, when referring to " this matter ", are a reference to what precedes it. What precedes it is a very clear, express and unambiguous reference to asserted breaches of licence which it is said that Software takes "very seriously". 12 I do not regard the content of the letters generally or having regard to the specific words used in the letter of 12 September 2006, as being capable of supporting the pleading in paragraph 7B and the relief consequentially sought. 13 Accordingly, for these reasons, I propose to further order that paragraph 7B and the words "... and the Applicant thereby says that the Threats as pleaded in the preceding paragraph are unjustifiable within the meaning of s 202 of the Act " within paragraph 7C be struck out as not disclosing a reasonable cause of action and that Racing and Wagering pay Software's costs of the motion. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | application to strike out part of statement of claim whether not disclosing a reasonable cause of action pleading struck out. section 202(1) copyright act 1968 (cth) whether unjustifiable threat disclosed by pleading. pleadings copyright |
The applicant, BING! 2 For convenience, I will continue to refer to BING! Software Pty Ltd ACN 079 281 197 as "the applicant" in these proceedings, and Bing Technologies Pty Ltd ACN 098 420 903 and Mr Cranitch as "the respondents". The sole director of the applicant is Mr Emmanuel Theodosiou. At all material times Mr Cranitch was in effective control of the first respondent through his roles as managing director, secretary and Chief Executive Officer of the first respondent. Mr Cranitch, through an associated company, was also in control of a majority of the issued share capital of the first respondent. 4 The applicant is the registered proprietor of Trade Mark 836622 with a priority date of 24 May 2000 ("the Bing Trade Mark"). . The Bing Trade Mark appears on the software (on-screen), on software user guides and on the footer of Family Court documents created using the software. The Bing Trade Mark and the word BING! are also used on the applicant's software and marketing material. 7 The applicant maintains a website www.bing.com.au featuring the Bing Trade Mark, and since 1997 has also developed software products for various markets, all incorporating the word and following exclamation mark " BING! ". The applicant lead evidence that its annual fees for the past three years have exceeded $350,000, and that it maintains a list of customers, with 1400 law firms having purchased BING! software since 1997. The applicant submits that currently more than 500 entities subscribe to its products. 8 In his affidavit of 3 December 2007, Mr Cranitch deposed that the business of the first respondent was the provision of an internet protocol postal mail service. The nature of the business is that, by using the service, customers of the first respondent can route letters over the internet and have them printed and posted at points closest to the recipient, with the result that customers experience faster, cheaper and more efficient letter-based communications. Mr Cranitch deposed that the first respondent did not sell a product, rather it sold a service , and that it did not target legal firms as customers in any marketing or advertising. Mr Cranitch deposed further that approximately 90% of the first respondent's income was derived from posting invoices, statements and debt collection letters. 9 The first respondent purchased the domain name www.bing.com for $US25,000 and had purchased the domain names www.easymail.com and www.easymail.com.au from third parties. The first respondent has also registered the domain name www.easypost.com.au . 12 These logos are set out later in the judgment. Class 16 --- machines for office use for moistening mail; machines for office use for opening mail; machines for office use for signing mail; machines for office use for stamping mail; machines for office use for wrapping mail; machines for office use in addressing mail; machines for office use in cancelling mail; machines for office use in closing mail; machines for office use in endorsing (franking) mail; mail inserting machines for office use; mail order catalogue; mailers (office machines); mailing labels; printed sheets of paper for mailing purposes. Class 38 --- data transmission by electronic mail; electronic mail; provision of electronic mail facilities. Class 39 --- forwarding of mail; franking of mail; mail forwarding. 14 On 5 September 2007 the applicant lodged opposition to the granting of the trade mark registration to the first respondent. 15 During the course of the hearing Mr Crowe SC for the respondents informed the court that he had received instructions from the first respondent to offer an undertaking to the court that the first respondent in relation to all references to the software the subject of the proceedings would not use the word "bing" when directly referring to that software in any documentation, on websites, or otherwise. Mr Crowe SC explained that the first respondent was not offering to change its name, but offered an undertaking that it would not refer to the software itself as "bing" nor any other combination of words using the word "bing" (TS 86 ll 18-25). I will consider this undertaking in more detail later in this judgment. An order permanently restraining the first respondent, whether by itself, its servants, officers or agents from using within Australian the sign BING or any sign which is deceptively similar to the Bing Trade Mark as a sign in connection with the distribution, sale and supply of software. 3. An order that the respondents deliver up to the applicant for destruction all marketing material in their possession or under their power or control in connection with the advertising and/or supply of the software which material uses or contains the Bing Trade Mark or any mark deceptively similar thereto and, to the extent that such material is stored in electronic form, that such material be permanently deleted and the respondent verify such delivery up or deletion by affidavit. 4. An order that the first respondent forthwith change its corporate name to a name not incorporating the word Bing or any word deceptively similar thereto. 5. An order that the first respondent transfer the registration of the domain name www.bing.com to the applicant. 6. Further or other orders under section 87 of the TPA. 8. Further and/or in the alternative to the relief sought in paragraph 6 above, at the option of the applicant, an account of profits made by the respondent by the said trade mark infringements and passing off and payment of the amount found to be due on the taking of such account. 9. Interest under section 51A of the Federal Court Act 1976 . 10. Costs. 11. Such further or other orders as the Court thinks fit. Both respondents had infringed the Bing Trade Mark. 2. The applicant had not authorised either respondent to use the Bing Trade Mark or any sign or signs which were deceptively similar thereto in connection with the distribution, sale or supply of software. 3. The conduct of the first respondent in infringing the Bing Trade Mark was, in summary, directed by Mr Cranitch. 5. By reason of, inter alia , the use by the applicant of Bing Trade Mark and the promotion of the trade mark in connection with its business as pleaded in the Amended Statement of Claim, the conduct of the first respondent had caused members of the public to believe that the first respondent's business was conducted by or under the authority of, or was connected in the course of trade or commerce with, the applicant or had the sponsorship or approval of the applicant, and the first respondent had therefore infringed the exclusive rights conferred by registration of the Bing Trade Mark. 6. By reason of, inter alia , the conduct of the first respondent in using the name "Bing" the first respondent had engaged in conduct in contravention of sections 52 and/or 53 TPA. 7. The conduct of the first respondent had taken place at the direction of and with the authority of Mr Cranitch, had been carried out by Mr Cranitch, and was pursuant to a plan or design devised by Mr Cranitch. 9. The first respondent had made profits from its wrongful acts and conduct. 10. The applicant had requested the first respondent to cease such conduct but the first respondent had neglected, refused or failed to do so. 11. Mr Cranitch had aided, abetted, counselled or procured the conduct of the first respondent or had been knowingly concerned in or a party to the conduct of the first respondent, and was a person involved in the passing off and contraventions of the TPA. 12. The applicant had sustained loss and damage by reason of the conduct of the respondents and would, unless such acts and conduct were restrained, continue to suffer loss and damage. Contended that the first respondent was in the business of supplying mailing services, including distributing and supplying software called EasyPost. 2. Denied that they were selling software. 3. Said that the word "Bing" was used by the first respondent in connection with mail services and not in respect of the classes of goods or services of the Bing Trade Mark. 4. Denied that the word "Bing" was substantially identical or deceptively similar to the Bing Trade Mark. 5. Denied that either respondent had infringed the Bing Trade Mark. 6. Denied that the first respondent required any authority, sponsorship or approval from the applicant. 7. This Bing software was developed in 1995 and was in existence and distributed for six years prior to the company "Bing! Software" being granted its trade mark. Accordingly the public are not likely to be misled or deceived by the respondents' use of the word "Bing". Note 2: For use see section 7. Note 3: In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A. Section 120 sets out circumstances in which a trade mark is infringed. 23 In addition to its reliance on the Act , the applicant also claimed passing off, and conduct in breach of ss 52 and 53 TPA. (2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1). Whether the trade mark used by the first respondent --- namely the word "bing" in various guises --- was substantially identical to the applicant's trade mark. 2. Whether the trade mark used by the first respondent --- namely the word "bing" in various guises --- was deceptively similar to the applicant's trade mark. 3. Whether the goods or services in respect of which the first respondent uses the word "bing" in various guises were goods or services in respect of which the trade mark was registered. 4. Liability, if any, of Mr Cranitch for infringement, if any, of the applicant's trade mark. 5. Whether the conduct of the first respondent amounted to conduct in breach of s 52 or s 53 TPA. 6. Whether the conduct of the first respondent amounted to passing off. 7. Liability, if any, of Mr Cranitch in relation to conduct of the first respondent in breach of the TPA or conduct in the nature of constituted passing off, if any. 8. In the event that the applicant has substantiated its case or any part thereof --- appropriate remedies. 26 In the context of the legislation I have set out above, I will now turn to each of these issues. 1. IS THE FIRST RESPONDENT'S USAGE OF "BING" SUCH THAT IT IS SUBSTANTIALLY IDENTICAL TO THE APPLICANT'S TRADE MARK? To that extent, there appears to be some concession by the applicant that it cannot establish an infringement of its trade mark within the meaning of s 120(1) on the basis of substantial identity. 28 However the claim by the applicant as to substantial identity was not specifically abandoned. It is appropriate for me to consider this allegation. 29 In The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 , Windeyer J considered "substantial identity" in terms of trade marks. "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 p 106. Whether there is substantial identity is a question of fact: see Fraser Henleins Pty Ltd v Cody [1945] HCA 49 ; (1945) 70 CLR 100 per Latham CJ...and Ex parte O'Sullivan; Re Craig (1944) SR (NSW) 291 per Jordan CJ, where the meaning of the expression was considered. 30 These principles are well settled and have been applied on numerous occasions by the Full Court of the Federal Court (for example, Starr Partners Pty Limited v Dev Prem Pty Ltd [2007] FCAFC 42 ; Crazy Ron's Communications Pty Limited v Mobileworld Communications Pty Limited [2004] FCAFC 196 ; (2004) 209 ALR 1). 31 Further, it is clear that in considering whether the competing marks are substantially identical within s 120(1) of the Act a comparison must be undertaken of the registered trade mark and the whole of the respondent's mark, and not merely part of it: Angove's Pty Ltd v Johnson and Eclar Investments Pty Ltd (1981) 55 FLR 1 at 8. It is also not in dispute that both parties pronounce the word "bing" in the same way, which is relevant in considering the similarity or otherwise of the marks (Gummow J in Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 121 ALR 191 at 229). 35 The fact that both marks include the same word does not conclusively mean that the marks are "substantially identical": Marc A Hammond Pty Ltd v Papa Carmine Pty Ltd (1973) 28 FLR 160; Angove's Pty Ltd v Johnson (1983) 66 FLR 216. Indeed, the fact that the Bing Trade Mark is written in capital letters, and the first respondent's mark is not, suggests that the two marks are not substantially identical: SAP Australia Pty Ltd v Sapient Australia Pty Ltd [1999] FCA 1821 ; (1999) 169 ALR 1 at 11. 2. IS THE FIRST RESPONDENT'S USAGE OF "BING" SUCH THAT IT IS DECEPTIVELY SIMILAR TO THE APPLICANT'S TRADE MARK? The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity. Therefore the comparison is the familiar one of trade mark law. It is between, on the one hand, the impression based on recollection of the plaintiff's mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant's television exhibitions. To quote Lord Radcliffe again: "The likelihood of confusion or deception in such cases is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the marks clearly before him... It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole": de Cordova v Vick Chemical Co at 106. And in Australian Woollen Mills Ltd v FS Walton & Co Ltd [1937] HCA 51 ; (1937) 58 CLR 641 Dixon and McTiernan JJ said "In deciding this question, the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same" (at 658)...(at 416). The deceptiveness that is contemplated must result from similarity; but the likelihood of deception must be judged not by the degree of similarity alone, but by the effect of that similarity in all the circumstances. The probability of deception or confusion must be finite and non-trivial. There must be a "real tangible danger of its occurring": Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1955] HCA 15 ; (1954) 91 CLR 529 at 594-595; Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020 ; (1999) 93 FCR 365 at 380. • A trade mark is likely to cause confusion if the result of its use will be that a number of persons are caused to wonder whether it might not be the case that the two products or closely related products and services come from the same source. It is enough if the ordinary person entertains a reasonable doubt: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1955] HCA 15 ; (1954) 91 CLR 529 at 594-595; Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020 ; (1999) 93 FCR 365 at 382. • Deceptive similarity must be judged by the standards of "ordinary" people keeping in mind the likelihood that they may have only an imperfect recollection of the registered mark: Johnson & Johnson v Kalnin [1993] FCA 210 ; (1993) 114 ALR 215 at 220. • Deceptiveness flows not only from the degree of similarity itself between the marks, but also from the effect of that similarity considered in relation to the circumstances of the goods, the prospective purchasers and the market covered by the monopoly attached to the registered trade mark: NSW Dairy Corporation v Murray Goulburn Co-Operative Company Ltd (1989) 14 IPR 26 at 67, cf Windeyer J in Shell 109 CLR 407 at 416. 41 The evidence demonstrates that the businesses of the parties are completely different, that the parties have no customers in common and that they operate in completely different markets. These factors militate against a finding of deceptive similarity of the trade marks. However on balance, I consider that the first respondent's usage of "bing" in its different forms is such that it is deceptively similar to the applicant's trade mark within the meaning of s 10 and s 120(1) of the Act . As Mr Franklin submitted --- "bing" is "bing". • Although the trade marks are used in respect of different services --- an issue to which I shall shortly return --- a customer using either the applicant's products or the first respondent's internet postal service does so by using a computer . Indeed the first respondent's advertisement in the December 2007 edition of the Virgin Blue in-flight magazine, which was the subject of evidence given by Mr Paul Kenna, depicts an Australia Post mail box linked by a computer cord to a computer and monitor, with the first respondent's trade mark displayed on the monitor. In this respect I consider that the average consumer with ordinary intelligence with an imperfect recollection of the applicant's trade mark, seeing or hearing the first respondent's mark, might be caused to wonder whether goods or services supplied pursuant to the first respondent's mark might be sourced from the applicant. Indeed this was the substance of evidence given by Mr Paul Kenna. Mr Kenna deposed that he had been aware of the applicant's products because he had previously contacted it in relation to its conveyancing software, and that he had assumed an advertisement in the December 2007 edition of the Virgin Blue in-flight magazine placed by the first respondent related to the applicant's products (affidavit of Paul Kenna sworn 12 December 2007). In my view whether Mr Kenna first contacted the applicant or the first respondent in relation to this confusion is irrelevant and does not materially detract from the substance of Mr Kenna's evidence. I accept the submission of the applicant that Mr Kenna knew of the applicant because of its conveyancing software and, that, upon seeing the advertisement with the trade mark "bing", Mr Kenna thought that the "mailing software" emanated from the applicant. While the authorities indicate that evidence of actual confusion such as the evidence of Mr Kenna does not conclusively establish that the first respondent's trade mark is deceptively similar to the applicant's registered trade mark, nonetheless evidence of actual confusion may be of considerable importance (Davison M, Johnston J & Kennedy P, Shanahan's Australian Law of Trade Marks & Passing Off (4th ed, Lawbook Co, 2008) at [30.2510] and cases cited therein). • On balance, expert evidence of Associate Professor Alpert supports a finding that the marks are deceptively similar. Software might be confused into thinking that BING! 3. ARE THE GOODS OR SERVICES, IN RESPECT OF WHICH THE FIRST RESPONDENT USES THE WORD "BING", GOODS OR SERVICES IN RESPECT OF WHICH THE TRADE MARK IS REGISTERED? Further, there is ample evidence that the respondents distribute computer software, and that in conducting its business the first respondent distributes and installs on each of its customer's computers the bing software that is necessary to operate the system. • The first respondent's promotional material uses the trade mark "bing" in relation to its software, and through installation and use of the software, the trade mark "bing" appears on the computer screen in various guises. It is clear from the respondents' own evidence that the first respondent uses the mark "bing" in relation to at least software (class 9); distribution of computer software (class 35), and updating of computer software (class 42). • The software distributed by the first respondent has a number of components including "bing Client", "bing Virtual Printer Driver", "Popup bing Mailroom", "Control bing Printer", and "bing Help". • Customers of the first respondent enter a software license agreement in respect of the software (and updates) provided to the customer by the first respondent under the name "bing". Further, the software licence agreements refer frequently therein to "bing". • The comparison is between the applicant's registered mark normally used in relation to any goods or services for which it is registered, including software, the distribution of software, software development, maintenance and upgrades, and the first respondent's actual use. The first respondent's use of "bing" in the course of conducting a business that involves the distribution of software to customers and the entering into of software licence agreements in relation to the Bing software so distributed, confirms or exacerbates that confusion. • The first respondent uses "bing" in various guises as a trade mark in relation to goods and services. • It is clear that the first respondent's service is a "software enabled" service, and is used in relation to goods or services for which the trade mark is registered, including "software" and "distribution of software". • How the applicant uses its trade mark, and whether there is any likelihood of deception or confusion because the applicant sells primarily legal software and the first respondent provides postal services, are irrelevant considerations because the applicant has exclusive rights to the trade mark under s 120(1) of the Act . • Notwithstanding submissions of the respondents in relation to s 120(2) the proviso to s 120(2) does not apply where the first respondent's use is in relation to goods and services covered by the registration. Legal principles in relation to goods and services of the same description are irrelevant to this case. The question whether the parties operate in different market segments is irrelevant if the specification of goods and services in the registration is sufficiently wide to encompass the respondent's actual use. • The first respondent does not have to "sell" a product to use a trade mark in respect of goods and services covered by the registration. To accept the applicant's case would be to accept that it has a monopoly in the use of the name "bing" as a trade mark in respect of any service which provides software even though the provision of that software is ancillary to the actual service acquired by customers. This approach has been rejected by the courts. • Although the first respondent is actually engaged in the provision of postal services , the applicant is trying to elevate those services to that of provision of computer software, relying upon the incidental use of that software in the conduct of the first respondent's business. That is an incorrect approach and contrary to binding authority on this Court. • This case is very similar to that in SAP Australia Pty Ltd v Sapient Australia Pty Ltd [1999] FCA 1821 ; (1999) 169 ALR 1. • The applicant is trying to distract the court by the fact that the services or goods offered by the parties might have some features in common. The Court should not be distracted by the fact that, in part, the services or goods provided by the first respondent involves the provision of software to its customers. • In any event, on the morning of the second day of the trial the first respondent provided an open undertaking to the Court that it would not use the word "bing" either by itself or in combination with any other words in directly referring to the software it provides to its customers. Resolution of the inquiry is a question of fact: Re Spillers Ltd's Trade Mark Application (1953) 70 RPC 51; cf Wal-Mart Stores Inc v Cadbury Schweppes Pty Ltd (2004) 61 IPR 596. 49 Leaving to one side for the moment the undertaking given by the first respondent, the essence of the respondents' case is that the first respondent conducts an internet postal service for which the use of software is but incidental. I shall return to discuss the first respondent's undertaking later in the judgment. 50 The respondents cite in support of their case MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236 and SAP Australia [1999] FCA 1821 ; 169 ALR 1 , both of which are authorities for the proposition that, when comparing services, one should focus primarily on a comparison of the totality of the two services rather than the individual aspects of those services (cf comments in Davison M, Monotti A and Wiseman L, Australian Intellectual Property Law (Cambridge University Press, 2008) p 105). This contention is superficially attractive, however in my view falters on closer examination. 52 This can be contrasted with the first respondent's service. I agree with the respondents that the first respondent is engaged in the provision of internet postal services , which prima facie are not goods or services in respect of which the applicant's trade mark is registered. However I consider it is also clear that, as Mr Franklin submitted, the first respondent's service is, in the manner in which it is conducted with the majority of its clients, a software-enabled service. While customers can access the first respondent's service without specific software (an issue to which I will return later in the judgment), the first respondent provides software, bearing the trade mark "bing", to customers to allow the customers to effect the internet postal service it provides, and to access that service. 53 Indeed, as the evidence demonstrates, the first respondent entered detailed software licence agreements with its customers in relation to software called "bing" software. To that extent the software is considerably more than "incidental" to the operation of the first respondent's service. It is an important aspect of the service which allows its operation. 54 In considering the principles articulated in MID Sydney 90 FCR 236 and SAP Australia [1999] FCA 1821 ; 169 ALR 1 I am of the view that the facts of the case before me do not support an application of those principles. 55 In MID Sydney 90 FCR 236 (so far as material in the present case) the appellant was the registered proprietor of the trade mark "The Chifley Tower", registered for services in class 36 described as " leasing of office and retail space; building and property management ". The respondents proposed to use the word "Chifley" in relation to hotel-related services. The Full Court accepted that the hotel business entailed "management" of hotel properties. However the Court did not accept that hotel-related services therefore were "property management" services within the meaning of class 36. These activities cannot ordinarily be described as "property management services". To elaborate on what might be thought an obvious proposition about the ordinary use of language is often not profitable. But the ordinary meaning of property management services - and this is supported by Mr Garnett's evidence about his own business activities - would not encompass the occupation of a property under contract with, or licence or lease from, its owner or lessee in order to manage a business, for the benefit of both the manager and the owner or lessee, conducted on that property. Certainly it is true that a provider of property management services is no less such a provider because it provides, in the course of its business, other services as well. But where, in this case, services are performed which are incidental to the conduct of the hotel business, it is not correct, in our view, to conclude that Touraust is using the word "Chifley" (or a sign incorporating it) in relation to property management services. Similarly, distributing and updating that software are "services" within classes 35 and 42. The software supplied by the first respondent, and the services provided by the first respondent in support thereof, are not, to draw an analogy with MID Sydney 90 FCR 236 , goods or services which lose their features as software because they form part of an overall broader service. The software remains software, which requires distribution and updating, no matter that it is used in connection with the first respondent's internet postal service. 58 The respondents also submitted that the facts of this case parallel those in SAP Australia [1999] FCA 1821 ; 169 ALR 1. In SAP Australia [1999] FCA 1821 ; 169 ALR 1 the first appellant, a subsidiary of a German company (the second appellant), had traded in Australia since 1989, and distributed computer software products of the second appellant in Australia. The first appellant had also established a training college under the name "Sapient College". 59 The respondent was incorporated in Australia in 1998 and provided custom-designed computer systems for clients and some ancillary training. The appellants alleged infringement by the respondent of the registered trade marks, misleading or deceptive conduct in contravention of s 52 TPA, and passing off. The action at first instance was dismissed. 60 In dismissing the appeal before it the Full Court observed that there was some force in the respondent's contention that the trial judge erred, favourably to the appellants, in finding that the respondent's use of "Sapient" was in relation to the same services as the services in respect of which the second appellant's trade mark was registered. Sapient Australia is simply not engaged in the general activity of providing education and training in computer software. Its trade is quite different: see MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 42 IPR 561 at 565-8. As I noted earlier, the software used by the first respondent is a product in its own right --- the copyright therein is owned by a third party, and the first respondent has exclusive distribution rights (TS 66 ll 12-13). The first respondent provides the software even though, as Mr Cranitch conceded during cross-examination, the first respondent has some clients who do not use the software, but send to the first respondent documents in the form of PDF files, word documents and publisher documents (TS 71 ll 40-41). The software and associated services are an important part of the first respondent's internet postal service. 62 In ascertaining whether software is "incidental" to its internet postal service as submitted by the first respondent, it is useful to test the first respondent's hypothesis in this way. Computer hardware cannot properly function without the benefit of software. Yet it could scarcely be said in relation to a computer that software loaded on to a computer hard drive was "incidental" to the computer itself, merely because the software allowed the computer to operate in certain ways. This is clear from the many cases involving claims of infringement of trade mark with respect to software (for example, Microsoft Corporation v PC Club Australia Pty Ltd [2005] FCA 1522 and Microsoft Corporation v Ezy Loans Pty Ltd (2005) 62 IPR 54). 63 Software is pervasive in twenty-first century Australia. (Brian Fitzgerald, "Software as discourse? Further, the fact that the software used by the first respondent is not sold by the first respondent, or indeed that it has no operation other than in relation to the first respondent's service, does not mean that it is not "software" for the purposes of classes 9, 35 and 42 for which the applicant has a statutory monopoly. 65 Accordingly, and putting aside for the moment the undertaking given by the first respondent (to which I will return later in this judgment), in my view the software provided by the first respondent and services in respect of distributing and updating that software, are goods and services in respect of which the applicant's trade mark is registered. Accordingly, I find that the first respondent has infringed the applicant's trade mark. 4. 68 As the conduct of the first respondent infringed the applicant's trade mark, in my view it is clear that Mr Cranitch had procured or directed that conduct, and accordingly is similarly liable for such infringement (cf also King v Milpurrurru (1996) 66 FCR 474). 5. The applicant in the amended statement of claim claimed that the first respondent had, inter alia , contravened s 52 TPA on the basis of the same conduct on which the applicant alleged infringement of its trade mark. Conduct which misleads a customer so that, under some mistaken impression of a trader's connection or affiliation, he or she opens negotiations or invites approaches may be misleading or deceptive even if the true position emerges before the transaction is concluded. • However, each case depends on its own facts and conduct may not be misleading or deceptive or likely to mislead or deceive, notwithstanding that it may engender temporary and commercially irrelevant error (cf Knight v Beyond Properties Pty Ltd [2007] FCAFC 170 at [56] ; Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181 at [41] ). • Characterisation of conduct as "misleading or deceptive or likely to mislead or deceive" involves a judgment of a notional cause and effect relationship between the conduct and putative consumer's state of mind. • Whether or not there is the requirement of some exclusive reputation as an element in the common law tort of passing off, there is no such requirement in relation to Pt V of the TPA. The question is not whether an applicant has shown a sufficient reputation in a particular get-up or name. The question is whether the use of the particular get-up or name by an alleged wrongdoer in relation to his product is likely to mislead or deceive persons familiar with the claimant's product to believe that the two products are associated, having regard to the state of knowledge of consumers in Australia of the claimant's product: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Limited (2007) 159 FCR 359 at 419; Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181 at [39] . • Where the relevant conduct involves representations to the public at large or to a section thereof, such as prospective purchasers of a product the respondent markets or proposes to market, the issue is one of identifying the "ordinary" or "reasonable" members of that class of prospective purchasers: Campomar Sociedad, Limitada v Nike International Ltd [2000] HCA 12 ; [2000] 202 CLR 45 at 84-85. • It is necessary to isolate by some criterion a representative member of the class of prospective purchasers: Campomar [2000] HCA 12 ; 202 CLR 45 at 85. This excludes erroneous or fanciful assumptions: Campomar [2000] HCA 12 ; 202 CLR 45 at 86. • Where a transitory association between the names of two products in the mind of a member of the public is immediately dispelled upon a comparison of those products, this brief association will generally be of no significance and therefore will not give rise to misleading conduct or deception: Knight v Beyond Properties Pty Ltd [2007] FCAFC 170 at [53] . 72 The applicant's submissions as to misleading and deceptive conduct under s 52 TPA overlap significantly with its contentions as to liability of the first respondent under s 53 TPA and the tort of passing off. 73 In this case both the applicant and the first respondent use the word "bing" prominently in their respective trade marks. In the context of discussing infringement under the Act I considered the similarity between the two trade marks. I also noted that there is evidence from Mr James Helm and Mr Paul Kenna indicating that a small number of people were actually confused by the first respondent's trade mark into believing (temporarily) that it was related to the applicant. 74 In terms of s 52 TPA, the applicant has submitted that the "section of the public" against whom the first respondent's conduct was directed was the general public who were potential purchasers of the service offered by the first respondent. At its narrowest, I consider that, because of the nature of the service offered by the first respondent, the relevant section of the public would be the business community rather than consumers in general, however I do not think this distinction is material for the purposes of the applicant's s 52 claim. • The first respondent's advertisement in the relevant Virgin Blue in-flight magazine (upon which the applicant has partially based its claim) was presumably aimed at any member of the public who chose to fly with the airline during the month of publication. I do not understand the applicant's case to be confined to members of the public who use aircraft --- rather the general public is the relevant class for the purposes of the applicant's claim under s 52 TPA. • The applicant's submissions in relation to s 52 are by reference to "members of the public" (for example, TS 4 ll 25-41). 75 Assuming that it is "ordinary members" of the general public at whom the first respondent's conduct is directed, it is clear however that evidence of misconception arising in the minds of members of the public was minimal. Such evidence of misconception as exists from the evidence of Mr Helm (primarily arising from the similarity of the domain names used by the parties), and Mr Kenna (arising from the advertisement in the Virgin Blue in-flight magazine), demonstrates that any confusion was transient and ephemeral. The evidence also indicates that, while there were a small number of instances of initial confusion, those instances were resolved at the point of inquiry. Indeed this could scarcely be otherwise --- the goods and services of the applicant and the first respondent are so different that an ordinary member of the public seeking services offered by one of the parties would clearly not be satisfied by services offered by the other, and would realise this very quickly. 76 To that extent I consider that any brief association between the two trade marks in the mind of a member of the public would generally be of no significance, and that a significant number of members of the general public, in fact or by inference, have not been misled or would likely not be misled by the first respondent's use of the trade mark "bing" for the purposes of s 52 TPA (cf Hansen [2008] FCAFC 181 at [46] - [48] ). 77 Accordingly, I consider that the applicant's claim against the first respondent for breach of s 52 TPA fails. 79 During the proceedings Mr Franklin SC for the applicant submitted that, although breach of s 53 had been established, the applicant was not relying heavily on s 53 because the applicant considered that its case had been established in relation to s 52 (TS 22 - 23 ). Notwithstanding this submission I propose to consider the applicant's claim under s 53. More specifically, it is clear from submissions that the basis of the applicant's claim is subs 53(c) and 53(d) TPA. 82 While the respective trade marks of both parties feature the word "bing" there is absolutely no evidence that in doing so the first respondent represented any relationship with the applicant, that the first respondent's service was in any way related to the products and services provided by the applicant, or that the first respondent's service had, for example, uses or benefits which it did not have. While not conclusive, I also consider that the substantial differences between the products and service offered by the applicant and the service offered by the first respondent militate against the application of s 53 (cf Australian Home Loans Ltd t/as Aussie Home Loans v Phillips [1998] FCA 181 ; (1998) 40 IPR 392). 83 This finding is further supported by the absence of evidence before me that either the applicant or its products have a reputation from which the first respondent would be able to benefit (cf Australian Home Loans Ltd t/as Aussie Home Loans v Phillips [1998] FCA 181 ; (1998) 40 IPR 392 ; Mark Foys Pty Ltd v TVSN (Pacific) Ltd [2000] FCA 1626). Other than evidence of a small number of inquiries temporarily confusing the applicant with the first respondent, there is no evidence that the applicant or its products and service are sufficiently well-known that a substantial number of members of the public, or even a substantial number of members of those sections of the public which are likely to engage either with the applicant or respondent, would be misled in terms of ss 53(c) or 53 (d) TPA. 84 I do not consider the claim of the applicant in relation to s 53 TPA substantiated. 6. 2) Made by a trader in the course of trade. 87 Applying principles relevant to the tort of passing off to the facts of this case, for the following reasons I do not consider that the applicant has substantiated its claim in respect of passing off. 88 First, I have already found that the first respondent's use of the word "bing" did not constitute conduct in breach of ss 52 and 53 TPA. Similarly I do not consider that the first respondent's conduct amounted to a misrepresentation in terms of the applicant's claim for passing off. 89 Second, I do not consider that the evidence has established a sufficient reputation in the applicant in relation to the mark "BING! " such that a substantial number of persons would recognise relevant products or services under that mark as emanating from a single source --- rather I consider that evidence is scant as to the applicant's reputation in commerce including in relation to the Bing Trade Mark. 90 Third, in light of my finding as to the applicant's reputation, and the complete divergence between the businesses of the parties and their prospective customers, I do not consider that the applicant has established a likelihood of injury to its business from the use of "bing" by the first respondent. 91 Finally, and as I will discuss later in this judgment, I consider the lack of proven actual damage to the applicant from the conduct of the first respondent militates against the existence of grounds for a passing off claim in these circumstances. 7. 93 Notwithstanding this I will briefly consider whether, had the applicant substantiated its case against the first respondent in relation to its claims under the TPA or in relation to passing off, Mr Cranitch would have been liable in relation to the first respondent's conduct. The second respondent gave instructions to, and communicated with, Blink Studios in connection with the rebranding of the office mail system from EasyPost to Bing. iii. The second respondent approved the change of the first respondent's corporate name. iv. The second respondent negotiated the purchase by the first respondent of the domain name. In the premises the second respondent is a person involved in the said passing off and contraventions of the TPA. 97 Section 75B reflects the intention of Parliament to bring to account natural persons whose conduct brings about the contravention of the law by a corporation: Fencott v Miller [1983] HCA 12 ; (1983) 152 CLR 570 at 583; Red Bull Australia Pty Ltd v Sydneywide Distributors Pty Ltd (2001) FCA 1228 at [75] . 98 In this case I consider that, had the applicant substantiated its claims against the first respondent with ss 52 and 53 TPA, Mr Cranitch similarly would have been personally liable pursuant to s 75B. In my view it is clear that Mr Cranitch, in his role as managing director, secretary and Chief Executive Officer of the first respondent, and in effective control of the first respondent through an associated company, was the ultimate decision-maker of the first respondent and to that extent had actual knowledge through his personal involvement in conduct of the first respondent (cf Red Bull Australia (2001) FCA 1228 at [75] ). In para 16C Amended Statement of Claim the applicant claims further that Mr Cranitch was a person "involved in the said passing off". 100 Second, the applicant has pleaded that the conduct of the first respondent took place at the direction of and with the authority of Mr Cranitch, pursuant to a plan or design devised by Mr Cranitch (para 16A Amended Statement of Claim), and that Mr Cranitch has, inter alia , been knowingly concerned in or a party to the conduct of the first respondent (para 16B Amended Statement of Claim). Accordingly the pleadings support a claim by the applicant alleging liability of Mr Cranitch in respect of tortious conduct for which the first respondent is liable. Although it was clear from the evidence that Mr Cranitch was significantly involved in the activities of the first respondent and the development of the first respondent's trade mark, all activities of the first respondent in connection with its trade mark were carried out by the first respondent. I can identify no basis for asserting that Mr Cranitch himself passed off the first respondent's services as being those of the applicant or as being in any other way associated with the applicant. Involvement by Mr Cranitch in relation to management of the first respondent, and Mr Cranitch's involvement in decision-making in relation to development of the first respondent's "bing" trade mark, do not, in my view, amount to passing off (cf observations of the Full Court in Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 30 ; (2002) 55 IPR 354 at 399). 103 As I have already found, the evidence demonstrates that Mr Cranitch, in his senior executive role in the first respondent, procured or authorised the first respondent's conduct. Accordingly I consider that, had the applicant substantiated its claim against the first respondent in passing off, Mr Cranitch would have been similarly liable. 8. Accordingly, I now turn to the applicant's claims for injunctive and associated relief and damages. In this respect I note that, in closing submissions, the applicant elected to seek an award of damages rather than an account of profits pursuant to s 126(b) of the Act and in accordance with the principles in Colbeam Palmer Ltd v Stock Affiliates Pty Ltd [1968] HCA 50 ; (1968) 122 CLR 25 at 32. Any consideration of relief which would have been available to the applicant must be carried out in light of this undertaking. " when directly referring to that software in any documentation, on websites, or otherwise. To make that plain it is not offering to change its name, but it is offering an undertaking that it will not refer to the software itself as BING! or any other combination of words using the word "BING!". Where there is a reference to software it will not be referred to as BING! software, or BING! mailroom software or any other combination of words using the name BING! In the affidavit Mr Cranitch deposes as to steps taken by the first respondent to change all uses of the word "bing" in reference to software, where the word appears in documentation, on websites and otherwise, to its former name "EasyMail". Mr Cranitch deposed that he expected the review to take seven days to complete. It's provided, we say in a way which would avoid there being injunctive relief granted at all if you accepted our submissions in relation to the MID decision, the SAP decision, the fact that we were not using the mark in respect of the goods and services in respect of which it was registered. The purpose of the undertaking was just to, as I said, quite frankly, to bring ourselves even more squarely within the MID decision. In MID, for example, there was no suggestion that particular aspects of the service that was provided which might have fallen within the definition of property management services was separately called Chifley. So we've taken that out of our scenario to bring us on all fours, we say, with the Chifley decision. 112 If "bing" does not appear on, inter alia , software, agreements pertaining to software, or computer screens with reference to software when a customer accesses the first respondent's service or website, I understand that the first respondent would only use "bing" to describe itself and the operation of its internet postal service. This service is not covered by the applicant's trade mark. The fact that the internet postal service requires customers to use a computer and, invariably, software in the course of using the computer to effect and access the service --- either the first respondent's EasyMail software or alternative methods including emailing PDF attachments --- does not mean in the circumstances following the provision of the undertaking that the first respondent's conduct infringes the applicant's registered trade mark. The first respondent's internet postal service involves considerably more than use of software --- indeed key activities are printing mail in the appropriate location, folding it and posting it. These activities are not goods and services the subject of the applicant's registered trade mark. 113 Mr Crowe SC submitted that, if the first respondent could not successfully rely on MID Sydney 90 FCR 236 prior to the provision of the undertaking, it could do so following the provision of the undertaking (cf TS 174 ll 28-37). In my view this is not strictly the case. As I have already observed, I do not consider that MID Sydney 90 FCR 236 applies because I consider that the software is not "incidental" to the provision of the internet postal service in the sense used in MID Sydney 90 FCR 236 and SAP Australia [1999] FCA 1821 ; 169 ALR 1. However if the software provided by the first respondent does not bear the mark "bing", I do not see how the applicant's trade mark is infringed through the first respondent continuing to call itself "bing" in relation to provision of an internet postal service, which (according to Mr Cranitch's affidavit of 12 March 2008) uses a software called "Easymail". I do not accept that the applicant has a monopoly in the use of the name "bing" as a trade mark in respect of any service, including services which are not the subject of the applicant's registered trade mark, simply because the service requires a person using it to use any form of software. Such a proposition, in my view, takes the applicant's statutory monopoly beyond that sanctioned by the Act . 114 The first respondent's undertaking obviously does not address any past conduct which may have infringed the applicant's trade mark. However, other than continuing to call itself "bing" in relation to provision of internet postal services where the mark "bing" does not appear on any software or in any documentary references to software, and which in my view constitutes neither infringement of the applicant's trade mark nor misrepresentation in terms of the TPA or passing off, the applicant has not demonstrated conduct of the first respondent having an on-going effect for which the undertaking provided is not an answer in terms of the applicant's contentions regarding use of the trade mark and software (contrast, for example, Yeatman v L Homberger & Co (1912) 29 RPC 645). I consider that the terms of the undertaking provided by the first respondent are adequate to protect any rights of the applicant has in relation to this matter. 115 It is not in dispute that the undertaking given by the first respondent in Court through its Counsel is enforceable by order of the Court: O 35 r 11 Federal Court Rules . Indeed courts have, on occasion, declined to grant injunctions in circumstances where an undertaking given by one of the parties is adequate to protect the rights of the other (for example Simos J in Community First Credit Union Ltd v Khan (unreported, Supreme Court of New South Wales, 30 August 1995)). However it is also recognised that, in a proper case, a party may insist upon an injunction notwithstanding an undertaking which has been given (cf Phillimore and Pickford LJJ in Winkle & Co Ltd v Gent & Son (1914) 31 RPC 473 at 479, 480). 116 I do not consider an injunction in the terms sought by the applicant in this case is warranted in light of the undertaking given by the first respondent, for the reasons I have already outlined. However, as I consider that there has been infringement of the applicant's trade mark I am prepared to make an order in terms of the undertaking given by the first respondent through its counsel on 11 March 2008. 117 In relation to the claim of the applicant in para 3 of the Amended Application, I consider that the undertaking given by the first respondent and the actions of the respondents to date and as anticipated by Mr Cranitch's affidavit of 12 March 2008 answer that claim adequately. As I propose to make an order in terms of that undertaking, in my view an order for delivery up and destruction as sought by the applicant is not warranted (cf Colbeam [1968] HCA 50 ; 122 CLR 25 at 39 per Windeyer J). 118 In relation to the claim of the applicant in para 4 of the Amended Application --- although it is open to the Court to order a change of corporate name in appropriate circumstances (as, for example, was ordered by the Court in Anakin Pty Ltd v Chatswood BBQ King Pty Ltd [2008] FCA 1517) I do not consider these appropriate circumstances. As I have already explained, in my view the undertaking of the first respondent and the order I propose to make adequately address issues raised by the applicant. An order in the nature of that sought by the applicant, which would deprive the first respondent of that asset, is not lightly entertained by the Court. • While it may be commonplace for companies in Australia to use a ".com" or ".com.au" domain name, the first respondent's domain name is registered in the United States. An order that the first respondent transfer an international domain name to remedy infringement of an Australian trade mark --- which trade mark is territorial in its operation --- would in my view require extraordinary circumstances. • The applicant has relied on a number of cases in support of its application for an order that the first respondent be ordered to transfer the domain name, namely the English Court of Appeal case British Telecommunications PLC v One In A Million Ltd (1998) 42 IPR 289 and the High Court of New Zealand case Oggi Advertising Ltd v McKenzie (1998) 44 IPR 661. Further, Hill J ordered transfer of a domain name in CSR Ltd v Resource Capital Australia Pty Ltd [2003] FCA 279 ; (2003) 128 FCR 408. However each of those cases involved cybersquatting, defined by The Australian Concise Oxford Dictionary as "the practice of registering names, especially well-known company or brand names, as Internet domains, in the hope of reselling them at a profit", and which practice is, as Hill J noted in CSR Ltd [2003] FCA 279 ; 128 FCR 408 , conduct somewhat suggestive of criminality and fraud. The facts in each of those cases were very different from those in the case before me. 120 I consider that the facts of this case fall short of justifying an order depriving the first respondent of the domain name it currently owns and ordering it transferred to the applicant. If the court finds damage has occurred it must do its best to quantify the loss even if a degree of speculation and guess work is involved. Furthermore, if actual damage is suffered, the award must be for more than nominal damages. We should add that we can see no reason why this principle should not apply in cases under the Trade Practices Act as well as in cases at common law. We emphasize, however, that the principle applies only when the court finds that loss or damage has occurred. It is not enough for a plaintiff merely to show wrongful conduct by the defendant. I have already observed several times throughout this judgment that the activities and customer base of each of the applicant and the first respondent are completely removed from the other. There is scant evidence as to the reputation of the applicant, including in relation to its registered trade mark, and no evidence that its reputation has been affected. Any confusion between the services offered by the applicant and the first respondent was demonstrated to be short-lived and immediately resolved on inquiry. I consider this to be a case where the applicant has shown wrongful conduct by the respondents, but not substantiated any damage arising from that conduct. Accordingly, there is no evidence to warrant compensatory damages or even nominal damages in the absence of quantification of damages (cf The Sanitas Company Ltd v Condy (1887) 4 RPC 530 ; Munday v Carey (1905) 22 RPC 273 ; Paramount Pictures Corporation v Hasluck (2006) 70 IPR 293 at 302). 125 In claiming that damages "at large" should be awarded the applicant relied in part on the decision of Jessup J in Review Australia Pty Ltd v Innovative Lifestyle Investments Pty Ltd [2008] FCA 74. In Review Australia Jessup J accepted that the market presence of the respondents' product did bring about some minor dilution of the applicant's reputation for originality (at [30]). In my view there is some evidence of minor and short-lived confusion of a small number of consumers, but no evidence that there has been any dilution of the applicant's reputation in any respect by the market presence of the first respondent. There is, for example, no evidence (unlike in Review Australia ) that any value placed by the applicant on its goods and services has been diminished by the activities of the respondents. I make this observation particularly in light of the completely different activities of the parties and the markets in which they operate. • In the absence of demonstration by the applicant of any damage, the principles articulated by the Full Court in Enzed Holdings [1984] FCA 373 ; 57 ALR 167 which I have outlined earlier in this judgment militate against an award of damages. However, in my view, the evidence raises not only serious questions as to the witness' expertise in relation to the issue of value of the relevant brand, but also serious doubts as to its probity. 127 It would be appropriate for the parties to file written submissions as to the form the final injunction should take based upon the undertaking given by the first respondent in Court. Accordingly, at this stage the proper order is that the parties be directed to file written submissions by 4.00 pm on 28 November 2008 as to the form of the final injunctive relief based upon my reasons in this judgment, and costs, and that the matter be listed to return next week for final orders to be made. 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 Collier. | trade marks alleged infringement of s120 trade marks act 1995 (cth) by software enabled internet postal service whether mark substantially identical or deceptively similar whether goods or services in respect of which mark registered nature of first respondent's business nature of software whether software incidental to service effect of undertaking given during trial trade marks assessment of damages whether damages at large applicable to trade mark infringement whether wrongful conduct enough whether applicant established damage trade practices whether breach of ss 52 and 53 trade practices act 1974 (cth) (tpa) application of established principles whether confusion transient and ephemeral whether representation of sponsorship or approval tort wrongful passing off whether applicant established elements pursuant to recognised principles whether sufficient reputation in mark likelihood of injury to business intellectual property intellectual property intellectual property intellectual property |
The current statement of claim, the further amended statement of claim filed on 2 December 2005, alleges that Errol Investments Pty Ltd acts and acted on its own behalf. 2 The amendments sought to be made by the applicants may be separated into two categories. In the notice of motion, which was filed on 11 September 2006, the applicants sought a declaration as to the effect of actions taken before and after the second set of amendments. That order is not pressed. The applicants allege contraventions of the Trade Practices Act 1974 (Cth) ('the Act') by the respondents in connection with that transaction. 5 The Court has a general power of amendment ( Federal Court Rules O 13 r 2(1) ('the Rules')). Order 13 r 2(2) provides that all necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceeding, or of correcting any defect or error in any proceeding, or of avoiding multiplicity of proceedings. 6 Errol Investments relies upon specific provision in the Rules to permit the first set of amendments. 8 The applicants' evidence is that the Shellharbour Unit Trust Deed dated 9 June 1997 ('Shellharbour Trust Deed') established the Shellharbour Unit Trust with Errol Investments named as trustee of that trust. The Appointer, being the person entitled to act as appointer of the settlement, was John Robert Stevens. On 1 December 1999, the minutes of a meeting of Errol Investments as trustee of the Shellharbour Unit Trust record that it was resolved that the contract to purchase the Rothbury land would be executed by Errol Investments as trustee for the Shellharbour Unit Trust. That is, it was in the capacity as trustee that Errol Investments purchased the land and was the recipient of the alleged conduct in contravention of the Act. The evidence of the solicitor who drafted the application and statement of claim in these proceedings is that at the time of drafting the pleadings he had not seen the Shellharbour Trust Deed. 9 The title of the purchaser as specified in the Rothbury contract is Errol Investments, without qualification. In the ' Special Conditions to the contract for sale of land ', the purchaser is described as Errol Investments ' as trustee for Shellharbour Property Trust '. I am satisfied that that should have read the Shellharbour Unit Trust and that the Rothbury contract supports a finding that Errol Investments purchased the Rothbury land as trustee, at least in part, for that trust. 10 The evidence is also that, as at 11 September 2006, the beneficiaries of the Shellharbour Unit Trust remain unchanged and that Errol Investments has held the position of trustee of the trust since its establishment on 9 June 1997. 11 One other matter should be noted. After Errol Investments entered into the contract to purchase the Rothbury land but prior to completion, it executed a Declaration of Trust on 1 February 2000 ('the Vintage Trust') to the effect that it held part of the land ('the Vintage land') in trust for another beneficiary, Stevens Developments (NSW) Pty Ltd. Stevens Developments is the first applicant, now known as Vintage Developments Pty Ltd. The beneficiary of the remainder of the Rothbury land ('the Shellharbour land') remained the Shellharbour Unit Trust. 12 An issue has been raised as to the identity of the beneficiaries for whom Errol Investments held the Rothbury land in trust. The respondents point to an apparent discrepancy between the minutes that authorise Errol Investments to purchase the whole of the Rothbury land in trust for the Shellharbour Unit Trust and the Vintage Trust which provides that part of the land is to be held in trust for Vintage. 13 The cause of action brought by Errol Investments in these proceedings is held on behalf of the beneficiaries of the Shellharbour Unit Trust. There does not seem to be an issue that the capacity in which Errol Investments held the property was as trustee and that Errol Investments has acted in the capacity as trustee since the commencement of these proceedings. 14 I am satisfied on the evidence that it is arguable that the Rothbury land was purchased by Errol Investments at least in part as trustee for the Shellharbour Unit Trust. It may also be the case, in light of the Vintage Trust, that part was held as trustee for Vintage. Accordingly, it is appropriate to amend the application and the statement of claim to alter the capacity in which Errol Investments sues and the consequential amendments related to capacity. The second respondent seeks an order pursuant to Order 13 r 3A of the Rules that the amendment date from the date of making the amendment and not from the date of commencement of proceedings. It seeks the order as the relevant limitation period has now expired. Subrule 2(8) allows amendment to plead a fact or matter that has occurred or arisen since the commencement of proceedings. The claim for relief arises from matters that occurred well prior to the commencement of the proceedings. It follows that paragraph (7)(b) and subrule (8) of O 13 r 2 have no application. 18 Order 13 r 3(3) corresponds to O 13 r 2(7) and (8) and applies to amendments made prior to the close of pleadings. It has no relevant application. 19 Subrule 2(9) refers back to paragraph (7)(b) and subrule (8) and qualifies them to preclude any amendment that has an effect inconsistent with a statute of limitation. As this subrule only limits amendment under paragraph (7)(b) and subrule (8), it has no relevant application. 20 Accordingly, unless the Court otherwise orders, O 13 r 3A(1)(b) applies and the amendment takes effect when the documents to be amended, the application and statement of claim, were first filed. Should the Court apply the "otherwise order" provision of O 13 r 3A? It submits that the amendments effect a new cause of action because the damages after amendment are to the benefit of the beneficiaries of the Shell Harbour Trust and not Errol Investments. Hunter Valley accepts that the cause of action is a claim for damages pursuant to s 82 of the Act but submits that the recipients will be the beneficiaries of the trust rather than Errol Investments. 22 Further, it points to uncertainty by reason of the further declaration of trust that occurred between exchange and settlement of the Rothbury contract. This gave rise to the alleged circumstance I have noted that part of the land, the Shellharbour land, was purchased as trustee of the Shellharbour Unit Trust and part, the Vintage land, as trustee of the Vintage Trust for the benefit of the first applicant. 23 Ms Richards appears for the third respondent and adopts Hunter Valley's position. She submits that, other than as provided for specifically by the Rules, an amendment can not be made outside the limitation period that introduces a new cause of action. That proposition does not seem to be in dispute. 24 Mr Lancaster and Mr Kell, who appear for Errol Investments, submit that the evidence reflects a misdescription because it establishes, arguably, that at all times from December 1999 to the commencement of the proceedings and to the present day Errol Investments was acting as trustee for the Shellharbour Unit Trust and at no times on its own behalf. They submit that there is no new cause of action to correct that misdescription. As to the identity of the recipient of damages, he submits there is no change. Any loss suffered by Errol Investments was suffered as the trustee of the trust; the assets of the trust were reduced. As the pleading stands, there is no claim for consequential damages by the beneficiaries of the trust. The only claim is for damages suffered by the trust. That has not changed because at all times the damage suffered by Errol Investments was as trustee of the trust. In their submission, that is the reality if the cause of action is made out. 25 I am satisfied that the claim for damages and the cause of action have not changed. There presently is no new alleged conduct or representation, no new alleged reliance and no new alleged loss. Only the capacity of the party bringing the cause of action is clarified. Any monies obtained by way of damages will become part of the trust property rather than part of Errol Investments' property. The Rules recognise the right to seek amendment to reflect a change in capacity and do not make specific provision that such amendment date from the date of the making of the amendment. There is no reason at this stage to invoke the power to order otherwise than as provided by O 13 r 3A(1)(b) of the Rules. 26 Further, the effect of such an order would be to deprive the second applicant of the right to bring a cause of action simply because of an error in the characterisation of the company as a trustee, which character existed at the time the cause of action accrued and when the pleading was filed. 27 The amendment to change the capacity of Errol Investments takes effect when the application and statement of claim were filed. Is the proposed second further amended statement of claim the first pleading against Mr Johnston? 29 As set out in Vintage Developments Pty Limited v GHD Pty Limited [2006] FCA 531 at [10] (' Vintage (No 1)' ), the further amended statement of claim was filed with the leave of the Court, which leave, obtained in November 2005 and prior to the expiry of the limitation period, did not extend to joining Mr Johnston. I gave leave for that joinder on 11 May 2006 and no further order was sought from the applicants as to leave to file a second further amended application and statement of claim. 30 The submission now is that, despite the decision in Vintage (No 1) , this is the first amendment to the application and statement of claim to effect that joinder, so that the proposed second further amended statement of claim discloses a new (and statute barred) cause of action as against Mr Johnston. 31 In Vintage (No 1) , I granted leave to join Mr Johnston to the proceedings. That is, he was joined to the proceedings as pleaded in the pleadings filed on 2 December 2005. Those pleadings constitute the original claim against him. The circumstances, put shortly, were that an amended application and further amended statement of claim were filed within the limitation period naming Mr Johnston as a respondent. Leave that had been given to file the amended documents did not extend to leave to include Mr Johnston as a respondent, nor to include allegations or orders against him. Many of the arguments put by Ms Richards were canvassed in Vintage (No 1) . It is the case, as I noted at [24] and [27], that leave was not sought further to amend the amended statement of claim to permit the pleading against Mr Johnston, as pleaded in the further amended statement of claim. However, as I discussed at [33], the further amended statement of claim filed within time may be considered as a fresh pleading as against Mr Johnston. It was put in Vintage (No 1) that Mr Johnston should not be joined because it was a futility as the limitation period would apply because the proceedings had not commenced on 2 December 2005 but would only commence on the date of joinder. I rejected that submission. 32 It follows that I did not consider that the proceedings against him were only commenced on the date of the order for joinder. I am still of that view. It then follows that I reject the submission that the proposed second further amended statement of claim discloses a new cause of action against Mr Johnston. This did not necessarily obviate, however, the need to seek leave to amend the statement of claim by way of the amendments disclosed in the documents filed on 2 December 2005 or an order otherwise recognising that those documents also constituted the commencement of proceedings against Mr Johnston. 33 This is an interlocutory application for an order under O 13 r 2(6) of the Rules. It is, of course, open to Mr Johnston, or any of the respondents, to plead a limitation defence, as to liability or nature of damages sought. It may be that, as the facts develop, for example with respect to the nature of the trusts and the identity of the beneficiaries, further examination will be appropriate. They relate to the substitution of Errol Investments as second applicant with Errol Nominees Pty Ltd upon the replacement of Errol Investments by Errol Nominees as trustee of the Shellharbour Unit Trust. 35 The parties have agreed that, in summary, Errol Investments is a company with assets other than the property of which it is the trustee and those other assets are caught up in a significant multi-party transaction for the sale of certain assets and businesses (involving persons related to Errol Investments and third parties) as provided for in an Implementation Agreement dated 31 August 2006. It is a condition precedent to the Implementation Agreement that Errol Investments be replaced as the trustee of the Shellharbour Unit Trust and transfer legal title to all Shellharbour Unit Trust property from Errol Investments to a third party "Non Group Entity". That proposed Non Group Entity as replacement trustee is Errol Nominees. The transactions that have led to these proposals are unrelated to the course of these proceedings. 36 The relevant documentation to give effect to that replacement and transfer have been executed and placed in escrow pending leave of the Court to substitute Errol Nominees as trustee. That is, they are not yet effective and the deed of assignment is undated. The substance of the second set of amendments is to substitute the trustee in these proceedings. This course was explained by Mr Lancaster to be considered by the applicants to be preferable to a possible strike-out application if the substitution were effected prior to orders of the Court or an application for a conditional order, which the applicants considered inappropriate. 37 There seems to be no dispute that the Shellharbour Trust Deed provides for the resignation of the existing trustee and the power of the appointor, Mr John Robert Stevens, exercisable at any time to remove and appoint the trustee. 38 Errol Investment's position is straightforward. It sues in these proceedings as trustee of the Shellharbour Unit Trust. The beneficiaries of that trust, who are the prospective beneficiaries of the relief claimed in these proceedings by the suit of Errol Investments, have not altered. The order for substitution sought is simply to reflect the replacement of Errol Investments by Errol Nominees as trustee of the trust. Errol Investment relies on O 6 r 10(2) read together with O 6 r 11(1)(d) as providing the basis for the substitution order sought. 39 Mr Johnston submits that this is not a case for substitution of an applicant. The applicable order is then said to be O 6 r 11(3). On this basis Errol Investments is removed as a party and Errol Nominees added, with the result that the cause of action by Errol Nominees commences on the date of its joinder and outside the limitation period. 40 Order 6 r 10(2) provides for the "addition, removal or re-arrangement" of parties where the interest or liability of a party passes by assignment, transmission, devolution or otherwise to another person. Order 6 r 11(1)(d) provides that the powers of the Court under O 6 r 10 include the making of orders relating to the substitution of one party for another. Where an order for substitution is made, unless the Court otherwise orders, all things done in the proceeding are taken, effectively, to have been done by the new party (O 6 r 11(2)). Where a party is added pursuant to an order under O 6 r 10, the date of commencement of proceedings as far as concerns that new party is the date of the amended originating process (O 6 r 11(3)). First, it submits that the Court's powers to make a substitution order do not arise. GHD's submission is that the Court's power under O 6 r 10(2) arises only '[w] here the interest or liability of a party passes by assignment, transmission, devolution or otherwise to another person ' and that the condition, to be met, must have occurred historically or be contemporaneous with the order. That is not the case here. Following from this, it is submitted that the appropriate order, where the new trustee's rights vest only at a future date, is addition. 42 Secondly, GHD points out that the two sets of amendments, viewed together, change the applicant from a company simpliciter to a trustee to a new trustee. It is more appropriate, GHD submits, that this change be characterised as an addition, not a substitution. Those submissions were adopted by Hunter Valley. 43 Mr Johnston submits that, where Errol Nominees has not existed before this year and therefore did not exist when the cause of action arose, or when proceedings were commenced and where the application for substitution is based on internal commercial imperatives of the applicant, the appropriate order is not for substitution but for addition as a party. Indeed the rights of the proposed party have not yet come into existence. What is proposed, however, is that the rights of the new trustee will substitute for the rights of the existing trustee, which do extend back to the date on which proceedings were commenced. 45 A new trustee may by registered deed be appointed in place of a trustee (s 6(1) Trustee Act 1925 (NSW) (' Trustee Act ')). Section 6(8) provides that a new trustee appointed under this section may in all respects act as if the new trustee had been originally appointed a trustee by the instrument creating the trust. Errol Investments submits that this is reflected in O 6 r 11(2) which should therefore be applied. 46 In Yorkshire Regional Health Authority v Fairclough Building Ltd [1996] 1 All ER 519, the United Kingdom Court of Appeal considered the meaning of a "new claim" in s 35(2) of the Limitation Act 1980 (UK) and O 15 r 7 of the Rules of the Supreme Court (UK) as those provisions then provided. The Court recognised that the new party is substituted because he or she has succeeded to a claim or liability already represented in the action and sues or is sued in respect of the existing cause of action. It concluded that ' the expiry of the limitation period is completely irrelevant ' (at 523). While the English O 15 r 7 specifically provided for ' the proceedings to be carried on as if he had been substituted for the first mentioned party ' and those words are not present in O 6 r 10 of the Rules, the logic of the Court of Appeal is persuasive. 48 I also note that in Jennings v Credit Corp Australia Pty Ltd [2000] NSWSC 210 ; (2000) 48 NSWLR 709, an assignment of the legal ownership of a debt was made after the expiry of the limitation period. The Court permitted the substitution of the new legal owner. 49 The question is whether Errol Nominees, if it were the trustee, is added or substituted as a party. It is not uncommon for trustees to be changed. In ordinary circumstances it should not follow that questions of limitation thereby arise. If in such a case, the new trustee were added rather than substituted, the beneficiaries would lose their rights to bring proceedings. Consistent with the provisions of the Trustee Act and the authorities I have cited, I am of the view that the amendment sought is best characterised as a substitution. 50 The fact, however, is that the condition that gives rise to amendment under O 6 r 10(2) has not occurred as there has not yet been a passing of interest by assignment or otherwise. The occasion has not arisen to make the order for substitution sought. Leave should be granted to the applicants to amend the application and the statement of claim to clarify the capacity in which Errol Investments brings these proceedings. No order should presently be made that those amendments take effect otherwise than as provided by O 13 r 3A of the Rules. 52 No relevant interest or liability has yet passed between Errol Investments and Errol Nominees. Accordingly, no order should be made pursuant to O 6 r 10(2) and O 6 r 11(1)(d) of the Rules to substitute Errol Nominees for Errol Investments as the second applicant. 53 I have been asked to reserve the question of costs and I do so. I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | application to amend pleadings capacity of applicant acts as trustee rather than on its own behalf leave to amend granted whether "otherwise order" provision of o 13 r 3a applies amendment pre-dates expiry of limitation period application to substitute applicant for incoming trustee pursuant to o 6 r 10(2) and o 6 r 11(1)(d) substitution or addition of party interest or liability not yet passed to incoming trustee leave refused practice and procedure |
He had enrolled in a course for the degree of Master of Education. Apparently eight subjects were required to be satisfactorily completed. In one of those subjects, Enhancing Learning Environments with Educational Technology, he failed. Assessment for the subject involved four assignments. Mr Walsh was awarded a passing grade in one only. 2 Mr Walsh commenced proceedings in this Court on 3 May 2006 by application. In the subject "Enhancing Learning Environments with Educational Technologies" studies undertaken as part of the Master of Adult Education in 2000, a final injunction to be awarded a pass grading for the on-line learning task. In the subject "Enhancing Learning Environments with Educational Technologies" studies undertaken as part of the Master of Adult Education in 2000, a final injunction to be awarded a pass grading for the case study task part 2. In the subject "Enhancing Learning Environments with Educational Technologies" studies undertaken as part of the Master of Adult Education in 2000, a final injunction to be awarded a pass grading for the individual project. In the subject "Enhancing Learning Environments with Educational Technologies" studies undertaken as part of the Master of Adult Education in 2000 , a final injunction to be awarded a pass grading in the subject. In the course "Master of Adult Education" undertaken in 2000, a final injunction to be awarded that degree qualification . This document was not an affidavit strictly so called. It contained a large amount of argument and assertion. It is 30 pages long and consists of 95 numbered paragraphs. The remedy that I seek is to be awarded a pass grade for the on-line learning task, because my work satisfactorily met requirements including sound value and quantity, and was comparable to if not better than that of other students who were awarded a pass grade. The remedy that I seek is that I be awarded a pass grade for the case study task part 2 , because my work satisfactorily met requirements including sound value and quantity. Very little is said about the other two assignments. The allegations about the individual project consist almost entirely of allegations that 'UTS behaved unconscionably'. I will attempt shortly to come to grips with the way Mr Walsh has tried to develop his case further than the matters stated in these initial documents. However, one thing that has not modified substantially (except in respects to which I shall refer) is the nature of the relief he seeks and the assumption which underpins it. He thinks, evidently, that the Court has power to require directly, by some form of mandatory final injunction, that he be accorded passing grades in individual assignments and a subject and that he be admitted compulsorily, pursuant to an order of the Court, to a Master of Education degree. 6 On 1 September 2006 Mr Walsh filed an 86 page document containing 259 paragraphs which was entitled 'Statement of Claim'. 7 The judge who dealt with the matter in the first instance appears to have had some doubt whether the document filed by Mr Walsh on 1 September 2006 could be regarded as a statement of claim under the Federal Court Rules because by directions made on that day he required that: ' The respondent file and serve, by 19 September 2006, a response treating the applicant's document as a statement of facts and contentions. I extended time again, having directed that the matter go to mediation and, on 13 March 2007 I relieved the respondent, for the time being, from that requirement. 9 The reason that was done was because the respondent had filed a notice of motion seeking to strike out the proceedings. That notice of motion was filed on 9 March 2007 and is the matter to which the present judgment is directed. Like his earlier affidavit most of the document concerns complaints about his failure to pass the individual project. The great bulk of the document does not consist of allegations of material fact but is a mixture of argument, personal reflection, supposition and complaint. 12 It is neither possible nor necessary to deal in every detail with this document but mentioning some salient features will set a background for later discussion. For the purpose of the present notice of motion I proceed upon the basis that Mr Walsh can make good such factual contentions as are set out in the statement of claim. 13 The 'Facts of the case' are set out in paragraphs 1 to 85. Paragraph 13 identifies the worth of the respective assignments. Assessment was by 4 assignment tasks, which were known respectively as the group exercise (worth 20%), the 1 st assignment (worth 20%), the 2 nd assignment (worth 20%), and the 3 rd assignment (worth 40%). It appears that the course lecturers did not share his view that these interests should play a large part in his course work or assignments. The plaintiff stated that ETA was to deliver visual learning - in contrast to lectures and books that were overwhelmingly verbal. It was to cater for situations where visual provided significant benefits - eg visual type content, people with a preference for visual over verbal, and helping to overcome language translation problems - and deliver a range of further educational benefits. The plaintiff stated his interest in one ETA application only - brief movies to be presented during undergraduate science and engineering lectures, to enhance explanations. Both teachers displayed strong and unrelenting hostility towards the plaintiff's interest in ETA, in class and in assessment feedback for the 1st and 2 nd assignments. For the plaintiff EdTech was by far the most important subject in the course. It was the subject most directly related to his professional learning requirements, and the subject that figured to be most important for his future professional credibility if he were to find future employment producing ETA movies. For the plaintiff ETA has particular significance. It is the only prospect for new professional employment that he has been able to identify during several years of investigation. It appears to offer genuine opportunities because of the high value that ETA can deliver. For the EdTech group exercise the class was divided into 2 teams of 5 students each, who carried out a debate on a UTS email bulletin board system. The plaintiff carried out all required tasks, and submitted them by the due dates. Assessment feedback was by Mr Housego and comprised only comments on a review of the exercise that the plaintiff was required to provide (i.e. not on his assignment performance). The EdTech 1 st assignment was a set task in the form of an essay. The plaintiff completed this task and submitted it by the due date. Assessment feedback was by Ms Hayes and comprised only negative and hostile comments towards ETA. The EdTech 2 nd assignment was a set task in the form of an essay. The plaintiff completed this task and submitted it by the due date. Assessment feedback was by Mr Housego and comprised only negative and hostile comments towards ETA. The EdTech 3 rd assignment was an individual project stipulated in the Subject Handout Notes in the following words. "The aim of this assignment is the [sic] reflect critically on the use of educational technology for learning. You will negotiate your own project and how it will be assessed. Projects must be negotiated by the end of Block 2 Friday 5 th May. A learning contract is useful for documenting your proposal. Length --- minimum 3000 words. The plaintiff had stated to both teachers on the first day of classroom sessions (7 March 2000) his interest in producing an essay of practical value for his ETA intentions for the 3 rd assignment. The project later submitted by him was not judged to be satisfactory. He was requested to resubmit the assignment, first by one of the lecturers who had been responsible for assessing it and later by the Dean of Education of UTS after Mr Walsh had lodged a complaint with the registrar. 19 Mr Walsh decided that he would not resubmit the assignment. First, the plaintiff considered that resubmission would incur the grave risk of the plaintiff losing legal ownership --- at a shared public access level --- of ETA intellectual property that he had produced and which was essential to practice in the field of ETA. Third, the plaintiff was not confident of being awarded a pass regardless of what he did. Despite having complied with improper and highly excessive demands, he had been failed. Fourth, the plaintiff considered that the request for resubmission constituted a demand for slave labour. The tasks proposed were irrelevant to his interests, and hence of no learning benefit. The work would be for zero payment, because assignment requirements had already been met in full. Fifth, resubmission based on the new demands was distasteful. Ms Hayes was fully aware that the focus and philosophy of the article referred to were strongly opposed to the plaintiff's focus and philosophy for ETA. During 2004 there were apparently efforts within UTS to deal further with the matter but without resolution. 21 Following the 'Facts of the case' from paras 86 to 216 is a large section entitled 'Causes of action'. It is argued on multiple grounds that the group exercise and 2 nd assignment --- neither of which were awarded any assessment grade or mark --- be awarded pass grades . It is argued that respondent actions are so inconsistent with expected behaviour of universities and their staff, and with any responsible institution and people in general, that the respondent appears to have been acting under direction --- acting under the direction of some concealed third party. It is argued that in all the above cases the rightful and proper assessment result would have been a pass grade with a sound mark , because the plaintiff's assignment was of sound value. While the assessment comments were negative towards ETA, they did not relate to the assessment criteria. The plaintiff seeks remedy under s87 of Trade Practices Act (1974). He seeks the same consideration that he was due to receive for satisfactory performance of contract requirements --- a pass grade for the 3 rd assignment . The plaintiff seeks remedy under s87 of the Trade Practices Act (1974). He seeks to be restored to the position that he would have been in but for these breaches. The 3 rd assignment would have been an essay (as agreed with Ms Hayes at the start of contract negotiations), assessed in the standard way. It would have been passed, on the grounds of sufficient relevance, size and quality. The plaintiff seeks remedy under s87 of Trade Practices Act (1974). He seeks to be restored to the position that he would expect to have been in but for the unconscionable conduct --- awarded a pass grade for the 3 rd assignment . The plaintiff seeks remedy under s87 of Trade Practices Act (1974). He seeks to be restored to the position that he would have been in but for these negligent misrepresentations. The 3 rd assignment would have been an essay (as agreed with Ms Hayes at the start of contract negotiations), assessed in the standard way. It would have been passed, on the grounds of sufficient relevance, size and quality. Therefore, the plaintiff seeks a pass grade for the 3 rd assignment . The plaintiff seeks remedy under s87 of Trade Practices Act (1974). All demands were outside the terms of contract, and there was not even any consideration. All demands were outside the terms of contract, and there was no consideration. The plaintiff seeks remedy under s 87 of Trade Practices Act (1974). The plaintiff seeks remedy under s87 of Trade Practices Act (1974). Paragraphs 178, 185, 187, 189, 191, 193, 195 and 197 each seek relief of the kind earlier identified --- the award of passing grades in the three failed assignments and in the subject as a whole. He alleges contravention of s 51AA of the TP Act. 38 Three paragraphs then state again, and finally, the remedies sought. In order to protect his shared public ownership of intellectual property that he has produced , the plaintiff seeks examination under oath of relevant respondent servants in relation to respondent dissemination of such property, and in relation to any awarding of such property into private legal ownership. The plaintiff also seeks examination under oath of relevant respondent servants, to ensure that his legal actions are directed against his real legal opponent, and that the respondent is not acting as an agent of some concealed party. They echo paragraphs 102, 105 and 154 which I set out earlier. 40 Finally there is an 'Appendix A' which from paras 217 to 259 deals with a particular issue concerning a 'Learning Contract'. It arises in connection with the complaints about the individual project. Mr Walsh contends that the 'Learning Contract' was 'not a valid legal contract'. He maintains in various ways that it should be set aside. It contained 116 pages. Some features of it, and the content of his oral submissions, should be mentioned. (It should be noted that he also indicated he no longer relied on s 52 of the TP Act. I should make it clear, however, that even though it is no part of the Court's function to cast around for some alternative basis on which his claims might have been advanced I can think of no alternative formulation of causes of action or relief which would have advanced matters for him. 44 Aside from legal difficulties, further factual problems were disclosed during the course of his submissions. It will be recalled that in paras 61 --- 66 of the Statement of Claim Mr Walsh set out an explanation for not resubmitting his third assignment as he had been asked to do. It appears from what he said in submissions that this request was first made after Mr Walsh was informed he had not passed the subject. The clear inference is that it was still possible to secure a passing grade, if a resubmitted assignment was of an appropriate standard. Mr Walsh appeared to accept this in our discussion. However, he maintained that he was entitled to refuse to resubmit the assignment and, nevertheless, UTS should be required to afford him a pass in the subject. Part of his explanation was that refusal by UTS to accord a passing grade to the material he had already submitted rendered more likely the wrongful appropriation by UTS of 'patentable' items within that material --- and that was correspondingly less likely if the existing material was judged sufficient for a passing grade. I find this explanation difficult to follow. However, his insistence that resubmission was unnecessary and unreasonable emphasises that the Court is being asked to make value judgments to the effect that Mr Walsh, by his submitted assignments, achieved a satisfactory standard in the subject. 45 Mr Walsh's written and oral arguments crystallised into a series of propositions that 'but for' UTS's conduct he would have been awarded all the passing grades he sought and the degree itself. Necessarily, the impugned conduct extended not only to the assessment of his assignments but also to the standards and course content judged to be appropriate when evaluating his assignments. 46 A related contention was that UTS owed him 'a strong and non-delegable duty of care on the basis of university and student'. When I asked Mr Walsh to identify the content of any such duty of care he suggested (as he had in the written submissions) that it extended to ensuring that private fee paying students passed the courses in which they had enrolled. Linked with this idea was a proposition that ultimately at any trial the burden would fall on UTS to justify and objectively substantiate any non-passing grade assessment. I understand the proposition to be similar to the idea of a presumptive right to passing grades given diligent application. Different results would flow from each of those provisions. Under s 31A the Court may give summary judgment in relation to the whole or any part of a proceeding whereas under O 11 r 16 it may strike out the whole or any part of a pleading. Under the Federal Court Rules an application is not a pleading but a statement of claim is. 48 Mr Walsh's statement of his causes of action is lengthy and convoluted. I have already expressed the view that it does not comply with the requirements of the Federal Court Rules . I shall shortly discuss whether I should permit Mr Walsh to attempt to restate the substance of his complaint in some different form in an amended pleading but first I need to deal with whether the respondent should be required to meet it in its present form. 49 There must be some doubt whether Mr Walsh has ever complied with the direction of 15 June 2006 to file a statement of claim. However, if the document filed on 1 September 2006 is to be regarded as a statement of claim, as he insists it should be, then it is clearly liable to be struck out for non-conformity with the rules. Making due allowance for the fact that Mr Walsh is representing himself nevertheless it would, in my view, be oppressive to require UTS to treat the document as a pleading and file a formal defence to it. 50 It may be that the judge in whose docket the matter earlier lay took the same view and, despite its deficiencies, thought the most practical course was to direct a response to it, not by way of a formal pleading, but endeavouring to come to grips with the underlying factual and legal issues which Mr Walsh was attempting to raise. Be that as it may, I am not prepared to take such a charitable view of the document he filed on 1 September 2006. Whatever view is taken of the purported causes of action it contains, the document proceeds upon a level of speculation and generalised assertion with which, in my view, UTS should not have to grapple in its own endeavours to establish the facts upon which any evidentiary case from it would proceed. There is no warrant for requiring from it the expenditure of excessive costs in endeavouring to prepare for a case where the material facts are not presented with reasonable clarity. 51 So far, therefore, as UTS relies upon O 11 r 16 it has made out a case to be relieved from any obligation to respond to Mr Walsh's document filed on 1 September 2006. I would not permit any further reliance upon the document which he filed on 1 September 2006. The preferable course is to accept that it purports to be a statement of claim filed in accordance with a direction to file such a statement of claim. It should be struck out. Should the proceedings be dismissed? It is convenient to consider Mr Walsh's proceeding in various groups of issues. The source of power under the TP Act for the grant of injunctive relief is s 80. Mr Walsh has made a deliberate choice not to invoke it. Section 87, which he now relies upon exclusively as a foundation for the orders he seeks, provides the Court with power (without diminishing its powers under s 80) to grant compensatory and other forms of remedial relief. It is a source of power, for example, to vary contracts or declare them void. In that sense, subject to what I say later, it may have had some relevance to the attack upon the 'Learning Contract' but otherwise it does not seem to me to provide a suitable, or available, foundation for the injunctive relief sought, or the relief by way of compulsory 'examination' of UTS officers or employees in relation to his allegations concerning intellectual property and direction of UTS by a secret agent. 56 For this reason, in my view, so far as the proceedings are directed to claims for relief under s 87 they are misconceived. However, as will become apparent, there are other reasons why, having regard to the nature of the relief claimed and the foundation for such claims, the proceedings have no reasonable prospect of success. The relief claimed on the ground of coercion is the same in nature as claimed on most other grounds. The Court is being asked not only to vindicate Mr Walsh's choice of topic for his individual project but to substitute a different assessment of his work and directly enforce a passing grade. I shall deal with the nature of this type of relief claimed later as a separate issue. The notion of coercion has been held to involve a negation of choice (see Finance Section Union of Australia v Commonwealth Bank of Australia [2000] FCA 1468 ; (2000) 106 FCR 16 at [18] - [25] , Community and Public Sector Union v Telstra Corporation Ltd [2000] FCA 1610 ; (2000) 108 FCR 52 at [24] , National Union of Workers v Qenos Pty Ltd [2001] FCA 178 ; (2001) 108 FCR 90 at [128] , Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2001] FCA 456 ; (2001) 109 FCR 378 at [38] - [41] and National Tertiary Education Industry Union v Commonwealth of Australia [2002] FCA 441 ; (2002) 117 FCR 114 at [99] - [115] ). 60 Mr Walsh's allegations do not raise a case of that character. Furthermore, he makes no relevant connection between his complaints and the relief he seeks. It does not, and cannot, follow automatically that had there not been disagreement about a choice of topic for the individual project his work would have been assessed as at a satisfactory level. 62 Section 74 of the TP Act implies warranties into certain contracts. However, s 74 of the TP Act does not have the result that proceedings become available for alleged breach of the TP Act if, in fact, the warranties implied are not met. It has been held in other cases dealing with sections of the TP Act that operate in a similar fashion that such a provision 'prescribes no norm of conduct' and 'does not prohibit conduct of any kind by anybody' (see Arturi v Zupps Motors Pty Ltd (1980) 49 FLR 283 at 285-6 and Zaravinos v Dairy Farmers Co-Operative Ltd (1985) 7 FCR 195 at 199). This part of the statement of claim is, accordingly, also misconceived. There is no factual or legal foundation for this contention. It is inescapable that students will submit original work in order to complete assignments in the courses in which they have chosen to enrol. Absent some contractual arrangement their intellectual property will not thereby pass to UTS but, in any event, that would be, if it occurred, the consequence of the arrangement into which they had voluntarily entered. 64 Mr Walsh's concern with his intellectual property culminates (at para 215) with a claim that he should be allowed 'examination under oath of relevant respondent servants'. No cause of action has been identified which could support any such relief. The complaint about the necessity to pass his intellectual property to the university amounts in substance to no more than a complaint that, as a student, he was obliged to submit assignments in accordance with the course requirements. No disagreement by him about the nature of the assignments to be submitted, or which he wished to proffer under his own view of what the course should require, could raise a cause of action that his intellectual property had been wrongly taken or dealt with by UTS. 65 I would not permit him to replead this issue and would therefore dismiss so much of the proceedings as seek to raise any cause of action or seek any relief with respect to Mr Walsh's intellectual property. Mr Walsh conjectures that UTS is 'acting under the direction of some concealed third party'. There is no factual foundation suggested for this allegation. I would not permit it to be repleaded either. Discussions on 5 May 2000 on the last day of class culminated in Mr Walsh and one of the lecturers subscribing to this arrangement. Mr Walsh contends, and the university agrees, that the learning contract was not a document intended to be legally binding. The devotion by him to a substantial effort to argue that the learning contract he appeared to have accepted should be set aside or rendered non-binding is misplaced. 68 This aspect of the statement of claim was also, in my view, misconceived and I would not give leave to replead it. 70 Mr Walsh asserts that, so far as each of the group exercise, the second assignment and the individual project are concerned, his work merited a passing grade. His case, factually and legally, depends upon the suggestion that the Court can both directly and effectively substitute an opinion for that of UTS and require a different result to be awarded. Moreover, it requires vindication by the Court of his personal desire to focus his assignment upon matters of personal interest to him rather than matters judged by the course lecturers to be those with which the subject, as offered by UTS, was concerned. 71 I expressed directly to Mr Walsh during his oral submissions my reservations about the power of the Court to grant him any remedy of the kind he seeks. He was not able to draw my attention to any statutory provision, authority or legal principle which might provide a foundation or starting point for the proposition that the Court could direct UTS as to course content or requirements or require UTS to award him passing grades in either individual assignments or a whole subject. Indeed he said he had been unable to find any case of this kind and agreed that he was asking the Court to strike out into new legal territory. 72 In Griffith University v Tang [2005] HCA 7 ; (2005) 221 CLR 99 the High Court considered whether a decision to exclude a PHD student from its programmes was reviewable under the Judicial Review Act 1991 (Qld). It decided by majority that it was not. The university had acted in the exercise of a general discretion deriving from its activities generally as a university pursuant to the functions and general powers granted by its enabling Act which included setting academic standards. Its powers include the power to do anything necessary or convenient in connection with its functions. Subject to any other legal constraint, it may establish a PhD research programme, and decide who will participate in the programme and on what terms and conditions. Decisions about such matters are inherently unsuited to judicial review. 75 Gummow, Callinan and Heydon JJ referred to this at [58], although like Gleeson CJ they decided the case on other grounds. The basis upon which the lack of justiciability was put in Clark appears not to depend upon the absence of contractual relations for want of animus contrahendi; rather, the basis appears to be that any adjudication would be, as Sedley LJ put it, "jejune and inappropriate". However, he drew a distinction between disciplinary decisions and matters of academic judgment. They have special responsibilities, as the University Act envisages in this case, to uphold high academic standards about which members of the academic staff will often be more cognisant than judges. There are issues pertaining to the intimate life of every independent academic institution that, sensibly, courts decline to review: the marking of an examination paper; the academic merit of a thesis; the viability of a research project; the award of academic tenure; and internal budgets. Others might be added: the contents of a course; particular styles of teaching; and the organisation of course timetables. As Sedley LJ noted in Clark v University of Lincolnshire and Humberside , such matters are "unsuitable for adjudication in the courts ... because there are issues of academic or pastoral judgment which the university is equipped to consider in breadth and in depth, but on which any judgment of the courts would be jejune and inappropriate". Judges are well aware of such peculiarities. The law, in common law countries, has consistently respected them and fashioned its remedies accordingly. In the present appeal, the respondent's claim fell squarely within the former class. Academic judgment is one thing. But where an individual who has the requisite interest is affected by disciplinary decisions of an administrative nature made by a university body acting according to its powers under a statute, outside the few categories peculiar to "pure academic judgment", such decisions are susceptible to judicial review. They are so elsewhere. They should likewise be so in Australia. An appeal to "academic judgment" does not smother the duties of a university, like any other statutory body, to exhibit, in such cases, the basic requirements of procedural fairness implicit in their creation by public statute and receipt of public funds from the pockets of the people. It raises questions of academic assessment and judgment. 78 The English case cited by Gummow, Callinan and Heydon JJ and by Kirby J, Clark v University of Lincolnshire and Humberside [2000] 1 WLR 1988, concerned an action in contract, brought by a student against a university, which was initially struck out. The Court of Appeal, although allowing the student to replead to raise conventional allegations of breach of contract (a circumstance which does not arise in the present case) approved the summary rejection of the 'claim as originally pleaded [which] had travelled deep into the field of academic judgment' (at p 1988). The leading judgment was given by Sedley LJ. This is not a consideration peculiar to academic matters: religious or aesthetic questions, for example, may also fall into this class. It is a class which undoubtedly includes, in my view, such questions as what mark or class a student ought to be awarded or whether an aegrotat is justified. Summary judgment dismissing a claim which, if it were to be entertained, would require the court to make academic judgments should be capable of being obtained in the majority of situations. At the heart of Mr Walsh's claims, and underpinning the relief sought, is an attempt to involve the Court directly in an adjudication upon a matter of both academic standards and of the assignment of specific grades to particular assignments. In addition, his claim is that the Court enforce its own view directly. In the circumstances revealed by the present case I can discern no legal foundation for doing so. 81 However that matter is examined, so far as he seeks the direct grant of, or a mandatory injunction to require, passing grades in assignments or a subject or the award of a degree, in my view, on the material advanced by him, and having regard to the nature of his conflict with UTS as disclosed by that material, there is no reasonable prospect that he can succeed in obtaining such relief. 82 Even if the matter is approached by reference to the nature of Mr Walsh's complaints against UTS, rather than by reference to the relief he seeks, the matter does not improve for him. For myself, I can see no way in which Mr Walsh's claims might be legitimately reformulated to achieve anything like the result he seeks. That, in any event, is not the task of the Court even though he is unrepresented. 83 Moreover, it would be futile to allow the proceedings to go forward to an examination of the factual issues because ultimately nothing useful could come of it. 84 The complaints relating to the group exercise and the second assignment lack virtually any factual foundation. They appear to me to consist, factually at least, of a refusal by Mr Walsh to accept the legitimacy or correctness of the evaluation made of his work by the two lecturers responsible for delivering the subject. It may be accepted that his views are sincerely held but it seems, on his own version, to be a straightforward case of Mr Walsh not accepting the assessment made about these two assignments. 85 The main area of controversy in the case is the issue of the third assignment which was worth 40% of the overall assessment. It is clear from the allegations which Mr Walsh makes about this matter that he endeavoured from the outset to pursue his own view about what sort of project or assignment he would submit for this part of the course and, equally, that that view was disapproved at the outset. His determination to follow his own course has evidently brought him into conflict of various kinds with the course lecturers. Ultimately the issue which arose involved questions of academic judgment and the content and standard required by the university to satisfy its requirements for the award of its degree. 86 Mr Walsh rebuffed any suggestion that he should resubmit the assignment. He decided to maintain his position and, initially at least, seek some form of internal review within UTS. He was entitled to take that course and adhere to it. He could not be compelled to surrender his own views about these matters. Neither can he, in my view, call in aid the powers of the Court in the way which he has sought to do. The judgment to be made by UTS with respect to requirements for the award of a degree are not matters susceptible to judicial review in the ordinary way. At least to the extent that it may be possible to conceive of some form of possible judicial review, none is presented for consideration in the present case. I see no prospect therefore that an evidentiary excursion into the merits of his position (as he sees them) could conceivably provide a foundation for any form of relief (whether sought by him at the moment or not) which could provide him what he seeks --- a UTS Masters degree. 87 The difficulties which I have identified are matters of substance, not just form. Accordingly, I see no point arising from his factual complaints which would justify giving Mr Walsh leave to revisit the matter by granting him leave to amend the proceedings or by now attempting to file proper pleadings. I make no order as to costs at this stage. If UTS wishes to be heard on costs it is to file a written argument with respect to costs within 14 days of this judgment. Mr Walsh may reply within a further 14 days. It will not be necessary to take oral submissions on that issue. In the meantime costs are reserved. I certify that the preceding eighty-eight (88) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. | an application is not a pleading purported statement of claim struck out for failure to comply with requirements for pleadings no reasonable prospects of success remedies sought unavailable under the trade practices act practice and procedure summary judgment |
The Court made further consequential orders and reserved the costs of the proceeding for determination after receipt of further submissions ( Parker v Military Rehabilitation and Compensation Commission [2007] FCA 1161). 2 In relation to the question of costs, the Court invited the parties to make submissions in relation to the costs of the proceedings before the Tribunal and the costs incurred in the application to this Court pursuant to s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) ('the AAT Act'). 6 Accordingly, the applicant demonstrated an error of law on the part of the Tribunal; demonstrated that the Tribunal ought not to have affirmed the reviewable decision; and secured in substitution for the reviewable decision, a more favourable decision. 7 Accordingly, the applicant is entitled to an order that the respondent pay the costs of the proceeding before the Tribunal of and incidental to an application for review of Decision Q2005/572. 8 As to the costs of the proceedings before the Federal Court, two questions arise. First, the costs of and incidental to an application for an order for an extension of time to file and serve a Notice of Appeal from the decision of the Tribunal the subject of the decision made on 23 May 2006 (and a Corrigendum made on 5 June 2006). The second relates to the costs of and incidental to the appeal itself. 9 As to the application for an order extending time in which to file and serve the Notice of Appeal, the respondent says that the failure to file a Notice of Appeal within time is entirely a matter attributable to the conduct of the proceedings by the applicant. No conduct on the part of the respondent contributed to the failure to apply within time. Whilst it is correct to say that the respondent did not contribute in any way to the failure on the part of the applicant to apply within time, it seems to me that the more significant consideration is whether the merits of the application pursuant to s 44 of the AAT Act ultimately lie with the applicant. As the primary judgment demonstrates, the merits lie with the applicant and compensation ought to have been paid to the applicant some considerable time ago. Since the applicant has been successful in the primary appeal, I propose to make an order that the costs of and incidental to the proceeding including those costs incurred in relation to an application to extend time in which to file and serve the notice of appeal be paid by the respondent. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | resolution of the question of costs arising out of parker v military rehabilitation and compensation commission [2007] fca 1161 administrative law |
At the time of granting leave, the applicant indicated that he sought costs in both proceedings and I therefore directed he file and serve submissions on this matter by 12 June 2009, that the respondents do likewise by 19 June 2009 and that the applicant file and serve any submissions in reply by 26 June 2009. Those directions have been complied with. The respondents oppose the application for costs and submit that the appropriate order is for each party to bear their own costs. Proceeding SAD 52/2009 was an application, filed 2 April 2009, for an extension of time to file and serve a notice of appeal from a single judge (Besanko J) of the Court given on 23 January 2007 dismissing an appeal from a decision of the Administrative Appeals Tribunal ('the Tribunal') affirming a decision of a delegate of the first respondent ('the Minister') to cancel the applicant's Transitional (Permanent) (Class BF) visa ('TP visa') on 2 June 2005. Proceeding NSD 17/2009 was an application, filed 8 January 2009, seeking various forms of relief in the way of declarations as to the validity of amending legislation and the standing of the applicant as a 'lawful non-citizen' as well as mandamus, or an order in the nature of mandamus, directing the first respondent to release the applicant from detention in reliance of s 39B of the Judiciary Act 1903 (Cth). On 12 May 2009, Acting Chief Justice Spender made a direction under s 20(1A) of the Federal Court of Australia Act 1976 (Cth) directing that the original jurisdiction of the Court in relation to proceeding NSD 17/2009 be exercised by a Full Court. That direction was revoked on 3 July 2009 to facilitate, if it be necessary, my dealing with the remaining issue as to costs in both proceedings. On 4 January 1983 he was granted a permanent entry permit. The applicant's permanent entry permit, by operation of reg 9 of the Migration Reform (Transitional Provisions) Regulations 1994 , was taken to have become a TP visa on 1 September 1994. On 2 June 2005, pursuant to s 501(2) of the Migration Act 1958 (Cth) ('the Act'), a delegate of the Minister decided to cancel the applicant's TP visa. On or around 15 June 2005, the applicant was arrested and taken into detention. On 6 September 2005, on review, the Tribunal affirmed the decision to cancel the visa. On 23 January 2007, Besanko J dismissed the applicant's appeal from the Tribunal's decision. Following the decision of a Full Court of this Court in Sales v Minister for Immigration and Citizenship [2008] FCAFC 132 ; (2008) 171 FCR 56 , the decision to cancel the applicant's TP visa was ineffective for reason that at the time of cancellation it was not authorised by s 501(2) of the Act. As a result, the applicant was released from detention on, or shortly after, 21 July 2008. Schedule 4 of the Migration Legislation Amendment Act (No. 1) 2008 (Cth), which took effect on 19 September 2008, amended the Act to authorise a cancellation of a TP visa under s 501 of the Act and to validate previous decisions to cancel TP visas that were held to be unauthorised in the Full Court's decision in Sales. By letter dated 29 October 2008, the applicant was informed that as a consequence of the legislative amendments made under the Migration Legislation Amendment Act (No. 1), the decision to cancel his TP visa was validated, and he was liable to be detained under s 189 of the Act and removed from Australia. The applicant was arrested on or around 18 November 2008 and taken into detention. On 8 January 2009, the applicant commenced a proceeding under s 39B of the Judiciary Act (NSD 17/2009) seeking relief in the nature of habeas corpus ordering his release from detention and various other orders, including a declaration that he is a lawful non-citizen, and injunctions, including an injunction preventing the respondent from giving effect to the purported cancellation of his visa and removing him from Australia. On 4 February 2009, proceeding NSD 17/2009 came before me for the first time. The applicant appeared in person. We confirm that we will shortly be filing a Notice of Appearance in the proceedings. 1) 2008 ( the amending statute ). Mr Pull will also contend that the invalidity of Item 7 renders invalid the visa cancellation decision of 2 June 2005 ( the decision ) made by the delegate of the Minister for Immigration & Citizenship ( the Minister ). It is therefore reasonable for him to bring these proceedings to have the decision quashed. If Mr Pull is forced to move forward with these proceedings, considerable time and effort will be incurred in, inter alia, the preparation of pleadings, submissions and notices pursuant to s78B of the Judiciary Act 2003 (Cth). We therefore ask that, in the event that the Minister intends to move away from the decision --- whether through revocation or the consideration of a new cancellation decision or otherwise --- you notify us of this intention within 7 days of the date of this letter. In the event that we do not receive such a notification and the Minister later reconsiders the decision, our client intends to rely on this letter on the question of costs under the principles stated in Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] HCA 6 ; (1997) 186 CLR 622. Given this confirmation, we require no further documents regarding his legal status at this time. We understand that you received Our Letter on Monday 12 March 2009. 1) 2008 . We have therefore proceeded in the preparation of our case on the basis that the Minister for Immigration and Citizenship ( Minister ) intends to defend fully the validity of Mr Pull's detention. In the event that there is any dispute about costs, we will rely on this correspondence. 1) 2008 is invalid. As, in our client's view, the original decision made on 2 June 2005 to cancel your client's visa remains operative and authorises your client's continuing detention, the question of revocation or a need to make a further decision to cancel, as suggested at paragraph 4 of your letter, does not arise. We look forward to receiving your client's Amended Application. On 31 March 2009, the applicant filed an amended application in NSD 17/2009. In his amended application the applicant sought a declaration that item 7 of Sch 4 of the Migration Legislation Amendment Act (No. 1) was invalid. He also sought a declaration that he was a lawful non-citizen holding a valid TP visa as well as an order for mandamus directing the Minister to release him from detention. On 2 April 2009, the applicant filed an application (SAD 52/2009) for an extension of time to file a notice of appeal from the decision of Besanko J. On 21 April 2009, this application was transferred to the New South Wales District Registry of this Court to be heard by the same Full Court as heard NSD 17/2009. On 12 May 2009, without prior notice, the first respondent exercised the power under s 195A of the Act, reserved to him personally to be exercised in the public interest, and granted the applicant a Bridging (Removal Pending) (subclass 070) visa. The applicant was again released from detention. The visa granted entitles the applicant to remain in Australia temporarily, for a period of one year when the Minister '... intends to reconsider [the applicant's] circumstances ... and will at that time make a decision on whether to grant him a permanent visa'. No reason for the grant of the s 195A visa has been communicated to the applicant. In consequence, on 3 June 2009, the applicant sought, and I granted, leave to the applicant to file notices of discontinuance in both proceedings which he did on 12 June 2009, subject to a claim for his costs in both. The applicant's contention is that the Minister's grant of the s 195A visa has rendered both the claim for mandamus and declaratory relief redundant. According to the applicant, the critical issue has always been whether the applicant is a lawful or an unlawful non-citizen; the s 195A visa now confers upon the applicant the status of a lawful non-citizen and authorises his release from detention. According to the applicant, the Minister incorrectly fuses (i) the question whether the applicant is a lawful non-citizen, being a 'non-citizen in the migration zone who holds a visa that is in effect' (s 13 of the Act (emphasis added; see definition of 'visa': s 29)), with (ii) the discrete, and now futile, question whether the applicant holds a particular visa, namely a TP visa. The applicant says that the first question is answered completely by the grant of the s 195A visa; the second question is futile. The applicant does not require a declaration regarding his possession of a second visa: 'The Court does not act in vain': Malloch v Aberdeen Corporation [1971] 1 WLR 1578 at 1595 per Lord Wilberforce; cited in Re Refugee Review Tribunal; ex parte Aala [2000] HCA 57 ; (2000) 204 CLR 82 at [58] per Gaudron and Gummow JJ. But mandamus could only run to enforce a right based on the applicant's status as a lawful non-citizen. To ask for declaratory relief in relation to his TP visa was the cleanest way to 'cut through to' the issue that would determine whether he was a lawful or unlawful non-citizen. (b) The applicant could not challenge the cancellation decision directly. This Court is deprived of jurisdiction to hear a challenge to the decision of the primary decision-maker. (c) Nor could the applicant challenge the Tribunal's decision affirming the primary decision. This Court (Besanko J) had determined his application to review the Tribunal's decision (albeit on the law as it stood before Sales case ). A fresh application (rather than an appeal) could not be brought in respect of this application due to the time limit in s 477 of the Act. An appeal brought out of time from the decision of Besanko J, could only proceed by grant of leave, and not as of right. The applicant now has a visa and resides freely in the migration zone as a 'lawful non-citizen'. There is no need for an order in the nature of mandamus. (2) The basis for declaratory relief has also fallen away. A suit for declaratory relief would only result in a declaration that the applicant holds a second visa; or a determination (or declaration) that he is not in possession of a second visa. Neither outcome will alter any legal right or liability of the applicant, for he is now a lawful non-citizen. (3) The relief sought in the application is now futile. In such cases, the Court exercises its discretion to refuse relief ( Aala at [59]; SZBYR v Minister for Immigration & Citizenship [2007] HCA 26 ; (2007) 235 ALR 609 at [29] ), and it is responsible practice for an applicant to desist from pursuing such relief. (4) At the directions hearing on 3 June 2009, the Minister appeared to invite the applicant to clarify his TP visa status, suggesting that his s 195A visa was only temporary. The applicant also has no interest in acceding to such a request; he does not favour the possession of a TP visa over his current s 195A visa. It has been, and remains, common ground that the applicant fails the 'character test' under s 501 of the Act ( Pull v Minister for Immigration & Multicultural & Indigenous Affairs [2007] FCA 20). Any TP visa held by the applicant would be vulnerable to a new cancellation on this ground. Even if he did have such an interest, such an interest is insufficient to constitute a matter in federal jurisdiction ( Griffith University v Tang [2005] HCA 7 ; (2005) 221 CLR 99 at [90] ). Rather, costs are in the discretion of the Court under s 43(2) of the Federal Court of Australia Act 1976 (Cth) ( Inground Constructions Pty Ltd v Federal Commissioner of Taxation (1994) 27 ATR 513 ; Sullivan v Secretary, Department of Defence [2005] FCA 786 at [13] (Stone J)). The 'conduct of the parties in the matter and the reasons for the discontinuance can bear heavily on the exercise of the discretion as to costs' ( O'Neill v Mann [2000] FCA 1680 at [13] (Finn J); Sullivan at [13] (Stone J)). (2) A fortiori the significance of discretionary considerations in a case where the discontinuance is merely the procedural vehicle to terminate the dispute, and any futility in the proceedings has not been brought about by an external event, or the applicant's change of heart (cf., Smith v Airservices Australia [2005] FCA 997 ; (2005) 222 ALR 464 at [58] --- [59]), but by the opposing party's change in position. (3) Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] HCA 6 ; (1997) 186 CLR 622 at 624 --- 625 suggests a structure for the exercise of a broad discretionary power. It does not lay down a rule which substitutes for the discretion of the Court. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council ; Ex parte Raysun Pty Ltd [[1971] QWN 13], the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans. But such cases are likely to be rare. This approach has been adopted in a large number of cases. The difficulty cannot be resolved by embarking on a hypothetical consideration of which party would have been successful had the action proceeded. But the Court may consider the reasonableness of the conduct of the respective parties until the discontinuance ( Smith v Airservices at [46] --- [47]). (2) The basis for detention has always been the applicant's status as an unlawful non---citizen. The applicant has been successful in obtaining the status of lawful non---citizen. (3) Prior to the litigation, there was never any indication that the Minister would grant the applicant this status. The Minister detained the applicant twice between 15 June 2005 and November 2008 by (i) cancelling his TP visa on 'character grounds' and detaining him until July 2008; and (ii) then enforcing the (purported) retrospective validation of that cancellation by detaining him from November 2008 through to May 2009. (4) On 9 March 2009, the applicant invited the Minister to release the applicant or notify his position within seven days (extended by three days to accommodate a claim of late receipt) and received no response. On 20 March the applicant repeated his request, and received no response until 31 March 2009. Express reference was made in both items of correspondence to the question of costs and reliance on that correspondence for the recovery of costs. (5) The subject matter of the proceedings was removed by the Minister's grant of the s 195A visa without prior notice. This reversed the Minister's stance on the applicant's detention expressed (i) in writing, as late as 31 March 2009; and (ii) by conduct, as late as 12 May 2009. (6) At all relevant times, the Minister held a personal discretionary power to grant a s 195A visa which could be exercised swiftly under the minimal procedures stipulated by s 195A. The Minister chose not to exercise that power. (7) The applicant was deprived of his liberty for 43 months in total. (8) No explanation for the grant of the s 195A visa has been offered by the Minister. (9) Following the grant of the s 195A visa, the applicant accepted the futility of the proceedings, and indicated to the Minister and to the Court that he would discontinue the proceedings. There was no attempt by the applicant to pursue futile or hypothetical questions which would waste the resources of the Court and the parties. The applicant submitted that the Court should find that the grant of the s 195A visa upon a ministerial determination of an undisclosed 'public interest' occurred under the pressure of a Full Federal Court hearing on the constitutional validity of Item 7 of the amending statute. (2) The applicant was put to considerable cost and became upset in trying to obtain his liberty. This liberty was obtained by means of the proceedings. All previous entreaties to release him were refused. (3) The Minister refused to settle, even when confronted squarely with the question of costs. The Minister should not be permitted to walk away without paying the applicant's costs. It lay at the heart of the Minister's submissions that the Minister's decision to grant the applicant a s 195A visa did not render the declaratory relief he sought in NSD 17/2009 'moot'. According to the Minister, the issue of whether or not the applicant is in fact the holder of a TP visa is a live issue in that there remains a real and ongoing dispute between the parties as to the entitlement of the applicant to remain in Australia beyond the life of the s 195A visa granted to him; while the urgency of the resolution of that dispute is no longer present, that fact does not render the dispute between the parties moot. The Minister submitted that the power he ultimately exercised to grant the applicant a s 195A visa is a 'non-compellable' power and the failure of the Minister to exercise that power by any particular date, or at all, can never be unreasonable in the relevant sense. The Minister further submitted that the applicant's submission in [28] above, namely, '... that the grant of the s 195A visa upon a ministerial determination of an undisclosed "public interest" occurred under the pressure of a Full Federal Court hearing on the constitutional validity of Item 7 of the amending statute' should never have been made. According to the Minister, such a submission is simply not available on the known facts and should be rejected by the Court. In conclusion, the Minister submitted that the appropriate order, in the exercise of the Court's discretion, is that there should be no order for costs. I do not understand the Minister's submissions to contend otherwise; indeed, they are silent on this particular issue. Such relief was a significant component of the overall relief sought by the applicant in proceeding NSD 17/2009. The other significant component of the overall relief sought by the applicant in proceeding NSD 17/2009 was the declaratory relief that the applicant was a 'lawful non-citizen' by reason that he was the holder of a TP visa which had not been cancelled ( Sales ), even with the aid of amending legislation purporting to retrospectively validate the cancellation, because that legislation was invalid. The Minster's submission that the declaratory relief sought by the applicant was not rendered 'moot' by the grant of the s 195A visa is, in a juridical sense, correct; but as a practical matter, the grant of that visa rendered the declaratory relief sought futile. Why would the applicant, with little or no financial resources and dependent, for the able prosecution of his case, on the O 80 relief I determined on 4 February 2009, want to continue to press for that declaratory relief when his status as a 'lawful non-citizen' was no longer in issue, at least until the s 195A visa expired in 12 months time when, he had been informed, the Minister would review his case? The Minister did not contend, nor could he, that the applicant acted unreasonably in taking the action he did in either proceeding; and the applicant did not contend that the Minister acted unreasonably in opposing those proceedings; at least in express terms. There is an inference in the applicant's submissions that the Minister acted unreasonably in not taking up the invitation in the applicant's solicitors' letter of 9 March 2009 ([14] above), but I am not prepared to find any such inference even if it can be drawn. Nor am I prepared to make any finding along the lines of that submitted by the applicant in [28] above, that the grant of the s 195A visa upon a ministerial determination of an undisclosed 'public interest' occurred under the pressure of a Full Federal Court hearing on the constitutional validity of Item 7 of the amending statute. There is no evidence whatsoever to support any such finding. The Minister's change of position, unmoved by any external event and otherwise unexplained, leads me to the view that the applicant should have his costs in NSD 17/2009 but not in SAD 52/2009. The latter proceeding was unnecessary and each party should pay its own costs. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds. | where non-discontinuing party changes position rendering a significant component of the proceedings redundant and the other significant component practically futile whether the discontinuing party should have his costs of the application. costs |
Although several issues for decision arise in this application, the main issue is whether copy documents, the originals of which may not be privileged, are protected by a privilege claim where they were furnished by the Australian Competition and Consumer Commission ("the ACCC") in response to a Notice to Produce and requests from the solicitor acting for the Visy parties in another proceeding before the Court (VID 1650 of 2005 --- Australian Competition and Consumer Commission v Visy Industries Holdings Pty Limited ("the ACCC proceeding")). I set out below in short compass some additional background information relevant to this application. 3 Mr Heathcote, a partner of Arnold Bloch Leibler ("ABL"), solicitors for the Visy parties, gave evidence that on 8 December 2004 he formed the conclusion that there was a real prospect of litigation being commenced by the ACCC against the Visy parties in respect of alleged breaches of the Trade Practices Act 1974 (Cth). The ACCC in fact commenced the ACCC proceeding against the Visy parties (and others) on 21 December 2005. 4 In the ACCC proceeding, documents which were brought into existence (or otherwise obtained) by the ACCC for the purpose of that litigation were discovered. Pursuant to a request by ABL in the ACCC proceeding, some of those documents were copied by the ACCC and the copies were provided to ABL. The Visy parties claim privilege in this proceeding for those copy documents on the basis that they came into existence pursuant to ABL's request, which was made for the purpose of providing legal advice or assistance to the Visy parties in relation to the matters the subject of the ACCC proceeding or related proceedings at a time when litigation was reasonably anticipated. 5 A second group of documents in the possession of the Visy parties includes copies of transcripts of the examinations of certain persons by the ACCC in relation to the ACCC proceeding. This group of documents also includes copies of exhibits referred to in those transcripts. Copies of these transcripts and exhibits were provided to Mr Heathcote by the ACCC at his request for what he says was the dominant purpose of providing legal advice. 6 A third group of copy documents provided by the ACCC to the Visy parties in the ACCC proceeding comprises documents produced in response to Notices to Produce. There are eight matters to be considered. The ACCC filed a short response in relation to issues 3, 5 and 8. Are the proofs of the ACCC and the proofs of the Visy parties subject to an implied undertaking in light of the decision of Gordon J in Cadbury Schweppes v Amcor [2008] FCA 398? 2. Are the proofs of the Visy parties privileged? 3. How should outstanding claims of confidentiality and prejudice by third parties in relation to documents adduced in the ACCC proceeding, which may be subject to implied undertakings as to their use, be resolved? 4. Are copy documents provided by the ACCC to the Visy parties --- namely, transcripts and exhibits, discovered documents and documents the subject of Notices to Produce --- privileged? 5. Should leave be granted to Jarra Creek to subpoena the ACCC to the extent that the Visy parties succeed in their privilege claims? 6. Should the further discovery sought by Jarra Creek be ordered? 7. Are the s 155 notices discoverable? 8. What form should the orders take? ISSUE 1 --- IS THERE AN IMPLIED UNDERTAKING? However, having made this order, her Honour, on the application of the ACCC, stayed the requirement for compliance for one month (which stay was later extended by Weinberg J until resolution of any application for leave to appeal from her Honour's judgment). 9 In my view, the reasons of her Honour are applicable to the present case. I also consider that the Visy parties should be immediately released from their implied undertaking, subject to the opportunity being given to any third parties to make submissions before disclosure of any documents in which they have an interest. Any interests of third parties which may be prejudiced should be protected under the regime prepared in relation to Issue 3 below. 10 It is important to note that Jarra Creek submitted that the implied undertaking automatically yields to orders for discovery which I made in this proceeding on 31 March 2008. I do not consider that those orders displace the implied undertaking, or that they were intended to do so. ISSUE 2 --- ARE THE PROOFS OF THE VISY PARTIES PRIVILEGED? 12 The Visy parties submit that it is premature to decide this issue now. They say that the Fifth List of Documents (pursuant to which they discovered and claimed privilege over the relevant documents) was only filed on 7 April 2008. Any challenges to those claims of privilege, it is said, will require an order for verification of the claims and substantive argument on the point. 13 It is not appropriate at this stage to determine whether the proofs of the Visy parties are privileged. However, I do not want to defer determination of this issue until the full appeal process from the decision of Gordon J in Cadbury Schweppes v Amcor [2008] FCA 88 has been exhausted. This would delay the matter significantly, and the matter has already had a long history. Protracted delay is not acceptable. 14 For these reasons, I require that the Visy parties verify their claims of privilege forthwith so that the matter can proceed to argument and determination if the parties are not able to reach agreement on this point. ISSUE 3 --- REGIME TO RESOLVE CONFIDENTIALITY AND PREJUDICE CLAIMS? 16 Jarra Creek, the Visy parties, and the ACCC made submissions on the appropriate regime to be instituted to best reconcile the desirability of disclosure with the need to maintain confidentiality and avoid prejudice. Jarra Creek proposes a regime that makes available the relevant documents, subject to assertions of rights by the ACCC or by any affected third parties. The Visy parties propose a course, which involves the ACCC providing Jarra Creek with a list of names and addresses of affected third parties, Jarra Creek then writing to those third parties to advise them that it wishes to access and use their documents in this proceeding, and the Court then hearing any submissions at a future hearing date. Finally, the ACCC proposes a regime by which it provides some lists of names and addresses to Jarra Creek, but with some details not produced. 17 Given the possible adverse effect on third parties, I favour the submission of the Visy parties. I am aware that this procedure may involve some expense, but in my view it is the best way to progress this matter. 18 The appropriate course, which should be implemented immediately, runs along the following lines. The ACCC should immediately give Jarra Creek a list of the names and addresses of all persons who provided documents to the ACCC which were discovered to the respondents in the ACCC proceeding. The list should indicate which documents relate to each person who may wish to make submissions. Where a witness proof has been prepared and served on the Visy parties in the ACCC proceeding, the ACCC should list the names and addresses of the deponents of those witness proofs. The ACCC should supply Jarra Creek with the lists within 14 days of the date of this judgment. Jarra Creek should pay the reasonable costs of the ACCC in relation to the compiling of the information. Secondly, Jarra Creek should prepare a form of letter which it intends to send to third parties, advising them that it seeks disclosure of the documents supplied to the ACCC in this proceeding, and that any objections should be notified to the Court by a specified date. The form of the letter should be agreed between the parties and the ACCC, failing which it shall be determined by the Court. Finally, Jarra Creek should send the letter, as approved, to the third parties. On the next working day after the specified date for objections, the documents relating to those persons who did not object should be disclosed. A date will be set for the hearing of any objections that are maintained. 19 I do not accept the submissions of the ACCC on the regime. It is not appropriate to await the outcome of the appellate process from the decision of Gordon J. Given the ruling of Heerey J in the ACCC proceeding, I do not consider that documents RMA-24 and RMA-26 should be treated any differently. ISSUE 4 --- ARE THE COPY DOCUMENTS PRIVILEGED? This raises a factual issue as to whether the Visy parties have adduced sufficient evidence to establish that the documents were produced for the dominant purpose of providing legal advice or assistance. It is common ground that, in order to succeed, the Visy parties must establish that the copies were made for the dominant purpose of seeking legal assistance or advice or were made in relation to legal proceedings reasonably anticipated at the time the documents came into existence. It is not sufficient, so it is said by Jarra Creek, merely to show that the legal adviser for the Visy parties requested copies from the ACCC. It is necessary for the person at the ACCC who made the copy document or ordered that the document be copied be called to give evidence as to his or her dominant purpose. This, says Jarra Creek, has not been done. Furthermore, Jarra Creek rejects the proposition that the person at the ACCC who actually made the copy was acting as agent for ABL in complying with the request. 22 Jarra Creek submits that there was no evidence from the ACCC as to the purpose for which the copies were made, and therefore it is equally possible that the copy documents could have been made for non-privileged purposes. Jarra Creek says that the time at which the purpose of the creation of the documents must be assessed is when the copy documents are made. It says that any purpose of a solicitor who requests production of documents from a party, who is not bound to comply with that request, is not relevant and that the use made of the documents after they came into existence is also irrelevant. 23 Jarra Creek says that the evidence in this case purporting to identify the purpose at the time and for which the copy documents were created by the ACCC is neither focused nor specific, and cannot ground a claim of privilege. Jarra Creek submits that the evidence of Mr Heathcote as to his purpose in requesting the documents is not of any assistance because his motive is not that of the person making, or ordering the making of, the copy. The purpose of the ACCC is said to be the only relevant purpose and on that point the evidence is silent. Jarra Creek says that to extend privilege protection to copies made by strangers to the litigation travels beyond the principles set out in the authorities. 24 The evidence of Mr Heathcote is said by Jarra Creek to be insufficient because it does not establish the purpose for which the documents were brought into existence, nor does it establish that any such purpose is dominant. Jarra Creek says his evidence is at best equivocal. In addition, Jarra Creek says that, in any event, the ACCC had a discretion as to whether to accede to Mr Heathcote's request. Accordingly, the intent or purpose of the person making the request is not determinative and it is therefore essential to prove the purpose of the ACCC in making the document available in order to resolve the issue as to dominant purpose. As this has not been done, Jarra Creek says no claim of privilege can be maintained. 25 In response, the Visy parties say that the approach taken by Jarra Creek is too narrow and that it is necessary to take a more pragmatic approach. Practical common sense, they say, requires that where a solicitor makes a request for access to copies of documents from a third party, and seeks the copies for the purpose of giving legal advice or assistance or for use in reasonably anticipated litigation, it should be inferred that the dominant purpose for the creation of the copies by the copier was to carry the solicitor's purpose into effect. In other words, the Visy parties contend that the person making the copy at the ACCC should be regarded as making it in order to comply with ABL's request and that ABL's purpose therefore is sufficient to attract privilege. This, it is said, is the proper inference to be drawn from the fact that the request was made and that it was complied with unconditionally. 26 The Visy parties identify the "communication" claimed to be the subject of privilege as being the contents of the documents sent by the ACCC to ABL, namely, the copies, transcripts (including copy exhibits attached thereto) and the correspondence accompanying the documents sent to the Visy parties by the ACCC. 28 The most relevant authority in relation to copy documents is the decision in Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3 ; (1997) 188 CLR 501. In that case, the High Court undertook a detailed examination of legal professional privilege in circumstances where some original documents were not privileged, but a separate claim of privilege was advanced in respect of copies of those documents which were made for the purpose of obtaining or giving legal advice or for use in legal proceedings. It is important to note that, in Propend 188 CLR 510, the documents in question were not created by a stranger to the litigation. ' (Emphasis added. Although his Honour was in a minority in that case in adopting a dominant purpose as opposed to a sole purpose test, his Honour's observations are apposite to present circumstances, particularly in light of the later conclusion of the High Court that privilege is determined by reference to the dominant purpose: see Esso Australia Resources Limited v Commissioner of Taxation [1999] HCA 67 ; (1999) 201 CLR 49. 30 In Hartogen Energy Limited (In Liq) v The Australian Gas Light Company (1992) 36 FCR 557 at 568-569, Gummow J observed that the purpose for which a document is brought into existence is a question of fact, and the legal issue is whether the purpose of supplying the material to the legal adviser accounts for the existence of the material. His Honour accepted that the relevant "purpose" will ordinarily be that of the maker of the documents, but his Honour also observed that privilege is attracted where the person who calls the document into existence does so in the bona fide belief that litigation will probably ensue. By way of example, his Honour referred to situations where solicitors commission the provision of a technical report with the consequence that the relevant intention will not be that of the report's author but the solicitor who requests it. Privilege in a copy document may therefore arise where a person requests that the original document be copied for his or her own purpose of providing legal advice or assistance. 31 The principles summarised by Gummow J in Hartogen 36 FCR at 568-569 were affirmed and applied by Batt JA in the Victorian Court of Appeal in Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332 at 338, with whom Charles and Callaway JJA agreed. In that case, the reports in question were commissioned by the solicitors. His Honour considered that the relevant purpose included the intention of a person under whose direction the relevant document is brought into existence. 32 In the recent decision of Barnes v Commissioner of Taxation (Cth) [2007] FCAFC 88 ; (2007) 242 ALR 601 , the Full Federal Court considered the question whether privilege attaches to copy documents, and confirmed that the test was whether the copy itself came into existence for the dominant purpose of giving legal advice or assistance. In that case, the Full Court considered there was an insufficiency of direct evidence as to the purpose of creation. Their Honours emphasised the need for focused and specific evidence as to the making of the copies in order to properly ground a claim for legal professional privilege. They observed at 605 that "verbal formulae and bare conclusory assertions of purpose are not sufficient to make out a claim for privilege". The authorities refer to "the maker" of the relevant document --- a description which, in the circumstances of copy documents, could be interpreted literally to mean the person who actually carries out the physical task of copying. To limit the concept of "purpose" to such a person is clearly too restrictive, and would run contrary to the authorities which refer to the purpose of the person who "authorised", "ordered" or "procured" the creation of a copy document, or "called the document into existence". In addition, some authorities regard as relevant the purpose of the person at whose "request" a document comes into existence. An example of such a person is a legal adviser who requests an expert or third party to provide a report for use in litigation: see Hartogen 36 FCR at 568-569. 34 In principle, it is not easy to see why the purpose of a lawyer who acts for a party should not be relevant, or indeed in some cases controlling, where he or she requests another person to provide copy documents for that particular purpose. In such a case the circumstances may indicate, when taken together with the terms of the request, or by clear implication from the request, that the documents are required for the dominant purpose of providing legal advice or assistance. In such a case, an accession to the request (by copying the documents) can properly be treated as being for the purpose of the legal adviser who called the documents into existence. 35 In my opinion, the copy documents produced by the ACCC in response to the requests by ABL come within the privilege which applies in respect of copy documents produced for legal advice or assistance or for use in reasonably anticipated legal proceedings. As in the present circumstances, where the evidence is that documents are requested by a solicitor solely for such a purpose, and the request is complied with by the third party without any qualification, it can be reasonably inferred that the copy documents were made in order to comply with the request and to carry out the purpose (be it either expressed or implied from the circumstances) for which the request was made. There is no evidence in this case to indicate that the ACCC had any other motive or purpose in making the copies available except to comply with the request by ABL. This conclusion applies in respect of all copy documents requested by ABL orally or in writing in relation to the ACCC proceeding, including those produced under any Notice to Produce issued by ABL to the ACCC. 36 In light of the above reasons, it is appropriate that Jarra Creek should pay the costs attributable to the determination of this issue relating to the privilege claim in respect of the copy documents. ISSUE 5 --- SHOULD JARRA CREEK HAVE LEAVE TO SUBPOENA THE ACCC? 38 In my view, it is appropriate to grant leave to issue the subpoenas. The request for leave is not opposed by the Visy parties, and the form of subpoena proposed by Jarra Creek is specific and certain in its terms. Accordingly, leave to issue the subpoena should be granted immediately, and not delayed as the ACCC contends. ISSUE 6 --- SHOULD FURTHER DISCOVERY BE ORDERED? This order was intended to compel the Visy parties to discover and produce for inspection documents and categories of documents which were listed in two schedules to the Amended Notice of Motion. 40 By agreement, the parties do not require determination of this issue. Both Jarra Creek and the Visy parties agree that discussions between themselves may obviate the need for an order of the Court granting this further discovery. I shall therefore refrain from making any orders on this matter at this stage. ISSUE 7 --- ARE THE SECTION 155 NOTICES DISCOVERABLE? The Visy parties submit in response that any such notices are not relevant to this proceeding. 42 In my view, these notices may be relevant, and should therefore be discovered. ISSUE 8 --- WHAT FORM SHOULD THE ORDERS TAKE? If the parties cannot agree on the form of orders, the points of disagreement should be identified and competing Short Minutes of Order should be sent to my Associate in chambers with brief reasons. I will then decide on the form of orders in chambers. The Agreed Short Minutes of Order should be sent to my Associate in chambers. If agreement cannot be reached, I direct the parties to send their respective Short Minutes of Order to my Associate in chambers with brief reasons. 45 Jarra Creek should pay the costs of the Visy parties in relation to the privilege question concerning copy documents (Issue 4 above). Other costs are 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 Tamberlin. | request by solicitor to third party to copy documents copies made by third party privilege of copy documents purpose of creation whether purpose of solicitor the relevant purpose when determining privilege. implied undertaking not to disclose discovered documents for another purpose release from implied undertaking. discovery of documents provided by third party confidentiality of and prejudice to third party regime for disclosure. leave to issue subpoena. legal professional privilege discovery discovery practice and procedure |
A liquidator was appointed to the company on 23 May 2001. The applicant continued as a director until 28 June 2004. At the time it went into liquidation the company owed a considerable sum to the Australian Taxation Office. The Deputy Commissioner of Taxation sought to recover the monies from the applicant. He was able to do this because of provisions in the Income Tax Assessment Act 1936 (Cth) ("the Act ") which permitted the transfer of liability to make taxation payments from an insolvent company to its directors. In order to render a director liable it was necessary for a notice to be issued under the Act to the director. Five notices were issued to the applicant between 19 October 2000 and 2 March 2001. She asserts that she did not become aware that the notices had been issued until about 21 May 2005. She did not actually see copies of the notices until about 8 September 2005. 2 On 11 July 2006 she filed an application, supported by affidavit, in which she sought to impugn the validity of the notices and thereby be absolved from liability to make the payments sought. When the matter came on for Directions various deficiencies in the application were identified, and, at a further Directions hearing, the applicant sought leave to substitute an amended application. That the respondent was and is entitled to recover the penalty referred to in the penalty notices from the applicant under section 222AOE of the tax act. That an address for the purposes of section 222AOF of the tax act does not require a place of residence to be identified. That an ASIC company extract is an ASIC document for the purposes of section 222OAF of the tax act. Application to review the conduct of the respondent whereby it has treated the penalty notices as having been given to the applicant under sections 222AOE and 222AOF of the tax act and where by it has recovered the amount of $404.89 by way of offset of an income tax credit against the penalties referred to in the penalty notices, debited the applicant's tax account and demanded payment. Various declarations and orders were sought under both the ADJR Act and the Judiciary Act . 3 At a further Directions hearing the respondent advised the Court that he opposed the application for leave to amend the original application or substitute a revised application. Various reasons for such opposition were advanced. They included objections that the proceedings were commenced out of time; that the alleged decision and conduct of the respondent were not reviewable pursuant to the ADJR Act ; that the proposed application was vexatious or frivolous or an abuse of process because it would tend to prejudice, embarrass or delay a fair hearing; and that the Court otherwise lacked jurisdiction to entertain such an application. 4 Directions were given with a view to having these objections dealt with as a preliminary issue. 5 Notwithstanding the infelicities of language which beset the proposed amended application and the procedural problems to which it gives rise, it was clear from her written submissions that there were two grounds on which the applicant sought to rely in order to avoid liability to pay the penalties referred to in the notices. They were that the "address" appearing on the various notices and on the envelopes in which they were posted did not constitute an "address" within the meaning of the Act and that the Australian Securities Commission ("ASC") documents to which the respondent had resort for the purpose of ascertaining the applicant's "address" were not "ASC documents" within the meaning of s 222AOF of the Act . The parties were agreed that the determination of these two points would avoid unnecessary delay and expense and agreed that the Court should hear argument and resolve them on a final basis. The applicant contended and the respondent conceded that the Court had jurisdiction to entertain the application under s 39B(1A)(c) of the Judiciary Act . There was a justiciable controversy between the parties as to whether or not a statutory precondition to the recovery by the respondent of penalties from the applicant had been satisfied. If the precondition had not been satisfied no obligation to make payments would have arisen and the applicant would have been immune from any liability to pay the penalties: c.f. Felton v Mulligan [1971] HCA 39 ; (1971) 124 CLR 367 at 374, 408, 416; Guss v Commissioner of Taxation [2006] FCAFC 88 ; (2006) 152 FCR 88 at 91, 103. " Section 16 -70 requires an entity that withholds amounts from salaries and wages of employees as taxation deductions to pay those amounts to the Commissioner in accordance with Sub division 16-B. Section 16 -70 is what is known as a "remittance provision" for the purposes of Division 9 of Part VI of the Income Tax Assessment Act 1936 (Cth): see ss 222ANB(1) and 222AFB (1). Division 9 is entitled: "Penalties for directors of non-remitting companies". The duty is enforced by penalties. However, a penalty can be recovered only if the Commissioner gives written notice to the person concerned. The penalty is automatically remitted if the company meets its obligations, or goes into voluntary administration or liquidation, within 14 days after the notice is given. Conversely, amounts paid by the company reduce the amount of a penalty. If the obligation is not complied with within the prescribed period the persons who are directors of the company remain under a continuing obligation to meet their statutory responsibilities: see s 222AOB(3). If the obligations imposed by s 222AOB are not met the directors become liable to pay to the Commissioner a penalty equal to the unpaid amount. The Commissioner is not entitled to recover such a penalty unless he first issues a statutory notice. Companies were required, inter alia, to advise the ASC of the name and address of any director within one month of the appointment of the director. There was also an obligation to advise the ASC of any change to a director's usual residential address within one month of that change occurring. 7 Reference should also be made to two provisions of the Acts Interpretation Act 1901 (Cth). Section 28A(1) provides that, where any Commonwealth Act permits a document to be given to a person, the document may be served on a natural person by "sending it by prepaid post to the address of the place of residence or business of the person last known to the person serving the document". Section 29(1) provides that, where a Commonwealth Act authorises service by post, "the service shall be deemed to be effected by properly addressing, prepaying, and posting the document as a letter, and, unless the contrary is provided, to have been effected at the time at which the letter would be delivered in the ordinary course of post. The applicant was recorded as being a director and her "address" was the same as that of the principal place of business of the company. Each of the five notices was sent by prepaid post to the applicant, addressed to her at Woolaston Road, Warrnambool Vic 3280. The applicant resided at 199 Woolaston Road Warrnambool until November 1998. She has not lived there since. None of the notices was returned undelivered to the respondent. Despite this, the applicant gave evidence that she did not receive copies of the notices until, following a request by her, each was sent to her by the respondent under cover of a letter dated 8 September 2005. The letter was sent by the respondent to the applicant at her accountant's place of business in Mansfield. This was so even though it was the address supplied to the ASC as the residential address of the applicant in her capacity as a director of the company. She contended that the position was equivalent to that which would have arisen had no details of an address been included in the returns sent to the ASC. Counsel for the applicant agreed in argument that she could only succeed if it were accepted that a road or street name together with the name of a suburb or town could never constitute an "address" unless a street or road number also appeared. The applicant did not press her written submission that the respondent was not entitled to rely on information appearing in the ASC's database but rather was required to have resort to the original returns for the purpose of ascertaining the applicant's address. The respondent was entitled to rely on what appeared in the database to be the residential address of the applicant in circumstances where the information was supplied by the company pursuant to a statutory obligation. The Commissioner was also entitled to assume that the address was current given the failure by the company to advise of any change. "Woolaston Road, Warrnambool Vic 3280" reasonably appeared to the respondent to be an address to which notices could be sent to the applicant. The meaning to be attributed to the word as it appears in s 222AOF(1) of the Act , must be discerned from the legislative context in which it appears. Section 222AOF is a facilitative provision. When read with s 28A of the Acts Interpretation Act , it provides for various methods by which the notices contemplated by s 222AOE may be served on directors who the Commissioner of Taxation considers are liable to pay penalties when a company fails to meet its statutory obligations. One method of service is the sending of notices by prepaid post to "an address" that "appears" from returns lodged by the relevant company with the ASC to be the director's place of residence or business. Service would be deemed to be effected even if the notice is not received by the director: Deputy Commissioner of Taxation v Gruber (1998) 43 NSWLR 271 at 277. Evidence by a director that he or she has not received a notice served in accordance with a provision such as s 28A or s 29 of the Acts Interpretation Act does not constitute proof of non delivery: Fancourt v Mercantile Credits Ltd [1983] HCA 25 ; (1983) 154 CLR 87 at 96-97. 12 Records held on the ASC database, to which the respondent had resort prior to sending the notices to the applicant, disclosed that Max Kavanagh & Sons Pty Ltd made periodic returns to the ASC. Such returns were made pursuant to statutory requirement. Those acting on behalf of the company advised the ASC that the principal place of business of the company was at Woolaston Road Warrnambool. The ASC was also advised that this was the address of one of the company's directors, the applicant. No notice of variation to these details was provided to the ASC. This was so despite the fact that the applicant ceased to reside in Woolaston Road in November 1998. 13 The first question of law which arises in the present proceeding is whether "Woolaston Road Warrnambool Vic 3280" is an "address" for the purposes of s 222AOF of the Act . In my view it was. It was so regarded by company officers who made the periodic returns to the ASC. It bore the hallmarks of an address. Although no street number was included there was nothing, on its face, to suggest that it was other than an address where the company conducted business and the applicant could be contacted. Not all streets or roads, particularly in country areas, have numbered properties in them. Such streets and roads may be long or short; they may or may not have numbers allocated to allotments which abut them. The absence of a number adjacent to a street or road name will not necessarily suggest that what appears in a return is not an address. For present purposes, however, it is enough that the "address" proffered by the company and its director should "appear" to be the director's place of residence or business. There is nothing in the advice that the applicant's address was "Woolaston Road Warrnambool Vic 3280" which would reasonably suggest to the reader that it was anything other than an "address" at which the applicant could be contacted. The provisions of the Act dealing with the service of notices are designed to assist the respondent in the performance of his statutory duties. They enable him to rely on information supplied by companies when despatching notices and give him the benefit of deeming provisions which enable the assumption to be made that service has been effected. This whole scheme would be undermined were a director to be able to assert that a notice was invalid because what purported to be an address, supplied to the ASC by the company, was not an "address" to which notices could be sent. 14 The second point originally advanced but not pressed by the applicant was that the respondent erred by examining the ASC database rather than the original returns, provided by the company, the contents of which were subsequently entered on the database. The point made was that s 222AOF limits the range of ASC documents to which the Commissioner may have resort in determining an address to returns lodged with the ASC. 15 The applicant was correct not to press this argument. It was bound to fail for the reasons given by Santow JA in Deputy Commissioner of Taxation v Nercessian [2006] NSWCA 268 at [22] - [30] . I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY. | collection and recovery of tax applicant director of a company that went into liquidation while owing money to australian taxation office respondent sought to recover monies owed from applicant pursuant to income tax assessment act five penalty notices sent to applicant validity of 'address' appearing on the notices and envelopes in which they were posted whether 'woolaston rd warrnambool vic 3280' is an 'address' for the purposes of s 222aof of the income tax assessment act meaning of address discerned by its legislative context application of ss 28a, s29 acts interpretation act s 222aof deemed a facilitative provision 'address' used by respondent valid taxation statutory interpretation |
He was then self-represented. The application was to set aside the decision to issue a notice of intention to cancel Mr Fernando's permanent residency visa under the provisions of s 501 of the Migration Act 1958 (Cth) (the Act), and to restrain the respondent from cancelling his permanent residency visa. 2 During the period May 2007 to October 2007, Mr Fernando also filed three other applications in this Court all of which, in essence, claimed the same relief, namely, compensation in respect of what he alleged was false imprisonment in migration detention by the respondent and the Commonwealth. 3 On 18 December 2007, the Court appointed Mr John Robert Broderick Ley as tutor to act on behalf of Mr Fernando in this proceeding and in respect of the three other proceedings which he had commenced. 4 After the appointment of Mr Ley as tutor for Mr Fernando, the originating application was amended. On 13 August 2008, I dismissed the application on the basis that the Federal Court did not have jurisdiction to hear and determine the application ( Fernando v Minister for Immigration and Citizenship (No 2) [2008] FCA 1216). I said that I would hear the parties on costs. 5 The respondent contended that the usual rule in relation to costs should apply and that the Court should order that the applicant pay the costs of the respondent. This would have the effect, said the respondent, of rendering Mr Ley liable to pay the costs personally with a right of indemnity against the applicant. The respondent recognised that the question of costs was ultimately a matter of discretion, but contended that there was nothing in the circumstances of this case as would cause the Court to depart from the general rule. 6 In exercising my discretion in this regard, I have taken into account the following factors. 7 First, I take into account that each year the respondent is required to spend public monies in defending hundreds of migration cases, a substantial number of which are of dubious merit. The importance of recovering, so far as possible, public monies spent on defending these cases, is a significant consideration. So is the deterrent effect of there being a costs consequence in bringing unsuccessful litigation. I also recognise that one of the reasons why a next friend is appointed to conduct litigation on behalf of a person lacking capacity to conduct the litigation on his or her own behalf, is that there should be a person who is ultimately liable for the costs of the successful party. 8 Secondly, I take into account the circumstances of the appointment of Mr Ley to act as tutor for Mr Fernando. Order 43 r 1(3) of the Federal Court Rules (the Rules) permits a mentally disabled person to commence a proceeding by a next friend. This did not happen in this case. As previously stated, Mr Fernando commenced this proceeding and the other proceedings referred to above, whilst unrepresented. I made a referral under O 80 of the Rules that Mr Fernando be represented by pro bono counsel. Dr Cameron accepted appointment as pro bono counsel. 9 It was at the instance of Dr Cameron that the Court was asked to appoint a tutor on the grounds of Mr Fernando's mental incapacity to conduct the various proceedings which were then before the Court. 10 The tutor is not a family member of Mr Fernando. Mr Ley is a public spirited member of the Western Australian Bar who is acting pro bono. In so doing, Mr Ley is acting in accordance with the best traditions of the Bar in upholding the rule of law. The Court, particularly the Western Australian Registry, has benefited, and continues to benefit, from the pro bono assistance of the local legal profession. They have acted according to the highest ideals of the law. They have sought to give voices to those who are perforce voiceless and, on their behalf, to hold the Executive accountable for the lawfulness of its actions. In so doing, even if ultimately unsuccessful in the litigation they have served the rule of law and so the whole community. 11 There are, therefore, important policy considerations in favour of ensuring that persons who provide their services to assist the Court and the community voluntarily are, save in exceptional circumstances, not subjected to personal costs orders. This has been recognised in other cases where legal practitioners have acted on a pro bono basis on behalf of persons lacking capacity. In Jaffari v Minister for Immigration and Multicultural Affairs [2001] FCA 985 ; (2001) 113 FCR 10 , French J permitted a proceeding to be brought by two unaccompanied minors who were asylum seekers, without the appointment of a tutor, on the basis that they were represented in the proceeding by a legal representative. The legal representative in question, Dr Cameron, was acting pro bono. I am prepared to make an order to secure that result. 12 Thirdly, in my view, it cannot be said that Mr Ley acted unreasonably in continuing to prosecute this application after his appointment as a tutor of Mr Fernando. There was an unusual aspect to the decision-making process which was relevant in this case. The Act provides that the decision to cancel Mr Fernanado's permanent residency visa could be made by either the Minister personally or by a delegate. The Act also provides that, depending on who made, or was to make, that decision, a different court would have the jurisdiction to review the decision or apprehended decision. If a delegate made the decision, the Federal Magistrates Court would have jurisdiction, but if the Minister made the decision, the Federal Court would have jurisdiction. This application was dismissed because it was brought in this Court and not the Federal Magistrates Court. It is the case that the decision to issue the notice of intention to cancel the visa, showed that it was not made by the Minister personally. However, it was only when the respondent filed his submissions close to the hearing date, that he revealed, and then only impliedly, that it was not his present intention to personally make the decision whether or not to cancel Mr Fernando's visa but to delegate the making of that decision. It was the injunction to restrain the cancellation of Mr Fernando's visa which was the immediate focus of the relief sought by the tutor on behalf of the applicant at the hearing. 13 In balancing these factors, in my view, the second and third factors outweigh, in this particular case, the first factor. Accordingly, I have come to the view that the appropriate order is that there be no order as to costs. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | the court appointed a barrister to act as tutor to the applicant on the grounds of the applicant's mental incapacity the barrister agreed to accept appointment as tutor on a pro bono basis the court dismissed the application whether the court should depart from the usual rule as to costs costs |
2 The Appellant's grounds of appeal are these. 3 First, the Appellant contends that Federal Magistrate Driver erred by failing to find that the Tribunal failed to apply the correct test in determining the degree of satisfaction required to be established in order to find a well-founded fear of persecution for a Convention reason (Article 1A(2) of the 1951 Convention Relating to the Status of Refugees ('the Convention') as amended by the 1967 Protocol Relating to the Status of Refugees ('the Refugees' Protocol')) as contended for by the Appellant. As a subset of that notion, the Appellant contends that since the Tribunal could not be satisfied that the Appellant held a well-founded fear of persecution in the absence of further information from the Appellant, the Tribunal ought to have called for further information from the Appellant. 4 Secondly, the Appellant contends that Federal Magistrate Driver erred by failing to find that the Tribunal ought to have exercised powers conferred upon the Tribunal by s 424 of the Act in order to secure the provision of further information from the Appellant which might have informed the question of whether the Tribunal could be objectively satisfied, on all material, that the Appellant held a well-founded fear of persecution for a Convention reason. 5 Thirdly, the Appellant contends that Federal Magistrate Driver erred by failing to find that the Tribunal acted in a 'manifestly unreasonable manner' in concluding, in reliance upon 'one statement [of the Appellant] to the Department [of] the exact nature of his fear', that the Tribunal was not in a position to determine to its satisfaction whether the Appellant held a well-founded fear of persecution for a Convention reason. The Appellant contended that the Tribunal ought to have had the benefit of evidence from witnesses on behalf of the Appellant. 6 Fourthly, Federal Magistrate Driver is said to have erred by failing to find that the errors reflected in grounds 1, 2 and 3 constitute jurisdictional errors. 7 The background facts are these. 8 The Appellant is a citizen of India and arrived in Australia on 18 May 2003. On 18 June 2003, the Appellant lodged an application with the First Respondent for a protection visa (Class XA). On 1 August 2003, a Delegate of the First Respondent refused that application. On 18 August 2003, the Appellant applied to the Tribunal for a review of that decision. 9 On 5 December 2003, the Tribunal wrote to the Appellant and advised him that it had considered all the material before it relating to the Appellant's application but was unable to make a decision in favour of the Appellant on that information alone. In that letter, the Tribunal invited the Appellant to attend a hearing nominated for 27 January 2004 at 1.00pm and give oral evidence and articulate arguments in support of his claim for a protection visa. The Tribunal's letter noted, 'If you do not attend the hearing and the Tribunal does not postpone the hearing, it can make a decision on your case without further notice' and '... complete the "Witnesses" part of the form if you want the Tribunal to get oral evidence from another person; please note the Tribunal does not have to get evidence from any person you name'. On 14 January 2003, the Appellant by 'Naosams Migration Services', the agent for the Appellant, wrote to the Tribunal and advised that the Appellant had elected not to attend the hearing. The letter notes, 'kindly make a "decision on papers" based on the information that is already held by the Tribunal. Please feel free to contact us if required' . The author of the letter bears the name Bimal Bhattarai. The letter attached a completed 'Response to Hearing Invitation' form signed by the Appellant confirming that the Appellant did not want to attend a hearing. The Appellant ticked the box confirming that the Appellant consented to the Tribunal proceeding to make a decision on the review without taking any further action to allow or enable the Appellant to appear before the Tribunal. As to question 2(c) on the form, in these terms, 'Do you want the Tribunal to take oral evidence from any witnesses? , the Appellant simply put a line through that question and related questions. The form is signed and dated 8 January 2004. 10 On 20 January 2004, the Tribunal wrote to the Appellant advising that a decision in relation to the review application would be published on 10 February 2004. He stated that he completed 10 years of eduction in 1975 and he was self-employed as an air-conditioning and refrigeration mechanic from 1992 until 2003. The applicant stated that he lived at the same address in New Deli from 1993 until the day he departed for Australia in 2003. He stated that he married on 7 January 1998 and had a daughter on 1 October 2002. He stated that his wife and child, as well as his parents, lived in India at the time the application was lodged. The applicant provided a partial copy of his passport issued by the government of India on 28 January 2003 and valid until 27 January 2003. He entered Australia with a Temporary Business visa issued in Mumbai on 28 April 2003 and valid for a one month stay from the date of arrival. He completed the application with the assistance of a Migration Agent, Bimal K Bhattarai. He stated that he did not reveal his sexuality and when he was 30 years of age he "had to concede defeat" and "marry an unknown person of the society". He stated that after five years of marriage and while his wife was pregnant he started a "secret relationship" with another man and a few months after the child was born his wife found him in "a very indecent scene" with his lover. He stated that members of his wife's family wanted to kill him but he avoided harm by hiding in a neighbour's house. The applicant stated that it became common knowledge in the community where he lived that he was homosexual. He stated that he tried to relocate in the country but before he got "there people already knew about [his] situation and [he] had to return next day from there". He stated that he would never be accepted by society in India so he decided to come to Australia because he anticipated a "more tolerant society towards race, religion, sexuality etc". However, the applicant's claims were lacking in detail and the Tribunal has been unable to establish all the relevant facts. The applicant did not indicate how or if he intends to express his sexuality in the reasonably foreseeable future and he did not indicate who will seek to harm him in India. The applicant was forewarned that the information he provided in support of the protection visa application was not satisfactory and the Tribunal could not make a favourable decision on that information alone. He did not however provide further information in support of his review application despite ample opportunity to do so. The Tribunal has correctly approached its task by determining that if it is unable to be satisfied of those matters, the Tribunal must 'refuse to grant the visa' (s 65(1)(b)). 14 The approach adopted by the Tribunal is entirely consistent with the observations of their Honours in SJSB v Minister for Immigration & Multicultural Affairs [2004] FCAFC 255 at [15] , per Ryan, Jacobson and Lander JJ; Minister for Immigration & Multicultural Affairs v VSAF of 2003 [2005] FCAFC 73 at [17] , per Black CJ, Sundberg and Bennett JJ and Minister for Immigration & Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259. The Appellant contends that the Tribunal ought to have exercised a statutory power to seek further information from the Appellant before reaching a conclusion as to whether it could be satisfied of the relevant matters. Section 424 of the Act is an enabling provision. It does not create a mandatory obligation, in terms. 15 Section 424(1) provides that in conducting the review the Tribunal 'may get any information that it considers relevant' . If the Tribunal obtains such information, the Tribunal has a statutory obligation to have regard to the information in making the decision on the review. Without limiting the power to seek information, the Tribunal may also 'invite a person to give additional information' in a manner determined by the Tribunal. In this case, the Tribunal advised the Appellant that it was unable to be satisfied that the Appellant held a well-founded fear of persecution for a Convention reason and invited the Appellant to attend a hearing, give oral evidence, make submissions and nominate any additional witnesses from whom the Tribunal might be invited to seek and obtain additional evidence. The Appellant elected to not attend that hearing and failed to nominate any additional witnesses. Accordingly, the Tribunal was entitled to conduct a dispositive assessment of the evidence available to it in order to determine whether it could be satisfied that the Appellant was a person at risk of persecution in India due to his sexual orientation and thus determine whether the Appellant, objectively assessed, held a well-founded fear of persecution for a Convention reason namely, membership of a social group described as 'homosexuals in India'. No obligation arose in the Tribunal to seek further information from the Appellant. 16 Moreover, no obligation arose in the Tribunal to seek further information from the Appellant or any other person once the Tribunal determined that it could not be satisfied of the relevant matters on the evidence then before it. Notwithstanding that the Tribunal concluded that 'without further information from the applicant' the Tribunal could not be satisfied of the relevant matters, that observation does not reflect any qualification or limitation upon the statutory obligation of the Tribunal, having considered the material put before it, to determine, in the light of that assessment, that it could not be satisfied as to the criteria set out in s 36(2) of the Act and thus determine the Application for Review adversely to the Appellant. 17 Accordingly, the Tribunal discharged the review function in a manner entirely consistent with the appropriate standard and by application of the appropriate tests. The Tribunal was under no obligation to seek further information from the Appellant in assessing whether the Tribunal could reach the required state of satisfaction. The Tribunal did not act, as contended, in a 'manifestly unreasonable manner' by acting in reliance upon the statement of the Appellant in determining whether it could be satisfied of the relevant matters. 18 It follows that Federal Magistrate Driver did not err in the manner contended by the Appellant in the grounds of appeal. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of whether the refugee review tribunal applied the correct test in determining the state of satisfaction or otherwise to be reached in conducting the review function consideration of whether the tribunal is required to seek further information when unable to be satisfied of the statutory criteria in the absence of further information from an applicant. migration |
It is acknowledged that the clearance of such native vegetation is likely to have had a significant impact on a listed threatened species included in the endangered category, namely the Red-Tailed Black Cockatoo, in contravention of s 18(3) of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the EPBC Act). The applicant initially sought against the first and second respondents the imposition of civil penalties under ss 481 and 494 of the EPBC Act, injunctive relief under s 475 of the EPBC Act and declaratory relief under s 21 of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) in relation to the alleged contraventions of ss 18, 484 and 494 of the EPBC Act. The applicant filed an amended statement of claim on 19 June 2008 pleading the contravening conduct. The first respondent admitted the contravention pleaded in the amended statement of claim. The applicant has withdrawn his allegations against the second respondent, so it is now necessary to consider only the claims against the first respondent. The applicant and the first respondent have presented to the Court an agreed statement of facts and joint submissions as to the appropriate orders the Court should make. They address comprehensively both the legal issues and factual matters which underpin the declarations and orders which the parties join in asking the Court to make. They are agreed on the orders that the Court is invited to make, including the level of pecuniary penalty. The parties acknowledge, however, that it is for the Court to be satisfied that the first respondent did contravene the EPBC Act and to determine the amount of any pecuniary penalty and the nature of other relief to be ordered. I set out that contravening conduct taken from the joint submissions of the parties: Between April 2004 and July 2005, the Respondent took an action ("the Action"), namely, it caused the clearance of not less than 170 trees from the Property. The trees were of the species E. leucoxylon, E. camaldulensis and E. fasciculosa. The trees removed from the Property included an undetermined number of very old, large trees and also an undetermined number of younger trees. The South Eastern Red-tailed Black Cockatoo ( Calyptorhynchus banksii graptogyne ) ("the Cockatoo") is listed as an endangered species pursuant to sub-section 178(1) of the Act. The Property is within the known range of the Cockatoo and is part of an area mapped as nesting habitat that is critical for the survival of the species. The Cockatoo is considered endangered because of its small population size and continuing habitat loss. The parties have agreed that the Action is likely to adversely affect habitat which is critical for the survival of the Cockatoo. While the location of all nesting sites is not known, the Property is within a region which is recognised as one of the remaining strongholds of nesting for Cockatoos in South Australia and the area on the Property which was cleared could have supported up to six (6) nesting pairs. The Cockatoo has traditional nesting areas where it returns to breed. The removal of the potential nesting trees is likely to lead to reduced nesting success in this area and a reduced recruitment of new Cockatoos into the population. Most known nest trees of the Cockatoo are paddock trees (of the type removed), and there is little of this habitat type left in South Eastern South Australia. In addition to a reduction in suitable nesting habitat for the Cockatoo, it is also likely that the Action will reduce the area of occupancy of the Cockatoo with respect to the stringybark feeding habitat which adjoins the Property. As the Property will support fewer nesting pairs of Cockatoos, fewer Cockatoos will occupy and utilise the adjoining stringybark feeding habitat. For the purpose of this proceeding, the first respondent has admitted that the conduct as set out above contravened s 18(3) of the EPBC Act. I am satisfied that the first respondent contravened s 18(3) of the EPBC Act by that conduct. A penalty unit is defined by s 4AA(1) of the Crimes Act 1914 (Cth) to mean $110. It follows that the maximum civil penalty that may be imposed for contravention of s 18(3) is $5,500,000 in the case of the first respondent. If orders were sought against the second respondent, the maximum penalty would be $550,000. Parliament has specified very high maximum pecuniary penalties for contraventions of s 18(3) of the EPBC Act. The maximum penalties reflect the public expression by Parliament of the seriousness of the offence, but it remains for the Court to assess the seriousness of the contravening conduct in a particular case. The Court's power to impose civil penalties is conferred by s 481(2) of the EPBC Act. If satisfied that a person has contravened a civil penalty provision (including s 18(3)), the Court may order the wrongdoer to pay to the Commonwealth, for each contravention, the pecuniary penalty that the Court determines is appropriate, being not more than the specified maximum. Section 481(3) is very similar to s 76(1) of the Trade Practices Act 1974 (Cth) (the TP Act). The joint submissions note that in Minister for the Environment and Heritage v Greentree (No 3) [2004] FCA 1317 ( Greentree ), Sackville J said that the appropriate approach to imposing pecuniary penalties under s 481(3) of the EPBC Act is the same as that under s 76(1) of the TP Act, subject to any necessary adaptations specific to the relevant type of damage caused. The parties contended that I should adopt his Honour's approach, and I shall do so. In Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at 52,152-3 French J (as he then was) identified the following additional considerations as being relevant to the level of pecuniary penalty imposed, including: the size of the contravening company; the degree of power it 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 the conduct of senior management or at a lower level; whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention; and whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention. In NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134 ; (1996) 71 FCR 285 ( NW Frozen Foods ) and J McPhee & Son (Aust) Pty Ltd v Australian Competition and Consumer Commission [2000] FCA 365 ; (2000) 172 ALR 532 , the Full Court of this Court approved French J's list and added further relevant considerations, including whether the conduct was systematic, deliberate or covert. The joint submissions of the parties also identified other relevant matters that the Court may have regard to, including the "totality principle" (ie, that the total penalty for related offences ought not to exceed what is proper for the entire contravening conduct involved), the principal object of deterrence (both specific and general), and that a penalty must not be so high as to be oppressive. The clearance took place in circumstances where the first respondent (by the second respondent) knew that approval to clear the trees had previously been denied by the South Australian Native Vegetation Council, and that such clearance was (I find) likely to impact on the native wildlife. The first respondent knew that it was unlawful to undertake the clearance of those trees, at least because it did not have the approval to do so under the Native Vegetation Act 1991 (SA). It had explored pursuing such an approval, but had not at the time of the clearance received approval to do so. The first respondent accepts that the clearance of those trees is likely to adversely affect habitat critical to the survival of the Cockatoo, and likely to lead to reduced nesting success of that endangered species in the area. The Cockatoo's habitat is near areas of Desert Stringybark and Brown Stringybark woodlands, and the adjacent woodlands of River Red Gum, Yellow or Blue Gum, Pink Gum and Buloke. Senior counsel for the first respondent pointed out that the agreed habitat is geographically quite extensive: roughly from Horsham in Victoria as its north-eastern boundary, to Portland in Victoria as its south eastern boundary, then north westerly along the coast to Mount Gambier in South Australia and northwards (although bulging to the west) to about Bordertown in South Australia. He submitted that the removal of 170 trees over a relatively small part of that area would represent a relatively insignificant number of the trees over the whole geographical habitat. It is agreed that the 170 trees removed were River Red Gum, Pink Gum and Yellow or Blue Gum trees. He also pointed out that it is agreed that the Stringybark and Buloke trees provide the primary feeding resource for the Cockatoo, and that the eucalypts are significant for its breeding. Hence, it was argued, as a matter of arithmetic, the removal of 170 potential nesting trees over such a large area would have minimal impact. The arithmetic assumed that, over the whole geographical area, there would be at least 100,000 trees, so the estimated remaining 660 nesting pairs of the Cockatoo presently had access on average to about 150 eucalypts for breeding, and so the removal of 170 trees would be likely to affect only one breeding pair. I do not consider that such arithmetical analysis is of especial significance. Counsel was careful not to directly contradict any of the agreed facts, or the facts in the joint submissions. He did not resile from those facts. They include a description of the eucalypts in which the Cockatoo primarily nests: eucalypts with trunks greater than 60 cm with a hollow with a particular sized entrance and at least six metres off the ground, and in the main trunk or a "spout" angled at less than 45 o from vertical. Trees containing suitable hollows are likely to be over 220 years old. The nests are often in farmland with scattered live and dead eucalypt trees, almost all within close range of Stringybark trees. The specific qualities of nesting trees does not lend itself to the general analysis put forward. Moreover, it is agreed that in the lower south-east of South Australia, where the clearance took place, the remaining Red Gum communities are classified as vulnerable with 9.7% of the estimated original area remaining and only 0.3% protected in reserves. The trees were removed from an area which contains nesting habitat agreed as critical for the survival of the species. The first respondent's property is within a region recognised as one of the remaining strongholds of nesting for Cockatoos in South Australia, and the area which was cleared could have supported up to six nesting pairs. The known nest trees of the Cockatoo are generally paddock trees of the type removed, and there is little of this habitat type left in South Australia. Those agreed matters also indicate why the simple arithmetical averaging on an assumed spread of trees across the habitat of the Cockatoo is not appropriate. Also, of course, counsel for the first respondent was careful not to gainsay the agreed facts or facts in the joint submissions. The joint submissions acknowledged the damage that could be caused by the contravening conduct because The first respondent has admitted that its conduct is likely to have a significant impact on the Cockatoo. The matters acknowledged in the joint submissions and the agreed facts indicate why that is so. The clearance of the trees took place over an area of about 150 hectares of land on the first respondent's property, and involved not less than 24 trees which were potential nest trees for the Cockatoo from an area mapped as critical for its survival. There is likely to be reduced nesting success as a result. There could clearly be clearance of trees of much greater magnitude, either numerically or geographically, than the clearance of trees by the first respondent. There also might be clearance of lesser numbers of trees which might nevertheless involve an infringement of s 18(3) of the EPBC Act. I accept the description of the significance of the particular infringing conduct to the survival of the Cockatoo contained in the joint submissions and in the agreed facts. Overall, I suspect it is towards the lower end of the scale of significance. I have assessed the factor of the loss and damage caused by the contravention, in the factors relevant to the appropriate pecuniary penalty, in that way. The respondents have, however, each been convicted on two counts of unlawful clearing of native vegetation, contrary to s 26(1) of the Native Vegetation Act 1991 (SA). One count against each related to the clearing on the property which also gave rise to the present claim. On that count, the maximum penalty was $100,000. The first respondent was fined $29,750 and the second respondent (who was liable by virtue of s 30 of that Act) was fined $21,250. I note that the sentences were imposed without any assumption being made as to the impact of that clearing of the property on the Cockatoo. Each of the respondents has appealed from the penalty imposed on a range of grounds, including that the penalties were manifestly excessive, but (it is agreed) those appeals have been dismissed. The other counts related to clearing of land on a different property, although carried out at about the same time. As they occurred at about the same time, I shall treat the first respondent as not having previously engaged in conduct similar to that now under consideration. The first respondent is also the subject of civil proceedings instituted by the South Australian Native Vegetation Council in relation to the clearance the subject of these proceedings in which an order for remediation in relation to the clearance is sought under s 31B of the Native Vegetation Act 1991 (SA). It is not clear what order for remediation is sought, or might meaningfully be made, first because of the age of the trees removed and the time it would take to replace them with relevantly useful substitutes, and secondly because the first respondent has now disposed of its interest in the property Acacia Downs. The second respondent is the Managing Director of the first respondent. The joint submissions note that "any penalty imposed upon the [first respondent] is a penalty imposed upon the [second respondent]". The joint submissions note that the second respondent "decided upon the action which was undertaken without reference to the other directors of shareholders of the company". The first respondent is a family owned primary producer with its main business operations at Wemen in Victoria. Its balance sheet for the years ended 30 June 2007 and to 30 April 2009 shows a total equity of $3,544,846 and $2,906,995 respectively. Its total assets for each of those years are $25,366,317 and $27,639,941 respectively. The changes appear largely to be due to increases in property, plant and equipment, and in investment property, counterbalanced by a significant increase in non-current borrowing liability. The balance of trade and other payables, and current borrowings, has changed. The first respondent is obviously a significant enterprise. It employs some 80 staff. Its sales revenue in 2007 was some $18m, and for the 10 months to April 2009 was nearly $21m. Nevertheless, it has incurred trading losses in each of the last several years. To a significant extent, the trading losses have been offset by abnormal items, including the sale of a large permanent water right. For the last five years, its cumulative profits after allowing for abnormal items are a little over $900,000. It is now clearly highly geared, with its external debt at about 90% of its asset base at cost. There is no information as to the current real value of its asset base. In each of the last financial years, the first respondent has reported a net trading profit (loss) (current year to 30 April 2009) as follows: $ 529,641 $ 1,037,861 $ (11,783) $ 448,036 $(1,015,077) I noted that there was conflicting evidence suggesting the net trading profit (loss) for the 2008 financial year is $377,226. I also noted that the "shareholders and associates" (all apparently members of the Lamattina family) of the first respondent have had little taxable income over the last several years. In 2008, each of the eight of them drew an amount as cash drawings "through a related entity", as well as some drawings to reduce directors' loan accounts. The details provided are not sufficient to understand how, if at all, those drawings are reflected in the accounts of the first respondent or how, if at all, the related entity is reflected in the accounts of the first respondent. It purchased the property in May 2004 to secure a more consistent cropping program. That required significant capital expenditure, funded by debt and asset sales. Its debt servicing obligations in 2007 exceeded $1.8m. It appears that, putting aside revenue from non-current assets, it has not operated at a profit over the last several years. A copy of that decision was included with the contract for sale of the property available to the respondents before and following the purchase of the property from the previous owner. It is apparent that the respondents then either were aware, or ought to have been aware, that permission to clear the native vegetation had previously been refused. The second respondent attended a meeting with a representative of the South Australian Department of Water, Land and Biodiversity Conservation about making an application to clear trees from the property. At that meeting the second respondent was advised that any such application would not be considered for several months. By that point, at least, it is clear that the first respondent knew it could not clear the trees from the property without such approval. The first respondent decided to go ahead with the clearance of the trees in the face of the awareness that it was acting illegally. The parties jointly submit that the first respondent (through the second respondent) made the decision to clear the land "in frustration at not being able to readily obtain permission from the authorities to do so lawfully and in circumstances where the company was in difficult financial circumstances". The nature of the difficult financial circumstances is not explained in detail. However, I accept that the first respondent was under some financial pressure, and wished to increase its revenue by expanding its cropping area by clearing the native vegetation unlawfully to assist it in relieving that financial pressure. Clearly the relevant contravening conduct was deliberate. The first respondent was aware that the conduct was unlawful. However, the parties jointly submit, and I accept, that the first respondent "was not aware that the Cockatoo was an endangered species, nor did [the first respondent] appreciate that the clearance of the trees was likely to have a significant impact on the Cockatoo". Consequently, I accept that the clearance was not undertaken with any specific knowledge of the Cockatoo and that there was no intent on the part of the first respondent to have a significant impact on the Cockatoo. However, it does not follow that the first respondent was unaware that the native vegetation and trees might be a significant wildlife habitat. It must have realised that clearing of native vegetation was controlled for a reason. No reason other than the protection of native vegetation because of its especial features, including the possibility of the significance of those features to some native wildlife, was put forward. Consequently, I find that it ought to have been aware that by clearing the native vegetation, such clearance might impact on various wildlife in a not insignificant way. It has made timely appropriate admissions and is jointly seeking resolution of these proceedings with the applicant. The applicant has conducted an investigation into this matter since 2005. Since the investigation commenced, the first respondent has made its representatives available for interview and given access to its properties to assist in assessing whether remediation could be undertaken to offset the damaged caused by the clearance of the trees. The respondents have made full and frank admissions and have expressed contrition for the conduct. Moreover, senior counsel for the first respondent pointed out that the admissions made by the first respondent, as recorded in the joint submissions and the agreed facts, followed a mediation between the parties. Of course, I am unaware of what occurred at the mediation. I accept, however, that the first respondent had available to it expert evidence which indicated that the impact or potential impact on the Cockatoo was not as great as that asserted by the applicant, and by the expert evidence the applicant proposed to rely upon. Consequently, I also accept, and take into account, that the co-operation of the first respondent has included acknowledging factual matters on which there was scope for considerable and genuine dispute. There should be a significant reduction from the penalty which might otherwise be imposed by reason of that cooperation. I accept that specific deterrence should not be a significant factor in the determination of the appropriate penalty in this matter because I suspect that the first respondent will not offend again. Its cooperation suggests it has learned its lesson. The applicant submits, and the first respondent accepts, that a significant penalty is nonetheless warranted to deter other landowners in a similar position, directly or by their agents, from taking action likely to have a significant impact on the Cockatoo or other endangered species. It is appropriate that the penalty be fixed in an amount which is likely to have a strong deterrent effect on the public and to demonstrate to the public and those whose business interests are conducted on land on which there is native vegetation that such conduct is seriously regarded by the community, as expressed in the legislation. The amount of a pecuniary penalty needs to demonstrate that such conduct will not be tolerated by the Court. In Greentree , a corporate entity contravened s 16(1) of the EPBC Act by taking the deliberate action of clearing, ploughing and subsequently sowing wheat that had a significant impact on the ecological character of a declared Ramsar wetland. The maximum penalties were the same under s 16(1) of the EPBC Act as apply to the present conduct. Sackville J found that the contravening conduct was deliberate, as the respondents (as a corporate entity and its director) carried out the contravening conduct when they were well aware that any unauthorised action had a significant impact on the ecological character of the Ramsar wetlands site and would constitute a contravention of the EPBC Act. The deliberate conduct was found to be more than an isolated act of the kind that might occur as the result of an impulsive error of judgment, and that it was planned conduct. The nature and extent of the contraventions of the EPBC Act suggested that substantial pecuniary penalties were warranted. The personal respondent was ordered to pay a pecuniary penalty of $150,000, and the corporate respondent was ordered to pay $300,000. The other two cases to which my attention was drawn are not so directly relevant. They relate to different offences. In Minister for the Environment and Heritage v Wilson [2004] FCA 6 ( Wilson ), the respondent set a net in the Great Australian Bight Marine Park and caught a shark, contrary to s 354(1) of the EPBC Act. The Minister and the Respondent jointly submitted that the appropriate pecuniary penalty to be imposed was $12,500 (the maximum civil penalty for an individual was $55,000). Selway J decided that level of penalty was appropriate. On the facts put by the respondent and not disputed by the applicant, the respondent knew that he was close to the border of the Park and knew there was a risk that his vessel might drift into the Park, but did not know that in fact his vessel had done so. Further, it was a first offence, was not deliberate and was the result of negligence, bordering on recklessness. In Minister for Environment and Heritage v Warne [2007] FCA 599 ( Warne ), the respondent was the skipper of a vessel which carried out commercial fishing within the boundaries of a reserve contrary to s 354(1)(a) and (f) of the EPBC Act. Whilst inside the boundaries, the vessel took a species of fish classified as a native species under the EPBC Act. The parties filed an agreed statement of facts and made joint submissions in support of a pecuniary penalty of $25,000 (the maximum civil penalty for an individual was $55,000). The parties characterised the respondent's incursions into the wildlife park as "reckless". Siopis J ordered that the respondent pay the agreed penalty. In each of those matters, the civil penalty as agreed between the parties and proposed to the Court was accepted by the Court as appropriate. In one case, that penalty was in excess of 20% of the maximum, and in the other in excess of 45% of the maximum. The parties jointly submit that the Court should consider the first respondent's conduct as more serious than the relevant conduct in Wilson and Warne , but less serious than that in Greentree . Whilst that analysis may reflect the comparative degrees of culpability, it is not clear how the comparison leads to the proposed and agreed penalty. As noted, the maximum civil penalty that may be imposed upon the first respondent for a contravention of s 18(3) of the EPBC Act is $5,500,000. The applicant no longer seeks orders as against the second respondent. The parties have agreed, and jointly submitted, that the appropriate pecuniary penalty to be imposed on the first respondent in respect of its contravention of s 18(3) of the EPBC Act, having regard to the facts and circumstances, is $110,000. The joint submissions note that the proposed penalty represents 2% of the maximum penalty which can be imposed by the Court on a corporation pursuant to s 18(3) of the EPBC Act and "reflects the parties' submission that the offending conduct is at the lower end of the scale". The submissions further note that the proposed penalty equates to approximately 20% of the maximum penalty which could be imposed upon an individual pursuant to s 18(3) of the EPBC Act. The parties jointly submit that this is relevant to the assessment of penalty in light of the second respondent's role in the conduct of the first respondent and that any penalty upon the first respondent is essentially a penalty upon the second respondent. They draw support for that contention from the decision in Greentree . I do not accept that contention. Greentree relevantly concerned charges against a company and its director where the company was effectively a "one-man" company, and the personal respondent was its sole director and sole shareholder. It is appropriate to take that fact into account in order to prevent Mr Greentree being punished, in effect, twice over: Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd (No 2) [2002] FCA 559 ; (2002) 190 ALR 169 , at 182 [45], per Finkelstein J; Australian Securities and Investments Commission v Adler [2002] NSWSC 483 ; (2002) 42 ACSR 80 , at 116-117 [131]-[132], per Santow J. On the other hand, Auen has been involved in a deliberate contravention of s 16(1) of the EPBC Act . The contravening conduct was undertaken in Auen's commercial interests. It is also necessary to bear in mind that the maximum penalties that can be imposed on a corporation are ten times larger than the penalties that can be imposed on individuals who contravene the EPBC Act . The overall pecuniary penalty should obviously be no less than if Auen, a corporation, had been the sole contravenor. On the contrary, the overall penalty should reflect the fact that Mr Greentree, as well as Auen, has contravened s 16(1) of the EPBC Act . It was about 27% of the maximum. Had Auen been the only contravenor, taking into account its status as a private company and the higher maximum penalty applicable to a contravention by a corporation, I would have imposed a penalty in the order of $400,000. Having regard to the desirability of avoiding penalising Mr Greentree twice over, I think that Auen should pay a penalty of $300,000. In my view, the total penalty of $450,000 is appropriate in the circumstances of the case. The contrary is the case. His Honour recognised that a significant penalty should be imposed on the company having regard to the higher applicable maximum. The amount he would have ordered was, however, reduced somewhat for the reasons explained in that passage. In this matter, there is no penalty to be imposed on the second respondent. It is appropriate to impose a penalty on the first respondent as a corporation, having regard to the applicable maximum. It is the sole contravenor against whom a penalty is sought. It is not appropriate to adopt the lesser maximum applicable to individuals because the second respondent, its managing director, was the person who decided upon and arranged for the clearance of the vegetation on its behalf. Of course, that is not to say its individual circumstances should not be considered. It would be appropriate to take into account in the present circumstances that any penalty imposed on the first respondent is effectively a penalty imposed on the second respondent, if the second respondent were also the subject of a pecuniary penalty, in order to avoid the second respondent being punished "twice over". Here, the applicant no longer seeks orders against the second respondent. In these proceedings, the second respondent will not personally be the subject of a pecuniary penalty. That is a factor to take into account. He went on to note that the contravening conduct was motivated by commercial considerations. It may be a relevant factor to take into account, if the first respondent undertook the land clearing for commercial reasons, that it did or did not profit by virtue of the contravening conduct. However, I do not consider that the fact that, since the contravening conduct, the property has been resold at a loss is of any especial significance. There may be many reasons for that. It is unlikely to have become less valuable because its cropping potential was increased by the contravening conduct. There is certainly no evidence on that topic. It may be that it was resold at a lower value because the market generally had fallen. It may be that the first respondent had disposed of certain water rights attaching to it. It may be (although it is unlikely) that the property was allowed to run down. Without evidence, the reason for the lower resale value of the property is simply unexplained. If the focus is on the profitability of cropping the illegally cleared land, again there is no evidence to indicate whether the particular cleared land was cropped at a profit or a loss, compared to the more generally available cropping area. It is in the public interest for the Court to make orders in litigation concerning the EPBC Act on the terms that have been agreed between parties so as to encourage parties to assist the applicant in investigations and achieve negotiated settlements. The Court has recognised that, in addition to savings in time and costs, there is a public benefit in imposing agreed pecuniary penalties where appropriate as parties would not be disposed to reach such agreements where there are unpredictable risks involved. The Court's role, as the parties accepted, is not simply to accept and adopt the position agreed between the parties. In NW Frozen Foods [1996] FCA 1134 ; (1996) 71 FCR 285 , concerning the imposition of a civil penalty under the TP Act, a single judge declined to give effect to the civil penalty proposed in the minute of consent orders and the joint submissions of the parties, and imposed a more severe penalty. Because the fixing of the quantum of a penalty cannot be an exact science, the Court, in such a case, does not ask whether it would without the aid of the parties have arrived at the precise figure they have proposed, but rather whether their proposal can be accepted as fixing an appropriate amount. When corporations acknowledge contraventions, very lengthy and complex litigation is frequently avoided, freeing the courts to deal with other matters, and investigating officers of the Australian Competition and Consumer Commission to turn to other areas of the economy that await their attention. At the same time, a negotiated resolution in the instant case may be expected to include measures designed to promote, for the future, vigorous competition in the particular market concerned. These beneficial consequences would be jeopardised if corporations were to conclude that proper settlements were clouded by unpredictable risks. A proper figure is one within the permissible range in all the circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case. The fixing of a quantum of a penalty cannot be an exact science. However, it is necessary to form a view as to whether the proposed penalty is within the permissible range. Commonly, a proposed penalty does readily fit within that range and little more need be said about it. In this instance, the maximum penalty against the first respondent is $5,500,000. A civil penalty in the amount of $110,000, in my view, is not at first impression clearly within the permissible range. It is but 2% of the maximum. Moreover, as I have indicated, in certain respects I do not consider that matters said by the parties to be relevant, and presumably taken into account by them in arriving at their suggested penalty, should be taken into account. Consequently, it is necessary to consider in greater detail than is sometimes the case the permissible range of penalties in this matter. Having reached tentative views to that effect, I invited the parties to make further oral submissions, in addition to the written joint submissions, on such matters. The matters noted above have taken into account the further submissions and the further evidentiary material adduced on behalf of the first respondent. The contravention of s 18(3) of the EPBC Act occurred soon after the first respondent acquired the property. It acquired the property for the purpose of increasing its cropping output and securing a more reliable cropping foundation overall for its business. At the time, although it operated a very substantial business, the first respondent was apparently under significant financial pressure. Those matters provide some explanation for the first respondent's conduct. Nevertheless, it consciously embarked upon the clearing of native vegetation when it knew that it was not entitled to do so. It did not appreciate the particular risk to the Cockatoo when doing so, but I consider that it must have been aware --- if it thought about the issue --- that a reason for restricting the clearance of native vegetation may have been to protect natural wildlife habitat. I proceed on the basis that it was not aware of the particular provisions of the EPBC Act, or of the penalties prescribed under that Act for conduct in contravention of s 18(3). However, it was aware of the need to obtain approval of the relevant South Australian authority to the clearing of those trees and it chose to proceed despite not having that approval. As I noted above, although the impact of the contravening conduct upon the Cockatoo and its future breeding and its survival is not quantifiable, that conduct is likely to adversely affect habitat which is critical to the survival of the Cockatoo, a proclaimed endangered species. Consequently, the conduct was both deliberately unlawful, although in ignorance of the particular offence under s 18(3) of the EPBC Act and of any particular risk to the Cockatoo, and it was significant. It was also engaged in through its managing director. There are a number of reasons why, nevertheless, the pecuniary penalty should not be in a range towards the maximum prescribed. The first respondent is not a large public corporation with a substantial prescribed capital. It is a private family company. It has not previously contravened the EPBC Act, or like legislation. Those matters point strongly towards a penalty in the lower range. I have considered whether, because of the nature and purpose of the EPBC Act, the fact that conduct contravening s 18(3) has not previously been engaged in might not be so significant as in relation to contravention of some other legislative proscriptions, even though s 481(3)(d) specifies it as a relevant matter. A first contravention of s 18(3) may have quite devastating consequences for an endangered species. I have not taken that step because, in this matter, the applicant did not contend that I should do so, and because the effect upon the Cockatoo of the contravening conduct is not shown to be of that nature. I give the first respondent full credit for the fact that its conduct was its first contravention of the EPBC Act or of similar legislation. The penalties imposed upon the respondents for contravention of the Native Vegetation Act 1991 (SA), and the potential order on the remediation application, are each said to be reasons pointing towards a lower pecuniary penalty. I am prepared to take them into account, on the basis of the joint submissions. I do not think they weigh greatly in the scales towards reducing the pecuniary penalty of the first respondent. It was fined almost 30% of the maximum penalty for its contravention of the Native Vegetation Act 1991 (SA), but the maximum is a very low one relative to that under s 18(3) of the EPBC Act. I have commented at [29] above about the remediation application. I have no information about what orders might be made or at what cost to either of the respondents. I have rejected the implicit suggestion that the pecuniary penalty should be fixed on the assumption that it really is a penalty upon an individual, so that (implicitly at least) the relevant maximum penalty is $550,000. I take into account, in the first respondent's favour, not simply its status but its financial performance over the last several years. That is generally referred to above. It was under some financial pressure at the time of the offence. Indeed, it is not trading profitably at present and its borrowings are high relative to its assets (at least at cost). Nevertheless, whilst it is clearly a family company, it is a significant one with substantial sales each year and a number of staff. Whilst I am not critical of its assets being valued at cost, it is difficult to assess the impact of a significant penalty on it. That is also the case because it is not clear the extent to which the drawings of its shareholders and "associates" are reflected somehow in its accounts, presumably through an associated entity, or the extent to which ultimately they reflect the value of any services provided to the first respondent through the associated entity. On the other hand, the first respondent is clearly not in the lowest tier of potential contravenors of s 18(3) of the EPBC Act, at least from a financial perspective. It is agreed that the jointly proposed penalty of $110,000 would not be unduly oppressive, but it does not follow that a higher penalty would be unduly oppressive to the first respondent, particularly if progressive payment of any penalty were to be ordered (as is the case in respect of the proposed penalty). I have also taken into account, for the reasons I have discussed above, the cooperation of the first respondent both in admitting the offence and in agreeing the facts presented to the Court, as well as the cooperation with the applicant from an early point in the investigation of the offence. But for that cooperation, I would have reached a penalty considerably higher than I have reached. Having regard to the matters raised by the joint submissions, and the matters I have discussed, in my view the penalty proposed by the joint submissions is not within the permissible range. The contravention was not within the least serious category of contraventions. The deliberate nature of the conduct, the indifference to its potential consequences, and its significance in relation to the endangered species, and the need for the Court to fix a penalty which will operate as a deterrent to those who might otherwise be minded to clear native vegetation contrary to s 18(3) of the EPBC Act all point to a penalty significantly greater than that suggested, even taking into account all the matters which weigh in the first respondent's favour to fix a low pecuniary penalty. In my judgment, the appropriate pecuniary penalty is $220,000. That is, having regard to the first respondent's cooperation throughout, the bottom of what I regard to be the permissible range. It is only 4% of the maximum penalty. I order that the first respondent pay to the Commonwealth of Australia a pecuniary penalty of $220,000. As the parties have previously agreed upon a timetable for the payment of the proposed agreed penalty, I will give them the opportunity to reach agreement upon a timetable for the payment of that penalty, and to submit consent minutes on that topic. In the event that there is no agreement, I give liberty to either party to apply for any orders as to the period by which that pecuniary penalty is to be paid or as to the rate at which it is to be paid. As agreed, I order that the first respondent pay to the applicant the costs of the application fixed at $22,500. I certify that the preceding eighty (80) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. | civil penalties contravention of s 18(3) of the environment protection and biodiversity conservation act 1999 (cth) by taking an action that had a significant impact on an endangered species proposed penalties agreed between parties criteria to be taken into account when determining penalty determination that agreed pecuniary penalty not within range of appropriate penalty environment |
It seeks security in the sum of nearly $129,000. 2 The motion is supported by affidavits sworn by Rosaline Lee Cheng Tan on 27 February and 20 March 2008. 3 An order for security for costs may be made under s 56 of the Federal Court of Australia Act 1976 (Cth) ("the Act "). The section confers a "broad power" upon the Court: James v Australia & New Zealand Banking Group Ltd (No 1) (1985) 9 FCR 442 at 444 per Toohey J. The discretion is unfettered. Rules of Court in relation to matters of practice and procedure cannot operate so as to limit the wide powers conferred by s 56 itself: Energy Drilling Inc v Petroz NL (1989) ATPR |P40-954. 4 In particular, although Order 28 rule 3 of the Federal Court Rules 1976 (Cth) ("the 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 of the Act : Bell Wholesale Co Ltd v Gates Export Corp (No 2) (1984) 2 FCR 1 at 3. 6 In KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 at 197-198 Beazley J set out some relevant considerations. (b) That regard is to be had to the strength and bona fides of the applicant's case. (c) Whether the applicant's impecuniosity was caused by the respondent's conduct subject of the claim. (d) Whether the respondent's application for security is oppressive. (e) 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. (f) Whether persons standing behind the company have offered any personal undertaking to be liable for the costs. (g) Is the party against whom security is sought in substance a plaintiff. Indeed, for many years the practice has been to order such a party to provide security for costs unless that party can point to other circumstances which overcome the weight of the circumstance that that person is resident out of and has no assets within the jurisdiction. 8 This "well-established" principle was cited by Besanko J in Cheng XI Shipyard v The Ship "Falcon Trident" [2006] FCA 759 at [9] . In that case, Besanko J ordered that security be given. His Honour concluded that although the applicant had a strong claim that it would obtain a judgment in its favour, this was not sufficient to outweigh the fact that the applicant was not resident in the jurisdiction and had no assets in the jurisdiction. I am satisfied that this concession was soundly based in the evidence before me. On the other hand, the mere circumstance that an applicant is resident outside the jurisdiction does not necessarily invite an exercise of discretion in favour of ordering security, the question being how justice will best be served in the particular case: Barton v Minister for Foreign Affairs [1984] FCA 89 ; (1984) 2 FCR 463 ; CBS Records Australia Ltd v Telmak Teleproducts (Aust) Pty Ltd (1987) 72 ALR 270 at 284-285. 12 A person who is ordinarily resident outside of the jurisdiction but who has real or personal property inside the jurisdiction may avoid an order to give security for costs. The property must, however, be available to meet an order for costs. The principle question informing the exercise of my discretion is, accordingly, whether the applicants have property available to meet an order for costs. Assets within the jurisdiction? This submission picks up the language of Gummow J in Energy Drilling to which I have referred. 14 The first and second applicants together own 25 shares in the first respondent ("Awap"), whose sole business concerns the ownership and leasing of 'International House', a building on St Georges Terrace, Perth. On the applicants' case, the first and second applicants own half of the issued shares in Awap. On the respondents' case, they own one third. 15 International House was recently valued at $50 million dollars. It has associated debt of approximately $28 million and generates a net rental income of $3.28 million per annum. Awap's interest payments on its borrowings amount to approximately $2.47 million per year and it currently holds $688,000 on deposit with the Bendigo Bank. The applicants submit that Awap has substantial cash flow and a favourable debt to equity ratio. 16 Awap, accordingly, generates more than $800,000 in gross profit. The lease which produces this profit does not expire for at least 7 years and there is no reason, therefore, why it should not continue to generate profits of this order on an annual basis. The first and second applicants hold shares in a company that could comfortably issue a dividend to its shareholders in excess of $400,000 based on a single year's profits. 17 In the event that the applicants are unsuccessful in these proceedings, the second, third and possibly the fourth respondents will control the board of directors of Awap. If the applicants do not pay a costs order against them (estimated by the respondents to be of the order of $130,000), the relevant respondents can cause Awap to declare and pay a dividend to its shareholders such that the first and second applicants' share of that dividend would be sufficient to cover any costs order. On the respondents' case regarding the first and second applicants' shareholding, a dividend of $390,000 would cover the estimated costs. On the applicants case, a dividend of around $260,000 would be sufficient. 18 Once the dividend has been declared, it is a debt owed to the first and second applicants by Awap and is therefore an "available debt" as that term is defined in s 46 of the Civil Judgment Enforcement Act 2004 (WA) ("CJE Act"), which can be appropriated for the purposes of enforcement under s 49 of the CJE Act. Pursuant to s 49(2) of the CJE Act, the Court may make an order that the dividend issued to the first and second applicants be paid to the respondents to satisfy the costs order. 19 However, the respondents submit and I accept, that the first and second applicants, as shareholders in Awap, have no entitlement to be paid dividends from Awap's profits. Pursuant to Articles 123 and 126 of AWAP's Articles of Association, its directors have a discretion as to whether dividends are declared. It cannot be presumed that dividends in a sufficient amount, or at all, will be declared. Awap, by its directors, may determine to employ its profits in its present and or other business activities. I do not regard the mere possibility that the first and second applicants will be the beneficiaries of dividends as amounting to them presently having assets within the jurisdiction. 20 The respondents do not have other realisable assets in Australia which would be available to satisfy an order to pay the respondents' costs. The respondents have conducted relevant searches which have disclosed that none of the applicants is the registered proprietor of any real property in Western Australia. It is not suggested however, that the personal applicants are impecunious. In Barton (at 468) Morling J said that "the court has a discretion to refuse to make an order for security for the payment of costs even if an applicant is ordinarily resident outside Australia". His Honour considered that the historical basis for an order for security for costs did not apply because if the defendant were successful it could rely on the UK legislation, ( Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK) s 2) which allowed for the enforcement of Australian judgments, upon registration. On that basis, security for costs was ordered but limited to the sum of $2,000, being an estimate of the cost of registering the judgment, in the UK, for enforcement. 22 The applicants submit that these proceedings are similar to Barton in that an Australian judgment, upon registration in Singapore, can be enforced there pursuant to the Reciprocal Enforcement of Commonwealth Judgments Act (Chapter 265) (1921) (Sing.). Further, there would be even less inconvenience for the Respondents than in Barton , since the third respondent (who is a director of the other respondents) is also a Singapore resident and the respondents retain Singapore lawyers to instruct Australian lawyers in this proceeding and for other purposes. 24 Regulation 3 and the Schedule to the Foreign Judgments Regulations 1992 (Cth) provide that the Republic of Singapore is a country to which Part 2 of the Act is extended. Regulation 4 and the Schedule provide that the Supreme Court of Singapore (consisting of the Court of Appeal and the High Court) is a superior court for the purpose of the Foreign Judgments Act . 25 In Farmitalia Carlo Erba Srl v Delta West Pty Ltd [1994] FCA 950 ; (1994) 28 IPR 336 at p 342, Heerey J having first considered Barton stated that merely showing, without more, that the relevant party was ordinarily resident in one of the countries listed in the Foreign Judgments Regulations was insufficient to meet the prima facie case established for the application of Order 28 rule 3(1)(a). To conclude otherwise, his Honour observed, would amount to treating the Foreign Judgments Act or the Foreign Judgments Regulations as an amendment sub silentio of Order 28 rule 3(1)(a) of the Rules. In that case there was no evidence that the applicant had assets available in Italy or in some other country or countries or, if it did, that an Australian judgment would be enforceable in such other country or countries. Such is the position here should, in due course, any judgment for costs against the applicants be registered in Singapore or elsewhere. There is no evidence that the applicants have any assets in Singapore or elsewhere amenable to execution upon an Australian judgment which, in due course, might be registered there. Weinberg J referred to Farmitalia with apparent approval in Logue v Hansen Technologies [2003] FCA 81 ; (2003) 125 FCR 590 at [40] . I, also, respectfully agree with the view expressed by Heerey J. 26 These findings are sufficient to dispose of the application in favour of the respondents and it is not necessary accordingly to deal with the other grounds relied upon, in argument, by them. The applicants have not identified any circumstances to overcome the weight of their concession that they are ordinarily resident outside the jurisdiction allied with my finding that they have no assets within the jurisdiction: P.S. Chellaram at p 323. 28 The second, third and fourth respondents' estimated party and party professional costs and outlays up to the provision of discovery by each of the parties, are contained in a draft bill annexed to Ms Tan's affidavit sworn 20 March 2008. The draft bill estimates that those costs will be in the vicinity of $128,870.60. This is the kind of evidence contemplated in Soh v Commonwealth (2006) ALR 425 at [30]. 29 This estimate was not called into question by the applicants. Nonetheless the matter is of a discretionary nature. In Farmitalia at p 345-346 Heerey J identified a non-exhaustive list of relevant considerations. I have in the course of these reasons traversed some of these. 30 The consideration that the case might settle without coming to trial is largely met by the fact that security is presently sought only to the discovery stage. Some of the costs referred to concern the cross-claim. The estimated costs therefore are not entirely defensive in character. Furthermore, a taxing officer might award less than is asked. For these reasons I would apply a discount. Security should be ordered in the amount of $115,000. The proceeding should be stayed until such security is provided. Security should be by way of an Australia Bank guarantee or bond, to be provided within 28 days, in a form acceptable to the respondents or fixed by the Court, for the costs of and incidental to this proceeding up to the provision of discovery including inspection. There will be liberty to apply. The applicants should pay the respondents' costs of the application. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | security for costs discretion of court if applicant ordinarily resident outside australia no evidence of any assets within the jurisdiction no evidence of assets in foreign jurisdiction where judgment may be registered in future federal court of australia act 1976 (cth) s 56 federal court rules 1976 (cth) o 28 r 3. practice and procedure |
Section 170(10AA), in conjunction with s 170(1), confers power on the respondent, the Commissioner of Taxation ( the Commissioner ), to amend a notice of assessment in circumstances, relevantly, where disposal of an asset pursuant to a contract for sale is deemed to have occurred when the contract was made rather than when the actual disposal occurred. The question is relevant to a notice of amended assessment issued by the Commissioner to the applicant, Metlife Insurance Ltd ( the Taxpayer ), in respect of a liability for capital gains tax. The notice of amended assessment was issued after the actual disposal of the relevant asset. 2 By consent, the Court made an order on 14 December 2007, pursuant to Order 29 Rule 2(a) of the Federal Court Rules , that the question of construction be decided separately from, and in advance of, the hearing of all other issues in the proceeding. The Taxpayer and the Commissioner have agreed on the facts that are relevant to the question. Before stating the question and the agreed facts, I shall describe the relevant statutory framework. In the light of the contentions of the Taxpayer, I shall also say something about the legislative history of some of the relevant provisions. 4 Section 204(1A) of the 1936 Act provided that the tax payable by a full self-assessment taxpayer for a year of income becomes due and payable on 1 December of the following year of income, unless the taxpayer's year of income ends on a day other than 30 June. In that case, the tax becomes due and payable on 1 June of the following year of income. Section 18(1) provided that any person may, with the leave of the Commissioner, adopt an accounting period consisting of the 12 months ending on some date other than 30 June. Under s 6(1) of the 1936 Act, year of income , in relation to a company, means the financial year next preceding the year of tax, or the accounting period, if any, adopted in lieu of that financial year. Year of tax means the financial year for which income tax is levied. 5 At the relevant time, liability for capital gains tax in a year of income depended upon the happening of a CGT Event, as defined in the Income Tax Assessment Act 1997 (Cth) ( the 1997 Act ), in that year of income. Section 104-10(1) of the 1997 Act provides that CGT Event A1 happens if a taxpayer disposes of a CGT asset. Under s 104-10(2), a taxpayer disposes of a CGT asset if a change of ownership occurs from that taxpayer to another entity, whether because of some act or event or by operation of law. Under s 104-10(3), the time of the CGT Event is when that taxpayer enters into the contract for the disposal, unless there is no contract, in which case, the CGT Event is when the change of ownership occurs. By the operation of s 104-10(4), a taxpayer makes a capital gain if the capital proceeds from the disposal are more than the asset's cost base. 6 Section 170(1) provided, at the relevant time, that the Commissioner may, subject to the other provisions of s 170, amend any assessment at any time by making such alterations therein or additions thereto as he thinks necessary, notwithstanding that tax may have been paid in respect of the assessment. • During a tax audit, the Commissioner could seek an extension of the four year period from the taxpayer or the Court. • Where the taxpayer had engaged in various tax avoidance schemes, the period was extended to six years. • Where the Commissioner is of the opinion that the taxpayer is guilty of fraud or evasion, an amendment to prevent resultant avoidance could be made at any time. • An amendment could be made at any time to give effect to the result of an appeal. 7 However, s 170(10AA) relevantly provided that nothing in s 170 prevents the amendment, at any time, of an assessment for the purposes of giving effect to any of the provisions of the 1997 Act set out in the Table to s 170(10AA) ( the Table ). Item 30 in the Table contains s 104-10(3), as well as ss 104-10(6), 104-25(2), 104-45(2), 104-90(2), 104-110(2), 104-205(2), 104-225(5) and 104-230(5) of the 1997 Act. Each of the provisions in Item 30 provides that when a taxpayer enters into a contract having a specified effect, the time of a relevant CGT Event is when the taxpayer enters into the contract that has that effect. Each of the provisions provides that, if there is no contract, the time of the relevant CGT Event is specified by reference to some other juridical act. 8 Section 170(10AA) was amended to read as it did in connection with rewriting of the capital gains tax provisions. The capital gains tax provisions were removed from the 1936 Act and the rewritten provisions were enacted in the 1997 Act. The Taxpayer contends that the construction of s 170(10AA) is informed by provisions relating to that rewriting. However, it is desirable at this stage to say something about the provisions that were replaced. 9 Section 160Z(1)(a) of the 1936 Act relevantly provided that, where an asset has been disposed of by a taxpayer during a year of income, if the consideration in respect of the disposal exceeds the indexed cost base to that taxpayer in respect of the asset, a capital gain equal to the excess shall be deemed to have accrued to the taxpayer during that year of income and to have so accrued at the time of the disposal . However, under s 160U(3), where the asset was disposed of under a contract, the time of disposal was to be taken to have been the time of the making of the contract. Section 160U(10) then provided that s 170 does not prevent the amendment of an assessment at any time to give effect to s 160U(3), where the time of disposal is taken to have been before the making of the assessment . Thus, s 104-10(3) of the 1997 Act took the place of s 160U(3) of the 1936 Act and s 170(10AA) replaced s 160U(10). However, both those latter provisions are located in the 1936 Act. 10 Section 160U(10) was inserted by s 51 of the Taxation Laws Amendment Act (No 2) 1994 (Cth) ( the 1994 Act ). The object of that amendment was said, by s 50 of the 1994 Act, to be to amend the 1936 Act to ensure that amended assessments may be made at any time to give effect to various capital gains tax provisions. Paragraph 13.2 of the Explanatory Memorandum promulgated in connection with the Bill for the 1994 Act said that the purpose of the amendments is to ensure that the time limits imposed by s 170 of the 1936 Act for the making of amended assessments did not prevent necessary amendments for capital gains tax purposes. Paragraph 13.5 then explained that s 160U(3) provides that, if an asset was disposed of under a contract, the time of disposal is to be taken to have been the time of the making of the contract. The paragraph said that, in some cases, there is no change in ownership under a contract until the time at which the contract is completed. Paragraph 13.7 then stated that, at present, the time limits imposed by s 170 could prevent necessary amended assessments to give effect to s 160U(3). It also said that the proposed amendments will correct that situation. Paragraph 13.12 then said that the 1994 Act will ensure that s 170 does not prevent the amendment of an assessment if, after the assessment was made, a disposal is taken, under s 160U(3), to have happened before the assessment . 11 In the course of the consideration of the Bill for the 1994 Act by the Senate, the relevant Minister was asked a series of questions on notice and his answers to the questions were incorporated in Hansard. The Minister indicated that the questions went to issues of interpretation and that the answers were provided, in so far as remarks by the Government in debate can be adduced under the Acts Interpretation Act 1901 (Cth) as evidence of what a Bill was meant to mean, for that purpose. 12 One of the questions on notice referred to the provision of the Bill that was to insert s 160U(10) and asserted that the Commissioner seemed to have been given unrestricted time limits for issuing amended assessments in all cases. The question asked whether the Government intended to create that situation. The response was that the proposed provision did not give the Commissioner unrestricted time limits for issuing amended assessments in respect of capital gains, even where there had been no delay between the contract date and the disposal date. The response said that the scope of s 160U(10) was limited by the important words ' to give effect to ', which meant that the Commissioner may only amend an assessment for the purpose of making s 160U(3) effective. The response asserted that that view was reinforced by the commentary in the explanatory memorandum. Before 1 January 2000, the Taxpayer, pursuant to s 18 of the 1936 Act and with the leave of the Commissioner, adopted an accounting period ending 31 December in lieu of 30 June. Accordingly, the accounting period of the Taxpayer for the year ended 30 June 2001 was the 12 month period that ended on 31 December 2000 ( the 2001 Year of Income ). The Taxpayer was a full self assessment taxpayer, within the meaning of s 166A(3) of the 1936 Act, in respect of the 2001 Year of Income. 14 From before 1 January 2000, the Taxpayer was carrying on a life insurance business in Taiwan ( the Business ). On 19 July 2000, the Taxpayer and Fubon Life Assurance Co Limited ( Fubon ) entered into a Transfer of Business Agreement. By the Transfer of Business Agreement, the Taxpayer agreed to sell the Business to Fubon. Settlement of the sale occurred during January 2001. In the Return, the Taxpayer disclosed that the capital proceeds from the sale of the Business were as indicated above. The Taxpayer showed its taxable income in the Return on the basis that, on the sale of the Business, it derived a taxable capital gain of $ 28,869,482. • But for the operation of s 104-10(3), the time of the disposal of the Business, within the meaning of s 104-10(2) of the 1997 Act, would be January 2001, when the disposal actually occurred. 17 On 15 July 2005, the Commissioner issued to the Taxpayer a notice of amended assessment for the 2001 Year of Income. By that notice, the Taxpayer's assessable income was increased by including, as assessable income, the capital gain attributable to the disposal of policy rights of the Business, in the sum of $ 12,491,602. The question that has been posed for separate determination is whether the amendment of the Taxpayer's deemed notice of assessment of 16 July 2001, by the notice of amended assessment issued on 15 July 2005, was an amendment made, within the meaning of s 170(10AA) of the 1936 Act, for the purpose of giving effect to s 104-10(3) of the 1997 Act. 19 The Taxpayer contends that the power to amend an assessment conferred by s 170(10AA), to give effect to the provisions listed in the Table, is triggered only if a subsequent event occurs after the original assessment is made, so necessitating its amendment. The Commissioner, on the other hand, contends that the amendment power may be exercised regardless of whether the subsequent event occurs before or after the making of the assessment sought to be amended, so long as it occurs after the end of the relevant year of income. Thus, the Taxpayer says, the power to amend at any time conferred by s 170(10AA), is triggered only if the subsequent event occurs after the original assessment is made or is deemed to be made, so necessitating the amendment of the original assessment. The Taxpayer contends that in a provision that concerns the amendment of assessments, a power that arises from the occurrence of subsequent events is naturally to be read as one that arises from events subsequent to the assessment to be amended. The Taxpayer says that s 170(10AA) assumes, as a premise, that there is an antecedent assessment and that it is that assessment that is the event by reference to which all the time limits in the section are fixed. 21 The Taxpayer argues that, if an event that retrospectively alters the incidence of tax in a year of income occurs before the making of an assessment, that event is part of the matrix of facts upon the basis of which a subsequent assessment is made. If that assessment erroneously deals with that event, the amendment power is subject to the time limits for amendment described above. It is only if the relevant event occurs after the original assessment has been made, so that it could not have been taken into account in the making of that assessment, that the unlimited power in s 170(10AA) is attracted. Since a retrospective alteration in circumstances could occur at any time and, in particular, could occur outside the ordinary amendment period, so too the requisite amendment should be permitted to be made at any time. 22 The Taxpayer says that, if s 170(10AA) were construed otherwise, it would have a scope that is inconsistent with the scheme of amendment powers described above. Section 170(10AA) is not directed to tax avoidance or evasion by fraud or tax schemes but only to giving effect to certain provisions, including but not limited to capital gains tax provisions, by authorising amendment to assessments in accordance with alterations in tax liabilities arising from subsequent events. The Taxpayer says that a construction that would confer on the Commissioner an amendment power greater than that given in the case of participation in tax avoidance schemes and equivalent to that given in the case of tax evasion by fraud should be rejected. 23 The Taxpayer attaches significance to the phrase ' where the time of disposal is taken to have been before the making of the assessment ' in s 160U(10), which the Taxpayer says was subsumed in s 170(10AA), and contends that the legislative intention was to draw a distinction between the case where settlement of a contract for a disposition takes place before the date of an assessment or deemed assessment, on the one hand, and the case where settlement occurs after the date of an assessment or deemed assessment, on the other. The Taxpayer says that it is only in the first case that the Commissioner could exercise the power to amend at any time. In the second case, the power would have to be exercised within the four year period; the present proceeding is an instance of the second case. 24 The Taxpayer contends that the common thread running through the provisions in the Table is the potential for those provisions to operate by reason of facts that occur after the original assessment is made or deemed to be made, thus making that original assessment wrong, ex post facto , by operation of law, not because of a mistake in treatment of facts existing at the time of the original assessment. Because such facts might occur at any time, the Commissioner can amend the original assessment if and only if he is giving effect to provisions that did not operate on the facts as they existed at the time of the original assessment. 25 The Taxpayer asserts that, in each case referred to in the Table, the question of whether there is a liability to tax and the question as to the amount of any such liability turn on whether there is an event that occurs after the original assessment is made or deemed to have been made. The Taxpayer draws attention to a number of the Items in the Table in that regard. 26 Item 1 in the Table refers to Sub-Division 20-B of the 1997 Act, which reverses the effect of deductions for lease payments for a car leased to a taxpayer, if the taxpayer makes a profit by disposing of the car after acquiring it from the lessor. Item 1 must be considered in conjunction with Items 10 and 210. Item 10 refers to Division 28, which deals with car expenses, and Item 210 refers to Division 900, which is concerned with substantiation. Division 900 makes the retention of records for a period of five years a requirement for deductibility under certain provisions, including Division 28. 27 Accordingly, if a taxpayer has not in fact retained records for the requisite period, which is longer than the four year amendment period, Division 28 or Division 900 can operate to deny the taxpayer a deduction that was allowed, more than four years earlier under an original assessment. Since the operation of Sub Division 20-B depends on deductibility of lease payments under Division 28, the profit on disposal of a car will not be assessable under Sub Division 20-B if the lease payments are not deductible under Division 28 because of the failure to retain records for five years. In amending the original assessment, the Commissioner will be doing so on the basis of the new fact that has arisen, thus giving effect to the provisions, the operation of which has changed from the time of the original assessment because of the new facts, namely, failure to keep records for five years. 28 Item 5 refers to s 26-25(3), which provides that a taxpayer cannot deduct interest or a royalty if the Taxation Administration Act 1953 (Cth) requires the taxpayer to withhold an amount from the interest or royalty and the taxpayer fails to withhold that amount. If, apart from that provision, a taxpayer can deduct interest or a royalty for an income year, and the withholding tax payable for the interest or royalty is paid, the taxpayer can deduct the interest or royalty for that income year. At the time of an original assessment, no withholding tax might have been paid. Accordingly, the deduction is not allowed. It might be more than four years later that the withholding tax is paid. There is potential for a new fact to arise that alters the operation of the provision as it operated under the original assessment. 29 Item 20 refers to s 42-290, under which a taxpayer may exclude an amount that has been included in the taxpayer's assessable income for plant as a result of a balancing adjustment calculation, to the extent that the taxpayer chooses to treat that amount as an amount deducted for depreciation of replacement plant. The taxpayer can only make that choice for the replacement plant if the taxpayer acquires it within two income years after the end of the income year in which the balancing adjustment occurred. Thus, Item 20 refers to a concession to a taxpayer that is dependent on a condition subsequent. The taxpayer is entitled to choose that a balancing adjustment not be treated as assessable income if it is treated as depreciation for replacement plant. However, the taxpayer must acquire the replacement plant within two income years after the year of income and if he does not the liability to tax in the income year increases. Thus, a new fact arising after the original assessment, namely, non-acquisition of replacement plant, will change the tax liability for that year of income. 30 Each of Items 40, 130 and 140, which refer to ss 104- 15 (4)(a), 126- 5 (3) and 126-45(3) respectively, is concerned with CGT Event B1. Under s 104- 15 , CGT Event B1 happens if a taxpayer enters into an agreement with another entity under which the right to the use and enjoyment of a CGT asset owned by the taxpayer passes to another entity and the title to the asset will or may pass to the other entity at or before the end of the agreement. The time of the CGT Event is when the other entity first obtains the use and enjoyment of the asset. However, s 104- 15 (4)(a) provides that a capital gain or capital loss made by the taxpayer is to be disregarded if title in the asset does not pass to the other entity at or before the end of the agreement. Under s 126- 5 (3), there is a rollover if a CGT Event happens involving an individual and his or her spouse as the consequences of certain marital property orders. However, there is no rollover if, for CGT Event B1, title in the CGT asset does not pass to the transferee at or before the end of the agreement. Under s 126-45(3), there may be a rollover if a CGT Event happens involving a company and another company in circumstances set out in s 126-50. However, there is no rollover for CGT Event B1 if title in the CGT asset does not pass to the transferee at or before the end of the agreement. Thus, a new fact arising after the original assessment, such as cancellation of the agreement, will change the tax liability for a particular year. 31 Item 50 refers to s 104-40(5). CGT Event D2 happens if a taxpayer grants an option to an entity. The time of the event is when the taxpayer grants the option. However, a capital gain or capital loss made from the grant is disregarded if the option is exercised. Thus, a new fact arising after then original assessment, being exercise of the option, may change the tax liability for the relevant year. 32 Item 60, which refers to s 108- 15 , and Item 70, which refers to s 108-25, are similar. Under s 108- 15 , if a taxpayer owns collectibles that are a set that would ordinarily be disposed of as a set and the taxpayer disposes of them in one or more transactions for the purpose of trying to obtain an exemption under s 118- 10 , the set of collectibles is taken to be a single collectible and each of the taxpayer's disposals is a disposal of part of that collectible. Under s 104-25, if a taxpayer owns personal use assets that are a set, which would ordinarily be disposed of as a set, and the taxpayer disposes of them in one or more transactions for the purposes of trying to obtain an exemption under s 118- 10 , the set of personal use assets is taken to be a single personal use asset and each of the taxpayer's disposals is a disposal of part of that asset. Thus, a new fact arising after the original assessment, being the further transactions, may change the tax liability for that year; that new fact could occur more than four years later. The Taxpayer says that the unlimited time to amend is required, not because these are anti-avoidance provisions, but because a fact subsequent to the facts existing under the original assessment must occur for the provision to operate for the year of income. 33 Item 80 refers to s 116-45, under which the capital proceeds from a CGT Event are reduced if the relevant taxpayer is not likely to receive some or all of the proceeds and that is not because of anything the taxpayer has done or omitted to do and the taxpayer took all reasonable steps to get the unpaid amount paid. The capital proceeds are reduced by the unpaid amount. Thus, a taxpayer is assessed on the capital proceeds from CGT Events, including amounts that the taxpayer receives or is entitled to receive. However, if it later transpires that the taxpayer is unlikely to receive some or all of the amounts, the amount of the capital proceeds from the CGT Event is reduced. Thus, a new fact arising after the original assessment, namely, non-receipt of proceeds, will change the tax liability for the earlier year. Similarly, if the proceeds are reduced by the unpaid amount but the taxpayer later receives a part of that amount, the capital proceeds from the CGT Event are increased by that part. 34 Item 90 refers to s 116-50, under which the capital proceeds from a CGT Event are reduced by any part of them that the taxpayer repays or any compensation that the taxpayer pays that can reasonably be regarded as a repayment of part of the proceeds. However, the capital proceeds are not reduced by any part of the payment that the taxpayer can deduct. The provisions referred to in Item 90 contemplate that a taxpayer might be obliged to repay amounts received as capital proceeds from a CGT Event. Thus, a new fact arising after the original assessment, namely, repayment of part of the capital proceeds will change the tax liability for an earlier year. 35 Items 100, 110 and 150 deal with provisions, ss 122-25(4), 122-135(4) and 126-50(3) respectively, providing for a CGT rollover on the disposal of assets. A condition for choosing such a rollover is that a rolled over option may not be exercised to acquire an asset that becomes trading stock upon acquisition. Such an exercise of the option has the result that the rollover was not available in the year of income. There would therefore be a tax liability for the disposal of the assets in that year. Thus, a new fact arising after the original assessment, being acquisition of trading stock, will change the tax liability for the earlier year. 36 Item 120 deals with Sub-Division 124-B, which provides a rollover for a CGT Event that depends on a taxpayer's buying a replacement asset within one year. If the taxpayer does not do so, that new fact changes the tax liability under the original assessment. The rollover was not available in the year of income and there would be a tax liability for the disposal of the asset in that year. Again, a new fact arising after the original assessment, being non acquisition of a replacement asset, will change the tax liability for the earlier year. 37 Item 160 deals with s 126-70, which provided that wholly owned companies could choose not to rollover a CGT loss made on the transfer of a CGT asset between them, if a particular intention was held. Section 126-170 denied that choice and disallowed that loss if the intention was not subsequently realised or if certain other circumstances arose within a four year period after the intention was realised. Once again, a new fact arising after the original assessment, being non realisation of the relevant intention, changes the tax liability for the earlier year of income. 38 Item 170 deals with s 165-115ZA(2), which sets out tax consequences for an entity that has an interest in a loss company at a certain time. If at the same time, or at a later time, s 245- 10 of Sch 2C to the 1936 Act applies in respect of a debt to which s 165-115ZA applied, s 165-115ZA is taken not to have been applicable. Once again, a new fact arising after the original assessment may change the tax liability for the earlier year. 39 The Taxpayer also argued that, if the construction contended for by the Commissioner were correct, an unlimited power of amendment would be conferred when any of the CGT Events listed in Item 30 occurred and there was a back-dating altering the occurrence or the amount of a capital gain or loss. The Taxpayer says, on the Commissioner's construction, it would be unnecessary to make provision for the situation where some part of the capital proceeds was not received or was repaid; the provisions in Items 80 and 90 expressly contemplated an unlimited power to amend in respect of backdated CGT Events, but those provisions would be otiose. The Commissioner's response is that, so far as Item 80 is concerned, capital proceeds may be agreed to be paid over a number of years. However, unknown to the seller of an item, the buyer might in a later year, because of bankruptcy or some similar event, occurring prior to an assessment in respect of the first year, be unable to pay. That is to say, the context of the provision being interpreted must be considered. It is appropriate to consider the context in the first instance, and not merely at some later stage, when ambiguity might be thought to arise. The context includes such things as the existing state of the law and the mischief that one may discern that the statute was intended to remedy. Thus, if apparently plain words of a provision are read in the light of the mischief that the statute was designed to overcome and of the objects of the legislation, they may be seen to have quite a different meaning (see CIC Insurance Limited v Bankstown Football Club Limited [1997] HCA 2 ; (1997) 187 CLR 384 at 408). 41 On the other hand, the task of construing a statute involves the determination of the meaning of the words used by the Parliament. While the meaning of words may be affected by the context and the object of the statute, the words are to be given their ordinary English meaning in the light of the relevant context. Where the provisions of a statute are repealed and re-enacted in a different context, the words must ordinarily be construed in that new context. 42 The question of construction that arises in relation to the operation of s 170(10AA) in the present case concerns the way in which the disputed amended assessment is for ' the purpose of giving effect to ' s 104-10(3). The effect of s 104-10(3) is that a disposition that takes place on settlement of a contract for sale is deemed to have occurred at the time when the contract for sale was entered into, rather than at the time of settlement, when there would be a change of ownership, as a matter of law. In the present context, CGT Event A1 happened in relation to the disposal of the Business by the Taxpayer when the Taxpayer entered into the Transfer of Business Agreement. It is the happening of that CGT Event that gave rise to a capital gain. An amendment to take account of the fact that a CGT Event is deemed by the operation of s 104-10(3) to have occurred at a time prior to the time when, by operation of law, that CGT Event would otherwise occur, is an amendment to give effect to that deeming. Thus, it is necessary to amend the assessment for the year of income when the disposal is deemed to have occurred, notwithstanding that the disposition may actually have occurred, as a matter of law, during a different year of income. 43 The construction contended for by the Taxpayer would allow an unlimited power to amend only in circumstances where the lodgement of a return, giving rise to a deemed assessment, occurred prior to the settlement of the contract for the disposal of an asset. The Taxpayer's contention would therefore give rise to the anomaly that the time of the lodgement of a return, in the case of a full self-assessment taxpayer such as the Taxpayer, relative to the settlement of a disposition, would be determinative of the extent of the Commissioner's amendment power. If the return happened to be lodged prior to the date of settlement, there would be an unlimited power to amend. On the other hand, if the return were lodged after the date of settlement of the contract for the disposition, the Commissioner's power would be limited to the period of four years. There is no rationale for such a distinction. 44 Section 170(10AA) constitutes a departure from the scheme of s 170 described above, in so far as it authorises an amendment at any time , even in the absence of fraud or evasion on the part of a taxpayer. There is something to be said for the proposition that, where an assessment is made or deemed to be made after the subsequent event that might give rise to a change in the incidence of tax, the Commissioner's powers to amend should be limited, in accordance with the scheme described above, to a period of four years, in the absence of fraud or participation in a tax evasion scheme. However, the language of s 170(10AA) must be construed in its present context. Section 170(10AA) relates to all of the provisions set out in the Table. It may be that there is a common thread running through those provisions in the way described above. Nevertheless, it would have been open to the Parliament to enact a provision which made clear that the unlimited power of amendment applied only in relation to an event subsequent to the end of the year of income that occurred after the original assessment or deemed assessment. The Parliament did not do so. 45 There is no rationale for saying that the Commissioner's power to amend in order to give effect to the deeming, provided for in s 104-10(3) and other provisions referred to in the Table, should depend upon when a tax return, giving rise to a deemed assessment, is lodged by a taxpayer. Section 170(10AA) states unequivocally that the Commissioner may amend at any time to give effect to any of the provisions referred to in the Table. The anomaly, if there is one, is that the Parliament gave such an unlimited power to the Commissioner. It may have been possible, for example, to say that the Commissioner could amend during the period of four years after any subsequent event that is referred to in the provisions in the Table. Rather, however, the Parliament provided that, in order to give effect to any of those provisions, the Commissioner could amend at any time. I consider that the phrase must be given its clear and unequivocal meaning, despite the legislative history of s 170(10AA). 46 It may be that s 170(10AA) is intended to express the same idea as is expressed in s 160U(10). However, it expresses additional ideas as well and its language must be construed in the full context in which it appears. While s 160U(10) provided for a power to amend where "the time of an acquisition or disposal is taken to have been before the making of the assessment", s 170(10AA) provides for a power to amend to give effect to s 104-10(3) and other sections. Section 170(10AA) clearly operates in more circumstances than the circumstances in which s 160U(10) operated. 47 In any event, it is by no means clear that the words "this Act" in s 1-3 should be read to include the 1936 Act. The definitions in s 995-1(1) are said to operate except so far as the contrary intention appears . Section 1-3 intends to draw a distinction between this Act and the 1936 Act, which is referred to as that Act in s 1-3(2)(a). That intention is contrary to the inclusive definition in s 995-1. That conclusion is buttressed by a contextual reading of s 1-3: although the definition in s 995-1 is designed to facilitate a broad intention that the 1936 Act and the 1997 Act be read together as a single scheme of income taxation legislation, s 1-3 has a more specific operation to facilitate the progressive rewriting and reincorporation of the provisions of the 1936 Act into the 1997 Act. Accordingly, s 170(10AA) is unaffected by s 1-3 and should be given its plain meaning. The question posed for the Court should therefore be answered in the affirmative. The Taxpayer should pay the Commissioner's costs of the determination of that question. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. | income taxation amended assessments commissioner's power to amend 'at any time' full self-assessment taxpayer giving effect to cgt event timing provision time of contract taken to be time of disposal amendments to the income tax assessment act 1936 whether replaced provision relevant to the interpretation or replacing provision whether implied limitation on the commissioner's power to amend taxation |
His Honour granted interlocutory injunctive relief restraining the applicant for leave to appeal, C & S Systems Pty Ltd, trading as IPS (IPS), from representing that it is authorised to respond to callouts made to customers of the respondent to this application, Custom Security Services (CSS). The terms of the injunction were set out in order 1 made by the Federal Magistrate. 2 His Honour granted additional injunctive relief in orders 2 and 3. Order 2 restrains IPS from opening the security control panels, or otherwise interfering with the security systems of clients or customers of CSS. Order 3, which is in the nature of mandatory relief, orders IPS to return keys of clients or customers of CSS currently in its possession to those clients or customers by 5 pm on 19 September 2006. I do not propose to repeat the reasons for judgment given by the learned Federal Magistrate. 3 Counsel for IPS does not dispute, for the purpose of this application, the finding made by his Honour that there is a serious question to be tried or the finding on balance of convenience. However, Mr Arthur contends that orders 2 and 3 were made in breach of the principles which govern the grant of injunctive relief under s 80 of the Trade Practices Act 1974 (Cth) as recently considered and explained by a Full Court in Foster v Australian Competition and Consumer Commission [2006] FCAFC 21 ; (2006) 149 FCR 135. 4 In particular, Mr Arthur submits that it was not appropriate to make orders 2 and 3 because there was no sufficient nexus demonstrated between the contravention of s 52 of the Trade Practices Act and the conduct which is the subject of orders 2 and 3. Mr Arthur concedes that the grant of interlocutory injunctive relief was an exercise of his Honour's discretion and that it is necessary for him to point to an error of principle in the making of orders of 2 and 3. He submits that whilst it would have been open to his Honour to find a nexus, his Honour failed to do so. Alternatively he submits that there was no evidence from which his Honour could draw that conclusion. 5 It seems to me that the learned Federal Magistrate must be taken in [24] and [25] of his reasons to have found that there was a threat to continue to make the implied representation which his Honour found to have been made in [11] and which gave rise to the exercise of the learned Federal Magistrate's discretion to grant injunctive relief. I'm satisfied that there was evidence, in particular in the affidavit of Ms Klitogiannis, to support that finding. 6 Whilst it would certainly have been open to the learned Federal Magistrate to decline to make orders 2 and 3; see for example Australian Rugby Union Ltd v Hospitality Group Pty Ltd (2000) 173 ALR 702 at [152] to [153], I can see no error of principle by the learned Federal Magistrate in deciding upon the evidence before him that orders 2 and 3 were appropriate within the principles referred to by the Full Court in Foster . Accordingly, the order I will make is that leave to appeal be refused. | application for leave to appeal from interlocutory orders applicable principles no error of principle practice and procedure |
It is alleged that the Deans and their company have taken and misused for their own commercial advantage confidential information and copyright works that belong to GSS and had been used by that company in its former bookselling business. It is alleged against the other defendants that they conspired with the Deans for them (the other defendants) to make use of GSS' intellectual property. GSS had owned and operated the bookselling business in its capacity as trustee of the GSS unit trust. Landmark, a company controlled Mr Porch, is a beneficiary of the trust as are the Deans through the Dean Family Trust. At present the action is at a standstill because the board of GSS, which comprises Mr and Mrs Porch and Mr and Mrs Dean, is deadlocked. The result is this application by Mr Porch for an order under s 237 of the Corporations Act 2001 (Cth) that he be given leave to intervene in the proceeding, in effect to run the action on behalf of GSS. The action is one of several that have been commenced as a result of a long-standing, and at times bitter, dispute between the Deans and the Porches. One of the actions (proceeding VID 718 of 2006), which I might describe as a parallel proceeding, is brought by Landmark against substantially the same defendants as in the principal action (VID 690 of 2006). In the parallel proceeding it is alleged that the defendants misused Landmark's intellectual property and copyright in certain works that are similar to the works described in the principal action. One difference between that action and the principal action is the capacity in which Landmark sues. In the parallel proceeding it sues in its own right. In the principal action it sues as beneficiary of the GSS unit trust and is making claims that would ordinarily be brought by the trustee. It is common ground, however, that in certain circumstances, arguably such as exist here, a beneficiary of a trust is entitled to sue in his own name to recover trust property or damages for breach of trust. Still, there is a significant degree of similarity between Landmark's action and the principal action, at least as regards the information that is alleged to be confidential and the works that are said to be copyright. Perhaps the explanation is that the two proceedings should be treated as making claims in the alternative. There is, however, one important difference between the two actions. The difference is that in the principal action GSS makes claims against the defendants that cannot be maintained by Landmark. The claims are for the breach by its officers of their duties of office, both under the Corporations Act (in particular ss 180 and 181) and at common law. On no view could Landmark pursue these claims. Mr Porch relies primarily on the claims against the directors for his argument that there is a need for GSS to prosecute the action. The point made by Mr Porch is that the relief available to the company, including the right to compensation under s 1317H and the right to an injunction under s 1324, might not be available to Landmark. So, according to the argument, it would be unfair to GSS, and presumably to Landmark as a beneficiary of the GSS unit trust which would succeed to the fruits of the action, not to allow the action by GSS to go ahead. A somewhat similar point is made in respect of GSS' claim against the third parties. It is said that there may be claims at the suit of GSS that are different from any claim that could be prosecuted by a trustee whose claims against third parties would ordinarily be confined to allegations of procuring a breach of trust or knowingly being in receipt of trust property. Mr Porch says that GSS makes claims in law other than for breach of trust. Reference was made to Morlea Professional Services Pty Ltd v Richard Walter Pty Ltd (in liq) [1999] FCA 1820 ; (1999) 96 FCR 217. Although the conditions in s 237(2) have been satisfied, I feel some disquiet about allowing the action by GSS to proceed. This is not because I have formed any view about the merits of its case. I am satisfied that Mr Porch genuinely believes that GSS has claims that ought to proceed. However, I am troubled by whether there is any utility in allowing the action to proceed with GSS as a plaintiff. My concern is that GSS may add nothing to the case. By this I mean that if the allegations against the Deans and their co-defendants are made good, the claim by Landmark will succeed and there is little, if anything, additional that GSS could recover in a separate action. Conversely if the claim by Landmark fails, it is difficult to see how the action by GSS could succeed having regard to the almost complete overlap of the allegations against the defendants. My concern is heightened by the fact that when at the hearing I identified my concern, counsel for Mr Porch did not explain how the GSS Unit Trust would be better off in a financial sense if the action by GSS goes ahead. Nonetheless, and notwithstanding my reservations, I am prepared to grant Mr Porch the relief he seeks. The reason is that if GSS stays in the action it would not add materially to the complexity of the case. Put another way, the defendants will not be prejudiced if, in addition to the claims prosecuted by Landmark, they must also confront the claims of GSS. Either way, the evidence will be the same. There may be some additional legal argument, but any extra submissions will be brief. I have decided, however, that leave will only be granted if Mr Porch undertakes that he will be responsible for GSS' costs in prosecuting the action, along with any costs that may be awarded against it. The costs of this application will be costs in the cause in that action. | application for leave to intervene proceedings on behalf of a company similar proceedings on foot one action by trustee other action by beneficiary principles to be applied utility of granting leave additional causes of action and relief available no prejudice to other parties corporations |
The application was filed with the Court on behalf of the Patta Warumungu people on 7 July 2006 and registered with the National Native Title Tribunal on 13 September 2006. The areas of land surrounding the Tennant Creek township were the subject of a grant of land under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (the ALR Act) following the Warumungu Land Claim Report No 31 by the Aboriginal Land Commissioner Mr Justice Maurice on 8 July 1988. Section 3(1) of that enactment precluded land within the township of Tennant Creek from being available for such a grant. 2 The native title claim group comprises principally of descendants of the uppermost generation known to the native title claim group and it also encompasses those persons who are recognised, in accordance with traditional law and custom, by senior members of the native title claim group to have connection with the land based on conception or birthplace affiliation with the area; long term residence and historical association with the area and the native title claim group; close kinship ties, including intermarriage; shared subsection or moiety affiliation; possession of traditional religious or ceremonial knowledge; authority and responsibility for shared Dreaming tracks or sacred sites connected with the claim area; or seniority in traditional matters concerning the native title claim group or the claim area. The only respondent is the Northern Territory of Australia. 3 The parties have agreed that native title exists within certain parcels of land within the claim area and that native title has been extinguished in other parts of the claim area. They have agreed also about the nature and extent of those native title rights. They now seek orders which would give effect to a consent determination pursuant to s 87 of the Act. The traditional territory of the Patta Warumungu people is said to extend in all directions beyond the claim area. As I noted above, the Aboriginal Land Commissioner in his Report on the Warumungu Land Claim under the ALR Act recognised those claims. To complete the context, I note that the territory of the Patta Warumungu people is, in turn, one of ten estates within the Warumungu language region. 5 Since the original application, one parcel of land, which was only included in the application by administrative error, was removed by order of the District Registrar on 12 September 2006. A further six parcels of land listed in the original application were each subdivided into two parts, as one part of each of those parcels concerned land over which it was agreed native title should be recognised (these new parcels kept the description of the original parcels), and the other part of each of those parcels concerned land over which it was agreed that native title has been extinguished (these new parcels were given new descriptions). Consequently, there are now 65 administrative parcels that make up the claim area. 6 The parties have agreed that native title exists in 18 of those parcels, which are relatively large and surround, but are within, the declared township. Those parcels comprise around 80% of the total claim area. They are described in Schedule 1 to the Orders made today. They are all vacant Crown land. I am satisfied that, within the meaning of s 47B(1)(c) of the Act, one or more members of the claim group occupied those parcels of land at the date the application was filed. 7 The remaining 47 parcels of land are areas where it is agreed that native title has been extinguished. They consist of relatively smaller parcels within the township, being residential and vacant industrial lots, as well as two larger parcels in the south east of the township subject to a pastoral lease, and one larger parcel of vacant Crown land to the east of the township. Those 47 parcels are described in Schedule 2 to the Orders made today. That section requires the period of notice under s 66 to have elapsed, that a signed copy of the agreed orders has been filed with the Court, and that the Court is satisfied that the orders are appropriate and within its power to make. 9 The period of notice under s 66 of the Act on this application expired on 10 January 2007, so clearly the first of those criterion has been met. So, too, has the second criterion: a minute of consent orders signed by both parties was filed with the Court on 31 August 2007. 10 It remains for the Court to be satisfied that the Orders sought are within the Court's power and are appropriate to make. For the reasons that follow, I am so satisfied. 11 Because the Orders sought contain a determination of native title, they must comply with s 94A of the Act. That section requires that such orders set out details of the matters mentioned in s 225 of the Act. Each of the affidavits speak of the basis of the deponent's membership of the Patta Warumungu people and of their connection to the claim area. With the other ladies, we still get all the bushtucker from around town: bush honey, bush banana, conkaberries and goanna all over town within the application area. It is harder for me now but I am still going out sometimes. We also collect Spinifex wax in the application area and ochre from near Mary-Ann Dam, just outside the application area. We are doing ceremony every year at Tingkarli, within the application area. I am helping with the ceremony for young ones and teaching all the kids about that business. I am always singing there and at Nyinkka Nyunyu with Kathleen Fitz. We are still holding sorry camp within the town at Tingkarli and Mulga camps. The applicants are of the view, and I accept, that the report contains adequate evidence on which to base the making of a consent determination. 15 According to the report of Ms Donaldson, some practices of the Patta Warumungu people on land within the claim area have continued in the same way since before sovereignty. Evidence of land use and occupation practises employed just a generation after sovereignty coupled with details of stable societal characteristics, religious practices and use of a developed language recorded just to generations after sovereignty, lead the author to conclude that [practices] such as these were also exercised by the claimant's ancestors before sovereignty. It refers to estates, often overlapping, which follow Dreaming tracks and focus on known water sources. In many places, the estate groups, the Patta Warumungu estate group being the relevant one, share the rights to own songs and designs for a Dreaming. 17 The full range of rights and interests which Ms Donaldson says exist in the Patta Warumungu estate group over the claim area include a number of rights to use and enjoy the claim area; the right to speak for and make decisions about the claim area; the right to protect significant sights in the claim area; a limited and non-exclusive right to control access to the claim area; the right to prevent disclosure of matters relating to the claim area; the right to be acknowledged as owners of the claim area; and the right to determine membership of the native title claim group. Most, but not all, of those rights are reflected in the proposed determination. 18 The material relied upon by the parties in support of the proposed consent determination, in my view, adequately addresses (inter alia) the requirements of ss 223 and 225 of the Act and the appropriateness of making the proposed consent determination. I accept their submission that the statements of the applicants and the report supports the recognition of native title rights and interests possessed by the native title claim group, as defined by s 223 and explained by the High Court in Members of the Yorta Yorta Aboriginal Community v Victoria [2002] HCA 58 ; (2002) 214 CLR 422. 19 I also conclude on the basis of the material before me that the parties likely to be affected by the proposed consent determination have had sufficient access to independent legal representation; and that the Territory, in providing its consent, has given appropriate consideration to the evidence and to the interests of the community generally; see Munn v Queensland [2001] FCA 1229 ; (2001) 115 FCR 109 at [29] . Indeed, the material suggests that both the applicants and the Territory have carefully considered all that material and its significance. 20 I have also considered the terms of the proposed consent determination. In my view, it satisfies the requirements of s 225 of the Act. It is carefully worded. The native title rights and interests are in appropriately specific terms. And the nature and significance of the other interests in the areas of the proposed consent determination are also clearly spelled out, as is the consequence of those other interests, both as they presently affect the agreed native title rights and interests, and in the longer term as to how the native title rights and interests will become more enlivened as those other interests come to an end progressively over time. 21 Where the Court proposes to make a determination that native title exists it must determine whether the native title is to be held in trust and if so by whom: s 55 and 56(1) of the Act. A nomination in writing to the Court that the Patta Aboriginal Corporation (the Corporation) is to hold the rights and interests comprising the native title in trust for the common law holders pursuant to s 56(2)(a) has been filed. The Corporation is a body corporate which may be determined under s 56 to hold the rights and interests in trust for the common law holders (see s 59 of the Act and r 4 of the Native Title Prescribed Bodies Corporate) Regulations 1999 ). It has consented to act in that capacity. Consequently, the provisions of s 56 are met and justify the making of para 3 of the proposed consent determination. I therefore make the orders and determination which is contained in the Orders now made by the Court for the reasons which I have given. 23 Finally, I wish to make some remarks about the process by which the proposed consent determination has come about. There are a large number of native title determination applications in the Northern Territory. They have presented a considerable challenge to ensure that they are dealt with in as efficient a manner as possible. To that end, and with the support generally of the claimants (particularly through the Northern Land Council and the Central Land Council as the relevant representative bodies under the Act) and the Northern Territory, as well as other respondents, the Court adopted a strategy of hearing selected cases to determine particular issues of principle, or perhaps more accurately issues which relate to the decided case and to a number of others with similar geographical, cultural, social or legal characteristics. That process has almost been completed. It is expected that, as a result of those cases having been decided, many of the claims with which they have common features will progressively resolve by a series of consent determinations. 24 This is the first consent determination in what, the Court hopes, will be an escalating process. It has occurred in the framework of that overall strategy. The process will require the active engagement of the parties to each application. The present outcome reflects such active engagement in this matter on the part of both the native title claim group and the Northern Territory. It also reflects the fact that, in some respects, the outcomes which are negotiated may include outcomes beyond the declaration of the existence of native title rights and interests. The consent determination is to be accompanied by an Indigenous Land Use Agreement, about to be executed. It has been achieved with the support of the National Native Title Tribunal. Its role under the Act is an important one, and its capacity to contribute to mediated resolution of native title claims is well illustrated by the present matter. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. | determination of native title by consent native title |
(b) The appellant married Claudine in Lebanon on 14 July 2002. Claudine returned to Sydney on 9 August 2002. (c) The appellant was granted a temporary spouse visa on 13 September 2002 and arrived in Australia on 14 November 2002. (d) The couple first stayed at the home of Claudine's parents and then moved to the appellant's sister's home in Merrylands. (e) Claudine then ignored the appellant and "put him down" in private and in public, and did not treat him with respect. (f) Soon afterwards, Claudine informed the appellant that she regretted marrying him and that she had no feelings for him anymore. She dominated the relationship and caused me stress, anxiety and despair. She is directly responsible for damaging my life, self esteem and confidence in myself as a man and a human being. ... The emotional and psychological damage she caused to me in a short time will take many years to heal. On 28 April 2003, the Minister's delegate refused to grant the visa, principally on the basis that the appellant had failed to demonstrate that the suffered domestic violence committed by the sponsoring spouse was within the meaning of Migration Regulations 1994 (Cth) reg 100.221(4)(c)(i). 5 On 19 May 2003, the Tribunal received an application for review of the decision of the delegate. On 2 June 2004, the appellant attended a hearing and gave oral evidence in support of his claims. On 9 June 2004, the Tribunal wrote a letter to the appellant informing him that it had made a decision and notifying him of the date on which the Tribunal would hand down its decision ('the 9 June letter'). On 23 June 2004, the Tribunal handed down its decision affirming the decision of the delegate. 6 The Tribunal found that the appellant had not suffered from domestic violence and that he had not satisfied the requirements of reg 1.24(2)(a) of the Regulations, in that he relied upon statutory declarations of two competent persons, Dr Teoh and Dr Hanna ('the statutory declarations') who were both medical practitioners. This did not satisfy different subparagraphs of paragraph (a) of reg 1.21(1) as required by reg 1.24(2). The statutory declarations, annexing the medical reports, had been submitted by the appellant to the delegate. The appellant submitted the medical reports to the Tribunal for the purposes of his application but did not resubmit the statutory declarations. 7 On 1 September 2005, Lloyd-Jones FM heard the appellant's application for review of the Tribunal's decision. The Tribunal erred in law by accepting letter to the Department by Claudine Mardini stating the relationship with the visa applicant has ended and that the visa applicant was only with her to gain entry to Australia and that she bore much emotional abuse from him. The Tribunal fell into jurisdictional error on the basis that they accepted such statement without cross examining or verifying this information. The Tribunal took evidence from the applicant and his brother-in-law, Tony Mardini, (who is Claudine's Uncle) and such evidence was uncontested as truthful and the Tribunal erred in law by denying the applicant his natural right to be considered as a victim of domestic violence. Such is a jurisdictional error. The Tribunal erred in law by stating in the decision dated 23 June 2004 verse 18 'the visa applicant confirmed that his former spouse was still alive and that he had no children either from that relationship or any other'. The applicant was never married before. The Tribunal did not fully understand the violence suffered by visa applicant in spite of the medical reports and oral evidence supported by witnesses. The applicant wishes to rely on the transcript of the hearing which is attached to prove he has suffered domestic violence for the purpose of the regulation and the poor translation may have led the Presiding Member not to understand the gravity of the suffering of the applicant. His Honour held that in the absence of any evidence of a judicially determined claim of domestic violence, the determination of the proceedings was confined to the single issue of whether the statutory declarations satisfied the requirements of Division 1.5 of the Regulations. 9 His Honour noted that the appellant had sought to satisfy the requirements of the statutory regime by presenting reports from two competent persons, whose qualifications and descriptions clearly placed both of them within reg 1.21(1)(a)(i), in breach of the requirements of reg 1.24(2)(a). His Honour determined that the Tribunal had correctly applied the criteria of the Regulations. 10 On 17 October 2005, the appellant filed a notice of appeal commencing the current proceedings. The Tribunal failed to accept the tendered statutory declaration as to satisfy the requirements of Division 1.5 of the Regulations. 12 The Minister was recently served with the appellant's written submissions setting out a number of matters on which he seeks to base this appeal. Mr Zipser, who appears for the appellant, does not rely on any error in the reasons of the Federal Magistrate. 13 This morning, a proposed amended notice of appeal was served, incorporating as grounds the matters in the submissions. Mr Zipser now seeks leave to file the amended notice of appeal. He suggested a possible adjournment to the Minister, who declined and is ready to proceed. Ms Wong, who appears for the Minister, opposes the filing of the proposed amended notice of appeal, which was further amended during the hearing of the application for leave to file and rely upon it. The Tribunal fell into jurisdictional error on this point, which the respondent concedes. On this basis, the appellant is entitled to relief. (2) The Tribunal told the appellant at the hearing that relevant domestic violence was limited to physical violence and did not include emotional or psychological violence. These statements were not correct. The Tribunal misled the appellant. In the circumstances there was jurisdictional error. (3) The Tribunal's letter to the appellant dated 9 June 2004 stated in part that ' the Tribunal has made a decision on your case '. The statement was misleading. In the circumstances there was jurisdictional error. (4) The Tribunal should have put to the applicant in writing that, in relation to the two statutory declarations by competent persons provided by the appellant to the Department, the competent persons were both of the same kind. The Tribunal's failure to put these matters to the appellant in writing gave rise to a breach of s 359A of the Migration Act and jurisdictional error. He points to the fact that no new evidence has been filed and that the appellant was not represented by a legal practitioner before the Federal Magistrate. He relies on ' a recent development in the law ' in SZEEU v Minister for Immigration & Multicultural & Indigenous Affairs [2006] FCAFC 2 which, he submits, is relevant to the Tribunal's reference to the statutory declarations. 17 Ms Wong opposes leave being granted to rely on grounds not raised before Lloyd-Jones FM. She points to the absence of any explanation for why these grounds were not raised before his Honour, other than the lack of legal representation. Ms Wong submits, further, that an application of the principles enunciated in NAJT v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 134 ; (2005) 147 FCR 51 at [166] by Madgwick J (with whom Conti J agreed) should result in refusal of leave. She points out that, relevantly, the law relied upon by Mr Zipser was determined in SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 215 ALR 162 and Minister for Immigration and Multicultural Affairs v Al Shamry [2001] FCA 919 ; (2001) 110 FCR 27 , both of which pre-dated the Tribunal hearing. 18 I shall return to the question of leave. That constituted jurisdictional error, the test having been stated in Sok v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 56 ; (2005) 144 FCR 170 as not being limited to physical violence. • The Tribunal referred to the statutory declarations. Those declarations were part of the information given by the appellant to the delegate and were not information within s 359A(4)(b) of the Migration Act 1958 (Cth). The medical reports were part of the information given by the appellant to the Tribunal as part of his application to the Tribunal and came within s 359A(4)(b) of the Act. • The Tribunal's finding that the statutory declarations failed to comply with reg 1.24(2) is correct (subject to a claim that the Tribunal failed to comply with s 359A(1)). • Did the Tribunal mislead the appellant in telling him the incorrect test of domestic violence? If so, is the appellant entitled to relief? • In the 9 June letter, the Tribunal stated: ' The Tribunal has made a decision on your case '. Did that mislead the appellant and, if so, does that amount to jurisdictional error entitling the appellant to relief? • Did the Tribunal fail to comply with s 359A(1) of the Act by referring to the statutory declarations? • Should the appellant be given leave to rely upon any of the proposed grounds? • If the appellant makes out any of the proposed grounds, should the Court, in its discretion, grant relief? The incidents described by the appellant did not constitute domestic violence ('the first basis'). Regulation 1.24(2) was not complied with as the statutory declarations did not establish relevant domestic violence because those claiming to be competent persons had the same qualifications (at [40]) ('the second basis'). The Tribunal was ' unable to accept that domestic violence had occurred under the regulations ' (at [41]). Accordingly, the Tribunal said, at [42], that ' As these are the only declarations or other applicable evidence put forward, the Tribunal is not satisfied that relevant domestic violence has occurred '. 22 Mr Zipser submits that the Tribunal could have come to a different conclusion as to whether the appellant's experiences satisfied the Sok test of domestic violence ( Re Refugee Review Tribunal; ex parte Aala [2000] HCA 57 ; (2000) 204 CLR 82 at [104] ). That is not challenged in this application. The Tribunal might have put to the appellant in writing the problem with the statutory declarations or it might have given the appellant the opportunity to obtain a further statutory declaration to satisfy reg 1.24. 2. If the Tribunal had not misled the appellant by telling him the incorrect test, the appellant might have been motivated at the hearing to ask the Tribunal for more time to obtain a further statutory declaration to satisfy reg 1.24. 3. The 9 June letter ' would have dissuaded the appellant ' from obtaining a further statutory declaration. 4. At a de novo hearing there may be a new declaration, so that a different result may be reached. 24 Relief may be dependent on establishing that the breach denied the possibility of a successful outcome ( Al Shamry at 41 per Merkel J). In Giretti v Commissioner of Tax (1996) 70 FCR 151, where there was an independent ground for a decision unaffected by procedural unfairness, Lindgren J (with whom Jenkinson J agreed) pointed out at 164 that Mr Giretti ' was not deprived of the possibility of avoiding the making of a sequestration order ', in contrast to the situation in Stead v State Government Insurance Commission [1986] HCA 54 ; (1986) 161 CLR 141. His Honour analysed Stead to determine whether that test was ' forward-looking ' or ' backward-looking '. His Honour pointed out that in many cases the result is the same but was of the opinion that the better view is that there is scope for the operation of both tests as alternatives. His Honour characterised the difference as whether there was or that there is no possibility of a different result but pointed out at 165 that '[i] t is difficult to accept readily that a person who has been denied the benefit of procedural fairness should be entitled to be placed in a better position than if he or she had not been '. He also observed at 166 that Stead does not require or admit of ' speculation or guesswork as to matters not suggested by the evidence or by the parties. An example would be that Mr Giretti might somehow even now obtain legal representation and mount a new and different attack on the assessments '. 25 It could well be said that Mr Zipser is inviting the Court to engage such speculation or guesswork. 26 Mr Zipser submits that the Tribunal appeared to have formed the view that, on the Cakmak test, there was no domestic violence and that, if it had appreciated the correct test, it may have been minded to adopt one or more of these routes. It should be noted that there is no evidence to support any of the above assertions. 27 Not every departure from the rules of natural justice will entitle an aggrieved party to a new hearing if the new hearing would be a futility ( Stead at 145). As the High Court said in Stead at 147 ' All that the appellant needed to show was that the denial of natural justice deprived him of the possibility of a successful outcome '. In Aala at [104] the High Court has applied the same test to jurisdictional error. That test applies to the first basis. The second basis, however, formed an independent ground for the Tribunal decision. 28 In the transcript of the hearing the Tribunal member said that the Tribunal had written to the appellant about the fact that the declarations did not ' meet the requirements of the law '. That was not correct. The issue was referred to in the decision of the delegate which had been forwarded to the appellant. The Tribunal asked the appellant why he had not made an effort to achieve other declarations, to which he replied that he did not know what he had to do. It is apparent that the appellant was aware of the problem, had the opportunity to fix it and did not do so. This, in my view, weighs against starting the proceedings afresh ( Turner v Official Trustee in Bankruptcy [1996] 71 FCR 418 at 423). 29 This is a case where, irrespective of the failure to apply the Sok test, the Tribunal was bound by the Act and Regulations to affirm the decision of the delegate. The Tribunal decision as to the inadequacy of the statutory declarations was correct and did not involve jurisdictional error. The Tribunal decision should be upheld on this independent ground ( Shaikh v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 174 at [34] ; Theunissen v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 1097 at [29] ). The fact that the Tribunal applied the test of domestic violence in Cakmak rather than the later test in Sok would not be sufficient to uphold the appeal if the appellant were permitted to rely upon this ground. In those circumstances, it is appropriate to refuse relief on discretionary grounds ( Aala at [58] per Gaudron and Gummow JJ; SZEEU at [232]-[233] per Allsop J). In telling the appellant of the incorrect test of domestic violence, did the Tribunal mislead the appellant and, if so, would the appellant be entitled to relief? In any event, as Mr Zipser conceded, if the Tribunal did mislead the appellant in telling him the incorrect test of domestic violence, the appellant would not be entitled to relief for the same reasons as set out above. 31 This proposed ground of appeal would not succeed. Did the 9 June letter mislead the appellant and, if so, does that mount to jurisdictional error entitling the appellant to relief? It is said that was misleading, as the appellant had the right to provide further evidence at any time prior to the handing down of the decision. 33 There is no evidence to support such an interpretation of the letter, nor that the appellant was misled, nor that there was any consequence of any such interpretation, nor that the appellant was dissuaded from obtaining further evidence, nor that he was deprived of any opportunity. Indeed, the appellant was placed on notice by the Tribunal at the hearing of the defect and did not seek to adduce further evidence. 34 This proposed ground of appeal would not succeed. Did the Tribunal fail to comply with s 359A of the Act with respect to the statutory declarations? 36 Ms Wong submits that the "information" represented the Tribunal's thought processes and identified defects in the appellant's evidence and, as such, was not encompassed by "information" within the meaning of s 359A(1) ( VAF v Minister for Immigration & Multicultural & Indigenous Affairs (2004) 206 ALR 471 at [24]). 37 The Tribunal, in its reasons, said at [40] that ' the available declarations do not establish relevant domestic violence because of the basis of those claiming to be competent persons '. Therefore, paragraph 1.24(1)(b) of the regulations has not been satisfied. It explained why it was not satisfied that domestic violence had occurred. That does not constitute information for the purposes of s 359A(1). 39 This proposed ground of appeal would fail. In my view, the proposed grounds of appeal would not succeed. In addition, as in SZBWJ , other than to rely on recent retaining of legal advice, the appellant has made no attempt to explain why the proposed grounds were not raised earlier. 41 Even if I were wrong I would not, as a matter of discretion, uphold the appeal and remit the matter to the Tribunal. The appellant had submitted the whole of each statutory declaration with its accompanying report to the delegate. It resubmitted the reports to the Tribunal with the intention to rely upon them and did so. Strictly, the reports needed to be accompanied by the statutory declarations to comply with reg 1.24(1)(a). The Tribunal did not reject the appellant's evidence on the basis of this "technicality". The Tribunal decision was correct in that the appellant failed to comply with the Regulations. The appellant was aware of the defect from the delegate's decision and was told about it again at the Tribunal hearing. He did not seek to correct it. 42 The appellant has not otherwise relied upon error on the part of the Federal Magistrate. 43 Leave to file the amended notice of appeal should be refused. The appeal should be dismissed with costs. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | tribunal applied wrong test of domestic violence jurisdictional error independent ground of failure to comply with regulations asserted effect of jurisdictional error on second basis for decision no jurisdictional error affecting tribunal's exercise of power application for leave to raise new grounds of appeal from decision of federal magistrate proposed new grounds could have been raised before federal magistrate proposed new grounds would fail no other alleged error on part of federal magistrate leave to file amended notice of appeal refused migration practice and procedure |
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules . The proposed evidence indicates that Dr Stampfer, a senior lecturer at the University, invented a method of diagnosing psychiatric disorders by monitoring the patterns of a subject's heart rate. The invention was the subject of a patent applied for in 1998. It appears from the materials that Dr Stampfer was regarded by the University as having developed the invention in the course of his employment at the University. He assigned his interest in the invention to HDPL in 1997. That transfer seems to have occurred without the prior consent of the University. HDPL paid patenting and commercialisation costs. 2 The University negotiated with HDPL and Dr Stampfer and ultimately entered into a Deed of Acknowledgement and Assignment with them and with the publicly listed company, Heartlink, on 25 July 2000. 3 The recitals to the Deed stated that HDPL and Dr Stampfer had been in dispute with the University over the ownership of the technology. They also recited that the dispute had been settled on the basis that the University and Dr Stampfer acknowledged that the technology had always been owned by HDPL and that HDPL would pay a commercial fee to the University. 4 The documents for tender include the Deed and exchanges relating to the negotiation of its terms as well as other deeds and correspondence and the prospectus issued by Heartlink. Minutes of the meeting of the Intellectual Property Committee of the University held on 15 December 1999 are also included. 5 The evidence is said to be probative of the tendency of the University, at a time relevant to the present proceedings, not to commercialise patentable inventions disclosed to it by its staff. Alternatively, it is said to be relevant to a lack of capacity on the part of the University to undertake such commercialisation. This is said to be relevant to the relief claimed by the University and the effect of the alleged non-disclosure by Dr Gray of his inventions. As Professor Glover put it in the first edition of his work on commercial equity: "characterisation of an opportunity as a fiduciary opportunity overlaps with the characterisation of whether the scope of fiduciary duties extends to the opportunity in question". This was evidence which, it was said, was covered by s 97 of the Evidence Act 1995 (Cth). Evidence covered by that section which defines "the tendency rule" is admissible only upon prior reasonable notice in writing to the other parties. Moreover it is not admissible if the Court considers that it would not, either by itself or having regard to other evidence, have significant probative value. The notice requirement can be waived by the Court under s 100(1). They relate to the resolution of a particular dispute about the ownership of intellectual property and do not appear on the face of them to support general inferences about the tendency or capacity of the University at the relevant time in relation to the commercialisation of intellectual property. They potentially open up a wide field of inquiry about the basis upon which the settlement reached in the case to which they relate turned upon an assessment of the strengths and weaknesses of the University's case or more general considerations. To the extent that the documents go to tendency in the sense covered by s 97 , I do not consider that they have significant probative value in the present case. To the extent that they are said to go to capacity, I consider that their probative value is substantially outweighed by the danger that they might cause or result in undue waste of time. 9 The tender of the documents will be refused. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | tendency evidence notice requirement probative value case management considerations tender refused evidence |
2 The first applicant seeks relief under ss 52 , 53 , 55A and 60 of the Trade Practices Act 1974 (Cth) and ss 42 , 44 , 50 and 55 of the Fair Trading Act 1987 (NSW). In addition the applicants seek damages for defamation against the respondents under the Defamation Act 1974 (NSW), the Wrongs Act 1958 (Vic), the Criminal Code Act 1899 (Qld), the Defamation Act 1889 (Qld), the Criminal Code Act 1913 (WA), the Wrongs Act 1936 (SA), the Defamation Act 1957 (Tas) and the Civil Law (Wrongs) Act 2002 (ACT). 3 In relation to defamation in a foreign place see John Pfeiffer Pty Limited v Rogerson [2000] HCA 36 ; (2000) 203 CLR 503 at [20] et seq; Regie Nationale des Usines Renault S.A. v Zhang ('Renault') [2002] HCA 10 ; (2002) 210 CLR 491 and Dow Jones & Company Inc v Gutnick ('Dow Jones') [2002] HCA 56 ; (2002) 210 CLR 575 at 600 et seq; cf Lazarus v Deutsche Lufthansa AG (1985) 1 NSWLR 188. See also Federal Court Rules Order 11 r5. 4 On 10 October 2006 orders were made by consent for certain questions to be decided separately and before the trial in the proceedings. The trial is presently listed to commence on Monday 4 December 2006. The separate questions concern imputations that are said to have been conveyed by the facsimile referred to, the letter to the Australian Tax Office and the email. 5 In the course of the hearing of the separate questions the applicants have sought and been granted leave to amend the Second Further Amended Statement of Claim filed 25 August 2006 by substituting the word 'email' for the word 'letter' in the first line of the 'Particulars of Publication' under paragraph 9, by inserting the words 'Second and Third' before the word 'applicants' in line 2 of paragraph 16 and by deleting the heading 'First applicant' and sub-paragraphs (a) --- (d) appearing thereunder in paragraph 16. 6 The first applicant has indicated that it may well seek an amendment in respect of paragraph 15 and the material appearing in subparagraphs 15(a) --- (c) under the heading 'First applicant' similar to that for which leave has been granted in respect of the claims made by the first applicant in paragraph 16. 7 In relation to separate question 16 an order has been made substituting a reference to '16(c)' for '16(b)' and a further order has been made substituting a reference to '16(g)' for '16(f)' in question 19. 8 The parties are agreed as to the answers which are appropriate in respect of questions 1 --- 16 and 18 as they now stand. 9 Questions 1 --- 16 and 18 and the agreed answers are set out hereunder. Is imputation 14(c) capable of being defamatory? Yes. Is imputation 14(h) capable of being conveyed by the Customer Facsimile? Yes. Is imputation 14(i) bad in form (two stings)? No. Does imputation 14(h) differ in substance to imputation 14(i)? Yes. Is imputation 14(j) capable of being conveyed by the Customer Facsimile? Yes. Is imputation 14(k) bad in form (two stings)? No. Does imputation 14(j) differ in substance to imputation 14(k)? Yes. Is imputation 15(e) capable of being conveyed by the ATO letter? Yes. Is imputation 15(f) bad in form (2 stings)? No. Does imputation 15(e) differ in substance to imputation 15(f)? Yes. Is imputation 15(g) capable of being conveyed by the ATO letter? Yes. Is imputation 15(h) bad in form (two stings)? No. Does imputation 15(g) differ in substance to imputation 15(h)? Yes. Is imputation 16(b) capable of being conveyed by the FYG email? Does not arise. Is imputation 16(b) bad in form? Does not arise. Does imputation 16(a) differ in substance to imputation 16(c)? Does not arise. Is imputation 16(f) bad in form? No. Is imputation 16(f) capable of being conveyed by the FYG email? Does imputation 16(e) differ in substance to imputation 16(g)? Is imputation 16(h) capable of being conveyed by the FYG email? Is imputation 16(k) capable of being conveyed by the FYG email? Whilst the email, which is reproduced in the 'Third Schedule', contains paragraphs which are unnumbered, it is agreed between the parties that the subject of the email should be identified as paragraph 11 and each of the paragraphs of the email itself should be identified as 1 --- 10. On or about 15 September 2005, the First respondent by its servant or agent Carl Moller wrote and published of and concerning the First applicant the letter (hereafter "The FYG email"), a copy of which is annexed hereto as the Third Schedule. [10] of the email. As Gleeson CJ, McHugh, Gummow and Heydon JJ said in Favell v Queensland Newspapers Pty Ltd ('Favell') [2005] HCA 52 ; (2005) 221 ALR 186 at [6] the question for decision is whether the material published was capable of giving rise to the defamatory imputations. 15 If reasonable minds might possibly differ about whether or not the material is capable of a defamatory meaning, that would be a strong, perhaps an insuperable, reason for not exercising the discretion to strike out (per McColl JA in Ahmed v John Fairfax Publications Pty Limited [2006] NSWCA 6 at [17] ). 16 Favell was concerned with whether matter published was capable of conveying defamatory imputations. The relevant newspaper article bore the heading 'DEVELOPMENT SITE DESTROYED --- FIRE GUTS RIVERSIDE MANSION'. The question was whether or not certain imputations could reasonably be conveyed to the ordinary hypothetical reasonable reader of the newspaper. The particular imputations alleged were that the owners of the property had committed the crime of arson, that they were reasonably suspected by the police of committing the crime of arson and that one of them lied about neighbourhood reactions to the proposed development of their property. If the words are so capable then it is a question for the jury to decide as to whether the words do, in fact, convey a defamatory meaning. In deciding whether words are capable of conveying a defamatory meaning the Court will reject those meanings which can only emerge as the product of some strained, or forced, or utterly unreasonable interpretation ... The test of reasonableness guides and directs the Court in its function of deciding whether it is open to a jury in any particular case to hold that reasonable persons would understand the words complained of in a defamatory sense. So he can and does read between the lines in the light of his general knowledge and experience of worldly affairs. That is an important reminder for judges. It can be said as a matter of practice that it very often does so, because although suspicion of guilt is something different from proof of guilt, it is the broad impression conveyed by the libel that has to be considered and not the meaning of each word under analysis. A man who wants to talk at large about smoke may have to pick his words very carefully if he wants to exclude the suggestion that there is also a fire; but it can be done. One always gets back to the fundamental question: what is the meaning that the words convey to the ordinary man: you cannot make a rule about that. They can convey a meaning of suspicion short of guilt; but loose talk about suspicion can very easily convey the impression that it is a suspicion that is well founded. If, however, it is accompanied by an account of the suspicious circumstances that have aroused the interest of the authorities, and that point towards a likelihood of guilt, then the position may be otherwise. There is an overlap between providing information and entertainment, and the publishing of information coupled with a derogatory implication may fall into both categories. It may be that a bare, factual, report that a house has burned down is less entertaining than a report spiced with an account of a suspicious circumstance. At this preliminary stage of the proceedings, the respondents have not yet had an opportunity to indicate why it was considered relevant to the story about the fire to link it with the development application. For that matter, the occasion has not yet arisen for a jury to decide what meanings the article would convey. We are concerned only with the anterior question of what the article is capable of conveying. In deciding whether any particular imputation is capable of being conveyed, the question is whether it is reasonably so capable and any strained or forced or utterly unreasonable interpretation must be rejected: Jones v Skelton . The ordinary reasonable reader is a person of fairly average intelligence who is neither perverse, nor morbid or suspicious of mind, nor avid for scandal. That person does not live in an ivory tower but can and does read between the lines in the light of that person's general knowledge and experience of worldly affairs. The reader of a book, for example, is assumed to read it with more care than he or she would read a newspaper. There is a wide degree of latitude given to the capacity of the matter complained of to convey particular imputations where the words published are imprecise, ambiguous, loose, fanciful or unusual (per Hunt J at CL in Marsden at 165). An implication is included in and is part of that which is expressed by the publisher. It is something which the reader understands the publisher as having intended to say. An inference is something which the reader adds to what is stated by the publisher; it may reasonably or even irresistibly follow from what has been expressly or impliedly said, but it is nevertheless a conclusion drawn by the reader from what has been expressly or impliedly said by the publisher (per Hunt CJ at CL in Marsden at 167). 20 Plainly a distinction is to be drawn between a publication which refers to the investigation of possible criminal activity, one which records that charges have been laid against a person and one which suggests that a person is guilty or probably guilty of an offence. The decisions are ... soundly based, even if we put aside the emphasis that has been given to the process of inference on inference that is involved in reaching a contrary conclusion. The ordinary reasonable reader is mindful of the principle that a person charged with a crime is presumed innocent until it is proved that he is guilty. Although he knows that many persons charged with a criminal offence are ultimately convicted, he is also aware that guilt or innocence is a question to be determined by a court, generally by a jury, and that not infrequently the person charged is acquitted. But this does not warrant the conclusion that by reporting the fact of arrest and charge a newspaper is imputing that the person concerned is guilty. A distinction needs to be drawn between the reader's understanding of what the newspaper is saying and judgments or conclusions which he may reach as a result of his own beliefs and prejudices. It is one thing to say that a statement is capable of bearing an imputation defamatory of the plaintiff because the ordinary reasonable reader would understand it in that sense, drawing on his own knowledge and experience of human affairs in order to reach that result. It is quite another thing to say that a statement is capable of bearing such an imputation merely because it excites in some readers a belief or prejudice from which they proceed to arrive at a conclusion unfavourable to the plaintiff. The defamatory quality of the published material is to be determined by the first, not the second, proposition. 23 Ordinarily, defamation is located at the place where the damage to reputation occurs. Ordinarily that will be where the material which is alleged to be defamatory is available in comprehensible form assuming, of course, that the person defamed has in that place a reputation which is thereby damaged. It is only when the material is in comprehensible form that the damage to reputation is done and it is damage to reputation which is the principal focus of defamation, not any quality of the defendant's conduct (per Gleeson CJ, McHugh, Gummow and Hayne JJ in Dow Jones at [44]). 24 In the case of an international email, ordinarily the place in the world at which the email is read will be the place where the tort of defamation, if there be such a tort, is committed. 25 In the submission of the applicants the ordinary hypothetical reasonable reader without any special knowledge cannot be said to be an ordinary hypothetical reasonable reader of the email in New South Wales. 26 Whilst an ordinary hypothetical reasonable reader of an email must be considered to be a person who does not live in an ivory tower and someone who can and does read between the lines in the light of that person's general knowledge and experience of human and worldly affairs, it seems to me that the hypothetical ordinary reasonable reader, who must be assumed to be without any special knowledge, is also taken to be a person in no particular geographical location for the purpose of deciding whether the email, in this case, was capable of giving rise to defamatory imputations, the assumption being that the relevant foreign law is the same as the local law (see O11 r 5 and Renault at [70]). 27 It may be observed that the email does not have the appearance of what is today referred to as 'spam' or, in the case of printed material, as 'junk mail'. One may assume that the ordinary hypothetical reader of the email would give it comprehensive consideration. 28 The email is not felicitously expressed: prepositions which were, no doubt, intended have been omitted and words such as 'prosecution' have, so it would seem, been misspelt as 'prosection'. 29 Counsel for the applicants submits, and I agree, that the subject heading of the email should be construed as if it read 'Official News from Australian Government Tax Office NAGS Maggie Lo Investigation Of Fraud' (emphasis added). Taken in context, paragraphs 5 and 6 are capable of supporting such an imputation, it being asserted that the second applicant sent accounts for NAGS to the Tax Office and that those accounts were false or incorrect and did not show the true profits of NAGS. Whilst the last sentence of paragraph 6 draws a distinction between the second applicant and 'all other directors' in relation to getting 'jail sentences', it must be taken in the context of references to investigation and possibilities, mention of fines as well as jail, and there being no suggestion that any charges had been laid. It cannot be said that the email is capable of conveying an imputation that the second applicant is likely to be imprisoned for taxation crimes. Independently of that concession, I could not conclude that in respect of directors of NAGS, other than the second applicant, the email was capable of giving rise to an imputation that any of them are likely to be imprisoned for taxation crimes. I do not consider that the imputation referred to in paragraph 16(g) of the Second Further Amended Statement of Claim is an alternative form of expression of the imputation alleged in paragraph 16(e). Apart from the distinction which I have attempted to draw above, it may be noted that the imputation alleged in paragraph 16(e) is concerned with conduct warranting official investigation into whether the second applicant has engaged in criminal conduct including taxation fraud, and also money laundering and predatory pricing as well. 36 In the light of earlier costs orders which have been made in respect of amendments to the pleadings, the parties have invited me to reserve the costs of the decision of the separate questions. | whether material published in an email was capable of giving rise to the defamatory imputations alleged significance of publication in the people's republic of china and the special administrative region of hong kong defamation |
The application was filed on 28 October 2008 in respect of a decision of the Federal Magistrates Court given on 12 September 2008. On 30 January 2009, subsequent to the filing of the notice of appeal, the applicant forwarded a letter to the solicitors for the first respondent, with a copy to the Court, stating, amongst other things, that the applicant "would like to withdraw my case", and was waiting for a reply from the Court. The letter indicated that the applicant did not "believe in this hearing" so was "unable to attend the hearing". The solicitors for the first respondent wrote to the applicant on 4 February 2009 stating that the solicitors noted the applicant's wish to withdraw from the proceedings and that, in order to do so, it would be necessary for either a notice of discontinuance to be filed or for consent orders to be executed. The letter advised that if one or other of these courses was not taken, then the first respondent would seek orders that the matter be dismissed with the applicant to pay the first respondent's legal costs of the proceedings (estimated to be in the sum of $1,500). The matter was called for hearing this morning and the applicant did not appear. The first respondent seeks an order that the application be dismissed pursuant to Order 35A r 2(1)(f) of the Federal Court Rules , namely, that the applicant has failed to prosecute the proceedings with due diligence with the consequence that the applicant is in default, and so that the Court may dismiss the proceedings under Order 35 r 3(1)(a). In circumstances where: - (i) the applicant has communicated to both the first respondent and the Court that the applicant would like to withdraw his case, and (ii) there has been no response to the letter from the solicitors for the first respondent, taken together with the applicant's failure to appear this morning, I am satisfied that the applicant is in default by failing to prosecute these proceedings with due diligence; in short, by reason of the failure to appear. Further, that the appropriate course in all of these circumstances is that the application be dismissed. I have also read the affidavit of Bernadette Marie Rayment sworn on 9 February 2009. On the basis of that affidavit, I am satisfied that I should make an order for costs in the first respondent's favour fixed in the amount of $1,500 and I so order, and I also make an order that the exhibits be returned. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | application for extension of time to file and serve notice of appeal from an order of the federal magistrates court migration |
2 I then indicated I would give short reasons for granting leave. These are those reasons. 3 In Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397, the Full Court (Sheppard, Burchett and Heerey JJ) indicated at p 398 that the tests normally to be applied in determining whether leave for interlocutory decisions should be granted are whether the decision at first instance was attended with sufficient doubt to warrant it being reconsidered, and whether substantial injustice would result if leave were refused, supposing the decision at first instance was wrong. 4 The Full Court recognised that where the interlocutory decision was on a point of practice, the High Court in Adam P Brown Male Fashions Pty Ltd v Phillip Morris Inc [1981] HCA 39 ; (1981) 148 CLR 170 at 177 has given a strong warning that 'a tight rein' should be kept on appeals. 5 The respondent contended that in this case the orders by the primary judge are attended by sufficient doubt to justify the granting of leave, particularly having regard to what might be gleaned from the sparse reasons of her Honour to be the basis for dismissing the application for security for costs. 6 It was further submitted that the primary judge failed to apply the relevant principles of law, misdirected herself as to the application of those principles, and the primary judge failed to provide adequate reasons. It was submitted that the inadequacy of reasons was itself sufficient to justify appellate review. The respondents further contend that the proposed appeal involves a point of principle as to the proper construction of s 1335 of the Corporations Act 2001 (Cth) and s 56 of the Federal Court of Australia Act 1976 (Cth) and, in particular, in whether the common law rule that impecuniosity is no bar to litigation is applicable, given the enactment of s 1335 of the Corporations Act 2001 (Cth) or s 56 of the Federal Court of Australia Act 1976 (Cth), and, further, whether that rule is applicable to companies. The respondents also dispute the contention that the purpose of s 1335 of the Corporations Act 2001 (Cth) or s 56 of the Federal Court of Australia Act 1976 (Cth) is to ensure that vexatious claims are not brought by companies having no assets. 7 The respondents further contend that they are at risk of the first and third applicants being unable to meet an adverse costs order should the respondents be successful in defence. This was so in circumstances where the applicants could not meet an adverse costs order, but there was no evidence that other persons who stood to benefit from the prosecution of the proceedings were themselves without means. It is further contended that the undertaking accepted by the primary judge in fact provided no real security, either as a matter of form or quantum, and the primary judge was therefore in error in placing reliance on it in her decision of refuse security for costs. 8 There is, in my opinion, sufficient merit in these contentions to justify the grant of leave. 9 In particular, many of those contentions have their basis in the paucity of reasons that were given in relation to the application for security for costs. The hearing occurred in circumstances of some time pressure, which, on one view, was quite unnecessary. The hearing commenced at 11.04am on Monday, 24 April, and, at the outset, her Honour said to the parties, ' Are the parties aware that I will need to adjourn the court at 12.15? ' On a number of occasions during the submissions by counsel on behalf of the applicants for security, her Honour noted that she was conscious of the time, and of the need to give counsel for the respondents to the motion an opportunity to speak. 10 The submissions by counsel for the respondents referred to the judgment of Branson J in The Airtourer Co-operative Ltd v Millicer Aircraft Industries Pty Ltd [2004] FCA 1400 , where her Honour there indicated that s 56 of the Federal Court of Australia Act 1976 (Cth) does not indicate any predisposition to or bias towards the granting of an order against an impecunious litigant. The whole purpose of the Act, and, indeed, the underlying thesis behind section 1335 of the Corporations Law, is to ensure that vexatious claims are not brought by companies having no assets, so that a person in the position of a respondent to just such a claim ought not be penalised by the fact that it can be an empty shell of a company as the applicant ...'. My preliminary view is that --- perhaps this is not a preliminary view. This is a final view. Impecuniosity is no bar to litigation. There's no question about that, and that has been made clear in cases such as Spender J's decision very recently. Further, I am of the view that this is not vexatious litigation. In my opinion, there is a sound case here being argued by the applicants. I note, however, that the applicants --- the respondents to this notice of motion --- have made an offer of $100,000, and I would have thought that that would have been a reasonable offer in the circumstances of this case ...'. '; and secondly, ' ...this is not vexatious litigation ... there is a sound case here being argued by the applicants. 14 As far as I can see from the evidence, there was no suggestion that the ordering of security in this case would stifle the litigation, a circumstance which distinguishes it from the factual position in Staff Development & Training Centre Pty Ltd v The Commonwealth of Australia [2005] FCA 1643 , a case referred to in the course of submissions to the primary judge. The requirement is considered an incident of the judicial process, the hallmark of which is, as McHugh JA stressed in Soulemezis (1987) 10 NSWLR 247, 278-279,' the quality of rationality', which is what serves to distinguish a judicial decision from an arbitrary decision. The giving of reasons is thus an aspect of judicial accountability, which was identified by his Honour in Soulemezis as the second of the three purposes served by the judicial duty of giving of reasons. The first, his Honour said, is that 'it enables the parties to see the extent to which their arguments have been understood and accepted, as well as the basis of the judge's decision'. The third is that judicial reasoning provides a precedent for the decision of future cases. See, to similar effect, what was said by Mahoney JA in the same case: Soulemezis, at 269, referred to with approval in Sun Alliance Insurance Ltd v Massoud [1988] VR 8, 19, in the Full Court of Victoria. For example, the primary judge may indicate that it is not proposed that reasons be given and there may be a tacit acceptance of this by counsel for the parties. For a discussion of qualifications to the general duty to give reasons see the observations of Mahoney P in Kiama Constructions v Davey (1996) 40 NSWLR 639 at 640. In this case there is no suggestion that there was anything in the way in which the matter was conducted which would lead to the conclusion that the normal principles or expectations in respect of the giving of reasons would not apply. Without wishing to limit the general obligation to give reasons, even on interlocutory matters, I note that the decision under consideration had the potential to prevent the applicants from pursuing the action and was thus one in respect of which reasons should have been given. For that reasons alone I would grant the extension of time. The bearing of the absence of reasons on the outcome of the appeal will be a matter for the Court which hears the appeal. S46(2)(c) of the District Court requires no less. More importantly, the general duty to give reasons, and its rationale as including proper exercise of rights of appeal, is well established: see Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Beale v Government Insurance Office (NSW) (1997) 25 MVR 373. That must be so if for no other reason than that litigation would clog up to the point of stagnation if full reasons had to be given for the tens or hundreds of interlocutory orders which many primary judges make in a week in busy trial courts. However, though applications for security for costs are matters of practice and procedure, they can have a significant impact on the substantive rights of plaintiffs, because if the order is made, the plaintiff may not be able to provide security for costs where one of the grounds for the application is that plaintiff's lack of funds. If so, that will prevent the plaintiff being able to have a judicial examination of the complaints made on the merits. Accordingly it would not be right to hold that there is no duty, or only a very exiguous duty, on a primary judge to give reasons for making an order as to security for costs. The reasons for judgment he provided, particularly given that they were ex tempore, set out in considerable detail his approach. Sometimes what might otherwise be said to be a deficiency in the reasons of a primary judge can be compensated for by a clear explanation in the course of argument by the primary judge for the outcome. However, that cure cannot be resorted to here. This Court does not have before it any transcript of the oral argument before the primary judge, and it has before it no affidavit indicating anything he may have said in the course of argument which would explain how he took the defendants' delay into account. I think there is room for the view that there was a desired result on the appeal searching for a reason to make it. 19 In my opinion, it is cases like Morris v Hanley [2001] NSWCA 374 that support the view of trial judges that appellate judges can be likened to those who come down out of the hills after the battle is over and shoot the wounded. 20 Nevertheless it is clear that, even on interlocutory orders, there is a duty to give adequate reasons, which do not display error. 21 It is sufficient in respect of other aspects of the application for leave to indicate that in my opinion it is arguable that the conclusion of the primary judge in dismissing the application for security was tainted by misapplication of principle, and an improper interpretation of s 1335 of the Corporations Act 2001 (Cth) and s 56 of the Federal Court of Australia Act 1976 (Cth). In particular, it is arguable that principles dealing with the impecuniosity of a plaintiff who is a natural person, have no application in relation to corporations falling within s 1335. 22 The primary judge in her assessment of the worth of the undertaking offered in relation to the provision of security for costs said that the applicants in the principal proceedings ' had made an offer of $100,000 and I would have thought that would have been a reasonable offer in the circumstances of the case. ' The undertaking in fact did not make an offer of $100,000. It provided that if a property was sold and there was a sufficient amount left after paying out the first mortgage, the sum of $100,000 would be paid into the trust account of the solicitors for the respondents. Alternatively, it provided that if the property was not sold, a mortgage would be granted to the respondents in that amount should the respondents obtain a costs order against the applicants. 23 It is highly arguable that the persons providing the undertaking had made no offer of $100,000, and undertook no obligation to meet the costs up to $100,000. The evidence was silent as to the amount owing on the property or the balance of the mortgage. There was no provision in relation to maintenance and repayments under the loan, or any undertaking that the balance secured by the mortgage would not be increased, nor was there any undertaking offered that attempts would be made to sell the property. 24 This aspect of the matter gains added significance for the grant of leave from the nature of the reasons of the primary judge. It is arguable that those reasons also failed to deal with the dispute between the rival claims as to the quantum of security, an important issue on the application. 25 For the above reasons, I granted leave, being of the view that both of the tests set out in Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR had application in the circumstances of the present matter. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender J. | appeals leave to appeal from interlocutory orders tests to be applied when granting leave from interlocutory decisions discretion to grant leave failure to provide adequate reasons duty to give reasons security for costs exercise of discretion misapplication of principle whether principles of impecuniosity of a plaintiff who is a natural person applies to corporations practice and procedure practice and procedure |
2 The applicant arrived in Australian on 20 December 2005. He is a citizen of the People's Republic of China. He applied for a protection (class XA) visa on 30 December 2005. Attached to the application was a typed statement. My hometown is located in Shenzhen City, Guangdong Province, the People's Republic of China. Before I came to Australia on 20 December 2005, I had managed my own business selling and repairing motor bikes spare parts. Later stage of my business, my business also sold smaller motor vehicles parts. Our customers were from all the over places. In around June 2001 I got to know a man by the name of [X]. Mr [X] was a truck driver working for a construction and building materials company based in Hong Kong. The company which Mr [X] worked for was one of the main suppliers of construction goods in my ity. Mr [X] also transported building materials from Hong Kong to different construction sites in China. From my childhood I heard about Christian from my parents. When I grew up I further understood that the religious practice in the official churches had been strictly restricted, controlled and monitored by the government. And furthermore the religious materials including the Bible used in these official churches had been strictly reprocessed by the government. My desire and interests to the Christian reached to its peak after I found out that Mr [X] was a Christian. Mr [X] told me that his mission was to transport the religious materials from Hong Kong to China, using an identity of a truck driver. After I told him about my intention to take part in and help him with his mission, he asked me to organize a special network with which we could distribute Bibles and the religious materials more effectively into different underground churches. As previously mentioned there were no real religious publications in China since they were strictly controlled. In order to let more people have opportunities to access those materials, I accepted Mr [X's] request and organized a special network from May 2003. First I started contacting some of my friends for help, including Mr [Y] and his brother Mr [Z] who had a fish store in the same city. Very soon after that, these two brothers introduced their distant relative, Mr [A] who was a college teacher. We later enlisted a few more people in our network. From May 2003 to December 2004 my network successfully transported and distributed thousands of copies of Bibles and religious promotion materials to the underground churches in south China areas and regions. I immediately asked Mr [Y] to inform the rest members of our network as soon as possible to stop all action until further notice. The situation was even getting serious when we learned that PSB had acted fully to find our network. It was our decision to disperse and hide for our own safety. I went to hide in a distant relative in Guangzhou for some time. I knew I was in a dangerous situation if I did not go overseas. But I don't have any friends overseas for me to go. As a person who organized transportation and distribution of Bibles and religious materials from overseas to China, I will be punished severely on my return. I seek protection from Australia government. On 5 April 2006 the applicant sought a review of the delegate's decision by the RRT. 6 The ground for the application in this Court, for leave to appeal against the judgment of the Federal Magistrates Court, is that s 424A of the Migration Act 1958 (Cth) ('the Act') was not complied with. 9 It has been held that the reference in s 424A(3)(b) is to the application for review by the RRT, and not the original application for a visa (see Minister for Immigration and Multicultural Affairs v Al Shamry [2001] FCA 919 ; [2001] 110 FCR 27 at 33-34 [17] , 38-39 [35]; VAF v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 206 ALR 471 at 475-6 [18]-[20]; SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214 at 222 [9] , 252 [154] and 256 [183]. 10 'Information' is not a narrow concept (see Win v Minister for Immigration and Multicultural Affairs [2001] FCA 56 ; (2001) 105 FCR 212 at 217-218 [17] - [22] ). It includes knowledge and assertions which might be relied upon in the decision-making process. Clearly enough, the content of the typed statement was adopted by the applicant in the hearing before the RRT. In addition, there was further exploration of the matters referred to in the statement. It is now settled in this Court that information which is given orally in a hearing before the RRT, whether volunteered or in answer to a request for confirmation of material before the RRT in some other form (e.g. an original application for the visa in question) is to be regarded as 'information ... that the applicant gave for the purpose of the application' (i.e. the application for review) and hence within the exception in s 424A(3)(b) to the requirement in s 424A(1) and (2) that it be given to an applicant in writing and his comments invited (see SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs ) [2006] FCAFC 2 ; (2006) 150 FCR 214 at 242 [91] , 254 [173] and 268 [264], SZCJD v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 609 at [42] - [43] , SZDPY v Minister for Immigration and Multicultural Affairs [2006] FCA 627 at [35] and NBKT v Minister for Immigration and Multicultural Affairs [2006] FCAFC 195 at [59] - [60] , SZHFC v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 1359 [24]. 11 In the present case, confirmation at the outset that the matters advanced in the visa application and the accompanying statement were true and correct and still relied upon was a basic starting point for the discussion which followed. The allegation of a breach of s 424A of the Act therefore cannot be made out. 12 As a result of its enquiries of the applicant, the RRT was not satisfied that he was a Christian or that he was in the past, or would be in the future, persecuted in China on the basis of religion. 13 On 21 August 2006 the applicant filed, in the Federal Magistrates Court, an application for judicial review of the decision of the RRT. The application alleged breach of s 424A of the Act but provided no particulars. On 27 November 2006 Driver FM dismissed the application for judicial review pursuant to Rule 44.12 of the Federal Magistrates Court rules for the reason that it disclosed no arguable case of jurisdictional error. That judgment is interlocutory (see Federal Magistrates Court Rules --- Rule 44.12(2)). 14 Leave to appeal to this Court is required (see Federal Court of Australia Act 1976 (Cth) s 24(1A)). Conventionally, one important matter to consider in an application for leave to appeal is whether an appeal would have any prospects of success. In this case, in my view, there are none. No error in the judgment of Driver FM can be shown. No jurisdictional error in the decision or proceedings of the RRT can be shown. I will dismiss the application for leave to appeal 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 Buchanan. | protection visa application for leave to appeal information given in hearing is information given for the purposes of the application migration |
The Federal Magistrate dismissed an application for a review of a decision of the Migration Review Tribunal (the Tribunal) which was signed on 1 September 2008. The Tribunal determined that it did not have jurisdiction to hear the application because the application for review to it was not filed within time. On 6 October 2007 the delegate of the Minister refused the application. On the same day the delegate notified the decision. This notification was in the form of a letter sent to the appellant's authorised recipient by prepaid post on 8 October 2007. If the applicant decides to lodge a review application, they must do so within 21 calendar days after you receive this letter. You are taken to have received it seven working days after the date of this letter. Under reg 4.10 of the Migration Regulations 1994 (Cth) (the Regulations) the period in which an application for review of the decision has to be given to the Tribunal starts "when the applicant receives notice of the decision and ends at the end of 21 days after the day on which the notice is received". The relevant method consisted of the Minister dating the document and then dispatching it within three working dates of the date of the document (s 494B(4)(a)). Section 494D allowed for the notification to be sent to an authorised recipient on behalf of an applicant and provided that notification given that way was taken to have been given to the applicant. Where the Minister gives notification in accordance with s 494B(4)(a) the person is taken to have received the document seven working days after the date of the document (s 494C(4)(a)). The first reflected grounds already stated in the notice of appeal and was the main argument agitated before the Federal Magistrate. The second matter argued was a new ground for which leave to argue was required. I will deal with each of these matters in turn. That section required that the mode of giving notice be set out in the letter because the section required the Minister to notify the applicant of the decision "in the prescribed way. " Counsel argued that s 494B(4) prescribed the way in which notice was given, and consequently its requirements had to be set out in the letter itself. Next, it was argued that the letter must comply with the law and be correct at the time of sending. A letter couched in the present terms may or may not be correct. It would be incorrect if in the events which happened the letter was not posted within three days. In that situation the time limits described in the letter would not have applied. Finally, it was argued that unless the precondition for the operation of the running of time was set out in the letter the section would have an unfair operation. If the letter were not posted within three working days the recipient would have no means of knowing from the letter that the time had not commenced to run. It was argued that the information given did not provide the basis for determining the time in which the application for review could be lodged. Section 66(2)(d)(ii) requires that the notification state the time in which the application for review must be made. It may well suffice to comply with this provision that a statement of the date at which the time to apply expires was made. It does not require an explanation of the way in which the time is calculated or arrived at. The text of the section is clear. The context of the provision confirms this conclusion. The cases which give rise to the need for such notification often involve non-English speaking applicants and often without legal representation. It is likely that Parliament chose to make the notification as simple as is consistent with proper communication. Indeed, the section would probably allow, as I have said, the mere statement of the date by which the application must be lodged. To require descent into the intricacies of the calculation of the period would not assist clear communication. Counsel for the appellant argued that the alternative construction led to some unfair results. Thus, if the letter in the present terms was not posted within three working days the recipient would not know the facts and might be misled into thinking that the time for lodging an application for review had expired when, in truth, time had not yet begun to run. Whilst some unfair operation of the section so construed can be imagined, such cases should not govern the interpretation of the section. Its terms are clear. Some unfairness may be the cost of the clear, certain and efficient scheme for notification. Those are factors particularly relevant to the special jurisdiction here involved which concerns a high volume of notifications often made to non-English speaking and unrepresented recipients. Counsel for the appellant also relied on the terms of s 66(1) to argue that the requirement to notify an applicant of the decision "in the prescribed way" was a reference to the prescription in s 494B, and therefore meant that the relevant terms of that section had to be included in the notification letter. However, s 66(1) has the function of stipulating that notification must be made in a certain way. It does not stipulate the contents of the notification. That is the special function of s 66(2). The first ground therefore should not be upheld. The second ground was that the decision of the Tribunal was attended by jurisdictional error as the delegate failed to comply with the requirements of s 66(2)(d)(ii) as the delegate's decision notice did not correctly state the time in which the application for review might be made by the appellant for the reason that the delegate's letter dated 6 October 2007 incorrectly referred to "receive this letter" and "notice is received" when the letter should have referred respectively to "taken to have received this letter" and "notice is taken to be received. " In Xie v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 172 , the Full Court held that the deemed receipt provisions in s 494C(4) apply to the notification referred to in s 347(1)(b) and reg 4.10(1)(a). The result is that reg 4.10(1)(a) operates so that the period starts when the applicant receives notice in the sense that the applicant is taken to have received notice by operation of s 494C(4). " The appellant argued that there is an apparent contradiction in the final two sentences of the third paragraph of the letter which is set out at [2] of these reasons. On the one hand the second sentence directs attention to time running by reference to the receipt of the letter. Then in the third sentence there is a reference to a deemed receipt. It followed that the delegate failed to comply with s 66(2)(d)(ii) when the time for lodging the application for review did not begin to run. The argument should not be accepted. The third sentence is a clear reference to the point at which the 21 days referred to in the previous sentence commenced to operate. It qualifies the operation of the second sentence and makes clear that receipt of the letter for the purpose of the running of 21 days is the end of the seven days from the date of the letter. The proposed second ground of appeal is therefore bound to fail and in those circumstances it is not appropriate to give leave to the appellant to argue that ground on the appeal. The appeal is therefore dismissed. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North. | appeal application for review lodged out of time in federal magistrates court whether appellant properly notified of decision of refugee review tribunal deemed receipt taken to have occurred seven days after date of letter requirement for letter to be sent within three days of date of letter for time to run under migration act 1958 (cth) whether delegate must state in notification letter three day requirement migration |
The Tribunal's decision concerns the proper classification under Sch 3 to the Customs Tariff Act 1995 (Cth) ("the Customs Tariff Act ") of certain goods imported by the respondent over the period from 2002 to 2004. 2 Under s 44 of the AAT Act , this Court exercises original jurisdiction in hearing such an appeal, and the appeal is confined to questions of law. The Court is empowered to make such order on the appeal as it thinks appropriate, including orders affirming or setting aside the decision of the Tribunal or an order remitting the case to be heard and decided again by the Tribunal in accordance with the directions of the Court: see s 44(4) and (5). The relevant importations concern four products. Two of them targets codling moth in apples and pears, a third targets light brown apple moth in apples and grapes, and a fourth targets oriental fruit moth in peaches and nectarines. In these reasons for judgment, I shall refer to them collectively as 'the products'. 4 The products work by releasing large quantities of synthetic female pheromones into the air in fruit orchards, thereby confusing male moths and preventing them from finding and mating with female moths of their species. The relevant moths have a short life cycle, typically seven to ten days. Over time, the products can eliminate or significantly reduce particular moth populations. 5 None of the products could be described as merely a chemical or mixture of chemicals. One tube contains a piece of wire to provide stiffness and the other is filled with a controlled release formulation consisting of a synthetic pheromone and sealed. The subject goods are presented in two forms: a pair of parallel tubes as described or a pair of parallel tubes of a slightly smaller diameter that have been twisted into twist-tie dispensers. They are designed to be tied to the branches of trees in fruit orchards and to allow the pheromones to gradually seep into the air as a vapour. 6 The respondent imports the products from Japan, which is not a Preference Country. Accordingly, duty payable on the importation of the products is to be calculated in accordance with s 16(1)(a) of the Customs Tariff Act . 7 On 5 August 2002, the respondent through its customs broker, LEP International Pty Ltd, lodged an application for a tariff advice in respect of the products. On 16 August 2002, Customs gave a decision on this tariff advice classifying the products under sub-heading 3808.10.90 of Sch 3 to the Customs Tariff Act . The respondent subsequently sought internal reviews of the tariff classification, but Customs twice confirmed its classification. 8 As it is permitted to do under s 167 of the Customs Act 1901 (Cth) ("the Customs Act "), the respondent paid customs duty under protest in respect of multiple entries of the products. It then sought review of the decisions by Customs to demand the duty that it paid under protest. In respect of all but one of the entries, the respondent sought to review the decision within six months of having paid the duty under protest. The Tribunal reviewed those decisions under s 273GA(2) of the Customs Act . In respect of one further entry, the respondent applied for a refund of duty which it had paid under protest. The Tribunal reviewed Customs' decision to refuse this refund application pursuant to s 273GA(1)(haaa). All of the decisions under review were made on the basis that the products should be classified under sub-heading 3808.10.90 of Sch 3 to the Customs Tariff Act . 9 The Tribunal determined that the products should be classified under a different sub-heading, namely 2905.29.00. By notice of appeal dated 10 February 2005, Customs lodged an appeal to this Court on the ground that the Tribunal had erred in law in the tariff classification it adopted. 14 The parties have agreed that the Tribunal erred in law in its classification of the products, and that they should have been classified under sub-heading 3808.10.90. In other words, they have agreed that the classification adopted by Customs was correct in law. On the footing that this is the relevant classification, the parties have also agreed that some of the products were covered by Tariff Concession Order 0302437 ("the TCO") made pursuant to s 273 of the Customs Act and Item 50A of Sch 4 to the Customs Tariff Act . The effect of the TCO is that the particular goods to which it applied were rendered free from duty. The operation and effect of the TCO was not appreciated by the parties until recently and was not drawn to the attention of the Tribunal. Assuming that the TCO applies, the demands for duty were erroneous in law to the extent of $44,557.55, and Customs would be required under s 163 of the Customs Act and r 126(1)(ea) of the Customs Regulations 1926 (Cth) to refund that amount to the respondent. The decision of the Tribunal dated 22 December 2004 be set aside. The parties shall bear their own costs of this proceeding. 16 The proposed consent orders relate to a matter of public law, and would involve setting aside a carefully reasoned decision of the Tribunal. It would be inappropriate for me to accede to the orders that have been sought, simply because they are consent orders, without satisfying myself that the Tribunal in fact erred in law, and that the correct tariff classification of the products is under sub-heading 3808.10.90. Further, if I were to be so satisfied, I also consider that I should identify the error of law by the Tribunal which founds the orders I am asked to make. That can be done either in these reasons or in any order I pronounce. I will take the former course. 17 The principles which apply in this situation are not in doubt. This is a power conferred upon it by the Parliament under Ch III of the Constitution of the Commonwealth. Its exercise is a public function and operates to bind the parties. Its public character applies to agreed orders disposing of private litigation between citizens or corporations and proceedings brought by or against governments and their agencies or public authorities. It is not appropriate to make an order of uncertain content or the content of which is to be derived from materials which are not on the public record. The court is then making an order without being apprised of its basis and proposed operation. To do so in my opinion is a purported, but not an actual exercise of judicial power. Moreover, in a practical sense the decision-maker or tribunal lacks the benefit of any binding direction from the court as to precisely what it is that the decision-maker or tribunal is required to do. In the present case the precise concession which led to the proposed consent order had not been communicated by the respondent to the applicant. The possibility arose that the matter could have been remitted to the Tribunal with the parties themselves not being ad idem as to the error of law which had led to the decision being set aside and which the Tribunal was required to rectify. And even if there had been such an agreement the terms of the order proposed would not have disclosed to the public what the parties had agreed should be its content. In the particular case where a tribunal decision is set aside, the Tribunal itself is not usually a party and has played no role in the negotiation of the agreement that it erred in law. A fortiori in that case the order must be clear and complete and the Court must be satisfied that it is appropriate. It is well-established that in making a consent order or indeed in accepting undertakings the Court must have regard to the limits of its power. The parties cannot, by consent, confer power on the Court to make orders which the Court lacks power to make --- Thomson Australian Holdings Pty Ltd v Trade Practices Commission ( 1981 ) [1981] HCA 48 ; 148 CLR 150 at 163. The question whether a consent order is to be made, is not concluded by a finding that it is formally within the power of the Court. In the exercise of its power the Court is not merely giving effect to the wishes of the parties, it is exercising a public function and must have regard to the public interest in doing so: see Australian Competition and Consumer Commission v Real Estate Institute (WA) Inc (1999) 161 ALR 79 at 86 and the authorities referred to there. It is important therefore that the Court itself addresses and is satisfied of the basis upon which its order is to be made and in particular where the order sets aside the decision of an official decision-maker or a tribunal. In the case of error of law attributed to a decision-maker or tribunal there is a particular public interest which requires the Court's specification of the error and its satisfaction that error occurred. If such a determination is to be set aside on the basis that it has failed to apply or has misapplied the law whether substantive or procedural, there may potentially be some precedential impact in other like cases. To permit the principle underlying the order to be formulated only by the parties in their submissions to the decision-maker or the Tribunal leaves the content of that principle in the hands of the parties. Subsequently, Stone J in Yulianti v Minister for Immigration and Multicultural Affairs [2001] FCA 142 agreed with the views expressed by French J and Sackville J. Her Honour observed in addition that the grounds for the making of the order can appear in the Court's reasons for judgment, rather than in the order itself. Similar views were expressed by RD Nicholson J in Xiao v Minister for Immigration [2001] FCA 459 ; (2001) 109 FCR 129. The principles explained by French J in Kovalev have been approved numerous times: see Re Allan and Repatriation Commission (2003) 77 ALD 140 at 144-145 [12]-[14]; Lobo v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 168 ; (2003) 132 FCR 93 at 110 [55] - [56] ; and WAKM v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 730 at [5] . If the products were classifiable to heading 3808, they could not be classified elsewhere. 19 The Tribunal held that the products were not classifiable under heading 3808 as insecticides. In summary, the Tribunal reasoned that, as there was no trade or technical meaning for the word 'insecticide', the ordinary meaning of the word must be applied. Its ordinary meaning was that of 'a substance or preparation for the killing of insects either by direct or indirect means'. It followed that the products were not classifiable to heading 3808, as the evidence showed that the products did not kill insects either directly or indirectly. 20 The Tribunal did not consider that there was any ambiguity in the meaning of 'insecticide' in heading 3808. Consequently, it considered that there was no need to have resort to the explanatory notes to the harmonised commodity description and coding system ("the Harmonised System Notes"). The Harmonised System Notes were developed by the committee established by the Convention on Nomenclature for the Classification of Goods in Customs Tariffs, Brussels in 1950. The Tribunal said that while the Harmonised System Notes are a recognised extrinsic aid to the construction of headings in the Customs Tariff, they are a secondary guide only and cannot displace the plain words of the statute or be used where there is no ambiguity in the legislation. In these circumstances, the Tribunal considered that there should be no recourse to the Harmonised System Notes. However, the Tribunal added that even if there were ambiguity in the meaning of the word 'insecticide', and regard were had to the Harmonised System Notes, the products would still not be classifiable under heading 3808. This was because none of the products had a repellent effect or an attractant effect within the meaning of the Harmonised System Notes. 21 The Tribunal also held that the products were not similar products within heading 3808. The reference to 'similar products' must be read as relating to all seven products that precede it, and so requires a finding as to the class or genus of goods common to all of the proceeding words. We must determine what is common class in all of the words in heading 3808. What is common is that they all have a pathological effect on either plant or insect life. In the case of those that kill (insecticides, rodenticides, fungicides, some herbicides and disinfectants), that pathological effect is fatal. In those that control (other herbicides and anti-sprouting products, plant growth regulators), that pathological effect inhibits or regulates growth. Inhibition or regulation relates to the growth of the plant itself. It does not extend to such matters as its reproduction even though inhibition or regulation may lead to its not reproducing by the production of seed, tubers or otherwise. Pathological effect on an organism produces growth changes, disease or death in that organism. We have already found that the subject goods do not have any pathological effect on the moths to either kill them or to inhibit or regulate their growth. Their effect is only physiological and, once outside the range of the subject goods, not ongoing. Therefore, the subject goods are not of the class or genus to which the products in heading 3808 belong. It held that the products could not fall within heading 3824 because it could not be said that they wholly comprised 'chemical products'. While the products included chemicals, they comprised much more; they were dispensing devices manufactured from wire, plastic and chemicals. 23 The Tribunal then considered whether the products could be classified under sub-heading 2905.29.00. The Tribunal held that it was appropriate to classify each product under this sub-heading having regard to the provisions of r 3(b) of Sch 2. Schedule 2 contains General Interpretation Rules for Sch 3. Where this rule applies, goods can be classified as if they consisted of the material or component giving them their essential character. In the case of each of the products, the Tribunal found that it derived its essential character from its active chemical component. In each case that component was, or was a derivative of, an unsaturated monohydric alcohol. In my opinion, the products should be classified under sub-heading 3808.10.90. They are not classifiable under sub-heading 2905.29.00. My reasons for reaching this conclusion are set out below. 25 I am also satisfied that the erroneous classification of the products amounts to an error of law. There has been some debate about whether a mistake as to the ordinary meaning of a word used in a statutory provision can of itself amount to an error of law. Reliance was placed upon the principle that, where a word is an ordinary English word, its meaning is not a question of law and, accordingly, whether the facts of a given case fall within that meaning is a question of fact. Reference was made to Hope v Bathurst City Council (1980) 29 ALR 577 at 580-2; [1980] HCA 16 ; 144 CLR 1 at 6-8 (per Mason J); Blackwood Hodge (Aust) Pty Ltd v Collector of Customs (NSW) (No 2) (1980) 3 ALD 38 at 49-51 (per Fisher J) and at 55-6 (per Sheppard J); and Brutus v Cozens [1972] UKHL 6 ; [1973] AC 854, esp at 861 (per Lord Reid) where his Lordship said: 'The meaning of an ordinary word of the English language is not a question of law. The proper construction of a statute is a question of law. If the context shows that a word is used in an unusual sense the court will determine in other words what that unusual sense is. ... It is for the tribunal which decides the case to consider, not as law but as fact, whether in the whole circumstances the words of the statute do or do not as a matter of ordinary usage of the English language cover or apply to the facts which have been proved. If it is alleged that the tribunal has reached a wrong decision then there can be a question of law, but only of a limited character. The question would normally be whether their decision was unreasonable in the sense that no tribunal acquainted with the ordinary use of language could reasonably reach that decision. If taken to its logical conclusion the appellants' argument really asserts that it is for the Customs to say in each case whether any, and if so which, provision of the Tariff applies to particular goods. But it is not a question of the Customs simply determining whether particular goods fall within the meaning of ordinary English words. What the Customs would be deciding, if the appellants are correct, is whether the description of particular goods falls within particular chapters, items, sub-items, paragraphs and sub-paragraphs of the Tariff. It must be a question of law whether a given description of goods falls within a particular part of the Tariff. Here the question is what particular part of the relevant Schedule, if any, applies. This necessarily involves a question of construction of the Tariff and is a question of law: see Whitton v Falkiner [1915] HCA 38 ; (1915) 20 CLR 118, per Isaacs J (at 127). 26 In Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36 ; (1996) 186 CLR 389 at 396-397, the High Court expressed reservations about the supposed distinction between the ordinary meaning of words, which is said to raise a question of fact, and the construction and effect of a term or provision which is said to raise a question of law. The meaning attributed to individual words in a phrase ultimately dictates the effect or construction that one gives to the phrase when taken as a whole and the approach that one adopts in determining the meaning of the individual words of that phrase is bound up in the syntactical construction of the phrase in question. This is not the way language works. The unit of communication by means of language is the sentence and not the parts of which it is composed. The significance of individual words is affected by other words and the syntax of the whole. 27 Subsequently, the issue was discussed at some length by Burchett J in Baxter Healthcare Pty Limited v Comptroller-General of Customs (1997) 72 FCR 467 (" Baxter Healthcare ") in a most helpful judgment. Where there is a question whether something falls within a verbal description in a statute (as in a case raising the application of a tariff item), the answer may depend simply on findings of fact as to the meaning of the words constituting the description and as to the nature of the thing itself. With regard to the words, '[t]he question what is the meaning of an ordinary English word or phrase as used in [a] Statute is one of fact not of law': Australian Gas Light Co v Valuer-General (1940) 40 SR (NSW) 126 at 137 per Jordan CJ. Nevertheless, once the nature of the thing has been found as a fact, whether it falls within the verbal description will, in many cases, be a question of law. For, in the first place, it may not be a matter of applying merely the ordinary English meaning of words or phrases, but of applying a meaning derived from the statute by a process of construction, which is a process of law: Hope v Bathurst City Council [1980] HCA 16 ; (1980) 144 CLR 1 at 10 per Mason J, with whose reasons Gibbs, Stephen and Aickin JJ stated their agreement. The principle that construction is a process of law has never been doubted, although the completeness of the proposition derived from it that '[t]he effect or construction of a term once its meaning or interpretation is established is a matter of law': Agfa-Gevaert Ltd v Collector of Customs (1994) 124 ALR 645 at 648 per Gummow J; Collector of Customs v Pozzolanic Enterprises Pty Ltd (at 287), and the relationship between that proposition and the proposition that the meaning of an ordinary word or phrase is a matter of fact, were left in some doubt when Agfa-Gevaert v Collector of Customs was reversed on appeal by the High Court: see Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36 ; (1996) 186 CLR 389 at 395-397. His Honour added that the limitation 'generally' was required, even in this last case, 'because the law may use a word in an ordinary sense, but there may be a number of ordinary senses and it then is necessary to select that which is appropriate, and because whilst the word may have but one ordinary meaning that is imprecise, the word will take its colour from the context and that will require construction of the law, a lawyer's task. The result in such cases will be more than the matching of a set of facts with plain words'. The proposition that 'whether facts fully found fall within the provisions of a statutory enactment properly construed is a question of law' was stated to be sustained by '[m]any authorities' in the judgment of Mason J in Hope v Bathurst City Council (at 7). The same proposition was subsequently applied by Full Courts of this Court to cases where what was in issue was whether facts as found fell within the provision of a tariff item: Peacock v Zyfert (1983) 48 ALR 549; Rheem Australia Ltd v Collector of Customs (NSW) (1988) 78 ALR 285 at 293, 306. 29 The first qualification arises where a statute uses a word whose meaning is clear but the word is inherently capable of more than one application or outcome in the circumstances of the case. In such a case, the question whether the statutory description is satisfied will often be simply a question of fact: see, for example, the discussion of Brutus v Cozens [1972] UKHL 6 ; [1973] AC 854 by Mason J in Hope v Bathurst City Council [1980] HCA 16 ; (1980) 144 CLR 1 at 7-8; and see also Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6 at 14-15. 30 The second qualification arises where there is uncertainty as to the meaning of a statutory word or expression, and that uncertainty can be resolved by construing the word according to its context. That process raises a question of law. Of course, it is conceivable that a particular provision in an enactment will raise both kinds of problem. But Gummow J's remarks in Agfa-Gevaert Ltd v Collector of Customs seem to me to involve that, where the susceptibility of words and expressions to different meanings or shades of meaning is to be resolved by a process of construction of the statutory language in order to determine whether it embraces the facts found, the ultimate question is one of law. This accords with the view of Fullagar J in Hayes v Commissioner of Taxation (Cth) , with Hope at 10, and with the joint judgment of Sheppard and Burchett JJ in Australian National Railways Commission v Collector of Customs (SA) (1985) 8 FCR 264 at 277. In Collector of Customs v Agfa-Gevaert Ltd at 397, the joint judgment of the High Court refers to the principle 'that the determination of whether an "Act uses [an] expression ... in any other sense than that which they have [scilicet, it has] in ordinary speech" is always a question of law'. On that basis, logically it must also be a question of law, in a case where a statutory expression has several ordinary senses, whether it is used in a particular one of them. And as the joint judgment of Neaves, French and Cooper JJ in Pozzolanic Enterprises points out (at 288-289), uncertainties may require to be resolved by reference to a value judgment about the range of the Act, rather than a matching of the facts to the, or an, ordinary meaning of the words. There is necessarily a selection process involved. The range of relationships to which the words apply for the purpose of the Act depends upon a judgment about that purpose. The selection process involved is analogous to that used in determining what causal relationships between conduct and loss attract liability for the purpose of s 82 of the Trade Practices Act (1974) (Cth): see Elna Australia Pty Ltd v International Computers (Aust) Pty Ltd (No 2) (1987) 16 FCR 410 at 418-419; Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274 at 286-288; 84 ALR 700 at 712-713. In the end this is not a process of fact finding. The facts are found. What is left is a value judgment about the range of the Act and that is a question of law. In my opinion, the Tribunal erred in the way in which it construed headings 3808 and 2905. In particular, it failed to give effect to the statutory context in which those provisions appear. a substance or preparation for the killing of insects either by direct or indirect means. Depending on its context, this is an available meaning of the word, but in my opinion it is an unduly narrow meaning in the context of heading 3808. 33 In adopting this meaning of 'insecticide', the Tribunal had regard to the Latin root of the suffix 'cide'; it derives from 'caedere' meaning to cut or to kill. The Tribunal also had regard to the way in which words were grouped in the heading and sub-heading. In particular, the Tribunal placed weight on the fact that anti-sprouting products and plant-growth regulators were grouped with herbicides. The Tribunal said that this indicated that the terms which connoted control, or both control and/or killing, were separated from those that were directed at killing. 34 In my opinion, neither of these factors is compelling. The word 'insecticide' can be applied to substances that control or repel insects. For instance, Webster's Third International Dictionary (1971) includes as a broad definition of insecticide 'an agent hostile or repellent to insects...'. The same dictionary defines 'insecticidal' as '(1) destroying or controlling insects'. I would not attach the same weight as the Tribunal did to the grouping of terms in the sub-headings to 3808. There may be other reasons for grouping herbicides with plant-growth regulators and anti-sprouting products, such as the simple fact that both are concerned with plants rather than with insects or other organisms. He expressly recognised that in common usage the term insecticide might be broader than the meaning he was concerned to address. 36 What is of much greater significance is that heading 3808 and its sub-headings contain other indications that the word 'insecticide' is used in a way that embraces products that are designed to exterminate, reduce, repel or control targeted insect populations. Sub-heading 3808.10, 'Insecticides', is elaborated by sub-headings 3808.10.10 and 3808.10.90. Sub-heading 3808.10.10 provides that certain types of insecticides, namely camphor, fly papers and mosquito spirals and coils, are to be free of duty, whereas other insecticides attract duty at the rate of 5 per cent. We know from Markwell v Wollaston that the mixture of oil and resin that is smeared on fly paper is a preparation that falls within the ordinary meaning of the term 'insecticide'. The term is not used in a way which is confined to chemicals which directly or indirectly kill or exterminate insects. 37 The examples given in parentheses in heading 3808, namely sulphur treated bands, wicks and candles and fly papers, provide another indicator that points in the same direction. The first two examples suggest that the word 'insecticides' in heading 3808 is intended to include products that repel insects or that in some way modify the behaviour or physiology of insects so as to render them less pestilent. 38 The Tribunal failed to take these contextual indications into account. Both sets of indications support a wider meaning of 'insecticide' than that adopted by the Tribunal. 39 At the very least, the examples in heading 3808 and the references to camphor and mosquito spirals and coils in sub-heading 3808.10.10 suggest that there is some ambiguity about the way in which the term insecticide is used in the heading. To adapt the language used by Burchett J in Baxter Healthcare , a legal choice must be made about possible concepts conveyed by the statutory expression, and in making that choice it is appropriate to take account of the intent and purpose of the Customs Tariff Act . In my opinion, it would have been permissible for the Tribunal to have regard to the Harmonised System Notes as an extrinsic aid to the interpretation of heading 3808. Where the language of a heading is ambiguous or susceptible to different interpretations, the Harmonised System Notes are an appropriate extrinsic aid to interpretation: Gardner Smith v Collector of Customs Victoria (1986) 66 ALR 377 at 383-384; Barry R Liggins Pty Ltd v Comptroller-General of Customs (1991) 103 ALR 565 at 571-573; and Toyota Tsusho Australia Pty Ltd v Collector of Customs [1992] FCA 282 at [22] - [30] . 40 The Tribunal went on to hold that it would have reached the same conclusion about the meaning of the term insecticide even if it had regard to Note (I) to Item 38.08 of the Harmonised System Notes. In reaching this conclusion, the Tribunal focused on two particular phrases in Note (I) and asked itself the question whether the products had a repellent or attractant effect of the kind described in Note (I). It was common ground on the evidence that the products were not repellents. The expert witnesses disagreed as to whether or not the products were attractants in a general sense. However, the Tribunal found that there was no evidence that the products attracted moths to traps or poison baits, which it evidently considered to be the relevant question for the purposes of applying Note (I) to Item 38.08 of the Harmonised System Notes. 41 In my opinion, the Tribunal fell into error by not reading the Notes concerning Item 38.08 of the Harmonised System Notes as a whole. The products may be in a variety of forms such as sprays or blocks (against moths), oils or sticks (against mosquitoes), powder (against ants), strips (against flies), cyanogen gas absorbed in diatomite or paperboard (against fleas and lice). In effect, the Tribunal focused solely on two examples given towards the end of Note (I). They were simply examples of insecticides which adopt a particular mode of action in the course of functioning as repellents or attractants. In my opinion, the Tribunal did not appreciate the full significance of Note (I) because it failed to have regard to the overall content and context of the Note. 44 Nor did the Tribunal refer to the closing passage in the Notes to Item 38.08 which stated that the heading also includes products to control mites and ticks (acaricides), molluscs (molluscicides), nematodes (nematocides), rodents (rodenticides), birds (avicides), and other pests (e.g., lampreycides, predacides). 45 A fair reading of the Notes to Item 38.08 indicates that it was intended to cover substances which operate as repellents or attractants, or which operate to control insect populations in other ways such as by sterilisation or by chemicals which interfere with biochemical and physiological processes in insects. The Tribunal wrongly focused on the particular instances of repellents and attractants described in Note (I), without recognising that they were only examples of possible modes of action. The appellant was critical of this approach, but there is nothing exceptional or unorthodox about it. Such approach is commonly referred to as an application of the ejusdem generis rule, but it overstates its proper function to call it a rule. It is no more than a guide to interpretation and must be used cautiously: see Pearce and Geddes, Statutory Interpretation in Australia (5 th Ed) at [4.19]-[4.24]. The rule has been criticised by Mahoney JA in Mattinson v Multiplo Incubators Pty Ltd [1977] 1 NSWLR 368 at 373 and by Wells J in Brewarrana Pty Ltd v Commissioner of Highways (No 2) (1973) 6 SASR 541 at 587. There will be occasions when it is not appropriate to apply the rule having regard to the context and purpose of the particular statutory provision. There will also be occasions where the descriptive terms that precede the general words are so varied that it is futile to search for a single genus or class that can be of assistance in giving meaning to the general words. Conversely, there will be occasions where it is both sensible and appropriate to give meaning to the general words by identifying the class or genus that is indicated by the preceding particular words. All in all, the surest approach is to give meaning to general words which follow particular words in a statutory provision by determining the meaning of those words in their context and by reference to the purpose of the provision, in the same way as meaning is given to other words in a statute. 47 The Tribunal identified the class of goods in heading 3808 very narrowly. At the outset of its discussion of this issue, the Tribunal said that the class or genus of goods in heading 3808 is that they all relate to controlling living organisms. In the end, however, the Tribunal adopted a much narrower formulation: the common class was identified as substances or products that have a pathological effect on either plant or insect life. In my opinion, this is too narrow a description of the relevant class. When account is taken of all the contextual features I have described, it would be more appropriate to describe the class as products that have a controlling, deterring, inhibiting or exterminating effect on insects, rodents, fungi, plants or bacteria. If this approach were to be adopted, and if the products in question did not themselves constitute insecticides, it would have been open to the Tribunal to find that the products were similar products within the meaning of heading 3808. 48 The appellant argued that it is sufficient in law if the goods in question are similar to any of the goods previously described by name, citing Acrow Australia Ltd v Collector of Customs (1986) 12 FCR 129 at 132. The appellant also submitted that if the Tribunal had asked itself the question whether the products in question were similar to insecticides, it would have been bound to answer the question affirmatively. 49 It is unnecessary for me to express any concluded view about this aspect of the appellant's argument. I have some reservations about it. It begs the question as to what standard of similarity is to be applied. Moreover, if the term insecticides were properly defined in its statutory context in the narrow way that the Tribunal determined, it would not necessarily follow that the products were similar to insecticides. The products in question were not merely chemicals but rather devices for dispensing certain chemical agents. 51 I agree with the appellant's submission. When Ch 29 is read as a whole, it is clear that it is only intended to apply to chemicals, and not to dispensing devices that incorporate certain chemical agents. 52 Note 1 to Ch 29 makes it fairly clear that the Chapter does not apply to manufactured dispensing devices. Except where the context or other specific provisions otherwise require, it confines Ch 29 to 'separate chemically defined organic compounds, whether or not containing impurities'. While the language could be clearer, this paragraph indicates that Ch 29 is only intended to apply to things that are identifiable as consisting exclusively of chemical compounds, unless some special exception applies. There are exceptions mentioned in pars (c), (d), (e), (f) and (g) of the Note, but otherwise the intention appears to be that Ch 29 is only concerned with chemicals. 54 Paragraph 1(e) of the Note provides another indication that Ch 29 does not apply to dispensing devices. Its effect is that a chemical mixture will fall outside Ch 29 if the chemical compound in question is dissolved in a solvent for reasons other than safety or transport, or if the solvent renders the chemical particularly suitable for some specific commercial use rather than general use. An earlier version of the same provision was explained and applied in Re Bayer Australia Ltd v Collector of Customs (NSW) (1985) 7 ALN 84. That case concerned a chemical known as flumethrin which was the active ingredient in a cattle tick insecticide. The flumethrin was imported in 200 litre drums as a 60 per cent premix concentrate dissolved in a solvent. The Tribunal held that the chemical mixture was taken outside Ch 29 by the relevant paragraph of Note 1. This was because the addition of the solvent so as to make a standardised 60 per cent solution was not a normal and necessary method adopted solely for reasons of safety or for the purpose of transporting the goods as required by the Note; it was also adopted for several other reasons including the production of a workable solution at the place where final mixing takes place. 55 In my opinion, these indications are confirmed by a reading of the whole of Ch 29. 56 The Tribunal did not examine Note 1 to Ch 29. Nor did it specifically consider the question whether Ch 29 was confined to chemicals, and was incapable of applying to dispensing devices which incorporated a chemical dosage. Rather, the Tribunal moved directly to r 3 of Sch 2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this Rule), presented unassembled or disassembled. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. In fact, as I have indicated, the Notes to Ch 29 provide that the Chapter is confined to goods or products that consist exclusively of chemical compounds, unless some special exception applies. As no such exception applies, the occasion did not arise for r 3(b) to be applied. 58 Accordingly, I consider that the Tribunal erred in law in classifying each of the products under sub-heading 2905.29.00. The Tribunal held that heading 3824 was inapplicable because it was restricted to products that were wholly chemical; it could not apply to the products in question because they contained wire and plastic tubes. 60 Strictly speaking, given the conclusion I have reached that the products are properly classifiable under sub-heading 3808.10.90, the applicability of heading 3824 does not arise. However, I should indicate that in my opinion the conclusion reached by the Tribunal was wrong in law. Heading 3824 applies, inter alia , to chemical products and preparations of the chemical or allied industries. If heading 3808 were inapplicable, there would be no reason for excluding the relevant products from classification under heading 3824. On the evidence, they were clearly chemical products or at the very least preparations of chemical or allied industries. The products are not excluded from classification as chemical products or preparations of chemical or allied industries under heading 3824 on the ground that they are not wholly chemical and consist of wire and plastic dispensers that contain a chemical dosage. The correct classification of the products is under sub-heading 3808.10.90. 62 In the circumstances, I propose to make orders in accordance with the minutes of consent orders that were submitted to me by the parties. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young. | appeal from decision of administrative appeals tribunal parties agreement that tribunal erred in law consent orders whether orders appropriate whether tribunal erred in law respondent imports isomate pheromones dispensers which disrupt insect mating identification and classification of products by australian customs service under customs tariff act whether products "insecticide" meaning of "insecticide" whether products "similar products" meaning of "similar products" " insecticide ", " similar products " administrative law words and phrases |
On 21 December 2005 APRA filed a statement of claim in which it was alleged that Mr Siminton had, in various ways, contravened provisions of the Banking Act 1959 (Cth) ("the Act "). On 15 January 2002 Mr Siminton had registered a business name under Victorian legislation. That business name was "Principality of Camside". Later he established a website which advised readers that the Principality had a "new bank" which was to be known as the "Terra Nova Cache". Mr Siminton addressed a number of public meetings in which he encouraged those present to deposit funds with the "new bank". He succeeded in persuading a considerable number of people to place their funds in the "bank". Upon becoming aware of these events APRA filed the application which initiated this proceeding. 3 On 10 January 2006 APRA sought interlocutory relief against Mr Siminton. The respondent have liberty to apply on 2 days notice in writing to the Applicant, supported by an Affidavit as to his means, for an order that he be permitted to withdraw monies for the purposes of paying his own living expenses and/or paying his legal expenses in relation to the proceeding. 5 On 29 December 2005, 4 January 2006 and on 19 January 2006 APRA filed notices of motion and statements of charge seeking orders that Mr Siminton be punished for contempt in respect of nine alleged breaches of the orders made by Sundberg J. The contempt charges were heard on 29 March 2006 and, on 30 March 2006, Merkel J found that Mr Siminton had committed contempt by breaching certain of the orders made by Sundberg J on 15 December 2006: see [2006] FCA 326. These included various contraventions of Order 2 (b) of his Honour's orders. 6 On 10 April 2006 Merkel J ordered that Mr Siminton be imprisoned in respect of the various contempts: see Australian Prudential Regulation Authority v Siminton (No. 3) (2006) 230 ALR 528. 7 Mr Siminton lodged an appeal against the findings and orders made by Merkel J. His appeal was allowed in part because the sealed copy of the orders made by Sundberg J, although personally served on Mr Siminton, had not contained the endorsement required by Order 37 Rule 2 of the Federal Court Rules . The order that Mr Siminton be imprisoned was set aside. The Full Court, nonetheless, upheld Merkel J's findings that Mr Siminton had been guilty of contempt and substituted a penalty of $50,000: see Siminton v Australian Prudential Regulation Authority [2006] FCAFC 118 ; (2006) 152 FCR 129. 8 The question of whether the necessary endorsement appeared on the copy of the orders which was served on Mr Siminton was raised by a member of the Court on the first day of the hearing of the appeal --- 5 May 2006. APRA noted that the copy of Gray J's orders which had been served on Mr Siminton also lacked the endorsement. As a result a further copy of Gray J's orders, which contained the endorsement, was served on Mr Siminton on 9 May 2006. This date is of significance because some of the conduct which is the subject of the present charges occurred shortly before the hearing of the appeal commenced and before the amended orders were served on Mr Siminton. Some of the charges are laid as alternatives. Each of the charges alleges that, at some time between 2 May 2006 and 28 September 2006, Mr Siminton transferred, disposed of or, alternatively, dealt with moneys standing to his credit, the credit of the Principality of Camside and/or the credit of two persons whom it is alleged were Mr Siminton's nominees. Shortly put, APRA submits that Mr Siminton breached Gray J's Order and sought to conceal those breaches by transferring moneys to a credit card account operated by a third party and using a credit card which bore the third party's name as if it were his own. 10 The evidence relied on by APRA was contained in a series of affidavits (together with the exhibits referred to in those affidavits). 11 The charges, and the evidence relied upon by APRA in respect of those charges (with footnotes omitted), were as follows. $5468.96. On 2 May 2006, Mr Siminton effected or gave instructions in relation to the transfer of $5760.30 standing to the credit of Mr Siminton and/or the Principality of Camside with Mobile EFT Pty Ltd, to a Visa card account in the name of Dale and Karen M Holzheimer held at the Adelaide Bank. At all relevant times Mr Siminton operated an electronic banking facility with Mobile EFT Pty Ltd (the Camside Account). On 2 May 2006 the amounts listed in paragraph 53 were transferred from the Camside Account. The corresponding credit entry to the Visa Account is recorded at page 71 in Annexure "HJG(9)" to the Goodliffe affidavit. The Visa Account statement shows credits for 2 May 2006 of $291.34 and $5468.96. The Applicant submits that the transfer of $5760.30 from the Camside Account to the Visa account was deliberate. Mr Siminton had previously attempted to transfer money under his control into the Visa Account. Further, the Applicant submits that Mr Siminton, or a person acting on his instructions, made the transfer. The conclusion that Mr Siminton deliberately effected, or gave instruction in relation to the transfer of $5760.30 from the Camside Account to the Visa Account is the only rational inference to be drawn from the evidence. Any alternative hypothesis could not be regarded as reasonable in the absence of evidence to support hypothesis when that evidence, if it exists at all, must be within the knowledge of Mr Siminton. $2743.82. On 3 May 2006, Mr Siminton effected or gave instructions in relation to the transfer of $3125.88 from the Camside Account to the Visa Account. On 3 May 2006 the amounts listed in paragraph 61 above were transferred from the Camside Account. The corresponding credit entry to the Visa Account is recorded at page 72 in Annexure "HJG(9)" to the Goodliffe affidavit. The Visa Account statement shows credits for 3 May 2006 of $382.06 and $2743.82. The Applicant submits that the transfer was made deliberately by Mr Siminton or by a person acting on his instructions. $37.81. On 4 May 2006 the amounts listed in paragraph 66 above were transferred from the Camside Account. The corresponding credit entry to the Visa Account is recorded at page 72 in Annexure "HJG(9)" to the Goodliffe affidavit. The Visa Account statement shows credits for 4 May 2006 of $191.03 and $37.81. The Applicant submits that the transfer was made deliberately by Mr Siminton or by a person acting on his instructions. On 8 May 2006, Mr Siminton effected or gave instructions in relation to the transfer of $781.28 from the Camside account to the Visa Account. The total sum of $781.28 was transferred on 4 May 2006 in a lump sum. On 8 May 2006 the amount listed in paragraph 71 above were transferred from the Camside Account. The corresponding credit entry to the Visa Account is recorded at page 72 in Annexure "HJG(9)" to the Goodliffe affidavit. The Visa Account statement shows a credit for 8 May 2006 of $781.28. The Applicant submits that the transfer was made deliberately by Mr Siminton or by a person acting on his instructions. $3515.76. On 16 May 2006, Mr Siminton effected or gave instructions in relation to the transfer of $4608.05 from the Camside Account to the Visa Account. On 2 May 2006 amounts listed in paragraph 76 above were transferred from the Camside Account. The corresponding credit entry to the Visa Account is recorded at page 72 in Annexure "HJG(9)" to the Goodliffe affidavit. The Visa Account statement shows credit for 16 May 2006 of $1092.74 and $3515.76. The Applicant submits that the transfer was made deliberately by Mr Siminton or by a person acting on his instructions. $74.60 on 6 August 2006. The Applicant alleges that Mr Siminton used a Visa credit card issued to Karen M Holzheimer to make purchases totalling $2,887.27 using monies in the Visa Account standing to the credit of Dale and Karen Holzheimer, as his nominees. The total sum of $2,887.27 was spent in 31 separate credit card transactions (in the form of purchases) between 2 May 2006 and 16 August 2006. On 11 April 2006, prior to 31 transactions listed in paragraph 86 being made, Karen Holzheimer reported to the Adelaide Bank that her Visa credit card attached to the Visa Account as (sic) lost. A replacement Visa credit card, number 4564 3679 0031 1427, was issued to Karen Holzheimer on 11 April 2006 and sent to her in Queensland by registered post on 12 April 2006. Each of the 31 transactions listed in paragraph 82 above was made using Visa card number 4564 3679 0031 1427 issued to Karen Holzheimer on 11 April 2006. The Adelaide Bank froze the Visa Account on 15 September 2006 in order to protect its interests and to ensure that the cards attached to the Visa Account were not being misused. Karen Holzheimer made no complaint to the Adelaide Bank that the Visa Account had been frozen --- she merely requested that the fact be confirmed in writing. The Applicant has obtained the credit card vouchers for each of the 31 transactions listed in paragraph 82. The credit card vouchers are the slips presented by a merchant to a customer to sign in order to authorise a transaction. In most cases the date of an actual transaction on a credit card voucher will be earlier than the date recorded on the credit card statement due to processing delays. The Applicant has had the signatures on each of the credit card vouchers for the 31 transactions listed in paragraph 90 above compared to the signature of Mr Siminton by a handwriting expert. The handwriting expert has expressed the opinion that the signatures on the credit card vouchers for the 31 transactions listed in paragraph 90 above are those of Mr Siminton. The card was used at restaurants to purchase food and beverages and at shops. Further, there are other transactions in the period 2 May to 16 August which, although not the subject of contempt charges, appear specifically to relate to Mr Siminton. APRA submits the Court can use this additional evidence to assist it in drawing the inference that the Visa account was being used by Mr Siminton as principal, for his own purposes, and that the use of an account and card in Karen Holzheimer's name was nothing more than an attempt to disguise the fact that Mr Siminton was accessing funds in breach of the Orders. Alternatively to Charge 1.6, the Applicant alleges that between 2 May 2006 and 16 August 2006, Mr Siminton disposed of, alternatively dealt with, monies totalling $14,504.80 standing to the credit of Dale and Karen Holzheimer in the Visa Account, as nominees of Mr Siminton, by expending and/or withdrawing a total of $14,504.80 in a series of individual transactions through the Visa Account. Between 2 May 2006 and 16 August 2006 Mr Siminton deposited $14,504.80 into the Visa Account. However, at 16 August 2006 the Visa Card was in debit of $2463.73. As a result, the sum of $14,504.80 was disposed of, alternatively dealt with by expending and/or withdrawing a total of $14,504.80 in a series of individual transactions through the Visa Account. The evidence demonstrates, alternatively supports the inference, that only Mr Siminton was using the card and account at this time. Further to Charges 1.6 and 1.7, the Applicant alleges that between 2 May 2006 and 16 August 2006, Mr Siminton disposed of, alternatively dealt with, monies totalling $14,504.80 standing to the credit of Dale and Karen Holzheimer in the Visa Account, as nominees of Mr Siminton, by making the sum of $14,504.80 available for expenditure, and/or withdrawal through the Visa Account. Between 2 May 2006 and 16 August 2006 Mr Siminton deposited $14,504.80 into the Visa Account. However, at 16 August 2006 the Visa Card was in debit of $2463.73. As a result, the sum of $14,504.80 was disposed of, alternatively dealt with by making the sum of $14,504.80 available for expenditure, and/or withdrawal through the Visa Account. The evidence demonstrates, alternatively supports the inference, that only Mr Siminton was using the card and account at this time. On 16 August 2006, Mr Siminton effected or gave instructions in relation to the transfer of $25,000 to the Visa Account from an account controlled by him at the Anglo-Irish Bank in Austria. The total sum of $24,981 ($25,000 minus bank fees) was transferred by SWIFT electronic transfer into the Visa Account on 16 August 2006 in a lump sum. SWIFT is in (sic) acronym for Society of Worldwide International Financial Telecommunications --- a group which allows customers to transfer money electronically between banks around the world. APRA submits that the transfer of $24,981 from the Anglo-Irish Bank account to the Visa Account was deliberate. The account at the Anglo-Irish Bank is in Mr Siminton's name. Mr Siminton has previously used the Anglo-Irish Bank account to pay for investments in Australia. Further, APRA submits the Court can infer that Mr Siminton, or a person acting on Mr Siminton's instructions, made the transfer. The evidence discloses that he was the person who had authority to operate that account. The conclusion that Mr Siminton deliberately effected, or gave instructions in relation to the transfer of $24,981 from the Anglo-Irish Bank to the Visa Account is the only rational inference to be drawn from the evidence. Any alternative hypothesis could not be regarded as reasonable in the absence of evidence to support that hypothesis when that evidence, if it exists at all, must be within the knowledge of Mr Siminton. $127.02 on 8 September 2006. The Applicant has obtained the credit card vouchers for each of the 4 transactions listed in paragraph 109. The Applicant has had the signatures on each of the credit card vouchers for the 4 transactions listed in paragraph 111 above compared to the signature of Mr Siminton by a handwriting expert. The handwriting expert has expressed the opinion that the signatures on the credit card vouchers for the 4 transactions listed in paragraph 111 above is that of Mr Siminton. Further, Mr Siminton was recorded by security camera conducting Transaction 4 listed in paragraph 111 above. Alternatively to Charge 1.10, the Applicant alleges that between 16 August 2006 and 28 September 2006, Mr Siminton disposed of, alternatively dealt with, moneys totalling $21,377.93 standing to the credit of Dale and Karen Holzheimer in the Visa Account, as nominees of Mr Siminton, by expending and/or withdrawing a total of $21,377.93 in a series of individual transactions through the Visa Account. Between 16 August 2006 and 28 September 2006 Mr Siminton deposited $24,981.00 into the Visa Account. The Visa Account was frozen by the Adelaide Bank on 15 September 2006 and the Visa card belonging to Karen Holzheimer was cancelled on 19 September 2006. However, at 28 September 2006 the balance of the Visa Account was $3603.07. Further, Mr Siminton was recorded by security video camera conducting the two withdrawals listed in paragraph 117 above. As a result, the sum of $21,377.93 was disposed of, alternatively dealt with, by Mr Siminton by expending and/or withdrawing a total of $21,377.93 in a series of individual transactions through the Visa Account. Alternatively to Charges 1.10 and 1.11, the Applicant alleges that between 16 August 2006 and 28 September 2006, Mr Siminton disposed of, alternatively dealt with, moneys totalling $21,377.93 standing to the credit of Dale and Karen Holzheimer in the Visa Account, as nominees of Mr Siminton, by making the sum of $21,377.93 available for expenditure and/or withdrawal through the Visa Account. Between 16 August 2006 and 28 September 2006 Mr Siminton deposited $24,981.00 into the Visa Account. The Visa Account was frozen by the Adelaide Bank on 15 September 2006 and the Visa card belonging to Karen Holzheimer was cancelled on 19 September 2006. However, at 28 September 2006 the balance of the Visa Account was $3603.07. As a result, the sum of $21,377.93 was disposed of, alternatively dealt with, by Mr Siminton by making the sum of $21,377.93 available for expenditure, and/or withdrawal through the Visa Account. Each of the charges involved the use of a Visa card, the account for which was in the name of Karen and Dale Holzheimer. APRA submits Karen and Dale Holzheimer are 'nominees' for the purposes of the Orders because they were 'someone appointed by another to act as their agent'. All of the transactions to which the charges refer are undertaken by Mr Siminton as principal, using Karen and Dale Holzheimer, and their Visa credit card account, as his agents. At all relevant times Karen and Dale Holzheimer held a Visa credit card account at the Adelaide Bank (BSB 610-101, account number 070787941) ("Visa Account"). Dale and Karen M Holzheimer opened the Visa account in April 2002. The residential address given for the Holzheimer's in the application for the Visa credit card was 12 Aquamarine Street, Springfield, Qld 4300. All of the Visa Account statements were sent to addresses in Queensland. All of the transactions listed in para 82 [set out above at [23]] took place in Victoria. At all relevant times Mr Siminton was resident in Victoria. At no stage did Dale or Karen Holzheimer request that an additional credit card be issued on the Visa Account for use by Mr Siminton. The terms and conditions of use of the Visa Account forbade the use of the credit card by anyone other than the person named on the card. It had been opened by Mr Siminton in March 2000 as the Australian representative of a business named "Synchronistic Corporation". In 2003 Mr Siminton changed the trading name of the account to "HM Government of Camside". Mobile EFT is a service which allows merchants to accept credit cards from customers. Once the customer's account has been debited the funds are transferred from their financial institution to Mobile EFT and, after about eight days, the money is then credited to the merchant's nominated bank account. When the account was opened Mr Siminton nominated a Commonwealth Bank account as that into which payment was to be made. He subsequently varied that direction. On 13 February 2006, about a month after Gray J made his orders, Mr Siminton changed the nominated account for receipt of funds from the Principality of Camside's Mobile EFT account to the Holzheimer's Visa account at the Bank of Adelaide. The only person who was nominated as the owner of the "HM Government of Camside" business in the documents completed by Mr Siminton was Mr Siminton himself. It was he who established the merchant account and it was he who, from time to time gave instructions to vary the arrangements. 38 As already noted some of the charges were laid in the alternative. Charge 1.7 is an alternative to Charge 1.6. Charge 1.8, in turn, was put as an alternative to Charge 1.7. Counsel for APRA advised the Court that if it found Charge 1.7 proven, APRA did not invite findings to be made in respect of Charges 1.6 and 1.8. For similar reasons APRA submitted that, if Charge 1.11 were found proven, it would not be necessary for the Court to make findings in relation to Charges 1.10 and 1.12. However, the disobedience will amount to a criminal contempt if it involves 'deliberate defiance or, as it is sometimes said, if it is contumacious': see Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525 at 530 ... However, as all proceedings for contempt are now regarded as criminal in nature, all of the charges must be proved beyond reasonable doubt: see Witham at 534. 40 In Advan Investments Pty Ltd v Dean Gleeson Motor Sales Pty Ltd [2003] VSC 201 Gillard J identified the elements which it is necessary for a complainant to establish in order to make good a charge of civil contempt of Court. • A copy of Gray J's orders was served on Mr Siminton on 23 January 2006. An amended copy of the orders was served on him on 9 May 2006. The relevant amendment was the inclusion of the endorsement required by Order 37 Rule 2(3) of the Federal Court Rules . • Mr Siminton had knowledge of the terms of the orders. 42 Before dealing with the principal issues in dispute I should note that Mr Siminton raised certain preliminary objections to the contempt charges being heard and determined before the principal application had been heard. He did not object to the contempt charges being heard immediately after the hearing of the principal application. As events transpired this is what occurred. There were other preliminary objections which can be grouped under two heads. The first was that, for a variety of reasons, provisions of the Act on which APRA relied in the principal proceeding were "unconstitutional". There was also an objection that the principal proceeding was an abuse of process and that it should permanently be stayed. I rejected these submissions for reasons which I gave when dealing with the principal proceeding: see Australian Prudential Regulation Authority v Siminton (No 6) [2007] FCA 1608 at [7] to [27]. In any event, these arguments cannot avail Mr Siminton in contempt proceedings. Whilst the order stands, and it is not set aside, it must be observed and obeyed and any breach or contravention of such an order can give rise to a charge of contempt for failing to comply with it or observe it. It was these moneys which Mr Siminton was prevented from dealing with. The expert opinion was that a reader of the order would understand it to apply to moneys which were in the relevant accounts on the date on which the order was made --- 10 January 2006 and not moneys thereafter added. I rejected the tender of this evidence because the proper construction of Order 1(e) was a matter of law, not a matter of fact: see Universal Music Australia Pty Ltd v Sharman Networks Ltd [2006] FCAFC 41 ; (2006) 150 FCR 110 at 116. 44 I allowed counsel to pursue an argument that, as a matter of law, the order was to be construed and understood in the manner contended for by the expert. As developed the submission was that "the moneys" was a reference to a definite article. When read in conjunction with " standing " the use of the present tense meant that the relevant moneys were those in the relevant accounts on 10 January 2006 rather than "future moneys" in "future accounts". 45 Counsel for APRA submitted that Order 1(e) was properly to be construed as applying to any moneys standing to the credit of a relevant account during the currency of the order. Attention was directed to other parts of Gray J's orders, for example, paras 1 (a), (b) and (c), which restrained Mr Siminton from doing things in the future. Counsel conceded that, if Mr Siminton's construction argument succeeded, no contraventions of Order 1(e) could be established. 46 It is trite law that injunctive orders of the Court "should be granted in clear and unambiguous terms which leave no room for the persons to whom they are directed to wonder whether or not their future conduct falls within the scope or boundaries of the injunction: see ICA Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 259 per Lockhart J, with whom Gummow and French JJ agreed. What is not as clear is what is comprehended, in the context, by the word "unambiguous" and what consequences flow from a finding of ambiguity if it is sought to enforce an order in proceedings for contempt. In Australian Consolidated Press Ltd v Morgan [1965] HCA 21 ; (1965) 112 CLR 483 the appellant contended that, unless the language of an undertaking was unambiguous and certain, it should not be enforced by contempt proceedings. This submission was rejected by the Court. But, if it bears a meaning which the Court is satisfied is one which ought fairly to have been in the contemplation of the person to whom the order was directed or who gave the undertaking as a possible meaning, the fact that that meaning results from a process of construction and involves a choice of possible meanings does not, in my opinion, preclude the Court from enforcing the order or undertaking in the sense in which the Court assigns to it. If the Court is satisfied that the party said to be in contempt bona fide believed himself bound only by a construction which the Court thinks to be erroneous, it may for that reason, in its discretion, refuse to make an order or, if it makes an order, refuse to make an order for costs against that party. But, even in such a case, the enforcement of the plaintiff's rights must not be left out of account. A party who has bona fide acted on erroneous view of an order or undertaking may, according to the circumstances, nonetheless be justly adjudged guilty of contempt in procedure. In my opinion, this is equally so where, because of its terms or circumstances, the order or undertaking requires construction in order to determine its meaning and will move ambiguities patent or latent. If that were so, I would agree that a mistake in construction could not excuse disobedience, although it might perhaps mitigate its consequences ... If its true meaning, although not immediately plain, can be ascertained according to ordinary rules of construction, then the person giving the undertaking is bound by it in that sense. That the uncertainties that lurk in the words of this undertaking, and which were exposed during the argument, cannot be resolved in that way, for they do not arise from a debatable construction but from an uncertain denotation. At least where the true construction of the order is one which ought fairly to have been in the contemplation of the person to whom the order was directed ... the Court which entertains the charge of contempt will be required to determine that construction. Of course, it may be highly relevant to the question of punishment that a respondent failed to comply with the order because he, she or it placed a construction on the order that was not its true construction. The evident purpose of his Honour's order was to prevent any dealings with the accounts operated and controlled by Mr Siminton or those associated with him pending the hearing and determination of the principal proceeding. It was for this reason that it was deemed necessary to make provision for Mr Siminton to obtain access to funds for living and legal expenses. This would not have been necessary had Mr Siminton had access to funds added to any of the accounts after 10 January 2006. It was reasonable to expect that account balances would change over the period during which the order was to be in force if only because of interest payments being credited and bank fees being debited. The construction contended for by Mr Siminton would have rendered his Honour's orders progressively ineffective as the balances of the accounts covered by it changed after 10 January 2006. Had his Honour intended that his orders should have been so confined in their operation he would have inserted the words "on 10 January 2006" after "nominee". Order 1(e) is properly to be understood as applying to all moneys standing to the credit of the relevant accounts during the currency of the order. This construction is one that ought fairly to have been within Mr Siminton's contemplation when Order 1(e) was made. 50 I note that Order 1(e) is, relevantly, in identical terms to Order 2 (b) made by Sundberg J on 15 December 2005. When Mr Siminton was charged, before Merkel J, with having contravened this order he did not contend that it was ambiguous or uncertain or that he had not understood it. 51 The question of whether or not Mr Siminton, in the present proceeding, acted on a bona fide misunderstanding of the order, will fall for consideration, on the evidence, when it becomes necessary to determine what action the Court should take in response to any contravention on the part of Mr Siminton. This objection, as I understood it, applied to Charge 1.9 which alleges that Mr Siminton gave instructions that a sum of money held in an account controlled by him in a bank in Austria should be transferred to the Holzheimer's Visa account. 53 Order 1(e) applied to accounts which Mr Siminton had authority to operate. The order was not confined, in terms, to accounts held within Australia. 54 This objection must fail. At all relevant times Mr Siminton has been in Australia and subject to the jurisdiction of the Court. That jurisdiction includes power, under s 23 of the Federal Court of Australia Act 1976 (Cth), to make orders of the kind which Gray J made in this proceeding: see Siminton v Australian Prudential Regulation Authority [2006] FCAFC 118 ; (2006) 152 FCR 129 at 132; Australian Competition and Consumer Commissioner v Purple Harmony Plates Pty Ltd (No 3) (2002) 196 ALR 576 at 589. There was no jurisdictional obstacle to Mr Siminton being required not to perform certain acts in Australia which might lead to consequential action being taken overseas. I propose to record my findings in respect of all charges and then to make some particular observations in relation to some of them. 56 In seeking to make good each of these charges APRA invites the Court to draw certain inferences. This invitation is made in circumstances in which neither Mr Siminton nor any other persons, such as the Holzheimers, who might reasonably have been expected to have knowledge of relevant events, gave evidence. No adverse inference can be drawn merely because Mr Siminton has chosen not to give or call evidence in defence of the charges. The failure is nonetheless of potential significance. The most that can be said in criminal matters is that there are some cases in which evidence (or an explanation) contradicting and apparently damning inference to be drawn from proven facts could come only from the accused. In the absence of such evidence or explanation, the jury may more readily draw the conclusion which the prosecution seeks. ' "(footnotes omitted). Counsel for Mr Siminton did not make any specific submissions as to why the inferences for which APRA contended should not be drawn. 57 In each case I am satisfied beyond reasonable doubt that those inferences ought to be drawn, that the conclusions contended for by APRA are supported by the evidence and that the evidence does not support a finding that there is any reasonable or rational hypothesis consistent with Mr Siminton's innocence of any of these charges. 58 I am also satisfied that the affidavit and documentary evidence tendered by APRA strongly supports the case made by it and that this evidence establishes each of the matters of fact necessary to make good each of the charges. 59 Charges 1.1 to 1.5. Each of these charges involved the transfer of funds from the Mobile EFT Account, held in the name of the Principality of Camside, to the Holzheimer's Visa account at the Bank of Adelaide. The evidence supports the conclusion that Mr Siminton was the only person with authority to direct that funds paid into the Principality of Camside account should be transferred to the Holzheimer's Visa account and that he had, in fact, given a standing instruction that this was to occur. It may be assumed, in Mr Siminton's favour, that he did not give Mobile EFT specific instructions to make the transfers which are the subject of these charges. The transfers occurred because of the pre-existing arrangements under which, after the expiry about eight days, moneys owing to the Principality of Camside were transferred after the deduction of Mobile EFT's commission. Nonetheless, each time, after 10 January 2006, on which Mr Siminton accepted a credit card payment in favour of the Principality of Camside he was aware that, in accordance with his standing instruction to Mobile EFT, that sum (less commission) would be transferred to the Holzheimer's Visa account. Despite this, he continued to accept the credit card payments and did not revoke the standing order pursuant to which the transfers were made. He thereby constructively dealt with and withdrew funds from the Mobile EFT account acting through the agency of Mobile EFT. Order 1(e) restrained him from acting by agents to deal with or withdraw funds from any account which he had authority to operate. Mobile EFT was such an agent. I am satisfied that APRA has proven beyond reasonable doubt that Mr Siminton deliberately engaged in the conduct alleged in Charges 1.1 to 1.5 inclusive and that that conduct contravened Order 1(e) made by Gray J on 10 January 2006. 60 Charge 1.7. Charge 1.7 deals with the disposition of moneys transferred into the Holzheimer's Visa account. Between 2 May and 16 August 2006 over $14,000 was withdrawn from the Holzheimer's Visa account. The Holzheimer's held those funds as nominees of Mr Siminton. Of this sum $2,887.27 was withdrawn in a series of 31 transactions using a credit card which I infer was supplied by Mrs Holzheimer to Mr Siminton. In each case the vouchers provided to merchants were signed by Mr Siminton even though the name Holzheimer appeared on the card. During the same period the account was used to make payments totalling $12,500 to Mr Siminton's solicitors and $7,000 to counsel acting for him. The vouchers supporting these transactions were not in evidence. It may, however, reasonably be inferred that Mr Siminton authorised each of these transactions. 61 I find that APRA has established Charge 1.7 beyond reasonable doubt. I do not, therefore, make findings in relation to Charges 1.6 and 1.8. 62 Charge 1.9. This charge relates to the transfer, from the Anglo-Irish Bank in Austria, to the Holzheimer's Visa account of almost $25,000. The Austrian account was controlled by Mr Siminton. It was held in his name. At his direction the money was transferred on 16 August 2006, shortly after the balance of the Visa account fell into debit. Mr Siminton drew on the account by using the card on the same day. The evidence adduced by APRA satisfied me beyond reasonable doubt that Mr Siminton is guilty of this charge. 63 Charge 1.11. This charge deals with the disposition of a large part of the money transferred from the Anglo-Irish Bank to the Holzheimer's Visa account. In each case the funds were withdrawn by the use of the credit card which Mrs Holzheimer had supplied to Mr Siminton. Two amounts of $1,000 each were withdrawn in cash from an automatic teller machine. Mr Siminton was filmed undertaking these withdrawals. The film footage was shown in Court. No submission was made that the person pictured undertaking the withdrawals was a person other than Mr Siminton. Vouchers were obtained for four further transactions totalling $507.42. These transactions were undertaken using vouchers which were signed by Mr Siminton. One of these four transactions was also captured on video footage. I, therefore, have little difficulty in drawing the inference that the other transactions which were made using the card during the relevant period were made by Mr Siminton. 64 I find Charge 1.11 established beyond reasonable doubt. I do not, therefore, make findings in relation to Charges 1.10 and 1.12. I will give directions as to the steps which need to be taken in advance of a hearing on penalty. I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey . | civil contempt injunction extra-territorial operation failure to comply clarity of order standard of proof beyond reasonable doubt contempt |
That decision was based upon the judgment of Rares J in Tervonen v Minister for Justice and Customs [2007] FCA 1684 ; (2007) 98 ALD 589 and consequent orders declaring invalid and quashing successive notices purporting to have been given pursuant to s 16 of the Act ( Tervonen v Minister for Justice and Customs (No 3) [2007] FCA 1898). That basis for the decision meant that I did not need to consider the other arguments raised on behalf of Tervonen. The Full Court allowed an appeal from the decision of Rares J ( Minister for Home Affairs v Tervonen [2008] FCAFC 24 , corrected in Minister for Home Affairs v Tervonen (No 2) [2008] FCAFC 32). Consequently, on 6 March 2008, the Full Court allowed an appeal from my earlier decision, set aside the orders that I had made and remitted the matter to me to be determined according to law ( Republic of Finland v Tervonen [2008] FCAFC 25). 2 The general nature of the jurisdiction pursuant to s 21 of the Act is not in doubt --- it is a rehearing in which the Court reaches its own conclusions on the eligibility for surrender, although only having regard to the material before the Magistrate ( Dutton v O'Shane [2003] FCAFC 195 ; (2003) 132 FCR 352 at 386; Brock v United States of America [2007] FCAFC 3 ; (2007) 157 FCR 121 per Black CJ at [20]---[24] and [29] and Rares J at [73]---[80]). Tervonen challenges both satisfaction of the conditions precedent in s 19(1) and the conclusions on the merits of surrender reached by the Magistrate pursuant to s 19(2). In Tervonen [2007] FCA 2067 (at [6]---[9]), I discussed the question as to how a review is to be conducted in relation to s 19(1). It is convenient to deal with the questions arising pursuant to s 19(2) in the first instance. Finland is declared to be an extradition country. The Act applies in relation to Finland subject to the Treaty between Australia and Finland concerning Extradition that came into force on 23 June 1985 (being the treaty a copy of the English text of which is set out in Schedule 1) as amended by the Protocol between Australia and Finland amending that Treaty that came into force on 14 February 1986 (being the protocol a copy of the English text of which is set out in Schedule 2). Each Contracting Party undertakes to extradite to the other Contracting Party, subject to the provisions of this Treaty, any person found in its territory who is charged by a competent authority with, or has been convicted of, an offence against the law of the other Contracting Party, whether committed within the territory of that Party or outside that territory in the circumstances referred to in paragraph 3. 2. Extradition may be refused for an offence committed within the territory of the requested State, but if the offence has been committed within that territory by an officer or employee of the requesting State who is a national of the requesting State, the requested State shall, subject to its law, extradite the person sought unless it considers it proper not to do so, in which event it shall submit the case to its competent authorities for the purpose of prosecution. 3. Extradition shall be granted in respect of an offence committed outside the territory of the requesting State only where the law of the requested State provides for the punishment of an offence committed outside its territory in similar circumstances. A request for extradition shall be made in writing. All documents submitted in support of a request for extradition shall be duly authenticated. To the extent permitted by the law of each Contracting Party extradition may be granted of a person sought pursuant to the provisions of this Treaty notwithstanding that the requirements of paragraph 2 of this Article have not been complied with provided that the person sought consents to an order for his extradition being made. A document that, in accordance with Article 7, accompanies a request for extradition shall be admitted in evidence, if duly authenticated, in any extradition proceedings in the territory of the requested State. 2. This, in turn, referred to what was described as a draft request dated 20 July 2006. That request identified eight warrants for arrest, a request for provisional arrest dated 22 June 2006, the applicable provisions of the Finnish Penal Code and a list of property requested to be delivered pursuant to Art 14 of the Treaty. 6 Supplementary information was provided in support of the request for extradition by a document dated 14 August 2006 which enclosed a table describing the acts and omissions of Tervonen as well as the evidence available in more detail than the original request. The amended notice of receipt of extradition request pursuant to s 16 set out 58 offences, some being the subject of multiple counts. The fourth heading contained reference to the local provision or provisions that it was said would correspond with the Finnish offence. Warrant for arrest? He contends (and contended before the Magistrate) that five of the eight warrants are for his arrest for pre-trial investigation purposes rather than for trial for the offences. He submits that there is a clear distinction in Finnish law between the two purposes. He submits that only a public prosecutor can bring a prosecution, the police powers being limited to the investigation stage. These submissions are not evidence, but have clearly flagged an issue. The material relied upon by Tervonen before the Magistrate included a statement from his Finnish attorney dated 9 March 2007. According to this discussion indictments are these:" [19 charges in seven groups are then set out]. 9 The present point is not taken as to the first three warrants for arrest which were claimed by a District Prosecutor. The claim for the fourth warrant is made by a Senior Detective Superintendent of Police. Arrest is not an excessive measure due to the nature of the case, the age of the suspect or other personal conditions. This coercive measure can be deemed justified considering the seriousness of the offence, the importance of solving the case, the violation of the rights of the suspect and other persons the application of this coercive measure means, as well as other relevant factors. Grounds The authorities have not been able to reach Jan Tervonen for the pre-trial investigation, and his place of residence is unknown. Jan Tervonen has been missing since August 2004 in connection with other criminal cases. There is reason to suspect that Tervonen will obstruct investigations by e.g. contacting witnesses and other suspects in this case. In addition, accounting of e.g. Creative Builders Oy and Bauflex Ab are missing. The suspect does not have a permanent place of residence in Finland and it is probable that he will leave the country. Arrest is not an excessive measure due to the nature of the case, the age of the suspect or other personal conditions. This coercive measure can be deemed justified considering the seriousness of the offence, the importance of solving this case, the violation of the rights of the suspect and other persons the application of this coercive measure means, as well as other relevant factors. "The person claimed to be arrested, Jan Tervonen, is suspected of having been involved, as one of the central background figures, in the carrying out of the criminal activity. His identity was unknown to Raappana and Söderqvist who acted as dummies. Jan Tervonen served a sentence of imprisonment between April and August 2004. In spite of this, he is suspected with probable cause of having been involved in the case at hand. Information on Tervonen's suspected involvement in the present case was gathered mainly through coercive measures related to pre-trial investigations of different cases. Furthermore, there is reason to suspect that Tervonen will attempt to alter, hide or destroy evidence in Finland or abroad that the investigators have not yet obtained. There is a particularly large amount of criminal proceeds missing. There is reason to suspect that Jan Tervonen will attempt to be involved in the further hiding of the proceeds in Finland or abroad. In the context of a different case, an international wanted notice has been issued on Jan Tervonen, and the authorities have not been able to reach him since August 2004. The suspect does not have a permanent place of residence in Finland and it is probable that he will leave the country. Arrest is not an excessive measure due to the nature of the case, the age of the suspect or other personal conditions. This coercive measure can be deemed justified considering the seriousness of the offence, the importance of solving the case, the violation of the rights of the suspect and other persons the application of this coercive measure means, as well as other relevant factors. The suspect does not have a permanent place of residence in Finland and it is probable that he will leave the country. Arrest is not an excessive measure due to the nature of the case, the age of the suspect or other personal conditions. This coercive measure can be deemed justified considering the seriousness of the offence, the importance of solving the case, the violation of the rights of the suspect and other persons the application of this coercive measure means, as well as other relevant factors. The suspect does not have a permanent place of residence in Finland and it is probable that he will leave the country. Arrest is not an excessive measure due to the nature of the case, the age of the suspect or other personal conditions. This coercive measure can be deemed justified considering the seriousness of the offence, the importance of solving the case, the violation of the rights of the suspect and other persons the application of this coercive measure means, as well as other relevant factors. The translations of the warrants are attached to this request. when: - a less severe punishment than an imprisonment for two years has been provided for the offence, but the most severe punishment exceeds or equals imprisonment for one year and having regard to the circumstances of the suspect or on some other grounds, it is probable that the suspect will escape or otherwise avoid pre-trial investigation, court proceedings or enforcement of punishment; - the identity of the suspect is not known and the suspect refuses to divulge his name or address, or gives evidently false information; or - the suspect does not have a permanent residence in Finland and it is probable that the suspect will avoid pre-trial investigation, court proceedings or enforcement of punishment by leaving the country. According to the Coercive Measures Act, chapter 1, section 6, an official with the power of arrest shall decide on arrest. A public prosecutor has, according to this section, the power of arrest. According to the Coercive Measures Act, chapter 1, section 10, during the criminal investigation, an official with the power of arrest may request detention. Before a request is made, it shall be notified to the prosecutor, who may take it upon himself to decide whether the detention request is to be made. When the case has been sent to the prosecutor after the conclusion of the criminal investigation, the prosecutor may request detention. The court shall not order the detention of the defendant on its own initiative. The evidence is the same as in count 10. ... The Finnish legislation makes a difference between deliberate neglecting of accounting duties and neglecting them through gross negligence, if the essential elements of both provisions are fulfilled in other respects, as in this case. The essential difference between the Sections 9 and 10 of Chapter 30 is the degree of deliberation with which the act can be considered committed. If on the basis of pre-trial investigation both provisions are applicable, the claims may be presented as alternatives. The court will then decide on the basis of the hearings, which one will apply. At this stage of the procedure and investigations the information provided is as detailed as possible. Rares J decided that it was open to the Minister to form the relevant opinion but did not consider the correctness or otherwise of that opinion, the proceeding before him being a challenge on administrative law grounds. 21 In my opinion, it is tolerably clear in the present case that only the first three warrants would normally be regarded as being "for the arrest of the person for the offence", the other warrants being connected with coercive investigation. To borrow from Art 1 of the Treaty, it was only those warrants by which Tervonen had been charged by a competent authority with the relevant offences against the law of Finland, bearing in mind that an extradition treaty must be a treaty relating to the surrender of persons accused or convicted of offences (s 5). That conclusion is assisted by the failure of Finland to produce material to the Magistrate explaining the system as it applied to the issues in the case. 22 However, counsel for Finland submits that this argument is effectively foreclosed to Tervonen by the decision of the High Court in Director of Public Prosections (Cth) v Kainhofer [1995] HCA 35 ; (1995) 185 CLR 528. There are certainly similarities between that case and this, as extradition was sought by the Republic of Austria, a civil law country as is Finland. The Full Court of this Court had held that, on the material placed before the Magistrate on behalf of the Republic of Austria, he could not properly be satisfied in terms of s 19(2)(a) and s 19(3)(a) of the Act that the duly authenticated warrant that he had before him provided for the arrest of the appellant as a person "accused" of the offences to which the warrant referred ( Kainhofer v Director of Public Prosecutions (1994) 52 FCR 341 at 359G). The Court had held that the Act and the Treaty with Austria (which appears to be similar to that in the present case) provided for the surrender of a person only if the person was "accused" or convicted of an extradition offence. In the jurisprudence of this country, one would not normally speak of a person as a person who is "accused" of a criminal offence in the sense in which that expression is used in the Act unless legal proceedings for the imposition of a penalty in respect of the offence have been commenced by the laying before a magistrate or other appropriate official of an information or complaint alleging the commission of the offence or by the presentation to a court of an indictment alleging such commission or unless the person has been formally charged with the offence before an appropriate official following upon his arrest. That statement may not be exhaustive but, in any event, it would not be sufficient to establish that a person was "accused" of an offence to show only that a complaint had been made to the police alleging the commission of the offence or that the police, or other investigating body, were conducting inquiries to determine whether there was evidence of the commission of the offence sufficient to warrant the person being "accused" of the offence in the sense mentioned. The "offence" referred to in sub-s (2)(a) is the offence referred to in sub-s (1), namely, "the extradition offence or extradition offences for which surrender of the person is sought by the extradition country". Given that the person is an extraditable person, "the offence" in s 19(2)(a) must be taken to be either an offence "that the person is accused of having committed" or an offence of which the "person has been convicted". The introductory words of sub-s (3)(a) and (b) merely direct the s 19 magistrate to the relevant description to be applied to the supporting documents in the case of the particular extraditable person who is the subject of the s 19 proceedings. The relevant direction is obtained by the s 19 magistrate by reference to whatever material is produced. If that material does not include supporting documents that answer one of the categories of documents described in sub-s (3), the requirement of sub-s (2)(a) is not satisfied; if there be supporting documents that answer the description in one of those categories, the requirement of sub-s (2)(a) is satisfied. In the present case, the only issue for determination under s 19(2)(a) was whether the document produced was a duly authenticated warrant or copy warrant issued by the Republic of Austria for the arrest of the respondent for an extradition offence for which the surrender of the respondent was sought by the Republic of Austria. That issue did not require a finding as to whether the respondent was a person "accused". Gummow J agreed in that result, although by a somewhat different path. 24 It is not at all clear to me what meaning is to be given to the words "for the offence" in s 19(3)(a) in the light of the decision of the High Court. The submission for Finland reduces the content of s 19(3)(a) (and so s 19(2)(a)) to mere authentication of the warrant. So far as the substance of the warrant is concerned, all that is necessary is to tick off the offences against those in relation to which extradition is sought. It is difficult to discern any reason in principle why the opinion of the Attorney-General in relation to s 16(2)(a)(i) should not be examinable by the Magistrate where appropriate and yet the opinion in relation to s 16(2)(a)(ii) and s 16(2)(b) can be dealt with on the merits by the Magistrate notwithstanding the earlier opinion of the Attorney-General. It is even more difficult to understand why a magistrate's satisfaction in relation to a provisional arrest warrant pursuant to s 12 should decide the relevant issue to the exclusion of a magistrate pursuant to s 19 where appropriate. Neither the Attorney-General nor the first Magistrate has any better means of deciding the point than would be available to a properly instructed magistrate acting pursuant to s 19. However, I can see no escape from the conclusion that the decision of the High Court in Director of Public Prosections (Cth) v Kainhofer [1995] HCA 35 ; 185 CLR 528 does have the effect as submitted on behalf of Finland. There is nothing in the majority judgment in the High Court to indicate that they would have taken a different view in principle from Gummow J if the question had fallen for determination. The original documents are in evidence. 27 It was also submitted that warrants 1, 2 and 3 were vitiated by a conflict of interest on the part of the prosecutor making the claim for those warrants as he was a victim of one of the other alleged offences, and so the warrants could not be authenticated. Even if a conflict were established, it would not affect authentication and there is no other relevant ground to oppose surrender available under s 19(2) on that basis. It is submitted for Finland that this is the ninth offence in the first warrant, although it is conceded that there is a typographical error in the English translation of the dates of the offence. In my opinion, the offences correspond in substance. There is a similar question in relation to offence no 4 in the amended s 16 notice. The form of the documents is such that offence 4 in the notice should relate to offence 5 in warrant 1. Offence 4 is described as "One count of Aggravated Receiving Offence between 1 October 2001 and 30 November 2001". Offence 5 in the summary portion of warrant 1 is described as "Aggravated receiving offence 01 October 2001 and 28 October 2002, Helsinki". However, the actual offence was aggravated receiving 1 October 2001---30 November 2001. The s 16 notice is correct. No particulars are given about that contention. Counsel for Finland has provided a cross-reference for each of those counts and the conduct alleged to constitute the relevant offence to a provision of the Crimes Act 1900 (NSW), the Corporations Act 2000 (Cth) or the Criminal Code 1995 (Cth) that it is submitted would be contravened if the conduct which is alleged by Finland took place in New South Wales at the time of the alleged conduct. I accept the contentions on behalf of Finland in that respect. 30 In relation to the offences reflected in warrants 4---8 inclusive, Tervonen has relied upon his general attack upon those warrants rather than taking issue with individual offences. The table which was provided to the Magistrate identifying the equivalent offences in Australia is in the Review Book and, in the absence of argument to the contrary, I accept the submission that it is correct. It is submitted for Finland that that question is irrelevant as it does not arise pursuant to s 19(2). That proposition follows from the wording of the section together with the authority of the Court in Zoeller v Federal Republic of Germany (1989) 23 FCR 282 at 303. Tervonen submits that this should be qualified because Art 7(2)(d) of the Treaty requires setting out the relevant provisions of the statute creating the offence or a statement of the relevant law as to the offence including any law relating to the limitation of proceedings. It was also submitted on behalf of Finland that, certainly in relation to the first warrant, it is clear that criminal proceedings were commenced within the limitation period. 32 Whilst the effect of the Treaty when combined with s 11 of the Act may be to require production of information as to time limitations, there is nothing in the Treaty or the Act which would entitle the Magistrate to take that information into account in deciding eligibility for surrender. This may seem anomalous, but presumably the Attorney-General can take that information into account in exercising the discretions in relation to surrender pursuant to s 22 of the Act as well as the earlier discretion pursuant to s 16. The approach most favourable to Tervonen is that the issues are to be decided on the merits. I will consider them on that basis in the first instance. However, he claims that he was not on remand in relation to all of the extradition offences. That may be correct in one sense as the amended s 16 notice was served after the second remand, but I accept the submission on behalf of Finland that s 19(1) does not require that the applicant be on remand pursuant to s 15 in relation to each and every extradition offence. In any event, the point is academic in the sense that the offences which had been added after the last remand (57 and 58) are now excluded because of the decision of the Full Court as to the s 16 notice. Tervonen was not released, whether or not he was entitled to be released. In any event, the decision of Rares J held that a s 16 notice could be amended, and, once the invalidity that he found is removed by the decision of the Full Court, the foundation for Tervonen's submission disappears. After several appearances, on 8 March 2007 Tervonen was remanded in custody under s 15 with a return date of 14 March 2007. On that date the matter was adjourned to 18 April 2007 for hearing for one day. On that date the matter was adjourned on the basis that it must proceed on the next occasion with no more adjournments. On 8 May 2007 the matter was adjourned to 6 June 2007 for hearing and it was agreed that the matter would proceed on the papers with no evidence to be called by way of witnesses. There is no transcript of that appearance. 39 There is a transcript of what took place on 6 June 2007. FUGITIVE: Yes, I am, your Honour. HIS HONOUR: Have you filed your submissions? FUGITIVE: Yes, I have. FUGITIVE: No, your Honour. HIS HONOUR: You wish to rely completely on the documents? FUGITIVE: Yes. HIS HONOUR: From the crown? MORGAN: No, your Honour. He did not raise any problem on the hearing in June because the Magistrate had said on 18 April 2007 that he would not give any more adjournments no matter what. 41 No doubt, anybody in Tervonen's position would have difficulties in dealing with an extradition from custody being without legal representation and not being a native English speaker. However, in the present circumstances, on any view, Tervonen had more than reasonable time in which to prepare for the conduct of the proceedings. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | review of surrender determination of magistrate in respect of applicant challenge to sufficiency of "supporting documents" under s 19 extradition act 1988 (cth) whether certain arrest warrants validly authenticated whether arrest warrant backing for certain extradition offences whether certain arrest warrants were for the arrest of the applicant for an extradition offence or for coercive investigation only whether determination of latter issue foreclosed by high court authority whether dual criminality established for certain extradition offences whether certain extradition offences barred by time limitation in finland whether applicant on remand for purposes of s 19 extradition act whether notice of extradition request issued out of time for purposes of s 16 extradition act whether applicant afforded reasonable time before magistrate grounds of review not made out orders of magistrate confirmed extradition |
On 19 October 2006, the Tribunal published its decision to affirm a decision of the delegate of the first respondent ('the Minister') to refuse to grant each appellant a protection visa under the provisions of the Migration Act 1958 (Cth) ('the Act'). 2 Appellant SZJRW, the primary appellant, is a citizen of the People's Republic of China ('China') who sought a protection visa based upon a contended well-founded fear of persecution on the ground of his participation in protests against the government of China, that is, by reason of his political opinion. Appellant SZKEM is his wife and sought a protection visa as a family member of the primary appellant. 3 In these reasons, I will use the term 'the appellant' as a reference to the circumstances, findings and contentions concerning the primary appellant unless otherwise apparent. 4 The appellant contends by his notice of appeal that the primary judge erred in failing to identify the following errors on the part of the Tribunal going to its exercise of jurisdiction under the Act. First, the Tribunal used country information dated 1998, 2001 and 2003 in reaching its decision rather than more recent and thus relevant country information going to the ease or otherwise of the appellant obtaining a passport from Chinese authorities. To the extent that those circumstances informed the Tribunal's acceptance or otherwise of the appellant's evidence, reference to older country information in preference to more recent country information is said to be a jurisdictional error (para 1(a) and 1(b), notice of appeal). The appellant says such an approach, ... effectively permits the RRT to cut and past from old decision templates without having to double-check its conclusions against more recent information. The appellant says that by reason of the contended failures reflected in the first and second grounds of appeal, the Tribunal failed to exercise its statutory review function by failing to consider the appellant's claims. 7 Thirdly, the Tribunal failed to consider the appellant's protest activities against the government of China 'during the period between [his arrival in] Australia and his application for the protection visa' and 'protests after he applied for a protection visa' . The appellant says these protest activities were undertaken by him 'not to enhance his [protection visa] application but manifest his genuine and continuing support for those protests' . The appellant says he holds a well-founded fear of persecution arising out of these activities as he 'has been identified by his home government and will be regarded as [a] leader [s] of those protests' (para 2, notice of appeal). 8 The respondent construes ground two as contended errors in respect of the Tribunal's relocation finding, the Tribunal's application of s 91R(3)(b) of the Act and contended errors going to whether the Tribunal considered the applicant's claims as sur place claims. 9 Fourthly, the Tribunal failed to properly identify and apply the test of whether a well-founded fear of persecution for reasons of 'political opinion' is satisfied. The Tribunal, wrongly, it is said, required that the political opinion be 'expressed'. The applicant says a fear of persecution by reason of his political opinion can, for the purposes of s 36 and s 91R(1) of the Act, be well-founded even though the appellant has not 'acted upon his beliefs prior to departure from his home country' (para 3, notice of appeal). 10 Fifthly, the Tribunal failed to consider the appellant's claim to belong to 'a number of particular social and political groups that are forbidden in his home country' (para 3(d), notice of appeal). 11 The appellant filed an amended application for review before the Federal Magistrates Court on 2 April 2007 that raised the same contended errors on the part of the Tribunal as the appellant asserts on appeal as contended errors of identification by the Federal Magistrates Court. There is some confusion in the papers about the extent of the material before the Federal Magistrate on the application for review. The Appeal Book before this Court does not contain copies of a number of the affidavits received into evidence and discussed in the reasons by the Federal Magistrate. Because the affidavits formed part of the record before the Federal Magistrates Court, I received copies of the affidavits as part of the record on the appeal. The first respondent took no objection to this course. 13 With a view to avoiding the disclosure of the identity in these reasons of the deponents, I will describe the affidavits by reference to the initials of each deponent. 14 The appellant refers to two other statements before the Tribunal not before either the Federal Magistrates Court (that is, not included in the 'green book') or included in the Appeal Book on the appeal. The appellant identifies the statements by reference to AB88 which is a copy of the hearing form the appellant returned to the Tribunal nominating two witnesses to give evidence in support of the appellant's contentions. The first witness is deponent J H and the extract of evidence is, in effect, a synopsis of the content of the deponent's subsequent affidavit. The second witness is W F Z. This witness engaged in protest activity with the appellant outside the premises of the Chinese Consulate-General in Sydney on 13 March 2006. The appellant says each of these statements was handed to the Tribunal at the hearing. 15 Apart from the affidavits mentioned earlier, the following further affidavits were received by the Federal Magistrates Court into evidence: an affidavit by the primary appellant sworn 14 November 2006 and filed on 16 November 2006 (AB131-AB133); an affidavit by the primary appellant sworn 28 June 2007 and filed on 29 June 2007 (AB238-AB246); and two affidavits sworn by Hayley Anne Blackman, a solicitor employed by the solicitors for the first respondent, filed on 30 March 2007 (AB135-AB136) and 17 April 2007 (AB139-AB140) attaching copies of particular documents. There is also a further affidavit by the primary appellant filed in the Federal Magistrates Court proceedings sworn 8 July 2007 and filed on 9 July 2007 (AB286-AB289, and attachments). 16 By the affidavit filed on 16 November 2007, the appellant deposed to the central facts asserted before the Tribunal. He explained the reasons for not undertaking anti-government protests in China. He described the protest events of 13 March 2006 in Sydney and other activities on his part on 8 April 2006 and 20 May 2006. By the affidavit filed on 29 June 2006, the appellant makes extensive submissions (AB239-AB244) concerning the elements making up the notion of a well-founded fear of persecution for reasons of political opinion or membership of a social group. At AB245 (para 8 of the affidavit), the appellant describes protest activities he says he undertook in Australia against the Chinese government. The appellant also annexes material to the affidavit concerning the requirements for obtaining a Chinese passport and directs attention to the official website for the Fujian Provincial Authority. The appellant lived in Fujian Province prior to arriving in Australia. 17 The appellant's affidavit filed on 2 April 2007 presents a critique of the Tribunal's decision and takes issue with a range of matters. The appellant identifies many typographical errors and some factual errors in the Tribunal's reasons. The appellant suggests that these errors are emblematic of a failure to properly undertake the review function. The affidavit further canvasses the factual issues before the Tribunal and seeks to explain the reasons for the appellant not engaging in anti-government protests in China. The affidavit contextualises the appellant's employment and educational background and suggests methods of surveillance of Chinese nationals in China and the potential persecution of nationals through various mechanisms. The affidavit addresses the facts concerning the events leading up to the protest in Sydney on 13 March 2006 and the protest itself. By paras 15 to 23, the appellant describes a range of anti-Chinese government activities he says he undertook in Australia from 8 April 2006 to 11 March 2007. The affidavit also attaches copies of human rights protest material concerning the activities of the Chinese government, copies of open letters to Chinese leaders protesting about human rights violations, a copy of nine commentaries on the Communist Party contained in a publication described as 'The Epoch Times' and other material directed to contended or actual acts of violence on the part of Chinese government authorities. The affidavit also annexes a photograph of the primary appellant protesting in front of the offices of the Chinese Consulate-General in Sydney on 13 March 2006. 18 The affidavits of G B W and J H go to the events in connection with the protest outside the Chinese Consulate-General in Sydney on 13 March 2006 and the inclusion of the primary appellant's name on a website of protestors, described under the usual www sequence as 'jueshi.org'. 19 The proper approach to the utility of the affidavit material in the disposition of the appeal is this. The affidavit of the appellant filed on 16 November 2006 engages each of the factual matters before the Tribunal and agitates the merits of the appellant's claim. To that extent, the affidavit does not assist the inquiry of whether a ground of appeal is made out. The affidavit of the appellant filed on 29 June 2006 is essentially an argumentative document in the nature of a submission and should be so considered in addressing the grounds of appeal. Paragraph 8 of that affidavit asserts events of protest activity by the appellant in Australia since the date of the Tribunal's decision. Evidence of those events can not support a contended error by the Tribunal at the date of decision. The appellant's sur place claim is considered later in these reasons. The critique of the Tribunal's decision contained in the appellant's affidavit filed 2 April 2007 should also be treated as a submission as to contended errors and their jurisdictional significance. To the extent that the affidavit engages factual matters before the Tribunal it also seeks to engage the merits of the Tribunal's decision. Those paragraphs deposing to post-Tribunal events of protest fall into the same category as the events described in the affidavit filed 29 June 2006. The affidavits of G B W and J H primarily go to the protest events on 13 March 2006 and seek to support the appellant's contended engagement in that protest. The appellant's participation in the events of 13 March 2006 was a matter of controversy before the Tribunal and was the subject of findings of fact by the Tribunal. The subsequent affidavits simply re-agitate the merits of the appellant's claim. The appellant also filed a statement with the Tribunal in support of the application for review (AB79-AB81). The essence of the appellant's contention was this. In 1946 the appellant's grandparents returned to China from Indonesia together with two of the appellant's uncles. In 1949 the Chinese Communist Party came to power and the appellant's grandparents were treated as class enemies of the State. Their home and other property was confiscated. One of the appellant's uncles was persecuted and died in 1968. Another uncle was also persecuted and subjected to particular humiliating events. In October 2003, the appellant's uncle visited him and sought help during his illness. The appellant was told that he would not be able to accommodate his uncle in the appellant's dormitory quarters and was denied the right to look after him. The appellant had to turn him away. The appellant's uncle died two months later. By reason of these family experiences, the appellant contended that he had a strong dislike for communist rule and the Chinese government. 21 The appellant arrived in Australia on 8 March 2006. In his statement to the Minister's delegate, the appellant said that on 13 March 2006 from 7.30am he participated in a one day sit-in and hunger strike in front of the Chinese Consulate-General in Sydney. He said his participation was in protest against the violation of human rights, democracy and freedom by the Communist Party. The appellant said, in his statement, that his name 'is also registered on the website of [worldwide web prefix.jueshi.org]'. He said that in June 2003 Bao Ying, a captain of the 2002 class of students of the 'Tourist Industry Management of Lanshou University' was detained for 13 days for agitation in support of a hunger strike and classmate Liu Xi Feng was sentenced to 15 years imprisonment for anti-government protests. The appellant concluded his statement by asserting 'Due to these facts ... once I return to China, I would be denied the right of democracy and freedom' . 22 In the appellant's statement lodged with the application for review before the Tribunal, the appellant restated the previous foundation facts. In addition, the appellant emphasised that he had read issues of the Epoch Times since arriving in Australia and had read about calls for support for a hunger strike in support of a human rights lawyer Zhi Sheng GAO. The appellant decided to engage in the hunger strike protest. He said his name was registered on the website previously described. The appellant made reference to a hunger strike organised in Hunan Province by Yu Zhi Jian who was detained for 32 days. The appellant contended that if he returned to China he would also be sent to detention. The appellant described his participation in a rally of protest against the Chinese Communist Party on 8 April 2006 and his attendance at a meeting at the Ashfield Town Hall on 20 May 2006 to discuss developments in China. 23 On 28 June 2006, the Tribunal advised the appellant of a proposed hearing on Wednesday, 16 August 2006. The appellant returned the hearing invitation form to the Tribunal confirming his willingness to attend the hearing. The form nominated the two proposed witnesses previously discussed. The Tribunal noted that each appellant had obtained a passport in July and November 2005 respectively from PRC authorities. The Tribunal noted that independent country information suggested that people of concern to PRC authorities are not issued with passports or allowed to leave China. The Tribunal referred to a Country Information Report No. 12/03 dated 15 January 2003 which suggested that by reason of checks made by the Public Security Bureau in the PRC, a person of concern to Chinese authorities (that is, persons who might be harmful to State security or cause a major loss to national interests) would be likely to be denied a passport. The Tribunal referred to a report of the Department of Foreign Affairs and Trade of July 2001 that suggested that all passport applicants in China require a letter from their work unit confirming their employment status before a passport can issue. The power to provide or withhold such a letter was said to lie with the work unit itself. The Tribunal referred to country information (CX27863) which suggested that generally speaking individuals who have obtained Chinese passports and exit permits to leave China have been thoroughly vetted by the security authorities and such persons would not be on any 'wanted list' if they were to return to China. 25 The Tribunal put to the appellant that since each appellant had obtained a passport in their home province of Fujian and were allowed to leave China on 7 March 2006, the appellant must have been supported in making a passport application by his employer who did not hold adverse views about him. The Tribunal suggested that this may indicate that the appellant was of no interest to PRC authorities in China either by reason of his own conduct or by reference to the appellant's family's background including any view held about the appellant's uncles. The Tribunal put to the appellant that because the appellant was able to obtain a passport without apparent concern to PRC authorities, the appellant may have embellished his claims to enhance the prospects of obtaining a protection visa and that the appellant was thus 'not a credible witness'. 26 Further, the Tribunal although noting the appellant's contended strong opposition to the Chinese Communist Party and the Chinese One Party system, also noted that in oral evidence, the appellant did not claim to have undertaken any political or anti-government activity in China but only supported some people who lost their jobs and participated in demonstrations. The Tribunal noted that the appellant undertook education through courses provided by what the appellant described as the 'TV University' and then secured a job in the State owned Long Yan Electric Power Administration from January 1991 until he came to Australia on 8 March 2006 (with a year off from employment with that company in 2000/2001 and then rejoining that company). The Tribunal put to the appellant that these factors suggested that the appellant was not a political activist in China prior to arriving in Australia. The Tribunal also put to the appellant that independent country information suggested a growing level of political freedom in China including a right to demonstrate and a right of free speech. The Tribunal noted independent country information which suggested that in recent years there have been many labour demonstrations and significant legal reforms. The Tribunal noted that based on this information 'only high profile leaders have experienced any difficulties' . The Tribunal put to the appellant that his views of a multi-party State might be able to be expressed freely and thus a claim of a well-founded fear of persecution based on political opinions might not be made out. 27 The Tribunal noted the appellant's claim that his participation in a one day rally in front of the Chinese Consulate on 13 March 2006 would result in his being dismissed by his employer. The Tribunal noted that at the hearing the appellant made it clear that he left China on 7 March 2006 with some leave approved by his employer but was dismissed when a request for further leave was made and the appellant's contract expired. Thus, the appellant's loss of job may not be persecution for any Convention related reason. 28 The Tribunal also noted a one month delay between the appellant's arrival in Australia and his application for a protection visa. 29 The Tribunal noted the appellant's claim of participation in a one day sit-in rally and hunger strike in front of the Chinese Consulate in Sydney on 13 March 2006 and his claim that, as a result, he would be subject to constant harassment, detention and imprisonment. The Tribunal noted that the appellant did not claim to have been involved in other protests outside the Chinese Consulate in Sydney or the Chinese Embassy in Canberra. The Tribunal noted a report of the Department of Foreign Affairs and Trade dated 12 December 1995 that Chinese authorities pay little attention to criticisms made by refugee applicants as such authorities appear to take the view that claimants are simply 'seeking to take advantage of an opportunity presented by western legal systems' and that Chinese nationals returning to the PRC are treated in accordance with Chinese law. The Tribunal noted that although this country information was dated December 1995, there was no material available to the Tribunal which contradicted that view. The Tribunal put to the appellant that even though the appellant may have participated in the events of 13 March 2006 and the appellant's name appeared on the nominated website, the appellant would 'not be subjected to serious harm amounting to persecution on this basis if you return to China' . 30 On 22 August 2006, the appellant responded to the Tribunal's letter. 31 The appellant identified W F Z as the other person who joined him in the demonstration on 13 March 2006 outside the Chinese Consulate. The appellant described the banner he held protesting the activities of the Chinese government. The appellant gave two further examples of individuals who had experienced the attention of Chinese authorities. One sought asylum in the United States and the other was deported from China. The appellant said that his 'real name' had been registered on the protest website previously described. The appellant said based on these facts, he held a genuine fear of being persecuted by reason of his participation in the hunger strike. The Tribunal notes the appellant's contention that the capacity to obtain a passport can not be relied upon as a basis for concluding that the appellant had not been persecuted and, inferentially, was not of interest to PRC authorities. 33 The Tribunal at AB117 to AB119 records the oral evidence given by the appellant and witnesses on his behalf. The Tribunal notes that the 'applicant's sister ... opted to be a witness' . The Applicant and his sister replied that they were not aware to expect a telephone call from the Tribunal. The Tribunal asked the Applicant if they were only going to say that the Applicant was involved in a demonstration in front of the Consulate, and they replied in the affirmative. Asked if they were going to say anything else, they replied in the negative. The Tribunal further said: In view of this, the Tribunal put to the Applicant that it accepted that he had demonstrated in front of the Consulate on 13 March 2006. However, it was going to write to the Applicant and given [give] him a letter after the hearing closed which would include a date when a response was required. It invited the Applicant to contact these two people and if there was anything else they wanted to add, then they should include this in his letter along with his response to the matters raised by the Tribunal. 34 In the course of the hearing, the Tribunal asked the appellant about his initial reason for visiting Australia. The Tribunal asked about the circumstances in which his sister came to Australia in 1991 or 1992. The Tribunal asked questions about the appellant's educational and employment background. The Tribunal asked the appellant about his political activities in China before he came to Australia and noted the appellant's response that 'basically he was not involved in any activities but he did support some people who had lost their jobs and took part in some small scale demonstrations' . The Tribunal took the appellant to each of the matters which were subsequently the subject of the Tribunal's letter of 16 August 2006. 35 Having considered the appellant's responses and the oral evidence given at the hearing, the Tribunal reached these conclusions. 36 The Tribunal accepted that the appellant's family had suffered identified difficulties in China since the assumption to power of the Chinese Communist Party. However, the Tribunal did not accept that on the basis of the appellant's family history in China that the appellant held a well-founded fear of serious harm for a Convention reason should he return to China. The Tribunal noted that each appellant had obtained a passport from the PRC authorities in their home province of Fujian. The Tribunal concluded based on the identified independent country information and ease of departure to Australia that neither appellant would have been likely to have been granted passports or exit permits if either of them had been of any interest to the Chinese authorities. 37 Thus, the Tribunal concluded that the appellant 'does not have a well-founded fear of serious harm amounting to persecution for a Convention reason because of his political activities in China' [emphasis added]. The Tribunal noted that the appellant did not claim that he 'experienced any difficulties whatsoever because of his involvement in these activities [that is, some small scale demonstrations] let alone Convention related serious harm . This finding is consistent with the appellant not being the subject of particular interest to PRC authorities. The Tribunal also concluded that protest activity in China is now more common and that the appellant 'would be able to express his views freely in China' . 38 The Tribunal then considered the appellant's claim, described by the Tribunal as his 'main claim' that by reason of his participation in the sit-in rally and hunger strike outside the Chinese Consulate in Sydney on 13 March 2006 and the incorporation of his name in a protest website, the appellant would be subject to 'constant harassment, detention and imprisonment' . The Tribunal noted the appellant's claim that should he return to China, the Longyan Municipal PSB (Public Security Bureau) would arrest him and he would be 'laid off by his employer' . The Tribunal reviewed the evidence concerning the appellant's participation in the protest in front of the Consulate including a number of photographs of the appellant sitting in front of the Consulate. The Tribunal asked the appellant questions about the duration of the protest, the precise time it began and ended, and what happened at the demonstration since only two individuals participated, that is, the appellant and W F Z. The Tribunal asked the appellant to tell it about other rallies and protests he had participated in during his five month period in Australia. The Tribunal noted that the appellant 'replied he didn't remember, but there was one in Central Park and he has some photographs' . The Tribunal 'again requested the details of what protests and rallies he ash [has] been involved in, and he claimed it was too long ago and he did not remember' . Asked again if he had ever again protested against the Consulate in Sydney and whether he had only protested the once on 13 March 2006, the applicant replied in the affirmative. 39 The second appellant gave evidence that the primary appellant initially wanted to demonstrate outside the Chinese Embassy in Canberra but she dissuaded him from doing so as she was worried about her child and family. However, from the fact that this occurred only some five days after his arrival in Australia but in the following five months the applicant has not again protested there or outside the Chinese Embassy in Canberra, that there were only two people involved, and its earlier finding that the Applicant was not a political activist, the Tribunal has not been able to satisfy itself that he has a well-founded fear of serious harm amounting to persecution for a Convention reason of persecution in China because of his involvement in this one demonstration outside the PRC Consulate in Sydney, his involvement in other activities in Australia which at the hearing he could not remember when he was involve[d] in them or the details of them, even though it must have been in the last five months. 42 The Tribunal relied upon the Department of Foreign Affairs and Trade cable of 12 December 1995 previously mentioned to conclude that protests of the kind described by the appellant are regarded by PRC authorities as of no particular significance. The Tribunal referred to the appellant's response of 22 August 2006 and his assertion of a genuine fear of persecution due to participation in the hunger strike outside the Consulate on 13 March 2006. The Tribunal noted the appellant's concern that his 'real name is on a protest website' and his genuine fear of persecution was due to his political beliefs. In short, given all the above and based on the claims made by the Applicant and the country information put to him and notwithstanding his response, the Tribunal is satisfied that the Applicant does not have a well-founded fear of serious harm amounting to persecution for a Convention reason on this basis. 43 The Tribunal then considered the operation of s 91R(3)(b) of the Act in the circumstances contended for by the appellant. 44 As to the circumstances of the appellant's employment, the Tribunal accepted that although the appellant's failure to return to his job at the end of his leave of absence might well provide a reason why his employer would not re-employ him (should he seek employment upon his return to China), the Tribunal was not satisfied that such a refusal would be for a Convention related reason, that is, related to the political opinions of the appellant. Nor was the Tribunal satisfied that the appellant's demotion whilst in employment was Convention related. 45 The Tribunal concluded having regard to all the claims taken individually and collectively that it could not be satisfied there was a real chance that the appellant would be subjected to serious harm amounting to persecution for a Convention reason should he return to China. 46 It can be seen from the Tribunal's reasoning and its findings that the Tribunal could not be satisfied the appellant held a well-founded fear of persecution by reason of any events in China because the appellant's evidence did not support such a finding. His evidence was 'basically' that he was not involved in any political activities in China. The appellant subsequently accepted that finding and sought to explain the reasons for his lack of political activity (AB132, para 1; affidavit, primary appellant filed 2 April 2007, paras 3 and 4). Nevertheless, the finding was plainly open on the evidence. 47 The appellant contends that the Tribunal reached its finding on this aspect of this claim in reliance upon old country information concerning the prevailing protocols and other checks made by PRC authorities before granting a passport to an applicant. The appellant says that the Tribunal inferred that there was no basis for any concern on the part of PRC authorities about the conduct and activities of the appellant as he and his wife were able to obtain passports with ease. The appellant says that more recent country information demonstrates that applicants in the PRC can obtain passports and exit documentation without the level of scrutiny by PRC authorities which previously prevailed and was the subject of the country information reports relied upon by the Tribunal. Applicants submit a form along with copies of their identification documents (ID cards or household registration papers/hukou) through their local post office, and are digitally photographed. Since February 2002, private individuals no longer need to provide an overseas invitation. After a fixed period (2-3 days), applicants return, pay a fee and collect their passport. Provided the applicant does not fall into any of the categories of persons ineligible to leave China the passport would likely be issued. Authorities expect to extend this procedure to all large and medium sized cities by 2005'. 48 The appellant says a proper inference can not be drawn from the country information relied upon by the Tribunal that an applicant for a passport is of no interest to PRC authorities on grounds of prior protest conduct for reasons of political opinion, simply because the applicant obtains a passport and achieves an objective of lawfully leaving China. However, five things should be noted. First, the Tribunal was entitled to prefer the country information it obtained and rely upon it in discharging its fact-finding role ( NAHI v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 10 [11] and [41], relying upon VTAG v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 91 ; (2005) 141 FCR 291 and VAO v Minister for Immigration and Multicultural Affairs [2002] FCA 161 at [25] ). Secondly, the finding is primarily supported by the Tribunal's assessment of the appellant's evidence. Thirdly, the appellant accepted that he had not engaged in protest activity and explained the conjunction of circumstances causing that to be so. Fourthly, even if no proper inference arises out of the older country information, the Tribunal did not act on 'no evidence' in reaching its finding as evidence (that is, the appellant's own evidence) supported the finding. Fifthly, the question of whether there is any evidence of a particular fact is a question of law just as whether a particular inference can be drawn from facts found or agreed is a question of law. Accordingly, in the context of judicial review, the making of findings and the drawing of inferences in the absence of evidence is an error of law. On the other hand, clearly enough, there is no error of law in simply making a wrong finding of fact. In addition, even if the reasoning upon which the decision-maker reached its conclusion of fact is demonstrated to be unsound, that would not amount to error of law ( Minister for Immigration and Multicultural Affairs v Al-Miahi [2001] FCA 744 ; (2002) 65 ALD 141 per Sundberg, Emmett and Finkelstein JJ at [34]). Even if it is accepted that the earlier country information did not support an inference drawn by the Tribunal, there was nevertheless evidence before the Tribunal supporting the findings of fact. 49 The Tribunal's reference to the country information upon which it relied is said to reflect a less rigorous standard for assessing prospective risk and reflects an approach on the part of the Tribunal of simply relying upon out of date and irrelevant information rather than an inquiring or analytical approach to the question before it. Two things should be noted about this contention. First, it is clear from the Tribunal's reasons that it comprehensively reviewed all of the evidence both in terms of the appellant's written evidence and the evidence of the witnesses at the hearing. Thus, the Tribunal did not simply rely upon 'old decision templates'. Rather, the Tribunal asked itself whether it could be satisfied on all the material that the appellant held a well-founded fear of persecution for a Convention reason should he return to the PRC. Secondly, to the extent that the appellant's contention raises the notion of bias on the part of the Tribunal, there is no basis for such a ground of challenge. There is no evidence of pre-judgment by the Tribunal ( Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17 ; (2001) 205 CLR 507 , per Gleeson CJ and Gummow J at [71] and [72]). If the contention is one of apprehended bias rather than actual bias, no fair-minded lay observer examining the reasons of the Tribunal could reasonably apprehend bias ( Re Refugee Review Tribunal & Anor; Ex parte H & Anor [2001] HCA 28 ; (2001) 179 ALR 425 per Gleeson CJ, Gaudron and Gummow JJ at [27] - [32]; Ebner v Official Trustee [2000] HCA 63 ; (2000) 176 ALR 644 at 647 at [6] per Gleeson CJ, McHugh, Gummow and Hayne JJ; Expectation Pty Ltd v PRD Realty Pty Ltd & Anor (No. 2) [2006] FCA 392 ; (2006) 151 FCR 160). 50 There is no ground of bias made out by the appellant. 51 By the third ground of appeal, the appellant contends that the Tribunal failed to consider the appellant's protest activities against the government of China during the period between his arrival in Australia and his application for a protection visa. Secondly, the Tribunal failed to consider protest activities undertaken by the appellant after the application for a visa. A consideration of the reasons demonstrates that the Tribunal comprehensively examined the written and oral evidence put to the Tribunal by the appellant. That evidence comprehended factual allegations concerning the appellant's participation in the protest in front of the Chinese Consulate in Sydney on 13 March 2006 and evidence of other discussion groups or protest events in which the appellant said he was a participant. 52 The Tribunal's reasoning demonstrates that it accepted that the appellant had demonstrated in front of the Consulate on 13 March 2006 ([33] and [40] of these reasons). The Tribunal pressed the appellant to identify other specific examples of protest activity apart from the events of 13 March 2006. The appellant could not recall other activities with any precision. 53 In evaluating the facts concerning the appellant's protest activity in Australia, the Tribunal gave weight to the consideration that the appellant engaged in the primary protest event on 13 March 2006 immediately after arriving in Australia on 8 March 2006. The Tribunal gave weight to the consideration that the protest event involved only two people consisting of the appellant and W F Z. The Tribunal gave weight to the consideration that the appellant had not engaged in other protests outside the Consulate in Sydney or the Chinese Embassy in Canberra. The Tribunal gave weight to its earlier finding that the applicant had not been a political activist in China. The Tribunal concluded that it could not be satisfied that the appellant held a well-founded fear of persecution for a Convention reason should he return to the PRC, due to his involvement in the demonstration on 13 March 2006 or other activities in Australia about which the appellant was, in evidence before the Tribunal, uncertain. 54 The Tribunal placed weight upon the failure of the appellant to provide evidence of the protest website upon which his name had been placed. The Tribunal noted that the appellant had not provided any copies or print-outs of web pages corroborating his contention in that regard. The Tribunal observed that the appellant had provided no evidence of those matters and thus the Tribunal did not accept the appellant's claim of inclusion on the website. The appellant had provided a reference to the website in both the initial statement in support of the protection visa application and the statement supporting the application for review before the Tribunal. The Tribunal was in error in observing that no evidence had been provided by the applicant. The applicant gave the Tribunal written and oral evidence of the website details. 55 Although the Tribunal was in error in respect of this evidence, the error does not amount to an error of law. The error as to evidence of the website itself is an error of fact as to the state of the evidence. It was however, open to the Tribunal to conclude that the appellant's name had not been included on the website without evidence of web pages. That conclusion formed part of the fact finding role of the Tribunal. Moreover, the finding of the Tribunal that it could not be satisfied that the appellant held a well-founded fear of persecution for a Convention reason arising out of the appellant's activities in Australia, was supported by the Tribunal's analysis of the appellant's evidence, that is, the matters which, in the mind of the Tribunal, attracted weight and emphasis ([40] and [54]). The onus of proof to the civil standard is borne by the appellant ( SBCC v Minister for Immigration and Multicultural Affairs [2006] FCAFC 129 per French, Lander and Besanko JJ at [39]; NAST v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 1536 per Wilcox J at [26]; NBKT v Minister for Immigration and Multicultural Affairs [2006] FCAFC 195 ; 156 FCR 419 per Young J at [89] with whom Gyles J and Stone J agreed). 58 The Tribunal examined the written and oral evidence of the appellant's protest activity on 13 March 2006 and his evidence of other acts of engagement in protest meetings to the extent of the evidence put forward. The Tribunal reached a conclusion that the appellant had undertaken the protest activity about which he gave evidence for the sake of strengthening his claims for a protection visa. The Tribunal described the appellant's protest activity in Sydney as 'token activity' and that description contained within the finding was predicated upon these considerations. First, that the appellant had participated in only one protest outside the Chinese Consulate. Secondly, that protest occurred with only one other person, namely, W F Z. Thirdly, the appellant's participation in a hunger strike on the evening of 13 March 2006 and throughout the following early morning was, by definition, of limited duration. Fourthly, the appellant's evidence of other protest activities 'elsewhere in Sydney' was limited and uncertain. Fifthly, the appellant's evidence was that he had not engaged in political activity in China. Having regard to these identified factors drawn from the Tribunal's assessment of the evidence, the appellant had not satisfied the Tribunal that he engaged in the conduct otherwise than for the purpose of strengthening his claim to be a refugee. The Tribunal did not simply find that the appellant had failed to discharge the onus. The Tribunal positively found that the activity undertaken by the appellant was merely token activity undertaken for the purpose of strengthening his claims. Accordingly, the Tribunal disregarded the appellant's conduct in Australia. The Tribunal's finding was open on the evidence and there is no error of law in reaching that finding. 59 The question of whether the appellant had engaged in the protest activity in Australia for the purpose of strengthening his claims to refugee status were expressly raised by the delegate at AB70 - AB71. In regard to this matter I am obliged to consider the applicant's activities post arrival in Australia against the provisions of Section 91R(3) ... The delegate quoted s 91R(3) and then said: On the basis of what has been presented to me, I am not satisfied that any involvement in anti PRC government activities by the applicant since his arrival in Australia has not been for the sole purpose of bolstering claims to a well founded fear of persecution. Therefore I have disregarded any such conduct under Section 91R(3) of the Migration Act . 60 Against the background of the delegate's contention that the sole purpose of the appellant's protest activity in Australia was to bolster claims to a well-founded fear of persecution, the appellant responded to the Tribunal with his statement at AB79 --- AB81 setting out the motivation for and content of the protest activity. Those matters were further addressed in detail at the hearing. The appellant was unable to persuade or satisfy the Tribunal that his protest activity was undertaken for any reason other than to strengthen his claim to be a refugee for the purposes of the Act. 61 In addition, the Tribunal considered whether the appellant might be able to seek and obtain employment in the PRC other than for his former employer, the State owned Long Yan Electric Power Administration authority and thus in the province where the appellant formerly lived. The Tribunal was not able to be satisfied that any Convention related reason would prevent the appellant from obtaining employment in any other part of the PRC. Thus, the Tribunal concluded that it would be practicable with no objective risk of persecution for a Convention reason for the appellant to relocate within China and obtain employment. 62 It is clear from the Tribunal's reasons that the sur place claim was considered entirely separately from the claim of a well-founded fear of persecution by reference to the appellant's activities in China. The sur place claim was described as the 'main claim' supporting the appellant's contention of a well-founded fear of serious harm by reason of his political opinion. Clearly, the Tribunal extensively examined the written and oral evidence going to the sur place claim. 63 The appellant raises two further grounds of appeal. The first goes to the Tribunal's approach to the notion of 'political opinion' for the purposes of the Act and the second goes to the appellant's contention of participation in a 'social group'. 64 As to the Tribunal's approach to the notion of a well-founded fear of persecution by reason of a person's political opinion, the appellant says the Tribunal required the political opinion to be 'expressed' before a well-founded fear of persecution might arise. In this case, the appellant did not assert that he had engaged in the expression of his political opinions through protest activity. Moreover, the Tribunal noted that the appellant simply claimed that 'basically he was not involved in any activities ... in China' but did take part in some small scale demonstrations. The Tribunal noted that the appellant did not claim that he 'experienced any difficulties whatsoever because of his involvement in these [small scale demonstrations] ' (paras [36] and [37] of these reasons). Moreover, the appellant sought to explain the reasons for his lack of protest expressed in China. 65 The Tribunal assessed the claim of the appellant to a well-founded fear of persecution arising out of family and other events in China, on the footing that no express protest activity had occurred, because that was the evidence of the appellant. The Tribunal was not seeking to impose any particular constrained approach to the notion of 'political opinion'. It applied the correct approach. It simply assessed the evidence on the footing upon which it was put. 66 As to the ground relating to the appellant's contended participation in 'a number of particular social and political groups that are forbidden in his home country' , two things should be said. First, the appellant has failed to identify the facts or circumstances going to the contended social or political groups to which he might belong. In other words, there is simply no content to the contention. Secondly, the basis upon which the appellant said before the Tribunal that he held a well-founded fear of persecution for a Convention reason was his 'political opinion'. No other contention was made. The appellant sought to evidence conduct of repression by Chinese authorities by reference to the suppression of particular social groups. However, the appellant did not contend that he was a participant in any particular group or that he held a well-founded fear of persecution by reason of his membership of any particular social group. Thus, the ground is not made out. 67 The appellant has framed the grounds of appeal to this Court on the footing that the Federal Magistrates Court erred by failing to find errors on the part of the Tribunal as contended by the appellant. There is no error on the part of the Federal Magistrates Court in its treatment and disposition of each of the grounds advanced before it in the appellant's application for review. 68 One further matter should be mentioned. The appellant in his affidavit filed on 2 April 2007 identified many typographical errors on the part of the Tribunal and errors in the description of each appellant's name. There are 26 typographical errors identified such as references to 'ash been' instead of 'has been' and 'form doing' instead of 'from doing' and 'whey there were' instead of 'why there were'. The reference to each appellant's name in one example inverts the first name with the second name and in the other case separates, it is said, the primary appellant's first name so as to read [Abcde Fghi] rather than [Abcdefghi]. These errors are said to be emblematic of a failure to discharge the review function. While the errors are unfortunate they are simply, in the main, typographical errors. The reference to each name of the appellant is simply a mis-description. It should be noted that in the application form for a protection visa signed by the primary appellant, he describes his given names in a separated way. In his wife's application for a protection visa as a member of the primary appellant's family unit, she describes her given names in a similar separated way. If the Tribunal has erred in this method of description, these errors are in any event simply mis-descriptions. Importantly, it is clear from the Tribunal's decision that it has comprehensively examined all the underlying facts going to the claims of the appellants. I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of the use by the tribunal of country information said to be less relevant than more contemporary country information consideration of a contention of bias consideration of a claim for a well-founded fear of persecution for a convention reason based upon events of protest in australia after the arrival of the applicant to this country consideration of a sur place claim consideration of s 91r(3)(b) of the migration act 1958 (cth) migration |
Also filed was a supporting affidavit of Scott Robert Coulthart, sworn on 2 September 2009. The affidavit of Mr Coulthartd outlines the documents sought. They are sought from screen-printing customers of the respondent, identified by invoices and packing slips referred to in Item 1 of Schedule 1 of the list of documents filed by the respondent on 13 July 2009. Five classes of documents were sought. On 6 October 2009, when the Notice of Motion was first before the Court, the respondent produced a number of unfiled affidavits which, it was submitted, showed that the One Way Vision product, the subject of these proceedings, was not being used in the way claimed by the applicants. I then suggested that once the applicants had had a chance to read the respondent's material (when produced in proper form), they should advise my associate as to whether the Motion was pressed. On 23 October 2009, the solicitors for the applicants wrote to chambers advising that they did press their application, on the basis of a proposed Amended Notice of Motion, which was annexed to a further affidavit filed by Mr Coulthart on 23 October 2009. In addition to the two affidavits of Mr Coulthart, the applicant filed affidavits of Belinda Nicole Dixon and Jessica Williams on 22 October 2009. By this point the respondent had filed affidavits for eight of its customers. They each said that the customer only uses the One Way Vision product for digital printing and not for screen-printing. The respondent also filed a further affidavit of Jia Ying Wang, the sole director and secretary of the respondent, sworn on 10 October 2009 and filed on 19 October 2009, and an affidavit by Cathryn Weekes sworn on 19 October 2009 and filed on 20 October 2009. The affidavit of Ms Weekes swears to conversations she had with customers of the company regarding the use of its product and to certain problems with getting affidavits from some customers, particularly those who were overseas or were in remote locations. The foreshadowed Amended Notice of Motion, which the applicants seek leave to file today, has an amended list of customers which no longer includes those customers of the respondent from whom properly sworn affidavits have been received, but in addition includes a further 19 persons who are customers of the respondent. The submission from the applicants is that the documents discovered by the respondent are an incomplete collection, and further relevant documents are likely to be in the possession of the screen-printing customers. These are the seven customers from the original list for whom affidavits had not been produced by the respondents, and, in addition, 19 new customers that are referred to in the affidavits of Ms Dixon and Ms Williams. The affidavit of Ms Williams in particular is significantly deficient, even for interlocutory purposes. Ms Williams says that she is a personal assistant in the employ of Servcorp, which provides secretarial and personal assistant staff to a number of businesses, including the solicitors for the applicant. At the request of Mr Coulthart, she says she made telephone calls to 140 businesses on a list that Mr Coulthart had provided. If the answer was affirmative, I asked whether they would be prepared to screen print onto "one way vision film". There is no indication of the questions put to those unidentified persons, nor is there any detail of the precise response of that person. There was no effort to identify the respondent's One Way Vision product, but references were made in a generic way to "One Way Vision film". Discovery is a process which is within the discretion of the Court. Order 15 r 3 of the Federal Court Rules empowers the Court to order at any time that discovery shall not be required, or shall be limited to such documents or classes of documents, or to such matters in question in a proceeding as may be specified in the order. In determining whether to order discovery, and the scope of the order, the Court will have regard to the issues in the case, the order in which they are likely to be resolved, the likely cost, the possible oppression of discovery, and its likely benefit to the resolution of the proceeding. The scope of discovery is determined by the pleadings. It is the intention of the Court in relation to discovery to confine discovery to those documents or categories which are clearly and directly relevant to issues in dispute. Recent history is replete with instances where the scope of discovery has been totally out of proportion to the value of discovery to the proceedings. The cost of discovery has on occasion been demonstrated to be wholly disproportionate to the matters in dispute. So far as third-party discovery is concerned, it is plain that pursuant to O 15A r 8, discovery against third parties is exceptional, and therefore the power to order third-party discovery has to be exercised with restraint. An order for disclosure of documents by a stranger to proceedings should be made only where the stranger has the only copies of the particular documents disclosure of which is sought, and the party to the proceedings who is seeking disclosure has exhausted his rights with respect to discovery against the other party to the proceedings. It also might be ordered where it has been demonstrated that, exceptionally, discovery orders against a third party are necessary for a just determination of the proceeding. Before an order for discovery can be made, a party seeking the order has to satisfy the Court that the non-party is probably in possession of documents that are relevant and necessary to the determination of the proceedings. The basis of the applicants' third-party discovery application suffers from an hiatus in the reasoning process. The applicants can point to the fact that the parties against whom third-party discovery is pressed are purchasers of the product the subject of these proceedings, and also can point to the fact that those persons engage in screen printing. The difficulty is that the nexus between the purchase of the products and the screen-printing activities of the purchasers of the products is not made out. The evidence from Mr Wang is that the respondent's One Way Vision product, as identified in the immediate Statement of Claim, is not used and is not suitable for use in conjunction with screen printing. That claim, it may be accepted, is contentious and will be pursued at trial, but for interlocutory purposes, Mr Wang says that the respondent's product is unsuitable for use for screen printing, because of its curled form after unpacking from a roll, and the inappropriateness of the ink used for screen-printing on a perforated substrate. There is the logical difficulty in making the inference that the respondent's One Way Vision product is used in conjunction with screen-printing. The evidence shows that those persons who responded by sworn evidence when the application of third-party discovery was canvassed, deny that they screen print using the respondent's product. They have been deleted from those against whom third-party discovery is sought. Those parties have demonstrated that there is no proper basis for seeking third-party discovery. It is not right to require third parties to swear by way of denial that they do not use the product in the way for which the applicants contend. The continuation of the claim for discovery against the remaining persons in the original Notice of Motion, and the attempt for leave to join a further 19 parties, seems to me to be really a fishing expedition, hoping for evidence that might support the applicant's case, but without any probative evidence that it was likely that those parties had documents which were relevant and necessary to the determination of the proceedings. I have been told by Mr Piggott of counsel, for the applicants, that the application for leave to add a further 19 parties was based on answers given over the phone to questions by Ms Williams. The original 15 persons had advertised on the internet that they were engaged in screen-printing activities, and it was that description which led to their selection. The evidence on the Notice of Motion and on the application for leave to file an Amended Notice of Motion, as I have indicated, is inadequate. The evidence of Ms Williams is not admissible for the want of the identification required by s 75 of the Evidence Act . I am of the view that what is required to be demonstrated, before third-party orders by way of discovery should be made, has not been made out. What evidence there is suggests that the "smoking gun" documents do not exist. For these reasons, not only should the original Notice of Motion be dismissed, but leave should be refused in respect of the proposed Amended Notice of Motion. For the reasons which I have indicated, had leave been granted, I would not have allowed the Amended Motion because of the deficiencies of the evidence on which it is based. Both the original Notice of Motion and the application for leave to file an Amended Notice of Motion, are dismissed. The parties agree, in the light of what I have decided, that the appropriate order on costs is that there be no order as to costs of the hearing of 6 October 2009, and that otherwise the applicant on the Notice of Motion pay the costs of the Motion, and the costs of the application for leave to file an Amended Notice of Motion. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. | discovery of documents discovery from non-parties to the proceedings discovery against third parties is exceptional and the power to order third-party discovery must be exercised with restraint inadequate evidence no proper basis for ordering discovery notice of motion dismissed. practice and procedure |
Phillip Coombes, Sandra Armstrong, Leslie Calma, Malya Teamay, Sandy Willie and Rosslyn Yiparti are members of the corporation's governing committee. The corporation and the named persons have brought an application for an order of review under s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('the ADJR Act'). The application was brought in this Court on 1 May 2006. 2 The Registrar of Aboriginal Corporations is an office created under Pt II of the Act and the Registrar is the respondent to the application for an order of review. The Registrar appointed an administrator to the corporation under s 71 of the Act and it is that decision which is the subject of the application for an order of review. 3 Section 71 of the Act is in the following terms. 5 The decision to appoint the administrator was made by Mr Peter Armstrong, who was the delegate of the Registrar for this purpose. 6 In the application for an order of review, the decision is said by the applicants to have involved an error of law or an improper exercise of the powers conferred by s 71 of the Act, or to be a decision which was made in breach of the rules of natural justice. An order is sought quashing or setting aside the decision. Other orders are sought in the alternative, but it is not necessary to mention them. In the application, the applicants seek a stay of the decision from the date of the application until such further or other order as the Court thinks fit. 7 Under s 15 of the ADJR Act the Court may make an order suspending the operation of the decision (s 15(1)(a)) and/or grant a stay of all or any proceedings under the decision (s 15(1)(b)). In the course of the applicants' submissions, it became clear that the precise order sought by the applicants is an order suspending the operation of the decision until trial. I made interim orders suspending the operation of the decision pending the filing of affidavits and the presentation of argument. 8 On 23 May 2006, I refused the applicants' application for a suspension of the operation of the decision until trial. At that time, I said that I would publish reasons for my decision. These are my reasons. 9 A number of affidavits were tendered on the hearing of the application for a suspension of the operation of the decision. There is some common ground between the parties, but there is also a good deal which is in dispute. In setting out the facts, I will attempt to indicate those which are common ground and the matters which are in dispute. I will refer to Mr Grieves as 'the examiner' and to his written report, which is dated December 2005, as 'the examination report'. After the notice to show cause had been received by the corporation, Mr Graham Harbord of that firm corresponded with the Registrar, first seeking an extension of the date specified in the notice for a response (ie, 31 January 2006) and then about the various matters raised in the notice. Mr Harbord requested a copy of the examination report, but it was not provided. By letter to the Registrar dated 5 April 2006 Mr Harbord asked the Registrar whether she had any further concerns. The Registrar responded by saying she was still considering the appointment of an administrator; the next step taken by the Registrar was to make the appointment. 12 At some point in early 2006, Minter Ellison, solicitors, were instructed by the Registrar and in April 2006 Mr Garry Hamilton of that firm started corresponding with Mr Harbord. Mr Hamilton advised Mr Harbord of the appointment of the administrator by letter dated 28 April 2006. 13 Mr Glendle Schrader is the chief executive officer of a company called Wana Ungkunykja Pty Ltd ('WU Pty Ltd') and of associated companies and trusts within what he calls the Wana Ungkunykja Group ('WU Group'). As at 29 April 2006, Ninti was said to be responsible for the management of the corporation. 15 The shares of WU Pty Ltd are owned by the corporation. The WU trust is said to be a recognised public benevolent institution which has a substantial investment income from a share portfolio and manages the Anangu Job Network, including the Anangu Job Futures Programme and the Unangu Training Division. 17 The corporation is a beneficiary of the WU trust. The other companies in the WU Group are also trustee companies and the corporation is a beneficiary of each trust. Each of the companies in the WU Group conducts a business and in some cases both the business and the assets of the trust are substantial. It is said that over the last three years total distributions from the trusts have averaged in excess of $500,000 per annum. 18 Mr Schrader details a number of adverse consequences that he says will follow from the appointment of an administrator. I will return to consider these matters a little later. 19 Mr Armstrong states that he made the decision to appoint the administrator because, taking into account all the representations made to him, he was satisfied that the governing committee had failed to comply with a provision of the Act and/or the regulations and/or a provision of the corporation's Rules, that it had failed to provide a satisfactory explanation for this (see s 71(2)(b) of the Act), and that the appointment of an administrator was required in the interests of the corporation, its members and creditors (see s 71(2)(d) of the Act) and in the public interest (see s 71(2)(f) of the Act). He annexes to his affidavit a statement of his reasons for the appointment as provided to the relevant Minister who was required to give his prior approval to the appointment (s 71(3) of the Act). Mr Armstrong also refers to the fact that it appeared that the corporation had traded at a loss for at least six months during the preceding 12 months. 20 Mr Armstrong identifies a number of reasons why, in his opinion, the appointment of the administrator should not be suspended. If there are no members, there may be no validly appointed governing committee with the power to conduct the affairs of the corporation. 2 Mr Grieves was told by the chief executive officer of the corporation that there were no subsidiaries of the corporation and this is incorrect. 3 The corporation manages and operates the Nyangatjatjara College for Aboriginal students ('the college') and operational issues involving the college are not stable. 4 There are no consolidated accounts for the corporation showing the financial operations of the college and the financial operations of the corporation's subsidiaries. There is significant uncertainty whether the corporation will be able to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. The affidavits that fall into this category are the affidavits of Wayne Richard Anthoney, Clive Douglas Scolley, Margaret Smith, Yama Lister, Phillip Coomes and Malya Teamay. 22 There are two issues which were the subject of a good deal of affidavit evidence and which warrant particular mention. The first is the relationship between the corporation and the college, and the second is the financial position of the corporation. 23 Mr Ralph Folds is the principal of the college and Mr Dan Lynch is the deputy principal. They have each sworn an affidavit. The applicants submitted that I should not receive the affidavits, but I ruled that I should do so on the basis that they clearly dealt with a relevant issue. Mr Folds states that the corporation or its representatives have not provided the financial information he requires to make proper decisions about the conduct of the affairs of the college. This is contested by the applicants, who have put forward evidence to the effect that in fact it is Mr Folds who has not co-operated in providing necessary financial information to the corporation or its representatives. It is not for me to resolve this dispute on this application and accordingly I refused the applicants' application that they be permitted to cross-examine Mr Folds and Mr Lynch. What is important for the purposes of this application is that Mr Schrader, on behalf of the applicants, admits that there is 'a continuing issue with Mr Folds about his employment, in particular covering his performance. It is asserted by the applicants that the examiner did not meet with any members or creditors of the corporation for the purposes of preparing the examination report. 25 As I have said, the corporation is a beneficiary under the WU trust and under the respective trusts of the subsidiary companies. The three communities and their respective bodies, Kaltukatjara Community Aboriginal Corporation, Mutitjulu Community Inc and Imanpa Development Association Inc, are also beneficiaries under the various trusts. The practice of the various trustees was to allocate the income earned by the trusts 40 per cent to the corporation and 20 per cent to each of the three communities, which income they were required to expend for suitable community development purposes. With respect to the 40 per cent of the income allocated to the corporation, the practice was for 20 per cent to be loaned back to the trustee company and for the corporation to forgive the loan the following year. I will refer to this as 'the loan-back practice'. It is not disputed that the loan-back practice was not shown in the corporation's financial statements. 2 WU Pty Ltd and other companies in the WU Group paid a trust distribution of $97,288 to the corporation on 8 February 2006. 3 WU Pty Ltd paid $25,000 to the corporation on 7 April 2006 and $75,000 on 5 May 2006. These payments were made to meet what were said to be the operational needs of the corporation. 27 Ms Claire Gibbons is a qualified accountant employed by WU Pty Ltd. When the board of WU Pty Ltd referred to the payments made to the corporation in April and May 2006, it said that such payments were made 'having regard to its financial difficulties'. Ms Claire Gibbons states that the college is not a separate legal entity from the corporation, but because the reporting periods are different, consolidated accounts are not prepared. Ms Gibbons states that the college is in a strong financial position and generates substantial income aside from the monies it receives by way of grants. She expresses the opinion that if the accounts were consolidated it would show that the corporation is in an 'extremely strong financial position'. Ms Gibbons also expresses the view that the corporation is solvent. 28 The examiner deposes to the fact that the report that was marked 'Draft' and that was sent to the respondent was the final version of his report, and that he told Mr Armstrong that during a telephone conversation in late February 2006. The examiner deposes to what he was and was not told by the chief executive officer of the corporation about the source of the dividend income shown in the corporation's financial statements. The examiner states that he was not told of or shown any documents revealing the trust distribution and loan-back practice. 29 The examiner expressed the opinion that, as at 30 September 2005, the financial position of the corporation was precarious and near to insolvent. As at 15 May 2006, he did not consider the corporation's position to be sound. He said 'the corporation needs to be and is being propped up by "related entities"'. According to its financial statements, the corporation traded at a significant loss over the 15 month period to 30 September 2005. 30 The applicants applied to cross-examine the examiner. I refused that application because I did not think that any of the matters the applicants identified as matters that they wished to cross-examine on were matters I could resolve on this application. 31 Mr Loader conducted an audit of the corporation for the year ended 30 June 2005. He prepared an independent audit report to the members of the corporation and I have already set out the qualification to his report (see [20] above). 32 Mr Loader was not told of the corporate structure or of the trust distribution and loan-back practice. He was told the dividend income was simply a trust distribution by the WU trust. It is clear enough that the applicant is not required to show 'special' or 'exceptional' circumstances before he or she is granted a suspension or stay. The wording of s 15(1) does not suggest such a high hurdle. 34 One formulation of the proper test is to apply the test applied on an application for an interlocutory injunction, namely, whether there is a serious question to be tried and, if so, where does the balance of convenience lie. 35 The other formulation of the appropriate test is that an order may be made under s 15(1) of the ADJR Act if the applicant satisfies the Court that it is just in all the circumstances to make such an order. That was the approach suggested by Keely J in Perkins v Cuthill (1981) 34 ALR 669 at 671 and favoured by French J in Snow v Deputy Commissioner of Taxation (1987) 14 FCR 119 at 131. 36 In Faingold v Zammit (1984) 1 FCR 87 the Full Court of this Court considered the two formulations and said that, in practical terms, there may be very little difference between them. It held that the trial judge in that case had not erred in applying the test appropriate on the application for an interlocutory injunction. 37 In Snow v Deputy Commission of Taxation (supra), French J said that there may be cases where an order under s 15 of the ADJR Act will not be made, even though the test for the granting of an interlocutory injunction is satisfied. 38 In many cases, including the present, the application of the test for an interlocutory injunction is the proper test to be applied on an application under s 15(1). Both parties to this application argued the application on the basis that the two requirements for an interlocutory injunction were both necessary and sufficient and I will proceed on that same basis. 39 I turn to consider whether there is a serious question to be tried. 40 The operation of the decision should not be suspended if there is no serious question to be tried. The applicants' submissions on this issue were brief. Furthermore, a number of their grounds of challenge appear to be an attack on the merits of the decision. 41 The applicants applied to amend their application for an order of review to add additional grounds during the course of submissions on the application for an order suspending the operation of the decision. The additional grounds raised a number of matters, one of which was the fact that the examination report upon which the Registrar acted had not been concluded. The Registrar opposed the applicants' application to amend, but, in fact, she complained only of the proposed amendment raising the allegation that the Registrar had acted on a draft report. That was, submitted the Registrar, plainly not correct when regard is had to the evidence of the examiner that he advised the delegate in late February 2006 that the examination report which had been sent to him was the final report (see [28] above). There is force in that contention, but in view of the absence of any prejudice to the Registrar, I decided to allow the application to amend. 42 As I have said, the applicant alleges that in appointing the administrator, the Registrar committed an error of law, exercised the power improperly and acted in breach of the rules of natural justice. Under the rubric of the allegation of exercising the power improperly, the applicants allege that the Registrar took certain irrelevant considerations into account, failed to take certain relevant considerations into account, exercised the power unreasonably, in a manner which no reasonable person could, and in bad faith. 43 To successfully challenge the Registrar's decision, the applicants must make out one of the above grounds in the context of a power the exercise of which is conditioned on the Registrar being satisfied of one of the grounds in s 71(2) of the Act. The question of the limits that this fact places on the scope of a challenge to a decision has been considered in a number of authorities, but it is unnecessary to pause on this point on this application: Buck v Bavone [1976] HCA 24 ; (1976) 135 CLR 110; Darling Casino Ltd v NSW Casino Control Authority [1997] HCA 11 ; (1997) 191 CLR 602 per Gaudron and Gummow JJ at 628-629. 44 As I have said, a number of matters raised in the application appear to be relevant to the merits of the decision and not to raise errors of the type identified in s 5 of the ADJR Act. An example is the allegation that the Registrar erred in law in not concluding that there had been a proper and adequate response to the notice to show cause. 45 The applicants did emphasise various matters which occurred in the period leading up to the decision. 46 The Registrar authorised the preparation of the examination report pursuant to s 60. The examiner spoke to certain persons for the purposes of preparing the examination report. The applicants contend that there were persons the examiner should have spoken to, to whom he did not speak. The notice to show cause is based on the findings of the examiner, as set out in his report. As I have said, it seems that the delegate of the Registrar had a copy of the examination report before preparing the notice to show cause, but the examination report was marked 'Draft'. It was not until some time after the service of the notice to show cause that the delegate was told the examination report marked 'Draft' was in fact the final report. There is evidence before me that the delegate was told this some time in late February 2006. The conclusions of the delegate for the purposes of his decision to appoint an administrator were based on the findings of the examiner. The applicants asked for a copy of the examination report before responding to the notice to show cause, but it was not provided. I doubt that the failure to provide the examination report amounts to a breach of the rules of natural justice: see Jameson v Guri Wa Ngundagar Aboriginal Corporation [2001] FCA 1104. The applicants pointed to the fact that the Registrar did not raise any further concerns that she had despite their invitation by letter dated 5 April 2006 to do so. 47 It is not clear to me that there is a serious question to be tried. Had the fate of this application turned on that issue, I would have been disposed to allow the applicants to make further submissions on the issue. Although they have already had an adequate opportunity to do so, the decision is an important one from the applicants' point of view. As it is, I have reached the conclusion that the balance of convenience clearly favours the refusal of the application and it is unnecessary to pursue the issue of whether there is a serious question to be tried any further. 48 I turn now to consider the balance of convenience. 49 In private law litigation, the Court considers the respective positions of the plaintiff and the defendant and, sometimes, the effects on third parties (see Meagher, Heydon and Leeming, Meagher, Gummow and Lehane's Equity: Doctrines and Remedies (4 th ed, 2002) at [21]-[375]). In this case, there is the corporation and the members of the governing committee on the one hand, and the Registrar on the other. It is not contended that the Registrar will be personally affected by the granting or refusal of an order for suspension. However, under s 71, the Registrar has the power to consider the interests of the corporation, its members, the creditors of the corporation and the public interest. I think that I can have regard to the interests of those groups when considering the balance of convenience on this application. 50 The effect of the appointment of an administrator is to take the responsibility for the conduct of the affairs of the corporation out of the hands of the governing committee and place it in the hands of the administrator. That is no doubt a significant step. 2 It may reflect adversely on the reputation of the corporation and affect its ability to conduct its business in the usual way. 3 It may affect adversely the ability of entities or bodies associated with the corporation to carry on their activities, including their financial activities, in the usual way and, in this case, I include in that group the college and the companies in the WU Group. 4 There would no doubt be a measure of inconvenience in the administrator replacing the governing committee and then within a relatively short period of time the governing committee again assuming control of the affairs of the corporation. Furthermore, insofar as there might be irregularities in terms of the register of members, the holding of annual general meetings, the election of members of the governing committee, record keeping and the lodging of annual returns, I do not think that these matters are strong reasons in favour of not suspending the operation of the decision. That is not to make light of the irregularities if they are subsequently made out. However, they appear to represent relatively long-standing practices of the corporation and they are not such as to constitute pressing reasons for the appointment of the administrator to take effect. 52 As far as the so-called dispute between representatives of the corporation and Mr Folds, the principal of the college, is concerned, as I have said, I cannot decide the rights and wrongs of that dispute. However, what is clear and what I think is significant on the balance of convenience, is that the relations between representatives of the corporation and senior management of the college (ie Messrs Folds and Lynch) are not good. On the corporation's own evidence, there have been issues concerning Mr Folds' performance for several months. It seems to me that the immediate installation of the administrator is more likely to resolve this problem than leaving the governing committee in control of the affairs of the corporation. 53 As far as the issue of the corporation's solvency is concerned, I cannot, on this application, determine whether the corporation is solvent or insolvent. In fact, as I understand it, the Registrar does not assert that the corporation is insolvent. Rather, she asserts that she does not know whether the corporation is insolvent, but submits that the facts raise a real question as to solvency. 54 In my opinion, two matters relevant to the financial position of the corporation are established by the undisputed evidence. First, the corporation experienced financial difficulties in 2005 and those difficulties have continued to recent times. Those financial difficulties may or may not amount to insolvency. It is clear that the corporation was trading at a loss for a substantial period of time and that it required substantial cash injections. If for no other reason, the fact that the corporation was experiencing financial difficulties is established by the reference by WU Pty Ltd to the 'financial difficulties' of the corporation and the fact that the cash payments were made. The fact that the corporation was trading at a loss is established by the evidence of Mr Loader. 55 The second significant matter is that the loan-back practice was not disclosed in the corporation's financial statements. It does not seem to be disputed by the applicants that it should have been. More accurately, the first applicant's accounts might have reflected these loans at least until they were released. 57 It was for these reasons that I refused the application for the suspension of the operation of the decision. I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | aboriginal corporations application for order of review of decision to appoint administrator pursuant to aboriginal councils and associations act 1976 (cth), s 71 applicants sought order suspending operation of decision until trial pursuant to administrative decisions (judicial review) act 1977 (cth), s 15 whether serious question to be tried balance of convenience application refused. aboriginals |
Because of my oversight I framed order 1 in terms which limited the repayment to be made to BGR of what it was out of pocket. 2 Earlier I had found that by causing BGR to pay their legal costs associated with the proceedings, Triad and Cordato Partners Services had acted oppressively to Food Improvers (see order 3(a) made on 12 February 2007: The Food Improvers Pty Ltd v BGR Corporation Pty Ltd (No 3) [2007] FCA 97). 3 If any of the fourth to eighth defendants had paid costs of the defence of the proceedings that would have been equally oppressive to Food Improvers. The second and third defendants pay to the first defendant 90% of all amounts paid by the first defendant and/or the fourth to eighth defendants for or in respect of the legal costs and disbursements of any of the defendants in these proceedings. The Court has an implied or inherent power to correct any clerical mistake or error in a judgment or order if it were the result of an accidental slip or omission: Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446 at 449E per McHugh JA. He said that the power extended to permit a proposed variation of an order which related to a matter that was in issue in the proceedings or something which was incidental to such a matter if the need for such a variation is the result of an accidental omission or mistake ( Storey & Keers 9 NSWLR at 452F-G; see too Australian Fisheries Management Authority v PW Adams Pty Ltd (No 2) (1996) 66 FCR 349). 6 In addition to the power under the slip rule and O 35 r 7(3), under O 35 r 7(2)(e) the Court has power to vary or set aside an order after entry where it does not reflect the intention of the Court. 7 I intended that my orders restore BGR and its group to the position they should have been in had the oppressive conduct of Triad and Cordato Partners Services in causing the payment of their costs not occurred. I overlooked the plaintiffs' submissions that I should frame the relief more generally than just affecting BGR. 8 I am of opinion that had I been conscious that this was in issue, as I find it was, I would have framed the relief to ensure that whichever company within the BGR group had paid costs of the proceedings should be recouped 90% of those costs. 9 My mistake was one which I am satisfied is within my powers under the slip rule and O 35 r 7(3) to correct and that the interests of justice require me to do so. 10 The difficulty with the way in which the parties have proposed the correction is that there is a potential that BGR would be paid money that should be repaid to one of its subsidiaries. Since all relevant members of the BGR group are in liquidation, the proper order to be made is one which restores to the payer 90% of what it paid. That is the order which I would have made had I considered the matter properly on 28 February 2007. Ninety percent of all amounts paid by each of the first, fourth, fifth, sixth, seventh and eighth defendants for or in respect of the legal costs and disbursements of any of the defendants in these proceedings be paid by the second and third defendants to each respective one of the first, fourth, fifth, sixth, seventh or eighth defendants which made each such payment. | federal court of australia judgments and orders amendment of correction under slip rule where original order was the result of an accidental slip or omission where original order does not reflect the intention of the court practice and procedure |
The Commissioner had disallowed deductions represented by payments to the trustee of an employee welfare fund, claimed by the respondent (the "taxpayer") in each tax year on the footing that Part IVA of the Income Tax Assessment Act 1936 (Cth) (the "Act") applied because the taxpayer had entered into a scheme by which it had obtained, or would but for s 177F of the Act, obtain a tax benefit in connection with the scheme for the purposes of s 177C(1)(b) of the Act and those who had entered into the scheme had done so for the dominant purpose of enabling the taxpayer to obtain a tax benefit in connection with the scheme. The Commissioner had also disallowed the claimed deductions on the footing that the payments did not fall within s 51(1) of the Act in the 1997 tax year and Section 8-1 of the Income Tax Assessment Act 1997 (Cth) (the "1997 Act") in the 1998 tax year. The only questions alive in these proceedings concern the application of Part IVA of the Act and whether the Commissioner's power under s 177F(1) of the Act was enlivened. In 1986, Mr Mark Trail, Mr Allan Trail and Mr Robert Trail commenced business, as brothers, in partnership manufacturing cane-harvesting machinery, undertaking engineering repairs and manufacturing plastic components for the cane/harvesting industry. They carried on business in Home Hill in Northern Queensland. From 1988 the business was carried on by a corporation, Trail Bros Pty Ltd ("TBPL"). Each of the brothers held one third of the issued capital in TBPL. Within a relatively short time of incorporation, Mr Robert Trail withdrew from active participation in the business, resigned as a director and sold his shares in TBPL. From then, TBPL was controlled by Mr Mark Trail and Mr Allan Trail. By early 1996, TBPL had a cohort of 17 salaried employees. In early 1996, Mr Mark Trail and Mr Allan Trail decided to restructure the affairs of TBPL. They did this by bringing Mr Joseph Patane (the Fabrication and Floor Manager of the business), Mr Chris Holden (the Finance Manager) and Mr Terry Dall'Osto (an outside third party) into the business. The restructure was undertaken by incorporating Trail Bros Steel & Plastics Pty Ltd and selling the business of TBPL to the new entity at a price of $175,000.00. Mr Patane, Mr Holden, Mr Dall'Osto, Mr Mark Trail and Mr Allan Trail became members and directors of the new corporation. After the settlement of the sale transaction the shareholding in the new corporation was held in this way: 45% by TBPL; 20% by Lynpros Pty Ltd on behalf of Mr Holden; 25% by Mr Patane; and 10% by Mr Dall'Osto. In the new corporation, Mr Mark Trail was the General Manager. Mr Allan Trail was the Manager of the plastics division. Mr Patane was in charge of production and engineering. Mr Holden was in charge of finance and administration and Mr Dall'Osto was in charge of sales and marketing. Not long after the incorporation of the new entity, Mr Dall'Osto left the business and sold his shares. TBPL acquired an additional 6% of the issued shares elevating its shareholding to 51%. The remaining 4% was acquired by the other members. In addition, as part of the restructure leading to the establishment of the new corporation, the taxpayer entered into written contracts of employment on 1 April 1996 with Mr Mark Trail and Mr Allan Trail. In the case of Mr Mark Trail, his contract records that he is the General Manager of the taxpayer with responsibility for the overall management of the company's operations. He reports to the Board of Directors. His remuneration is recorded as $36,000.00. The contract in Schedule 1 also provides for contributions by the taxpayer to an Employer Superannuation Scheme on behalf of M.R. An amount of $60,000.00 shall be contributed prior to 30 th June, 1996. Contributions in the other three (3) years shall be in such amount as the employer shall, in its discretion determine, provided that the total amount payable as hereinbefore set out, is paid in the first four (4) years of trading operations. The remuneration and superannuation contribution provision is in the same terms. The contributions were to be paid into a self-managed superannuation fund of which Mr Allan Trail and Mr Mark Trail were the trustees (the "Trail Bros Superannuation Fund"). An amount of $120,000.00 was paid into the Superannuation Fund in the year ending 30 June 1996 representing the payment of $60,000.00 on behalf of each individual. That payment in the year ended 30 June 1996 was fully deductible to the taxpayer from its assessable income, by virtue of s 82AAC(2D) of the Act. In the course of the financial year ending 30 June 1997, the Act was amended by the Superannuation Contributions Tax (Consequential Amendments) Act 1997 (No. 71 of 1997) (Cth) and the Superannuation Contributions and Termination Payments Taxes Legislation Amendment Act 1997 (No. 191 of 1997) (Cth) which abolished deductibility for the full amount of superannuation contributions and introduced caps or aged-based limits on the deductibility of such contributions. The effect of the amendments was to significantly limit the deductibility of the amounts that the taxpayer had agreed under the contracts of 1 April 1996 to contribute to the Trail Bros Superannuation Fund on behalf of Mr Mark Trail and Mr Allan Trail over the balance term of the contracts. The Tribunal found that those who advised the taxpayer became aware of the legislative amendments. The Tribunal noted the evidence of Mr Mark Trail in his affidavit as to the steps which were then undertaken. The Tribunal then noted these paragraphs of Mr Trail's affidavit: Before 30 June 1997 Allan [Trail] and I spoke with the other directors about varying our arrangement in relation to Allan's and my remaining superannuation entitlements (of $474,000 over three years for Allan and me) so that the Applicant would instead contribute that amount to Trail Bros, which was still controlled by Allan and me. Trail Bros was to be the trustee of the Trail Bros Pty Ltd Employee Welfare Fund ("the Employee Welfare Fund"). We had explained to the other directors that this could be of additional benefit to the Applicant, because the Fund was established not only for the benefit of Allan and me, but also the other employees and their dependants. The other directors were agreeable to this and were agreeable to the Applicant bearing the costs of establishing the Employee Welfare Fund. The Tribunal found that the Employee Welfare Fund was established with the assistance of a firm of solicitors. The Fund was established by a Deed of Trust dated 19 June 1997. TBPL was the trustee and the taxpayer was the employer. The trust was a discretionary trust. The beneficiaries of the trust are described as the employees, including the directors, of the taxpayer. On 24 June 1997, the taxpayer paid an amount of $210,000.00 into the Employee Welfare Fund in accordance with a resolution of its directors. A further sum of $210,000.00 was paid to the trustee of the fund on 4 July 1997 in accordance with a resolution of the directors. Accordingly, by 4 July 1997, the taxpayer had made a payment of $60,000.00 in the financial year ending 30 June 1996 to the trustees of the Trail Bros Superannuation Fund on behalf of each of Mr Allan Trail and Mr Mark Trail and in each of the tax years ending 30 June 1997 and 30 June 1998 the taxpayer had paid an amount of $210,000.00 into the Employee Welfare Fund constituting total payments of $540,000.00 of the total amount contemplated by the two contracts, of $594,000.00. The shortfall of $54,000.00 was not paid by the taxpayer. At [12], the Tribunal, although expressing reservations on the question in the absence of documentary evidence, accepted and found that the agreements entered into between the taxpayer as employer and Mr Mark Trail and Mr Allan Trail, as employees, were varied, by agreements between the parties, "such that the contributions required by those agreements to be made to superannuation would, instead, be made to the Employee Welfare Fund". At [13], the Tribunal further explained the basis for that conclusion which contains some observations about the evidence put to the Tribunal by Mr Mark Trail. His evidence is, in many respects, unsatisfactory . His evidence about the "practice" of Steel & Plastics [the taxpayer] in helping employees, when tested by cross-examination, turned out to be hyperbole . Likewise I have considerable doubts about his evidence of the motivation for setting up the Employee Welfare Fund, in part, to benefit employees. Logic and common sense suggests that the Employee Welfare Fund was set up as a mechanism by which Steel & Plastics could continue making the payments that it was obliged to make to Mr Mark Trail and Mr Allan Trail. They were unlikely to agree to forego their entitlements and they, as the controllers of a majority of Steel & Plastics issued capital, had an obvious interest in ensuring that payments made by Steel & Plastics retained deductible status. Thus I conclude that there was a variation to the contracts of employment such that payments due would, from the 1997 income year onwards, be made to the Employee Welfare Fund. On 25 March 2003, the Commissioner made determinations under s 177F(1)(b) of Part IVA of the Act in relation to those claimed deductions in each tax year. Subsequently on 14 and 15 April 2003, the Commissioner issued assessments disallowing the deductions on the basis that the amounts were not deductible, or, if they were, that Part IVA operated to deny deductibility. A penalty was imposed at the rate of 50% on the basis that the claims were not "reasonably arguable". The penalty was discounted to 40% on the basis that the taxpayer had made a voluntary disclosure. The taxpayer objected to the assessments on 16 July 2003. Those objections were disallowed on 17 November 2004. At [19], the Tribunal notes the Commissioner's concession that if the Tribunal finds that the payments made to the Employee Welfare Fund were made pursuant to a contractual obligation arising out of the employment agreements as varied, the amounts would be deductible. At [12], [13] and [20], the Tribunal concludes that the contracts were varied such that the payments due to the brothers would be made by means of the Employee Welfare Fund. At [20], the Tribunal found those payments to be deductible "having regard to the character of the promise that underlay the payments". The Tribunal then considered whether Part IVA applied so as to enliven the Commissioner's power to determine under s 177F(1)(b) of the Act that the whole or part of the deduction not be allowable to the taxpayer and whether action taken under the final limb of s 177(1) of the Act to issue amended assessments on 14 and 15 April 2003 giving effect to the disallowance was supportable in the application of Part IVA to the relevant arrangements. Section 177D of the Act applies Part IVA to any scheme entered into, commenced or carried out where the taxpayer has obtained or would but for s 177F, obtain a tax benefit in connection with the scheme; and, having regard to the factors identified at s 177D(b)(i) to (viii), analysed objectively, it would be concluded that one or more of the persons who entered into the scheme or carried out the scheme (or any part of it) did so for the purpose of enabling the relevant taxpayer to obtain a tax benefit in connection with the scheme, or for the purpose of enabling the relevant taxpayer and another taxpayer (or other taxpayers) each to obtain a tax benefit in connection with the scheme. Such a purpose must be the dominant purpose. A scheme is broadly defined at s 177A(1) as any agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings; and any scheme, plan, proposal, action, course of action or course of conduct. A reference in Part IVA to the "obtaining by the taxpayer of a tax benefit in connection with a scheme" shall by s 177C(1) be read in a particular way. Section 177C(1) thus requires the entire set of schematic arrangements to be set aside so that the postulate contemplated by s 177C(1)(b) might be considered. In Federal Commissioner of Taxation v Lenzo (2008) 167 FCR 255, Sackville J at 278 made these observations concerning the operation of s 177C(1)(b): ... In determining whether Mr Lenzo obtained a tax benefit in connection with the scheme for the purposes of s 177C(1)(b), three things should be noted about the statutory formulation. First, the question posed by s 177C(1)(b) has to be answered on the assumption that the scheme had not been entered into or carried out. Section 177C, unlike for example s 177D, does not refer to "any part of the scheme". Thus the question, in order to be answered as s 177C(1)(b) requires, must be approached by assuming that the entire scheme found by the Court was not entered into or carried out: cf Federal Commissioner of Taxation v Peabody (1994) 181 CLR 359 at 383-384, per curiam . It is not open to the taxpayer to point to what might reasonably be expected to have been done if only part of the scheme had not been entered into or carried out. In this case, for example, it is not open to Mr Lenzo to point to what could reasonably be expected to occur if the Loan Deed is ignored, by the remainder of the scheme is assumed to have continued in tact. Secondly, s 177C(1)(b) applies where the deduction would not have been allowable or might reasonably be expected not to have been allowable had the scheme not been entered into or carried out. It involves a prediction as to events which would have taken place if the relevant scheme had not been entered into or carried out and the prediction must be sufficiently reliable for it to be regarded as reasonable. For the Court to conclude that a taxpayer has obtained a tax benefit in connection with a scheme, it must find that a deduction is allowable to a taxpayer in relation to a year of income in circumstances where the whole or part of "that deduction" would or might not have been allowable in the absence of the scheme. What does the expression "that deduction" mean? By hypothesis, if there were no scheme (assuming the incurring of the liability was a consequence of the scheme) the taxpayer simply could not have claimed the identical deduction. If the expression "that deduction" has a wider meaning, it may be open to a taxpayer to satisfy the onus of showing the Commissioner's assessment is excessive by demonstrating that, had the scheme not been entered into or carried out, he or she would have or might reasonably be expected to have incurred a liability of the kind actually claimed as a deduction. For example, in WD & HO Wills (Australia) Pty Ltd v Federal Commissioner of Taxation (1996) 65 FCR 298, the taxpayer argued that had it not entered into the scheme (involving payment of insurance premiums by it to a "captive" insurer), the taxpayer would have paid an equivalent sum in premiums to another insurer. On that hypothesis, even without the scheme, the whole of the deduction claimed by the taxpayer would have been an allowable deduction. The argument failed on the facts, but was accepted in principle: WD & HO Wills (Aust) Pty Ltd v Federal Commissioner of Taxation 65 FCR at 329. Sackville J concluded that s 177C(1)(b) should be given the wider interpretation that he discussed otherwise the words, "or might reasonably be expected not to have been allowable", would seem to have no role to play. Sackville J noted that the wider view seems to be implicit in the approach adopted in FCT v Peabody ; Federal Commissioner of Taxation v Consolidated Press Holdings Ltd (2001) 207 CLR 235 at 261-262 and Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404. In FCT v Spotless , the High Court in considering the obtaining of a tax benefit for the purposes of s 177C(1)(a), considered that the section identified an amount not being included in the assessable income of the taxpayer "more generally" than the taxpayer had contended for on the narrow basis. It follows therefore, as Sackville J observed in FCT v Lenzo , that: By parity of reasoning, in determining whether the particular deduction claimed by the taxpayer would or might reasonably have been allowable, the Court must consider, in the absence of the scheme, what activity the taxpayer would have undertaken. Accordingly, the taxpayer might satisfy the onus of showing that the assessments issued by the Commissioner are excessive by showing that it has not obtained a tax benefit in connection with a scheme, and thus Part IVA does not apply (s 177D), with the result that the Commissioner's discretion under s 177F(1) is not enlivened, by showing that it would or might reasonably have been expected to have engaged in particular activity, absent the scheme, and that activity would or might reasonably be expected to have resulted in an allowable deduction of the same kind as the deduction claimed by the taxpayer under the scheme. However, the hypothetical postulate must be more than a mere possibility. Since the hypothesis involves a prediction as to events that would or might reasonably have been expected to have taken place in the absence of the scheme, the prediction must be "sufficiently reliable" for it to be regarded as "reasonable" for the purposes of the statute. At [25], the Tribunal identified the real controversy as whether the taxpayer had obtained a tax benefit by reason of the claimed deductions, for the purposes of s 177C(1)(b) of the Act, in the 1997 and 1998 tax years. At [26], the Tribunal noted that in the absence of any variation to the contracts, the amounts that would have been deductible under s 82AAC of the Act as superannuation contributions were in 1997 $27,170.00 (Mr Mark Trail) and $9,782.00 (Mr Allan Trail) and in 1998, $28,620.00 (Mr Mark Trail) and $10,232.00 (Mr Allan Trail). At [27], the Tribunal noted that s 177C(1)(b) requires the making of an hypothesis as to what might reasonably be expected to have happened had the scheme not been entered into or carried out. The Tribunal noted the observations of Gummow and Hayne JJ in Commissioner of Taxation v Hart (2004) 217 CLR 216 at 243 [66] that the enquiry directed by Part IVA requires comparison between the scheme in question and an alternative postulate. The Tribunal also noted that the High Court in Commissioner of Taxation v Peabody [1994] HCA 43 ; (1994) 181 CLR 359 determined that a reasonable expectation requires more than a possibility with the result that the prediction must be sufficiently reliable for it to be regarded as reasonable. Having identified those principles, the Tribunal at [28] identified that the starting point in considering the prediction was to recognise that by virtue of the contracts of employment, the taxpayer was bound to make payments totalling $237,000.00 for the benefit of Mr Mark Trail and Mr Allan Trail in the three years after 1 July 1997. The Tribunal noted at [28] that at the time when the contractual obligation was undertaken by the taxpayer, it was an obligation to make contributions to a superannuation fund on behalf of the individuals and that such payments were fully deductible from the assessable income of the taxpayer. The Tribunal noted that the legislative amendments had the effect that the deductibility of the contractual payments was significantly reduced, if made as contributions to a superannuation fund on behalf of the two individuals. The Tribunal then said this: What the scheme achieved was to make the full amount of the payments deductible by changing the character of the payments from superannuation payments to payments to the Employee Welfare Fund. But, had the scheme not been implemented, I find it impossible to conclude that [the taxpayer] would have discharged its obligations to Mr Mark Trail and Mr Allan Trail in a way that was not fully tax deductible. It made no sense for [the taxpayer] or for Mr Mark Trail and Mr Allan Trail as the ultimate beneficial owners of 51% of its capital, to make significant payments on the revenue account that were deductible only in part, and a relatively small part at that. It made even less sense for the minority shareholders. The employment agreements were, I infer from their form, professionally prepared and the product of advice. The company obtained further advice when the legislation changed. The Employee Welfare Fund was the end product of that advice. In the circumstances of this case the "alternative postulate" necessarily starts with the continuing obligation to make the payments for the benefit of Mr Mark Trail and Mr Allan Trail. Because of the character of that obligation any payment by [the taxpayer] in discharge of the obligation would have been deductible except in circumstances, such as s 82AAC of the [Act] where the legislature limited the extent of the deductibility. It was contrary to the interests of all involved to discharge that obligation in a way that did not allow for complete deductibility of all payments. I accept the submission advanced by Mr Robertson that the payments would have been deductible in the hands of [the taxpayer] even if Mr Mark Trail and Mr Allan Trail had "asked for those payments to be made to themselves or to their wives or even to unrelated third parties". There may well have been adverse tax consequences for those recipients but that does not detract from my conclusion about the position of [the taxpayer]. In my view, absent the scheme, the payments would have been made and would have been made in a way that would have entitled [the taxpayer] to deduct the amount of the payments from its assessable income. Thus, when the comparison is undertaken between the scheme and what I regard as the alternative postulate, no amount is allowable as a deduction that would not otherwise have been allowable. It follows that [the taxpayer] has not obtained a tax benefit in connection with the scheme and Part IVA of the [Act] has no application. It is not then necessary to consider the purpose of entry into the scheme. The Commissioner frames the following questions of law for determination. 2.1 Whether the Tribunal applied the test required by s 177C(1) of the [Act]. It made even less sense for the minority shareholders". (at par [29]). The respondent says that the remaining questions are not questions of law but merely different ways of complaining that the Tribunal's findings of fact are incorrect. Grounds 4.1 to 4.6 of the notice of appeal correspond to the questions of law at 2.1 to 2.4 of the notice of appeal. The Commissioner contends that errors of law occurred in the Tribunal because it failed to apply the correct statutory test under s 177C(1) of the Act and took into account irrelevant considerations in reaching its administrative decision and each of those matters raises a question of law as to whether an error of law arose. The Commissioner also contends that the Tribunal reached findings of fact that were not supported by probative evidence or were based on inferences not reasonably open on the facts as found and thus the Tribunal fell into error of law. Grounds 4.7 to 4.9 are conclusionary in that the Commissioner contends that on the facts as found at paras [4] to [15] of the Tribunal's reasons, the Tribunal erred in law by failing to find that the respondent obtained a tax benefit in connection with a scheme within the meaning of s 177C(1) and by failing to find that the particular deductions would not have been or might reasonably be expected not to have been allowable if the scheme had not been entered into or carried out. At para 4.9, the Commissioner contends that the Tribunal erred in law by failing to find that if the scheme had not been entered into or carried out, the taxpayer would have, or might reasonably be expected to have, made substantially non-deductible superannuation contributions in accordance with its existing contractual obligations. An appeal only lies if there is raised for determination, a question of law and the subject matter of the appeal is the resolution of that question: Birdseye v Australian Securities and Investments Commission (2003) 38 AAR 55; [2003] FCAFC 323; TNT Skypac International (Aust) Pty Ltd v Commissioner of Taxation (1988) 82 ALR 175; Comcare v Etheridge (2006) 149 FCR 522; Hussain v Minister for Foreign Affairs (2008) 169 FCR 241. The questions of law to be determined must be properly framed in the notice of appeal supported by the contended grounds of appeal: Order 53, rule 3(2). Findings of fact are generally not susceptible of challenge unless the manner of their making gives rise to a question of law: Price Street Professional Centre Pty Ltd v Commissioner of Taxation [2007] FCAFC 154. The question of whether the Tribunal has isolated the relevant legal test is plainly a question of law. The question of whether the Tribunal has applied a correctly identified test or in applying the test so identified, has in fact applied a different test, is a question of law. The question of whether facts found fall within the statute properly construed is generally regarded as a question of law: Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280. Likewise, the question whether a particular inference can be drawn from facts found or agreed is a question of law. That is because, before the inference is drawn, there is a preliminary question as to whether the evidence reasonably admits a different conclusion. Accordingly, in the context of judicial review, the makings of findings and the drawing of inferences in the absence of evidence is an error of law. On the other hand, there is no error of law simply in making a wrong finding of fact. Even if the reasoning whereby the court reached its conclusions of fact were demonstrably unsound, that would not amount to an error of law. A party does not establish an error of law by showing that the decision-maker inferred the existence of a particular fact by a faulty process, for example by engaging in an illogical course of reasoning. Thus, at common law, want of logic is not synonymous with error of law. So long as the particular inference is reasonably open, even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place. The respondent says that questions addressing whether the Tribunal took into account irrelevant considerations is simply a mechanism for examining the Tribunal's findings of fact for the purpose of inviting the Court to substitute its own view as to the merits. The respondent says that the Administrative Decision (Judicial Review) Act 1977 (the "AD (JR) Act") is the framework for considering whether a decision under an enactment has miscarried on the ground that the decision-maker took into account irrelevant considerations and that statutory ground involves a consideration of the merits, unlike an appeal under s 44(1) of the AAT Act, which only involves a question of law. Although I would not embrace that assessment of the operation of s 5(1)(e) and s 5(2) of the AD (JR) Act, the proper approach to be adopted in identifying error of law on the part of an administrative decision-maker as a matter of common law giving rise to a question of law, involves these principles. In identifying whether the administrative decision-maker (in this case the Tribunal) has engaged in an error of law giving rise to a question of law , it is necessary to precisely identify the "nature and quality" of the error and the legal principle that attracts a particular legal consequence, that is, the "legal rubric under which a decision is challenged": Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 198 ALR 59 per Gleeson CJ at [9]. The scope of that legal rubric is conventionally understood in terms of the well known passage from Craig v South Australia (1995) 184 CLR 163 at 179 per Brennan, Deane, Toohey, Gaudron and McHugh JJ, adopted and applied in Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 351 [82] per McHugh, Gummow and Hayne JJ. As to misconceptions which might suggest an unsupportable supposition on the part of the decision-maker, see Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353 at 360 per Dixon J and R v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co. Pty Ltd (1953) 88 CLR 100 at 120 per Dixon CJ, Williams, Webb and Fullagar JJ. As to the constraints upon a court interfering with a decision-maker's assessment of the evidence in exercising supervisory review of administrative decision-making, see Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35-36 per Brennan J. At common law, want of logic, is not synonymous with error of law: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 per Mason CJ at 356 with whom Brennan, Toohey and Gaudron JJ agreed. It follows therefore that if the Tribunal takes an irrelevant consideration into account in reaching its decision, it has engaged in an error of law and the question of whether the Tribunal has taken an irrelevant consideration into account raises a question of law. It also follows that a question of whether the Tribunal has reached a finding unsupported by any evidence, raises a question of law. A contention that inferences have been drawn from facts in circumstances where those inferences are not reasonably open, also raises a question of law. Some time prior to 30 June 1997 the taxpayer and Mr Mark Trail and Mr Allan Trail entered into and carried into effect a scheme to vary the contracts of employment of 1 April 1996 so as to provide that the payments due to the brothers under the contracts would be made and the taxpayer's contractual obligations discharged, by making the payments to the trustees of the Employee Welfare Fund on the terms of the trust instrument. The trust had been brought into existence expressly for that purpose as part of the scheme. Having regard to the character of the contractual promise that underlay the payments, they were deductible from the assessable income of the taxpayer in the 1997 and 1998 tax years: [11], [12], [13], [14], [19], [20], [23] and [24] of the Tribunal's reasons. Although the Employee Welfare Fund's constitutional instrument contemplates a fund established for the benefit of the employees of the taxpayer, Mr Mark Trail's evidence of the practice of the taxpayer in helping employees was found by the Tribunal to be hyperbole. His motivation in establishing the fund was called into question by the Tribunal and the fund was described as a "mechanism" by which the taxpayer could continue to make the payments to the two brothers that it was obliged to make under the contracts: [13] of the Tribunal's reasons. Accordingly, the scheme consisting of the variation of the contracts; the incorporation of the Employee Welfare Fund to receive the payments under the mechanism of a fund for the benefit of the taxpayer's cohort of employees but which was a new vehicle for the payment to the brothers of the monies they would have received under the contracts; and the payments to the Fund, are to be set aside, notionally. The pre-scheme arrangements involved circumstances in which the taxpayer was contractually obliged to pay each brother a contribution to a superannuation fund of $237,000.00 within the 1997, 1998 and 1999 tax years, $60,000.00 having been paid to each brother in the 1996 tax year. These future payments in the 1997, 1998 and 1999 tax years were contractual obligations of the taxpayer notwithstanding that age-based limits on the deductible amount of contributions to an employee superannuation scheme, from the taxpayer's assessable income, had been imposed by amendments to the Act. The Tribunal examined a question it perceived to be the question required to be asked by s 177C(1)(b) of the Act of whether an hypothesis could be identified of what might reasonably have been expected to have happened had the scheme not been entered into. The Tribunal recognised that an alternate postulate to the scheme that involved a sufficiently reliable prediction as to the events that might have occurred, so as to be regarded as a reasonable alternate postulate , was the focus of the statutory enquiry. In that sense, the Tribunal did not formulate an incorrect test to be applied in deciding whether the kind of deduction claimed under the scheme would not have been allowable or might reasonably be expected not to have been allowable to the taxpayer, absent the scheme. That test however necessarily involves an examination of the particular activity the taxpayer would have undertaken or might reasonably be expected to have undertaken in lieu of the scheme and whether the activity would or might reasonably be expected to have resulted in an allowable deduction of the same kind as that claimed by the taxpayer in the two tax years, under the scheme: Federal Commissioner of Taxation v Lenzo per Sackville J at [128] and Heerey J at [38] to [41]. There was however no evidence before the Tribunal of that activity. What would or might the taxpayer have reasonably done absent the scheme? Would the taxpayer have paid all the amounts due under the contracts to the two brothers by making the contributions to the superannuation fund? The Tribunal thought not, because the characterisation of the payments involved fully deductible employment contributions by the taxpayer and the taxpayer had implemented the scheme, together with the Trail brothers, so as to enable the contractual payments to be varied and paid to the new Employee Welfare Fund to preserve the fully deductible character of those payments. It followed, in the Tribunal's view, that it was contrary to the interests of the taxpayer and each brother to engage in any activity that "did not allow for complete deductibility of all payments". It necessarily follows, having regard to that finding, that the taxpayer would not have made the pre-scheme contractual payments to the Employee Superannuation Scheme except to the extent of the age-limited deductible contributions. What would the taxpayer have otherwise done or might reasonably be expected to have done in the circumstances absent the scheme? Might it have varied the agreements to negotiate new employment contracts containing particular terms which might have given rise to an allowable deduction of the kind claimed in the full amount claimed, and, if so, on what basis or by reference to what steps? The Commissioner says that it is not part of the s 177C(1)(b) test nor is it therefore relevant to consider the tax implications of the alternate postulate as this simply invites the substitution of a new "scheme" for the one required to be stripped away. The Commissioner also says that since the variation of the agreements is part of the scheme that must be stripped away in its entirety, it is not part of the test under s 177C(1)(b) nor is it relevant, to bring within any formulation of an alternate postulate, any variation of the agreements. The question asked by s 177C(1)(b) of the Act however is what activity would the taxpayer have undertaken or might reasonably be expected to have undertaken absent the scheme? Since the deductibility of the payments had been substantially eliminated by the amendments to the Act, it is not unlikely that the employer and the two brothers would have engaged in an activity of seeking to negotiate new employment terms. The new terms may have resulted in steps, events, actions or activities being undertaken by the taxpayer in furtherance of its commercial undertaking that would have given rise to, or might reasonably be expected to have given rise to, a deduction in the hands of the taxpayer of the kind it claimed under the scheme. However, it may not have given rise to such a deduction. The deduction claimed under the scheme must be characterised and a comparison made with the character of the activity said to give rise to, or reasonably expected to give rise to, a deduction of the same kind. In considering that question, it is relevant to have regard to a contended variation to the agreements if that variation is said to form an element of the proposed activity giving rise to the alternate postulate. It is also relevant to have regard to whether that activity would give rise to or might reasonably be expected to have given rise to a deduction of the kind claimed under the scheme. That is not to say that an activity which simply involves a variation to employment contracts so as to substitute one contrived mechanism or colourable structure to clothe non-deductible payments with deductibility, with another, forms a part of the relevant hypothesis as such a payment would not give rise to an allowable deduction of the kind removed by the scheme. The first step is to isolate with clarity the particular activity that would or might reasonably be expected to have occurred. In undertaking that step it is relevant to have regard to the evidence of the taxpayer as to the steps it says it would have undertaken or would have been likely to undertake in the absence of the scheme: Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 at pp 423 and 424 per Brennan CJ, Dawson, Toohey, Gaudron, Gummow and Kirby JJ. That subjective evidence of the individuals informing the guiding mind of the taxpayer is, of course, not in any sense determinative of the alternate postulate. However, that evidence, against the background of all the evidence, might assist in framing the nature of the activity the taxpayer would have undertaken or might reasonably be expected to have undertaken. Ultimately, the hypothesis is a prediction as to future events that would or might reasonably be expected to have been undertaken, and the Court, or the administrative decision-maker, must form its own objective view of that hypothesis and whether, against the background of all the evidence, a sufficiently reliable counterfactual can be identified for it to be regarded as reasonable. The difficulty however is that although the Tribunal formulated the correct test, it applied a different test. The Tribunal did not have before it evidence from the taxpayer of the activity it would have undertaken or might reasonably be expected to have undertaken and was thus not in a position to identify as a sufficiently reliable comparative alternate postulate, an hypothesis that the taxpayer would have discharged its obligations to each brother in a way that was fully deductible. That finding or conclusion was not supported by any evidence of activity on the part of the taxpayer that might have brought about that result. Accordingly, it seems to me that the application of the test, properly identified, miscarried by applying a test that did not investigate the strength of the evidence of the alternate postulate to test whether such an hypothesis was just a possibility or unsupported speculation or, alternatively, sufficiently reliable so as to be regarded as reasonable. There was simply no evidence of the counterfactual as found. In that sense, I am satisfied that there was an error of law in the application of the test required by s 177C(1)(b) and an error of law in that there was no evidence to support the alternate postulate that "a way" would have been found by the taxpayer to make the payments to the two brothers that would or might reasonably be expected to have resulted in an allowable deduction of the same kind as that claimed. The content of the activity giving rise to the way, is critical and the manner of its being undertaken, resulting in a payment that is said to be or might reasonably be expected to be deductible, is also critical. The Tribunal has adopted an exclusionary or reductionist approach in isolating an hypothesis as reasonable, by finding that whatever unidentified activity may have been undertaken, it would have resulted in an allowable deduction to the taxpayer of the kind claimed under the scheme. As support for the notion that the taxpayer would have found a way to make the payments to each brother, the Tribunal embraced the submission of the taxpayer's counsel that the taxpayer could, for example, simply have paid the amount to the two directors (ie. the two brothers) or their wives or a third party and such payments would have attracted an allowable deduction. The taxpayer however did not identify any particular arrangement that might actually have been in contemplation or might reasonably have been adopted in the absence of the scheme. The taxpayer called no evidence providing a foundation for an objective assessment, on all the evidence, that the taxpayer would or might reasonably have been expected to take a particular course of action that would or might reasonably be expected to have given rise to an allowable deduction of the kind claimed under the scheme. No likely variation to the contracts was put in evidence nor the likely central terms of any potential variation. None of the other directors of the taxpayer were called to give evidence of the taxpayer's likely course of conduct had the scheme not been entered into having regard to the potential frustration of the employment contracts by the legislative changes. No other director of the taxpayer gave evidence that a common assumption upon which the contractual obligations rested had failed and, in consequence, in order to adjust the terms of the employment relationship, the taxpayer would have been likely to undertake particular steps for a particular reason giving rise to particular payments that would or might reasonably be expected to have given rise to an allowable deduction of the same kind as that claimed. Any payments to the two brothers either made to them or their wives or a third party would have been likely to result in assessable income in the hands of the brothers or fringe benefits tax being imposed upon the taxpayer. The taxpayer may have chosen to adopt a course of conduct which accepted such a liability but no evidence was available to demonstrate what might have occurred. The alternative postulate that represents a reasonable prediction of future events absent the scheme is that the taxpayer would have made payments to the two brothers up to the age-based limits provided for by the Act and would have sought to negotiate a variation to the contracts as to the balance payments which may have resulted in a new set of arrangements that may have given rise to an allowable deduction. However, in the absence of any real content or evidence of the relevant activity, it cannot be said that a deduction of the kind claimed under the scheme would have been allowable to the taxpayer or might reasonably be expected to have been allowable to the taxpayer absent the scheme, and thus the taxpayer has obtained a tax benefit in connection with the scheme in the amount of the allowable deductions in excess of the age-based limits. Accordingly, the decision of the Tribunal must be set aside. The matter is to be remitted to the Tribunal to determine the questions before it by applying the test so as to determine whether there is evidence which supports an hypothesis that the taxpayer would have undertaken or might reasonably be expected to have undertaken a particular activity in lieu of the scheme and whether that activity would or might reasonably be expected to have resulted in an allowable deduction of the same kind as the deduction claimed by the taxpayer under the scheme consistently with the methodology identified in the authorities and in particular, Commissioner of Taxation v Peabody (1994) 181 CLR 359; Commissioner of Taxation v Hart (2004) 217 CLR 216; and Federal Commissioner of Taxation v Lenzo (2008) 167 FCR 255 at 278 [121] to [125] and [128]; Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404. If there is no evidence before the Tribunal that enables a sufficiently reliable prediction to be made of an alternate hypothesis that would or might reasonably be expected to have resulted in an allowable deduction of the kind claimed under the scheme, the hypothesis that represents a sufficiently reliable prediction of future events in the absence of the scheme, is that the taxpayer would have made payments to the Trail Bros Superannuation Fund of amounts equal to the age-based limits under the Act on behalf of each brother, and no sufficiently reliable prediction can be made as to the course of conduct that would or might reasonably be expected to have been adopted as to the balance payments due under the contracts except that no payments beyond the age-based limits would have been paid into the Trail Bros Superannuation Fund. The respondent shall pay the costs of the applicant of and incidental to the application. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of whether the taxpayer obtained a tax benefit for the purposes of s 177c(1)(b) of the income tax assessment act 1936 (cth) in connection with a scheme for the purposes of part iva of the act consideration of whether an "alternate postulate" adopted by the tribunal was open as a sufficiently reliable prediction of future events so as to be reasonable consideration of the evidence as to the alternate postulate consideration of whether the questions the subject of the application under s 44(1) of the administrative appeals tribunal act 1975 raise a question of law consideration of the tests for determining error of law on the part of an administrative decision-maker and in consequence, a question of law consideration of whether the questions the subject of the application under s 44(1) of the administrative appeals tribunal act 1975 raise a question of law consideration of the tests for determining error of law on the part of an administrative decision-maker and in consequence, a question of law taxation administrative law |
The proceedings were heard together with the consent of the parties. 2 TSI and TSIA are related companies. The directors of TSI at all relevant times were Anthony James Scott ('Scott') and Andrew Ian Fairbank ('Fairbank'). At all relevant times, the directors of TSIA were Scott, Fairbank and Mark Merwan Bayoud ('Bayoud'). In each proceeding, the Commissioner of Taxation ('the Commissioner') has joined the relevant directors as third parties and made a claim against them pursuant to s 588FGA of the Corporations Act 2001 (Cth) ('the Act'). Scott and Fairbank appeared and defended these claims in each proceeding. In the proceeding relating to TSIA, the Commissioner did not serve its cross claim on Bayoud, and no orders are sought against him. 3 On 15 May 2003, the plaintiff and Karen Maree Mathers ('Mathers') were appointed as administrators of each company pursuant to s 436A of the Act. On 23 July 2003, the plaintiff and Mathers were appointed as liquidators of each company pursuant to s 439C. On 14 October 2004, Mathers resigned as liquidator of each company. 4 In the first proceeding (VID 8 of 2005), the plaintiff in his capacity as liquidator of TSI claims that payments totalling $38,319.55 made by TSI to the Commissioner were unfair preferences pursuant to s 588FA and are void against the plaintiff pursuant to s 588FE of the Act. The payment of $5,700.00 was made by TSI by cheque. The plaintiff contends that these payments were uncommercial transactions pursuant to s 588FB of the Act and are void against the plaintiff pursuant to s 588FE of the Act. In addition, s 588FE(3) provides that a transaction of the company is voidable if it is both an insolvent transaction, and an uncommercial transaction, that was entered into during the two years ending on the relation back day. 11 For both TSI and TSIA, the relation back day is 15 May 2003, being the day on which the administration of each company began: see ss 9 , 513B and 513C . The relevant relation back period for unfair preferences is the six month period from 15 November 2002 to 15 May 2003. The longer relation back period for uncommercial transactions is of no significance in the present case as all of the relevant payments were made within the six month period between 15 November 2002 and 15 May 2003. 12 Section 588FE needs to be read in conjunction with the provisions that define the concepts of an insolvent transaction, an unfair preference and an uncommercial transaction. The precondition to the making of an indemnification order against directors is that the Court must make an order under s 588FF against the Commissioner because of the payment of an amount in respect of tax liabilities arising under specified provisions of the Income Tax Assessment Act 1936 (Cth) or the Taxation Administration Act 1953 (Cth). Stated more simply, the effect of s 588FGA(1) is that the right of indemnity against the directors does not arise in respect of any payment to the Commissioner that is avoided by the Court under s 588FF(1). It only applies where the avoided payments relate to the particular tax liabilities specified in s 588FGA(1), which are commonly referred to as income tax withholding liabilities ('ITW liabilities'). 17 Where the Court makes an order of the kind referred to in s 588FGA(1) against the Commissioner, s 588FGA(2) provides that each person who was a director of the company when the payment is made is liable to indemnify the Commissioner in respect of any loss or damage resulting from the order. Section 588FGA(4) specifically provides that the Court may, in the same proceedings as those in which an order is made against the Commissioner, order a director to pay to the Commissioner an amount that is payable by that director pursuant to s 588FGA(2). Section 588FGB(3) provides that it is a defence for a director against whom indemnity is claimed by the Commissioner if it is proved that, at the payment time, the director had reasonable grounds to expect, and did expect, that the company was solvent at that time and would remain solvent even if it made the payment. In arriving at this settlement, the plaintiff and the Commissioner narrowed the number of payments in contest to those which I have set out above. The settlement did not extend to the claims brought by the Commissioner against the directors. 19 The agreement between the plaintiff and the Commissioner in each proceeding obviously has a direct impact upon the third parties. The Commissioner's third party claim only becomes available to the Commissioner if the Court makes an order against the Commissioner pursuant to s 588FF, and then only to the extent that the order relates to payments made in respect of ITW liabilities of the kind specified in s 588FGA(1). 20 In the first proceeding, of the payments totalling $38,319.55 which are now claimed by the liquidator, the payments which related to ITW liabilities total $29,260.82. This means, inter alia, that the relevant transactions must be proven to be insolvent transactions and unfair preferences and/or uncommercial transactions. In this case, Scott and Fairbank wish to contest the claims that the relevant payments were transactions within the meaning of s 9 , that they were unfair preferences or uncommercial transactions (as the case may be) within the meaning of ss 588FA and 588FB, and that the company was insolvent at the time when the relevant payments were made. Generally speaking, the right to contest issues that only arise in the principal proceeding are an accepted incident of third party status: see Helicopter Sales (Australia) Pty Ltd v Rotor Work Pty Ltd [1974] HCA 32 ; (1974) 132 CLR 1 per Barwick CJ at 5 and Mason J at 15. 23 The authorities recognise that directors in the position of Scott and Fairbank should be able to contest the liquidator's claims against the Commissioner: see Crosbie v Commissioner of Taxation [2003] FCA 922 ; (2003) 130 FCR 275 at [4] - [7] (' Crosbie' ); Hall v Commissioner of Taxation [2004] NSWSC 985 ; (2004) 186 FLR 111 at [16] and [21]-[23] (' Hall' ), and Dean-Willcocks v Commissioner of Taxation (No 2) (2004) 49 ACSR 325. In Crosbie , Finkelstein J made an order that the directors have leave to defend the liquidator's claim against the Commissioner of Taxation on terms that they be bound by all decisions made in that action and they be treated as if parties to the action on any issue relating to costs. In Hall , Barrett J directed that the third parties have leave to appear and take part in the hearing of the plaintiffs' claims and to defend those claims: at [25]. 24 When these issues were raised, I made orders in each proceeding in the same form as those made by Finkelstein J in Crosbie . Specifically, I ordered that the third parties have leave to defend the plaintiff's claim against the Commissioner on terms that: (a) they each be bound by all decisions made in those actions; and (b) they each be treated as if parties to the action on any issue relating to costs. This order was not opposed by either the plaintiff or the Commissioner. 25 In Crosbie , Finkelstein J also expressed the view, which was not necessary to his decision, that the Court should not act on the parties' admissions as to insolvency without satisfying itself on the evidence as to the correctness of that admission. In his Honour's view, this conclusion followed from the fact that the Court can only make an order under s 588FF if it is satisfied that a transaction of a company is voidable under s 588FE. Subsequent cases have rejected this view, and held that the Court can reach the requisite satisfaction on the basis of the parties' agreement: see Wanted World Wide (Australia) Limited v Commissioner of Taxation [2004] FCA 1063 ; (2004) 139 FCR 205 (' Wanted World Wide ') and Young v Commissioner of Taxation (2006) 56 ACSR 654 (' Young' ). As I see it, no practical significance attaches to the issue in this case, notwithstanding the settlement reached between the plaintiff and the Commissioner, because the claims made by the plaintiff as to solvency and other matters were contested by Scott and Fairbank. However, if and to the extent that the issue has any significance for this case, I prefer, and would apply, the views expressed in Wanted World Wide and Young . Companies within the group were linked in various ways, including cross shareholdings, common directorships, and/or licence agreements. 27 TSI and TSIA were subsidiaries of Trader Systems International Inc ('TSI Inc'). The intellectual property in 'The Trader System' was apparently owned by Wire Securities Limited (a New Zealand incorporated company) which entered into a licence agreement with TSI Inc giving TSI Inc the exclusive right to use and commercially exploit The Trader System software and trademarks. TSI Inc granted TSI a licence allowing it to set up a website to operate The Trader System. TSI Inc also granted TSIA a licence authorising it to exploit and develop the software and to use the trademarks by, inter alia, selling and marketing the Trader System and daily data supplied to it by TSI. Under a service agreement between TSI and TSIA, TSIA was authorised to market the software and daily data supplied by TSI, in return for a service fee payable by TSI to TSIA. 28 Swift Securities and Investments Limited ('Swift Malaysia'), a company incorporated and resident in Malaysia, and Swift Securities and Investments Pty Ltd ('Swift Australia') were also part of the group. Scott and Bayoud were directors of Swift Malaysia and Swift Australia. From time to time, Swift Malaysia and Swift Australia advanced funds to TSI and TSIA to support their operations. Swift Australia had the same registered office as TSI. 30 In each proceeding, Scott and Fairbank disputed the plaintiff's case that orders should be made against the Commissioner pursuant to s 588FF on essentially two grounds. First, and most substantially, they contended that neither TSI nor TSIA was insolvent at the time the relevant payments were made. They argued that both TSI and TSIA relied on, and could reasonably rely on, funds provided by Swift Malaysia to pay their respective debts as and when they fell due. They said that as soon as Bayoud told Scott on 13 May 2003 that Swift Malaysia would not provide further financial support to TSI and TSIA, they appointed administrators to both companies. Secondly, they contended that the payments made by TSI and TSIA to the Commissioner did not constitute unfair preferences within the meaning of s 588FA, as they were not transactions between the relevant company (ie TSI or TSIA as the case may be) and its creditor within the meaning of s 9 and s 588FA. Rather, they contended that the payments were made by Swift Malaysia or by the employees of TSI or TSIA (as the case may be) from whose wages tax payments were deducted, and not by TSI or TSIA. 31 Aside from these defences to the principal claim, Scott and Fairbank mounted independent defences to the third party claims brought by the Commissioner pursuant to s 588FGA. First, they argued that, even if the Court made an order in the principal proceeding pursuant to s 588FF(1) in the terms sought by the liquidator, this would not establish that the Commissioner had suffered 'loss or damage' within the meaning of s 588FGA(2). In substance, they argued that the effect of any such order would simply be to require the Commissioner to repay amounts to which he was not entitled. In addition, Scott and Fairbank contended that neither interest nor costs paid by the Commissioner to the liquidator would constitute loss or damage resulting from an order made under s 588FF. 32 Lastly, Scott and Fairbank contended that they had a good defence to the Commissioner's claims under s 588FGB(3). In their submission, the evidence proved that, at the time of each payment, they each had reasonable grounds to expect, and did expect, that TSI and TSIA were solvent and would remain solvent. This has long been recognised. The extent to which their existence will prevent a conclusion of insolvency will depend on a number of surrounding circumstances, one of which must be the nature of the assets and in the case of a trader, the nature of his business. But the debtor's own moneys are not limited to his cash resources immediately available. They extend to moneys which he can procure by realization by sale or by mortgage or pledge of his assets within a relatively short time---relative to the nature and amount of the debts and to the circumstances, including the nature of the business, of the debtor. The conclusion of insolvency ought to be clear from a consideration of the debtor's financial position in its entirety and generally speaking ought not to be drawn simply from evidence of a temporary lack of liquidity. It is the debtor's inability, utilizing such cash resources as he has or can command through the use of his assets, to meet his debts as they fall due which indicates insolvency. Whether that state of his affairs has arrived is a question for the Court and not one as to which expert evidence may be given in terms though no doubt experts may speak as to the likelihood of any of the debtor's assets or capacities yielding ready cash in sufficient time to meet the debts as they fall due. If the company can borrow without security, it will have funds to pay its debts as they fall due and will be solvent, provided of course that the borrowing is on deferred payment terms or otherwise such that the lender itself is not a creditor whose debt can not be repaid as and when it becomes due and payable. It comes down to a question of fact, in which the key concept is ability to pay the company's debts as and when they become due and payable. Kearney J in Re Adnot Pty Ltd (1982) 7 ACLR 212; 1 ACLC 307 took into account that the company "instead of having to resort to some outside lender, is in the fortunate position of having its fellow member of the group of companies to which it belongs, available in effect as banker to provide funds required to meet any shortfall": at ACLR 217; ACLC 311; the shortfall was until completion and sale of a shopping centre. In Re a Company [1986] BCLC 261 Nourse J declined to find that a company was unable to pay its debts as they fell due although it was being "propped up by loans made to it by associated companies and possibly by others": at 262; his Lordship noted at 263 that he had evidence from a director to the effect that there was no question of the loans being withdrawn, the loans not being repayable for some 18 months. ' (The emphasis appears in the judgment. In Tru Floor at [44], Sundberg J said, correctly in my view, that it must also be borne in mind that the plain words of s 95A ('as and when they become due') require anticipated debts to be taken, to some extent, into account in determining solvency. There is overwhelming evidence to support this opinion. 41 TSI's operating revenue was never sufficient to meet the costs and expenses it incurred in each period after 1 July 1999. These expenses included $321,407.00 in wages and salaries and $152,517.00 in rent. It is obvious from these figures, as the liquidator said in evidence, that TSI's profit margins were not such that the company could maintain ongoing operations without funds from sources exterior to the company. Fairbank's report as to affairs did not contain an estimate of the total deficiency confronting TSI, but it did state that his estimate of the total realisable value of TSI's assets was $41,935.00, whereas its liabilities to creditors amounted to $196,261.00, i.e. a total deficiency on those figures of $154,326.00. 44 The liquidator gave evidence that it is generally accepted in the accounting profession that a company with a current ratio lower than 1:1 and a net asset deficiency has a high probability of being insolvent. The current ratio is the ratio of current assets to current liabilities. TSI's current ratio was lower than 1:1 throughout the period from 1 July 2001 to 14 May 2003. On 12 March 2002, the Australian Taxation Office issued penalty notices against the directors of TSI. On 25 March 2002, a payment agreement was executed whereby TSI agreed to make fortnightly instalments of $4,000.00 from April 2002 onwards, and larger payments in August 2002. These arrangements were not complied with and, as a result, the Commissioner obtained a garnishee order against TSI's bank account with the Commonwealth Bank of Australia. On 3 October 2002, TSI and the Australian Taxation Office made a further arrangement for a repayment proposal to the effect that TSI would pay the Commissioner $50,000.00 per month in reduction of outstanding tax liabilities. TSI did not comply with this arrangement. On 4 March 2003, TSI's accountant contacted the Australian Taxation Office and requested that the garnishee order be lifted. This request was declined on the basis that TSI had already defaulted on two payment arrangements with the Commissioner. On 7 April 2003 the Commissioner again issued penalty notices against the directors of TSI. 46 Throughout the period from November 2002 to April 2003, TSI's outstanding creditors were owed approximately $600,000.00. Debts to several creditors had been outstanding for substantial periods of time. These included debts owing to Baker & McKenzie, the State Revenue Office of Victoria ('SRO'), and Swinburne University of Technology ('Swinburne'). From August 2002, TSI fell behind in its obligation to make employee superannuation payments to REST Superannuation. By 30 April 2003, unpaid employee superannuation amounted to $4,938.00. In their reports as to the affairs of TSI, Scott and Fairbank estimated that unsecured creditors as at 15 May 2003 totalled approximately $1,301,575.00 and $196,261.00 respectively. 47 TSI's largest debtors pertained to related party loans. After the appointment of the liquidator, only $35,684.00 was realised from cash at bank and the sale of assets. Related party debtors resulted in no recovery to date. 49 There is further evidence that TSI was in financial difficulty for a lengthy period. In his answers to a questionnaire sent to him by the liquidator, Scott said that TSI's failure could be attributed to various factors, including the fact that the original investor had failed to provide the full amount of capital that he had agreed to commit, and that when a company is in difficulties it is hard to change without adequate capital or cash flow. Scott also said that creditors had requested payments by TSI at various times though no formal proceedings were ever commenced. He also said that arrangements were made with creditors either for full payments or payments in part over time. In this regards Steven Girotto has been aware that the local companies have been in difficulties for sometime. The reason that the business has failed is due to undercapitalisation at the outset. In this regard, it may be noted that the original agreement for Steven Girotto to participate in the business was for him to provide capital of US$7 million but no more than one third was ever provided. At present, they are not in a position to continue that support due to their other commitments. Asked when creditors had pressed TSI for payment of outstanding debts, Fairbank said that it varied: some were within normal trading terms and some had pressed for payment months before, for example, Swinburne and the Australian Taxation Office. Fairbank added that creditors were being paid from funds made available by Swift Malaysia pursuant to its agreement. 52 I will return to the arrangements that were allegedly made between TSI and TSIA and certain creditors, and to the provision of funds by Swift Malaysia. Again, this conclusion is supported by overwhelming evidence. 54 TSIA's trading results demonstrate that it was unable to generate sufficient revenue to meet its ongoing trading commitments or to satisfy its obligations to unsecured creditors after 1 July 2000. Its profit and loss statements disclose net losses for the periods ending 30 June 2000, 30 June 2001, 30 June 2002 and 14 May 2003 of $24,590.00, $277,940.00, $431,181.00, and $452,931.00 respectively. During the period from 1 July 2002 to 14 May 2003, TSIA's accounts indicate that only $188,496.00 was recorded in sales whilst expenses of $663,219.00 were incurred. These expenses included $154,403.00 in wages and salaries and $126,173.00 in royalties. Specifically, TSIA had a net asset deficiency at 30 June 2000, 30 June 2001, 30 June 2002 and 14 May 2003 of $22,196.00, $300,135.00, $731,316.00 and $894,288.00 respectively. As these figures indicate, TSIA's net asset deficiency increased rapidly over the period from 30 June 2000 to 14 May 2003. 57 The liquidator estimates that TSI's overall deficiency in the liquidation will be $3,510,367.00. This is greater than the substantial deficiencies which were estimated by Scott and Fairbank in their reports as to affairs of $2,028,381.00 and $1,750,443.00 respectively. 58 The answers which Scott gave in response to the liquidator's questionnaire concerning TSIA were substantially identical to the answers he gave in respect of TSI. The statements made by Scott in his letter to the solicitors acting for Steven Girotto were directed to both TSI and TSIA. 59 In his answers to the questionnaire concerning TSIA, Fairbank set out the same causes of failure as he had in his answers to the TSI questionnaire. As for TSIA's creditors, Fairbank said that the time at which they began pressing for payment varied: some were within normal terms but some such as TSIA's accountants, the MBA Partnership Pty Ltd ('MBA'), had pressed for months. Again, he added that the creditors were being paid from funds being made available by Swift Malaysia pursuant to its agreement. 60 Between November 2002 and March 2003, TSIA had outstanding creditors who were owed between (approximately) $1.91 million and $2.42 million. A number of creditors had debts outstanding for a very substantial period of time, including the SRO, Paul Turner (Focus Point Services), CARE Superannuation and MBA. 61 TSIA fell behind in its employee superannuation payments from July 2002 onwards. Over the period from 1 August 2002 to 15 May 2003, debts amounting to $2,985.00 became payable to CARE Superannuation. Over the period from July 2002, TSIA also fell behind in its superannuation guarantee payments to the Australian Tax Office. As of May 2003, $10,293.00 was owing to the Australian Tax Office in respect of superannuation guarantee payments. 62 TSIA did not meet its obligations to make PAYG tax payments to the Commissioner. In his report as to affairs, Scott said that the amount of unpaid PAYG tax owing by TSIA amounted to $73,802.00. TSIA was not meeting its tax liabilities prior to October 2002 and only partially meeting its ongoing tax liabilities thereafter. TSIA did not report PAYG withholding tax until October 2002. PAYG amounts withheld for the month of December 2002 and the period March 2003 to May 2003 were not reported to the Australian Taxation Office. TSIA wrote to the Australian Taxation Office on 12 November 2002 and made a repayment proposal which the ATO accepted after TSIA made a part payment of $20,000.00 towards outstanding tax liabilities on 15 November 2002. 63 The largest debtors of TSIA involved related party loans to TSI and TSI Inc. As at 14 May 2003, the amounts owed to TSIA by TSI and TSI Inc were, respectively, $546,117.00 and $418,952.00. The liquidator gave evidence that there are no documents available to him to suggest that these related parties are willing or able to repay their debts. TSI is in liquidation and TSI Inc has lodged a proof of debt in the liquidation of TSIA. 64 The proof of debt submitted by the SRO to the liquidator totals $118,408.00 and relates to unpaid payroll tax liabilities going back as far as the financial year ending 30 June 2002. 65 The liquidator also gave evidence that TSIA was not in a position to raise funds from the sale of assets in the short term. Following the appointment of the liquidators, the assets of TSIA, including cash at bank and plant and equipment, have realised only $7,383.00. Related party debtors in the amount of $993,176.00 have resulted in nil recoveries. Instead, they relied on assertions made from the witness box largely without any prior notice to the Commissioner or the liquidator. This was remarkable for several reasons. First, both Scott and Fairbank are solicitors. Secondly, by orders made on 13 December 2005, Finkelstein J directed Scott and Fairbank to file any affidavits upon which they may wish to rely by 10 March 2006. Fairbank filed a short affidavit on 10 March 2006, but it did not dispute the existence of any of the debts relied upon by the liquidator. Scott did not file any affidavit in accordance with the direction. Instead, he sought and obtained leave to file an affidavit on the first day of the hearing. That affidavit contained assertions concerning the status of the debt to the SRO. Thirdly, Scott made assertions in oral evidence about the existence of arrangements between TSI and TSIA (as the case may be) and certain other creditors. There was nothing to support the existence of those arrangements other than Scott's assertions in the witness box. None of the arrangements were recorded in writing, as Scott conceded. Further, no evidence was called from any disinterested person who could give direct evidence concerning the existence of the alleged arrangements. Fairbank adopted the assertions made by Scott. However, Scott did not dispute that some debts were owing to the SRO in respect of payroll tax and that those debts dated back to the year ended 30 June 2002. 71 In his evidence, Scott asserted that a payment arrangement had been made with the SRO by Geoff Missen ('Missen'), a partner of MBA, acting on behalf of TSI and TSIA. Missen was not called to give evidence. Scott confirmed that there was no written record of the alleged arrangement. Scott asserted from the witness box that Missen had told him that the SRO was prepared to wait until TSI and TSIA were in a position to submit amended accounts before pressing for payment. He added that the SRO had not pressed for payment. There is, accordingly, no direct evidence of any payment arrangement with the SRO. I do not accept Scott's evidence. I find that there was no payment arrangement with the SRO and that debts were due and payable to the SRO as set out in the SRO's proof of debt. Both Scott and Fairbank listed this debt as an outstanding debt of TSI in their reports as to the affairs of TSI. 73 In his oral evidence, Scott asserted that an arrangement had been made between Bayoud and Swinburne, and that Bayoud had told Scott in August 2002 that Swinburne would not require the debt to be paid until the beginning of the next financial year in July 2003. There is no written record of this arrangement. There is no admissible evidence to support it. I reject the assertion that such an arrangement was made with Swinburne. The debt arose from invoices submitted during the period 19 April 2002 to 26 July 2002. The invoices show that much of the work related to the preparation of software licences for entities described as 'TSI- Malaysia or Australia'. The invoices were directed to Swift Australia and marked for the attention of Scott. The invoices were recorded in TSI's accounts as a debt owing by TSI to Baker & McKenzie. Both Scott and Fairbank listed the $13,000.00 debt to Baker & McKenzie as a debt of TSI in their reports as to the affairs of TSI. 75 In his oral evidence, Scott asserted that he had made a payment arrangement with a partner of Baker & McKenzie, Jacobs, under which Baker & McKenzie would not require payment of the outstanding debt until July 2003. There is no written record of this arrangement. Jacobs was not called. No prior notice of this asserted arrangement was given by Scott to the other parties. It is not referred to in his affidavit. I do not accept Scott's evidence that such an arrangement was made. 76 Fairbank disputed that the debt to Baker & McKenzie was a debt of TSI at all, contending by reference to the invoices that it was really a debt of Swift Australia. Having regard to the fact that the debt was recorded in the books of account of TSI, and had previously been regarded by the directors of TSI as a company debt, I do not accept this evidence. TSI's records show that it incurred its debt to Gasp over the period from March 2001 to June 2002. TSIA's records show that it incurred its debt to Gasp between February 2003 and May 2003. Both Scott and Fairbank asserted that Gasp was a related company and no debt was due or payable. I am not prepared to act on the unsubstantiated assertions by Scott and Fairbank. Instead, I prefer the liquidator's evidence which is supported by the company's books and records in each case. Girotto Precast has filed a proof of debt in the sum of $1,115,000.00 in the liquidation of TSI. Both Scott and Fairbank asserted that these monies were not due and payable to Girotto Precast. No evidence was led to substantiate their assertions. The onus is on the directors to substantiate the assertion that debts recorded in the books of account of TSI are not in fact due and payable, and to do so by satisfactory evidence. I am not prepared to act on assertions made by Scott and Fairbank. The accounts of TSIA record that it owed a debt of $44,040.00 to Paul Turner (Focused Point Services) which was incurred between July 2001 and October 2001 and which remained unpaid as at 15 May 2003. Scott did not dispute the existence or quantum of these debts. In his oral evidence, he asserted that he made an arrangement with Turner in February 2003 under which Turner would not require payment of the debt until the end of June 2003. Fairbank said that Scott had told him of this arrangement. Fairbank also disputed the accuracy of the figure for the debt owed to Turner and Focused Point Services. Again, there was no written record of this arrangement and nothing else to substantiate the assertions made by Scott and Fairbank. I do no accept those assertions. The accounts show that the debt arose over the period from August 2002 to March 2003. In his oral evidence, Scott asserted that he had made an arrangement with Missen of MBA in December 2002 and January 2003 to the effect that MBA would wait three to four months for payment of the debt. 81 It is difficult to reconcile this assertion with other evidence. In their respective reports as to the affairs of TSIA, both Scott and Fairbank said that TSIA owed a debt of $11,728.00 to MBA. There was no mention that a payment arrangement had been entered into in respect of this debt. There is no written record of the payment arrangement. In addition, Fairbank answered the liquidator's questionnaire in relation to the affairs of TSIA by saying that MBA had pressed for payment of its debt for months. I do not accept that any payment arrangement was made with MBA. 82 It will be apparent from the foregoing that I reject the evidence given by Scott and Fairbank concerning these payment arrangements as self-serving and untruthful. I infer that they did not raise these claims concerning payment arrangements earlier because they were incapable of being supported by admissible evidence and would not withstand investigation if prior notice were to be given. 83 In any event, even if I were to have regard to the payment arrangements asserted by Scott and Fairbank in respect of one or more of the creditors in question, it would not alter my conclusions as to the insolvency of TSI and TSIA throughout the six month relation back period. There were other debts which were not paid by each company as and when they fell due during the relation back period. Further, given these other debts, the claim that various payment arrangements were entered into with creditors serves to underlie the fact that the company did not have the financial capacity to meet its debts as and when they fell due during the relation back period. 85 The agreement takes the form of a letter dated 17 July 2002 from Swift Malaysia to TSI Inc that was countersigned on behalf of TSI Inc ('the July agreement'). The letter is signed on behalf of Swift Malaysia by Bayoud. The second page of the letter contains additions in a different type face by which TSI Inc states that it accepts the arrangement proposed by Swift Malaysia subject to clarifications which are then set out. This additional segment of the letter was signed on behalf of the TSI Inc by Steven Girotto ('Girotto') and Fairbank in their capacity as directors of TSI Inc on, it seems, 19 July 2002 and 20 July 2002 respectively. SSI to purchase all shares in Trader Systems International Pty. Ltd. (TSIP/L) and TSI Australia Limited (TSIA), subject to the requirements of Paul Turner and Marco Bragagnolo. In return SSI agrees to take over and be responsible for the liabilities of TSIP/L and TSIA and if appropriate to compromise those liabilities. This is subject to SSI being provided up to date and accurate financials for these companies including Profit and Loss statements and Balance sheets. SSI to have its nominated directors on the board of directors of TSIP/L and TSIA. It is proposed that Michael Cornips be the nominated director. SSI agrees to allowing Paul Turner and Marco Bragagnolo as directors on those boards. Apart from the above, the existing board of directors to resign. The retiring directors to give full disclosure and indemnities for this. The ongoing operations of TSIP/L and TSIA must be reduced (put into hibernation) so as to only maintain the existing client and subscription base and to allow the completion of Research and Development that has been proposed on the existing retail and enterprise products and for the retail product in China. To this end all staff unnecessary to carry out this activity must be removed or made redundant. Agreement to this condition is a condition precedent to the acceptance of this offer. In this regard both TSIA and TSIP/L are to be self-sustaining unless SSI otherwise agrees. A business plan for the hibernation phase and the proposed model to relaunch the retail product to be provided within the next two weeks. The identification of the needed staff to be by mutual agreement and in the absence of mutual agreement, to be determined by the director appointed by SSI. It is noted that TSIA have provided Bonds to SSI totalling AUD $350,000.00. These liabilities are to remain. It is proposed that upon completion of the Research and Development that new retail based services will then be available. SSI shall at its own discretion then determine the budgets, if any for further development, marketing and sales. If and when appropriate SSI may at its own discretion float, sell or otherwise dispose of the business or assets of TSIP/L and or TSIA. If this arrangement is acceptable please execute your acceptance on the foot of this letter and we shall immediately move to heads of agreement and execution of share transfers so as to expedite the implementation and completion of these arrangements. TSI agrees to sell all its shares in TSI P/L and TSIA to SSI and will use its best endeavours to persuade the pre-IM shareholders in TSIA to sell their interests in TSIA for their respective original investments if SSI wishes. Add "and or full access to all the financial records of those companies. It is noted that two of the shareholders (direct or beneficial) and two of the directors of SSI were directors of one or both of the companies and or have had access to or been responsible for the preparation of some or all of these financial records. After "full disclosure" add the same addition as in 2 above. If SSI wishes the current directors of TSIA and TSI P/L to make redundant all surplus staff, they will do so prior to their resignations provided that the funds to meet all such redundancies are first provided by SSI. TSI will use its best endeavours to assist in the preparation of a business plan for the hibernation phase. The correct amount is $250,000 (TSIA bond s dated 18/12/01, 7/5/02 and 27/5/03). In addition there was a Pre-IM investment of $200,000 (letter dated 3/4/02). Scott deposed that in total Swift Malaysia provided approximately $861,544.00 to TSI and TSIA, of which $461,500.00 approximately was provided under the July agreement. Scott also said that, until 13 May 2003, whenever he made a request for payment of any liability of either TSI and TSIA, those payments were made by Swift Malaysia and he had no reason to expect that those payments would not continue. According to Scott, the position changed on 13 May 2003 when Bayoud told him that Swift Malaysia was no longer able to provide financial support to TSI and TSIA in accordance with the terms of the July agreement. 89 In his oral evidence, Scott confirmed that the arrangements with Swift Malaysia were embodied in the July agreement. However, he also made a series of far-reaching assertions about the effect of the July agreement. In his evidence in chief, he asserted that the July agreement contained an undertaking by Swift Malaysia to pay the then known liabilities of TSI and TSIA as and when they arose. He then elaborated that the agreement was that Swift Malaysia would pay any and all debts as they arose from the time of entering that agreement and onwards. Later in his evidence, Scott said that the undertaking by Swift Malaysia to be responsible for the liabilities of TSI and TSIA was the quid pro quo for the transfer of the shares in TSI and TSIA from TSI Inc to Swift Malaysia. The shares in TSI and TSIA were never transferred by TSI Inc to Swift Malaysia. When asked why would Swift Malaysia go on paying liabilities of TSI and TSIA when there was no performance of the corresponding obligation of TSI Inc to transfer shares to Swift Malaysia, Scott said that it was the arrangement that had been entered into and Swift was receiving the benefit of the output of the services of TSI for its own purposes. 90 In his affidavit sworn 10 March 2006, Fairbank also said that the agreement with Swift Malaysia was embodied in the July agreement and that, of the $861,544.00 provided by Swift Malaysia to TSI and TSIA, the sum $461,554.00 was provided pursuant to the July agreement. In his oral evidence and in submissions, Fairbank made similar assertions to Scott as to the effect of the July agreement. 91 The July agreement was an agreement between Swift Malaysia and TSI Inc; neither TSI nor TSIA was a party to it. The crux of the agreement was that Swift Malaysia agreed to purchase, and TSI Inc agreed to sell, all of its shares in TSI and TSIA, subject to the provisions of the agreement. In consideration of the sale of those shares, Swift Malaysia agreed to take over and be responsible for the liabilities of TSI and TSIA. The plain and natural meaning of these provisions is that Swift Australia was agreeing to take over and assume responsibility for the then known liabilities of TSI and TSIA as they stood at the date of sale. As set out in paragraph 2 of the letter, Swift Australia wished to verify the amount of those liabilities by reference to up to date and accurate financial statements for the companies. This was not entirely agreed by paragraph 2 of the clarifications: words were added providing that, as an alternative to up to date financial statements, Swift Malaysia would be given full access to all of the financial records of the companies. 92 In critical respects, the July agreement was never performed. TSI Inc did not transfer any shares in TSI or TSIA to Swift Malaysia. Swift Malaysia was not provided either in July 2002 or at any time thereafter with up to date financial statements for TSI or TSIA. The existing board members of TSI and TSIA did not resign, and Swift Malaysia did not have its nominated directors appointed to TSI or TSIA. Although the activities of TSI and TSIA were reduced after July 2002, there is no evidence that the ongoing operations of those two companies were put into hibernation to the extent contemplated by paragraph 4 of the letter. There is no evidence of any business plan for the hibernation phase, or any proposed model to relaunch the retail product, being provided to Swift Malaysia within two weeks of 17 July 2002 or at all. 93 I do not accept that the July agreement had the far-reaching effect asserted by Scott and Fairbank. Specifically, I do not accept that the July agreement contained any undertaking or promise by Swift Malaysia to pay the on-going liabilities of TSI and TSIA, regardless of the lack of performance of the other conditions set out in the agreement, including the transfer of the shares in TSI and TSIA. 94 The evidence establishes that Swift Malaysia provided substantial advances from time to time to assist TSI and TSIA to meet pressing liabilities. I am satisfied that these were ad hoc loan arrangements between related companies. The funds provided by Swift Malaysia were recorded in the books of account of TSI and TSIA as loan funds. In his evidence, Scott said that the payments made by Swift Malaysia to TSI and TSIA were recorded as loans on the basis that the loans were to be repaid after research and development activities had been completed. This is not consistent with the proposition that the funds were provided as a matter of obligation under the terms of the July agreement. The funds were not provided by Swift Malaysia pursuant to any legally binding commitment enshrined in the July agreement or otherwise. 95 I have given careful consideration to the evidence given by Scott and Fairbank. I carefully observed their demeanour when they were giving evidence. In my opinion, neither Scott nor Fairbank was a reliable or truthful witness. In the absence of corroborating evidence, I am not prepared to act on their assertions. In particular, I reject their evidence that Swift Malaysia was bound by the July agreement to provide funds to TSI and TSIA to enable those companies to discharge their liabilities as and when they arose. I am satisfied that Swift Malaysia never undertook any such obligation and, moreover, that it did not perform such an obligation. 96 I am also satisfied that the funds actually advanced by Swift Malaysia directly, or via Swift Australia, to TSI and TSIA were not sufficient to enable either TSI or TSIA to pay their debts as and when they fell due. On the contrary, there is clear evidence that TSI and TSIA never had sufficient funds, whether from Swift Malaysia or elsewhere, to pay all of their debts as and when they fell due. It does not avail the directors to say that they used funds provided by Swift Malaysia to pay some of the larger and more pressing debts of TSI and TSIA, especially those, such as the debt to the Commissioner, which might expose the directors to personal liability. As Kirby P said in FAI Insurances Limited v Gold Leaf Interior Decorators Pty Ltd (1988) 14 NSWLR 643 at 649, a company's failure to pay a small debt may often be the best possible evidence of the company's insolvency. 97 Given my factual findings, the decision in Lewis does not assist the directors. In any event, that was a very different case. There, a corporate reconstruction had resulted in a number of intercompany loans. Following the reconstruction, over a period of slightly more than three years, the company paid all of its debts as and when they fell due with the assistance of funds provided by other companies in the group. Over that period, there was no evidence of any of the usual indicia of insolvency, such as unpaid group tax or payroll tax or other unpaid debts. Most importantly, the funds provided by other group companies were sufficient at all relevant times to enable the company to discharge its debts as and when they fell due: see at 570-573 [74]-[82]. The present case is very different, in that the related company was never providing sufficient funds to enable TSI and TSIA to pay their respective debts as and when they fell due. In the second proceeding concerning TSIA, the liquidator alleges that six payments, totalling $66,827.05, were unfair preferences. 99 To establish these contentions, the liquidator must establish three things: (1) the payments were transactions; (2) the Commissioner received the payments in his capacity as a creditor; and (3) each payment resulted in the Commissioner receiving in respect of an unsecured debt more than he would receive if he proved for that debt in the winding up. 100 There was no dispute as to the last requirement. The liquidator gave evidence that he did not expect to make any payment to unsecured creditors in either liquidation. Consequently, by receiving and retaining the benefit of the payments identified by the liquidator, the Commissioner would, in the words of the statutory test, receive from the company in respect of the debt 'more than the creditor would receive from the company in respect of the debt if the transaction were set aside and the creditor were to prove for the debt in a winding up of the company'. 101 In my opinion, each relevant payment was a transaction within the meaning of s 9 of the Act. In the first proceeding, TSI was a party to each payment made to the Commissioner; the payment was either made pursuant to a garnishee order on TSI's bank account or, in one case, by TSI paying an amount to the Commissioner by a cheque drawn on its bank account. In the second proceeding, each alleged unfair preference payment was made by TSIA by cheque drawn on its bank account. 102 The basis upon which Scott and Fairbank contended that the payments were not transactions was utterly misconceived. They argued that many of the payments were made directly by Swift Malaysia, or at least using monies that had been provided by Swift Malaysia. Alternatively, it was put that the payments were really made by or on behalf of the employees from whose wages tax deductions had been made. In fact, none of the relevant payments now in issue were made directly by Swift Malaysia or Swift Australia. It is irrelevant to the definition of transaction in s 9 that the company in question may have used funds borrowed from Swift Malaysia. The argument that the payments were really made by or on behalf of employees fails to take account of the relevant legislative provisions: see Income Tax Assessment Act 1997 (Cth), ss 255 -1 and 255 -5; and Taxation Administration Act 1953 (Cth), s 2(2) and s 3AA and Sch 1 (especially ss 12 -35, 12 -45, 16 - 5 , 16 -25, 16 -70, 16 -75 and 16 -80). Broadly stated, the effect of these provisions is that a company is legally obliged to withhold amounts from wages on account of income tax, the amounts withheld must be paid to the Commissioner, and the amounts withheld constitute a debt that is due and payable by the company to the Commonwealth. 103 In each proceeding, the impugned payments constitute transactions within the meaning of s 9 , and the amounts in question were received by the Commissioner in its capacity as a creditor of the relevant company. 104 I have already found that all of the relevant payments were made at a time when TSI or TSIA (as the case may be) was insolvent. Accordingly, each unfair preference payment was also an insolvent transaction within the meaning of s 588FC. These payments were recorded in the relevant company accounts as loans made by TSIA to TSI, and the appropriateness of this characterisation is not challenged. 106 The test for an uncommercial transaction posed by s 588FB(1) is that it may be expected that a reasonable person in the company's circumstances would not have entered into the transaction, having regard to the benefits and detriments to it of entering into the transaction, the respective benefits to other parties to the transaction, and any other relevant matter. 107 In my opinion, the payments in question were uncommercial transactions. They conferred no benefit on TSIA. Indeed, the payments conferred only detriments on TSIA in that they had the effect of increasing the outstanding liabilities of TSI to TSIA in circumstances where there was no prospect that TSI would be able to repay the advances. This conclusion is supported by the decision in D'Aloia v Commissioner of Taxation (2003) 203 ALR 609 (' D'Aloia '). In D'Aloia , the issue was whether payments that had been made on behalf of another company for the discharge of its taxation debts were uncommercial transactions within the meaning of the Act. In return for making the payment, there was a reduction in the loan account of the company making the payment. Merkel J held that the transaction was uncommercial. However, the evidence is to the effect that the benefit to Damark was minor compared to the amount it paid. I am not satisfied that, having regard to the matters set out in s 588FB(1), a reasonable person in Damark's circumstances would have made the payments. Accordingly, subject to any defence under s 588FG(2), I am satisfied that the three payments in question constituted uncommercial transactions . Neither Scott nor Fairbank pointed in evidence, or in submissions, to any benefit to TSIA in making these tax payments on behalf of TSI. Each payment in question was an insolvent transaction of the relevant company and it was entered into during the six months ending on the relation back day. It is unnecessary to consider the longer relation back period relating to uncommercial transactions. 110 In these circumstances, s 588FF(1)(a) and (c) empowers me to make the orders sought by the liquidator in each proceeding. In my view, it is appropriate to make orders under s 588FF in each proceeding in the terms sought by the liquidator. 112 Two defences were raised. The first was that there was no relevant loss or damage for which indemnity could be sought. The second was that Scott and Fairbank had each proved that, at the payment time, he had reasonable grounds to expect, and did expect, that the company was solvent at that time and would remain solvent even if it made the payment. I propose to address the second question first. The defence requires an actual expectation that the company was and would continue to be solvent, and that the grounds for so expecting are reasonable. A director cannot rely on a complete ignorance of or neglect of duty ( Metal Manufacturers Ltd v Lewis (1986) 11 ACLR 122 at 129) and cannot hide behind ignorance of the company's affairs which is of their own making or, if not entirely of their own making, has been contributed to by their own failure to make further necessary inquiries: Statewide Tobacco Services Ltd v Morley (1990) 2 ACSR 405; Morley v State Wide Tobacco Services Ltd [1993] 1 VR 423; (1992) 8 ACSR 305. The grounds on which the director forms the view as to the company's solvency or otherwise must be reasonable. This implies an objective consideration of the grounds viewed against all circumstances and not whether, when looked at from the point of view of the director in question, the grounds appear reasonable. From the cases in which the meaning of these words has been considered, it would appear that to "suspect" something requires a lower threshold of knowledge or awareness than to "expect" it: see a discussion on "to suspect" by Kitto J in Queensland Bacon Pty Ltd v Rees [1966] HCA 21 ; (1966) 115 CLR 266 at 303; [1966] ALR 855; and 3M Australia at 192. The expectation must be differentiated from mere hope in order to satisfy this defence: Dunn v Shapowloff [1978] NSWLR 235; (1978) 3 ACLR 775. It implies a measure of confidence that the company is solvent. The directors must have reasonable grounds for regarding it as likely that the company would at the relevant date have been able to pay its debts as and when they fall due. It will be apparent from the factual findings I have already made that I do not accept this evidence. 116 I am satisfied that Scott and Fairbank knew, during the relation back period, that TSI and TSIA were not able to pay their debts as and when they fell due. They both knew that payment arrangements had been entered into with the Commissioner and that those arrangements had not been complied with. They knew that funds had been advanced, ad hoc, by Swift Malaysia to enable TSI and TSIA to make payments to the Commissioner. But they also knew that the company was not able to pay other creditors as and when their debts fell due. They knew that substantial debts were outstanding, for instance, to the SRO, but took no steps to pay those debts. The fact that TSI and TSIA were delaying the payment of their debts to the SRO, and the SRO was not pressing for payment, does not mean that the debt to the SRO was anything other than due and payable and not being paid. Similarly, TSI and TSIA were not paying other debts as and when they fell due. I am satisfied that both Scott and Fairbank were well aware that this was the case. 117 I have already indicated that I do not accept the evidence given by Scott and Fairbank concerning the asserted payment arrangements with creditors such as the SRO, Swinburne, and MBA. Scott's unsubstantiated assertions about these payment arrangements are not capable of discharging the onus that falls on the directors to establish the defence set out in s 588FGB(3): see Superior Press Pty Ltd v Deputy Commissioner of Taxation (2004) 55 ATR 541 (' Superior Press ')at 546-547. 118 I am also satisfied that the financial support that was provided by Swift Malaysia did not provide Scott and Fairbank with reasonable grounds to expect that TSI and TSIA were solvent during the six months ending 15 May 2003, and that they would remain solvent even if they made the payments to the Commissioner with the support of Swift Malaysia. I refer to my earlier findings: the July agreement does not contain any obligation or undertaking by Swift Malaysia to provide funds to TSI and TSIA on a continuing basis to enable those companies to discharge their liabilities as and when they arose; and the funds actually advanced by Swift Malaysia and/or Swift Australia to TSI and TSIA were ad hoc loans and were not sufficient to enable either company to pay its debts as and when they fell due. 119 I also consider that there was no evidence establishing that Scott and Fairbank could reasonably rely upon Swift Malaysia to provide all of the funds necessary to enable TSI and TSIA to pay their debts, on a continuing basis, as and when they fell due. 120 No evidence was forthcoming as to the financial position of Swift Malaysia and Swift Australia during the six months period ended 15 May 2003. This was despite the fact that at all relevant times Scott was a director of each of Swift Malaysia, Swift Australia, TSI and TSIA. Fairbank gave evidence that he never asked Scott how Swift Malaysia was travelling. Based on general discussions with Scott, he said he had only a limited idea of what Swift Malaysia was doing. I see no basis in the evidence for a reasonable expectation on the part of Scott and Fairbank that Swift Malaysia could be relied upon to go on providing funds to TSI and TSIA, in such a way as to enable TSI and TSIA to discharge all their ongoing liabilities as and when they fell due. 121 I have concluded, therefore, that Scott and Fairbank have not established the defence afforded by s 588FGB(3). I reject this submission. 123 The first part of the submission was that any order against the Commissioner requiring it to repay amounts that were paid to the Commissioner in respect of ITW liabilities would simply involve unwinding preferential payments that the Commissioner had no entitlement to receive. On this basis, it was submitted that the Commissioner would not suffer any loss or damage. I disagree. By the order I propose to make in favour of the liquidator, the Commissioner will be required to repay amounts it received in payment of debts that were outstanding to the Commissioner. To the extent that those debts relate to ITW liabilities, an order requiring that the amounts in question be paid to the liquidator will cause loss or damage within the meaning of s 588FGA(2). Instead of retaining payments amounting to $29,260.82 in the case of TSI's ITW liabilities, and $107,329.99 in respect of ITW liabilities owed by TSIA, the Commissioner will have to prove in the winding up of TSI and TSIA respectively. As the liquidator said in evidence, unsecured creditors will not receive any distribution in the winding up of those companies. Consequently, the orders sought against the Commissioner will result in loss or damage: see Superior Press , per Byrne J at 548 [35]-[37]. 124 In the first proceeding, the Commissioner has agreed to submit to an order that he will pay the liquidator the sum of $16,865.33 in respect of interest and costs. The corresponding order in the second proceeding does not make any provision for interest or costs. Scott and Fairbank argue that interest and costs paid by the Commissioner to the liquidator forms no part of the loss or damage resulting from the s 588FF order. 125 In Superior Press , Byrne J accepted that interest that the Commissioner is ordered to pay to the liquidator pursuant to s 588FF will constitute loss and damage suffered by the Commissioner within the meaning of s 588FGA(2), or at least it will do so when payment is made: at 549 [38]. However, Byrne J took into account the fact that the interest ordered under s 588FF related to all of the impugned payments, whereas the indemnity under s 588FGA only relates to those payments which were made in respect of ITW liabilities. Accordingly, Byrne J adjusted the amount of interest to reflect the ratio of total tax payments recovered by the liquidator to the ITW tax payments that attracted indemnity. I propose to adopt a similar course. In TSI's case, the ITW liabilities of $29,260.82 represented 76.36 per cent of the payments totalling $38,319.55 which will be the subject of the order under s 588FF; and in TSIA's case, the ITW liabilities of $107,329.99 represented 67.15 per cent of the payments totalling $159,815.12 which are to be the subject of orders under s 588FF. 126 Scott and Fairbank also submitted that any costs that the Commissioner might be required to pay to the liquidator of TSI pursuant to s 588FF should not attract indemnity under s 588FGA(2). In Superior Press , Byrne J accepted that if the Commissioner is ordered to pay costs to the liquidator in an appropriate amount, that will form part of the Commissioner's recoverable loss and damage under s 588FGA(2): at 549 [39]-[40]. I agree. 127 For these reasons, I reject the argument that the Commissioner has not suffered any recoverable loss or damage resulting from the order I propose to make in each proceeding under s 588FF. To the extent that the Commissioner is ordered to pay an amount to the liquidator in each case, representing the amount of payments it received in respect of ITW liabilities, and amounts in respect of interest and costs, those amounts can properly be the subject of an indemnification order. I am satisfied that the figure agreed for interest and costs in the first proceeding of $16,865.33 is an appropriate sum, and less than the figure that might have been awarded in the absence of agreement. I will, however, adjust this figure so as to take account of the ratio of ITW payments to total payments. I propose to make orders in each proceeding in the form sought by the liquidator. (2) Anthony James Scott and Andrew Fairbank pay to the liquidator interest on the sum of $38,319.55 for the period after 14 November 2005 to the date of judgment. (3) Pursuant to section 588FGA(3) of the Corporations Act 2001 , Anthony James Scott and Andrew Fairbank pay the sum of $46,126.15 to the Commissioner. (4) Anthony James Scott and Andrew Fairbank pay the Commissioner's costs of and incidental to its cross claim. 130 The liquidator submits that Scott and Fairbank should pay the liquidator his costs, and interest on the moneys recovered by the liquidator, from 14 November, that being the date upon which the liquidator and the Commissioner arrived at a settlement agreement. The Commissioner supports this submission. Both the liquidator and the Commissioner argue that the settlement was reached at a mediation in which Scott and Fairbank participated and, but for the unsuccessful arguments raised by Scott and Fairbank in this proceeding, final orders could have been made disposing of the whole proceeding on 14 November 2005. 131 While I consider that the liquidator is entitled to recover costs from Scott and Fairbank, it would be too harsh to run the calculations from 14 November 2005. The more appropriate date from which to calculate costs is 13 December 2005, being the date upon which Finkelstein J made directions for the contested hearing of these two proceedings. Aside from the settlement agreement between the liquidator and the Commissioner, the liquidator would have been entitled to recover interest from the Commissioner in each proceeding pursuant to s 51A(1) of the Federal Court of Australia Act 1976 (Cth). In the ordinary course, interest would relate to the period from the date of demand by the liquidator for the repayment of the preferences until the date upon which such preferences were repaid: Ferrier v Civil Aviation Authority (1994) 55 FCR 28 at 92-93. In these proceedings, however, the liquidator did not advance any claim for the recovery of interest from the Commissioner, save and to the extent that the orders proposed in the first proceeding include an agreed amount of $16,865.33 in respect of interest and costs. The liquidator has not advanced any cause of action against Scott and Fairbank that would entitle him to recover interest directly from them. Furthermore, the Commissioner has not made any claim for the recovery of interest from Scott and Fairbank. The Commissioner's only entitlement against Scott and Fairbank is for an indemnity under s 588FGA and as the Commissioner is not exposed to any liability for interest in respect of the period after 14 November 2005, there is no basis for claiming interest against Scott and Fairbank in respect of that period. In my opinion, it is not appropriate to order that Scott and Fairbank make any payment of interest to the liquidator. 132 As for the order that Scott and Fairbank pay $46,126.15 to the Commissioner, the figure has two components. The first component represents that part of the total payments of $38,319.55 that reflects the payment of ITW liabilities, namely $29,260.82. The second component represents the sum agreed between the Commissioner and the liquidator for interest and costs of $16,865.33. In my opinion, the second component is excessive. As I have explained, it needs to be reduced to take account of the fact that ITW liabilities represented only 76.36 per cent of the total figure of $38,319.55. Applying this percentage produces a figure of $12,878.37 for interest and costs, which I consider to be the appropriate measure of the Commissioner's loss and damage in this respect. 133 It follows that the order referred to in sub-paragraph (3) above must be adjusted by substituting the amount of $42,139.19 for the sum of $46,126.15 proposed by the Commissioner. 134 I consider that Scott and Fairbank should be ordered to pay the Commissioner's costs of and incidental to the cross-claim. 135 Some adjustments must also be made to the orders which the liquidator and the Commissioner seek in the second proceeding. (2) Anthony James Scott and Andrew Fairbank pay to the liquidator interest on the sum of $159,815.12 for the period after 14 November 2005 to the date of judgment. (3) Pursuant to s 588FGA(3) of the Corporations Act 2001 , Anthony James Scott and Andrew Fairbank pay the sum of $107,329.99 to the Commissioner. (4) Anthony James Scott and Andrew Fairbank pay the Commissioner's costs of and incidental to its cross-claim. 136 In my opinion, the liquidator is entitled to an order for costs, but not interest, as against Scott and Fairbank. However, the relevant costs should relate to the period from 13 December 2005 to the date of judgment. 137 There is no proposed order in the second proceeding requiring the Commissioner to pay any amount to the liquidator on account of interest or costs. There is accordingly no need for any adjustment of the figures put forward by the liquidator and the Commissioner in paragraph (3) above. The whole of the sum of $107,329.99 represents payments that the Commissioner received in relation to ITW liabilities and which it will be ordered to repay to the liquidator. 138 Scott and Fairbank ought, in my view, to pay the Commissioner's costs of and incidental to its cross-claim. | insolvency whether transactions unfair preferences or uncommercial transactions order that commissioner of taxation repay monies to liquidator whether directors had reasonable grounds for expecting solvency directors bear onus of proving expectation of solvency no reasonable grounds corporations |
Futuretronics claims declarations and injunctions against Graphix Labels and Mr Atta, orders for delivery up of certain brochures and products and manufacturing materials said to be in their possession and damages or an account of profits under the Copyright Act 1968 (Cth) ("the Copyright Act "), damages under s 82 of the Trade Practices Act 1974 (Cth) ("the Trade Practices Act ") and damages at common law. In addition to these claims, Futuretronics claims against each of Graphix Labels and Mr Atta a compensation order under s 1317H of the Corporations Act 2001 (Cth) ("the Corporations Act ") and the right to elect for an inquiry as to damages and payment of all sums found to be due upon such inquiry, or the taking of an account. 2 On 16 November 2006 a Judge of this Court made an order that issues of liability be determined separately from and prior to issues of quantum. The amendments sought were substantial. I granted leave to Futuretronics to amend its application and statement of claim. In order to explain my reasons for doing so, and to outline the nature of Futuretronics' claims it is convenient to outline its claims before the application to amend and then to outline the nature of the amendments. 4 Futuretronics is a designer, importer and wholesaler of electronic goods and accessories. It claims, and it is not in dispute, that from January 2004 until 29 September 2006 Mr Atta was one of its employees, and that from 4 October 2006 to the present Mr Atta has been an employee of Graphix Labels. 5 Futuretronics claims that in or about May 2005 it became aware of a product design for an adhesive cover made from a particular vinyl material which was suitable for covers for mobile phones, handheld games, iPods and electronic game controllers, and that such product design was being offered for sale for customised products on a direct purchase basis on the Internet. 6 Futuretronics claims that in or about June or July 2005 it entered into an agreement with Graphix Labels whereby Graphix Labels was to manufacture covers for mobile phones, iPods, handheld games and electronic game controllers for it "with the intention of utilising digital printing technology to make the [covers] in substantial quantities for wholesale supply". In the evidence, the covers were referred to as "skins" and I will use that term in these reasons. Furthermore, unless otherwise indicated, when I refer to skins I will be referring to skins for mobile phones, iPods, handheld games and electronic game controllers. Graphix Labels would deliver the skins within one week of receiving the graphic artworks to be printed on the skins from Futuretronics and the sample of the relevant skin being approved by Futuretronics. Insofar as they were in writing, it is alleged that they were contained in order forms placed by Futuretronics with Graphix Labels, invoices issued by Graphix Labels to Futuretronics for the production of manufacturing materials, invoices issued by Graphix Labels to Futuretronics for the purchase of the skins and electronic mail messages ("emails") passing between Futuretronics and Graphix Labels in June, July and August 2005. In the context of this case, "manufacturing materials" means die or line drawings and dies or tooling brought into existence by Futuretronics or Graphix Labels for the purpose of manufacturing the skins. "Artworks" means the graphic designs or patterns to be placed on the skins by Graphix Labels. 9 Insofar as the express terms were oral, it is alleged by Futuretronics that they were agreed during conversations between Mr Harry Chojna or Mr Atta, on behalf of Futuretronics, and Mr Grant Taylor and Mr Simon Tallent, on behalf of Graphix Labels, in June or July 2005. 10 It is appropriate to note at this point that by the end of the trial there was no evidence to support a finding that the third and fourth express terms set out above were express terms of the agreement, and so much was conceded by counsel for Futuretronics in his closing address. Graphix Labels would not manufacture, distribute, promote, advertise or sell skins on its own behalf for supply by it to any entity other than Futuretronics. 13 A central issue in this case is whether it is proper to imply into any agreement between Futuretronics and Graphix Labels the last of the implied terms identified above, that is to say, a term that Graphix Labels would not manufacture, distribute, promote, advertise or sell skins on its own behalf for supply by it to any entity other than Futuretronics. Futuretronics claims that it is entitled to a declaration that Graphix Labels has breached that term and an injunction restraining Graphix Labels from manufacturing and supplying skins to third parties without the consent of Futuretronics. Graphix Labels denies that there was an implied term of this nature. 14 Futuretronics alleges that by reason of the agreement between it and Graphix Labels it is entitled to require Graphix Labels to assign to it any copyright to which it otherwise may be entitled with respect to the manufacturing materials, and all other intellectual property rights in the skins and is furthermore entitled to claim equitable ownership of copyright in the manufacturing materials from the time of creation of such manufacturing materials by Graphix Labels. No other intellectual property rights in the skins were identified by Futuretronics in the course of evidence or submissions, and this particular allegation may be taken to relate only to the manufacturing materials. 15 Futuretronics alleges that in breach of the agreement, Graphix Labels has made representations to customers and potential customers that it is the owner of the artworks and manufacturing materials, that it is entitled to use and reproduce the manufacturing materials and artworks to manufacture skins for third parties without the consent of Futuretronics, that it is entitled on its own account to manufacture and supply skins to third parties without the consent of Futuretronics, and that in advertising, marketing, promoting, offering for sale, selling, supplying or attempting to supply skins to third parties it did so with the sponsorship or approval of Futuretronics. In addition to these representations, Futuretronics alleges that in breach of the agreement Graphix Labels has purported to manufacture, distribute, promote, advertise and sell skins on its own behalf for supply by it to entities other than Futuretronics. It is not necessary at this point to set out the particulars of the breaches alleged by Futuretronics. 16 Futuretronics alleges that it has or will suffer damage by reason of the breach by Graphix Labels of the agreement. First, it alleges that it lost its investment in time and cost in designing, developing and marketing skins and the artistic works in association with Graphix Labels and paying Graphix Labels to develop the manufacturing materials and to manufacture the skins. Secondly, it alleges that its reputation and goodwill have been damaged. Thirdly, it alleges that it will suffer damage in the conduct of the business of further sales of the skins which it projected would, within two years, be a business turning over $5 million per annum and attempt to sell its remaining stock of the skins at a loss. Fourthly, it alleges that it is aware that Graphix Labels has offered skins for much lower prices and that accordingly in order to be able to sell skins it has had to reduce its price significantly to remain competitive in the marketplace therefore substantially compromising its ability to make a profit from the sale of skins. 17 Futuretronics alleges that the representations by Graphix Labels constitute misleading or deceptive conduct contrary to s 52 of the Trade Practices Act or conduct in contravention of ss 53(c) or (d) of said Act and that it is entitled to damages under s 82 of the Act. It also alleges that Mr Atta was an accessory to such conduct within s 75B of the Trade Practices Act or engaged personally in misleading or deceptive conduct contrary to s 12(e) and (f) of the Fair Trading Act 1999 (Vic). 18 Futuretronics alleges that the artworks were produced by Ms Wendy Hung who was one of its employees at the time she prepared the artworks and that it is the owner of copyright in the artworks. It also claims that it is the owner of the copyright in the manufacturing materials. It alleges that Graphix Labels has infringed its copyright in the artworks and manufacturing materials in breach of s 36 of the Copyright Act and that Mr Atta authorised the infringement of its copyright in the artworks and manufacturing materials. 19 Futuretronics alleges that on 12 February 2004, Mr Atta signed a confidentiality agreement which conferred certain rights on Futuretronics. It alleges that Mr Atta has breached the confidentiality agreement and it gives two particulars of this allegation. First, it alleges that Mr Atta used pricing information for the sale of skins by Futuretronics to its customers in determining the prices at which Graphix Labels offered skins to potential customers and that Mr Atta used Futuretronics' "customer (including potential customer) list", in contacting a third party to offer it skins for sale. Secondly, Futuretronics alleges that Mr Atta disclosed to a third party the name of one of its suppliers. 20 In broad terms, the above is a summary of Futuretronics' case as pleaded before the application to amend. I say in broad terms because some relatively minor amendments to the pleadings in respect of the above claims were part of the application to amend made on the first day of trial. 21 The substance of the amendments was the introduction of new causes of action against Graphix Labels and Mr Atta. First, Futuretronics alleges that Mr Atta owed it fiduciary duties by reason of his employment as the national sales manager of Futuretronics from January 2004 to 29 September 2006. It is not necessary at this point to set out the particular aspects of the fiduciary duty which are pleaded by Futuretronics. It alleges that by no later than May 2006, Graphix Labels was a competitor of Futuretronics and that by no later than early September 2006, Mr Atta was aware of this fact. Futuretronics alleges that in breach of his fiduciary duties and while still employed by Futuretronics and in order to further his new employment role with Graphix Labels, Mr Atta utilised resources of Futuretronics for and on behalf of Graphix Labels, made prospective business plans for Graphix Labels to operate in competition with Futuretronics, advised Graphix Labels of business opportunities for skins and did not advise Futuretronics of business opportunities for skins. Furthermore, Futuretronics alleges Mr Atta disclosed confidential information to a third party. 22 The particulars of these alleged breaches were said to be two emails sent by Mr Atta to Mr Tallent on 13 September 2006 and an email sent by Mr Atta to Graphix Labels dated 14 July 2006. It is convenient at this point to note that in closing submissions counsel for Futuretronics abandoned any reliance on the email dated 14 July 2006. 23 Futuretronics also alleges that Mr Atta was in breach of his fiduciary duties after he left the employment of Futuretronics. In relation to his dealings with one third party Futuretronics alleges that Mr Atta sought to exploit for Graphix Labels a business transaction or opportunity available to Futuretronics that was current at the time of Mr Atta's departure from his employment by Futuretronics, and in relation to his dealings with another third party, it is alleged that Mr Atta disclosed confidential information to that third party, being the name of one of Futuretronics' suppliers. 24 Futuretronics claims that as a result of the breaches of fiduciary duty by Mr Atta it has suffered loss and damage and Mr Atta has made profits for which he is liable to account. 25 Futuretronics alleges that Graphix Labels wrongfully induced Mr Atta to breach his fiduciary duties. It alleges that Graphix Labels well knew or ought to have known that Mr Atta was employed by Futuretronics as its national sales manager, that by reason of that employment Mr Atta owed fiduciary duties to Futuretronics and that Futuretronics was engaged in the business of designing, producing, marketing and selling skins. It alleges that between July 2006 and 29 September 2006, representatives of Graphix Labels discussed with Mr Atta business opportunities for the exploitation of skins by Graphix Labels, held out to Mr Atta the offer of employment with Graphix Labels to exploit skins in competition with Futuretronics, induced Mr Atta to produce business plans by which skins might be exploited by Graphix Labels in competition with Futuretronics and induced Mr Atta to carry out and pass on to Graphix Labels market research in relation to exploitation of skins. It alleges that since 29 September 2006, Graphix Labels has induced Mr Atta to exploit for Graphix Labels a business transaction or opportunity available to Futuretronics that was current at the time of his departure from the employment of Futuretronics and has induced Mr Atta to disclose confidential information to a third party. 26 Futuretronics alleges that Mr Atta's conduct while still employed by it and alleged to be in breach of his fiduciary duties was also a contravention of s 182 of the Corporations Act , and that his conduct after his employment with Futuretronics ceased and alleged to be a breach of his fiduciary duties was a contravention of s 183 of the Corporations Act . Futuretronics alleges that Graphix Labels was involved in the contraventions within s 79 of the Corporations Act . Futuretronics claims that it is entitled to declarations that each of Graphix Labels and Mr Atta has contravened s 182 and s 183 of the Corporations Act and that damage has resulted from those breaches and that it is entitled to orders that they compensate it for the damage suffered, including profits made by them resulting from the contraventions. 27 Counsel for Futuretronics said that the amendments were put forward only at the beginning of the trial because the two emails dated 13 September 2006 had been discovered by Graphix Labels and Mr Atta after the proceedings had been commenced and shortly prior to the application for leave to amend. He submitted that in those circumstances the application for leave to amend should be allowed. 28 Counsel for Graphix Labels and Mr Atta submitted that the amendment should not be allowed because had the alleged breaches of fiduciary duty and contraventions of ss 182 and 183 of the Corporations Act been included in the claims made by Futuretronics from the outset, it would have been open to Graphix Labels and Mr Atta to claim the privilege against self-incrimination in relation to the emails. Having now had the opportunity to consider the provisions of the Corporations Act in more detail, it seems to me that Futuretronics did not have standing to apply for a declaration of contravention: s 1317J. At all events, counsel for Graphix Labels and Mr Atta pointed out that Futuretronics could apply for a compensation order (s 1317J(2)) and the Court could make such an order if satisfied that the relevant person or persons had contravened one of the relevant sections. Sections 182 and 183 are relevant sections: s 1317E. The argument was that if I made a finding of contravention in relation to either s 182 or s 183 , or both, that finding could lead to an application by ASIC for a declaration of contravention. If such a declaration were made it would be conclusive evidence of various matters: ss 1317F and 1317E (2). The imposition of a penalty could follow a declaration of contravention. It was argued by counsel for Graphix Labels and Mr Atta that in making discovery and inspection and then facing amendments to allege contraventions of the Corporations Act , Graphix Labels and Mr Atta had been deprived of the opportunity to claim the privilege against self-incrimination or, more accurately in the circumstances of this case, the privilege against self-exposure to a penalty. It was argued by counsel for Graphix Labels and Mr Atta that as the alleged breaches of fiduciary duty were based on the same facts as were relied upon by Futuretronics to allege contraventions of the Corporations Act , the amendment insofar as it raised such breaches should also be refused. Counsel for Graphix Labels and Mr Atta referred to the decision of Bergin J in One.Tel Ltd (in liq) v Rich [2005] NSWSC 226 ; (2005) 53 ACSR 623. 29 After hearing submissions, I gave leave for the amendments to be made. Leaving aside the privilege point, there was nothing to suggest that Graphix Labels and Mr Atta would not have had a sufficient opportunity to meet the claims raised by the amendments. As to the privilege point, there were two acts said to constitute breaches of fiduciary duty or contraventions of s 182 of the Corporations Act by Mr Atta while still in the employ of Futuretronics, and they were evidenced by two emails discovered by Graphix Labels and Mr Atta shortly prior to trial. No privilege was claimed in relation to the emails and they were inspected by Futuretronics. Graphix Labels and Mr Atta had an opportunity to claim privilege in relation to the emails and they did not do so. Such an opportunity arises for a person not because a penalty is sought against him or her, but rather, because answers to questions or documents, tending to expose the person to the imposition of a penalty, are sought from him or her. The requisite characteristic of an answer or document --- namely, that it has the tendency to expose to a penalty the person giving it or producing it --- does not depend upon existing, or even contemplated, proceedings for a penalty. The person called upon to answer questions or to produce documents may not even be a party, but a witness, or stranger to the proceedings. Nonetheless, that person is best-placed to appreciate whether an answer or document tends to expose him or her to a penalty and must either claim the privilege or be taken to have waived it. This is not a case where a party is seeking to resist inspection on the ground of privilege. No privilege having been claimed, I saw no unfairness in allowing Futuretronics to amend to allege claims reasonably open to it. I was not told anything about when the documents relating to the alleged breaches or contraventions by Mr Atta after he had left his employment by Futuretronics were discovered, but again I saw no unfairness in allowing Futuretronics to amend to raise claims reasonably open to it. I note that the facts forming the basis of one of the alleged breaches or contraventions were pleaded in the statement of claim before the amendment as giving rise to a breach of the confidentiality agreement. 30 Before leaving the topic of the application to amend, I mention that counsel for Graphix Labels and Mr Atta suggested that at least some of the proposed amendments were not arguable and ought not to be allowed. It did not seem to me to be an appropriate case to entertain extended argument on that point particularly as some of the matters he outlined in support of this submission seemed to me to involve questions of fact and degree. Since 1979 it, or its predecessors in business, have been involved in that business. It seems that since 1972 these entities were also involved in a business involving car accessories. 32 Futuretronics deals in a large range of products including games products. It imports and distributes accessories for Playstation 2 (PS2), XBox, Nintendo DS and DS Light, Nortek IT equipment and GPA. Such products include, for example, handheld, cordless guns and steering wheels for such games systems. The products are sold by Futuretronics to major retail chains around Australia, including Harvey Norman, Kmart, Target, Toys R Us, Gamesnet.com.au, EB Games (Electronic Boutique) and the Games Wizard. Futuretronics sells its products to its customers in large volumes. The company has a significant turnover per annum. 33 Futuretronics employs 12 people which includes office and sales staff. It occupies premises in a building which, at least in 2005, was also occupied by Graphix Labels. Futuretronics may own the building although the evidence is unclear. 34 Mr Harry Chojna is the managing director of Futuretronics and he is the chief executive officer of the company. He is responsible for overseeing its operations. He visits product shows and is responsible for liaising with buyers who represent the company's customers. He has the final say on all issues relating to the company's business and he is responsible for costing and pricing issues. He said, and I accept, that he is always looking to source new products in the electronic goods and accessories market which might be attractive to his customers. In the 1970s he successfully marketed metric conversion kits for motor vehicles. These kits were essentially stickers placed over the speedometer of a vehicle to convert miles to kilometres. 35 Graphix Labels operates a business involving the use of conventional and digital technologies. It provides services to a wide range of industries and specialises in intricate and difficult printing work that other printers may not have the skill or desire to do. It has a strong client base in the food and beverage labelling industries but it includes other industries such as oil and pet food. Mr Grant Taylor is a director and the company secretary of Graphix Labels. He has over 25 years experience in the printing industry. He was the general manager of the company until July 2002. Mr Simon Tallent has been the general manager of Graphix Labels since July 2002. Prior to July 2002 he had worked in the printing industry for more than five years. Mr John Sinosich is the operations manager of Graphix Labels. 36 Graphix Labels has a longstanding business relationship with a company operating in the United States of America called Avery Dennison ("Avery"). That company is well-known and supplies many adhesive paper products in Australia. It is a major supplier of products to Graphix Labels, although prior to June 2005 Graphix Labels had not purchased from Avery the particular vinyl material that Futuretronics envisaged being used in the manufacture of the skins. 37 Mr John Raymond Atta is the market development manager of Graphix Labels and he has worked in that position since 4 October 2006. He is responsible for the promotion, sale and distribution of the skins produced by Graphix Labels which are designed for use on iPods and other hand-held electronic products. He was employed by Futuretronics from January 2004 to 29 September 2006. His employment by Futuretronics came about in the following way. Mr Atta and Mr Tallent have known each other socially for a number of years. Mr Chojna and Mr Tallent were both members of a body corporate which managed the building in which Futuretronics and Graphix Labels conducted their respective businesses. Prior to January 2004, Mr Tallent mentioned Mr Atta's name to Mr Chojna as a possible employee of Futuretronics, and Futuretronics subsequently employed Mr Atta in a sales capacity. 38 While employed by Futuretronics Mr Atta was responsible for the promotion, sale and distribution of all the company's products. His duties included finding customers for any goods distributed by Futuretronics, including skins. His duties also included servicing existing customers and trying to promote the sale of Futuretronics' products. 39 As part of his employment contract with Futuretronics, Mr Atta signed an agreement dated 12 February 2004. Mr Atta is an employee of the Company. The Company has requested Mr Atta not to disclose any confidential information as defined in this Agreement subject to the following terms and conditions. C. Mr Atta has agreed not to disclose any confidential information as defined in this Agreement subject to the following terms and conditions. (d) Nothing in this Agreement shall impose an obligation on Mr Atta with respect to maintaining confidence regarding information which is generally known or available by publication, commercial use or otherwise than a result of a breach by Mr Atta of their obligation in this section. Mr Atta acknowledges and accepts that, in addition to any other remedy which may be available in law or equity, the Company is entitled to injunctive relief to prevent a breach of this Agreement and to compel specific performance of this Agreement by Mr Atta. Mr Atta will immediately reimburse the Company for all costs and expenses (including legal costs and disbursements on a full indemnity basis) incurred in enforcing the obligations of Mr Atta under the Agreement. 40 Mr Atta wrote a letter of resignation from his employment by Futuretronics and it is dated 9 August 2006 and gives a proposed resignation date of 6 September 2006. Mr Chojna asked Mr Atta to stay on a little longer and he agreed. Mr Atta wrote a second letter of resignation dated 4 September 2006 and it gives a resignation date of 29 September 2006. Mr Atta resigned on that date. 41 The product for the purpose of this case is a skin, which is placed on electronic goods such as mobile telephones, iPods, handheld games and electronic game controllers. The evidence suggested that the ideal features of a skin are that it can be placed on an item without "bubbling" or leaving adhesive on the item when removed and which can then be placed on another item without difficulty. Skins can be made from vinyl, rubber or plastic and they can have designs or patterns on them. A skin can be personalised to the point of having a picture of a loved one on it or a particular design or pattern or there can be a number of skins with the same design or pattern. The particular skins in issue in this case are made of vinyl and have common designs or patterns on them, that is to say, designs or patterns applied to a large number of skins. As far as the evidence in this case is concerned, the production of skins included the purchase of the vinyl material, the preparation and production of artworks, namely, the designs or patterns, the preparation of die or line drawings, namely, a drawing (which is in two-dimensional form) of an object which is in three-dimensional form, such as a mobile telephone, and the making of the necessary dies or tooling. In this case the vinyl was purchased by Graphix Labels from Avery, the die or line drawings were prepared by employees of Graphix Labels, and the designs or patterns were prepared by Ms Hung and sent to Graphix Labels by Futuretronics. The dies or tooling were made by a die or tool-maker engaged by Graphix Labels. 42 Prior to 2005, Futuretronics had no prior business dealings with Graphix Labels. 43 The facts in this section are not in dispute. Each witness gave his or her evidence by way of affidavit or affidavits and, in some cases, there was further evidence-in-chief by way of oral question and answer. Each witness was cross-examined by counsel for Graphix Labels. Each witness called by Futuretronics, other than Mr Chojna, was honest and straightforward and I accept their evidence. I will return to the evidence of Mr Chojna. 45 Graphix Labels and Mr Atta called Mr Simon Tallent, Mr Grant Taylor and Mr Atta himself. Again, the bulk of their evidence was given by way of affidavit or affidavits. Each witness was cross-examined by counsel for Futuretronics. Mr Tallent was an honest and straightforward witness and I accept his evidence. Mr Taylor admitted to making an untrue statement in a letter dated 31 May 2006 to Mr Tom Stemple of Skinit, but I do not think that affects the substance of his evidence which, for the most part, was uncontroversial. I accept the substance of his evidence. I will return to the evidence of Mr Atta. 46 Before commenting on the evidence of Mr Chojna and Mr Atta, respectively, some general matters about the way in which the matter proceeded should be noted. First, there was an application for interlocutory relief, and a number of affidavits were filed on that application. At trial, four affidavits of Mr Chojna and three affidavits of Mr Atta were tendered. As far as the relevant meetings in 2005 are concerned, the earlier affidavits of Mr Chojna were in rather general terms, whereas the later affidavits contained a good deal more detail. I have placed more weight on Mr Chojna's later affidavits. Secondly, a number of issues were raised on the interlocutory application which were no longer issues at the commencement of the trial, or by the end of the trial. To some extent, the respective cases of the parties were fashioned as the trial proceeded. For example, Mr Chojna said that Mr Atta had not made proper efforts to sell the skins and that that was the reason, or at least a reason, Futuretronics had not placed more orders for skins with Graphix Labels. Mr Atta gave evidence denying that allegation. There was also an allegation that Mr Chojna had delayed in arranging for the packaging of some of the skins. For its part, Graphix Labels put forward evidence of the reasons why it decided to produce and market its own skins. That prompted some evidence in response from Mr Chojna. None of the issues I have just mentioned were significant issues by the end of the trial. 47 There was a substantial attack on the credit of Mr Chojna. It was submitted that his evidence was unsatisfactory in many respects. His evidence in relation to two relatively minor issues was clearly unsatisfactory. First, Mr Chojna said that Ms Hung had left the employ of Futuretronics because she "could not stand Mr Atta". When Ms Hung gave evidence, she denied that was the reason she left the employ of Futuretronics. She said that she did not have "any conflict" with Mr Atta and that she got on with him quite well. Secondly, Mr Atta changed his resignation date from Futuretronics from 4 September 2006 to 29 September 2006 and in cross-examination, Mr Chojna was asked whether that occurred because he had persuaded Mr Atta to stay on for a while. It wasn't appropriate for him to leave, according to him, at that stage. In his first affidavit sworn on 6 November 2006, Mr Chojna said that in or about May 2005 he became aware of a vinyl-based product which could be purchased from Avery, a US company. In his third affidavit sworn on 4 December 2006, he said that at the meeting on 27 June 2005 he saw Mr Sinosich "peel a Skinit product off Mr Atta's phone and he said that the material was made by Avery, who I knew to be a very large plastics and labels manufacturer based in the USA". Mr Chojna said that he must have had a discussion with Mr Tallent at the end of May when Mr Tallent told him that Avery was a very large plastics and labels manufacturer based in the US. There is force in the submission that Mr Chojna's recollection of the precise sequence of events in 2005 is not as accurate as he might think but, subject to the observations set out below, I accept the substance of his evidence about the events in 2005. 49 In his evidence-in-chief, Mr Chojna gave some evidence of the relationship between Futuretronics and Skinit over time. He was cross-examined at length about that relationship and a number of emails were put to him. It is true that there was a good deal more to that relationship than was revealed in Mr Chojna's affidavits. It is also true that Mr Chojna's evidence raises a number of questions which would require careful consideration had the topic of Futuretronics' relationship with Skinit been material to the resolution of the issues in this case, or had Mr Chojna's credit been decisive to the resolution of those issues. For example, careful consideration would need to be given to the basis upon which Futuretronics lodged an application for the trademark "Skinit" on 1 September 2005. Mr Chojna said that he had the agreement or approval of Skinit to do that. As against that, there is an email from Mr Tom Stemple to Mr Atta dated 17 August 2005 advising Futuretronics that "Skinit has chosen another company to become our partner in Australia". Careful consideration would also need to be given to whether Mr Chojna's evidence that he registered the trademark for Skinit, and that his intention was that if "the business" (I assume he means a proposed partnership or joint venture) continued, Skinit would get the trademark, if it did not he would "unregister it" should be accepted having regard to the subsequent dispute between Futuretronics and Skinit about the trademark which was only resolved after many months. It is not necessary for me to consider those issues because that part of Mr Chojna's evidence which was relevant to the issues as ultimately formulated by the parties may be accepted subject to some particular observations I make. 50 There was one disputed factual matter involving Mr Chojna's evidence although, even in relation to this matter, neither party suggested in their closing submissions that the resolution of the issue was critical. Mr Chojna said that on two occasions he said to representatives of Graphix Labels that Futuretronics would pay for the vinyl made by Avery. Mr Taylor and Mr Tallent denied that he made such an offer. I prefer their evidence to that of Mr Chojna. As to the first occasion upon which this was allegedly discussed, that is, the meeting on 27 June 2005, it seems to me to be unlikely that the parties would be discussing this topic on that occasion. 51 I scrutinised Mr Atta's evidence with care. There were some unsatisfactory features of his evidence. First, Mr Atta admitted telling untruths or making gross exaggerations in correspondence he sent in attempting to market the products of Graphix Labels. There are a number of examples in the evidence, but reference to one will suffice. From all reports retailers love the idea. It seems that Mr Atta was prepared to make that statement and others like it in order to market the products he was selling. Secondly, when Mr Atta was asked about the fact that in October 2006 he had disclosed to a third party the name of a supplier of Futuretronics, his initial response was to say that Futuretronics had not "used them probably for two --- last two years I was there". The following day correspondence between the supplier and Futuretronics in August 2006 was put to Mr Atta. On seeing that correspondence, Mr Atta said that his definition of supplier was someone that "you are actually purchasing from". When we look at new assignments, we try to contact every known supplier in China to give us some feedback on the products that they might have. It seems to me that Mr Atta could have been more forthcoming on this topic. Despite these matters, I accept the substance of the evidence given by Mr Atta. Mr Tom Stemple was a representative of Skinit and he is described in the company's correspondence as a co-founder. The skins made by Skinit were made for application to electronic products such as mobile telephones. The company advertised the skins on the Internet and it seems that it was possible for a person in Australia to purchase the skins via the Internet. So far as the evidence goes, it suggests that Skinit was a relatively small operation which specialised in each consumer deciding upon the artwork he or she wanted on the skin they were purchasing. 55 In May 2005 Mr Chojna instructed Mr Atta to attend an electronics show in Los Angeles in the USA. On his return to Melbourne Mr Atta told Mr Chojna that Mr Tom Stemple of Skinit had approached him and asked him if Futuretronics would be interested in distributing skins made by Skinit. Mr Atta showed Mr Chojna his mobile telephone with a skin attached. 56 Mr Chojna had not previously heard of Skinit and although he was aware of skin-type products, he said that in his experience they were usually made from plastic or rubber. He saw that the skins made by Skinit had advantages, the main one being the fact that on removal they left no residue of adhesive on the item to which they had been applied. He saw a business opportunity and one that he could exploit through his existing customer base and on an ongoing basis as new electronic products were developed and released. 57 Mr Chojna contacted Mr Stemple and made other inquiries about the skins made by Skinit. He said that he formed the view that it was unlikely he would distribute skins made by Skinit. The evidence is fairly general and the evidence of the discussions was not given in direct speech. Nevertheless, I accept the substance of Mr Chojna's evidence as to what occurred. 59 The important meeting took place on 27 June 2005 at the offices of Graphix Labels and later at its factory premises. According to the evidence of Messrs Taylor, Tallent and Atta there was a meeting shortly before this meeting at which they were present and the topic of skins and the product made by Skinit was discussed. Mr Chojna was not present at this meeting. I accept that such a meeting took place, but the fact that it took place does not alter any of the conclusions set out below. 60 At the meeting on 27 June 2005 Messrs Chojna and Atta were present on behalf of Futuretronics and Messrs Taylor, Tallent and Sinosich were present on behalf of Graphix Labels. The participants in the meeting discussed the skins made by Skinit and Mr Chojna's idea for mass production of the skins and the possible applications and markets for such a product. Mr Chojna said that he wanted to be able to produce the skins in large volumes. He said the skins could have a variety of uses and he gave examples of various electronic products to which they could be applied and he then went on to say that any electronic device that could have a sticker on it could be a potential market for the skins. He said that the potential market for skins could be worth $10 million. 61 Mr Atta's mobile telephone had a skin made by Skinit on it and he produced the telephone during the meeting. The skin was peeled off by Mr Sinosich and the word "Avery" was observed by Mr Sinosich. Mr Chojna had heard of Avery. Mr Tallent told Mr Chojna that Avery was a supplier of material to Graphix Labels and that the company already had a business relationship with Avery. He said he had seen the material before but not used it for the purposes of a skin. Mr Chojna said that up until that point he had not realised that the material could go around corners without bubbling as most materials do. This evidence from Mr Chojna could not be literally correct because it was established in cross-examination that the word, Avery, was written on the back of the backing paper and not the skin itself. There was then discussion about the printing processes required and Mr Chojna asked if Graphix Labels had the capacity to produce the skins. Mr Taylor mentioned the fact that Graphix Labels had a very expensive and highly specialised machine --- a Hewlett-Packard digital printer --- which had the necessary capacity. Mr Chojna was impressed by the features of the machine as they were described by Mr Taylor and the participants in the meeting later inspected the machine. 62 Mr Chojna said that none of the representatives of Graphix Labels said anything during the meeting to indicate that they were "previously aware of the skins product or of the application of the Avery material as a cover for electronic products". 63 Mr Chojna said that during the meeting there was no discussion about the likely cost to produce the skins as the participants at the meeting said they did not know how much it would cost to buy the vinyl material from Avery. He said that Futuretronics would be happy to buy the necessary quantities of the vinyl material. Messrs Taylor and Tallent deny that Mr Chojna ever made any offer to buy the vinyl material from Avery and, as I have said, I accept their evidence on this point and prefer it to that of Mr Chojna. 64 Mr Chojna visited Skinit's offices in Denver in the USA on 1 July 2005 and met Mr Tom Stemple. He discussed the Skinit operation with Mr Stemple and inspected its facilities. Various proposals were discussed. He said that he has continued to have discussions with Mr Stemple but to date no agreement had eventuated. 65 After the meeting on 27 June 2005, Mr Taylor made inquiries of Avery as to whether it could supply vinyl material comparable to the vinyl material used by Skinit and which Graphix Labels could process through its printing machines. Avery advised that it could supply such material. Mr Tallent had noted the name on the back of the Skinit samples provided to Graphix Labels by Mr Atta. 66 Graphix Labels conducted considerable testing to see if it could process the Avery material through its printing machines and in the course of the testing it consulted with Avery. It still had considerable concerns as to whether it could manufacture the skins and the first batch of skins ordered by Futuretronics were manufactured by a third party called Graphix Effects. There is no suggestion in the evidence that Graphix Labels and Graphix Effects are in any way related businesses. The order was for 1000 units of iPod skins at a price of $1.68 per unit, 1000 units of iPod shuffle skins at $1.28 per unit and 10,000 units of Nintendog skins at $2.75 per unit. Futuretronics provided the artwork to be applied to the skins. As I have said, the first batch of skins were manufactured by Graphix Effects who charged Graphix Labels for the work. Graphix Labels invoiced Futuretronics for the amount it was charged by Graphix Effects without adding any charge of its own. In effect, Graphix Labels subcontracted the work to Graphix Effects. On 5 July 2006, Graphix Labels and Graphix Effects had signed an agreement in relation to "Project Skins" that the latter company would not disclose to any other person or use for any other purpose, information relating to design, configuration, construction, manufacturing processes and uses and marketing strategies in connection with the project. 68 Mr Chojna and Mr Atta attended a meeting at the premises of Graphix Labels in or about late August 2005. Mr Tallent was present and Mr Taylor may have been present. Mr Chojna was introduced to a Mr Iain Gartley from Graphix Effects. He was told that Graphix Labels could not do the work associated with the first batch of skins ordered by Futuretronics but that Graphix Effects could do it. Mr Chojna instructed Mr Gartley to proceed and he left it to Mr Atta to organise the details. 69 Mr Taylor described how the work was carried out under the first order. Futuretronics provided samples of the relevant products to Graphix Effects. Graphix Effects prepared die or line drawings using their computer system. These drawings indicated where the material needed to be cut so that the skins fitted the product properly. Samples were then produced which were sent to Futuretronics for approval. They were approved and skins were then manufactured. In effect, this is like cutting a piece of paper with a scalpel. 71 Mr Chojna said that at about this time there was a further meeting with a representative of Graphix Labels. Those present at the meeting were Mr Chojna, Mr Atta, Ms Hung and Mr Tallent. There was a discussion about the supply of the Avery material and Mr Chojna said that if necessary Futuretronics would pay for the material and freight "so that Graphix Labels didn't have to be out of pocket for the material". Mr Tallent said that Futuretronics never offered to pay for the Avery material and I prefer Mr Tallent's evidence on this topic to that of Mr Chojna. 72 Mr Chojna said that because of Mr Atta's costing of the skins Futuretronics lost money on the transaction involving the Nintendog skins which formed part of the first batch of skins made for Futuretronics. It is not necessary to set out the details of Mr Chojna's criticisms of Mr Atta's conduct in this regard because it is not an issue in the case. 73 By September 2005 Graphix Labels was confident that it could produce skins for Futuretronics and in October 2005 in response to requests for quotations by Futuretronics, Graphix Labels provided various quotations to Futuretronics. 74 Mr Chojna was overseas for five weeks in September and October 2005. At about that time he engaged an advertising and public relations firm and there were discussions about a name for the skins. The name "Static Skins" was agreed upon in preference to the other suggestion of "eGo Skin". Also in late 2005 there were meetings involving employees of Graphix Labels, discussions about branding, designs and the packaging of the skins and Ms Hung was instructed to and did prepare a number of designs for the skins. The total price was said to be $32,099 including GST. 76 Mr Chojna said that at this time he was confident about the potential of the skins business. He had received positive feedback from various overseas buyers about the product. 77 The skins which were the subject of the second order were delivered to Futuretronics on 31 January 2006 and Graphix Labels sent four invoices to Futuretronics. In order that Graphix Labels could manufacture the skins required by the second order, Futuretronics provided to Graphix Labels actual samples of the various models of iPod and the XBox 360 for which the skins were to be made and the artwork for the images that were to be printed on those skins. 78 Mr Taylor described the printing technology used by Graphix Labels. Graphix Labels produced die or line drawings using its computer system and Mr Taylor said that Graphix Labels still has electronic copies of the drawings. A sample of the die or line drawings was sent to Futuretronics for approval. Once approved, the die or line drawings were sent to the die-maker who made the die. Mr Taylor described the dies and how they worked. The printing technology differed from that used by Graphix Effects. A groove following the lines of a die drawing is then carved into the PVC and a very fine metal blade is embedded into that groove. In effect, this creates a device which works like a cookie-cutter. Mr Chojna said he had 18,780 iPod skins from the skins delivered pursuant to the second order at the business premises of Futuretronics which have not been sold. He said that he had arranged for those skins to be packaged so that he could try to sell them to Futuretronics' customer base. 80 Graphix Labels did not receive any further orders from Futuretronics after the second order. Mr Tallent gave evidence of the reasons for that decision. First, Graphix Labels had made a considerable investment in the research and development associated with producing skins and it had absorbed a large amount of the cost arising from this on the basis that it anticipated large orders from Futuretronics which did not eventuate. Secondly, the company had Avery material in stock worth about $20,000 and which was lying idle, and there was a further quantity of Avery stock worth about $100,000 which had been allocated by Avery to Graphix Labels. Graphix Labels did not want to jeopardise its long-standing relationship with Avery by failing to take up the stock. 82 The representatives of Graphix Labels asserted in evidence that its marketing plan was very different from that of Futuretronics. First, Graphix Labels will market skins for new models of, for example, iPods, and because of the fact that the manufacturing materials relate to existing or old models they will be of no use to Graphix Labels in terms of its plan to produce and market skins. Secondly, Graphix Labels plans to market and sell its skins to wholesalers, distributors and brand owners who will, in turn, market them to retailers. It will not be marketing and selling skins to retailers, such as Myer and JB Hi-Fi, who are the type of customers to whom Futuretronics sells its skins. Graphix Labels' pricing policy will not take account of Futuretronics' pricing policy (so it is said by Graphix Labels) because it will be selling to a different market, namely, wholesalers, distributors and brand owners and not retailers. 83 Although Graphix Labels' case at trial was that there was no legal constraint preventing it from producing commercial quantities of skins it had not done so as at the date of trial. The majority involved Mr Atta and some were before he ceased his employment with Futuretronics on 29 September 2006 and some were after that date. Graphix Labels infringed Futuretronics' rights by reason of Mr Taylor's dealings with Powermove Distribution Pty Ltd ("Powermove") in July or August 2006. 2. Mr Atta and Graphix Labels infringed Futuretronics' rights by reason of Mr Atta's dealings with THQ Asia Pacific Pty Ltd ("THQ") in August and October 2006. 3. Mr Atta and Graphix Labels infringed Futuretronics' rights by reason of Mr Atta's conduct as outlined in two emails dated 13 September 2006. 4. Mr Atta and Graphix Labels infringed Futuretronics' rights by reason of Mr Atta's conduct in distributing brochures to three potential customers in October 2006. 5. Mr Atta and Graphix Labels infringed Futuretronics' rights by reason of Mr Atta's conduct in providing information to Cygnett Pty Ltd in October 2006. 86 Mr Atta and Mr Tallent were friends. Some time after 9 August 2006 Mr Atta told Mr Tallent that he was going to resign his employment with Futuretronics and Mr Tallent introduced him to a recruiting agent to help him find employment. Some time between that event and 29 September 2006 Mr Atta and Mr Tallent began negotiating about Mr Atta being employed by Graphix Labels. It is not possible on the evidence to fix the precise date when the negotiations began. It is likely to have been in early September 2006. The letter of offer from Graphix Labels to Mr Atta is dated 25 September 2006 and it was signed and thereby accepted by Mr Atta on 26 September 2006. The two emails from Mr Atta to Mr Tallent which are alleged to show breaches of his fiduciary duty to Futuretronics during his employment by that company were sent by Mr Atta on 13 September 2006. The terms of those emails are set out below [97]-[100]. I think that it is likely that by 13 September 2006 the essential terms of a contract of employment had been agreed. At the very least, negotiations between Mr Atta and Graphix Labels had reached an advanced stage. 87 It seems that when skins were produced by Graphix Labels for Futuretronics, a certain number of spares or, as they were referred to in the evidence, "overs" were produced. Futuretronics claims that Graphix Labels infringed its rights in relation to the skins by producing the overs and then providing some of them as samples to Mr Ian Bagnall who is the operations manager of Powermove. 88 Mr Taylor contacted Mr Bagnall by telephone in or about July or August 2006 and introduced himself as being from Graphix Labels. Mr Bagnall had not previously dealt with Graphix Labels or Mr Taylor. Mr Taylor told Mr Bagnall that he had some products he wanted to show him which were films or skins for iPods. The products Mr Taylor described seemed to Mr Bagnall to be similar to products Mr Bagnall had previously seen and he doubted whether Powermove would be interested in purchasing them. Nevertheless he agreed to meet with Mr Taylor. Mr Bagnall said that he was very familiar with the concept of skins in July or August 2006 and, in fact, he had seen skins in early 2005. Powermove had sold skins for an iPod Shuffle in 2005 but they had ceased doing so because they were unable to sell sufficient quantities. 89 A meeting took place at Powermove's offices between Mr Taylor, Mr Bagnall and Powermove's chief executive officer, Mr John Osmotherly. Mr Taylor showed them some sample skin products for iPod 4G, iPod Mini, iPod Shuffle and XBox products. Mr Bagnall said that Mr Taylor told him that the products would cost $1.50 per unit, and that they would be delivered unpackaged. Mr Bagnall told Mr Taylor that he did not think Powermove would be interested in purchasing any of the products but that he would speak with Powermove's designer to obtain his views. Mr Taylor gave Mr Bagnall two presentation folders which contained the samples he had been shown. Mr Bagnall gave these folders to Powermove's designer. Mr Bagnall said that nothing further came of the approach by Graphix Labels and he said that he had not spoken to Mr Taylor since the meeting. 90 The folders contained samples with the artworks produced by Ms Hung on them. 91 Mr Bagnall also said that on 17 November 2006 he attended a Trade Fair at the Melbourne Exhibition Building on behalf of one of Powermove's manufacturers named "Logic3". The stand he was in was next to a Futuretronics stand. A person approached him and said his name was Harry and that he had noticed that Logic3 displayed iPod accessories. He asked if Mr Bagnall would be interested in looking at a product he had and he showed him some iPod skin products. Mr Bagnall said that he had been shown and offered these products by Mr Taylor of Graphix Labels. 92 Mr Taylor also gave evidence of what transpired at the meeting in July or August 2006 between himself, Mr Bagnall and Mr Osmotherly. Although there are differences between his version and that of Mr Bagnall they are not such as to suggest that either Mr Bagnall or Mr Taylor was not credible. Moreover, none of the differences are critical in terms of the issues in this case. Mr Taylor said that Mr Bagnall said very little at the meeting and that most of the talking on behalf of Powermove was done by Mr Osmotherly. Mr Taylor said that at no time did he offer to sell skins with the designs shown on the samples and he said if Powermove wanted to purchase skins they would have to provide the artwork it wanted to use. The tenor of Mr Bagnall's evidence is that he does not agree with the latter part of this proposition. I think it likely that the position was not made clear. Mr Taylor said that he did not offer to sell the skins for $1.50 per unit but, rather, said that a price of $1.50 to $2 per unit might be possible if an order was placed for a sufficient quantity of skins and with a sufficiently limited range of artwork. There was only a brief discussion of prices and Mr Taylor never gave Messrs Osmotherly and Bagnall an actual quotation in respect of the cost of providing skins to Powermove. 93 In August and October 2006, Mr Atta had dealings with Mr David Blogg who is the national sales manager of THQ. Mr Blogg has worked for THQ for approximately six years and prior to that he worked for Futuretronics. 94 THQ is a developer and publisher of interactive entertainment software. It develops products for all popular console and handheld games systems, including XBox and XBox 360, video game and entertainment systems from Microsoft; Playstation 3 (PS3) and Playstation 2 (PS2) computer entertainment system, Playstation Portable (PSP) system; and Nintendo's Wii, Gamelube, Game Boy Advance and DS systems. It licences a number of major brands, such as Disney, Pixar, Nickelodeon and Bratz T, and markets its gaming products to a wide range of consumers. It markets and distributes games throughout the Asia Pacific and it operates as a wholesaler not a retailer. 95 In August 2006, Mr Atta contacted Mr Blogg by telephone and discussed with him a proposal whereby Futuretronics would supply vinyl-skin products to THQ for the "Bratz" Nintendo DS product and a range of other items to bundle with THQ games. Emails were exchanged between the two at or about the same time and there was a meeting involving Messrs Blogg, Chojna and Atta. Mr Atta quoted a price for the skins of $4.00 per unit. The proposal did not proceed. I will return to the details of Mr Atta's contact with Mr Blogg in October 2006. 96 Mr Atta sent two emails to Mr Tallent on 13 September 2006. As I have said, by that time it is likely the essential terms of his employment by Graphix Labels had been agreed. He was to be employed to promote skins to be sold by Graphix Labels and the two emails are likely to have been sent in response to a suggestion made to him by Mr Tallent that he put his thoughts as to how to exploit the skins market in writing. You can pick the eye's [sic] out of it as I have only tried to show you the potential of the Skin concept. Plan A, shows the best opportunity as it stays within your core business. This is by no means a business plan, just my thoughts following up from our conversation we had yesterday. The opportunities are wide spread but I will take time to identify our best opportunities if we go forward with this assignment. It is a general document and cannot be described as sophisticated or detailed. Furthermore, whatever its merits, it does not seem to me to contain anything that would not have been known by, or available to, a person generally familiar with the particular industry. Please find the following results. In order of Representation in store are the following Brands that should be able to add the Skin Concept to their Range of Ipod [sic] Accessories. Mobile phones are a different story as there are a lot of No Name products out there but some of the above also have Mobile Phone Accessories as part of their range. There is no evidence to contradict that assertion. 102 Some time in the second half of 2006 Graphix Labels produced a brochure showing the skins that it could produce and the way in which that was done. On the front of the brochure were examples of designs and patterns, and some of them were the artworks produced by Ms Wendy Hung. Ms Hung was employed by Futuretronics from 19 August 2005 to 21 April 2006 and she performed a wide range of duties for the company. At Mr Chojna's request she produced the artworks for the skins and they were provided to Graphix Labels. She described the way in which she produced the artworks but it is not necessary to set out the details. The brochure was distributed to various persons. The brochure was distributed to Mr David Bartlett and Mr Boyd Dainton of Audion Australia on 10 October 2006, to Mr Peter Batt of Fosh Australia in October 2006 and Mr Waldo Latowski of Griffin Technology on 12 October 2006. 103 Mr Chojna contacted Mr Taylor by telephone and advised him that artwork owned by Futuretronics was being used without its authorisation. That contact was followed by a letter from solicitors acting for Futuretronics dated 19 October 2006 complaining about the use of the artworks. About this time --- the exact point in time is not made clear by the evidence --- the Graphix Labels brochure was changed to delete the artworks produced by Ms Hung. On 24 October 2006 solicitors acting for Graphix Labels and Mr Atta gave an undertaking that Graphix Labels would not distribute the brochure or any other advertising material bearing any of the designs shown on the brochure and not to import, manufacture, print, offer for sale or sell any skins bearing any of the designs shown on the flyer without the consent of Futuretronics. On 13 November 2006 and after the proceedings had been commenced, the solicitors for Graphix Labels and Mr Atta again proffered certain undertakings in relation to the artworks. 104 A number of witnesses were asked if they considered they could order the artworks of Ms Hung on the skins that they might purchase. Counsel for Graphix Labels and Mr Atta submitted that recipients of the original brochure would have understood that they could not and they were only illustrative of the type of artworks which might be produced. 105 I return to the events involving THQ and Mr Blogg. On 11 October 2006, Mr Blogg received a telephone call and subsequent email from Mr Atta who said he was then employed by Graphix Labels. In his evidence-in-chief, Mr Blogg said that Mr Atta asked him if "we could revisit the concept he had previously approached me about for the Bratz skins". Mr Blogg said that at that time he had a particular retail customer in mind who he believed might have been interested in the product and so he sent an email to Mr Atta and asked him to provide him with a quotation. Mr Atta provided a quotation by reply email and by further email sent later that day he also provided Mr Blogg with a document setting out the requirements of Graphix Labels in relation to printing artwork. On 12 October 2006, Mr Atta sent a formal quotation to Mr Blogg by email. 106 At about the time THQ received the quote from Mr Atta, it became apparent that the retailer was not interested in the product and therefore Mr Blogg decided not to pursue the dealings any further. Mr Atta sent two further emails to Mr Blogg on 19 October 2006 and in one of those emails he raised the possibility of bringing the price down to $2 per skin. 107 In November 2006, Mr Chojna contacted Mr Blogg by telephone. Mr Chojna advised Mr Blogg that he had a retailer who was interested in the "Bratz" skins products for the Nintendo DS, and Mr Blogg and Mr Chojna again began discussing what Mr Blogg referred to as "this project". On 28 November 2006, Mr Blogg placed an order with Futuretronics for 3000 units of these products. 108 In cross-examination, Mr Blogg agreed that when Mr Atta contacted him on 11 October 2006 he said to Mr Atta words to the effect that the timing of his call was really good because THQ were currently working on a project relating to skins which could be of interest to Mr Atta. 109 Mr Atta's evidence was that after he had given notice of his resignation to Futuretronics but before he had left its employ, he told Mr Blogg that he was leaving Futuretronics and Mr Blogg asked him to let him know where he ended up going. Mr Atta said that this was the context in which the telephone conversation on 11 October 2006 was made. He said that although he told Mr Blogg that his role within Graphix Labels was to market and sell skins, he did not raise the possibility of Graphix Labels selling skins to THQ. That was done by Mr Blogg as he, that is Mr Blogg, agreed in cross-examination. 110 I have carefully considered the evidence. It appears that the project discussed in October 2006 involved Bratz skins as did the project discussed in August 2006. However, I am not satisfied that it was the same business opportunity in the sense of the same customer wanting to order Bratz skins. It was for Futuretronics to prove that fact and I do not think that it has done so. 111 Ms Sophie Swann is the marketing director of Cygnett. That company is an importer and wholesaler of iPod accessories and it sells such products to the major retail chains in the accessory and audio markets. Cygnett generally does not source products from any local suppliers, but is an importer of products. Ms Swann received a telephone call from Mr Atta in or about early October 2006. Prior to that she had not dealt with Graphix Labels. She met with Mr Atta at Cygnett's office on 18 October 2006. Mr Atta showed her some vinyl skin covers suitable for iPod video and iPod mini products. Those skin covers included a black and white face, denim jeans print, a "bomb" print, a stripe print and metal flooring print. Some of these were left as samples with Ms Swann. 112 There then followed a series of emails between Mr Atta and Ms Swann in which Mr Atta was attempting to sell vinyl skins to Cygnett. Of importance is the fact that Mr Atta disclosed the name of one of Futuretronics' suppliers, Storm Electronics, to Ms Swann. Ms Swann always understood that if skins were produced for Cygnett they would have artwork provided by Cygnett. Ms Swann said that she has had no contact with Mr Atta since 17 November 2006. Ms Swann was aware of skins for electronic products from late 2005 but they were not of the same quality as the skins shown to her by Mr Atta in October 2006. 114 Mr Atta said that Storm Electronics was an old supplier of Futuretronics and that he gave the information to her to do her a favour and to ingratiate himself with her. He agreed that he would not have disclosed the name to people who carried on business in the same industry. 115 A number of emails passing between Futuretronics and the supplier in August 2006 were put to Mr Atta in cross-examination and they suggested that there were dealings between Futuretronics and the supplier. In my opinion, there was no binding agreement as a result of the discussions between the representatives of Futuretronics and Graphix Labels, respectively, in June 2005. There was no agreement as to the price for the skins to be paid by Futuretronics to Graphix Labels or the quantity or quantities to be ordered. It is significant that nothing was agreed as to a minimum contractual period or a minimum quantity of skins to be ordered or supplied under any agreement. There was no plea or submission by Futuretronics that the "contract" was for a particular period, or was determinable only upon reasonable notice, nor was anything put in detail as to the circumstances in which the "relationship" between Futuretronics and Graphix Labels had come to an end other than it had come to an end and Graphix Labels' reasons for deciding to produce and market its own skins. 118 In the circumstances of this case a binding contract only came into existence on the placing of an order by Futuretronics and acceptance of the order by Graphix Labels and the contract then related to that order. What was said on 27 June 2005 might then be a term of the contract relating to that order. That it was an express term that Graphix Labels would manufacture skins in accordance with the order or orders placed by Futuretronics and according to the terms of the order or orders is uncontroversial. As far as the question of payment for die drawings, tooling and templates required to manufacture the skins there was no discussion to that effect on 27 June 2005. Nevertheless, Futuretronics in fact made payment and that was a term of the contract constituted by each order. 119 I turn now to consider the terms said by Futuretronics to be implied terms. I start with the alleged term that Graphix Labels would not manufacture, distribute, promote, advertise or sell skins on its own behalf for supply by it to any entity other than Futuretronics. The term must not contradict any express term of the contract. 121 A formal contract is one which appears complete on its face. The test is not as stringent in the case of an informal contract. The contract or contracts in this case are informal contracts. That general statement of principle is subject to the qualification that a term may be implied in a contract by established mercantile usage or professional practice or by a past course of dealing between the parties. In that case, their Honours went on to reject the alleged implied term on the ground that the contract was capable of operating reasonably and effectively in the absence of the term. 123 The differences between the test for a formal contract and the test for an informal contract are not easy to identify with precision. In addition to the matters identified in Hawkins v Clayton and Byrne v Australian Airlines Ltd it may be assumed that even in the case of an informal contract a term will be implied only if it is capable of clear expression and does not contradict an express term of the contract. The authors of Contract Law in Australia (5 th ed, 2007) JW Carter, E Peden and GJ Tolhurst at 223-224 [11-06] suggest that the matters identified in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (supra) are, in the case of an informal contract, "more in the nature of factors to be considered than essential requirements". 124 The question of whether a term of the nature alleged by Futuretronics should be implied arises in the following context. 125 In 2005 the concept of a skin for mobile telephones, handheld games, iPods and electronic game controllers or products of this type was known in the market. The evidence is not precise as to the type of skins available in the market at that time, only that the idea or concept was known in the market. Skinit advertised its product on its website and in that sense its product was known in the market in Australia. If a purchaser in Australia wished to he or she could purchase a skin made by Skinit. The skins made by Skinit were made of vinyl manufactured by Avery and although its mode of operations differed from the operations proposed by Futuretronics, the product was for all intents and purposes the same. By mode of operations I mean that the Skinit operation seems (at least in 2005) to have been on a relatively small scale and to involve individual artworks. By contrast, Futuretronics proposed mass-produced artwork and production on a large scale. However, I do not think that either of those operational differences bear on any aspect of the product itself. 126 No doubt Mr Chojna saw a real business opportunity. If he could become the first Australian supplier on a large scale of skins manufactured in the way he proposed and with the advantages he saw flowing from the use of the vinyl manufactured by Avery, he might secure a strong position in the market. However, he had no patentable invention, nor was any aspect of the product or its proposed method of manufacture information which was confidential. Futuretronics' case was not put on those bases because clearly that case could not have succeeded. 127 It is true that Graphix Labels, which had a longstanding relationship with Avery, had not purchased the particular vinyl from it before and that Mr Tallent said that prior to his discussions with Mr Atta and Mr Chojna in 2005, he had not previously seen skins of the nature shown to him by Mr Atta. Furthermore, Mr Taylor said that he had not thought of the potential for marketing the skins prior to those discussions. Though all of that may be accepted, Futuretronics had no rights in the skins which it could enforce against third parties. It conceded, and it must be the case, that from 2005 it had no right to prevent other parties (that is, parties other than Graphix Labels) from manufacturing skins from vinyl manufactured by Avery for mobile telephones, handheld games, iPod and electronic game controllers or products of that type. Providing there was no infringement of Futuretronics' rights in artworks or manufacturing materials any number of third parties were free to compete against Futuretronics. 128 Why then would a term be implied that Graphix Labels could not manufacture skins and sell to entities other than Futuretronics after its relationship with Futuretronics had broken down? 129 It seems to me that it is significant that, as I have said, there is no evidence that the parties turned their respective minds to the period of the proposed contractual relationship. Nor is there any evidence of a minimum quantity to be ordered by Futuretronics and supplied by Graphix Labels. 130 In addition to these matters, the proposed term is unlimited as to time and as to the circumstances in which it operates. There is no time limit specified in the proposed term and, on the face of it, if there is such a term then as a result of the relationship between Futuretronics and Graphix Labels between June 2005 and May 2006, Graphix Labels is prohibited for an indefinite period from manufacturing and selling skins of the type manufactured and sold by Futuretronics. Not only is the prohibition one for an indefinite period, but it is a prohibition to apply regardless of the circumstances. In other words, it is to apply irrespective of who brought the "relationship" to an end. 131 Futuretronics relied on the decision of Crennan J in Gold Peg . That case went on appeal: Kovan Engineering (Aust) Pty Ltd v Gold Peg International Pty Ltd [2006] FCAFC 117 but the appeal was dismissed and there was no suggestion by the Full Court that her Honour erred in her approach. The applicant was the inventor of the Direct Steam Injection Cooking Machine (the DSI Cooker). The first respondent was a manufacturer of the DSI Cooker. The principal issue in the case was the ownership of the copyright used in the development and manufacture of the DSI Cooker. That was resolved in favour of the applicant. This is a clear matter of business efficacy; the applicant would not have been able to maintain its rights to exclusively manufacture its machine if its manufacturer were to assert rights in the drawings against it or to refuse to maintain confidence in the drawings. I am also satisfied that the first respondent would never have been retained by the applicant to undertake manufacture for it if the first respondent had sought to debate these issues. I am also satisfied Mr Miller and Mr Zakis well understood this at the time of commencement of manufacture for the applicant. Similarly, I am satisfied that it is appropriate as a matter of business efficacy to imply a term that the first respondent would not use the Alfa Laval Drawings or the manufacturing drawings it created to manufacture cooking machines for the applicant other than for the purposes of manufacturing for the applicant. This term was, in any event, partly oral and was agreed to by Mr Smith and Mr Miller in around 1992. Both Mr Miller and Mr Zakis confirmed this was their understanding of the general agreement between the parties for the manufacture of cooking machines by the first respondent to the order and specification of the applicant. The terms in Gold Peg related to the use of drawings of the DSI Cooker either in existence or to be brought into existence. They or their forerunners were technical drawings in respect of which patent applications had been made. In this case the implied term does not relate to drawings but rather to an idea which did not involve a patentable invention or confidential information. 133 In my opinion, the fact that the product was not unique and does not involve confidential information, the fact that the contract or contracts between Futuretronics and Graphix Labels were not for a set term and did not involve a minimum quantity and the fact that the proposed term was so general indicate that it is not appropriate to imply a term of the nature advanced by Futuretronics. It is not necessary for the reasonable or effective operation of the contracts constituted by each order to imply such a term. 134 In the circumstances, it is unnecessary to address a further argument put by Graphix Labels and Mr Atta against implying such a term and that was that such a term would amount to an unreasonable restraint of trade. I was referred to Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd [1973] HCA 40 ; (1973) 133 CLR 288. Of course, there have been a number of cases dealing with the common law doctrine of restraint of trade since those two cases (see, for example, the discussion in Seddon and Ellinghaus, Cheshire & Fifoot's Law of Contract (8 th Australian ed, 2002) pages 860-863). 135 Before leaving this topic I should mention that Futuretronics referred to the agreement between Graphix Labels and Graphix Effects as supporting its argument in favour of an implied term and Graphix Labels referred to the absence of a written agreement between Futuretronics and its new printer as supporting its argument against implying a term. I do not think either point is of any real significance in terms of the resolution of the issue. 136 The other alleged implied terms were not the subject of detailed submissions. Insofar as they refer to knowledge or information about skins, they must be rejected for the reasons I have already given. Insofar as they refer to the artworks I think it was an implied term that the artworks would be used by Graphix Labels for the purpose of fulfilling the orders and for no other purpose. In any event, Graphix Labels and Mr Atta accept that Futuretronics is the owner of the copyright in the artworks. As far as the manufacturing materials are concerned, it is not necessary to pursue some of the difficult questions which might have otherwise arisen because there is no longer an issue between the parties as to the manufacturing materials. I refer to the discussion in [145] below. 137 I turn now to consider the conduct by Graphix Labels and Mr Atta between July and October 2006, which is said to infringe the rights of Futuretronics. They do not dispute that the artworks were reproduced by Graphix Labels in a brochure which was distributed to three customers or potential customers. 139 Graphix Labels asserts that the breach of copyright was not knowing or deliberate because it did not intend, nor would a recipient of the brochure understand, that by the brochure Graphix Labels was offering to produce skins with the precise artworks on them. In other words, the artworks in the brochure were illustrative only. 140 Furthermore, it asserts that there is no risk of any infringement being repeated in the future. Graphix Labels now has a new brochure which does not show any of the artworks. It has given undertakings not to reproduce the artworks in the future. 141 Graphix Labels submits that Futuretronics has not led any evidence of damage suffered by it as a result of the infringement of its copyright in the artworks and that the evidence is there has been no sale of skins by Graphix Labels with the artworks on them. In those circumstances and having regard to the undertakings proffered, Graphix Labels submits that Futuretronics should not be granted any relief whether by way of declarations, injunctions, orders for delivery up, damages or an account of profits or otherwise. 142 In the alternative, questions of relief are to be dealt with at the second stage of the trial and that will include, so Graphix Labels submits, a determination of whether any infringement of copyright in the artworks was innocent. As I understand it, Futuretronics submits that the nature of the breach, that is, whether it was deliberate or innocent, is relevant, if at all, only to the question of damages. 143 There is no doubt that by distributing the brochures to three customers or potential customers Graphix Labels infringed Futuretronics' copyright in the artworks. Little was said about Mr Atta's potential liability in closing submissions and it is not clear to me whether that claim is being pursued. I will give the parties the opportunity to make further submissions on what orders, if any, should be made and the potential liability of Mr Atta for breach of copyright. 144 Futuretronics asserts that Graphix Labels infringed its artworks in another way. It alleges that in producing overs with Ms Hung's artworks on them and giving some of those overs to Mr Bagnall as samples it infringed the copyright of Futuretronics in the artworks. The submissions on this point were not detailed. Graphix Labels had a licence from Futuretronics to reproduce the artworks and, on the evidence, I think that that included a licence to produce overs. It is not clear to me that handing a sample to Mr Bagnall was a breach of copyright, but it was a breach of the implied term that the artworks only be used for a purpose authorised by Futuretronics. I will hear the parties on what orders, if any, should be made in light of these conclusions. 145 The manufacturing materials comprise the die or line drawings and the dies or tooling. Graphix Labels submitted that copyright did not exist in these objects or, in the alternative, copyright was held by the author of the work and that was not Futuretronics. It was submitted there had been no assignment of the copyright (see s 196(3) of the Copyright Act 1968 (Cth)). Furthermore, Graphix Labels submitted that appropriate undertakings as to the manufacturing materials had been given. I need not consider these submissions, and the submissions Futuretronics initially put in response to them, because in the course of closing submissions counsel for Futuretronics said it no longer pressed the claim in respect of the manufacturing materials. In doing so, he noted the undertaking by Graphix Labels to deliver up the dies or tooling and not to use the die or line drawings, and he conceded that whether copyright subsisted in them or not, there was no evidence of breach in relation to the manufacturing materials. I do not think there is any evidence of a breach of duties under the confidentiality agreement and that may be put to one side. 149 Graphix Labels and Mr Atta did not dispute that Mr Atta owed fiduciary duties to Futuretronics but submitted that any duty on Mr Atta not to exploit business opportunity came to an end on the cessation of his employment by Futuretronics and that his fiduciary duties to Futuretronics did not prevent him from making plans for his departure, including establishing a competing business or working for a competitor. 150 I turn now to examine the relevant principles. 151 An employee owes a duty of fidelity and good faith to his employer. That duty arises as a matter of an implied term of the contract of employment: Robb v Green [1895] 2 QB 315 at 317 per Lord Esher MR. As part of the duty of fidelity and good faith, an employee owes certain duties of confidentiality: Blyth Chemicals v Bushnell [1933] HCA 8 ; (1933) 49 CLR 66. 152 In addition to the duty of fidelity and good faith arising as a matter of contract, an employee may owe similar duties because the relationship is a fiduciary one or because the elements of ss 182 or 183 of the Corporations Act 2001 (Cth) are made out. The relationship between employee and employer is one of the accepted fiduciary relationships ( Concut Pty Ltd v Worrell (2000) 176 ALR 693) but not every obligation undertaken by an employee is fiduciary in character ( Nottingham University v Fishal [2000] ICR 1462). Within the fiduciary duties is a duty on an employee to act in his employer's interests and not in his own interests at the expense of his employer and also a duty not to misuse confidential information. The duties are not absolute however, and an employee is able to do certain things in preparation for his new employment. 153 In this context the respondents referred to Pioneer Concrete Services Ltd v Galli [1985] VR 675 (" Pioneer Concrete ") and Independent Management Resources Pty Ltd v Brown [1987] VR 605 (" Independent Management "). 154 I do not think that Pioneer Concrete is of assistance on the present point. The issue there was an alleged breach of restraint of trade covenants and required the Court to consider the difference between acts preparatory to the carrying on of a business and carrying on a business. Independent Management is more helpful. The plaintiff in that case alleged that a former employee had misused confidential information obtained during her employment and had breached her duty of fidelity. The employee had successfully tendered for a contract previously held by the plaintiff. Marks J said that the skill and information gained by the defendant was outside the protected category. A further distinction has to be drawn between information which forms part of the employee's stock of general knowledge, skill and experience, and that which should fairly be regarded as a separate part of the employee's stock of knowledge (whether it be identifiable as "particular" or "detailed" or "special") which a man of ordinary intelligence and honesty would regard as the property of the former employer. He accepted that this could be described as a duty to serve faithfully the plaintiff and to act in its interests and not against them. There was an allegation that the defendant's decision to tender while still employed by the plaintiff created a conflict between her own interest and that of the plaintiff. For instance, he may legitimately canvass, issue his circulars, have his place of business in readiness, hire his servants, etc. Each case must depend on its own circumstances'. This passage was quoted with approval by Maugham LJ as a member of the Court of Appeal in Wessex Dairies v Smith [1935] 2 KB 80, at 87 although he qualified his acceptance of the reference to canvassing. I think the essence of the matter is that the plaintiff must satisfy me there was some conduct on the part of the defendant which, to use the phrase of Hawkins J, 'fraudulently undermined' the plaintiff whilst the defendant was in its employ. For the reasons I have stated, the plaintiff has failed to do so. The qualification to this statement is that a transaction current when the employee leaves his or her employment cannot be exploited by the employee after the employment has ended. Absent a restrictive covenant an employee can compete with his employer after the employment has ended. 157 Another duty an employee may owe the employer is the equitable duty of confidence. 158 As far as soliciting customers is concerned there is an important distinction between an employee doing so during his employment and doing so after his employment has ended. In the latter case the employee may use subjective knowledge or information he has acquired as a necessary consequence of the way he is employed, but he may not use objective knowledge or information which includes information deliberately copied or memorised. 159 In Forkserve Pty Ltd v Pachiaratta (2000) 40 IPR 74, Young J considered the obligations of a former employee in terms of general knowledge and skills acquired while he was an employee and confidential information acquired while he was an employee. Two propositions emerge from the case which I accept as correctly stating the law. First, Young J said, after referring to the Restraint of Trade Doctrine , JD Heydon (2 nd ed, 1999) at 80, that an employee can approach a customer or client whose name he can recall without a list or deliberate memorisation. Secondly, by reference to one of his own previous decisions --- Rosetex Company Pty Ltd v Licata (1994) 12 ACSR 779 --- his Honour said that the general coverage of the predecessors of ss 182 and 183 "are not to any major extent wider than the duties under the general rules of equity". Note: This subsection is a civil penalty provision (see section 1317E). (2) A person who is involved in a contravention of subsection (1) contravenes this subsection. Note 1: Section 79 defines involved . There was a good deal of debate before me as to whether Futuretronics and Graphix Labels would operate in the same market. Graphix Labels submitted that they would not because Futuretronics sold primarily to retailers and it proposed to sell to wholesalers and distributors. It is true that Futuretronics sold primarily to retailers, but I do not think one can draw the clear distinction put forward by Graphix Labels. After all, the evidence in this case is that both companies were trying to sell skins to THQ. 162 I have no doubt that by 13 September 2006 Mr Atta knew that Graphix Labels proposed to produce and market its own skins and I think that it is reasonable to infer that he knew that in some areas at least the companies may compete. 163 Mr Atta's two emails dated 13 September 2006 were sent from his work email address. There is no evidence as to whether they were sent within Mr Atta's working hours or outside his working hours because there is no evidence of his working hours at Futuretronics. Mr Atta said his "normal store visit" was a visit he carried out as part of his duties for Futuretronics. I am prepared to accept that to be the case. He said that normal store visits were carried out on weekends or on a Friday night when shopping with his wife. The time of the normal store visit referred to in his email is unclear with the email itself suggesting it might have been on 13 September 2006. In the end, I do not think I need to resolve this point. 164 I do not think the sending of the emails constituted a breach of fiduciary duty or a contravention of s 182 of the Corporations Act . First, neither email discloses any confidential information of Futuretronics. The company did not identify any confidential information in the emails in the course of evidence or submissions. Secondly, I do not think either email contains a business opportunity diverted away from Futuretronics. Whatever their merits, the business plans are unsophisticated and would have been obvious to anyone reasonably familiar with the industry. No other specific business opportunity is identified in the emails. Thirdly, I am not satisfied that Mr Atta has used the time of his then employer (that is, the time of Futuretronics) for his own purposes and not for Futuretronics' purposes. Such an allegation would in any event be better framed as a breach of the contract of employment but, leaving that aside, the evidence is not sufficiently clear to enable a finding to be made that he has in effect misused company time. 165 The authorities I have referred to indicate that an employee is entitled to do a certain amount by way of preparation for his new employment and some refer to the test in terms of whether he has fraudulently undermined the employer by breaking the confidence reposed in him. I do not need to consider whether that is the test and, if so, its precise meaning. For the reasons I have given, Futuretronics has not established a breach of fiduciary duty or a contravention of s 182 by Mr Atta in connection with the two emails dated 13 September 2006. 166 In the circumstances, I do not need to consider the allegation that Graphix Labels induced Mr Atta to breach his fiduciary duties or was involved in a contravention of s 182 of the Corporations Act . The confidentiality agreement is void for uncertainty because it contains only an inclusive and not an exclusive definition of confidential information. Reading down or severance is not possible. 2. The confidentiality agreement is a restraint on competition and void as against public policy because it purports to go beyond what may be lawfully protected. Mr Atta referred to the decision in Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317. Again, it is said that reading down or severance is not possible. 3. As I understood it, the submission was that even in the case of a confidentiality agreement which purports to define confidential information a party complaining of a breach of such an agreement must prove the information disclosed was in fact confidential. Reference was made to the requirements in equity for the protection of confidential information: Corrs Pavey Whiting and Byrne v Collector of Customs (1987) 14 FCR 434 at 443 per Gummow J. There is no evidence that the information was confidential and Mr Atta said that it was not confidential. 4. The information disclosed [to THQ and Cygnett] was disclosed after Mr Atta had left the company's employ. 5. There is no pleading of loss which could conceivably flow from a breach of the confidentiality agreement. There is a claim for damages for breach of the confidentiality agreement, but the only claim for loss and damage particularised in the statement of claim relates (so it is said) to the alleged breach of the implied term. It seems to me that the proposed submissions fall squarely within the terms of O 11, r 10 of the Federal Court Rules and Mr Atta should not be permitted to raise them at this late stage. I cannot be satisfied that there will be no prejudice to Futuretronics if Mr Atta is able to raise the matters at this stage. 170 I do not think the submission in paragraph 3 is right. In the case referred to Gummow J identified the elements of an equitable action for breach of confidence. His Honour was not dealing with a claim for breach of contract by disclosing confidential information as defined in the agreement. There is nothing to suggest that subject to restraint of trade considerations the parties cannot define for themselves what is confidential. They are not bound to protect no more than is already protected in equity. 171 The submission in paragraph 4 cannot succeed because the confidentiality agreement specifically purports to apply to the period after Mr Atta has left the employ of Futuretronics. 172 The submission in paragraph 5 is essentially a pleading point which I would not allow Mr Atta to raise at this late stage or at least without giving Futuretronics the opportunity to apply to further amend. 173 Despite these conclusions, I do not think Mr Atta breached the confidentiality agreement. Clause 2(d) of the agreement provides that information generally known is not confidential information. More than that, I think that the definition of "confidential information" in clause 1 itself requires that the relevant information not be generally known outside the company. As far as Mr Atta's dealings with THQ are concerned there is no evidence that he used confidential pricing information of Futuretronics in his dealings with Mr Blogg. Nor is there evidence that he used confidential information of Futuretronics in contacting Mr Blogg of THQ in the first place. As far as Mr Atta's dealings with Cygnett are concerned, even if Storm Electronics is a person or company "dealing with" Futuretronics within clause 1, the information, being the name of the company, was not confidential unless it was not generally known outside the company (clause 1) or not generally known (clause 2(d)). Other than the statement by Mr Atta that now that he did not import he was "good" to pass on the name of Storm Electronics, there is no evidence that the name of that company as a supplier to Futuretronics was not generally known outside Futuretronics or not generally known. Mr Atta's statement is suggestive of that fact but by itself is not sufficient to establish that fact. 174 I have already discussed the scope of Mr Atta's fiduciary duties. Note 1: This duty continues after the person stops being an officer or employee of the corporation. Note 2: This subsection is a civil penalty provision (see section 1317E). Note 1: Section 79 defines involved . Note 2: This subsection is a civil penalty provision (see section 1317E) . The confidential information was said to be Futuretronics' pricing policy and its customer or potential customer list. The answer to this alleged breach is that there is no evidence that Mr Atta used Futuretronics' pricing policy in his dealings with THQ and, absent the copying or memorising of a list of customers, there is no prohibition on an ex-employee contacting a customer or potential customer of his employer. The answer to the second aspect of the alleged breach is that Futuretronics has failed to establish on the evidence that the business opportunity discussed in October 2006 was the same business opportunity discussed in August 2006. 176 The second act relates to Mr Atta's dealings with Ms Swann of Cygnett and his disclosure of the name of one of Futuretronics' suppliers. The fiduciary duty owed by Mr Atta and his duty by reason of s 183 of the Corporations Act are similar in scope. His fiduciary duty came to an end on the cessation of his employment save and except for confidential information. Futuretronics has failed to establish that the name of Storm Electronics as one of its suppliers was in any material sense confidential information. 178 In my opinion, Futuretronics is not entitled to relief under either the Trade Practices Act or Fair Trading Act . Insofar as the alleged representations relate to the right of Graphix Labels to produce and market skins on its own behalf, that point has been decided in that company's favour and the representations (even if made) were not misleading or deceptive. Insofar as the alleged representations relate to the rights to the manufacturing materials, Futuretronics no longer presses its claim in relation to that matter. Insofar as the alleged representations relate to rights in the artworks, I do not think Futuretronics is entitled to relief. I say that because the undertakings mean that there is no need for an injunction and, absent proof of at least some damage, it has not been established that there is a cause of action for damages under s 82 of the Trade Practices Act or the equivalent section under the Fair Trading Act . Otherwise, its claims against Graphix Labels and Mr Atta must be dismissed. 180 I will adjourn the proceeding to a date to be fixed to enable the parties to make submissions as to the appropriate orders in light of these reasons. I certify that the preceding one hundred and eighty (180) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | identification of terms implied terms where applicant company marketed for sale "skins" where applicant arranged for first respondent company to manufacture skins where no agreement as to price where no agreement as to minimum term or quantity where first respondent subsequently manufactured and marketed skins for itself in competition with applicant whether informal contract between applicant and first respondent whether implied term of any contract that first respondent would not manufacture skins except to supply applicant where alleged implied term unlimited as to time and circumstances of operation contracts |
Hard in the sense that it raises for consideration and then application the effect of the non-attendance of a visa applicant at the place where the Refugee Review Tribunal ("Tribunal") has offered a hearing, in circumstances where, mistakenly, the visa applicant has attended at another place but has not, before the Tribunal comes to make its decision, in any way drawn to the Tribunal's attention that mistaken attendance. What is hard about the case is the feeling that such an outcome, in circumstances where the Tribunal affirms a visa refusal decision, must produce on a visa applicant. 2 To understand how the appeal comes about in this case some further detail in respect of its background must be given. There are two Appellants, they are husband and wife. The appeal was argued on behalf of the Appellants by the male Appellant. He argued his case with precision and brevity. The grounds of appeal are set out in the notice of appeal filed on 16 May 2008. His Honour Federal Magistrate failed to hold that Refugee Review Tribunal made jurisdictional error it failed to appreciate that applicant suffered harm at the hands of Muslim opponents only because of his religion (Hindu). The Tribunal did not understand the applicant's fear of harm and misapplied the law affected the Tribunal's application of law. The Tribunal failed to asses the cumulative effects of separate incidents related with his claim for Protection Visa. 2. The Applicants were denied procedure fairness when Hon. Federal Magistrate failed to consider that the applicants did not attend the hearing scheduled on 23 July 2007 due to misdirection and unawareness about process of hearing. There were some problems related to his wife for that he came to Sydney but hearing was scheduled in Griffith. Applicant lived in remote area of regional area. In the hearing time in the Federal Magistrate Court said that he did not file amended application because of his limited knowledge of English and legal procedures of the Court. The Court provided solicitor on pro-bono basis, the applicant was unable to come Sydney because of lack of finance. That is not to say that ground 1 was not advanced, but it was advanced against the background of a submission that neither the male nor female Appellant had had an opportunity to detail to the Tribunal the nature of the claim which they made for refugee status. 4 The Appellants came to Australia on 17 March 2007. The following month, on 24 April 2007 they lodged applications for what is known under the Migration Act 1958 (Cth) ("Migration Act") as a protection visa with the Department of Immigration and Citizenship. It is necessary to set out the nature of the claim which was made. That took the form of a statement which was annexed to the visa applications along with copies of the relevant passports. The statement is that of the male Appellant. The statement reads as follows, omitting as the Act requires, the name of the Appellant. "I, [name omitted] was a resident of Mansa Gujrat, India. I as the owner of a hardware shop in Masjid Chawk, in Muslim area in Mansa. Unfortunately where I was doing my business the most community were Muslims and that's where the main problem start. I completely lost my business when there was a Godhra Kand (RIOTS). In riots they break in my shop steal everything from my shop and left me nothing but pain and depression. I have to close my shop down because I didn't have money to set my shop again from scratch. This is not the end of the story, more problem start after I close down the shop. Now all the Muslims got another idea. They started harassing me for that place of Shop. I didn't want to lose the place as they were not offering good money at all. So that I can get some economical help but I lost the shop and couldn't be any money from those Muslims people. I had asked for my money to them again and again but they started cheating me. One day their men come to my home and beat me badly so I was bleeding from nose and mouth. After this incident my family afraid a lot to go out. It becomes terrifying for living there. So we decided to stay away from that area. But the economical crisis had broken me more. But with all my courage, I asked for help from nearby friends and started farming. But my luck my all place were getting disturbed as I lost my money in this also. Now my debt to my friends and bank had increased a lot with its interest. Now even bank finance person had also given last warning for payment. I had changed different places but the same problem arises every time. Now it's a question of my family life and safety. Day by day I received different frightening calls, notes etc. They started follow me and my family members. That threat of my life inspired me to move out of India. With economical help of some good friends and relatives, I applied for Visa to Australia. Now I am presenting the true life story of mine and request the Australian Government to provide me the cover under protection visa. Kindly allow me to work so that I earn enough to repay me debt and keep my rest family happy and safe ever. 5 The female Appellant did not raise independent bases for her claim for a protection visa. Rather, the strength or weakness of her claim depended upon that of her husband's. On 19 May 2007 a delegate of the Minister for Immigration and Citizenship, who is the First Respondent to the appeal, refused the Appellants' application for a protection visa. As was their right under the Migration Act the Appellants, on 12 June 2007, sought a review on the merits of the Minister's delegate's decision. On 9 August 2007, the Tribunal decided to affirm the Minister's delegate's decision. That decision and the reasons for it were communicated to the Appellants by way of a letter from the Tribunal to them dated 30 August 2007. 6 So far as procedure is concerned, the Tribunal came to offer to the Appellants a hearing by video link to Sydney from the Griffith police station. A hearing at that place and in that manner was offered so as to spare the Appellants the inconvenience and expense of an attendance in Sydney. Griffith was much closer to their then residence. In so doing, the Tribunal in its written offer of hearing indicated to the Appellants that if a preference were nonetheless expressed to attend a hearing in person in Sydney that could be arranged at the request of the Appellants. No such request was made of the Tribunal prior to the appointed date of hearing. 7 The male Appellant gave evidence as to what transpired in respect of the offered hearing before the Federal Magistrates Court. Instead of attending at Griffith on the day appointed the Appellant, (the male Appellant) attended at the Tribunal's Sydney address. 2. Though he is not fluent in English he checked the hearing list on the noticeboard in the premises and noticed that his case number was not on the noticeboard. 3. During that time he received a phone call from his wife the effect of which was "our hearing is at Griffith". Apparently, that was because she had just seen a letter from the Tribunal and someone had said, "Look, your hearing is in Griffith. The male Appellant did not, while at Sydney, speak to any member of the Tribunal's staff that day in respect of his having attended by mistake at the wrong place. 5. Between then and when the Tribunal came to give its decision he did not make any contact with the Tribunal to draw to the Tribunal's attention the error which he had made in relation to where the hearing was to be held. 8 Another fact which appears in the Tribunal's records as reproduced in the appeal book should be noted. Understandably therefore the learned Federal Magistrate did not make any particular reference to it in his reasons for judgment. Importantly, the Tribunal invited the applicants to a hearing pursuant to section 425 of the Act. The relevant letter provided notice of the specified date, time and place of the hearing. The opportunity for the applicants to be heard by way of videoconference is consistent with the discretion provided to the Tribunal pursuant to section 429A of the Act, that the Tribunal may allow an appearance by an applicant by telephone or closed circuit television or any other means of communication. The words of the relevant part of the Tribunal's letter make it plain that the applicant should attend the hearing by attending at the Griffith Police Station at the address given in Griffith. Nor is there error in the Tribunal indicating to the applicants that if there was a "preference" to attend in person in Sydney, that could be arranged on request of the applicants. 11 The learned Magistrate did not see any error in the procedure adopted by the Tribunal. I respectfully agree, for the reasons that the Magistrate gave in the passage which I have quoted, with that view. 12 Section 422B of the Migration Act provides that the subdivision of the Migration Act of which s 422B forms part is taken to be an exhaustive statement of the requirements of the natural justice hearing rule in relation to the matters it deals with. One matter dealt with is that for which s 425 provides. Materially, by s 425(1) , the Tribunal must invite an applicant to appear before the Tribunal to give evidence and present arguments relating to the issues arising in relation to the decision under review. There is no doubt that the hearing offered must be a real and meaningful one, but the word "invite" in the subsection will be noted. Such an invitation was extended in this case. It is just that for reasons of confusion it was not availed of and the Tribunal knew nothing of this before making its decision. 13 In my opinion, the present case is to be contrasted with that which came before the High Court in Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597. In that case the Immigration Review Tribunal, the procedural fairness requirements for which were materially analogous, came to decide a review application in ignorance of a request which had been made on behalf of the review applicant for a later hearing date because of an inability to attend the scheduled hearing. Because of an internal error within the Immigration Review Tribunal, that letter requesting the later hearing was not drawn to the Immigration Review Tribunal member's attention before the case was decided. Later, following representations by the visa applicant's agent, the Immigration Review Tribunal did hold a further hearing and made a second decision which was in favour of the visa applicant. The High Court by majority held that the Immigration Review Tribunal had power to make that second decision. Indeed, having regard to the reasons for judgment of certain members comprising the majority, the Immigration Review Tribunal's first decision was no decision at all because a requirement of the governing provisions had not been observed. 14 Here, though, a hearing was offered. It is just that the invitation was not availed of and the Tribunal then went on to decide the case on the basis of the material which it had before it. 15 Section 426A of the Migration Act makes provision for this type of situation. (2) This section does not prevent the Tribunal from rescheduling the applicant's appearance before or from delaying its decision on the review in order to enable the applicant's appearance before it as rescheduled. The fact that, had the Appellants attended at the Griffith Police Station on the invited day, the video link might not have worked is, in the circumstances, a distraction. What is critical is the absence, and the unexplained absence, before decision, in respect of attending. 17 I have no doubt that if the Appellants had attended at the Griffith Police Station on the appointed day and if the video link did not work and if the Tribunal nonetheless went ahead to decide their case, that the Tribunal's decision would be no decision at all for the reasons given by the majority in Bhardwaj's case. That is not, though, this case. It seems to me that the Tribunal did what s 426A permitted it to do and that therefore the learned Magistrate was not in error in so regarding the Tribunal's actions. 18 There remains then the first ground of appeal. The difficulty with that is that the Tribunal was not obliged, just on the basis of a statement which I have set out, to grant the Appellants' a protection visa. This was so because the Appellant had provided insufficient information and detail in support of his claims. The Tribunal was clearly aware that the Appellant was a Hindu who claimed to fear harm at the hands of Muslims but could not be satisfied no the "bare outline of claims" it had before it that the Appellant was someone to whom Australia owed protection obligations. 19 The granting of a protection visa requires the engendering of a state of satisfaction on the part of the Minister or his delegates. There are authorities in this Court which stand, with respect unremarkably, for the proposition that it would be difficult for the Tribunal to achieve the requisite degree of satisfaction, standing as it does in the place of the Minister if an applicant does not put before the Tribunal sufficient information, for example, because of an absence of attendance at a hearing. Without that "satisfaction" engendered on the part of the Tribunal, the visa application has to be rejected --- see amongst the authorities for this Minister for Immigration and Multicultural and Indigenous Affairs v VSAF of 2003 [2005] FCAFC 73 per Black CJ, Sundberg and Bennett JJ. 20 Indeed, some judges have gone so far as to regard the rejection of an application in that circumstance as an "inevitable consequence" of non-attendance at a hearing --- see NAFX v Minister for Immigration and Multicultural Affairs [2004] FCAFC 287 at para 5. The bare statement provided in the visa application did not, for example, provide any basis for satisfaction in respect of an inability for the Appellants to secure state protection. 21 In these circumstances and hard though it may be, the result on the appeal is, in my opinion, clear. It must, for reasons which I have given, be dismissed. The appeal is dismissed. 2. The Appellants are to pay the First Respondent's costs of and incidental to the appeal which are fixed in the amount of $2600. 23 I especially thank the Appellant for some very thought-provoking submissions and I should also as a matter of fairness record my thanks for the assistance provided on behalf of the Minister by especially Ms Johnson. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. | protection visa where invitation to attend at tribunal hearing extended where mistaken attendance at incorrect place for tribunal hearing where mistake not drawn to tribunal's attention before making of decision where tribunal's decision valid migration |
The Tribunal by its decision affirmed the decision of a delegate of the appellant refusing to grant a visa to the visa applicant, who is sponsored by his brother, the respondent. The appellant contends in his notice of appeal that the learned Federal Magistrate erred in his application of clause 138.216 of the Migration Regulations 1994 (Cth), firstly by considering whether the visa applicant had been employed as a Business and Information Professional, which was the subject of a finding of fact by the Tribunal and not open to review; secondly, by finding that the Tribunal asked itself the wrong question or failed to give consideration to a relevant consideration, as whether the applicant was utilising "higher order skills" was not relevant; and thirdly, by misapprehending the necessary qualifications and the actual employment requirements that the visa applicant must satisfy with respect to the nominated skilled occupation. The appellant also says that the learned Federal Magistrate erred in finding that the Tribunal's conclusion was one no reasonable Tribunal would have reached, on the basis of the Tribunal failing to act upon unchallenged evidence, and on the basis of the Tribunal incorrectly focusing on a "tasks" level analysis rather than a "skills" level assessment. The appellant finally says that the learned Federal Magistrate erred in finding that the Tribunal, in asking whether the visa applicant was a Bank Worker / Credit and Loans Officer rather than whether he was a Business and Information Professional, asked itself the wrong question. He listed his nominated occupation as "Business and Information Professional". It should be noted that some of the documents in the proceeding put the application date as 21 April 2005, notwithstanding that it is stamped 19 April 2005 (see p 277 of the Appeal Book). Mr Hossain was born in February 1972. He is a citizen of Bangladesh, where he currently resides. According to his visa application, he holds a Bachelor of Arts and a Master of Social Science from Bangladesh National University and a Diploma in Computer Science and Technology from the Bangladesh National Training and Research Academy. He achieved a score of 5.0 (of a possible 9) under the International English Language Testing System ("IELTS"). Mr Hossain stated on his application that he had been employed since August of 2001 at the Arab Bangladesh Bank ("the Bank"), as an Assistant Officer. By the Gazette of 1 April 2005 the Minister specified "Business and Information Professional" as a skilled occupation for the purposes of Regulation 1.03. "Bank Worker" and "Credit and Loans Officer" were not gazetted as skilled occupations. Clause 138.111 defines "employed" as having the meaning set out in sub-regulation 2.26A(7) of the Regulations which defines "employed" as "engaged in an occupation for remuneration for at least 20 hours weekly". The effect of regulation 138.216(1)(b) is that an applicant for that subclass must, apart from holding the relevant qualifications and academic credentials for the skilled occupation, also amass sufficient points to satisfy that criterion by working in the relevant occupation for a certain period of time. Fifty points have been specified as available points for the description Business and Information Professional. Mr Hossain's application fell to be assessed by the decision-maker in accordance with sub-clause 138.216(1)(b). He must have been employed for a period of, or for periods totalling, at least 24 months in the period of 36 months immediately before the day on which the application was made. The Australian Standard Classification of Occupations (ASCO) is a publication of the Australian Bureau of Statistics (ABS). The ABS defines ASCO as "a skill-based classification which encompasses all occupations in the Australian work force". ASCO sets out the following descriptions of Bank Worker, Credit and Loans Officer, and Business and Information Professional. Bank Worker has the ASCO classification code 6143-11. It falls within the major group "Intermediate Clerical, Sales and Service Workers"; the sub-major group "Intermediate Clerical Workers"; the minor group "Intermediate Numerical Clerks"; and the unit group "Bank Workers". The level below unit group in the ASCO classification is "Occupation", which in this case is "Bank Worker". It falls within the major group "Advanced Clerical and Service Workers"; the sub-major group "Other Advanced Clerical and Service Workers"; the minor group "Advanced Numerical Clerks"; and the unit group "Credit and Loans Officers". "Credit and Loans Officer" is the Occupation. In some instances relevant experience is required in addition to the formal qualification. It falls within the major group "Professionals"; the sub-major group "Business and Information Professionals"; the minor group "Miscellaneous Business and Information Professionals"; and the unit group "Other Business and Information Professionals". "Business and Information Professional nec" is the Occupation. The List of Abbreviations in ASCO shows that "nec" means "not elsewhere classified". In some instances relevant experience is required in addition to the formal qualification. Most occupations in this sub-major group have a level of skill commensurate with a bachelor degree or higher qualification or at least 5 years relevant experience. In some instances relevant experience is required in addition to the formal qualification. Tasks performed by Business and Information Professionals typically include collecting, analysing and interpreting information on the financial standing, cost structures and trading effectiveness of organisations; conducting audits and investigations and preparing financial statements and reports; establishing, controlling and reviewing treasury systems and policies; supporting business growth and development through the preparation and execution of marketing objectives, policies and programs; acquiring and updating knowledge of employer's and competitors' products and understanding of market conditions; developing methods to improve and promote business operations and effectiveness; designing or advising on computing systems and developing computer hardware and software; developing, implementing and administering staff training programs, information systems, or situational and policy reviews; and collecting, preserving, organising and disseminating information. The VETASSESS assessment is a skilled migration assessment. It is dated 28 February 2005. Based on the documents provided, the qualification described above meets the requirements of your nominated occupation and is assessed as suitable for migration purposes. " On 24 October 2005 Sharma Lawyers again wrote to the Department, enclosing a letter from Mr Payer Ahmed, Assistant Vice President and Manager of the Bank, confirming that Mr Hossain was employed at the Bank full-time and briefly setting out his duties; a letter from Mr Ahmed stating that Mr Hossain's command of English was satisfactory; a copy of Mr Hossain's passport; a certificate of completion for a course in spoken English; and a letter from the Bangladesh National University confirming that the medium of instruction in Mr Hossain's political science degree was English. On 7 February 2006 Sharma Lawyers again wrote to the Department enclosing a certificate showing that Mr Hossain had completed a course in General English with the British Council, and an IELTS Test Report Form showing a score of 5 for listening, reading, writing, and speaking. On 12 April 2006 a representative of the Department wrote to Sharma Lawyers inviting Mr Hossain to provide further information. The letter notifies the solicitors that a Department official had contacted the Bank by telephone and had been told that Mr Hossain did not supervise any staff and that his typical duties included account opening, local remittance, telegraphic transfers, and working in the demand and draft department. The management staff who provided that information confirmed that they considered Bank Worker to be the best description of Mr Hossain's employment. On 29 June 2006 Sharma Lawyers again wrote to the Department, attaching an employment reference letter written by Payer Ahmed, Senior Assistant Vice President and Manager of the Bank. It confirms the date on which Mr Hossain took up employment at the Bank and explains that in previous contact with the Department only Mr Hossain's current tasks were discussed rather than the tasks he had undertaken in various other positions in the Bank. A delegate of the Minister of Immigration and Citizenship made a decision on 23 January 2007 to refuse the visa on the basis that Mr Hossain did not satisfy clause 138.216 of Schedule 2 to the Migration Regulations 1994 because he had not been employed in a skilled occupation. The delegate's opinion was that Mr Hossain's position in the Bank was not Business and Information Professional, but Bank Worker or Credit and Loans Officer, which are not skilled occupations. On 15 June 2007 Sharma Lawyers wrote to the Tribunal enclosing submissions and Mr Hossain's previous statutory declaration. Mr Hossain explains in his statutory declaration that the reference letters previously provided by the Bank were in very general terms and did not set out his responsibilities in detail. He attaches a further description of his position. He states that he believes his duties correspond more closely with Business and Information Professional than with Bank Worker, and that the duties of Bank Workers as described are undertaken by clerical staff in the Bank. The correspondence also attaches a letter from Mr Ahmed. Mr Ahmed states that the employees of the Bank are divided into clerical staff, junior officers, senior officers, and management staff. Mr Hossain began employment with the Bank on 20 August 2001 as an internee. He took up a position as an Assistant Officer in May 2002 and was confirmed as a permanent employee in November 2002. He supervises up to three employees. He has worked in a number of departments in the Bank. He explains that as officers become more senior, they cease to be required to undertake routine clerical duties. Mr Ahmed opines that the duties Mr Hossain performs fall into the category of Business and Information Professional. On 17 August 2007 Sharma Lawyers again wrote to the Tribunal enclosing a statutory declaration of Mr Kamruzzaman, Mr Hossain's previous statutory declaration, and the letter from Mr Ahmed referred to above. The letter suggests the Tribunal might make a decision without a hearing because the letter from Mr Ahmed and Mr Hossain's VETASSESS assessment sufficiently address the question of Mr Hossain's duties. Mr Kamruzzaman's statutory declaration is to the effect that he is in regular contact with Mr Hossain and is aware of his employment at the bank and the changes to his responsibilities from time to time. He confirms that Mr Hossain's statutory declaration and the letter from the bank is consistent with the information given to Mr Kamruzzaman by Mr Hossain. Also attached to the letter of 17 August 2007 are a letter dated 9 August 2001 offering Mr Hossain an internship at the Bank; a letter of acceptance from Mr Hossain; a letter appointing Mr Hossain an Assistant Officer; and a document showing that Mr Hossain had been confirmed as a permanent employee. The Tribunal wrote to Mr Kamruzzaman on 17 and 30 October 2007 inviting him to appear on 16 November 2007. Mr Kamruzzaman appeared on that date. Mr Hossain also appeared by telephone. The matter was listed for further hearing on 3 December 2007 but quickly adjourned when no interpreter was available. There was a further hearing at which Mr Kamruzzaman and Mr Hossain both appeared on 4 January 2008. On 18 January 2007 Sharma Lawyers wrote to the Tribunal requesting an extension of time to lodge submissions. The submissions were lodged on 24 January 2008. On 28 April 2008 the Tribunal wrote to Mr Kamruzzaman to notify him of its decision to affirm the decision of the Department. The Tribunal referred to the following documents submitted to it on Mr Hossain's behalf: A skilled-migration assessment by VETASSESS dated 28 February 2005 certifying that Mr Hossain's qualifications had been assessed as suitable for his nominated occupation, for migration purposes; A letter from the Bangladesh National University dated 20 March 2005 showing that the medium of instruction for his Masters degree was English; An IELTS Test Report Form showing a score of 5 for listening, reading, writing, and speaking; Letters of 5 April and 12 October 2005 from Mr Ahmed stating that Mr Hossain had been employed as an "Assistant Officer" since 20 August 2001 and setting out the duties ascribed to that position; Letter from the Department to Sharma Lawyers dated 12 April 2006 advising that Departmental officers had contacted the Bank by telephone and been informed by senior management, relevantly, that Mr Hossain's tasks were more accurately described as those of a Bank Worker; Letter dated 14 May 2006 stating that the Bank's previous description of Mr Hossain's employment had been provided by referring to his present job description rather than his previous working experience, and that he had been employed in various positions; Statutory declaration sworn by Mr Hossain on 10 June 2007 (as attached to the letters from Sharma Lawyers dated 15 June and 17 August 2007, summarised above); Letter from Mr Ahmed dated 11 June 2007 (as attached to the letters from Sharma Lawyers dated 15 June and 17 August 2007, summarised above); Letters from the Bank offering Mr Hossain an internship and appointing him as Assistant Officer; Statutory declaration sworn by Mr Kamruzzaman on 27 June 2007 (as attached to the letter from Sharma Lawyers dated 17 August 2007, summarised above). The Tribunal discussed evidence given before it by Mr Kamruzzaman and Mr Hossain. Mr Hossain said he was currently employed in the clearing department, clearing cheque deposits. He essentially stated that he promoted personal loans and term deposits. The Tribunal asked Mr Hossain to clarify the meaning of a number of the tasks in his position description. The Tribunal then read to Mr Hossain the tasks of a Bank Worker and Credit and Loans Officer and asked him how his position differed from those occupations. Mr Hossain responded that although some of his tasks did correspond with those of a Bank Worker or Credit and Loans Officer, he also had other responsibilities, such as business dealings, public relations, research and development, product promotion, and customer enquiries. The Tribunal found that Mr Hossain's explanations of the tasks assigned to his position closely aligned them with the tasks of a Bank Worker or Credit and Loans Officer. He was unable to meaningfully distinguish his responsibilities from the tasks of a Bank Worker or Credit and Loans Officer. The Tribunal accepted that Mr Hossain was employed by the Bank for 24 months in the 36 months immediately preceding the visa application; that he was positively assessed by VETASSESS; and that the tasks he undertook were at a significantly higher level than those performed by clerical staff. However, the Tribunal held that it was not satisfied that Mr Hossain had worked in any skilled occupation: it characterised his position at the Bank as that of a Bank Worker or Credit and Loans Officer. Those occupations were not skilled occupations at the time the application was lodged. The Tribunal held that it was not satisfied Mr Hossain had been employed in a skilled occupation for a period of two years in the three years preceding the day of the application, and thus that he did not meet clause 138.216(1) or (2) of the Migration Regulations . The Tribunal affirmed the delegate's decision on 16 April 2008. It was alleged that the Tribunal had fallen into jurisdictional error by failing to correctly apply the relevant regulations; finding that Mr Hossain did not satisfy clause 138.216; and failing to take account of relevant material, particularly the criteria for Business and Information Professionals. With regard to the first ground, the applicant contended that the Tribunal considered the wrong issue when it found that Mr Hossain "[had] not been employed in a skilled occupation" rather than determining whether he was employed in the skilled occupation nominated in the application. The Tribunal had allegedly considered only the tasks required for Bank Workers and Credit and Loans Officers and failed to take into account the tasks required of Business and Information Professionals. It had also, in the applicant's view, not taken into account evidence that Mr Hossain's duties extended beyond those of a Bank Worker. Federal Magistrate Burnett found that the Tribunal had noted the applicant's assertion that Mr Hossain's responsibilities were wider than those of a Bank Worker, and also supporting evidence including that of Mr Ahmad. However, the Tribunal did not consider whether those higher responsibilities called for the application of higher-order skills. His Honour noted the particularity of the ASCO definitions and was of the opinion that the "skill levels" and "tasks" are significant and "set the parameters of relevant matters to be considered". The definition of Business and Information Professionals is essentially a negative one --- Business and Information Professionals not elsewhere classified --- and, unlike other definitions, it does not contain a task list. Federal Magistrate Burnett held that it was not apparent that the Tribunal considered the tasks of a Business and Information Professional. Given the lack of detail in the definition the Tribunal should have given particular consideration to the skill level associated with that occupation, particularly in comparison with Bank Workers and Credit and Loans Officers. Those two occupations required only certificate-level training; the level of skill required in the occupation could be assumed to be consistent with that training. The Tribunal did not discuss this matter. Federal Magistrate Burnett observed that what the Tribunal was to consider was not any particular responsibility, but rather "the relationship between skill levels and duties and thus whether...the skill level associated with a Business and Information Professional would be exercised in the performance of the occupation. The Tribunal failed to do this. In my view this omission is fatal to the Tribunal's decision because it bespeaks either the identification of a wrong issue resulting in the Tribunal asking itself the wrong question or of it ignoring relevant material. The Tribunal's conclusion was unreasonable in that it was against the weight of the evidence. In relation to the third ground, Burnett FM agreed with the applicant that the Tribunal asked itself whether Mr Hossain was a Bank Worker or Credit and Loans Officer rather than whether he was a Business and Information Professional, and that the Tribunal thereby asked itself the wrong question and was thus in error. On 19 November 2008 Burnett FM ordered that the Tribunal's decision be annulled and set aside and the application remitted to the Tribunal. For the sake of completeness, it should be noted that the orders annulling the Tribunal's decision were amended on 3 December 2008 to alter the amount of costs payable from $500 to $5,000, apparently due to a typographical error. His Honour found, in essence, that the Tribunal committed a jurisdictional error by failing to consider whether Mr Hossain's tasks required him to exercise his tertiary-level skills. The appellant submits that the learned Federal Magistrate erred by finding that the Tribunal was required to consider whether Mr Hossain was applying higher-order skills. The appellant says the question the Tribunal was required to consider was whether Mr Hossain was employed as a Business and Information Professional, not whether he was utilising some of his skills arising out of his qualifications. The appellant submits that the Tribunal undertook the required task by examining Mr Hossain's responsibilities, ascertaining his description of the elements of those responsibilities, and then considering whether those duties went beyond the tasks of Bank Workers and Credit and Loan Officers. The appellant submits that this is a factual finding. In Shahid v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 1412 , Kiefel J considered a Tribunal finding as to whether a visa applicant's duties were those of a skilled occupation under clause 138.216. Her Honour considered such a finding to be one of fact. The appellant says the Tribunal's finding that Mr Hossain was a Bank Worker was a finding of fact open to it on the evidence. The respondent submits that Shahid is distinguishable on the facts. However, her Honour's description of a finding under clause 138.216 as a finding of fact is not dependent on the facts of the case. A decision as to whether Mr Hossain's tasks are those of a skilled occupation requires an examination of those tasks in parallel with the tasks of the skilled and non-skilled occupations under consideration, and a conclusion as to which occupation more closely aligns with his tasks. That is a factual matter and thus not open to review. Clause 138.216 requires the visa applicant to be employed in "a skilled occupation" for a specific period of time. A skilled occupation is not an occupation in which higher-order skills are utilised. A skilled occupation is an occupation which has been specified by the Minister in an instrument in writing, as a skilled occupation. It was proper for the Tribunal to examine the tasks Mr Hossain actually performed against ASCO classifications to determine which of those classifications most closely described Mr Hossain's actual employment. Having determined that his responsibilities were most closely aligned with a Bank Worker or Credit and Loans Officer rather than with a Business and Information Professional, it was proper for the Tribunal to conclude that Mr Hossain had not been employed in a skilled occupation. Whether Mr Hossain was utilising his tertiary-level skills in undertaking the tasks of a non-skilled occupation is not relevant to that determination. The learned Federal Magistrate erred in finding that the Tribunal had committed jurisdictional error by failing to consider whether Mr Hossain's tasks required him to exercise his tertiary-level skills. In relation to the second ground of appeal, the appellant says that the learned Federal Magistrate erred in finding that the Tribunal's conclusion was one, no reasonable Tribunal could have reached, in reliance on the failure to act upon unchallenged evidence, and on the basis that the Tribunal incorrectly focussed on the "tasks" level rather than the "skills" level. The respondent submits that the Tribunal's finding that Mr Hossain did not satisfy sub-clause 138.216 was contrary to the evidence, which it says was to the effect that Mr Hossain worked in the nominated occupation and undertook the duties required. The appellant contends that the weight to be given to the evidence is a matter for the Tribunal. It says the Tribunal properly and fully examined the tasks listed as the responsibilities of a Business and Information Professional, a Bank Worker, and a Credit and Loans Officer, and concluded that the responsibilities Mr Hossain had engaged in did not go beyond those of a Bank Worker or Credit and Loans Officer. The appellant submits that this finding of fact was open to the Tribunal on the evidence. The Tribunal expressly took into account the evidence submitted by the visa applicant. It is correct to say that the visa applicant's evidence was unchallenged. However, it was not the only evidence before the Tribunal. Also the Tribunal is not required to accept or act upon unchallenged evidence. The weight to be placed on particular pieces of evidence is a matter for the Tribunal ( Lee v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 464). A review of the material before the Tribunal and the Tribunal's reasons demonstrate that the Tribunal acted upon the evidence put forward by Mr Hossain. The decision sets out in considerable detail the tasks Mr Ahmad ascribes to Mr Hossain in his letter of 11 June 2007 (p 6). It also discusses Mr Hossain's evidence as to the correct interpretation of the descriptions of his tasks. Based on that evidence, the Tribunal came to the conclusion that the tasks as described by Mr Ahmad and Mr Hossain were those of a Bank Worker or Credit and Loans Officer. Federal Magistrate Burnett found that the Tribunal had committed a jurisdictional error by focusing on Mr Hossain's tasks rather than his skills. Clause 138.216 does not specify whether, in considering whether an applicant's occupation is a skilled one, a decision-maker is to give primary weight to the applicant's skills, or to the tasks actually undertaken. The ASCO classifications for Bank Worker and Credit and Loans Officer contain two types of information about those occupations: "Skill Level" and "Tasks Include". The ASCO classification for Business and Information Professionals contains information about "Skill Level" and "Occupations in this group include", but not about tasks. However, "skills" is to some extent a misnomer. The skills section of the classifications does not specify a set of skills applicants must possess in order to be able to undertake the occupation. Instead, it contains information as to the qualifications required for entry to that occupation. The introductory notes to the Second Edition of the ASCO classification system confirm that the criteria used to measure skill level are formal education and / or training, and previous experience. In order to determine whether an applicant's employment fits into a particular ASCO classification, a decision-maker is required to consider all of the details set out in that classification. However, in making such a decision, the skills that are to be considered are those set out in the "Skill Level" section of the classification to which the applicant's position is being compared. That is, the decision requires a consideration of whether the applicant holds the qualifications or experience prescribed for that occupation. Although the Tribunal did not expressly analyse the application in terms of the "skills" criterion, it is clear from a consideration of the Tribunal's reasons that it accepted that Mr Hossain had the relevant qualifications based on his certificates and on the VETASSESS assessment. The Tribunal, in substance, assessed and determined the particular question of "skills" for the purposes of the ASCO classifications, in reaching its decision on the facts. It was necessary for the Tribunal also to consider the "tasks" section of the classifications, and this examination is set out in some detail (p 10). The Tribunal's decision was not "so devoid of any plausible justification that no reasonable body of persons could have reached [it]" ( Andary v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 211). The learned Federal Magistrate erred in concluding that no reasonable Tribunal would have reached such a conclusion. The third ground of appeal is that the learned Federal Magistrate erred in finding that the Tribunal, in asking whether the visa applicant was a Bank Worker / Credit and Loans Officer, rather than whether he was a business information professional, asked itself the wrong question. The appellant submits that the Tribunal considered the ASCO descriptions of a Bank Worker and Credit and Loans Officer as part of determining whether Mr Hossain was actually employed as a Business and Information Professional. It submits that it was reasonable for the Tribunal to ask whether Mr Hossain's position could be described as one of those occupations because Mr Hossain worked in a Bank. The appellant also contends that it was reasonable for the Tribunal to focus on those occupations because the description of Business and Information Professional is not of great assistance. The appellant further says that the Tribunal did not need to enquire further into the responsibilities of a Business and Information Professional because Mr Hossain's tasks fitted exactly within the description of a Bank Worker or Credit and Loans Officer. It is clear from the Tribunal's decision that it did emphasise the comparison between Mr Hossain's duties and those of a Bank Worker or Credit and Loans Officer. However, the Tribunal did consider the description of a Business and Information Professional sufficiently to engage a comparison between Mr Hossain's tasks, the tasks of a Business and Information Professional, and the tasks of a Bank Worker or Credit and Loans Officer, in order to determine the question before it. It focused on Bank Worker and Credit and Loans Officer because it found that those occupations corresponded more closely with Mr Hossain's duties. Accordingly, his Honour erred in concluding that the Tribunal asked itself the wrong question. Accordingly, the appeal is to be allowed and the decision of the Federal Magistrates Court of 19 November 2008 is to be set aside. The decision of the Migration Review Tribunal is reinstated. The respondent shall pay the costs of and incidental to the appeal and the hearing before the Federal Magistrates Court. I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of the requirements of a permanent skilled australian-sponsored (migrant) (class bq), schedule 2, sub-class 138, migration regulations 1994 (cth), visa application consideration of the criteria applicable to such an application migration |
I had in mind that those costs would be assessed on a party and party basis. 2 Subsequently, the respondent intimated that it wished to be heard in support of an application that costs be paid on an indemnity basis, either from the date of the commencement of the proceeding or, alternatively, from a date shortly after it sent what it regarded as a Calderbank letter. However, it opposes any order that such costs be paid on an indemnity basis. 5 The principles that govern the award of costs in this Court are well settled. Section 43(2) of the Federal Court of Australia Act 1976 (Cth) confers upon the Court a wide discretion which must, however, be exercised judicially: Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151 at 152 per Black CJ. Detailed provisions in relation to costs are to be found in Order 62 of the Federal Court Rules. These are predicated upon the assumption that costs orders will normally be on a party and party basis. However, it is clear that the Court has a discretion under s 43 in appropriate cases to award costs on some other basis. 6 There is a useful discussion by Sheppard J of the principles under which indemnity costs can be ordered in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225. There should be present some special or unusual feature in the case to justify a departure from the usual order that costs be paid on a party and party basis. Sheppard J set out some examples of such features. They included the bringing of proceedings in wilful disregard of known facts or clearly established law, the making of allegations that ought never to have been made, and an imprudent refusal of an order to compromise. Nonetheless, it must be remembered that each case has to be considered in the light of its own particular facts and care must be taken not to circumscribe the broad discretion as to costs by reference to closed categories. 7 Indemnity costs have been awarded on the basis of actions and/or defences maintained without a proper foundation. See, for example, Davids Holdings Pty Ltd v Coles Myer Ltd (1995) ATPR 41-383 and Ogawa v Spender [2006] FCAFC 68 ; (2006) 151 FCR 228. 8 It was submitted on behalf of the respondent that there were a number of special features that warranted an award of indemnity costs in its favour. The applicant's claim was essentially based on breaches of the Copyright Act 1968 (Cth). It claimed that the respondent, by the design and construction of the Villa View home, substantially reproduced and thereby infringed its copyright in the designs of two of its project homes, the Urban and the Seasons. 9 By letter dated 18 April 2006, written in response to the applicant's letter of demand dated 28 March 2006, the respondent denied having infringed the applicant's copyright. In particular, the respondent claimed that the Villa View had been designed through the evolution of a number of plans created by the respondent, which were made without reference to the applicant's plans. These included the respondent's First Villa Grand and Second Villa Grand. Copies of these earlier plans were attached to the respondent's letter as were copies of hand-drawn sketches showing how the Villa View plan had evolved from these earlier designs. That was the defence relied upon by the respondent in the trial of this proceeding. It was the defence upon which the respondent eventually succeeded. 10 According to the respondent, despite it having even at that stage provided solid evidence of the independent creation of the Villa View design, the applicant persisted with its claims and issued the proceeding in this Court. 11 By letter dated 26 June 2006, the respondent reiterated that it had created the Villa View design independently and without reference to any of the applicant's designs. Further detail was provided as to how the Villa View had evolved from earlier designs that had been created by the respondent. In this letter, the respondent advised the applicant that it considered the applicant's case to be misconceived and hopeless and warned the applicant that, if successful in the proceeding, it would seek an order for indemnity costs. 12 The respondent submitted that even if it could not be said that the applicant had behaved unreasonably in commencing the proceeding, it should not have continued with the litigation once discovery had been given. On 30 August 2006 the respondent filed a list of documents, which made it clear that the Villa View had been based on previous designs and had been created independently. According to the respondent, the discovered documents included a number of plans, all of which showed a clear design progression leading from what were described as the Mawson Lakes plans through to the Villa Grand and ultimately the Villa View. The respondent submitted that, at least by that stage, the applicant should have recognised that it had no viable claim for breach of copyright. The applicant had no evidence of copying, conscious or otherwise, and could only hope to build a case based on cross-examination of the respondent's witnesses. Such a case could only be described as speculative. 13 According to the respondent, even that slim hope must have dissipated once the respondent's evidence was filed on 15 May 2007. This set out clearly on oath the evidence of the three key individuals associated with the design of the Villa View, namely, Mr Di Natale, Mr de Weerd, and Mr Lazarovski. They each swore that the Villa View was based on changes made to earlier plans designed by the respondent over an extended period. They denied having seen, or having been aware of, any of the applicant's plans, or having inspected any of its homes: cf Barrett Property Group Pty Ltd v Metricon Homes Pty Ltd (2007) 74 IPR 52. 14 The respondent submitted that by that point it should have been obvious to the applicant and its advisers that its case could only succeed on the basis of subconscious copying and that this depended upon establishing sufficient points of similarity between the parties' plans to enable that inference to be drawn. However, such a case would be difficult to mount in the face of a credible and convincing explanation, supported by a clear documentary trail, of how the Villa View had independently evolved from the respondent's own earlier plans. 15 Finally, the respondent relied upon what it described as a Calderbank letter dated 17 August 2007. The purpose of such a letter is, of course, to encourage the recipient to consider carefully the consequences of proceeding further with the litigation. The party seeking a special costs order must show that the rejection of the offer that the letter contained was so unreasonable that the usual order should not be made. 16 The letter of 17 August 2007 outlined the matters referred to above, as well as some additional matters, and warned the applicant that it would seek indemnity costs at the conclusion of the proceeding if, as it anticipated, the applicant failed. It warned the applicant that there was no basis upon which the respondent's case of independent creation could properly be challenged. It offered to accept the sum of $35,000 as partial recompense for what it asserted were the actual costs incurred to that date. The offer was open for seven days. It was not accepted. 17 The applicant disputed the respondent's contention that its case was always built on speculation and ought to have been seen as having no chance of success. It submitted that it was all very well to view matters in this way with the benefit of hindsight. It had relied upon the unusual level of publicity that its homes had generated as the basis for an inference that the respondent had access to at least its broad designs, if not its detailed plans. That would then allow for the inference of subconscious copying, a recognised and legitimate head of copyright infringement. 19 According to the applicant, the respondent's pre-trial denials of knowledge of the applicant's designs, and its denials of deliberate use of those designs, while ultimately accepted by the Court, were not necessarily determinative. The respondent might have been found to have infringed the applicant's copyright unwittingly. That was the point of the allegation of subconscious copying. 20 Put simply, the applicant submitted that although it had been unsuccessful, it could not be said that its claim was doomed to fail or that it was so unreasonably maintained as to warrant a departure from the usual rule as to costs. In that regard, the applicant noted that, under cross-examination, its independent expert, Mr Wines, had resiled significantly from the evidence that he gave in chief. This could not reasonably have been anticipated and, according to the applicant, represented one of the ordinary vicissitudes of litigation. It goes without saying that the trial of any proceeding involves risks of this kind. 21 The applicant referred to Dresna Pty Ltd v Linknarf Management Services Pty Ltd (in liq) (No 2) [2006] FCA 755 , where I said at [18] that the Court should not readily be persuaded that a case had no chance of success. The case in question had failed and, with hindsight, it might well have been anticipated that this was precisely what would occur. Nonetheless, there were some imponderables. 22 With regard to the Calderbank letter, the applicant submitted that the making of such an offer, and its rejection, did not of itself justify a special order for costs. To justify such an order, the respondent bore the onus of establishing that the rejection of the offer was "imprudent" or "plainly unreasonable": Black v Lipovac (by his next friend Lipovac) [1998] FCA 699 ; (1998) 217 ALR 386. It was also necessary to consider whether, in all the circumstances, the offer by the respondent represented any real element of compromise or whether it was an "offer to capitulate" made essentially to trigger a possible claim at a later time for indemnity costs. 23 The applicant referred to Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (No 2) [2002] FCA 224 ; (2002) 190 ALR 121 , where I observed that rejection of a reasonable offer was not the same as an unreasonable refusal to compromise. It was the latter that the respondent was required to establish. 24 The applicant also submitted that the offer made to it by the respondent, namely to withdraw and pay the respondent $35,000, might be viewed as not constituting a genuine Calderbank offer. That is particularly so in the light of doubts expressed in some of the authorities as to whether a "walk-away" offer can properly be characterised as an offer of compromise. The applicant noted that, despite an assertion in the supposed Calderbank letter that the sum of $35,000 was significantly less than outgoings already incurred, there was no evidence to support that statement. It submitted that it had not acted unreasonably in refusing to accept what it justifiably regarded as an ungenerous offer. 25 The present application is finely balanced. The respondent has acted reasonably and responsibly in pointing out to the applicant, from the outset, the weaknesses in the applicant's case. It has openly flagged its defence and repeatedly warned the applicant that it would seek indemnity costs if that defence ultimately succeeded. It also made an attempt to resolve this case without the need for a trial by its offer of 17 August 2007. 26 On the other hand, it would have been irresponsible of those advising the applicant to counsel surrender merely on the basis of assertions contained in correspondence from the respondent's solicitors. The matter becomes more problematic once discovery has been completed and evidence has been filed. 27 After giving this matter anxious consideration, I am not persuaded that the case brought by the applicant was so weak that it was unreasonable to pursue it. Although the documentary trail leading back from the Villa View through to the Villa Grand and ultimately the Mawsons Lake home proved to be powerful evidence in support of the respondent's denial that copying had taken place, that trail was littered with obstacles that had to be carefully navigated. The trail was not self-evident. It had to be explained and evaluated. Mr Wines only departed from his original opinion after being cross-examined at considerable length and being taken through the earlier plans in great detail. 28 Although a claim based on subconscious copying will always face obstacles, it cannot be said that such a claim lacks any chance of success. Nor can it be said that the allegations of subconscious copying were made without any foundation. I note, for example, that the respondent did not submit that there was no case to answer at the end of the applicant's evidence. Had there been no evidence to support a critical element of the applicant's case, as was suggested, such a submission might have been made. I recognise, of course, the risks associated with an election to pursue a course of that kind. 29 I do not regard the applicant's rejection of the offer contained in the letter of 17 August 2007 as having been imprudent or unreasonable. The matter might have been different had the respondent offered to pay the applicant a sum by way of compromise. Had the applicant discontinued the proceeding, it would probably have been liable for an amount similar to the $35,000 claimed in the offer. There was little by way of genuine compromise in what the respondent was prepared to accept. 30 It follows that the application for indemnity costs must be refused. The orders made on 18 June 2008 will stand. The respondent must pay the applicant's costs of and incidental to today's hearing. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg. | costs circumstances in which indemnity costs will be ordered calderbank letter whether indemnity costs should be ordered when respondent makes offer to settle if paid proportion of costs incurred practice and procedure |
3 The setting of the application was a refusal by a delegate of the respondent Minister, Fevronia Plomaritis (the second respondent), to grant Ms Tepperova an 820/801 Spouse Visa on the ground contained in s 501 of the Migration Act 1958 (Cth) that she did not pass the character test. That refusal was based upon the alleged non-disclosure of information by Ms Tepperova and her husband, Dezider Schwarzbacher, in connection with her visa application which information related to Mr Schwarzbacher's previous marital relationships and visa sponsorships. 5 According to the Application, on 13 August 2002 Ms Tepperova sought review of the delegate's decision in the Administrative Appeals Tribunal. The decision was set aside by consent on 2 October 2002 and the matter was remitted to the respondent Minister for reconsideration with the direction that the visa applicant passed the character test. 6 Ms Tepperova was held in immigration detention from 12 August 2002 until 29 September 2002. On 23 February 2003 the Department wrote to Ms Tepperova requiring payment of $2,561.55 being the cost of detention and stating, according to the Application, "that the subclass visa (820/801) could not be granted until debt [sic] is repaid or waived". Apparently the non-payment of the debt adversely affects her ability to meet the visa criteria and her ability to re-enter Australia. Ms Tepperova wished to visit relatives in Slovakia but feared she would not be allowed to re-enter Australia. 7 Ms Tepperova's initial application was in large measure both unilluminating and misconceived. No relief was sought against the third respondent. The relief sought against the respondent Minister mistakenly assumed, for some purposes, that he was the Commonwealth and for other purposes that he could be compelled to grant the visa in question. The proposed amendment added to the Application, in skeletal form, claims in negligence and for misfeasance in public office against all three respondents. Given that there was no decision to review in consequence of the Administrative Appeals Tribunal decision, I refused leave to amend. The proceeding appeared in substance to be little more than a tort claim (which was inadequately outlined), although in form it had properly invoked the jurisdiction of this Court through the s 39B of the Judiciary Act 1903 (Cth) prayer for an order of review. I required that an Amended Application and Statement of Claim be brought back and leave to file and serve these be sought. As counsel for the respondents objected to the grant of leave, I adjourned the hearing of the leave application and directed Dr Bleby for the respondents to file an outline of the objections taken to the proposed Amended Application and Statement of Claim. It emerged from the affidavit accompanying the motion that on 25 February 2005, Ms Tepperova wrote to the Department advising that she wished to withdraw her "spouse application for permanent residency in Australia". She indicated she would be returning to Slovakia permanently. 12 In light of both the Administrative Appeals Tribunal decision and the withdrawal of the visa application, the futility of the order to review claims was highlighted to the applicant's advisers. Likewise I indicated to her counsel that if misfeasance in public office claims were to be made against the respondents, it was necessary to separate out the claim made against each respondent and plead separately the ingredients of the respective claim against each respondent. In the proposed Amended Application the misfeasance claims were stated in an omnibus fashion. 13 I refused leave to file the Amended Application, but granted leave to file a fresh Amended Application and Statement of Claim by 28 March 2006. The documents were not filed until 20 April 2006. The pleading was obviously defective on its face particularly in relation (a) to how it pleaded the misfeasance tort and (b) to its failure properly to link causes of action to particular respondents. I refused leave to file and serve the Statement of Claim. 15 I indicated I would give one further opportunity to amend the Statement of Claim. I gave the respondents leave to file a fresh motion in relation to that Amended Statement of Claim. Leave was given to file and serve the Amended Application which sought a writ of mandamus requiring the Minister to issue the applicant an 820/801 Spouse Visa and damages for misfeasance in public office. At a later aborted hearing on 26 June 2006 I indicated to the applicant's solicitor that I would not entertain any further application to amend the pleadings. The respondents moved for summary judgment under s 31A(2) of the Federal Court of Australia Act or for orders striking out the Amended Application and the Amended Statement of Claim. 17 The Amended Statement of Claim retains, in large measure, material relevant only to the order of review claims made in the original Application but which are not pursued in the Amended Application. 18 Before turning to those parts of the pleading that are presently relevant, I would note the following by way of background. Mr Schwarzbacher sponsored Ms Tepperova's application for migration and, it is claimed, filled out for her as well a form 47SP which disclosed only one of his previous marriages. Ms Tepperova signed that form. At a later interview with an immigration officer, Ms Tepperova disclosed Mr Schwarzbacher's previous two marriages. In his interview, he disclosed only one. When Ms Tepperova arrived in Australia she was granted a TO-300 visa. She later applied for the 820/801 Spouse Visa. The decision of 28th June 2002 was not a bona fide exercise of powers vested in the Minister pursuant to Regulation 1.20J(2) and s 501(1) respectively of the Act, in that the decision was made for an improper purpose, namely to prevent Schwarzbacher from successfully sponsoring a third spouse. 21 Paragraph 13 of the pleading stated there was no basis for the second and third respondents' assertion that she had made a misleading statement. Both the Second and Third Respondents had the intention of causing harm to the Plaintiff for the reason set out in paragraph 12 above, and in case of the Second Respondent paragraph 10.3 above and in case of the Third Respondent paragraphs 10.1 and 10.2 above. 24 The pleading then asserted that the applicant suffered harm, loss and expense "[b]y reason of the decision and her consequent detention" and damages were claimed. 25 Paragraph 19 sought mandamus against the Minister for not considering her visa application. It nonetheless acknowledged in par 18 that she had notified the Department of her wish to withdraw her application but went on to claim that she did so under duress because she was told (a) that unless she paid her (detention expenses) debt she would not be allowed to return to Australia but (b) that that sum would not be claimed if she withdrew her application. 28 While there is some level of uncertainty as to the burden of the "no reasonable prospect" formulae in s 31A: see e.g. Vans, Inc v Offprice.Com.Au Pty Ltd [2006] FCA 137 ; this is not a case in which it is necessary to explore that formula at any length. The claims made against the first and third respondents are doomed to failure as they disclose no reasonable causes of action in any event. The Amended Statement of Claim is itself embarrassing and must be struck out under O 11 r 16. As the applicant has been given every reasonable opportunity to replead and has been given adequate forewarning of what was needed and required, I will not give leave again to further amend the Amended Statement of Claim. Rather I will order the application be dismissed. The first was that he was vicariously liable for the misfeasance tort of the second and third respondents. Accepting that an employer could be vicariously liable for such a tort: see Racz v Home Office [1994] 2 AC 45; Porter v OAMPS Ltd (2005) 215 ALR 327 at [108]; the applicant abandoned this claim when confronted with the constitutional reality in this country that public servants, such as the second and third respondents who are employed under the Public Service Act 1999 (Cth), are employees of the Commonwealth, not of the relevant portfolio Minister. 31 The Second claim was for an order of mandamus directing the Minister to issue the applicant's 820/801 Spouse Visa application which was remitted to the Minister by the Administrative Appeals Tribunal (the Statement of Claim wisely retreated to an order directing the Minister "to consider" her application). The answer to this claim howsoever cast lies in the applicant's own admission that she withdrew that application. The pleading alleges that she did so under duress but it states no cause of action that could lead to her withdrawn application being reinstated and which would activate the duty to consider the application. I would add that the conduct alleged to constitute "duress" is slight to say the least of it. In s 31A terms, this claim has no reasonable prospect of being successfully prosecuted. This was not done in the crucial par 14 of the Amended Statement of Claim. The consequence of this is that the claim against the third respondent is fatally flawed. The misfeasance alleged inhered in the decision to refuse to grant the 820/801 Spouse Visa. That was not a decision made by the third respondent. While par 14 alleges that the second respondent's decision was made on the advice of the third respondent, no separate claim has been made alleging misfeasance by the third respondent on that basis. The allegations that the third respondent intended to cause harm to the applicant (par 14(e)) relate back (i) to par 12 which relates to conduct directed at Mr Schwarzbacher, not the applicant and (ii) to par 10.1 and 10.2 which merely describes the recommendations made by the third respondent. The allegation in par 14(c) that the third respondent knew or ought to know the decision made was beyond power refers again to par 12 as also par 11. The latter of these relates to the now abandoned order of review claims and is simply not directed at what this respondent knew or ought to have known. Further it relates only to the second respondent. 33 In short, not only is no separate tort of misfeasance in public office claim pleaded against this respondent, the factual matters pleaded which in some fashion are designed to implicate him in the commission of such a tort do not carry the burden attributed to them in the assertions made in par 14. 34 The applicant has no reasonable prospect of successfully prosecuting this claim: cf s 31A(1)(b). Further, the proceeding discloses no reasonable cause of action against this respondent: cf O 20 r 2(1) of the Federal Court Rules . The claim ought be dismissed. I say "elements" for this reason. The claim made against this respondent is so compounded with that supposedly made against the third respondent that it is difficult to determine whether a claim has been pleaded against her which could survive the dismissal of the claim against the third respondent. Paragraph 14 alleges a common knowledge, intent and purpose of both respondents. The pleading does not indicate the significance of this (i.e. whether the respondents acted severally or in concert) or how it occurred other than seemingly the second respondent accepted the submission and recommendation of the third respondent. And how this produced a community of purpose to commit a dishonest abuse of public power is a matter on which the pleading is silent. 36 I have already noted that I pointed out to the applicant's counsel the need to separately plead each misfeasance claim. This was not done. I also made plain that I would not give leave to further amend the Amended Statement of Claim. The time has well and truly been reached where this proceeding stands or falls on this pleading. More than a reasonable opportunity has been given to the applicant in this regard, the moreso since she has been legally represented throughout. 37 When one considers the pleading and, in particular, the all important par 14, one can only conclude that it is internally contradictory and embarrassing (as the respondents have amply demonstrated in written submissions). It provides an unsafe and unsatisfactory platform upon which to conduct a hearing of the matter. 38 As I earlier indicated, the proceeding itself was originally for an order of review and the content of the original Application was cast accordingly. While the proceeding has metamorphosed primarily into a misfeasance tort case, it has retained much of the character of a judicial review proceeding. This is apparent in par 11 of the pleading (not reproduced in these reasons) which is directed towards showing that the decision of the second respondent refusing the visa on s 501(1) grounds was beyond power because she "misconceived her jurisdiction" in a number of pleaded respects and she "misconstrued ... the Ministerial Direction" with which she was bound to comply. While designed to demonstrate jurisdictional error, this paragraph was not designed to, and does not, address whether the second respondent knew or ought to know that her decision was beyond power. Yet it is relied on for this very purpose in par 14(c) of the Amended Statement of Claim. Far from supporting the claim made in that paragraph, par 11 is drafted in terms more consistent with the second respondent having acted honestly but mistakenly. 39 As is now well accepted, the misfeasance tort can take either of two forms. In one form (that of "targeted malice") it must be shown that the public officer in question has acted as such with an actual intent to cause injury to a person or persons. In its alternate form it must be shown either that the officer has actual knowledge both that his or her action was beyond power and would cause or be likely to cause injury, or else that the officer has acted with reckless indifference both to the possibility his or her action was beyond power and to the possibility that that action would cause or be likely to cause injury: see generally Sanders v Snell (No 2) [2003] FCAFC 150 ; (2003) 130 FCR 149 at [95] - [100] . The essence of the tort in either of its forms is the "dishonest abuse of power": L (a child) v Reading Borough Council [2001] EWCA Civ 346 ; [2001] 1 WLR 1575 at 1588. 40 Paragraphs 14(c) and (e) attempt to plead the alternative forms. Paragraph 14(e) alleges targeted malice, but seemingly does so against Mr Schwarzbacher because, notwithstanding the allegation made in that sub-paragraph that both the second and third respondents "had the intention of causing harm to the plaintiff", their reason for doing so is said to be set out (inter alia) in par 12 of the pleading. That paragraph in turn assigns to the two respondents "an improper purpose, namely to prevent Schwarzbacher from successfully sponsoring a third spouse". As Particular (a) to par 12 states "[t]he decision was directed at Schwarzbacher". 41 The other paragraph of the pleading relied upon in par 14(e) as revealing an intent to cause harm to Ms Tepperova is subpar 10.3. That sub-paragraph is simply narrative in character which, while indicating that the second respondent accepted the third respondent's submission and recommendation to refuse the visa, does not illuminate in any way her intention in so doing. 42 The alternative formulation of the misfeasance claim in par 14(c), i.e. knowingly acting beyond power while knowing there was a foreseeable risk of harm, is likewise problematic. To the extent it relies upon par 11 (to which I earlier referred) to demonstrate the knowledge of the second respondent, it is misconceived as I have indicated. This claim, then, if it is to stand must do so for the reasons set out in par 12 of the pleadings --- a paragraph which, as I have indicated, is deployed in par 14(c) to a quite inconsistent end. 43 While it may be able to be said, and Dr Bleby concedes as much, that it is possible to discern a pleaded case of misfeasance in public office against the second respondent, I am satisfied that it should be struck out. The Amended Statement of Claim is as embarrassing as it is oppressive of, and unfairly prejudicial to, the second respondent. She is entitled to be properly, fairly and intelligibly informed of the basis of the claim against her. I have given considerable latitude to the applicant to salvage, first, an application and, then a pleading which were in large measure misconceived in the claims made and which, in the case of the pleading, was deficient, uncertain and contradictory. I would add that had I not taken this course I would in any event have been inclined to give judgment against the applicant on this claim as well under s 31A. The pleading discloses a claim with obvious flaws and little by way of prospect. 44 Counsel for the applicant has sought a further opportunity to replead at least the claim against the second respondent in an acceptable form. I am not prepared to do this. Having already dismissed the claims against the first and third respondent, I will order that the Amended Statement of Claim as it relates to the second respondent be struck out. I will, in consequence, order that the application be dismissed and that the applicant pay the respondents' costs including reserved costs. | applicant filed original application seeking order of review and damages grounds of relief in application flawed leave granted to amend application amended application sought claim in negligence and misfeasance in public office no live decision to review opportunity provided to further amend application and statement of claim leave refused leave granted to file fresh amended application and statement of claim respondents indicated deficiencies in amended statement of claim leave granted to amend statement of claim notice of motion whether claims made against first and third respondents disclose reasonable cause of action s 31a federal court of australia act 1976 (cth) whether amended statement of claim internally contradictory and embarrassing o 11 r 16 federal court rules application dismissed. practice and procedure |
Prior to the onset of the symptoms of which Mr Croker complains he held various jobs, the last of them being a casual job as a butcher. In early 1993 Mr Croker unsuccessfully attempted clerical work. No causal pathology that explains Mr Croker's symptoms has ever been identified. 2 In March 1994 Mr Croker applied for disability support pension ('DSP'). He was assessed in August 1994 as having a 10% impairment from a somatoform pain disorder and 15% impairment from pain in his hands that caused difficulty with lifting. He was granted a DSP and continued to receive it for twelve years. 3 By letter dated 6 September 2005 Mr Croker was notified that payment of his DSP would cease on 18 October 2005. By a letter to the Secretary, Department of Family and Community Services, Mr Croker requested a review of the decision to terminate his DSP. On 2 December 2005 an Authorised Review Officer ('ARO') affirmed the termination decision. On 3 January 2006 Mr Crocker lodged an appeal from the decision of the ARO with the Social Security Appeals Tribunal ('SSAT'). The SSAT affirmed the decision of the ARO. Mr Croker applied to the Administrative Appeals Tribunal for review of the decision of the SSAT. On 15 April 2007 the AAT affirmed the decision of the SSAT. 4 This is an appeal under s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) ('AAT Act') from the decision of the AAT. An appeal under s 44(1) is an appeal on a question of law. Schedule 1B also contains an introductory section that explains the purpose of the tables and the proper approach to assessing impairment in relation to work by reference to them. In particular the introduction stresses that the tables are function based rather than diagnosis based; that is, each loss of function is to be assessed, whether caused by one or more medical condition, but the double assessment of a single loss of function is to be avoided. It accepted an expression of expert opinion that the appropriate diagnosis in respect of Mr Croker's hand condition was 'undifferentiated somatoform disorder' and that the diagnosis of RSI was simply an alternative explanation or diagnosis for that condition. 10 The Tribunal took the view that Mr Croker's functional impairment should properly be understood as involving activity limitations which he has imposed in order to forestall or avoid the recurrence of the symptoms he describes as RSI. It therefore determined that his impairment was a behavioural pattern which has been induced by his undifferentiated somatoform disorder. The Tribunal concluded that the appropriate table for the assessment of Mr Croker's functional impairment was 'Table 6 --- Psychiatric Impairment' rather than 'Table 3 --- Upper Limb Function' . 11 The Tribunal found that the evidence demonstrated that Mr Croker's somatoform disorder had significantly disrupted his ability to work. Having regard to the terms of Table 6, the Tribunal concluded that the appropriate rating for Mr Croker's impairment was 20 points. 12 As this gave Mr Croker an impairment of 20 points or more for the purpose of s 94(1) , it was necessary for the Tribunal to determine if it was satisfied that Mr Croker's impairment was 'of itself sufficient to prevent [him] from doing any work within the next 2 years' (s 94(2)(a)). 13 On the issue of whether Mr Croker has a continuing inability to work, the Tribunal noted that 'work' in the context of s 94 meant at least 30 hours work per week at award wages or above in an Australian job. It further noted that 'work' should be understood to mean work of a kind that is within Mr Croker's actual capacity without the need for training. After giving consideration to the nature of Mr Croker's disability; the unlikelihood of its improving in the foreseeable future; his studies, training and experience; and relevant expert opinions, the Tribunal concluded that Mr Croker could be successfully reintroduced into the workforce within the next two years. The Tribunal identified customer service, call-centre and light retail work as kinds of employment that were within Mr Croker's functional capacity. It was not satisfied that Mr Croker's impairment was 'of itself' sufficient to prevent him from doing any work independent of training within the next two years. 15 The first question concerns the true meaning of the words 'of itself' in s 94(2)(a) of the Act and, in particular, whether they are apt to include expert medical opinions concerning Mr Croker. 16 The second question concerns the true meaning of the words 'any work' in s 94(2(a) of the Act and, in particular, whether those words are apt to include work for which Mr Croker is over qualified and which might, as he contends, be demeaning or psychologically damaging for him to undertake having regard to his educational qualifications. 17 The third question arises out of the language of the introduction to the Impairment Tables. The issue raised by the amended notice of appeal is whether, having regard to the requirement identified in [11] of the introduction of allocating separate scores for each impairment where more than one impairment is present, a somatoform disorder should attract a score as a physical impairment and a separate score as a psychiatric impairment. 18 The fourth question concerns the meaning of the word 'rehabilitation' and whether there can be rehabilitation of a permanent condition. Your Honour, I would say that in the amended notice of appeal do the words "of itself" include expert medical opinion of the applicant that are held by the respondent. He suggested that the Tribunal had 'cherry picked' the medical reports rather than taking them all into account. 21 Mr Croker's submissions made it plain that he did not challenge the meaning that the Tribunal attributed to the words 'of itself' ; his concern was with the findings of fact that the Tribunal made by reference to the medical reports. An appeal under s 44(1) of the AAT Act is not an appeal of the kind that allows this Court to re-evaluate the evidence before the Tribunal for the purpose of making fresh factual findings. 22 Nonetheless, it is appropriate to observe that the Tribunal carefully analysed the medical and other reports before it and provided persuasive reasons for preferring some expressions of expert opinion over others. I see no reason to conclude that any error affected this aspect of the Tribunal's reasons for decision. 24 It is plain that the Tribunal understood that 'work' in the context of s 94 at the relevant time meant work that is for at least 30 hours per week at award wages or above. At [59] of its reasons for decision, the Tribunal set out the terms of s 94(5) of the Act which define 'work' in this way. Moreover at [71], in evaluating the various expressions of expert opinion concerning Mr Croker's ability to work, the Tribunal again referred to 'a 30 hour working week'. The medical assessment reports concerning Mr Croker on which the Tribunal placed particular reliance all indicated that Mr Croker could work 30 hours a week either immediately or within 6 months to two years. 25 Mr Croker's reference to work that is 'benign' appears to derive from an observation made by the Full Tribunal in Re Hamal and Secretary, Department of Social Security (1993) 30 ALD 517 when considering the application, in the circumstances of that case, of s 94(2) of the Act before it was amended to its present form. I would say I would virtually be stepping back into really a position where I was doing things which I knew caused me injuries and obviously there could be potential harm or psychological harm again and even if there is a psychological injury as well the potential there would be raised even further. However, I do not accept that the Act discloses an intention that a person with tertiary qualifications is to be regarded as a person with a continuing inability to work, and thus as a person entitled to taxpayer funded DSP, just because the person's impairment prevents him or her from undertaking professional or other high status employment. A person able to do work of a character undertaken by a very large number of Australian taxpayers (ie customer service, call-centre or light retail work) is not, in my view, a person with a continuing inability to work within the meaning of the Act. 28 I see no reason to conclude that the Tribunal erred in its understanding of the words 'any work' in s 94(2)(a) of the Act. It gave careful consideration to this question by reference to the expert evidence before it. It noted that there was no evidence that any past examination had revealed a basis for RSI as a medical condition suffered by Mr Croker. The Tribunal concluded that Mr Croker's 'RSI' was not a separate condition from his somatoform disorder. It concluded that the only diagnosis that could be assigned a rating under the Impairment Tables was Mr Croker's somatoform disorder. For a rating to be assigned the condition must be a fully documented, diagnosed condition which has been investigated, treated and stabilised. The Tribunal found that his impairment is of 20 points within the meaning of s 94(1)(b) of the Act. A higher assessment would not have improved his position. The Tribunal's decision was not based on a conclusion that he did not meet the requirements of s 94(1)(b) but rather on a conclusion that s 94(1)(c) did not apply to him. In any event, I can identify no error affecting this aspect of the reason for decision of the Tribunal. As mentioned above, this appeal is not an occasion for this Court to review the factual findings of the Tribunal. 33 I am not satisfied that any legal error affects the Tribunal's understanding of s 94(2) or its failure to be satisfied that Mr Croker's impairment is not of itself sufficient to prevent him from doing any work within the next two years. Mr Croker has not identified any error of law affecting the decision of the Tribunal. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson. | appeal from a decision of the aat section 94 social security act 1991 (cth) whether the appellant had a 'continuing inability to work' whether impairment assessment under the act correctly calculated definition of 'any work' within the act held : decision of the aat affirmed appeal dismissed. administrative law |
Notices of both motions are in identical form and both seek relief in the form of summary judgment under subs 31A(2) of the Federal Court of Australia Act 1976 (Cth) ('the Act'). In all relevant and material respects, the terms of the initiating process are identical. 5 The application in each proceeding seeks declaratory relief in the form of a declaration that the assessments are not a proper assessment for the purposes of the Income Tax Assessment Act 1936 (Cth) ('the ITAA 1936') and a declaration that the assessments are invalid and should be quashed. 6 In each proceeding, the applicant sought relief in reliance on the Court's original jurisdiction under subs 39B(1A) of the Judiciary Act 1903 (Cth). The applicant was at all material times during the years [of] income ended 30 June 1995 --- 2003 inclusive ("the relevant years") a director and shareholder in the capital of Anestat Pty Limited ("the company") being the holder of one of the two issued shares in the capital of the company. The respondent is an officer of the Commonwealth having the responsibility for the due administration of, inter alia, the Income Tax Assessment Act 1936 (ITAA 36), the Income Tax Assessment Act 1997 (ITAA 97), and the Taxation Administration Act 1953 . During the relevant years the company carried on business under the name and style Cafe Brioni, at 393 Oxford Street Paddington New South Wales. During the relevant years the company derived income from the carrying [on] of its business and incurred expenditure in gaining or producing that income or in carrying on business for the purpose of gaining or producing that income. For each of the relevant years the company furnished returns of income. Pursuant to section 166A ITAA 36, on the respective days on which the returns of income of the company were furnished, the respondent made assessments of taxable income and the tax payable on that taxable income, being the amount specified in the respective returns, and the respective returns were deemed to be Notices of Assessment under the hand of the respondent and were deemed to have been served on the respective days on which the respondent was deemed to have made the respective assessments. Subsequent to the furnishing of returns of income by the company for the relevant years and the making of assessments for the relevant years, the respondent purported to raise amended assessments in respect of the company for each of the relevant years. For the purposes of raising amended assessments for each of the relevant years the respondent was required to ascertain the gross income of the company and to subtract there from expenses incurred by the company in gaining or producing the gross income, and any expenses necessarily incurred in carrying on business for the purpose of gaining or producing the gross income or else make an assessment of the amount upon which in [her] judgment income tax sought to have been levied. For each of the relevant years the respondent in purporting to raise amended assessments in respect of the company, increased the amount of its assessable income (hereinafter "the increased gross income") for each of the years of income and treated the increased gross income as additional taxable income of the company for the relevant years. The respondent in purporting to amend the assessments of the company for each of the relevant years failed to turn [her] mind to the question whether there were any expenses incurred by the company in gaining or producing the additional gross income of the company included in the amended assessments for the relevant years. By reason of the matters pleaded in paragraphs 7, 8, 9 and 10, the respondent failed to make any genuine attempt to ascertain the taxable income of the company for the relevant years and accordingly the purported amended assessments were not in fact genuine assessments and any purported notices of amended assessment did not reflect any genuine assessment of the tax liability of the company for the relevant years. Further to paragraphs 7, 8, 9 10 and 11, the respondent purported to raise amended assessments in respect of the applicant for each of the relevant years by purporting to include in the applicant's assessable income amounts by way of deemed dividend in reliance on section 108 ITAA 36 and Division 7A ITAA 36. In order for the respondent to raise valid assessments or amended assessments, as the case may be, in respect of the applicant for the years of income ended 30 June 1995, 1996 and 1997 (up to 4 December 1997) to include amounts in the assessable income of the applicant as deemed dividends in reliance upon section 108 ITAA 36, the process of assessment required the respondent to turn [her] mind to whether there had been a payment or crediting of an amount to the applicant as a shareholder in the company, and the respondent was further required to form an opinion whether the amount so paid or credited represented a distribution of profits by the company. For the years of income ended 30 June 1997 (from 4 December 1997) --- 2005 inclusive, in order for the respondent to raise a valid amended assessment to include in the assessable income of the applicant an amount by way of deemed dividend under Division 7A ITAA 36, the respondent was required, inter alia, to determine whether there were any payments made by the company to the applicant, the quantum of amounts (if any) paid to the applicant as a shareholder in the capital of the company, whether in respect of each year of income the company had a distributable surplus, and whether if amounts were paid to the applicant as a shareholder, amounts so paid represented a distribution of profits. For the years of income ended 30 June 1995 --- 1997 (up to 4 December 1997) inclusive the respondent in purported reliance upon section 108 ITAA 36 purported to include in amended assessments of the applicant amounts equal in quantum to 50% of the amount of the deemed dividends claimed by the respondent to have been paid by the company during the years of income ended 30 June 1995 --- 1997 inclusive. Further to paragraph 15 the respondent in purporting to raise amended assessments in respect of the applicant for each of the years of income ended 30 June 1995 --- 1997 (up to 4 December 1997) inclusive did not turn [her] mind to the question whether the amounts purported to have been included in the assessable income of the applicant by operation of section 108 ITAA 36 had been paid or credited to the applicant, or whether the company had any distributable profits, or whether the amounts purported to have been included in the assessable income of the applicant represented distributions of profits by the company to the applicant. For the years of income ended 30 June 1997 (from 4 December 1997) --- 2005 inclusive the respondent purported to include in amended assessments of the applicant respective amounts equal in quantum to 50% of the amount of deemed dividends claimed by the respondent to have been paid by the company during the years of income ended 30 June 1997 --- 2005 inclusive. Further, for the years of income ended 30 June 1997 --- 2005 inclusive the respondent did not consider whether the amounts included in the amended assessments for the applicant had been paid or credited to the applicant, whether the company had any distributable profits for the years of income ended 30 June 1997 --- 2005 inclusive, or whether the amounts represented a distribution of profits by the company. Further to paragraph 18, the respondent did not determine whether the company had any distributable surplus for the years of income ended 30 June 1997 --- 2005 inclusive. By reason of the matters pleaded in paragraphs 15, 16, 17, 18, and 19 the respondent failed to make any genuine attempt to ascertain the taxable income of the applicant for each of the relevant years and accordingly the purported amended assessments for the applicant were not in fact genuine assessments, and any purported notices of assessment of the applicant did not reflect any genuine assessment of the tax liability of the applicant for each of the relevant years. By reason of the matters pleaded above, the applicant is entitled to the relief sought [in] her application to the Court of 7 November 2007. From that book or books the respondent purported to raise amended assessments in respect of the company for each of the relevant years. The respondent in raising those amended assessments should not have had regard to that book or those books. These are matters relevant to proceedings under Part IVC of the Taxation Administration Act 1953 (Cth) and it is uncontroversial that there are proceedings pending in the Administrative Appeals Tribunal seeking review of the Commissioner's objection decisions. However, neither of these matters is sufficient to challenge the validity of the assessments. 12 The more so because, following the hearing of the motions, the High Court handed down its judgment in Commissioner of Taxation v Futuris Corporation Limited [2008] HCA 32 ; (2008) 247 ALR 605. That is because s 175 provides that the validity of any assessment shall not be affected by reason of the fact that any of the provisions of the Act have not been complied with. ... Having regard to s 175, there is no inconsistency, apparent or otherwise, between the requirements of the Act relating to the making of an assessment and s 177(1), and no reconciliation is called for. Indeed, as I have said, s 177(1) does no more than give evidentiary effect to s 175. The notion of bona fides had the content explained earlier in these reasons and did not enter the case by the tortuous path of statutory construction and reconciliation with which Dixon J was concerned. [69] Something more should also be said respecting Richard Walter. That case decided first, that the Act permits the Commissioner to issue assessments on an alternative basis to different taxpayers in respect of the same income and, secondly, that s 177(1) does not limit the jurisdiction conferred by s 39B of the Judiciary Act . Neither holding is challenged in this litigation. [70] Various views were expressed in Richard Walter respecting the construction of and relationship between s 175 and s 177(1). Reference was made to the then accepted distinction between mandatory and directory provisions, and to what seems to have been some doctrinal status then afforded to Hickman. As to the first matter, Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 29 ; (1998) 194 CLR 355 has changed the landscape and as to the second, Plaintiff S157/2002 has placed "the Hickman principle" in perspective. Hence this appeal should be decided by the path taken in these reasons and not by any course assumed to be mandated by what was said in any one or more of the several sets of reasons in Richard Walter. 14 Which brings me to the amended para 7 of the statement of claim. Subsequent to the making of returns of income of the company for the relevant years and the making of assessments for the relevant years a member of the New South Wales police force illegally removed a book or books from the domestic premises of the applicants. Prior to formal dissemination of any information by the New South Wales police to the respondent pursuant to section 7 of the New South Wales Crime Commission Act 1985 (NSW), the respondent was given access to the illegally seized books and from that information subsequently the respondent purported to raise amended assessments in respect of the company and the applicants for each of the relevant years. 7C. By reason of paragraphs 7A and 7B the respondent was not lawfully entitled to receive the information and was not entitled to use the information in purporting to raise amended assessments as aforesaid and the purported assessments raised to the company are void and of no effect. 16 Moreover, there is no allegation that the Commissioner participated in any alleged illegal activity; nor is there any allegation that the Commissioner was aware, if it be the case, of any illegality in the seizure of the books; nor any allegation of illegality in the subsequent receipt of the information contained in the books that might found a bar to the use of such information. 17 Neither proceeding has any reasonable prospect of success and both must be dismissed. The applicants must pay the costs of their respective proceeding (including the motion). I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds. | application for declaration that assessments are not proper assessments and invalid on grounds that the commissioner failed to turn his mind to certain factual matters and had regard to information that he should not have considered the validity and due making of an assessment ss 175 and 177 of the income tax assessment act 1936 (cth) motion for summary judgment under s 31a of the federal court of australia act 1976 (cth) no allegation commissioner participated in any alleged illegal activity or was aware of any alleged illegal activity income tax |
The application is made under s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (" ADJR Act ") and s 39B of the Judiciary Act 1903 (Cth) (" Judiciary Act "). 2 The AAT refused to grant a stay under s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (" AAT Act ") against the operation of a decision of the first respondent, the Migration Agents Registration Authority ("the MARA") made on 20 February 2006. On that date the MARA refused an application made by the applicant for registration as a migration agent for the 12 month period from 24 May 2005 to 23 May 2006. 3 The Migration Act 1958 (Cth) ("the Act "), both in its previous form, and in the terms as amended by the Migration Legislation Amendment (Migration Agents Integrity Measures) Act 2004 (Cth) ("the Amending Act "), provided for migration agents to be registered and that the registration lasts for a period of 12 months after registration. Application for registration must then be made annually. 4 Section 300 of the Act provides for automatic continuation of a registered migration agent's registration in certain circumstances. The provisions for automatic continuation were amended by the terms of the new s 300 introduced by the Amending Act . 5 The AAT refused to grant the applicant a stay because it considered that the terms of the new s 300 prevented the AAT from granting a stay order which would be effective. In particular, the application turns upon the construction of s 300(7) which provides that "for the purposes of this section", the MARA is taken to have made a decision, even if the decision is later stayed. His Honour described the repeat registration system as a 'continuum' and found that s 300 operated as a deeming provision so that an agent is treated as if s/he were registered and has the same rights as if s/he were registered up to the time of the making of the decision not to renew. He concluded that a decision by the MARA not to renew has an operation capable of being stayed, pursuant to s 41(2) of the AAT Act . 9 However, on 1 July 2004, amendments contained in the Amending Act came into effect. For reasons which are not clear, the applicant's registration came to expire on 23 May each year. 11 In May 2004, the applicant applied for registration for the year from 24 May 2004 to 23 May 2005. The application was refused by the MARA in February 2005 but the AAT subsequently granted a stay of the decision under the terms of the Act as in force prior to the Amending Act . The MARA's decision was affirmed by the AAT in January 2006. Judicial review of that decision has been sought from another judge of the Court. That matter is quite separate from the present proceedings. 12 On 5 May 2005, the applicant lodged his application for registration for 24 May 2005 to 23 May 2006. The parties agree that the amended s 300 was in force at the time of the application, by virtue of the transitional provisions in Item 179A in Schedule 1 to the Amending Act . 13 On 20 February 2006, the MARA rejected the application for the period 24 May 2005 to 23 May 2006. 15 The learned Deputy President referred to the decision of Tamberlin J in Shi . However, he observed that Shi was decided on the Act as it stood before the Amending Act . The question for the Deputy President was therefore whether there was power to grant a stay under the new s 300 introduced by the Amending Act . 16 The AAT referred to the amendments to s 300 and the supplementary explanatory memorandum to the Amending Act . It noted that the effect of s 300(4)(a) was that the Applicant's registration as a migration agent ceased on 20 February 2006 when the MARA made its decision. The registration of the Applicant ceased on 20 February 2006 and without registration he cannot act as a migration agent. To grant a stay order might have the effect that the public is misled and moreover would expose the Applicant to prosecution under a number of sections of the Act . I appreciate that the effect of this decision might appear to be harsh; however, the legislation is cast in terms which in my view, prevents me from granting a stay order which is effective. Recourse to extrinsic material, including the legislative history and explanatory material such as a Second Reading Speech is permitted; see Newcastle City Council v GIO General Limited [1997] HCA 53 ; (1997) 191 CLR 85 at 99 (Toohey, Gaudron and Gummow JJ) and at 112 (McHugh J); Isherwood v Butler Pollnow Pty Limited (1986) 6 NSWLR 363 at 387-388 (McHugh JA). Persons must be registered as migration agents in order to give, and charge a fee for, migration assistance; see ss 280 and 281 . Severe penalties are imposed for the breach of these provisions. 21 Division 3 of Part 3 concerns the registration of persons as migration agents. Central to these provisions are the duties and powers of the MARA to determine applications for registration, cancel or suspend a migration agent's registration, or caution a migration agent; see s 303. 22 The provisions setting out the requirements for registration are highly prescriptive. When applying for registration, different criteria apply to those who have, in the 12 months prior to making an application, been a registered migration agent, and those who have not; see ss 288(2) and 288A . The criteria in relation to the latter group is more onerous, and includes completion of a prescribed course, within a prescribed period, and passing a prescribed exam or having prescribed qualifications; see s 289A. 25 There are further requirements relating to professional development, professional indemnity insurance, age, citizenship, and residency; see ss 290A, 292B, 293 and 294. 26 As noted earlier, registration lasts for 12 months (see s 299), though this period is subject to a number of other provisions, including s 300, which has been reproduced above. 29 An application may be made to the AAT for review of a decision by the MARA: s 306. It reveals an intention to ensure, so far as possible, that registered migration agents have and maintain sufficient training and good character so that they provide appropriate immigration assistance to visa applicants and persons seeking advice on migration questions. 31 Tamberlin J observed in Shi at [14] that Part 3 of the Act was introduced in 1992 with the purpose of establishing a comprehensive scheme for registration and control of migration agents. Prior to its introduction, there was no regulation of migration agents. The emphasis in Division 3, Part 3 on migration agents having sufficient training and good character, and the provisions relating to publication of disciplinary proceedings indicates a concern that the integrity of the visa scheme governed by the Act is maintained. It is to be borne in mind that a registered agent does not have a right to be re-registered. Applications must be made each year and the criteria for registration must be satisfied on each application. 33 It is true that s 300(1) operates so as to extend the period of registration of a registered migration agent beyond the expiry date of the agent's registration. The combined effect of ss 300(1) and (4) is that a registered agent's registration is taken to continue after the expiry date, provided that the requirements of s 300(1) (a) to (c) are satisfied. 34 However, s 300(4) makes it plain that the registration is taken to continue only until the earliest of the decisions of the MARA specified in s 300(4) (a) to (c), or the date specified in s 300(4)(d). 35 The effect of s 300(4) is that although the usual period of registration is for 12 months, it may be extended for a period of up to 10 months. 36 But it is plain from s 300(4)(a) that the statutory extension of an agent's registration ceases when the MARA decides the application in respect of the current year. If the decision is favourable to the agent, he or she is registered for the full 12 month period. 37 However, if the MARA's decision is to refuse registration, then the applicant ceases to be a registered migration agent, so long as that decision is made before the end of the 10 month extension provided for in s 300(4)(d). 38 The same consequence applies if the MARA's decision is to suspend or cancel the agent's registration; see s 300(4)(b) and (c). 39 If the MARA's decision is to refuse registration, an applicant may seek review of the decision of the AAT; see s 306. An appeal on a question of law lies to the Court from the decision of the AAT; see s 44(1) of the AAT Act . Alternatively, the decision of the AAT is amenable to judicial review. 40 It is in those circumstances that the effect of s 300(7) falls for consideration. 41 The ordinary meaning of s 300(7) follows from the opening words. 42 Thus, upon the proper construction of ss 300(4)(a) and (7), the statutory extension of an agent's registration ceases when the MARA decides to refuse the application for registration, even if that decision is later stayed. 43 This is the ordinary meaning of s 300(4)(a) and s 300(7). It is consistent with the scheme of Division 3 of Part 3. It is consistent, in particular, with the central role of the MARA in regulating the scheme. It achieves the dual aim of the provisions of Division 3 of Part 3 , being the protection of visa applicants and maintaining the integrity of the visa scheme. 44 It may also be thought that this meaning is consistent with the title of the Amending Act , that is to say the Migration Legislation Amendment (Migration Agents Integrity Measures) Act 2004 (Cth). 46 The learned Deputy President set out in full at [14] of the decision of the AAT the content of the relevant paragraphs of the Supplementary Explanatory Memorandum to the Amending Act . Those paragraphs explain the provisions of s 300 and I do not propose to repeat them. 47 However, I should observe that [30], [31] and [36] of the Supplementary Explanatory Memorandum state in the plainest terms that the statutory extension continues only until the decision of the MARA, or until the other events stated in s 300(4). Reference is made, by way of example, to orders staying the operation of a suspension or cancellation. 49 Although this paragraph of the Supplementary Explanatory Memorandum refers to only two of the three types of decision referred to in s 300(4), these words can only be used as a guide to the meaning of the Act. They do not replace the statutory language; see Re Bolton; Ex parte Beane [1987] HCA 12 ; (1987) 162 CLR 514 at 518 (Mason CJ, Wilson and Dawson JJ); see also R v Young [1999] NSWCCA 166 ; (1999) 46 NSWLR 681 at [35] (Spigelman CJ). 50 In my opinion it is clear that the Supplementary Explanatory Memorandum referred to a cancellation and suspension only by way of example. It is clear that the draftsman of the document was pointing to the effect of s 300(7) in relation to all types of decisions contemplated by the section. 51 If further support be needed, it may be found in the Second Reading Speech made by Mr Gary Hargrave, the Minister for Citizenship and Multicultural Affairs. 52 The Minister said, on 24 March 2004, at Hansard p 27110, that the Amending Act , dealt inter alia , with concerns about sanctioned agents no longer being able to practice once their registration year expires. He said that such an agent will no longer be able to practice after the expiry date by making an application for review and obtaining a stay. 53 These comments, on their face, seem to be directed at agents whose registration is suspended or cancelled but the overall thrust of the speech supports the construction which I have adopted. The words "for the purposes of this section" mean what they say. There is nothing to suggest that they should be read down in the manner urged by the applicant. 56 The applicant submits that the AAT's decision ignores the power given to the AAT to stay decisions of the MARA pursuant to s 306AA and Regulation 7B of the Migration Agents Regulations 1998 . Rather, s 306AA deals with orders staying a decision under s 303 to cancel or suspend the registration of an agent who has already been registered for the current year; that is, prior to the cancellation or suspension. This was illustrated in Tanari v Migration Agents Registration Authority [2005] AATA 419 (" Tanari "). 58 Section 300 lays down a different regime for deemed registration. Quite plainly, a migration agent whose application for registration in the current year is granted, is no longer deemed registered; s/he is actually registered. But the registration is treated as having taken effect at the end of the expiry date; ie from the commencement of the current year; see s 300(6). 59 Section 300(4)(b) and (c) therefore deal with the situation where the MARA decides, during the period of deemed continuation of registration (but before the grant of any application for registration), to suspend or cancel the agent's registration. The relevant regime is explained by reference to s 300(2) and (3) when read with s 300(4). 60 Section 300(2) and (3) deal with the situation where an application for registration is made before the end of the expiry day and, between the date of the application and the end of the expiry day suspension or cancellation proceedings are brought against the agent. If, between those dates the MARA makes a decision to suspend or cancel the registration, then s 300(4) does not apply to continue the agent's registration unless the conditions stated in s 300(2)(a) or (b) or s 300(a) or (b) are satisfied. 61 Section 300(4)(b) and (c) must therefore address the situation where suspension or cancellation proceedings are on foot between the date of application and the expiry day but the MARA has not made a decision on those proceedings until after the expiry day. The effect of ss 300(4)(b) and (c) is that, if the MARA then decides to suspend or cancel the registration, the deemed continuation ceases. 62 Such a decision, as with a decision taken during the deeming period to refuse an application for registration, is not amenable to an effective stay by virtue of the provisions in s 300(7). 63 This approach to the proper construction is supported by the Minister's Second Reading speech to which I referred in [51] --- [52]. 64 The applicant submits that the interpretation of s 300(7) which I have adopted produces an "absurd result". Mr Hurley argues that Part 3 creates a scheme where registration is paramount, is to be obtained over short periods, and decisions refusing registration are subject to merits review. The applicant submits that without the possibility of staying a decision of the MARA, the merits review system is 'useless' unless concluded within one registration year, for otherwise, an agent would not be eligible for re-registration. 65 The applicant also points to the serious consequences of the AAT's decision for the applicant. The practical effect of the decision is that he can no longer practice as a migration agent and so is deprived of the opportunity to pursue his livelihood, at least until he obtains successful merits review or successfully applies afresh for registration. 66 I do not think these consequences can be described as "absurd". It seems to me that the construction given to s 300(7) by the AAT is consistent with the purpose of the provisions and the clear wording of the section. Upon a decision to refuse registration, s 300(4)(a) is enlivened and the deeming provision in s 300(1) ceases to have the effect of continuing an agent's registration; section 300(7) evinces a clear legislative intention that even a stay cannot operate to defeat the effect of the decision. | application for review of a decision of the administrative appeals tribunal ("aat") aat decision to refuse application for stay of decision of migration agents registration authority to refuse migration registration application effect of s 300(7) of migration act 1958 (cth) whether stay would be effective administrative law |
The context in which the motion is brought, is not without significance. 2 The native title claim group represented by the applicants has already had an application under the Native Title Act 1953 (Cth) struck out: see McKenzie v State Government of South Australia [2005] FCA 22. Before that matter was struck out (for reasons relating both to the identification of the claim group and to the alleged authority of the claimants), the applicants had amended their application on a number of occasions. Following the strike out decision, a fresh application was filed on 16 February 2006 resulting in the present proceedings. 3 Shortly thereafter the Aboriginal Legal Rights Movement ("the ALRM") notified the applicants of perceived deficiencies in its Form 1. Once again these related both to authorisation and to the composition of the claim group. Initially, the applicants sought simply to amend their application, the amendment seemingly being to change the composition of the claim group somewhat. It was then made plain to the applicants that leave was required. 4 The ALRM opposed the grant of leave on the ground that there was a reasonable basis for concluding that the Form 1 would still be defective for reasons similar to those given in the earlier McKenzie litigation. On 12 May 2006, the application for leave to amend was adjourned to allow the applicants to address the ALRM's concerns. Instead of proceeding further with that application, the respondents purported to discontinue this proceeding. They have now conceded correctly that that is not within their power to do so as of right and that the leave of the Court is required. After the hearing before His Honour Justice Finn on 12 May 2006, which considered the ALRM's objections to the Form 1 in this matter, I took further instructions from the Applicants in Pt Augusta on the following weekend. The purpose of those further instructions was to prepare supplementary affidavits of the Applicants to respond to the ALRM's objections. While taking those instructions I became aware for the first time that Willy Austin should have been named as an apical ancestor as part of the claim group description. Willy Austin had been raised as a possible apical ancestor by Dr Daniel Vachon, the anthropologist for the Kuyani-Wilyaru people and his name was raised at the authorization meeting on 16 July 2005. It was decided at this meeting not to include Willy Austin as an apical ancestor but no detailed discussion as to his exclusion took place. As mentioned above I only became aware on the weekend of 13 May 2006 that descendants of Willy Austin do identify themselves as Kuyani. Although I advised the applicants and they have considered the possibility of amending the present proceedings, I have been instructed to discontinue and lodge fresh proceedings to avoid any argument in relation to a perceived lack of authorization in relation to these proceedings. The reference to my advice should not be taken as any waiver of legal professional privilege. Leave of the Court is required under subrule (2): see Ankamuthi People v State Government of Queensland (2002) FCA 897. Where leave to discontinue is sought in a proceeding, the Court normally will allow an applicant to discontinue if he or she wants to, provided no injustice will be caused to the defendant: Covell Matthews & Partners v French Wools Ltd [1977] 1 WLR 876 at 879 which has been adopted in a number of cases in this Court. I have determined that discontinuance in this matter will occasion no injustice, subject to the question of costs. 6 The Court has a general discretion under s 43 of the Federal Court of Australia Act 1976 (Cth) to make cost orders. The principles informing the Court's discretion in such cases are well known: see eg. Ruddock v Vadarlis (No 2) (2001) 155 FCR 229 at par 234. However, when costs are sought in discontinuance proceedings, somewhat different considerations obtain to those that obtain under s 43. It has been recognised that the underlying policy of the Rules is that the discontinuing party should be liable to pay the other party's costs unless the Court orders otherwise: see e.g. Grundy v Lewis [1998] FCA 563. That policy, though, has not itself solidified into a principle which parallels the usual rule under s 43 of costs following the event. The Courts have indicated that, on a motion for discontinuance, the conduct of the parties in the matter and the reasons for the discontinuance can bear heavily on the exercise of the discretion as to costs: see O'Neill v Mann [2000] FCA 1680 at par [13] . 7 The consideration of an award of costs in this particular proceeding must, of course, be seen under the shadow of s 85A(1) and (2) of the Native Title Act. His Honour noted first, that s 85A(1) is intended to remove the expectation that costs will follow the event but that despite this, the Court retains its discretion as to costs unlimited by subrule (1); secondly the "unreasonable conduct" of the parties is not a jurisdictional fact which preconditions the exercise of the discretion and, conversely, s 85A(2) will not control or limit the discretion in subrule (1); thirdly, whilst the exercise of the discretion when making a costs order should be judicial, the starting point is that each party will bear their own costs. 9 In relation to the current application, it is, in my view, perfectly clear that a costs order should be made in favour of the two respondents. The reason that is the case is that the respondents have had to perform a tutelary function in relation to the conduct of this proceeding to date. That function has been discharged, primarily by the ALRM but concurred in by the State, in the interests of the orderly conduct of these proceedings and has assisted to that end. 10 There is a reasonable basis for concluding that the original application and the amendment that was proposed were seriously defective. It is not necessary that I express a final view on that matter. It equally is clear, from Mr McDonald's affidavit, that the applicants considered it necessary to respond to the ALRM's objections: a need which was made quite apparent to them when the matter was first heard and then adjourned on 12 May 2006. In these circumstances, it seems to me entirely proper and appropriate that a costs order should be made and I will order accordingly. 11 I order that leave be given to discontinue matter number SAD 27 of 2006 and the applicants pay the respondents' costs of the discontinuance. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. | application to discontinue proceedings leave granted costs exercise of discretion under s 85a of native title act in discontinuance proceedings conduct of parties native title native title |
As alleged, the conduct was engaged in by Mr Mates at a construction site for the extension of a warehouse at 372 Darebin Road, Alphington ("the site") on 28 and 31 July 2006. The builder concerned at the site, Kane Constructions Pty Ltd ("Kane") had been engaged by a developer to build the extension to the warehouse. As building construction jobs go, the extension of the warehouse at the site was a relatively small one. Kane employed only one person on the site, the Site Manager, James Leonard. He reported to the Project Manager for the job, Howard Dawson. He in turn reported to Kane's Construction Director, John Chambers. Save for the duties performed by Mr Leonard himself, all the work done on the site was performed by subcontractors. According to the allegations of the applicant, Mr Mates arrived on the site on Friday 28 July 2006 and, having discovered that there was no labourer employed as the workers' occupational health and safety representative, demanded that one should be so employed promptly. It is alleged that Mr Mates told Mr Leonard that, unless such a labourer was employed, he would organise a work stoppage on the site, or would take other action to procure a disruption of work on the site. The applicant says that this conduct by Mr Mates amounted to coercion of Kane to employ a person as a building employee, or to designate a building employee or contractor, to perform occupational health and safety duties, in breach of s 43 of the BCII Act. Mr Mates denies both that he demanded (or even requested) the employment, or the designation, of a worker with occupational health and safety duties and that he made any threat that he would stop, or disrupt, the performance of work on the site. It is common ground that he did attend the site on 28 July 2006, and that he did speak to Mr Leonard. The respondents say that, when he arrived at the site on that day, Mr Mates found the amenities in an appalling condition, and that the screened-off section of the sheds which was allocated as a first-aid room was being used as a de facto storage area for construction tools. They say that Mr Mates inquired of Mr Leonard whether there was a person on site with occupational health and safety qualifications, whether there was a person to perform "peggy" duties (ie including general cleaning and housekeeping tasks, particularly around the site sheds and amenities) and whether there was a person with first-aid qualifications. In each case, he was told that Mr Leonard himself had the role in question, as well as the role of Site Manager. It was apparent to Mr Mates that Mr Leonard had too many responsibilities, and that the cleanliness and general condition of the sheds and amenities was suffering as a result. He told Mr Leonard that he needed some assistance, and that that assistance should be provided by Kane. The applicant alleges that Mr Mates returned to the site on Monday 31 July 2006. It is alleged that Mr Mates told Mr Leonard that he (Mates) had spoken to Mr Chambers, who was not prepared to engage a labourer as the occupational health and safety representative. As a result, Mr Mates said that he was on site "to shut the job down". There was a meeting of workers, addressed by Mr Mates, after which the workers ceased work, and no further work was performed that day. It is alleged that, by proceeding in this way, Mr Mates organised, or took, action with intent to coerce Kane to employ a labourer, to engage a contractor or to designate some other building worker, for the performance of occupational health and safety duties, in contravention of s 43 of the BCII Act. It is also alleged that Mr Mates thereby engaged in unlawful industrial action within the meaning of s 38 of the BCII Act. The respondents deny that Mr Mates intimated, either to Mr Leonard or to anyone else, that it was his intent "to shut the job down". They agree that Mr Mates did attend the site on 31 July 2006, and did conduct a meeting of workers at the site. However, they say that, during the course of that meeting, Mr Mates went no further than to inform the workers of his concerns about safety on the job, and about the condition of the site sheds and amenities, and to discuss with them their own views on the subject. The respondents' position is that it was the consensus of workers at the meeting that, in the light of those concerns, they should not work further at that site. It is common ground that, save for the unloading of some steel which had just been delivered to the site, no further work was done that day. Finally, the applicant alleges that, before he left the site on 31 July 2006, Mr Mates told Mr Leonard that, if there was not an occupational health and safety labourer on the site the following day, "we'll go through all this again". It is alleged that this implied a threat to organise or to take action with intent to coerce Kane to employ a person, to engage a contractor or to designate a worker, with occupational health and safety responsibilities for the site, in contravention of s 43 of the BCII Act. The respondents deny that Mr Mates made any such statement. It is common ground that such a person would, if so employed, engaged or designated, be a building employee or a building contractor. The respondents defend the case on the factual proposition that Mr Mates did not organise or take any such action, or with such an intent, and did not make any such threat. The respondents deny that there was a ban etc; or, if there was, they say that Mr Mates was not involved in it. They also say that, if there was a cessation of work, it was based on a safety concern of the kind to which par (g) of the definition refers. Additionally to the requirements of the above definition, the "building industrial action" must be "industrially-motivated", "constitutionally-connected" and not "excluded action" within the meaning of s 37 of the BCII Act. The respondents put the applicant to his proof in relation to those additional requirements. Each of ss 38 and 43 of the BCII Act is a "Grade A civil penalty" provision. This means that, upon finding that a contravention has occurred, the court may impose a penalty of up to 1,000 penalty units ($110,000) in the case of a body corporate and of up to 200 penalty units ($22,000) in the case of an individual: BCII Act, s 49. Early progress had been delayed to an extent by unforeseen problems with the suitability of the ground to support the intended structure, the result of which was that a larger than anticipated quantity of the existing soil had to be removed and replaced with something described by Mr Leonard as "mudstone". Then the concrete pads for the steelwork were laid by a business called Northwest Concrete ("Northwest Concrete"). On Friday 28 July 2006, the job had reached the stage of near readiness for the erection of the steel columns that were to form an element of the framework for the extension. The steelwork was to be supplied and erected by Barra Steel (Vic) Pty Ltd ("Barra Steel"), which in turn had further subcontracted the erection of the steelwork to B.V. Rigging (Australia) Pty Ltd ("BV Rigging"). Barra Steel had also engaged a boilermaker to carry out certain welding operations made necessary by the circumstance that the new structure was to be an extension to, and thus had to be joined to, the existing warehouse. Mr Leonard said that the boilermaker had commenced working on the site on 21 July 2006 (which he mistakenly supposed was the Monday prior to 31 July). Mr Leonard, whose responsibility it was to ensure that subcontractors were on site when required by the construction program, said that he had arranged for Barra Steel to commence erecting the steelwork on 31 July 2006, and to proceed until that aspect of the job was completed. He had also made direct contact with BV Rigging to ensure that its crew of erectors were on the site on 31 July 2006. His arrangement with BV Rigging was also that the erectors would work on the site until their aspect of the job was finished. There were four sheds on the site: a site manager's office; a lunch room; a shed which constituted the change room and, in a screened-off section, the first-aid room; and the toilets. On Friday 28 July 2006 Mr Mates visited the site. In the course of seeking out the site manager (Mr Leonard, although not then known to him by name), Mr Mates observed the condition of the site sheds. He said that they were "in an appalling state". The first shed which he saw was the change room and first-aid room. Mr Mates said that the shed was "in a bad state of neglect". He said that there were tools --- spades, shovels, picks and the like --- in the first-aid room, and that there was "construction material" --- "cement and just general bolts and all that sort of business" --- on the floor and to an extent on the first-aid bed itself. There was no first-aid box in the room. Mr Mates said that the room was "in a very poor state of affairs in regards to the cleanliness of it", by which he meant that the room was "filthy". Particularising, he said that there was "mud all over the floor, [and] dust all over everything". It appeared obvious to Mr Mates that the room had never been cleaned. The next shed that Mr Mates observed was the toilet shed. He said that the toilets were "filthy". He said that there was "mud all over the toilets". It was obvious to him that the shed had not been cleaned "in a considerable period of time". He said that "the bowls were disgraceful". He said that the washbasins had not been cleaned and that there were "towels all over the floor". He added that "there was mud all over the floor". It was obvious to Mr Mates that the toilets were "in a state of neglect". Mr Mates next observed the lunch shed. There he found garbage bins without lids which were full and overflowing. From the size of the job, Mr Mates estimated that the bins had not been emptied "for quite a considerable period of time because the amount of rubbish that had accumulated was quite significant". He also said that this shed was "full of mud". After completing his observation of the site sheds, Mr Mates found Mr Leonard in conversation with an organiser from the plumbers' union, Norm Kelly. According to Mr Leonard, Mr Mates asked who was the occupational health and safety representative for the site. Mr Leonard said that he was himself that person. Mr Mates asked who was the worker who attended to matters of first aid. Mr Leonard said that he was himself that person. Mr Mates asked who was the "peggy" for the site. Again, Mr Leonard said that he was himself that person. Mr Leonard's evidence was that Mr Mates then said that he "would probably prefer to have a labourer on site as an OH&S rep for the blokes". Mr Leonard replied that he did not have any control over labour with Kane, and that Mr Mates would have to speak to the project manager, Mr Dawson. Mr Leonard said that Mr Mates did not broach the subject of health and safety on site. I'm only a site manager. Before setting out the passage in that statement upon which the respondents specifically rely in the present context, I should refer to the way the matter was introduced by their counsel. Okay. And I think the first one of those is in --- I think you provided two, is that right?---I provided one and then they came out and met me again and wanted some clarification on some phrases or. Okay. And your first statement that you provided was in August 2006?---Yes. Only weeks after the - - -?---Yes. - - - relevant events. And did they tell you that it was important that you tell the truth in everything you say to them and I think --- withdraw that, your Honour. And did they also say that you could be prosecuted if you didn't tell them the truth?---Yes, I think so, yes. All right. So, you were careful when you spoke to them - - -?---Yes. - - - that you told them - - -?---As much as I could recall, yes. - - - everything as best you could recall at that time and this is only weeks after the event, isn't it?---Yes. All right. And were you also to tell them - confident that you told them all of the relevant matters that you could think of?---Yes. [At this point the statement was identified in the Court Book. Do you recall giving that evidence?---Yes. You haven't included any reference to that in your statement though, have you?---Obviously not. So, is it possible the evidence you gave earlier was incorrect?---It's just what I recall at the time, so - at the moment, so. Do you agree or disagree?---Obviously it's not written in my statement, so, possibly, yes. I explained to him that I hold the relevant OH&S qualifications. Bobby went on to say that he did not think that this was good enough and that he wanted an OH&S representative, either a Kane employee or from the men on site to be in place by Monday. I stated he would have to speak to either Howard Dawson or John Chambers as I don't control the Kane labour on site. Bob MATES stated that he wanted to see this occupation health and safety representative on site or that "Kane would have some problems". The two men were in the site office for approximately 1 hour and left. Mr Leonard accepted that what he had written in his statement was most likely the more reliable rendition of what Mr Mates had in fact said. Mr Mates gave a quite different version of his conversation with Mr Leonard on 28 July 2006. He said that, after having introduced himself, he gave Mr Leonard the benefit of his opinion as to the condition of the site amenities and "the general condition of the job in regards to safety". He told Mr Leonard that "it was bad, ... it was unsafe, ... it was full of water, it was full of mud, it was dirty, it was unclean, it was unkempt". According to Mr Mates, Mr Leonard agreed. Mr Mates said that there was no reason for the amenities to be in the condition that they were, and again Mr Leonard agreed. Mr Mates said that Mr Leonard "may need someone to give him a hand with the safety". When Mr Mates asked who was doing what on the job, Mr Leonard said that he himself was "doing everything on the job". Mr Mates considered that Mr Leonard was probably "pretty weak" in expressing his needs to Mr Dawson. So Mr Mates said that he would himself ring Mr Dawson. Mr Mates categorically denied that he told Mr Leonard that he wanted an occupational health and safety representative to be engaged on the site. He denied also that he had said that there would be problems if Kane did not engage such a representative by the following Monday. He adhered to his evidence that the substance of the complaint he made to Mr Leonard related to the condition of the site, and particularly of the amenities, and that Mr Leonard himself needed assistance with all the tasks he was being required to perform. I asked him: why don't get [sic] you get some help? And he said: I can't. They won't give me any. And I said I'll take it up with Dawson and he gave me Dawson's number. Mr Leonard said (in his evidence) that he cleaned the toilets daily. Under cross-examination, he agreed that he could not say that he did so "every day of every time I have been on a job", but to the best of his knowledge the toilets were cleaned every day. He agreed that there may have been days when they were not cleaned, but he could not recall them. Do you recall or don't recall?---I don't recall. He said that the bins in the lunch room had lids, but when counsel put it to him that there were no lids, Mr Leonard said that he could not recall. Likewise, when it was put to him that the bins were "overflowing with rubbish", Mr Leonard said that he could not recall. Do you recall or don't recall?---I don't recall. I can't see it happening because I cleaned them on the Friday before [Mr Mates] turned up. But you don't recall?---I don't recall. It had his name and mobile phone number written on it. He agreed that it was "possible" that it was in the site office rather than in the first-aid room as such. Mr Leonard said that there was a sink and washbasin in the first-aid room, with hot and cold running water. He said that there was a resuscitation mask in the first-aid kit. Who's doing the cleaning, and who's your labourer and who's your OH&S representative. ?---I can't recall that. You can't recall. It's possible that he may have said that. And that you said in response that you were the OH&S representative, and you were the labourer?---Yes. And I also put to you that when Mr --- Mr Mates then said that, in his view, you needed some extra help with peggy work and OH&S rep work. Do you recall him saying that?---No, I don't. And, again, you say it's possible that he may have said that?---It's possible. All right. And I put to you that you agreed with him, that some extra help would be a good thing. Can you recall that or not?---Can't recall that. I can't recall that. Okay. Again, you --- it may have been said, you just can't recall?---Yes. It's two and a half years ago. Did he say that to you?---Possibly, yes. Well, I'll put it to you he did say that?---Okay, yes, yes. He did say that, you agree?---Yes, something --- yes, I don't know whether it was those words, but, yes, possible. Words like that he said to you?---Something like that, yes. Counsel for the respondents put it to Mr Leonard that Mr Mates had said that he would ask for a labourer for the site, and Mr Leonard responded that Mr Mates "may have" said that. Mr Leonard could not recall Mr Mates saying that an occupational health and safety representative need not be a new employee, but could come from one of the workers already on the site. Mr Kelly also observed the condition of the sheds on 28 July 2006. He said of the lunch room that there was "mud everywhere", and that the bins were overflowing. He said that there were a lot of tools, and there was a lot of rubbish, in the first aid room. He was to an extent also involved in the conversation between Mr Leonard and Mr Mates on 28 July 2006; more so perhaps initially. When asked in chief what Mr Mates had said, Mr Kelly said that there was a "conversation" to the effect that the job needed an occupational health and safety representative. He said that Mr Mates expressed his views as to the condition of the site. According to Mr Kelly, "[Mr Mates] wasn't happy with the condition of the site, mud, you know". Mr Kelly himself suggested that Mr Leonard could not be "in the shed running the job and ordering equipment and having the blokes out there on the job". Mr Mates expressed a similar view. Mr Kelly gave evidence that Mr Leonard "was sort of agreeing with us that he probably needed a bloke". Mr Kelly was taken to Mr Leonard's evidence that Mr Mates had said that there must be an occupational health and safety representative engaged by the following Monday, and responded that "the conversation was we needed --- the delegate --- the job needed to have a safety rep, but as far as having one by Monday I don't recall that". Mr Kelly did not hear Mr Mates say that he wanted to see an occupational health and safety representative on site, or Kane would have some problems. Neither Mr Leonard nor Mr Mates made any written record of their conversation. Under subpoena, Kane produced its site diary for the period which included that day. The diary was tendered by the respondents. There was no page which related to 28 July 2006. There were no entries between 25 July and 30 August 2006. The tender of the diary occurred after Mr Leonard had given his evidence and been excused. There was no suggestion that he be recalled for the purpose of explaining, if possible, the substantial gap in the sequence of entries in the diary. Mr Chambers, who produced the diary and was asked about the gap, could not explain it. On the respondents' side, Mr Mates gave evidence that he was the union organiser for a sector to the north-east of Melbourne which extended clockwise from Plenty Road to the Eastern Freeway. In the course of his work, he would make 300 or more site visits per year. He made no written record of his visit to the site on 28 July 2006, nor of his conversation with Mr Leonard. After his initial conversation with Mr Leonard on 28 July 2006, Mr Mates rang Mr Dawson. According to Mr Dawson, Mr Mates asked him who was the occupational health and safety labourer on the site, to which Mr Dawson responded that they did not have one. He explained that this was due to the size of the project: it did not warrant a labourer. He explained to Mr Mates that Mr Leonard held an occupational health and safety certificate, and that Kane's obligations were thereby fulfilled. He added that Mr Leonard also held a first aid certificate. Mr Mates said that that was not good enough, and that they needed a labourer on site whether the project was worth $1m or $100m. He said that project size was irrelevant to the need for a labourer on site. Mr Dawson reiterated that, considering the size of the project, the site did not warrant a labourer. He took Mr Mates' phone number, and said that he would get back to him. Mr Mates said that he wanted to have a meeting about the matter on Monday, but that he wanted the labourer in place straight away. When it was put to Mr Dawson that Mr Mates had expressed a concern about the lack of a person to clean the amenities, an occupational health and safety person to do first aid and someone to assist Mr Leonard, he (Dawson) said that he did not "exactly recall". But he did recall discussions in which he advised Mr Mates that Mr Leonard "held" appropriate occupational health and safety training and first aid training. When it was put to Mr Dawson that Mr Mates had told him that the toilets and the lunch room were dirty and that the first aid room was being used for storage, Mr Dawson said that he did not "wholeheartedly recall" Mr Mates saying that, but that he may well have. It was also put to Mr Dawson that Mr Mates had told him that an occupational health and safety representative could be elected from people who were already on site, a statement which Mr Dawson did not recall. Under cross-examination, Mr Dawson reiterated that he recalled Mr Mates asking for there to be an occupational health and safety representative on site by the following Monday. Mr Mates' recollection of this conversation differed from that of Mr Dawson. He said that, after introducing himself, he told Mr Dawson that he was on "his job", and Mr Dawson asked him what the problem was. According to Mr Mates, he told Mr Dawson the job was in a terrible condition, that there was water everywhere, there was mud everywhere and that he did not believe that Mr Leonard is coping very well with all the duties that he had been asked to perform by Kane. He said that Mr Dawson "made a derogatory remark in regards to Leonard's abilities" and said that it was Kane's policy not to have a labourer on a job that was worth less than $2.1 million. If anybody was going to change that policy, it would have to be Mr Chambers. Mr Mates denied telling Mr Dawson that there had to be an occupational health and safety representative on site by the following Monday. Mr Mates substantially adhered to this evidence under cross-examination. However, he did say that, in conversation with Mr Dawson, he had asked for "somebody with OH&S capabilities". Although Mr Kelly was not a party to the phone conversation between Mr Mates and Mr Dawson, he was present at the time and, after the completion of the conversation Mr Mates told him broadly what had been said. According to Mr Kelly, Mr Mates said that Kane had "suggested that the job was too small and it was under 2.1 and they were happy with just having the one guy there". The next thing that happened on 28 July 2006 was that Mr Dawson telephoned Mr Chambers. According to Mr Dawson, he told Mr Chambers that Mr Mates was on the site and had requested that a labourer be engaged there. He said that he had told Mr Mates that the project was not big enough to warrant it. Mr Chambers said that he would give Mr Mates a call and talk to him further about it. Without objection, Mr Chambers also gave evidence of his telephone conversation with Mr Dawson. He said that Mr Dawson told him that Mr Mates (in company with Mr Kelly) was on the site, and had requested Kane to place a labourer on the project to act as a general labourer, occupational health and safety representative and first aider. Mr Chambers asked Mr Dawson if any other issues raised had been raised in relation to the project, and was informed of what he (Chambers, in his evidence) described as "some minor issues relating to the operation of the job", such as the identity of the plumbers and the status of their industrial agreements, a stormwater pipe that needed to be fixed and the arm of an excavator to be "chopped". Mr Dawson told Mr Chambers that Mr Mates had said that "if a labourer wasn't provided to the site by Monday ... they would be coming back to close the job. " Mr Chambers said that he would give Mr Mates a call. The respondents tendered a written statement made by Mr Chambers on 7 September 2006, and witnessed by the applicant. In that statement, Mr Chambers referred to his telephone conversation with Mr Dawson, and said only that Mr Dawson had said that Mr Mates had requested the provision of a labourer on site to act as a "peggy" and as occupational health and safety representative. The statement said nothing of a threat by Mr Mates to close the job. Mr Chambers made another statement about the same conversation on 3 April 2008, but again did not mention any such threat. It was put to Mr Chambers in cross-examination that these were important matters and that, if there had been any such threat, he would surely have referred to it in one or both of his statements. It was suggested that his first statement, made on 7 September 2006, was more likely to be reliable than his unaided recollection, at trial, of an event which was then more than 2 years in the past. At this point, Mr Chambers revealed for the first time that he had made a file note on 1 August 2006 of the telephone conversation which he had had with Mr Dawson on 28 July 2006. He believed that his file note was more accurate than the statement he made on 7 September 2006. He could not explain why he made no reference to the threat in the statement, nor why he did not refer to the file note at the time. Later on 28 July 2006 Mr Chambers telephoned Mr Mates as he had told Mr Dawson he would. According to Mr Chambers, Mr Mates repeated the request for Kane to provide a labourer on the project to act as a general labourer, an occupational health and safety representative and a first aider. Mr Chambers said that there was no labouring work on the job, and that due to the nature of the job there was no requirement for Kane to have a labourer there at that time. As it happened, Kane had another job "five minutes around the corner", and Mr Chambers offered that, if Mr Mates had concerns over occupational health and safety, a labourer from that other job could periodically come to this site to "view any concerns that may exist". He said that Mr Mates was not interested in that expedient. Mr Chambers described the ending of the conversation with Mr Mates as one in which they "agreed to disagree" --- Mr Chambers held to his line that there was not enough work for a labourer, and Mr Mates said that he would be back to the job on the following Monday. I explained to him that this was a small site and that there would be insufficient work to justify the provision of such a labourer. In the end we agreed to disagree. MATES stated to me that he would be returning to the site on Monday. However, when it was further put to him that Mr Mates had never said such a thing in that conversation, he responded: "I believe he did. " Again, Mr Chambers relied upon his file note, which he had not consulted when making his statement. Later, however, when the court sought to clarify this aspect with Mr Chambers, and to have him distinguish between his conversation with Mr Dawson and his conversation with Mr Mates, he said that he did not believe that Mr Mates "said directly to me that he would shut the job". Mr Mates gave evidence that, when Mr Chambers rang him, he expressed his concerns as to safety on the job, and with respect to "getting some help in that department for the period of time that I thought was crucial to the job", by which Mr Mates meant the time when the job was "in erection, when they were putting up the steel ... when ... [there were] cranes on the job and ... heavy machinery". He said that he raised with Mr Chambers his concerns about the amount of water and mud on the job, the general untidiness of the job and the state of the amenities. According to Mr Mates, Mr Chambers said that he had Mr Leonard to do that job, and that Kane did not put labourers on a project that was worth less than $2.1million. Mr Chambers offered to have a labourer from another site visit this site on a periodic basis and clean the sheds. Mr Mates told Mr Chambers that that was not really good enough, and that he would return to the site on the following Monday. Under cross-examination, Mr Mates was not dislodged from his insistence that he did not require the employment on site of a labourer as occupational health and safety representative, and for the other tasks associated with that. His position as put to Mr Chambers was only that Mr Leonard should be given some assistance. Monday 31 July 2006 was the day upon which the erection of steelwork on the site was scheduled to commence. Mr Leonard arrived on site at about 6.30 am. At about 6.40 am, a crane crew from BV Rigging arrived on site. At about the same time the riggers themselves --- about five or six of them according to Mr Leonard --- arrived. So did a flat-bed truck carrying the steel columns. Also present by 7.00 am were "a couple of concreters" (employed by Northwest Concrete) and the boilermaker, Daniel Rand. Work commenced at 7.00 am. The concreters were not concerned in the erection of the steel. Mr Leonard could not recall what they were in fact doing on 31 July 2006; when concrete was not being poured, their role was to assist the carpenter with the construction of formwork for future pours. It seems that there was a deal of rain at the site over the weekend of 29-30 July 2006. According to Mr Leonard, when the workers came into the sheds on the morning of 31 July to have coffee, they muddied the floor to an extent. But Mr Leonard said the amenities were clean. He said that he "wouldn't say they were disgusting. There wasn't rubbish everywhere, just footprints on the ground". Mr Mates arrived on the site at about 8 am on 31 July 2006. According to his evidence, nothing had been done to improve the condition of the site sheds --- they were in the same condition as when he saw them on 28 July. Mr Mates then spoke to Mr Leonard. According to Mr Leonard, Mr Mates told him that he had spoken to Mr Chambers, and had been told that there was not going to be a labourer on the job as an occupational health and safety representative, since there was not enough work to keep two Kane employees going. Mr Leonard's evidence was that Mr Mates said that he was going to shut the job down, and asked him (Leonard) to call the workers then on site into the shed. In his own evidence, Mr Mates agreed that he told Mr Leonard that he had spoken to Mr Chambers, that there had been "no outcome" and that "obviously nothing has changed in regards to getting you some help in regards to keeping the job up to scratch". According to Mr Mates, Mr Leonard agreed with those propositions. Mr Mates agreed that he asked Mr Leonard to call the workers together in the shed. However, he rejected the suggestion that he had told Mr Leonard that he was going to shut the job down. As I have mentioned earlier, the respondents tendered a statement made by Mr Leonard on 23 August 2006. I informed him that there was no labourer OH&S representative. Bob instructed me to call the blokes into the shed. I did as he instructed. Whilst the blokes were coming in Bob stated that he had a conversation with John Chambers, who is our Managing Director. Bob MATES said that this conversation was about putting the labourer on. He stated that John CHAMBERS had "knocked the deal back" and that he was here "to shut the job down". Mr Leonard told Mr Dawson that Mr Mates had asked him whether a labourer had been put in place on the site, and that he (Leonard) had responded in the negative. Then Mr Leonard said that Mr Mates had wanted to call a meeting of workers on the site. Mr Dawson could not recall whether it was in the course of that conversation, but at some point he asked Mr Leonard to make sure that, if labour were to be withdrawn, the workers realised that it was the doing of Mr Mates, not of Kane. The workers on site duly met with Mr Mates in the shed. Mr Mates gave evidence of the course of the meeting. He said that there were about 7 or 8 workers present. I spoke to the blokes in regards to my thoughts about Leonard's ability to do the job, his competence, and I spoke to the blokes in regards to the state of the job with the mud and with the general amenities as well. They were dirty, they were muddy, they were unclean. " As to safety, Mr Mates told the workers that he had "reservations regarding the way the site was being run", being, as Mr Mates put it, "water and mud". He told them that Mr Leonard had confirmed to him that he (Leonard) "was not in control of that building site in regards to the safety aspect of it". He said that "there was a general concurrence that there [were] issues on the job", and that the general feeling was that the site was "a pigsty". .... I asked them to ring their bosses and --- ring their bosses and ask the bosses to consider relocation because of the state of the job. However, according to Mr Mates, most of the workers went out to make a phone call. Mr Mates was not shaken from this evidence under cross-examination. He denied that he told the workers that he was shutting the job down. He denied that he told them that Kane had been warned on the Friday about the state of the amenities and the absence of a labourer as occupational health and safety representative. He denied that he told them that their options were either to be relocated or to go home. He denied that he presented them with a fait accompli , whereby no work was to be done on the site that day. He adhered to his evidence that, at the meeting, he expressed his safety concerns to the workers, and they expressed their concerns to him. As I have said, Mr Rand was the boilermaker who was on the site on 31 July 2006. He was self-employed. Called by the applicant, he gave some evidence under cross-examination as to the condition of the site sheds, and of the site generally, on 31 July 2006. When it was put to him that the site was muddy, Mr Rand replied that it had been raining, and that "there was a bit of mud around", adding "[t]here is on all building sites". He agreed that there was "a bit of mud" in the amenities, adding "[y]ou have got to expect it". Asked whether the amenities were "messy", Mr Rand said: "They weren't the worst I have ever seen in my life but they weren't the best I have ever seen in my life either. " Asked to rate the amenities with those he had seen elsewhere, he said: "Average. Bit below average maybe. " Mr Rand confirmed that there was a first aid room on site, but, never having had the need to have resort to it, he could not say whether it had been used for the storage of tools. He accepted that the toilet and lunch room were "muddy and messy". He had not seen them being cleaned for the time that he was on site. Mr Rand was one of the workers in the meeting addressed by Mr Mates on 31 July 2006. He had only the broadest of recollections as to what occurred on that day. He recalled someone from the Union coming to the site; he recalled that the workers were told to stay in the sheds (although he introduced the fact that it was raining on and off, which to an extent explained why work was not being performed); he recalled being addressed by the person from the Union; and he recalled that this person informed the workers at the meeting something "along the lines of we were to sit in the smoko sheds for a while ... while some things were sorted out", namely "things that were raised with the builder on the Friday [that] hadn't been sorted out or something". When he was pressed to recall further particulars of what the person from the Union had said, Mr Rand said: "I can't remember whether it was him that said it or it's just because I have spoken to other blokes since then that the facilities on site ..."; at which point Mr Rand paused, and when pressed to continue, he said: "... and [sic --- an? ] OH&S rep on site. " Under cross-examination, Mr Rand agreed that the workers were not "actually told the site was closed"; that they were not told to leave the site; and that the person from the Union did not say that he was shutting the job. Mr Rand said that he rang Peter Deanrea from Barra Steel, for whom he was working at the time, and explained to him that there was not any work going on at the site. He said there was something going on between the union and the builder. He asked Mr Deanrea what he wanted him to do. There was no further work for Mr Rand, so he went home. On one view, Mr Rand's recollection was so limited, and so broad, as to make his evidence of little value to the court. I do not, however, take that view. I am not surprised that someone in Mr Rand's position would recall the events of 31 July 2006 in the very general way that he did. Mr Rand struck me as an honest and forthright witness, but one whose recall of events which seemingly meant little to him did not descend to the detail perhaps claimed by those who were directly involved in those events. The respondents called Mr Mario De Riva, who described himself as having been at the time a "director" of Northwest Concrete. He was contracted to do the concreting at the site. Previously to the events with which we are here concerned, they had laid the concrete pads for the steel columns. At the end of July 2006, they were at the stage of setting up for the later pouring of concrete for the floor of the new extension. By then, Mr De Riva had been to the site about six times. There was --- I noticed, because the first thing I would look for when I would go to the site would be access for concrete trucks to provide access, so the --- for concrete trucks and concrete pumps and machinery to set up. I noticed that the access was fairly tight because of the fact that the existing building or the neighbouring building was storing machinery outside of the site. So, I noticed it was fairly tight and confined and also that I think Kane, the builder itself, was storing or dumping a lot of excess spoils from, maybe the plumbing works, in an adjacent area in front of the car park of the site, so it was fairly tight and confined. So, there wouldn't have been more than two site amenities on the site at the time. .... I recall the state of the amenities being fairly messy, rubbish bins being full, a lot of equipment and gear being placed in the site amenities due to the lack of space. Fairly ordinary actually, yes. He recalled the amenities being used for storing certain equipment, which he assumed belonged to contractors or the builder. Possibly by way of contrast with his statement set out above that there was a dedicated first aid "room", Mr De Riva said that he did not recall a dedicated first aid "facility". On the morning of 31 July 2006, Mr De Riva received a telephone call from one of his workers at the site. The worker first spoke briefly to Mr De Riva. In his evidence, Mr De Riva did not leave it altogether clear what the worker said to him in that brief conversation. Indeed, in chief, Mr De Riva did not even mention that the call had come from the worker, saying that it was Mr Mates who had called him. However, under cross-examination he accepted that the worker had called him, and that the worker had told him that the job had been shut down by Mr Mates. The worker then handed the phone to Mr Mates, so that he could speak to Mr De Riva. That's why he had a concern about the amenities and certain other issues that I can't recall. He took Mr Mates' statement as indicating that the site did not seem to be "quite up to scratch". So he decided to relocate his workers to another site. He stressed that this was his own decision. Mr Mates' own evidence of this conversation was that he asked Mr De Riva if he could "relocate" the workers. Mr De Riva responded that he could. According to the evidence of Mr Leonard, when the meeting finished he happened to be on the telephone to Mr Dawson. Mr Mates (or one of the workers) told Mr Leonard that the workers were being "relocated". Mr Leonard handed the phone to Mr Mates, and Mr Dawson told Mr Mates that Kane was (in Leonard's words) "going to take him to the commission". The "commission" referred to was the Australian Industrial Relations Commission ("the Commission") under the Workplace Relations Act 1996 (Cth) ("the WR Act"). Mr Dawson confirmed that he had a phone conversation with Mr Leonard, which he recalls as being a different, and later, one from that in which Mr Leonard had told him that Mr Mates had returned to the site. In this second conversation, according to Mr Dawson, it was he (Leonard) who informed him that Mr Mates had said that the workers were being relocated. Mr Dawson said that Mr Leonard did not give him the "exact reasons" for the relocation of the workers, his only information being that it was because Kane had not "carried out [Mr Mates'] request". Mr Dawson also said that he informed Mr Leonard that Kane would be pursuing the matter in the Commission. He was not asked, and he did not say, whether he had spoken to Mr Mates at this stage. For his part, Mr Mates did not recall speaking to Mr Leonard after the meeting. He said that he was aware that Kane was taking the dispute to the Commission, but he did not know when he became so, adding: "But it would have been after [the] events. " Mr Leonard was informed by some of the workers themselves that they were being sent to other sites by their respective employers. It was common ground that, subject only to the unloading of the truck which was in the course of delivering steel, no further work was done on the site that day. The employees of Northwest Concrete were taken off site by Mr De Riva, in circumstances to which I have referred. There was no direct evidence of the communication which the employees of BV Rigging (they constituting the majority of the workers on the site that day) made to their employer, but it seems (from the evidence of Mr Mates) that they did make a phone call and, as I have said, they did leave the site. Mr Leonard's statement of 23 August 2006 also deals with the course of events on 31 July 2006. I put the Bob MATES on the telephone to Howard and they had a conversation. Bob has handed the telephone back to me saying that there was no point to the conversation as he had already had the same conversation with John Chambers. I spoke to Howard DAWSON and he informed me to tell Bob MATES that they will be taking this to the commission. Bob MATES then came out of the meal room and told me that the blokes were being relocated. The foreman of Barra Steel asked MATES if he and a bloke from North West Concrete could unload a truck. Bob MATES agreed to this and they unloaded a truck. Bob MATES said that he had to leave and go to another site and he stated that if the Kane bloke was not there as an OH&S representative tomorrow we would go through this all again. Neither does he state that he, or Mr Dawson, told Mr Mates that Kane intended to take the dispute to the Commission. Otherwise, the statement is broadly consistent with Mr Leonard's evidence. Both in his evidence and in his statement, Mr Leonard stated that Mr Mates had said that, if a labourer were not on site as occupational health and safety representative the following day, they would "go through all this again" or "go through the whole thing again". Although Mr Mates denied saying this, Mr Leonard was not cross-examined about it. On the same day, 31 July 2006, Kane referred the dispute at the site to the Commission. Mr Mates telephoned Ms Emma Walters, an employee of the union, and requested her to lodge a dispute notification with the Victorian Building Industry Panel, a dispute-settling body in the building industry in Victoria to which I shall refer further below. He told her that the dispute was about adequate health and safety and the amenities on the job. He said that he believed there was a breach of the applicable industrial agreement. Ms Walters lodged a notification, a copy of which was tendered in evidence. Although dated 31 August 2006, counsel for the respondents submitted, and I accept, that the notification was both completed and lodged on 31 July 2006. The amenities are not hygienic and are not being adequately maintained such that the breach of appendix e of the enterprise agreement. Kane Constructions are in breach of Appendix H of the enterprise agreement. In accordance with appendix e of the agreement, the union gave Kane's sufficient time to rectify the breaches which were brought to Kane's attention on 28 July 2006 in the early am. He did that, as he said, "because the job had been ... shut down on the pretext of a health and safety issue". However, he was unable to speak to an inspector, so he rang the "hotline" number. He spoke to a person on that line and explained the situation to her. She said that, from the information Mr Dawson had provided, it was an industrial matter, not a health and safety matter, and that an inspector would not attend the site. On the following day, Tuesday 1 August 2006, the dispute notified by Kane came before the Commission. Conciliation occurred, where it was agreed that work would resume on site and that the site would be visited the following day by the Victorian Disputes Board (ie the "Panel" which had been notified by the Union). That visit took place on Wednesday 2 August 2006. According to Mr Dawson, the members of the Panel inspected the amenities, with particular reference to the Union's concerns about mud on the floor and the like. Mr Mates said that the members of the Panel, representatives of Kane, a representative from the Master Builders' Association and himself (Mates) "walked around the job and [there] was general agreement that the ... amenities weren't real flash". He said, however, that there was still "a sticking point in regards to how we were going to proceed with the general safety on the job in regards to giving Leonard some sort of help". The outcome of the inspection was not documented. Mr Dawson said that the dispute "just seemed to go away". Kane held to its line that it would not put a labourer on the site, but it agreed to Mr Mates continuing to monitor the site and to raise such concerns as he had. The first is the WR Act. Building and construction work on the site was covered by the National Building and Construction Industry Award 2000 ("the award"), but the operation of the award was (by reason of provisions of the WR Act which do not need to be explored) subject, to the extent of inconsistency, to the terms of any applicable industrial agreement certified under the WR Act. There were two such agreements which were potentially relevant: the Kane Constructions and the CFMEU Building and Construction Industry Enterprise Agreement 2005-2008 ("the Kane agreement"), which covered the employees of Kane, and the BV Rigging (Aust) Pty Ltd and the Rigger/Steel Erecter CFMEU (Victorian FEDFA and Construction and General Divisions) Collective Bargaining Agreement 2005-2008 ("the BV agreement"), which covered the employees of BV Rigging. At least relevantly to the present matter, the provisions of these two agreements appear to be identical. Where there is no need to distinguish between them, I shall refer to them as "the certified agreements". Disputes over any work related or industrial matter or any matters arising out of the operation of the Agreement or incidental to the operation of the Agreement should be dealt with as close to its source as possible. Disputes over matters arising from this Agreement (or any other dispute related to the employment relationship) shall be dealt with according to the following procedure. Alternatively, the Company may submit an issue to the employee/s who may seek the assistance and involvement of the employee representative or other representative. Work shall continue without interruption from industrial stoppages, bans and/or limitations while these procedures are being followed. The pre-dispute status quo shall prevail while the matter is being dealt with in accordance with this procedure. If still not resolved, there may be discussions between the relevant Union official, or other representative of the employee, and senior Company representative. The relevant union official commits to make him/herself available to be involved at any stage of the procedure as required, or in respect of any potential dispute. Should the matter remain unresolved either of the parties or their representative shall refer the dispute at first instance to the Victorian Building Industry Disputes Panel (which shall deal with the dispute in accordance with the Panel Charter). Either party may, within 14 days of a decision of the Panel, refer that decision to the Australian Industrial Relations Commission (AIRC) for review. The AIRC may exercise its conciliation and/or arbitration powers in such review. A dispute resolution procedure, in almost identical terms, was also contained in the BV agreement. The certified agreements placed particular emphasis upon workplace safety. Part III of each dealt with the subject. 16.3.3 If any party involved in the resolution of the issue requests, the details of the issue and all matters relating to its resolution must be set out in writing by the Company to the satisfaction of all parties. 16.3.4 As soon possible after the resolution of an issue, details of the agreement must be brought to the attention of affected employees in an appropriate manner. 16.4.2 During any period for which work has ceased in accordance with such a direction, the Company may assign any Employee whose work is affected to suitable alternative work. 16.6.2 This would not be applicable on normal de watering (see clause 34.6.7 hereof) or normal housekeeping work or where a section of the site has been declared unsafe and normal rectification occurs whilst the remainder of the site carries on working. It is agreed that any 'housekeeping' work performed on projects is to be paid at single time rate. Clause 46 of the BV agreement provided that amenities were to be provided as prescribed in App F thereof, but that reference seems to be an obvious typographical error, since App F is concerned with the subject of "Shopping Centres". It is App E which deals with amenities, the terms thereof being identical to those of App E of the Kane agreement. Where, however, that standard is not maintained due to an action or event beyond the control of the Company, the Union agrees that the Company should be allowed reasonable time in which to rectify the problem. If the Company acts promptly to rectify the problem, there should be no interruption to work from industrial stoppages, bans and limitations. 5.6 Closets and urinals are to be washed daily with disinfectant and kept in clean, hygienic condition. Safety practices as set out in occupational health & safety authority "Alerts" will be adhered to. In the case of Acts, the list included the Occupational Health and Safety Act 2004 (Vic) ("the OH&S Act"). In the case of codes of practice, the list included Code of Practice No 13 --- "Building and Construction Workplaces" and Code of Practice No 18 --- "First Aid in the Workplace", each made with reference to s 55 of the Occupational Health and Safety Act 1985 (Vic). A copy of each of those codes of practice was tendered by the respondents. The award itself also contained provisions of potential relevance. Clause 11 of the award set out a stepwise procedure for the settlement of disputes. No party shall be prejudiced as to final settlement by the continuation of work in accordance with this subclause. This subclause shall not apply to any dispute involving a bona fide safety issue. Section 26 was concerned with the duties of persons who managed or controlled workplaces, and subs (1) required such a person to ensure, so far as was reasonably practicable, that the workplace and the means of entering and leaving it were safe and without risks to health. The OH&S Act made provision for the appointment of inspectors. Section 111 empowered an inspector to issue an improvement notice to a person whom the inspector reasonably believed was contravening a provision of that Act or of Regulations made under it, or who had contravened such a provision in circumstances that made it likely that the contravention would continue or be repeated. The notice would require the person to remedy the contravention, likely contravention or matters or activities causing the contravention or likely contravention. Section 112 of the OH&S Act made provision for the issue, by an inspector, of a "prohibition notice". There is a dispute between them as to what was said in their conversation on that day. The absence of any note, by either of them, about the conversation adds to the difficulty of resolving that dispute. It is true that, on the following Monday, the Union submitted a notification of a dispute to the Building Industry Panel, which notification was completed on the instructions of Mr Mates and provides support for his evidence as to his then perception of the conditions on site, but by then Kane had itself notified (or had made it clear that it intended to notify) the Commission, and the parties' positions had generally become more formalised and adversarial. I do not regard that notification as corroborative of Mr Mates' evidence as to the terms of his conversation with Mr Leonard on 28 July 2006. The court's task in deciding which version of the conversation --- Mr Leonard's or Mr Mates' --- is correct is made the more problematic by reason of the rather subtle, yet potentially quite important, differences between them. Aside from the issue whether Mr Mates threatened to close the job down, the difference comes down to whether he required the employment (or engagement or designation) of a labourer to be the site occupational health and safety representative (as recalled by Leonard) or whether he told Mr Leonard that, given the condition of the site and the amenities, it was apparent that he (Leonard) needed some assistance and that he would make representations to Kane in that regard (as recalled by Mates). The terms in which Mr Mates recalls the matter (unassisted by notes as he was) strike me as somewhat more developed than are likely to have been the actual words used at the time, particularly if, as Mr Mates insisted, he was quite appalled by the condition of the site sheds, including the amenities. I am disposed to think that Mr Mates' evidence represents a euphemistic way of conveying what was probably the direct sense of what he said to Mr Leonard, namely, that the site needed a labourer to discharge occupational health and safety responsibilities and to attend to matters of cleanliness and organisation generally, and that one should be engaged without delay. The respondents submit that I should accept Mr Mates' evidence as to the condition of the site sheds on 28 July 2006, and that that evidence provides support for their primary submission that he was the more likely to have emphasised to Mr Leonard the need for some help with respect to the general cleanliness of the site, rather than to have made a direct demand for the employment of additional labour. Some support for Mr Mates' position comes from the evidence of Mr Kelly who was also on the site on 28 July 2006. He corroborated Mr Mates' evidence that there was mud in the sheds, that the bins in the lunch room were overflowing, and that the first aid room was being used for the storage of tools. Mr Rand accepted that the lunch room and toilet were muddy and messy, but he made no comment (and was not asked for one) about the state of the bins. He was unable to say whether the first aid room was used for the storage of tools. Mr De Riva recalled the amenities being messy, the rubbish bins being full (not overflowing) and the amenities being used for the storage of equipment. As I have said, Mr Mates was specific and categorical in the way he described the condition in which he found the site sheds on 28 July 2006. Mr Leonard, by contrast, for the most part described his general practice of cleaning the sheds, rather than their actual condition at a particular point in time. When he was taken --- repeatedly --- to the latter, he tended to respond that he did not "recall". I do not take that as an indication of Mr Leonard's unreliability as a witness. If his evidence is to be accepted, 28 July 2006 was a normal day, save that Mr Mates visited the site and asked for a labourer to be employed; and nothing was said about the condition of the site. I would be surprised if Mr Leonard could give evidence about the state of the floors, the toilets, the bins or the first aid room on a particular day more than two years later. If Mr Mates' evidence is to be accepted, by contrast, he observed not normality but a seriously dysfunctional situation. He is more likely to have remembered that. It was not suggested by Mr Mates that he took Mr Leonard on an inspection of the site sheds and directly pointed out to him the matters that were, according to him, in such dire need of attention. Indeed, Mr Mates described his activity in relevant respects as an observation, not an inspection. The absence of a joint inspection, with the added focus and clarity that that would most likely have brought to the recollections of both parties, introduces, I consider, a certain unreality to the court's task of deciding whether the conditions were indeed as Mr Mates described them in his evidence. The subject-matter itself is to an extent a matter of degree, as is clear from the use of such judgmental expressions as "appalling", "filthy" and "a disgrace". This makes it the more regrettable that some record of the objective situation --- or at least of the allegations actually voiced at the time --- was not made. The situation is made the more curious by the circumstance that the parties --- Kane and the Union --- between them either referred the matter or attempted to refer the matter to no fewer than three independent agencies, presumably in an attempt to have them come to grips with the essence of the matters in dispute. In one way or another, however, each of those agencies left the parties with no record of any findings as to the now-disputed conditions on the site or as to the merits of Mr Mates' allegations generally. WorkSafe declined to send an inspector because of a view that the problem was an industrial one, not a health and safety one. The Commission withdrew from the field on the basis that the matter had been notified to, and would be handled by, the Building Industry Panel. The Building Industry Panel conducted an apparently formal inspection and resolved the dispute amicably --- but without leaving behind any finding as to the matters in dispute or the condition of the site. At least at this stage of the case, the central question is not whether the site sheds were in a clean and hygienic condition, but what Mr Mates said to Mr Leonard. I am disposed to view the statement which Mr Leonard made on 23 August 2006, set out in par 17 above, as the most reliable indication of what was said. It was tendered by the respondents. Mr Leonard was cross-examined towards acceding to the proposition that his recollection of the events of 28 July 2006 was likely to have been fresh, and therefore reliable, at the time when he made the statement. Indeed, by the trend of the cross-examination set out in par 17 above, the respondents have, I consider, tied themselves to the position that Mr Leonard's statement is accurate and reliable not only with respect to what it says but also with respect to what it does not say. If the respondents proposed to submit, notwithstanding their tender of the statement, that there was some respect in which it was inaccurate or incomplete, it was, in my view, incumbent upon them to put squarely to Mr Leonard not only the substance of the matters concerned (which they did) but also the problem of his inaccuracies or omissions as such (which they did not). I am, therefore, disposed to accept Mr Leonard's statement as setting out the substance of his conversation with Mr Mates on 28 July 2006. The statement contains no reference to Mr Mates having mentioned the condition of the sheds or of the site generally. Further, the statement makes it clear that Mr Mates did require the employment or engagement of an occupational health and safety representative on the site by the following Monday. I do not accept Mr Mates' evidence to the contrary in either respect. He is a party to this proceeding, and his evidence, both at this point and elsewhere, tended to emphasise the exculpatory connotations which his statements and conduct were plausibly able to wear. He gave his evidence directly and confidently, and without hesitation. Yet the clarity of recollection which he claimed to have in point of detail strikes me as incongruous in the context of an organiser who made over 300 site visits in a year. By contrast, Mr Leonard was less obviously confident in the giving of his evidence, yet more obviously cautious about overstating the position. He was often prepared to agree that various things put to him in cross-examination were "possible", which of course they were. On the two aspects presently under discussion, he made it clear that his recollection was that Mr Mates made no complaint about occupational health and safety concerns on the site and that Mr Mates did require the engagement of a labourer in an occupational health and safety role by the following Monday. I accept Mr Leonard's evidence in these respects. There is some other evidence which supports the applicant's case that Mr Mates required that the site have a labourer in an occupational health and safety-cum-peggy role. There is the evidence of Mr Kelly, called by the respondents. He said that there was a conversation to the effect that the job needed an occupational health and safety representative. He could not recall that Mr Mates insisted that there be one by the following Monday, but he did recall a conversation to the effect that one was needed on the site. There is the evidence of Messrs Dawson and Chambers. I accept that their evidence is relevantly contested by Mr Mates, but they struck me as honest and conscientious witnesses who were doing their best to recount events as they recalled them. They did not embellish their evidence with propositions which may have been helpful to the applicant. They readily accepted that statements of which they had no recollection might possibly have been made. Neither they, nor Kane, is a party to the proceeding, and I can think of no reason why either of them would perceive any advantage in giving evidence that was adverse to the respondents. Mr Dawson said that Mr Mates insisted that there be an occupational health and safety labourer on the site immediately. Mr Chambers recalls Mr Dawson conveying such a requirement to him by telephone on the same day. Of his direct conversation that day with Mr Mates, Mr Chambers said that Mr Mates requested the provision of someone to act as a general labourer, an occupational health and safety representative and a first aider. The suggestion which Mr Chambers made, and which Mr Mates rejected, that a labourer from another site could attend the site as required, also supports the notion that it was the addition of a labourer to the permanent workforce on site which was the focus of the discussion between them on 28 July 2006. Mr Chambers' evidence is supported by his statement of 7 September 2006, tendered by the respondents (see par 33 above). I also note that neither Mr Chambers nor Mr Dawson recalls having been told, on 28 July 2006, that Mr Mates' concern related to the condition of the sheds or of the sites generally. If Mr Mates' protestations were anything like as serious, or as categorical, as he had stated in his evidence, it is, in my view, quite improbable that Mr Leonard would not have passed the complaints on to Mr Dawson (and Mr Dawson to Mr Chambers). In the circumstances, I would find that the essence of the conversation between Mr Mates and Mr Leonard on the site on 28 July 2006 was as compendiously stated by Mr Leonard in his statement, as set out in par 17 above. The other contentious aspect of the conversation between Mr Leonard and Mr Mates on 28 July 2006 is the question whether Mr Mates threatened that, absent the presence of a labourer on site on the following Monday, he would shut (or close) the job down. Mr Mates strenuously denied having made any such threat. Mr Leonard initially gave evidence that such a threat was made, but later accepted that the terms of his statement of 23 August 2006 most probably provided the more reliable record of what had been said (ie, that, absent the labourer, Kane would have some problems). Apart from Mr Kelly (who could not recall even the "have some problems" comment), no other witness gave even indirect evidence of the conversation between Messrs Leonard and Mates. Messrs Dawson and Chambers did give evidence of what Mr Mates had said on 28 July 2006, but, in each case, that evidence was based upon what Mr Mates had said directly to the witness concerned. In the case of Mr Chambers, he gave evidence, to which he adhered under cross-examination, that Mr Dawson had told him that Mr Mates had threatened to close the job. However, Mr Dawson's own evidence does not contain any such element, and there is no suggestion that, in conversation with Mr Chambers directly, Mr Mates made any such threat. However these variations may be, the matter is, I consider, resolved by reference to the applicant's pleading. The applicant did not allege that Mr Mates threatened to shut (or to close) the job down. Neither did he rely upon what Mr Mates said to Mr Dawson or to Mr Chambers. He relied only upon the conversation between Mr Mates and Mr Leonard, and particularised his allegation in the terms employed in Mr Leonard's statement, as set out in par 17 above. He alleged that a threat to organise a work stoppage, or to take some other action which would disrupt work on site, was to be implied from Mr Mates' words to Mr Leonard "or Kane will have some problems". For reasons set out above, I find that Mr Mates did use those words, or words substantially conveying that meaning. As I have said, the cross-examination of Mr Leonard by counsel for the respondents as good as implied an acceptance that those words were used by Mr Mates. I am satisfied, therefore, that Mr Mates intimated to Mr Leonard that a person should be employed as a building employee, or that an employee or contractor should be designated, to perform occupational health and safety responsibilities, and general peggy duties, on the site. I am also satisfied that this intimation was firmly and directly made, and was intended to be taken seriously and to be complied with promptly. However, did Mr Mates thereby threaten to organise a work stoppage, or to procure a disruption to work, as alleged by the applicant? The applicant's case as pleaded is not that Mr Mates expressly made such a threat, but rather that he implicitly did so. Whether his words carried that implication is a question to be decided objectively, by reference not only to the words themselves but also to the surrounding context. An important consideration is the seriousness of the threat if the words did imply what the applicant alleges: since Kane did not have its own employees on the site (other than Mr Leonard himself), the conduct implied would have amounted to an interference in the performance of contracts between Kane and such of its sub-contractors as had work on the site at the relevant time. I would pause before accepting that words, otherwise benign in themselves, necessarily carried that implication. It was not suggested by the respondents that Kane was in breach of any statutory, regulatory or award provision in not having an occupational health and safety labourer on the site in addition to Mr Leonard (who, it seems to be accepted by the respondents, had the appropriate qualifications). That may not, however, have been the end of the "problems" which Mr Mates might be taken to have predicted. There was, for example, the possibility that the employees of sub-contractors working on the site from time to time might not be content with the health and safety arrangements, or with the condition of the site. Mr Leonard's discharge of his normal site management functions might, as Mr Mates asserted, leave him with insufficient time to attend to health and safety-related aspects of the working conditions of the site. Workers might, even without the prodding of a union organiser, have taken the kind of decisions that Mr Mates claims they did at their meeting on 31 July 2006. There were, therefore, a number of plausible courses that events might have taken on the site in the absence of an occupational health and safety labourer, looking at the matter objectively against the facts existing on 28 July 2006, and known to Mr Mates and Mr Leonard, and which could, without straining the language, be described as visiting "some problems" upon Kane. I do not consider that Mr Mates' words necessarily carried the implication for which the applicant contends. They were very general words, and doubtless the organisation of stoppages or disruptions might have been fairly described by them (ie as amounting to "some problems"). But so might many other outcomes. That being so, I cannot find that Mr Mates' words implied what the applicant alleges. Relevantly to the events of 28 July 2006, the applicant's case was conducted only by reference to the allegation that the "some problems" statement by Mr Mates implied a threat to stop or to disrupt work. That is to say, there was no alternative case that, absent that implication, Mr Mates' words, either in themselves or as implying something else, bespoke an intent to coerce Kane. Since I have not accepted the applicant's case on implication, it follows that his allegations of unlawful conduct on 28 July 2006 must be dismissed. In his statement of 23 August 2006, Mr Leonard said that Mr Mates told him that he had spoken to Mr Chambers about putting a labourer on, and that the latter had "knocked the deal back". Mr Mates said that he spoken to Mr Chambers, but that there had been "no outcome", and that "obviously nothing has changed in regards to getting you some help in regards to keeping the job up to scratch". I am satisfied that the substance of Mr Mates' concern, as expressed to Mr Leonard, was that Mr Chambers had refused to engage a labourer on the site, and that the position was, therefore, the same as it had been on the Friday. As to the allegation that Mr Mates told Mr Leonard that he intended to shut down the job, or used words carrying that meaning, I am satisfied that he did so. I am influenced by the tender, by the respondents, of Mr Leonard's statement of 23 August 2006, by the tenor of the cross-examination of Mr Leonard with respect to the reliability of that statement (albeit by reference to the events of 28 July 2006) and by the failure of counsel for the respondents to cross-examine Mr Leonard on his oral evidence that Mr Mates had made such a statement. I can think of no reason why Mr Leonard would not tell the truth as he recalled it in this respect --- either in his statement of 23 August or in court --- and none was suggested on behalf of the respondents. Mr Leonard is no longer employed by Kane, and would appear to have no interest in the outcome of this proceeding. I accept his evidence. While I also accept that Mr Mates was attempting to tell the truth as he recalled it, he did not have the advantage of any note or reasonably contemporaneous memorandum by reference to which to refresh his recollection. As noted above, he was involved in some hundreds of site visits each year. Against the evidence of Mr Leonard to which I have referred, I am not prepared to accept Mr Mates' denial of having stated an intention to close down the job. I turn next to the important question of what Mr Mates said to the workers at their meeting on 31 July 2006. The only direct evidence on this subject was that of Mr Mates and of Mr Rand. Each denied that the former had said that he was shutting the job down, or similar. Although Mr De Riva was told by one of his workers that the job had been shut down by Mr Mates, the evidence, indirect as it is, is not sufficient for me to find that Mr Mates had addressed the meeting in those terms. It is well within the bounds of reasonable probability that this statement by the worker to Mr Riva amounted to the worker's interpretation of what had happened. I find that Mr Mates did not tell the workers that he was shutting (or closing) down the job, and did not direct them to leave the site. I accept both the evidence of Mr Mates (as set out in par 39 above) and that of Mr Rand (as set out in par 42 above) as to the course of the meeting. However, I do not accept that Mr Mates went no further than to outline to the workers the poor state of the conditions on site, and the safety problems which that potentially involved, and left it to them to decide what to do about it. I commence with my earlier findings, first, that it was the absence of an occupational health and safety labourer-cum-peggy that was Mr Mates' principal concern on 28 July 2006 and, I consider, his principal reason to return to the site on 31 July, and secondly, that Mr Mates had already (on 31 July) told Mr Leonard that he was there to shut down the job. There is some corroboration of the first of these points in the evidence of Mr Dawson that Mr Leonard had told him by telephone that Mr Mates was back on site and had asked him (Leonard) whether a labourer had been put in place. From there, I accept Mr Mates' own evidence that he addressed the meeting in terms which were strongly critical of the condition of the site. I also accept his evidence that he told the meeting that Mr Leonard was not in control of the safety aspects of the site. These were, in my view, statements naturally calculated to induce a sense of reserve in a reasonable worker about continuing to work on the site. I then take account of the evidence of Mr Rand, general though it was, that Mr Mates expressed a concern about something raised on the Friday which had not been sorted out by the builder. The sense of this is that the builder (Kane) was in default in some way. I also note that Mr Rand did recall some point being made about an occupational health and safety representative on site. Finally, Mr Mates himself gave evidence that he asked the workers to ring their bosses and to consider relocation because of the state of the job. In the light of the evidence to which I have referred, it would be naïve not to recognise that the burden of Mr Mates' message to the workers in the meeting on 31 July 2006 was that they should perform no further work on the site that day. No doubt he had his own good reasons for conveying that message. I accept also that it was not a direction. It was, however, a recommendation with the authority of a union organiser. Neither would it have appeared to the workers to be any spur-of-the-moment thing: Mr Mates' reference to something having been raised with the builder on the Friday, and not sorted out, would have given an element of considered seriousness to what he was recommending. I accept also that the workers generally agreed with Mr Mates' assessment of the situation on site, but he himself added an opinion about Mr Leonard's ability to control matters of safety on site which would not otherwise have been known to the workers. That Mr Mates would have felt able to make a comment about such a subject could only have added further authority to what he said. For the above reasons, I accept the applicant's allegation that, on 31 July 2006, Mr Mates organised a stoppage of work on the site. I also accept the alternative, and effectively indistinguishable, formulation relied on by the applicant, namely, that Mr Mates "took ... steps to procure" such a stoppage. First, there is the tender of Mr Leonard's statement, in which such a statement by Mr Mates is referred to, by the respondents themselves. Secondly, there is the respondents' omission to cross-examine Mr Leonard on his oral evidence (unassisted at the time by any reference to his statement) to the same effect. I am satisfied that Mr Mates did use words generally along the lines alleged by the applicant, namely, that if there were not an occupational health and safety representative on site the following day, "we'll go through all this again". The "all this" to which Mr Mates referred was, of course, holding a meeting with the workers, persuading them to ring their employers with a view to having their own labour withdrawn from the site and the fact of such withdrawal. In context, Mr Mates' words were, in my view, a threat that, in the absence of a labourer on the site, he would procure those outcomes; Gietzelt v Craig-Williams Pty Ltd (No 1) (1959) 1 FLR 456 , 459. It was a threat capable --- subject to the existence of an intent to coerce --- of amounting to a contravention of s 43 of the BCII Act. The applicant contended that Mr Mates' organising of the work stoppage on 31 July 2006 was unlawful industrial action within the meaning of s 38. Following closely his client's Statement of Claim, counsel for the applicant put this in the following ways: The act of organising or procuring a stoppage of work constituted the engagement, by Mr Mates, in a ban, limitation or restriction upon the performance of work. The stoppage of work by the workers on the site constituted the engagement, by them, in a ban, limitation or restriction upon the performance of work, and Mr Mates organised or procured that stoppage. The stoppage of work by the workers on the site constituted the engagement, by them, in a ban, limitation or restriction upon the performance of work, and Mr Mates, by organising or procuring that stoppage, authorised the employees to engage in it. The stoppage of work by the workers on the site amounted to unlawful industrial action by them in contravention of s 38 of the BCII Act, and Mr Mates organised, counselled, procured, encouraged or was knowingly concerned in or a party to that contravention. To an extent, they appear to be the result of the highly structured terms of the BCII Act. By the first proposition, the applicant contends that what Mr Mates did was a ban etc as such. The second proposition has two elements, the first of which is that the workers engaged in a ban etc, and the second of which is that Mr Mates organised or procured it. The third proposition seems to invoke s 69(1)(c)(iii) of the BCII Act, which provides that conduct by a group of members of a "building association" (ie including the Union) authorised by an officer or agent of the association acting in that capacity is to be taken to be conduct of the association itself. The fourth proposition invokes s 48(2) of the BCII Act, which provides (relevantly) that, for the purposes of Pt 1 of Ch 7, a person is "involved" in a contravention of a civil penalty provision (such as s 38) if the person counselled or procured, or was knowingly concerned in or party to, the contravention. Although each of the second, third and fourth propositions may be regarded as alleging a form of derivative liability, to make good the fourth (but not the second or third) it would be necessary to show that the workers themselves not only engaged in a ban etc, but actually contravened s 38. Notwithstanding that distinction, to make good each of the second, third and fourth propositions the applicant must at least establish that the workers themselves engaged in a ban, limitation or restriction on the performance of work in accordance with the terms and conditions prescribed by an industrial instrument, within the meaning of par (b) of the definition of "building industrial action" in s 36(1) of the BCII Act (see par 7 above). I shall, therefore, commence with that aspect of the problem. Counsel for the respondents accepted that the workers were covered by an instrument or order of the kind referred to in par (b) of the definition. However, he submitted that the applicant had not identified, either in his pleading or in his evidence, the term of the industrial instrument which related to the performance of work and which was claimed by him to be the subject of the alleged "ban, limitation or restriction", as required by that paragraph. As an instance of such a term, counsel drew my attention to cl 12 of the award, headed "Employer and employee duties". Subclauses 12.1.1 and 12.1.2 were in the following terms: 12.1.1 An employer may direct an employee to carry out such duties as are within the limits of the employee's skill, competence and training consistent with the classification structure of this award provided that such duties are not designed to promote de-skilling. 12.1.2 Any direction issued by an employer shall be consistent with the employer's responsibilities to provide a safe and healthy working environment. However, counsel's point here was simply that it lay upon the applicant to prove the existence, and applicability, of a term of an industrial instrument which related to the performance of work, and that the applicant had not conducted his case by reference to that obligation at all. I do not accept the construction of par (b) of the definition of "building industrial action" for which counsel for the respondents contended. The genesis of the paragraph was the provision very commonly inserted into awards made by the Commonwealth Conciliation and Arbitration Commission, and before it by the Commonwealth Court of Conciliation and Arbitration, under the Conciliation and Arbitration Act 1904 (Cth). " .... My opinion is that Mr Wooten and Mr Collins have had to strain the natural meaning of "accordance" to gain support for the construction for which they contend. The dictionary meaning of accordance is "agreement with a person" or "conformity with a thing" whilst two of its synonyms are "concord" and "harmony. " Whether the phrase "in accordance with" attaches itself to "performance of work" or to "work" I cannot see why it should be given the harsh meaning sought by Mr Collins and Mr Wootten. I would hold that the phrase "the performance of work in accordance with this award" means no more than "the performance of work covered by this award". ... From a natural construction I am satisfied that the policy of the award and the inclusion of the sub-clause was to discourage or prevent organizations being concerned in a total prohibition of, or partial interference with, work covered by the award, whatever the motive or purpose of the prohibition or interference. The first statutory definition of "industrial action" was introduced into the 1904 Act by the Conciliation and Arbitration Amendment Act (No. 3) 1977 (Cth). That definition used the very formula now to be found in par (b) of the definition in s 36(1) of the BCII Act, namely, "... a ban, limitation or restriction on the performance of work, or on acceptance or offering for work, in accordance with the terms and conditions prescribed by ..." various generically-identified forms of industrial instrument. I do not consider that the introduction of the phrase "the terms and conditions prescribed by" after "accordance" altered the meaning attributed to the corresponding provision by Kirby J, ie that "in accordance with" meant "covered by". Thus the extended statutory phrase introduced in 1977 conveyed the meaning "covered by the terms and conditions prescribed by ...." The same meaning should be given to the same phrase in par (b) of the definition in s 36(1) of the BCII Act. The next issue which arises under par (b) of the definition of "building industrial action" is whether the workers engaged in a "ban, limitation or restriction" on the performance of their work. This meaning accords with the use of the term in industrial relations discourse. I would add that that the concept involves a prohibition which is absolute or categorical, and not merely a matter of inclination or preference. When Kirby J referred to a "lesser interference", I consider that his Honour had in mind a limitation or restriction which did not involve a total prohibition of all the work described, such as a refusal to use a particular machine or tool. There would still be, in my view, be the need for the refusal to have the qualitative dimension of being absolute or categorical that is required in the case of a ban as such. In the facts of the present case, Mr Mates effectively recommended that the workers stop work on the site, but he did so by having them contact their employers and ask to be relocated to other sites. Since those workers were under the control of their employers, not Kane, it is the nature of their communications with those employers that must govern the answer to the question whether they engaged in a ban, etc. If they refused to work on that site, there would, in my view, have been at least a limitation on the performance of work, notwithstanding that they may have been prepared to work elsewhere. On the other hand, if they went no further than to inform their employers of what Mr Mates had said, and then proceeded wholly in accordance with the employers' instructions, their conduct could not, in my view, be so characterised. There is evidence of the communication between the employees of Northwest Concrete and Mr De Riva on 31 July 2006. One of them rang Mr De Riva, and left it to Mr Mates to explain what had happened. Mr Mates suggested relocation, and Mr De Riva made his own decision. I could not hold, on this evidence, that those employees engaged in a ban, limitation or restriction on the performance of work. As to the employees of BV Rigging, the applicant's case, relevantly, is wholly inferential. No representative of that company was called. The court does not know (at least by direct evidence) what those employees, or their spokesman, said to their employer. Insofar as things may be inferred, I could not go further than to hold that, most probably, those employees asked to be relocated because of the view (right or wrong) expressed by their union organiser that the condition of the site and of the amenities was not such that work should be performed there. This does not, in my view, amount to a ban, limitation or restriction on the performance of work. It not having been established that any of the workers on the site on 31 July 2006 engaged in a ban, limitation or restriction on the performance of work, I would reject each of the second, third and fourth propositions set out in par 84 above. I turn next to the first proposition, ie that Mr Mates directly engaged in unlawful industrial action on 31 July 2006. The applicant's contention is that Mr Mates organised, or took steps to procure, the stoppage of work which in fact took place on that day (a contention which I have accepted) and that this amounted to the imposition of a ban, limitation or restriction on the performance of work. By imposing the ban etc (according to the applicant), Mr Mates necessarily "engaged" in it. In addition to the argument with which I have dealt at pars 86, 87, 88 above, counsel for the respondents made the omnibus submission that, of its nature, a ban, limitation or restriction on the performance of work could be engaged in only by the employees who would normally perform that work. In this respect, counsel relied upon the judgments of the Full Court in Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (1998) 89 FCR 200 , 213 (which, as it happens, was later reversed in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47 ; (2000) 203 CLR 194) and Davids Distribution Pty Ltd v National Union of Workers [1999] FCA 1108 ; (1999) 91 FCR 463 , 486 [52]. The same submission was, however, rejected by Kenny J in Cahill v Construction, Forestry, Mining and Energy Union (No 2) [2008] FCA 1292 ; (2008) 170 FCR 357 , 370-381 [31]-[60]. Her Honour pointed out that the two Full Court judgments were concerned only with the question whether a restriction on work implemented by way of a picket line which prevented those who would otherwise perform the work from having access to their work site was a "ban, limitation or restriction" within the meaning of the definition then under consideration. They were not concerned with the question whether a union, or one of its officials, engaged in a "ban, limitation or restriction" by imposing a prohibition upon its members working, or working in a particular way. Indeed, the formal imposition of a ban, limitation or restriction upon particular work by a trade union, with the intent that its members would be bound to give effect, and would in fact give effect, thereto, has been, over the years, the very essence of direct action for the maintenance and improvement of the working conditions of employed persons. I agree with Kenny J that, in each of the judgments referred to, the Full Court was concerned with a different proposition from that now advanced on behalf of the respondents. It follows that conduct by Mr Mates with reference to the workers on the site on 31 July 2006 is capable of constituting the engagement by him in a ban, limitation or restriction on the performance of work by those workers. However, did his conduct on that day do so? As I have found, immediately before the meeting of workers on the site on 31 July 2006, Mr Mates told Mr Leonard that he intended to shut the job down. I also accept that Mr Mates went into the meeting with the intention of prevailing upon the workers to bring about that very result by stopping working on the site. Had Mr Mates directed the workers to stop work, or announced that the job was shut down, he would thereby, in my view, have imposed a ban, limitation or restriction (and thus engaged in such). However, Mr Mates did neither of these things. He gave no direction. His own evidence was that he asked the workers to "ring their bosses and ask the bosses to consider relocation because of the state of the job". There is no direct evidence to contradict this, and the evidence of Mr De Riva supports it. Mr Rand's evidence is not inconsistent with it. However confident Mr Mates may have been that, by these means, he would achieve his object of closing down the site, the fact is that he did so by a recommendation which, if carried out, would have involved the workers themselves doing no more than asking their employers to consider relocation. I could not accept that Mr Mates' words amounted to the imposition of a ban, limitation or restriction on the performance of work in the sense I have explained it above. It follows from these reasons that the applicant's allegations that Mr Mates engaged in unlawful industrial action in contravention of s 38 of the BCII Act must be dismissed. Since Mr Mates was the only actor for whose conduct it was said that the Union was also liable, the like allegations against the Union also must be dismissed. This case requires inquiry at two levels: first, did Mr Mates organise the stoppage in order to have Kane do that, and if so, secondly, did this amount to coercion? As to the first aspect, Mr Mates' evidence was that the purpose of his visit to the site on 31 July 2006 was to see whether any of the safety issues which he claimed to have pointed out on 28 July had been addressed. He said that the purposes of his discussions with Mr Leonard "were all about trying to help the bloke; safety". Mr Mates did not give direct evidence of his purpose in suggesting to the workers in the meeting that they ring their employers and ask to be relocated. How such a procedure might have advanced his purpose of trying to help Mr Leonard with matters of safety was left obscure in the respondents' case. However, assuming that the provision of help for Mr Leonard was a concern of Mr Mates, the most obvious way for that to have been achieved would have been for Kane to be prevailed upon to employ or engage additional labour for the site. The same might be said if Mr Mates' concern was to bring about an improvement in the general condition of the site and of the amenities. That Mr Mates had either or both of these concerns would in no sense have been inharmonious with a direct insistence by him that such labour be employed or engaged. The identification of Mr Mates' purpose on 31 July 2006 is, of course, an objective matter to be done in the light of all the circumstances existing at the time. Had the evidence been such as to justify the conclusion that no union organiser, viewing the matter objectively, could have considered it safe for his or her members to continue working on the site that day, the case for supposing that Mr Mates' purpose was to protect the workers from an immediate risk to their health or safety would be that much stronger. However, I could not reach that conclusion on the evidence in the case. It is instructive that two witnesses (Mr Rand and Mr De Riva), both apparently quite independent of the parties and having no reason to be sympathetic to the cause of either, and each called by a different party, used the same expression to describe the condition of the site: "below average". Mr Mates' own emphasis on the need for Mr Leonard to be provided with assistance also suggests that this was a site that needed attention, not one on which a worker could not reasonably be asked to work. I consider that the condition of the amenities, even if as described by Mr Mates, did not give rise to an immediate, or even to a reasonably proximate, risk to the health or safety of the workers. It was not explained, for example, how full and overflowing refuse bins in the lunch room might have done so. Perhaps such matters --- and generally unclean conditions in the toilets for example --- might have raised legitimate concerns about risks to the health of workers, but no (eg professional) evidence dealt with this dimension of the problem as perceived by Mr Mates. In the respondents' case, it was as though it should be self-evident that the muddy and generally unclean condition of the site amenities was necessarily such as to give rise to risks of this sort. In the view I take, it is not. In short, I am not persuaded that it ought reasonably to have appeared to an organiser in the position of Mr Mates that, on health and safety grounds as such, work should not continue at all on the site on 31 July 2006. Putting these considerations together with my earlier finding that Mr Mates had required (on 28 July) the employment of a labourer and with Mr Mates' own evidence that he told Mr Leonard (on 31 July) that nothing had changed "in regards to getting you some help", I am led to the clear conclusion that a substantial, if not the only, intent of Mr Mates, when he addressed the workers in the meeting on 31 July 2006 was that Kane should be influenced (to use a neutral term at this stage) to employ or to engage such a labourer. It is, to adopt the language of General Motors Holden Pty Ltd v Bowling (1976) 51 ALJR 235 , sufficient that the proscribed reason is a substantial or operative reason. In the present case, the intent to have Kane employ, engage or designate a labourer was not only operative in Mr Mates' thinking at the time, but was substantially so. I note that the paragraphs of s 43(1) are expressed disjunctively, such that conduct directed to any one or more of those ends would fall within the terms of the section. In these reasons, I have generally not discriminated between the employment (par (a)) or the engagement (par (b)) of a labourer by Kane as the subject of Mr Mates' intention on 31 July 2006. To the extent that it matters, I would find that the essence of what Mr Mates required (and thus of what he intended should happen) was the employment of a labourer by Kane. There was a suggestion by the respondents that, at some point, Mr Mates may have made it clear that he would be content for an employee of one of the subcontractors engaged on the site to be designated (see par (d) of the definition), but how this might have worked was not developed in submissions. The thrust of Mr Mates' conversations with representatives of Kane at all levels was that a labourer should be employed for the site and should be employed by Kane. However that may be, on any view Mr Mates' intent was such as would be comprehended by at least one of the paragraphs in s 43(1) of the BCII Act. First, it needs to be shown that it was intended that pressure be exerted which, in a practical sense, will negate choice. Second, the exertion of the pressure must involve conduct that is unlawful, illegitimate or unconscionable. The question whether Mr Mates intended that Kane's choice whether to engage a labourer should be negated is, of course, a different one from whether he intended that the workers should have a choice whether to ask their employers for relocation or that the employers should have a choice whether to accede to any such request, if made. It may be supposed to be consistent with my earlier findings in these reasons that Mr Mates gave the workers a choice; and that (following Mr Mates' suggestion) the workers gave their employers a choice. But Mr Mates called the meeting and addressed the workers with a view to persuading them to have themselves taken off the site, and thus to shutting the site down, as he had told Mr Leonard he would do. His purpose was that these things should happen. And when they did happen, the position in which Kane found itself was very different from that which confronted Mr De Riva and, inferentially, the management at BV Rigging. Mr Mates' conduct on 31 July 2006 did, in my view, bespeak an intention to negate choice. It is possible to surmise that Kane had an element of choice on 28 July, and that Mr Mates then intended to return to the site on 31 July to see whether a labourer had been employed. However, by the time he arrived on site on 31 July, Kane had made its decision and refused to engage a labourer. It was that refusal which led to the holding of the meeting of workers and to the stoppage of work on site. By proceeding in this way, Mr Mates was rejecting the choice which Kane had made. Further, Mr Mates' action was taken on a day which --- as would have been apparent to him --- marked the commencement of a significant stage in the building works being carried out by Kane, namely, the erection of structural steel. Mr Leonard described it as a "critical path item". The disruption to the building program brought about by a stoppage on 31 July 2006 would, I infer, have been rather more damaging to Kane than if done on a day on which (to use Mr Leonard's words) only "mundane work" was taking place. As a very experienced industry worker and union organiser, this circumstance would have been apparent to Mr Mates. I find that his intent on 31 July 2006 was that Kane should have no choice but to employ, engage or designate a labourer in an occupational health and safety-cum-peggy role. That brings me to the question whether the action which Mr Mates took on 31 July 2006 was unlawful, illegitimate or unconscionable. The only respect in which counsel for the applicant submitted that the action was unlawful was that it was in contravention of s 38 of the BCII Act. Since I have rejected that part of the applicant's case, I would likewise reject the submission that Mr Mates' actions were unlawful. Was it illegitimate for Mr Mates to seek to achieve his purpose of having Kane employ a labourer on the site by organising the workers to have themselves relocated elsewhere, thereby bringing about a stoppage of work on the site itself? He was careful to do so in a way that did not involve any obvious breach of the workers' contracts of employment. Whether the withdrawal of labour by subcontractors (Northwest Concrete and BV Rigging) was a breach of their contracts with Kane was unclear: as matters were left in the evidence, I could not hold that it was in either case. However, the subcontractors had sent their employees to work on the site in accordance with normal commercial arrangements made by Kane and for the purpose of carrying out tasks which, at least to a significant extent, were on the critical path. It does not, in my view, require knowledge of the terms of the contracts between the subcontractors and Kane to conclude, as I do, that Kane was entitled --- in a business if not a legal sense --- to expect that, in the normal course, those employees would remain on site and carry out those tasks. It would, I consider, be rather odd for a court to hold that it was perfectly alright for a stranger to the relationship between the subcontractors and Kane to prevail upon the employees of the former to make a request to their employers that they be taken off site. I express these views not to suggest that they reflect anything like the actual situation on the site on 31 July 2006, but rather to establish a base-line of normality, as it were, by reference to which it should then be regarded as lying upon the respondents to establish that the situation on the site was such as to give legitimacy to Mr Mates' actions. It is implicit in the respondents' case that the legitimacy of Mr Mates' actions should be assessed in the context of his concerns about the condition of the site, and of the amenities in particular. However, the question of legitimacy is to be objectively determined. I have held that the situation existing on the site was not such as would have justified a union organiser taking the reasonable view that no work at all should be done, and that the site should effectively be shut down, on health and safety-related grounds. I would hold, therefore, that the concerns which Mr Mates in fact held about those matters were not as such sufficient to legitimise the action which he took. But Mr Mates' action should not be considered in isolation from the regulatory framework in which both he and Kane operated. Commencing with the OH&S Act, it is only upon an inspector reasonably believing that an activity occurring, or which may occur, at a workplace that involves, or would involve, an immediate risk to the health or safety of a person that he or she may issue a notice prohibiting the carrying on of the activity, either at all or in a specified way: s 112. The Act does not contemplate that workers might remove themselves from a workplace or that a union organiser might persuade them to do so. Mr Mates did not arrange for an inspector to attend the site on 31 July 2006 in order to exercise power under s 112. Within the scheme of the OH&S Act, therefore, Mr Mates' actions ought not to be regarded as legitimate. There was no evidence that Northwest Concrete was covered by a certified agreement, in which circumstance I infer that the only instrument binding on it under the WR Act was the award. I have referred (in par 57 above) to the disputes resolution procedure for which cl 11 provided. However, given the evidence of Mr De Riva, it is apparent that there never was a dispute between Northwest Concrete and any of its employees working on the site. I consider, in the circumstances, that the provisions of the award were neutral with respect to the legitimacy of Mr Mates' actions. The employees of BV Rigging (who appeared to have been the majority on the site on 31 July) were covered by the BV agreement. It is apparent from the provisions of that agreement relating to health and safety to which I have referred (see par 55 above) that a cessation of work, or the reassignment of employees to alternative work, is regarded as an exceptional procedure arising from the existence of an immediate threat to the health or safety of a person and the inability of the parties directly involved to adopt the processes for which cl 16.3 provides. Although the provisions of the agreement do not in terms proscribe the cessation of work, or a demand for reassignment, it is the tolerably clear contemplation of the provisions that work will continue in the normal way unless the exceptional circumstances referred to in cl 16.4.1 exist. It is true, of course, that, as between BV Rigging and its own employees, there is nothing in the BV agreement that would stop them agreeing that the employees should be relocated to a different site. Indeed, at that level, such an agreement could be reached for any reason that attracted itself to those parties. I could not find, therefore, that the employees' request to BV Rigging to be relocated, or that BV Rigging's accession to that request (each of which I have inferred) was illegitimate. However, the question is whether Mr Mates' action should be regarded as illegitimate along the axis between himself and Kane. Mr Mates was an organiser in the employ of the union. The union was a party to the BV agreement. BV Rigging was contracted to Kane to perform work on the site on 31 July 2006. In the circumstances, I consider it appropriate to have regard to the terms of the BV agreement, and to the regime for the orderly processing of the health and safety-related issues for which it provides, when considering whether Mr Mates' response to Kane's refusal to employ or engage a labourer was a legitimate one. Against the reference point provided by those terms, I do not consider that the response was legitimate. I have referred also to the disputes resolution procedure contained in cl 10 of the BV Rigging agreement (see par 54 above). There is no direct evidence of the reaction of BV Rigging itself to its employees' request to be relocated (the existence of which request I have inferred). However, it seems clear that the concern for their own health and safety which Mr Mates excited in those employees should be regarded as a "work related grievance" within the meaning of cl 10.2. As such, the proper course for the employees to have adopted in the circumstances was to continue working without interruption. For Mr Mates to have persuaded them to ask to be relocated could not be regarded as a legitimate reaction on his part to the conditions on the site as he perceived them. Notwithstanding that there was no employee of Kane on the site at relevant times to whom the Kane agreement applied (except possibly Mr Leonard himself), both parties conducted their cases by reference to an assumption that, in relation to the amenities and site conditions generally, it was Kane, as manager of the site, which had the relevant obligations and it was by reference to the Kane agreement that those obligations were to be identified. Indeed, in his evidence Mr Mates made that assumption explicit. I shall proceed consistently with that assumption and consider the legitimacy of Mr Mates' actions in the light of this agreement. In his cross-examination of Mr Leonard, counsel for the respondents drew attention to items 4.8 and 5.6 on the list in App E of the Kane agreement (see par 56 above). Mr Leonard said that he did clean and disinfect the facilities on a regular basis, and that, to the best of his knowledge, the closets and urinals were cleaned daily. He accepted that there may have been days when it was not done, but he could not recall any. Counsel also cross-examined Mr Leonard on the subject of Kane's compliance with certain provisions of the codes of practice referred to in App H of the Kane agreement. Facilities should also be provided for an adequate supply of boiling water at meal times and rest periods. Separate vermin proof containers should be provided for the storage of food and rubbish. Mr Leonard said that the bins had lids; it was put to him that the bins did not have lids; and he said that he could not recall. There was a list of the items of equipment and furniture that "may be appropriate" for a first aid room. Mr Leonard accepted that the room at the site did not have a desk, a telephone or chairs, and that the first aid kit may have been kept in the site office, rather than in the first aid room. In other respects the items raised by counsel were, according to Mr Leonard, in the room. The code also provided that a first aid room should not be used for other purposes. It was put to Mr Leonard that the first aid room was used for the storage of construction tools, a circumstance which he could not recall. Save in one respect, counsel for the respondents did not, in his final address, rely upon the provisions of the Kane agreement, or of the codes of practice, to which I have referred. I was not invited to find that Kane had failed to comply with any of the provisions thereof. I was not, at least explicitly, invited to find that those provisions, and/or Kane's non-compliance with them, gave legitimacy to Mr Mates' conduct on 31 July 2006. The one respect in which a point was made of App E of the Kane agreement was in counsel's reply. He submitted that, by showing Mr Leonard the respects in which the amenities did not comply with the appendix on 28 July, and by giving him until 31 July to rectify things, Mr Mates had allowed Kane a "reasonable time in which to rectify the problem" as required by the opening paragraph of the appendix. I accept that, on 31 July 2006, Mr Mates did have concerns of the kinds implied by the cross-examination of Mr Leonard. Mr Mates elaborated upon a number of those concerns --- albeit not specifically by reference to particular provisions of App E to the Kane agreement or of the codes of practice --- in his own evidence in chief. However, his action in persuading the workers to prevail upon their employers to withdraw them from the site was not, in my view, either authorised or contemplated by these provisions. Had Mr Mates taken the view that conditions on the site were such that workers could not reasonably be asked to work there, there were, under the statutory and regulatory provisions to which I have referred, two courses of actions which he might have adopted. The first was to have an inspector under the OH&S Act attend the site and issue a prohibition notice. The second was to process the dispute with Kane under cl 10 of the Kane agreement. Mr Mates did initiate a referral of the dispute to the Panel under cl 10.2.f --- for which he deserves credit --- but there was no warrant in those provisions for him to have procured a stoppage of work as a preliminary to that referral. As I have said, the Kane agreement treated health and safety in the workplace as a subject of particular importance. The relevant provisions were detailed and, for the most part, prescriptive. The application of, and compliance with, the OH&S Act was expressly contemplated. That Act contained a highly-defined regime of the circumstances in which work might be halted on account of a risk to health or safety. Only an inspector could issue a prohibition notice. The Kane agreement itself provided no authority for a union organiser to stop work on health and safety-related grounds. I consider that the agreement contemplated the existence of the regime for which the OH&S Act provided and, in that sense, contemplated that, subject to the overriding obligation of the employer under s 21 or of the site manager under s 26, work should continue in the absence of a prohibition notice. It was not, in my view, within the contemplation of the Kane agreement that an organiser in the position of Mr Mates might procure a stoppage of work in the circumstances existing on the site on 31 July 2006. Before concluding on the subject of legitimacy, there are two further matters which I should address. The first is the exception for which par (g) of the definition of "building, industrial action" in s 36 of the BCII Act provides, namely, and subject to certain conditions, that it is not building industrial action for an employee to refuse to work where he or she has a reasonable concern about an imminent risk to his or her health or safety. Because I have rejected the applicant's case under s 38 of the BCII Act for other reasons, the occasion for the application of this exception does not arise. There may be a question whether the existence of facts which would bring the exception into operation would be relevant to the matter of legitimacy under s 43 of the BCII Act. I was not addressed on that point, and shall say nothing further about it. It will, however, be apparent from my reasons above that I do not consider that the facts of the present case provided any basis for a reasonable concern on the part of any employee on the site on 31 July 2006 about a then imminent risk to his or her health or safety. The second matter concerns cl 11.1.2 of the award, the terms of which I have set out in par 57 above. Although the award was tendered by the applicant, his counsel said nothing in his address about this provision, or about cl 11 generally. Neither was I addressed on the relationship between cl 11.1.2 and the provisions of the certified agreements which dealt with the subject of the resolution of disputes. In the circumstances, save with respect to what I have said in par 112 above, I do not rely on that subclause in my consideration of whether Mr Mates' actions on 31 July 2006 were illegitimate. For reasons expressed above, I consider that it was illegitimate for Mr Mates to have procured a stoppage of work on the site on 31 July 2006 as a means of having Kane employ or engage a labourer. By proceeding in the way he did, Mr Mates intended to coerce Kane. His conduct was, I would hold, in contravention of s 43(1) of the BCII Act. That brings me to the last of the applicant's allegations under s 43 of the BCII Act, that Mr Mates' comments to Mr Leonard on 31 July 2006 that "we'll go through all this again" was a threat made with intent to coerce Kane. I have held (par 82 above) that it was a threat. Clearly it was said with intent to have Kane employ or engage a labourer. And, for reasons given above, it was illegitimate. That is to say, the comment amounted to a threat to do again what I have held was illegitimately done on 31 July 2006. In the circumstances, I uphold this allegation. An "officer" of an association includes a representative, and an employee, of the association. Mr Mates was such a person in relation to the Union. The Union was a "building association" as defined in the BCII Act. The respondents conducted an undifferentiated case in which they met the applicant's allegations on the merits. It was not suggested that, if I should find that Mr Mates had contravened the BCII Act in some respect, the Union would not likewise be liable for that contravention. In the facts of the case, Mr Mates was an organiser in the employ of the Union and, as I have said, clearly within the deeming provisions of s 69. In the circumstances, I would apply to the Union the findings of contravention which I have made above in relation to Mr Mates. I shall proceed in accordance with that proposal. 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 Jessup. | union organiser predicted that employer would have "some problems" if additional labour not engaged on building site whether amounted to threat that organiser would procure stoppage of work on site. union organiser recommended that workers on building site seek (from their employers) their own "relocation" away from the site whether amounted to recommendation of stoppage of work whether amounted to engagement by organiser or workers in "ban, limitation or restriction on the performance of ... work". union organiser recommended stoppage of work on building site in pursuance of claim for engagement of additional labour on site whether organiser intended that builder's choice in engagement of labour be negated whether method employed unlawful, illegitimate or unconscionable whether involved intent to coerce builder. industrial law industrial law industrial law |
The appellant is a national of Bangladesh born in 1980. He arrived in Australia on 5 October 2006 and applied for a Protection Visa on 3 August 2007. He claimed to hold a well-founded fear of persecution should he return to Bangladesh, due to the political opinions he held and expressed in Bangladesh prior to his departure from that country on 4 October 2006 and due to the active role he played in holding various positions in the Bangladesh Nationalist Party ("BNP") and ultimately membership of the district "Executive Committee" of the BNP for the Noakhali District of Bangladesh. Having regard to the issues raised in the appeal, it is necessary to examine the claims made by the appellant and the treatment of those claims by the Tribunal. In his statement dated 2 August 2007, the appellant asserted the following facts as the foundation for his claim of a well-founded fear of persecution for reasons of political opinion. After completing secondary schooling in 1996 the appellant was admitted into a college described as the Khalilur Rahman Degree College. At that time, the appellant became involved in the student wing of the BNP described as the Bangladesh Jatiyatabadi Chatra Dal. In 1998, he undertook a Bachelor of Science degree at the college. On 10 June 1998 at approximately 6pm, the appellant was attacked by a group of Awami League cadres at the college. The appellant was severely beaten and taken to Bajra Hospital. He was released after a week. In 1999, he was elected President of the College Committee of Chatra Dal and was actively involved in BNP affairs. At this time, the Awami League was in government in Bangladesh. The appellant protested against the autocratic rule of the Awami League. On 16 February 1999 at approximately 9pm while returning home, the appellant was attacked by activists who attempted to kill him. He was beaten seriously and left unconscious. He was taken to hospital and discharged after 10 days. Representatives of the BNP protested to the police about these acts. On 15 July 2001, the Prime Minister of Bangladesh resigned and transferred power to a caretaker government so as to facilitate a parliamentary election. That election occurred on 1 October 2001. The appellant worked for a BNP candidate in that election. The Awami League candidates were the primary opponents. The appellant campaigned door-to-door seeking voter support for the BNP candidate. That candidate was elected. The BNP-led coalition secured a two-thirds majority in the parliament and formed government under the Prime Ministership of the BNP leader, Begum Zia. In 2002, the appellant became the joint secretary of the Sonai Muri Thana BNP. The appellant became very well known. The Awami League resisted the programs of the BNP government. The appellant was targeted by Awami League supporters. In 2005, the appellant became one of the Executive Members of the District Committee and became very active in politics. The appellant was further targeted by supporters and allies of the Awami League. On 27 June 2006, the Awami League activists caused a false charge to be filed against the appellant. By October 2006 it was apparent to the appellant and Bangladeshi voters that a transition of power would take place from the BNP government to a caretaker government. The appellant was concerned that due to his long involvement in BNP politics he would be subject to hostile steps taken by the caretaker government against him. Accordingly, on 4 October 2006 he left Bangladesh for Australia on a student's passport. On 11 January 2007, a state of emergency was declared by the President of Bangladesh. The caretaker government has arrested approximately 200,000 political leaders and activists in Bangladesh. Having regard to these matters, the appellant contended that he would be persecuted for his political opinions should he return to Bangladesh. In the course of the review before the Tribunal the appellant, through his adviser, provided a letter to the Tribunal dated 15 December 2007 which enclosed a letter from the President of the Noakhali District of the BNP dated 1 November 2007. That letter described the appellant as a person who was "an active voice of the [BNP]". It said that the appellant had held various positions within the party at Thana and district level and that from 2005 until his departure from Bangladesh, he was an elected member of the Executive Committee of the Noakhali District of the BNP. The letter says that the caretaker government had arrested the BNP party leader Begum Zia without any formal charges and that many other promising leaders had been arrested. The appellant's adviser provided material to the Tribunal contending that the caretaker government had arrested people in the name of fighting corruption and had particularly focused upon the BNP and its leaders and activists so as to torture them and disqualify them for the purposes of a future election. On 18 December 2007, the appellant gave oral evidence before the Tribunal and presented arguments in support of his contentions. On 3 January 2008, the Tribunal wrote an extensive letter setting out those matters that the Tribunal considered would, subject to the appellant's comments, be the reason or a part of the reason for affirming the decision of the Minister's delegate. That letter addressed aspects of the facts and circumstances relied upon by the appellant and also put to the appellant information based upon a report from the United States Department of State and information provided on 3 May 2007 by the Department of Foreign Affairs and Trade. On 17 January 2008 [although the letter at AB160 is mistakenly dated 17 January 2007], the appellant through his advisers responded to that letter. The central contention in the appeal is that the Tribunal failed to have regard to matters put to the Tribunal in that letter and in particular the matters contained in paras 5, 6, 7 and 8 of that letter. We also confirm that you have extended [a] further two working days in reply the response [to respond]. The applicant on and off was living in Dhaka. Any alleged inconsistency arises from the different forms of questions asked or [on] different occasions. The applicant said that he was very nervous during the hearing of the Tribunal and could not recall the actual date of the lodgment of the cases in that environment. The applicant thought during caretaker role he will [would] be able to return to Bangladesh but the current caretaker government has extended its time without Constitutional provisions. The Tribunal's use of the 1998 US Department of State reports in deciding the fate of the applicant's claim in 2007 is not logical. This report is outdated and should not be considered [by] the RRT. The caretaker Government in its crackdowns has been arresting officials of all parties and even murdering them. The fact that the political parties are not able to engage in political activity against each other does not negate the fact that the political parties including the BNP are being persecuted by the current caretaker Government. The DFAT report is unable to comprehend the seriousness of the situation on the ground being faced everyday by the political workers and general public. It is the equivalent of saying that the fascists made the trains run on time. The report says that corruption is being addressed but it ignores that people are being falsely arrested and persecuted and even murdered by the caretaker Government. In a completely repressed state, there will be no political activity. The DFAT report suggests that, this is a good thing even it is [if it] means all of the previous political leaders are persecuted or murdered. The applicant had a profile of sufficient important[ce] that there will be a real chance that he will be persecuted in Bangladesh by the Caretaker Government [having regard to] the extent of the Crackdown. The fact that [the] applicant had been for a considerable time in Australia would add to his exposure of a risk of harm. This is because the caretaker government is particularly severe on those people that the Government considers my [may] have been involved in agitating against it in other countries. In reaching this view the Tribunal has had regard to the following reasons. First, the applicant belatedly revealed at the hearing that six months before his departure from Bangladesh he moved to Dhaka to live at a friend's house in order to avoid being harmed by his political opponents. This information contradicted the information he had provided in his application for a protection visa, which indicated that he lived at the same address from January 1991 until shortly before his departure from Bangladesh. Moreover, the applicant made no mention of his move to Dhaka in January 2006 in the statement he submitted in support of his application for a protection visa. ... The inconsistent evidence submitted by the applicant regarding his address and movements in Bangladesh casts doubt on his credibility and the credibility of his claims. At the hearing, however, when he was repeatedly asked if anything bad happened to him after 1999, he made no mention of any false cases having been filed against him. The Tribunal thought that having regard to the level of the appellant's education, the appellant would be knowledgeable about those matters particularly having regard to his contended dedicated involvement with the party for over a decade. The Tribunal concluded that the appellant did not exhibit any real depth of knowledge about the BNP and its activities. Fourthly, the Tribunal noted that the appellant had waited for a period of 10 months since his arrival in Australia before applying for a Protection Visa. The Tribunal examined the facts and submissions surrounding that matter and expressed a view that it found it difficult to understand the explanation for the delay. The totality of his evidence shows a propensity to tailor his evidence in a manner which achieves his own purpose. The Tribunal is also prepared to accept that he was assaulted on two separate occasions in the late 1990s. Apart from the false case and the threats, claims which the Tribunal has already rejected, the applicant did not claim to have suffered any other harm in the following seven years that he remained in Bangladesh. As it was put to the applicant at the hearing and in the Tribunal' s s.424A letter, DFAT has advised that politically-motivated violence has all but disappeared under the Caretaker Government presently in power in Bangladesh. As it was put to him, DFAT has advised that the political persecution of opponents which has been practised in the past by both the BNP and the Awami League has ceased under the State of Emergency which has deprived all parties of the machinery of state which they had used corruptly for political persecution and personal vendettas conducted in the name of politics. His representative, in his post hearing response [the letter from MS Haque and Associates incorrectly dated 17 January 2007], also stated that the Caretaker Government in its crackdowns has been arresting officials of all parties and even murdering them. He stated the fact that political parties are not able to engage in political activity against each other does not negate the fact that political parties including the BNP are being persecuted by the current Caretaker Government. The party members they have pursued appear to have been targeted because of corruption or criminal activity. When it was put to him that the information consulted by the Tribunal did not suggest this to be the case, he said he would provide information or evidence to support this claim. He also claimed that he had read somewhere that the new regime had a hidden agenda of targeting both the BNP and the Awami League. Neither the applicant nor his representative provided any evidence to back these claims. The Tribunal prefers the independent evidence referred to above and is not satisfied, given the applicant's low political profile, that there is a real chance that the applicant will be persecuted within the meaning of the Convention if he returns to Bangladesh in the foreseeable future. The appellant contended that by his response of 17 January 2008 [mistakenly dated 17 January 2007], he "squarely" put to the Tribunal that the caretaker government in Bangladesh is "particularly severe" on those people the government considered to have been involved in agitating against it in other countries. The appellant contended that notwithstanding the Tribunal's adverse findings as to credit, the Tribunal nevertheless accepted that the appellant was a "low level member" of the BNP in Bangladesh and had been assaulted on two occasions in the 1990s. The appellant contended that having regard to the BNP finding, the Tribunal erred in the exercise of its jurisdiction by failing to consider his sur place claim which was alternatively described as a claim of a real chance of persecution as a member of a "particular social group" defined as a group of individuals who exhibit two characteristics: first, they are members of a major political party in Bangladesh; and secondly, they have lived in Australia for a considerable time. An individual from that particular social group may be perceived, not as a remote possibility but as a real chance, as an agitator and thus suffer a real risk of persecution at the hands of the caretaker government upon return. Federal Magistrate Driver considered the treatment by the Tribunal of the evidence concerning the conduct of the caretaker government towards individuals who had been politically active and noted the comments of the Tribunal at AB184 and AB185. This was not a separate claim but merely an additional evidentiary assertion . While the Tribunal did not deal expressly with the suggestion that persons absent from Bangladesh for a significant period might be harmed as opponents of the present regime should they return , that suggestion was dealt with by reasoning of greater generality in the Tribunal's reasons. Logically, something more was required. If the applicant had actually been involved in activities in Australia agitating against the present Bangladesh regime then that would have been a relevant factor. If the applicant had had a sufficiently high political profile in Bangladesh as to be regarded as a regime opponent of significance on his return, that would also have been a significant factor. If the applicant had intended to agitate against the present regime on return to Bangladesh that would also have been significant. The Tribunal found that the applicant did not have a political profile of significance. It was, in my view, inherent in that reasoning that the applicant's fear of being suspected as an agitator upon his return was not well-founded. Firstly, the appellant's particular social group claim was a separate claim, not merely an additional "evidentiary" limb of the claim of a well-founded fear of persecution for reasons of political opinion. Secondly, although the Federal Magistrate recognised that the Tribunal failed to "expressly" deal with the claim that persons outside Bangladesh (and in this case in Australia) for a significant period might be regarded as suspected agitators against the regime, the Federal Magistrate failed to find that the claim was "sufficiently raised" and erred in concluding that a claim so raised could properly be addressed by the Tribunal within general findings relating to a broader claim of persecution for reasons of political opinion. Therefore, the particular social group claim ought to have been separately addressed and made the subject of discrete findings. The appellant says a separate particular social group claim is "sufficiently raised" on the material as the appellant placed particular emphasis on his presence in Australia. The appellant says the unaddressed particular social group claim is different from the more general claim rejected by the Tribunal. It follows, it is said, that the Tribunal failed to be satisfied of a well-founded fear of persecution without taking account of the "totality of the appellant's circumstances" by failing to analyse the special or particular features of the appellant's membership of the BNP coupled with his opportunity, external to Bangladesh, to pursue his political beliefs with the consequential risk to him of being perceived as an agitator upon his return. The second ground of appeal relied upon by the appellant intersects with the first. By ground 2, the appellant says that the Federal Magistrate erred by describing as a mere additional evidentiary assertion, a claimed risk of harm based on perceptions in the eyes of individuals within the caretaker government that a member of a political party formerly in exile and returning to Bangladesh would be an agitator against the regime. Having regard to these contentions, the question is whether the Federal Magistrates Court fell into error by failing to find jurisdictional error on the part of the Tribunal in the treatment of the appellant's claims raised before it. The answer to that question is to be found in the actual steps the Tribunal undertook. The Tribunal isolated each of the claims in the appellant's statement of 2 August 2007, examined documents put to the Tribunal and considered the elements of the appellant's oral evidence. The Tribunal referred to its s 424A letter to the appellant of 3 January 2008 and quoted extensively from the adviser's reply of 17 January 2008 including paras 5, 6, 7 and 8 of that letter. The essential foundation of the appellant's claim, on the facts, to hold a well-founded fear of persecution for reasons of political opinion led to the findings set out at [12], [13], [14], [15], [17], [180], [19], [20], [21], [22], [23] and [24] of these reasons. Those findings expressly deal with the appellant's central contention that he was a high profile activist within the BNP and by reason of that engagement, he would suffer persecution should he return. The Tribunal was not satisfied of that claim. The Tribunal was satisfied that the appellant had been a "low level member" of the BNP in Bangladesh and had on two occasions suffered harm by reason of assaults in the late 1990s. The Tribunal noted that independent country information suggested that politically motivated conduct had abated. The Tribunal noted the appellant's response of contentions concerning significant arrests of 200,000 people in Bangladesh including arrests of "leaders and high level activists" and the murder of some political officials. The Tribunal also noted the appellant's contention that although 60 to 70 "top leaders" had been arrested, many officials at district level had also been arrested. Those arrests suggested low level interception by the regime. As the findings recited at [17] and [22] (of these reasons) show, the Tribunal was not satisfied of the appellant's claims of being a leader or high level member of the BNP or that, on the evidence, he had a significant political profile in his locality or at any other level. It is true that the Tribunal did not isolate the elements of paras 7 and 8 of the adviser's letter of 17 January 2008 and address whether the additional consideration that the appellant had been in Australia for a considerable time "would add to his exposure of a risk of harm" as contended or that the caretaker government would consider the appellant as someone who had been external to Bangladesh and would be likely to be an agitator upon his return. Those passages were put to the Tribunal on the express footing that "the applicant had a profile of sufficient important[ce] that there will be a real chance that he will be persecuted in Bangladesh". That was the central matter determined by the Tribunal unfavourably to the appellant. The findings of the Tribunal dealt with it. All the claims upon which a well-founded fear of persecution was said to rest arising out of the appellant's engagement with the BNP were rejected by the Tribunal. Having done so, the Tribunal did not need to deconstruct each integer of that part of the adviser's letter addressing the contended particular social group claim and make findings about those facts. Those matters upon a proper construction fell expressly within the appellant's claims rejected by the Tribunal. Plainly enough, not each and every statement of fact made in a s 424A response need be separately addressed by the Tribunal when it is clear that the Tribunal has engaged on each of the central matters put to it in support of the contended Convention status. The Tribunal is required to set out its findings on those questions of fact which it considers material to the decision and the reasons adopted for reaching that decision. An examination of the reasons of the Tribunal in this case reveal that the Tribunal did not accept the real premise of the appellant's contended fear of persecution. A complaint that the Tribunal has not made a finding of fact on a matter of fact put to it by the appellant does not give rise to jurisdictional error ( Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 per McHugh, Gummow and Hayne JJ at [68] and [89]). The Federal Magistrate correctly concluded that the contended additional and separate consideration put to the Tribunal based on a combination of the significance of the appellant's role in the BNP and a period of residence in Australia, was taken into account in reaching the "higher level" and governing findings concerning the appellant's role in the BNP and the extent to which his engagement with the BNP would present a real risk of harm to him. In that sense, there was no error in the exercise of the Tribunal's statutory powers ( Yusuf [91] and [82] per McHugh, Gummow and Hayne JJ). Findings concerning the level of engagement of the appellant in the BNP and matters of fact going to a well-founded fear of persecution by reference to that question, were subsumed within the higher level findings. The Tribunal is required to isolate and consider those claims said to give rise to a well-founded fear of persecution properly arising on the material before it. One additional fact, taken in conjunction with a finding of the appellant's low level participation in the affairs of the BNP, said to ground such a fear was the considerable time the appellant spent in Australia. This consideration was said to give rise to the entirely separate claim based on the appellant's membership of a particular social group. The Federal Magistrate correctly found that no such separate claim was raised. No such contention was put to the Tribunal, in those terms. The additional fact was a feature of the appellant's claim of a well-founded fear of persecution for reasons of political opinion. The Tribunal was not required to deconstruct the additional fact put to it and hypothesise a separate class of claim based on membership of a particular social group. The Tribunal's approach to the exercise of its jurisdiction in that regard is entirely consistent with the principles in Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 ; (2003) 197 ALR 389. As Gummow and Callinan JJ observe at [24], the argument must be a substantial and clearly articulated one which relies upon established facts. In this case, the foundation facts were not accepted and thus not established and the matter relied upon by the appellant was not a substantial and clearly articulated argument. As Cooper J observed in SDAQ v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 120 ; (2003) 199 ALR 265 at 273 at [19] the alternative case "... had to arise squarely on the materials available to the RRT before it had a statutory duty to consider it. That is, it had to arise squarely on the history of past events and the account and justification of present fears". While the Tribunal is not to limit its resolution of the case before it simply on the footing articulated by an applicant if evidence and material, accepted by the Tribunal, raises a case not articulated ( Paramananthan v Minister for Immigration and Multicultural Affairs [1998] FCA 1693 ; (1999) 94 FCR 28 at 63, per Merkel J), the unarticulated claim must be raised "squarely" on the available material in the sense that it must be "... apparent on the face of the material before the Tribunal. Such a claim will not depend for its exposure on constructive or creative activity by the Tribunal" ( NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No. 2) [2004] FCAFC 263 ; (2005) 144 FCR 1 at 18 and 19 [58]). Accordingly, the Tribunal did not fall into jurisdictional error by failing to isolate a separate particular social group claim in reaching its decision. The Federal Magistrate did not err by failing to find jurisdictional error on the part of the Tribunal. The appellant shall be ordered to pay the costs of the first respondent of and incidental to the appeal. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of whether the refugee review tribunal fell into jurisdictional error by failing to give consideration to facts said to give rise to a claim of a well-founded fear of persecution on the ground of the appellant's contended membership of a particular social group migration |
It is not in dispute that the power summarily to dismiss a pleading as disclosing no reasonable cause of action is a power to be exercised with special caution, and only in the clearest of cases: General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 ( General Steel) . For the purposes of deciding a strike-out motion, or whether the pleading discloses a reasonable cause of action, the Court is obliged to assume the truth of the allegations in the Statement of Claim, and draw all inferences favourable to the party against whom the strike-out motion is brought. This is because the question is whether the allegations in the Statement of Claim, even if proved, cannot succeed as a matter of law: Imobilari Pty Ltd v Opes Prime Stockbroking Ltd [2008] FCA 1920 ; (2008) 252 ALR 41 per Finkelstein J, at [4]. Australialink publishes business directories on the internet, and sells listings in those directories to persons and businesses throughout Australia. The method by which Australialink primarily markets its services to potential clients and obtains listing orders is as follows. Since at least January 2006, Australialink has obtained details of potential customers by purchasing customer lists from third party suppliers and from the online version of the Yellow Pages directory. Australialink sends, by post or facsimile, a document called a "Listing Advice Notice" (" LAN ") to various businesses called " Recipients "), using the contact details obtained as described above. A copy of a LAN is Annexure A to the statement of claim. A slightly different version of the LAN is sent to Recipients located in Queensland. PLEASE DO NOT SEND ANY PAYMENT WHEN RETURNING. An example of a Qld LAN is Annexure B to the statement of claim. If the Responding Recipient does not pay the invoice, after several subsequent reminder notices Australialink sends a letter of demand purporting to be from a commercial collection agency. A copy of a Notice of Intention is Annexure C to the statement of claim. No court proceedings have been instituted at the time a Notice is sent by Australialink. It is true that the Qld LAN document has some additional words as a header, but that does not alter my conclusion about what the contents might convey. Applying the General Steel test, in my judgment the contentions by the ACCC that the documents convey the alleged representations are at least arguable, with the consequence that those impugned paragraphs should not be struck out. This view is buttressed by the heading of the document, and the failure to refer to the absence of any previous communication between the recipients of the LAN documents and Australialink. This conclusion is justified by the formatting and the subheading "Notice of Creditors Commencement of Proceedings at a Magistrates Court" which is expressed not as a future possibility but as a fact. It follows that the respondents' Notice of Motion should be dismissed. Notwithstanding that the ACCC sought its costs of the Motion on an indemnity basis, having earlier corresponded with the respondents and expressing the opinion that "on any reasonable view there was no real prospect of success" of the Motion, in my judgment this is not a case on which it would be right to order indemnity costs. For the above reasons, on 1 May 2009, the Notice of Motion was dismissed with costs. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. | striking out of a pleading whether the statement of claim discloses a reasonable cause of action held that the contentions set out in the statement of claim are at least arguable application dismissed practice and procedure |
Consistent with the decision of the High Court in SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 215 ALR 162, I propose to make an order joining the R R T as the Second Respondent in the proceedings although for the purposes of these Reasons I will describe the Minister for Immigration and Multicultural and Indigenous Affairs as the Respondent. 2 The essential contention in this application is that the R R T fell into jurisdictional error by failing to conduct a review of the Respondent's decision and therefore failed to exercise the statutory jurisdiction since the Tribunal failed to properly consider whether the Applicant is a person to whom Australia has protection obligations pursuant to section 36(2) of the Act as a refugee consistent with Article 1A(2) of the 1951 Geneva Convention Relating to the Status of Refugees , 189 UNTS 150 and the 1967 New York Protocol Relating to the Status of Refugees 606 UNTS 267 (and thus a person entitled to a protection visa pursuant to section 65 of the Act ). The failure to properly consider whether the Applicant is such a person is said to arise because the Tribunal failed to consider all elements of the Convention definition of "refugee" for the purposes of the Act , applied an adverse finding on credibility to a determination of all relevant factual questions, improperly relied upon apparent inconsistencies between the evidence of the Applicant and a Mr (Pastor) George Ddungu, failed to provide the Applicant with adequate particulars of the evidence of Mr Ddungu the Tribunal considered would form part of the reason for affirming the decision of the Delegate of the Respondent, failed to properly consider evidence establishing a well-founded fear of persecution for a Convention reason (assuming findings on the question of credibility properly excluded particular evidence) and failed to have regard to relevant evidence which would have been decisive in the determination of the application in the Applicant's favour. 3 The findings of the R R T on the question of the credibility of the Applicant and whether reliance could be placed upon any evidence of the Applicant, was a central matter to the claim that the R R T had failed to properly exercise the statutory jurisdiction of review. 5 The Applicant is a Ugandan national from the Muganda tribe in central Uganda. The Applicant was born on 25 December 1978. Prior to departing Uganda for Australia in October 2002, the Applicant was the Assistant Pastor to the Christ Alive Church in Uganda and the full time coordinator of a project called Earthlife Uganda and a further project called the Progressive Farmers Club (a project designed to assist the poor to become involved in various income generating activities). 6 The Applicant's father was killed when the Applicant was quite young. The Applicant's father had become involved in the activities of the Democratic Party opposed to the Government of President Milton Obote's Uganda People's Congress Party. The Applicant also became a member of the Democratic Party. Some years ago (approximately early 2000) a referendum occurred in Uganda to determine whether Uganda should adopt a party system called the "Movement System" proposed by President Museveni or whether Uganda should retain a multi-party pluralist electoral system. The Applicant opposed the adoption of the Movement System and campaigned both generally and through the Church against that system. As a result, the Applicant contends that he was harassed and beaten by "military men" who supported President Museveni and particularly a group described as the Kalangala Action Group led by Major Kakooza Mutaale. 7 Prior to the presidential elections on 12 March 2001, the Applicant became very politically active and outspoken against President Museveni in support of a presidential candidate, Mr Kizza Besigye. Besigye contended that the government had become corrupt and characterised by cronyism. Besigye lost the presidential election and fled Uganda. The Applicant says he was actively involved in many rallies and campaigns which criticised President Museveni, travelled to numerous villages campaigning for Besigye and criticised President Museveni to the congregation attending the Applicant's Church. 8 Immediately prior to the election (about five days) military men detained the Applicant at his workplace and questioned him about his opposition and two days before the election Major Kakooza Mutaale came to the Applicant's Earthlife workplace with soldiers, accused the Applicant of campaigning against the Government through the Church, arrested him, tortured and beat him and threatened to kill him unless he stopped criticising President Museveni. The Applicant was released about 10 hours later. 9 The day before the election, military soldiers came to the Applicant's workplace and instructed him to convince children and other young men and women to support President Museveni. The Applicant refused. During one rally, children and young men and women were taken by military men, beaten and subjected to physical injury. 10 After the 2001 election and President Museveni's success, Besigye supporters were frequently harassed, detained and often killed. On several occasions, the Applicant was threatened. On one occasion, the Applicant was detained for a day, interrogated about aspects of the activities of a group called the Allied Defence Force ("ADF") rebels fighting the Government and questioned about the Applicant's support for same sex relationships through various Church projects. The Applicant says he was further detained because of his support for Besigye, intimidated and went into hiding for three weeks. 11 In early June 2002, a man named Mugerwa Charles came to the Applicant's orphanage in difficult personal circumstances and stayed for approximately two weeks. His three children, Ssewankambo, Judith and Oliver Charles were already living at the orphanage due to the circumstances confronting their father. Mugerwa Charles then left the orphanage to re-join his wife who had acquired a house. Later that month, Mugerwa Charles was arrested by military officials and brutally tortured and killed by the group led by Major Kakooza Mutaale because Mugerwa Charles was perceived to be a strong supporter of Besigye and had attended anti-government rallies with the Applicant. Mugerwa Charles may also have been an ADF rebel. 12 The Applicant conducted the funeral service for Mugerwa Charles. After the funeral a group of five men in civilian clothes with guns came to the Applicant's office and said they wanted to take the three children of Mugerwa Charles. The Applicant refused to deliver up the children. The men said they would give the Applicant time to deliver up the children and would return. They said that if the Applicant failed to deliver up the children he would be killed like Mugerwa Charles. The LRA ("Lords Resistance Army") rebels captured me and my colleagues and told me that because I was a pastor they wanted me to give information to the President. I thought that they would take us to the Sudan where their base is. They released us, but they said that if we went back again they would get us. Since my assistant was killed in December 2002 I have thought more about this and now I feel afraid that the LRA rebels might come to central Uganda and capture me. The visa was granted on 5 July 2002. On 28 May 2002, the Applicant had obtained a visa to travel to Germany to attend a development workshop related to particular project work. However, the Applicant elected not to travel to Germany but travelled to Australia arriving on 4 October 2002. 15 In December 2002, the Applicant received a telephone call from Mr George Ddungu, the Administration Manager of the Earthlife Uganda Project. Mr Ddungu told the Applicant that the men who had previously sought the three children of Mugerwa Charles had returned. On learning that the Applicant was not in Uganda, the men abducted the Applicant's assistant Ssenyonga Robert. Ssenyonga Robert has not been heard of since. These men (soldiers) told people in the Earthlife Uganda Project office that the Applicant had assisted a rebel (Mugerwa Charles) and must also be a rebel. George Ddungu told the Applicant not to return to Uganda. The Applicant made arrangements for the three children of Mugerwa Charles to be taken to Kenya. 16 The Applicant says that he knows he will be killed if he returns to Uganda. If he had been at his workplace in December 2002, the Applicant believes he would have been taken and killed instead of Ssenyonga Robert. The Applicant says he would be killed because he helped Mugerwa Charles who the government soldiers believed to be a rebel and an "armed thief". The second reason why the Applicant believes he would be killed is his refusal to hand over the three children of Mugerwa Charles. The Applicant believes that he is perceived by these soldiers and particularly the group led by Major Kakooza Mutaale, the Kalangala Action Group, to be a threat. The Applicant says he believes these soldiers act with the approval of the government. The Applicant further says that these men who he describes as the "President's men" do not like him because he has persistently campaigned against President Museveni, he is a member of the Muganda tribe (President Museveni discriminates against Muganda people in favour of his own tribe, the Banyonkole tribe) and he counsels and assists homosexual men and lesbian women through the Church. 17 In the application form for the protection visa, the Applicant was asked to answer the question, "What do you fear may happen to you if you go back to that country? " [Uganda]. The Applicant wrote an extensive response to the question which appears at pages 57 to 63 of the document bundle dated 26 October 2004. In that response, the Applicant recites elements of the factual material reflected in the written statement put to the R R T in the statutory declaration dated 1 July 2003. The Kony rebels abducted two of our youth evangelistic team and later returned the next day without any problems to them. They were not hurt. They said that when they come back they will need the leader of the team to be taken so that he can talk to the Government for them. Failure to comply with what they say will mean death to the leader. I am the leader of the crusades of our Church for the outreach ministries. 21 The Applicant initially applied for a tourism visa on 11 December 2001 for the purpose of visiting a sponsor in Australia and to undertake a study tour relevant to projects undertaken by the Applicant in Uganda. The application was rejected on 20 December on the ground that the stated intention of only visiting Australia was not genuine. A further application was lodged on 3 July 2002 with supporting sponsor documentation. At that time, the Applicant identified a number of reasons which strongly suggested an intention and need on the part of the Applicant to return to Uganda at the conclusion of the three month visiting program. Those reasons included the observation that people served by the Applicant in the Progressive Farmers' Club project would need his continuing assistance, his mother was seriously handicapped and in need of support (and his sister and only sibling was living outside Uganda), he was committed to his project work associated with the Earthlife Uganda project, he had enduring obligations to take care of his family's farm and he was not tolerant of the cold winters in Australia. 22 In these applications, the Applicant did not foreshadow any apprehension about the matters of concern which were subsequently reflected in the protection visa application. 23 On 14 January 2003, the Applicant lodged an application for a protection visa with the Respondent. On 22 December 2003, the R R T invited the Applicant to attend a hearing before the Tribunal to give oral evidence in support of the claims. The hearing occurred on 19 February 2004. He had travelled on our Church's responsibility to meet a few persons out there and on behalf of the Church's activities. They later came to our Church office asking to take the orphans which [the Applicant] resisted saying he was a voice of the oppressed and they said they would come back to fulfil their mission. They claimed that the man we assisted was a rebel belonging to ADF rebel group who are based in southern Uganda. They also claimed that he had guns and was linked to the above group. Because of our association with him as a Church goer, they linked us to the above said group. We pray that you will continue rendering the necessary assistance as we are convinced that his return may cost his life. So our Church is now under organisations listed as supporting rebels and security organs claim that we are rebels. Generally speaking all pastors from this Church are being harassed. While on the way, the convoy was intercepted by LRA rebels and the applicant claimed to have been captured. He was asked where he was taking food. He was asked to tell the Government to stop attacking the LRA. He was ordered to speak to Government officials by phone to deliver this message. Eventually, he and his driver were able to escape and eventually made their way back to Masaka. Thereafter, he moved from place to place, at times pretending to be mad. He decided to leave the country, which he did with the assistance of George Ddungu. A six page typewritten commentary was sent with a handwritten covering letter to the Tribunal. They said that they have their informers also in the central part where I come from. They also said that they are also part of the Uganda People Defence Force (Army). The Ugandan Army is spread all over and so that also increased my fear and also to see that their informers are everywhere. After the telephone talk they wanted to take us to their base in southern Sudan to be trained and fight, but we managed to escape from them as they went to raid for food. George Ddungu recounted the content of the letters to the Applicant. The Applicant described them in this way: "The rebels dropped a letter saying that they need my head with the help of their informers in Kampala and Masaka where I live they will be able to get me; they dropped a similar letter on 27 January 2004 [saying] that they had not forgotten me that they will still pursue me and cut my head off. They also wrote in this letter that I escaped from them and so they want to teach me how to obedient to them a little bit more by cutting my head off. I cannot relocate to anywhere because in the north the rebels need me, in the central the rebels have their informers and Government is also there ... I thought of seeking asylum to Kenya, but I could not because it was very bad also, I could not even walk on the streets when I was there ... plus the Kenya Government sends back the asylum seekers to Uganda and they are killed. I also wanted Mugerwa's children to be taken to a different country, but it did not happen, consequently their killing by the same Government soldiers that were pursing them and killed their Dad, this has been confirmed in the telephone talk by Pastor George. When Pastor James was taken they were still pursuing me and also at the time of the death of the children even until now. Many of my friends and associates have either been killed or arbitrarily arrested because of their open support for the opposition. I was also tortured, arbitrarily arrested and put into detention into an army barracks a few times. They have said that [I] am part of the rebels" . 31 On 26 February, the Tribunal made telephone contact with George Ddungu in Uganda to enquire about aspects of the circumstances confronting the Applicant in Uganda and the challenges confronting the Christ Alive Church. He also had made several references --- both oral and in writing --- to telephone conversations with Mr Ddungu. I therefore decided to telephone Mr Ddungu at the phone number on the documents submitted by the applicant. The call was made in the evening of 26 February 2004. The number I called was 256-75-690099. I asked to speak to George Ddungu and the person who answered the phone identified himself as Mr. Ddungu. I took notes of the conversation as it occurred. The only problem the applicant has is because of his activities in the north of Uganda. In 2001, the applicant travelled to the north of Uganda twice a month, because he was in charge of the church's northern programs and made monthly reports on them. The children who died in Kenya died of a disease which was prevalent in the camp in which they were living. The church has contacted the Uganda Human Rights Commission about its situation. The church was tipped off by immigration authorities that the applicant should leave the country. The church's programs in the north continue and the church is in contact with other churches, including the Catholic Church, regarding its programs. The church's orphanages are in Masaka and in Kampala. Most of the children are in Kampala. The security people want the applicant to make a statement about the programs in the north. But one cannot discriminate --- one cannot know if a child is the child of a rebel if it needs shelter or has HIV/aids. Security people came to the Kampala office, but Mr. Ddungu told them that the church had written to the Human Rights Commission and had contacted a lawyer, so they went away. He could not go to Kampala office and was in a temporary office the church had in Masaka. The applicant could not survive in Uganda --- it was even necessary to bribe people at the airport because he was on a wanted list. The only problem the applicant has is because of his activities in the north of Uganda. In 2001, the applicant travelled to the north of Uganda twice a month. The children who died in Kenya died of a disease which was prevalent in the camp in which they were living. The church has contacted the Uganda Human Rights Commission about its situation. The church was tipped off by immigration authorities that the applicant should leave the country. The church's programs in the north continue and the church is in contact with other churches, including the Catholic Church, regarding its programs. Your comments are to be in writing and in English. They are to be received at the Tribunal by 23 March 2004. In response to the six matters, the Applicant said this. On 6 January 2001, the Applicant became chairman of the "Evangelistic Committee" of the Church which compelled the Applicant to travel to northern Uganda and particularly the districts of Gulu (in the north), Lira (in central to northern Uganda), Apach (northern district), Moyo and Kitgum (in the north). People had fled particularly from Gulu and Lira to the Apach district due to the activity of LRA rebels. The Applicant visited Gulu reserve camps characterised by high death rates of children from hunger. The Applicant felt a pastoral obligation to be with children sleeping on the streets apparently in fear of being captured by LRA rebels. The Applicant conducted, with others, Church services to help raise finance to make travel to northern Uganda and particularly Gulu possible to address the problems in the north. The Applicant repeated that during travel to the north he "was abducted by LRA rebels and forced to talk to the Government officials on the phone" . Which led to the government failure to understand that [I] am not an LRA rebel and thus their pursue of me as a rebel even until now. At the same time our release by the main boy who was the main guard after he was overpowered by my colleague by saying 'Go' in his northern language (during which time the others had gone to raid for food) marked our release when the boys said 'go' and thus our escape from all the group. Thus the LRA rebels need me because they said I prayed and cursed them and because I also escaped from them. As to the three children of Mugerwa Charles, the Applicant said, "I also wanted Mugerwa's children to be taken to a different country, but it did not happen, consequently their death of which [I] am far beyond sure that they were killed by the same security personnel who were pursuing them and killed their Dad" . 36 The Applicant sums up his response to the reference by George Ddungu to the Applicant's "only problem" being his activities in the north of Uganda, as a reference to the Applicant's trip to Gulu, his abduction by LRA rebels, his forced telephone discussion with Government officials, the resultant perception on the part of the Government that the Applicant is an LRA rebel and the lack of protection that will be afforded to him by the Government of Uganda for that reason. 37 The Tribunal reviewed the applications of 11 December 2001 and 3 July 2002 for a tourism visa by the Applicant and the notes of interview between the Applicant and a staff member of the High Commission of Australia in Nairobi in July 2002 concerning the Applicant's proposed trip to Germany on the night of that interview. On 12 March 2004, the Tribunal wrote to the Applicant putting particular information to the Applicant for the purposes of section 424A of the Act . You told the Tribunal that, on return to Masaka, you went into hiding for three weeks. The last of these states that you were a student, pursuing a two-years course leading to a Diploma in Tourism and that you were 'hard working, co-operative and willing to learn'. In an interview with the Australian High Commission, at that time, you said that you had to return to Uganda because you had a sick mother and that her only other child, your sister, was living in the United States. You stated that you were going to a workshop in Germany that night. You stated that your Australian sponsors had taken over your education when your father died. Papers attached to your visa application indicated that the sponsorship started when you were twelve. The documents indicate that you may not have been where you claimed to be or doing what you claimed to have been doing in northern Uganda on the dates on which you claimed to be doing them. You left Uganda and returned at least twice between December 2001 and your departure for Australia. None of the documents submitted when you sought your visa for Australia nor your statements in interviews with the Australian High Commission made any reference to responsibility for church work in or visits to northern Uganda or involvement with an orphanage. Although you received your visa in July 2001 [this date ought to have been July 2002] , you returned to Uganda and did not leave for Australia until October, raising doubts about your claim to have at that time feared persecution. Your comments are to be in writing and in English. They are to be received at the Tribunal by 6 April 2004. On the question of whether the Applicant was genuinely in northern Uganda in November 2001 having regard to the apparent inconsistencies arising out of the documents described in the letter of 12 March 2004, the Applicant said this. The Applicant was in northern Uganda in November 2001 and was abducted by LRA rebels on 21 November 2001. The Applicant then went into hiding in a particular home. The Applicant's assistant, Robert, collected the Australian visa forms from the Canadian Consular Office and the documents attached to the visa application including the support letters from the Progressive Farmers' Club project, the Butego project and the Bukoto Catholic Parish Church. Robert also collected a support letter from the Progressive Institute of Business Studies. All these documents were taken to the Applicant in hiding. They were filled out by the Applicant. Robert then sent them by registered mail to the Australian High Commission in Nairobi. The Applicant denied that he had travelled away from his hiding place at all. 39 As to the failure to mention in the visa application any reference to responsibility on the part of the Applicant for Church work or Church visits to northern Uganda or involvement with an orphanage, the Applicant said this: "we decided that we do not mention much about my work and my employment commitments ie Earthlife, Christ Alive and my involvement in the north as this would lead into my mentioning my abduction by the LRA and my forced telephone conversation by the LRA to the Government officials that right now has put me in a state of conflicting loyalty about my continued living. This alone would lead the Australian High Commission to know about my fear and thus learning that I was going to seek asylum in Australia hence their rejection of the visa" . 40 Unfortunately, the letter of 12 March 2004 from the R R T incorrectly makes a reference to the collection by the Applicant of a visa for Australia on 5 July 2001 rather than 5 July 2002. This caused the Applicant to extensively respond to the impossibility of collecting a visa in July 2001 which was applied for in December 2001. 41 The Applicant rebuts the notion that he left Uganda in periods between December 2001 and his date of departure for Australia. The Applicant returns to the matter of electing not to disclose to the Australian High Commission aspects of his involvement in Church work as that would necessarily involve disclosure of the contended abduction by LRA rebels in northern Uganda. For the same reason, the Applicant did not mention any aspects of his role at the orphanage or the problems concerning Mugerwa Charles. The Applicant asserts that he remained in hiding, was fearful for his life and anxious that he may not be able to leave Uganda for Australia. The Applicant described his arrangements with his Australian sponsors. In relation to his German hosts or sponsors (the subject of the proposed visit to Germany based on a visa of 2 June 2002 disclosed to the Australian High Commission as background to the application for the 5 July 2002 Australian visa), the Applicant said this: "About the workshop, that I had to attend at that night in Germany, after informing my hosts in Germany that I wanted also to seek asylum there when I go, they informed me that they were to meet me in Uganda instead and thus my not travelling to Germany that particular night" . However, the letter from the Progressive Institute of Business is dated in the middle of the period in which the applicant claims to have been in hiding and almost three weeks after his claimed trip to northern Uganda. Irrespective of who collected the letters submitted with his visa application, it does not appear from the documents submitted that he was absent either from his studies or from his work in this period. While I could accept that one person could do some of these things, I do not accept that one person could do them all. Failure to comply would mean the death of the leader. He stated that his answer was that he was a pastor who did not involve himself in politics. There is no mention of colleagues being abducted. This also contradicted the applicant's claims to have aroused the negative interest of security authorities because of his assistance to Mugerwa Charles and his children or because of his counselling of homosexuals. Moreover, George Ddungu also stated that the Church's work in northern Uganda continued, in collaboration with other churches, which calls into question the claim that this work had caused Government authorities to harass the Church. He also contradicted the applicant's claim that no complaint had been made to the Uganda Human Rights Commission. Finally, he stated that the immigration authorities advice that the applicant should leave the country prompted his departure, contradicting the applicant's claim to have heard it at the airport on departure. George Ddungu, in his written evidence and in conversation with me, clearly wanted to support the applicant, even though his evidence was not entirely consistent with what the applicant had claimed. However, I have some reservations about his own reliability, since I called him to the number shown on his correspondence for his Kampala office, whereas he told me he had moved to Masaka. He then went to considerable lengths to satisfy the High Commission as to the genuineness of his intention to return to Uganda. When he received his visa, he told the Australian High Commission that he was leaving for Germany that night. His claim as to why he did not go to Germany means, therefore, that, later on that same day, he called Germany from Nairobi and told his hosts that he would apply in Germany for asylum. In view of his experience with the Australian authorities, I find it inconceivable that he would do such a thing. It is much more likely that the applicant obtained the German visa to bolster his claim for an Australian visa and that no trip to Germany was ever planned. In view of all the above, I have great doubts about the credibility both of the applicant and of George Ddungu. Your comments are to be in writing and in English. They are to be received at the Tribunal by 4 June 2004 . The youth workers were abducted but died later of Ebola disease. Regarding the claimed intention to visit Germany, the Applicant re-asserted that this trip was planned and stated that he had had to tell his hosts of his plan to seek asylum because they were reading to him the program for his trip; he did not address my expressed scepticism that he would so such a thing on the day of his departure for Germany. The evidence put before the Tribunal reflected a number of inconsistencies. Those inconsistencies apparent to the R R T were put to the Applicant in the letters of 12 March 2004 and 12 May 2004. The responses contained in the submissions made by the Applicant on 30 March 2004 and 1 June 2004 failed to resolve, for the R R T, the apparent inconsistencies. 45 Some of the "difficulties" confronting the R R T arising out of the failure by the Applicant to properly address apparent inconsistencies were described as "peripheral" to the Applicant's central claims and although the R R T was not satisfied that its concerns about those matters had been addressed, the R R T nevertheless disregarded those concerns. The matters peripheral to the central claims included such factual assertions as the volume of tasks the Applicant claimed to perform while travelling regularly to the north of the country. The R R T also had reservations about the Applicant's claims of involvement in the 2001 presidential election campaign. 46 The R R T observed that in the response of 1 June 2004, the Applicant made it plain that his application for protection is based principally on a well-founded fear arising out of his encounter with the LRA and the consequences of that encounter. The letter from the High Commission initially rejecting his visa application stated that the High Commission did not believe that his expressed intention only to visit Australia was genuine. He then went to considerable lengths to satisfy the High Commission as to the genuineness of his intention to return to Uganda. He told the Australian High Commission that he was leaving for Germany that night. His response to the Tribunal's letter asks the Tribunal to accept, therefore, that, on that same day, he called Germany from Nairobi and told his hosts that he would apply in Germany for asylum. In the circumstances, the Decision of the Tribunal was illogical and unreasonable. As to the affidavit of 29 June 2005, the Applicant exhibits 11 documents. The first six exhibited documents already form part of the record being the letter from the R R T to the Applicant dated 27 February 2004, the Applicant's submission to the R R T dated 11 March 2004, the R R T's letter to the Applicant dated 12 March 2004, the Applicant's response dated 30 March 2004, the R R T's letter to the Applicant dated 12 May 2004 and the Applicant's reply dated 27 May 2004. The remaining exhibits (7 to 11) supported by paras 8 to 21 of the affidavit address the recollections of and circumstances surrounding the discussion between the Tribunal member and George Ddungu. Exhibit 8, for example, is an affidavit by George Ddungu deposing to George Ddungu's recollection of the telephone conversation on 26 February 2004. Exhibit 10 is an unsworn typewritten affidavit by George Ddungu. Exhibit 11 is a facsimile of a sworn version of exhibit 10. Exhibit 9 is the handwritten notes of George Ddungu. 52 The Respondent objects to the admission of the affidavit on two grounds. First, to the extent that the affidavit seeks to put before the Court the documents marked as exhibits 1 to 6, the documents are already before the Court and the affidavit adds nothing. As to paras 8 to 21 and exhibits 7 to 11, the Respondent says the affidavit ought not to be admitted because the evidence is irrelevant. The facts deposed to and documents exhibited do not go to any ground forming part of the application. The application does not involve any allegation of bias, bad faith or improper purpose on the part of the Tribunal member in conducting the conversation, noting the conversation or relying upon the conversation. The Applicant simply seeks to adduce evidence which demonstrates that minds might legitimately differ about the recollections of the content of the conversation notwithstanding that the Tribunal member's typewritten note of the discussion on 26 February 2004 was made contemporaneously on 27 February 2004. 53 In Waco v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 171 ; 131 FCR 511; Lee, Hill and Carr JJ found the Tribunal had failed to afford procedural fairness to the applicant for a Protection Visa by finding letters central to the applicant's claim (submitted after the conclusion of the hearing) were not genuine, without giving the applicant an opportunity to be heard on that issue. It is sufficient in such a case that the party has not been afforded an opportunity to put his or her case. Only where the case is one where it can be shown that the Appellant could not, even if given the opportunity to do so, affect the outcome would it be held that there was no denial of procedural fairness. If the possibility exists that the Appellant, if given the opportunity might be able to make submissions or call evidence which could affect the outcome, the Appellant will not fail merely because the Appellant has not proved that the submissions or evidence would affect the outcome. It is not admissible for the purpose of establishing a controversy of fact or merits as to whether the Tribunal member said something or failed to properly record or appreciate something said by George Ddungu. In this case, the Tribunal put its concerns about a conversation with George Ddungu to the Applicant on 27 February 2004 and made reference to apparent inconsistencies arising out of the discussion with George Ddungu in the R R T's letter to the Applicant on 12 May 2004. The Applicant had an opportunity to put information concerning a possible contradictory version of the conversation to the R R T from 27 February 2004. Moreover, the affidavit is not relevant to a ground of challenge. The particular ground of challenge going to the conversation with George Ddungu asserts a denial of procedural fairness arising out of a failure by the R R T to put all aspects of the conversation recorded by the Tribunal member to the Applicant. 55 The proposition is that had all elements of the conversation been put to the Applicant, the Applicant might have said something further in response. The question is whether there was a failure to afford procedural fairness in not putting all the elements of the conversation as noted by the Tribunal, to the Applicant. If the purpose of the affidavit is to contradict the Tribunal member's version of the conversation reflected in the typewritten note of 27 February 2004, no doubt the Respondent would seek to address the contention with evidence from the Tribunal member. However, paragraphs 8 to 21 and exhibits 7 to 11 of the affidavit of the Applicant sworn 29 June 2005 will be admitted into evidence solely on the basis that the facts deposed to and the documents exhibited reflect things which might have been said or put to the R R T had points 7 to 11 of the conversation [31] in the note dated 27 February been put to the Applicant. 56 The affidavit of 13 May 2005, deals with attempts by the Applicant to obtain the Tribunal member's handwritten notes of the conversation with George Ddungu. Perhaps it is thought the handwritten notes will be inconsistent with the typewritten note of 27 February 2004 [31] or that propositions put to the Applicant in the letter of 27 February 2004 [32] were not a fair representation of what was actually said by George Ddungu. Accordingly, leave is refused to read the affidavit sworn by the Applicant on 13 May 2005. Rather, the R R T ought to have addressed each element of the Convention (and therefore the statutory) criteria and made findings on all facts relevant to each element of the criteria. 60 In other words, the contention is that an examination of the reasoning of the R R T demonstrates that the Tribunal simply applied a reductive process of reasoning reducing all relevant questions to simply one of whether the Applicant could be believed. Thus, the R R T failed to exercise the statutory jurisdiction of review by failing to properly consider each element about which it was required to be satisfied. The Tribunal considered the precise elements of the definition and a number of important guiding opinions of the High Court of Australia in the construction and interpretation (and the Tribunal's obligations generally) of Article 1A(2) and important provisions of the Act . The Tribunal then identified four elements it described as key elements of the Convention definition. Those four key elements were identified as whether the Applicant was outside his country of nationality, whether the Applicant feared persecution involving serious harm, systematic and discriminatory conduct, a threat to life or liberty, significant physical harassment or ill treatment, significant economic hardship and other matters involving a consideration of section 91R(1)(b) and section 91R(2) of the Act . The R R T noted that the High Court has explained that persecution may be directed against a person as an individual or as a member of a group and that persecution must have an official quality in the sense that it is official, or officially tolerated or uncontrollable by the authorities of the country of nationality. The Tribunal further noted that the threat of harm need not be the product of government policy; it may be enough that the government has failed or is unable to protect the Applicant from persecution. The R R T further noted that persecution implies an element of motivation on the part of those effecting the persecution and that individuals are persecuted for something perceived about them or attributed to them by their persecutors. 63 The R R T noted that the persecution which the Applicant fears must be for a Convention reason of race, religion, nationality, membership of a particular social group or political opinion. The Tribunal noted that persecution feared by the Applicant need not be solely attributable to a Convention reason but a multiplicity of reasons will not satisfy the statutory test unless a Convention reason constitutes an essential and significant motivation for the persecution feared. The R R T further noted that the Applicant's fear of persecution for a Convention reason must be a well-founded fear and explained that notion as one where the Applicant has a genuine fear founded upon a real chance of persecution where there is a real substantial basis for it but not if it is merely assumed or based on mere speculation . The R R T observed that a 'real chance' is one that is not remote or insubstantial or a far-fetched possibility and a person can hold a well-founded fear of persecution even though the possibility of the persecution occurring is "well below 50%". 64 The Tribunal further noted that, additionally, the Applicant must be unable or unwilling because of his fear to avail himself of the protection of his country of nationality or be unwilling to return to his country of former habitual residence. 65 Whilst it is true that decisions of the R R T often recite a preliminary analysis of these elements in common or similar form, the reasons do not suggest a formulaic application of the elements to the evidence or a failure to appreciate the scope or burden of the elements about which it had to be satisfied. Rather, the Tribunal appreciated that section 36(2) recites as a criterion for a protection visa that the applicant for the visa must be a non-citizen in Australia to whom Australia had protection obligations under the Refugees Convention as amended by the Refugees Protocol . The Tribunal recognised that it was required by section 414 of the Act to "review" the delegate's decision and section 415 conferred upon the R R T the power to exercise all the powers and discretions conferred by the Act upon the decision-maker and that the R R T stood in the shoes of the Minister for the purposes of section 65. That section requires the grant of a visa upon satisfaction of the relevant matters and notably the criteria prescribed by the Act and Regulations (section 65(1)(a)(ii)) and the refusal of a visa if not so satisfied. However, inadequacy of the material before the decision-maker concerning the attainment of that satisfaction is insufficient in itself to establish jurisdictional error. Such error may embrace a number of notions. Those different kinds of error may well overlap . The circumstances of a particular case may permit more than one characterisation of the error identified, for example, as the decision-maker both asking the wrong question and ignoring relevant material. What is important, however, is that identifying a wrong issue, asking a wrong question, ignoring relevant material or relying on irrelevant material in a way that affects the exercise of the power is to make an error of law. Further, doing so results in the decision-maker exceeding the authority or powers given by the relevant statute. In other words, if an error of those types is made, the decision-maker did not have authority to make the decision that was made; he or she did not have jurisdiction to make it. Nothing in the Act suggests that the Tribunal has given authority to authoritively determine questions of law or to make a decision otherwise that in accordance with the law". 69 The R R T correctly framed, expressly, the issues which it had to consider in undertaking its review. The Tribunal elected to consider whether each of those elements were satisfied by embarking upon a detailed forensic assessment of each of the Applicant's claims and his evidence to determine whether it could be satisfied that the Applicant was, at the date of its decision, a person to whom Australia owed protection obligations. In undertaking that forensic exercise, the R R T considered all of the background facts recited at [4] to [16]. It considered the material before the Respondent's delegate and the answers given by the Applicant to the questions in the protection visa application. It considered the Applicant's submission of 29 January 2004 and the way in which the Applicant framed his claims for protection based upon a Convention ground [18]. The R R T considered the Applicant's statutory declaration sworn 1 July 2003 [24] and a document signed by George Ddungu on 7 January 2004 [24] speaking to aspects of the claims made by the Applicant. Because the Applicant had placed great emphasis upon the notion of his capture by LRA rebels and demands made by those rebels, the Tribunal had regard to the question of whether there was consistency between answers given in the protection visa application and oral evidence and statements made about those matters in the course of the proceedings before the R R T. The Tribunal considered the oral evidence of the Applicant [25], the Applicant's clarifying document of 21 February 2004 [26], the observations about capture by the LRA rebels and the forced telephone call to government officials [26], letters written by the LRA rebels on 20 July 2003 and 27 January 2004 [27] and the Applicant's fear of persecution arising out of his capture by the LRA rebels and his forced engagement with government authorities [28], [30], [33], [34], [36] and [39]. 70 It is clear from the process of reasoning that these matters were considered expressly in the context of an evaluation of the framework elements identified by the R R T [62] to [64]. 71 The R R T considered the Applicant's claims about the conduct of supporters of President Museveni concerning indiscriminate killing of individuals perceived to be hostile to the government and particularly illustrative of that conduct, the killing of Mugerwa Charles and his three children. The Tribunal then further considered the consequential fear on the part of the Applicant arising out of the government's failure to appreciate that the Applicant was not truly a member of the LRA rebel group. 72 The Tribunal then sought to elucidate aspects of the claims by speaking directly with [Pastor] George Ddungu [31]. That conversation [31] revealed 11 points going to aspects of the allegations or background facts concerning the Applicant's claims. The discussion with George Ddungu revealed, in the mind of the Tribunal member, a number of inconsistencies and on 27 February 2004 [32] the Tribunal put those matters it considered material to its determination to the Applicant. The function of that letter was to provide the Applicant with an opportunity to comment on six relevant matters which were perceived to be relevant to a decision on the application. The Tribunal [33] considered the Applicant's response, his claim of abduction by LRA rebels and forced engagement with government officials [33] and [34]. The R R T considered the Applicant's comments concerning the LRA letters of 20 July 2003 and 27 January 2004 and the reassertion of the killing of the three children of Mugerwa Charles [35]. 73 The conversation by the Tribunal member with George Ddungu [31], the letter to the Applicant [32] and the assessment of the response [33], [34], [35] and [36] was directed to both resolving, in the mind of the Tribunal, apparent inconsistencies and whether the evidence satisfied the framework questions [62] to [64]. 74 Further matters of inconsistency, in the mind of the Tribunal arose out of the R R T's consideration of aspects of the material put by the Applicant to the High Commission of Australia in applications made on 11 December 2001 and 3 July 2002 [37]. Those matters went to apparent inconsistencies between the movements of the Applicant in the latter months of 2001. These concerns were the subject of a further letter to the Applicant [37] providing the Applicant with an opportunity to clarify those matters. 75 The Tribunal considered the Applicant's response [38] and in the face of that response a lengthy letter was written to the Applicant [42] putting a series of concerns going to questions such as whether the Applicant was genuinely in hiding as he contended, whether the Applicant was engaged in the field of activities contended for, whether the Applicant was abducted by LRA rebels, whether the Applicant had such a level of engagement in the 2001 presidential elections that he would be perceived to be politically hostile to the government (particularly in conjunction with the forced engagement with government representatives by reason of his capture by LRA rebels) and other matters. 76 The reasoning of the R R T suggests that these propositions were put to the Applicant to test the strength of the various contentions of the Applicant as he sought to plot the points on the continuum in establishing each of the framework elements formulated by the R R T. The reasoning suggests strongly that the R R T was not simply reducing its statutory task to one of whether the Applicant could be believed. The question addressed by the R R T was whether the statutory elements were satisfied by reason of the evidence. 77 The Tribunal considered the Applicant's response of 27 May 2004 [43]. An assessment of that response reveals that the Tribunal's extensive consideration of the submission [43] is a fair and proper reflection of the response. 78 Having considered all of this evidence, the Tribunal noted that the Respondent principally based his application for protection upon a well-founded fear of persecution arising out of his encounter with the LRA rebels and the consequences of that encounter in terms of the perception the government (and the army) would hold of his political opinions either actual or imputed and its perception of his association with a group hostile to the government. The forensic analysis of the evidence was designed to lead to a judgment about whether the R R T would be satisfied of such a claim. The conclusions [46], [47] and [48] were clearly open to the Tribunal. Those conclusions reflect a thorough rejection of the evidence of the Applicant and his systemic claims. 79 A part of that assessment involved a core claim by the Applicant concerning his abduction by the LRA rebels and an assessment of the inferences and conclusions to be drawn from a consideration of all of the Applicant's material and statements made in response to questions in the protection visa application form as compared with the Applicant's statutory declaration sworn 1 July 2003 [24], the Applicant's submission dated 29 January 2004 [25], the Applicant's oral evidence, the Applicant's letter to the R R T dated 21 February 2004 [26], [27], [28], [29] and [30], the Applicant's letter of 11 March 2004 [33], [34] and [35] and the Applicant's submission of 27 May 2004 [43]. The conclusions on those matters were open to the Tribunal. 80 In reaching those conclusions, the Tribunal provided the Applicant with an opportunity to make written submissions, provide oral evidence and respond to a specific and focused expression of concern about particular matters. In dealing with the evidence of the Applicant and reaching the conclusions reflected at [46], [47] and [48], the R R T was expressly dealing with the issues identified at [62], [63] and [64]. The process of reasoning was not simply a reductive assessment of the credibility of the Applicant but an assessment of whether the evidence established the statutory criteria in the way framed by the R R T which, in turn, necessarily involved an assessment of the truthfulness of the Applicant. In the assessment of the evidence generally, the R R T's view of the credibility of the Applicant was, however, decisive. The findings demonstrate that the R R T evaluated each of the claims and tested the version given by the Applicant in relation to his alleged abduction by LRA rebels, the consequences of the abduction, the events surrounding the abduction, the obligation to conduct a telephone discussion with government officials, his claim to go into hiding on return to Kampala or Masaka, the claimed harassment by government officials and the explanation as to why the Applicant ultimately did not go to Germany. The R R T expressed "general problems" with the Applicant's credibility, described the Applicant's evidence as "completely unreliable" and rejected the Applicant on the matters identified at [48]. 81 Therefore, on the whole of the evidence, the R R T, for reasons given at length, found the Applicant's version of events completely unreliable. It may be that the Applicant's credibility had been so weakened that no weight redemptive of the poisoned well of credibility could be attributable to his evidence: Re Minister for Immigration and Multicultural Affairs; ex parte Applicant S20/2002 (2003) 77 ALJR 1165 at [49]; McHugh and Gummow JJ. However, the R R T undertook a systemic examination of each of the elements about which it had to be satisfied for the purposes of sections 36(2) , 65 , 414 and 415 of the Act . It was open to the R R T to make the findings reflected in the reasons. The process of reasoning was sound and not affected by illogicality, unreasonableness or irrationality. Based upon its assessment of the evidence, it was open to make the findings under challenge by grounds 2 and 3 of the application [50]. However, this was essentially a finding as to whether the prosecutor should be believed in his claim --- a finding on credibility which is the function of the primary decision-maker par excellence. If the primary decision-maker has stated that he or she does not believe a particular witness, no detailed reasons need be given as to why that particular witness was not believed. The Tribunal must give the reasons for its decisions, not the subset of reasons why it accepted or rejected individual pieces of evidence. In any event, the reason for the disbelief is apparent in this case from the use of the word 'implausible'. The disbelief arose from the Tribunal's view that it was inherently unlikely that the events had occurred as alleged. As to SGLB , the applicant says that the process of reasoning is one designed for arriving at the best possible understanding of the facts in an inherently imperfect environment and that the process is not one directed to punishing or disadvantaging vulnerable people because they have made false or inconsistent statements or are believed to have done so. As to Abebe , the applicant relies upon the observations of their Honours Gummow and Hayne JJ in observing that inquiring whether a person has a well-founded fear of persecution is attended by very great difficulties and that there is no warrant for the Tribunal adopting some unthinking application of rules of law to a person from a wholly different society coming to a new country in which that person seeks asylum. 83 As to the application of the principles reflected in SGLB , there is no basis for concluding from the reasons of the Tribunal that it sought to punish or disadvantage the Applicant as a vulnerable person. The Tribunal gave no weight to the matter at [22]. The R R T sought to establish to its satisfaction on all the evidence whether the Applicant was a person to whom Australia owed protection obligations within the framework of the case put by the Applicant. As to Abebe , there is no warrant for construing the reasons of the Tribunal as the formulaic unthinking application of procedural or legal rules derivative of an orthodox and stable democracy to a person from a wholly different society who would be likely to be conditioned by behavioural norms appropriate to an entirely different polity. The R R T sought to forensically determine a basis upon which it either might or might not be satisfied as to the framework issues identified at [62] to [64]. 84 The Applicant further contended that even if the forensic analysis of the evidence resulting in adverse credibility findings was properly undertaken, there were many other grounds for determining the application in favour of the Applicant which the Tribunal failed to address and upon which no findings were made. The Applicant exhibited a schedule identifying 42 factual contentions. No finding was made by the Tribunal on 14 of those contentions. As to 24 of these contentions, the Tribunal rejected the contention by disbelieving the Applicant. Some examples of factual contentions about which the Tribunal made no finding are these: supporters of President Museveni lobby youth and beat them; government not interested in Bawaga people; Applicant's father killed opposing President Milton Obote when the Applicant was a young boy; children beaten and legs broken. 85 In discharging the duty cast upon the Tribunal in undertaking a review of the decision, it is not necessary for the Tribunal to make a finding on each and every factual contention put to the R R T. The R R T must take the case put to it by the Applicant either articulated by the Applicant or identified upon a proper assessment of the material put to the R R T but not necessarily fully articulated or developed, inquire into the elements of the factual contentions to determine whether the Tribunal might reach the required state of satisfaction, address its statutory mind to the correct inquiry, correctly apply the rules of law including rules of procedural fairness and determine whether the Applicant is a person to whom Australia has protection obligations under the Convention. In discharging that role, it is not necessary to decide each and every factual contention. The Applicant has not demonstrated any error of law on the part of the Tribunal in the treatment of the evidence and the contentions. 86 The Applicant further contends that the R R T failed to have regard to other important evidence, namely, the evidence of George Ddungu confirming that the Applicant was a church worker in Uganda and had experienced problems with the LRA rebels in the north of the country because of his activities with the church, evidence that should the Applicant return to Uganda he would be killed because of these activities and independent country information (200 pages) evidencing problems faced by church and charity workers in Uganda. 87 As to these matters, the Tribunal expressly had regard to the historical work of the Applicant for the Christ Alive Church in Uganda and forensically examined the claims, work, movement and activity of the Applicant on behalf of the Church. The R R T had regard to the letter signed by George Ddungu on 7 January 2004 [24] and information concerning the activities of the Applicant in the north of Uganda on behalf of the Church [31] and the information provided by the Applicant [38]. The Tribunal tested all of these matters to determine whether it could reach the required level of satisfaction on the questions before it recognising that the emphasis in the claim made by the Applicant for a well-founded fear of persecution was persecution from government authorities by reason of a perception of political opinions he might hold hostile to the government and a perception of membership of the LRA rebel group by reason of his engagement with government as a function of his capture by the rebels. His claim of a well-founded fear of persecution is not based upon his membership of the Christ Alive Church. The claim made in the submission dated 29 January 2004 [18] was based upon actual or imputed political opinion or, alternatively, a perception that the Applicant was a member of a particular group hostile to the government arising out of his association with Mugerwa Charles. In any event, the R R T considered the totality of the evidence including the implications of the Applicant's role in the Church and reached a decision open on the evidence. 88 As to the independent country information, the R R T did not make findings about or comment upon the independent country information going to the scope of the problems faced by church and charity workers in Uganda. This is no doubt because an examination of the independent country information does not demonstrate material going to the Applicant's participation within a particular group or the activities of members of a group described as that group comprising those who gave "assistance to and protection of alleged rebel Mugerwa Charles" and those who were involved in a refusal to hand over to the military or government authorities the children of Mugerwa Charles. Further, although the independent country information describes the scope of the difficulties faced by charity organisations and church groups in Uganda, the information does not go to the issues put before the R R T as the basis for this Applicant's claim of a well held fear of persecution which relies upon a particular perception on the part of the government arising out of the contentious telephone discussion based upon the contentious capture allegation. 89 The Applicant further contends that the R R T misdirected itself by treating the information and evidence of George Ddungu with caution and that it was unreasonable for the Tribunal to question George Ddungu's credibility. The R R T, in fact, relied upon information put to it by George Ddungu as the basis for testing some of the claims of the Applicant and although the R R T member felt George Ddungu was, in some senses quite naturally, supporting and extending himself in support for the Applicant, the Tribunal simply adopted a cautious approach based upon an apparent inconsistency in George Ddungu's statement concerning his move from Kampala to Masaka. 90 The Applicant further contends that the R R T misdirected itself as to aspects of the original application by describing aspects of the oral evidence as raising new claims when those claims had been raised in the original application for a protection visa. Those claims went to the question of the alleged capture of the Applicant by LRA rebels. This event and aspects of it were seen by the Tribunal as new in the sense that they were not consistent with the matters raised by the Applicant in the visa application. The point seems to be that in the application form the Applicant said that Kony rebels (LRA rebels) abducted two of the Church's youth evangelistic team and released them the next day unhurt. The rebels apparently said that on the next occasion they would need the leader of the team so that the leader could speak to government officials for them, presumably because the rebels lacked the necessary education. Subsequently, the Applicant said that he had been captured by rebels with his colleagues, thought he would be taken to Sudan and was subsequently released. He later said that he had been captured and was forced into engaging in telephone discussions with government authorities which gave rise to the perception that the Applicant was a participatory member of the LRA rebel group. As indicated in these reasons [4] to [43] the R R T tested these matters in considerable detail. 91 There is no demonstrated error on the part of the Tribunal. In determining questions of fact on issues before it, the Tribunal was entitled to make an inquiry directly of George Ddungu and seek to put to George Ddungu questions which, in the view of the Tribunal, would be likely to inform its decision. The content of the obligation of procedural fairness in the discharge of the statutory function does not require an applicant to be present when the R R T seeks information about a contention or seeks to inform itself about facts. The Act requires the R R T to put to the Applicant in the way that the R R T considers appropriate in all the circumstances, particulars of any information that the R R T considers would be the reason or a part of the reason for affirming the decision under review. The Act also requires the R R T to ensure, as far as is reasonably practicable, that the Applicant understands why that information is relevant to the review undertaken and invite the Applicant to comment on the information (section 424A). 93 On 27 February 2004, the Tribunal wrote to the Applicant [32] and put six matters arising out of the conversation with George Ddungu [31] to him and invited him to comment on the information. The Tribunal expressly said that the six matters, subject to any comments by the Applicant, would be the reason or part of the reason for deciding that the Applicant was not entitled to a protection visa. The R R T did not put every aspect of information gathered by the Tribunal as a result of the discussion with George Ddungu to the Applicant. The information reflected at points 7 to 11 [31] may have been contextual. The Tribunal may have considered the information relevant or irrelevant. If relevant, the Tribunal had a statutory obligation to have regard to the information although ultimately it may not have formed the reason or a part of the reason, for affirming the decision under review. A consideration of the reasons and the conclusions demonstrate that the information noted at points 7 to 11 [31] did not form the reason or a part of the reason [46], [47] and [48] for affirming the decision under review. 94 Importantly, the Tribunal's duty and power to conduct the review is conditioned upon the Tribunal's observance of the requirements of procedural fairness as a matter of common law not just a question of construction of provisions of the Act : Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 at 615 per Brennan J; Attorney-General (NSW) v Quin [1990] HCA 21 ; (1990) 170 CLR 1 at 40 per Brennan J; Annetts v McCann [1990] HCA 57 ; (1990) 170 CLR 596 at 598 --- 600 per Mason CJ, Deane and McHugh JJ, 604-605 per Brennan J; Ainsworth v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564 at 591 per Brennan J; Re Refugee Review Tribunal; ex parte Aala [2000] HCA 57 ; (2000) 204 CLR 82 at 99-100 [38] --- [39] per Gaudron and Gummow JJ; Gleeson CJ at 89 [5], Kirby J at 131 [132] and Hayne J 142-143 at 168. A failure to provide procedural fairness is an error of law. Two aspects of procedural fairness require consideration. The first is that in the ordinary case where no issue of confidentiality arises, an opportunity should be given to an applicant to deal with adverse information given to the Tribunal that is "credible, relevant and significant" ( Kioa v West ; Brennan J) to the decision to be made. The second aspect involves a recognition that information of that kind is likely to create a risk of prejudice, perhaps subconscious, and it is unfair to deny a person whose interests are likely to be affected by the decision, an opportunity to deal with the information. 95 A question then is whether the information noted at points 7 to 11 [31] of the Tribunal member's conversation with George Ddungu constituted adverse information that is credible, relevant and significant to the decision to be made. Examining sentences, or parts of sentences, in isolation from the context is apt to lead to error. In particular, what Brennan J said about 'information that is credible, relevant and significant' takes its meaning from the point his Honour had made only a few sentences earlier [in his Honour's judgment in Kioa v West] that: '[a]dministrative decision-making is not to be clogged by inquiries into allegations to which the repository of the power would not give credence, or which are not relevant to his decision or which are of little significance to the decision which is to be made' . Moreover, what is meant by 'credible, relevant and significant' must be understood having regard also to the emphasis that his Honour had given earlier in his reasons to the fundamental point that principles of natural justice, or procedural fairness, 'are not concerned with the merits of a particular exercise of power but with the procedure involved that must be observed on its exercise'. That determination will affect whether the decision-maker must give an opportunity to the person affected to deal with the information. And that is why Brennan J prefaced his statement about a person being given an opportunity to deal with adverse information that is credible, relevant and significant, by pointing out that there may be information, apparently adverse to the interests of a person, which can and should be put aside from consideration by the decision-maker as not credible, not relevant, or of little or no significance to the decision to be made. 'Credible, relevant and significant' must therefore be understood as referring to information that cannot be dismissed from further consideration by the decision-maker before making the decision. And the decision-maker cannot dismiss information from further consideration unless the information is evidentially not credible, not relevant or of little or no significance to the decision that is to be made. References to information that is 'credible, relevant and significant' are not to be understood as depending upon whatever characterisation of the information the decision-maker may later have chosen to apply to the information when expressing reasons for the decision that has been reached. [NIB Health Funds Ltd v Private Health Insurance Administration Council [2002] FCA 40 ; (2002) 115 FCR 561 at 583 [84] per Allsop J]. It follows that asking whether ... the Tribunal may have been subconsciously affected by the information distracts attention from the relevant inquiry. The relevant inquiry is: what procedures should have been followed? The relevant inquiry is neither what decision should the decision-maker have made, nor what reasons did the decision-maker give for the conclusions reached. The Minister's delegate refused the applications and each sought review by the R R T of that refusal. After the applications had been made but before the R R T had completed its review, the Department of Immigration and Multicultural and Indigenous Affairs received an unsolicited but not anonymous letter making allegations against the male applicant. The letter alleged the applicant admitted he had been accused of killing a person prominent in the political affairs of the applicant's country of origin (Eritrea) and that the applicant was a supporter of, and working for, the government of Eritera. The letter was communicated to the Department on a secret or confidential basis but then provided to the R R T. The R R T affirmed the decisions not to grant protection visas to the applicants and in giving its reasons said that it gave no weight to the letter sent to the Department and forwarded to the Tribunal. The question was whether nevertheless, the applicant was denied procedural fairness by not being given an opportunity to respond to the letter and whether the letter had a subconscious effect upon the Tribunal's decision. 97 Their Honours concluded that the alleged admission by the applicant and whether the applicant was working for the government of his country of origin were matters that "bore upon whether he had a well-founded fear of persecution for a Convention reason": ( "Applicant Veal" ) [20] and that procedural fairness required the Tribunal to draw the appellant's attention to the information. Their Honours then dealt with important questions of analogical principle concerning "public interest immunity" not relevant in the present case. 98 The Tribunal, in the discharge of its duty is bound to make its own inquiries and form its own views upon the claim made by the Applicant. Information obtained by the Tribunal which is relevant to that inquiry cannot be ignored by the Tribunal nor can the information be put to one side before reaching a conclusion that the application should be refused, in circumstances where the information demonstrates facts and circumstances which would lead the R R T to the conclusion that it could not be satisfied that an applicant had a well-founded fear of persecution for a Convention reason. 99 In this case, the Tribunal made inquiries and obtained information from George Ddungu. The information was not communicated anonymously nor was it given in any confidential circumstances. The reasons demonstrate that the first six points of the note of the discussion contained adverse information affecting the Applicant which was credible, relevant and significant. It was communicated to the Applicant so that he might be provided with an opportunity to deal with the information. Points 7 to 11 in the note [31] were not matters relevant to the decision of the Tribunal or were matters of little significance to the decision to be made. The procedure adopted by the Tribunal was to put to the Applicant that body of information which the Tribunal regarded as credible, reliable, reflective of inconsistencies in other evidence of the Applicant (and therefore significant) so as to enable the Applicant to respond. 100 The Tribunal was not required to put points 7 to 11 of the information [31] obtained from George Ddungu to the Applicant. The Applicant's affidavit of 29 June 2005 (paras. 8 to 21 and exhibits 7 to 11) has been admitted into evidence simply on the ground that the documents reflect those further things that might have been said or put to the R R T had points 7 to 11 been put to the Applicant. Since there was no obligation to put those points to the Applicant there was no denial of procedural fairness. In any event, the Applicant knew from approximately 27 February 2004 [32] that the Tribunal member's discussion with George Ddungu resulted in important information (points 1 to 6) being provided to the Tribunal, the information was regarded as important and significant and likely to form part of the reason for deciding the application. Whatever contention the Applicant may wish to have put to the R R T, he was able to put it from approximately 27 February 2004. 101 The R R T did not fail to afford procedural fairness to the Applicant by failing to address questions to George Ddungu on matters which may or may not have been within his knowledge or upon matters likely to be within his knowledge. The R R T was entitled to obtain any information from George Ddungu that it considered potentially relevant. Nor did the R R T fail to afford procedural fairness by failing to provide the Applicant with a record or transcript of the information provided by George Ddungu. The Tribunal may gather information as it considers relevant. Some of that information will be relevant and will be considered and evaluated. Arising out of that consideration, information may form a part of the reason for affirming a decision in which event the R R T has a duty to put that information to the Applicant and invite comment upon it. The content of the obligation to provide procedural fairness does not require an applicant be provided with "a transcript of the evidence" [50] gathered by the Tribunal. In this case, there was no obligation upon the R R T to provide the Applicant with a transcript of the information provided to the R R T by George Ddungu. A consideration of the letter dated 27 February 2004 [32] demonstrates that the R R T conveyed the information the Tribunal then considered would be the reason or a part of the reason for affirming the decision under review, to the Applicant in clear and precise terms. Plainly enough, the Applicant understood the content of the letter and responded comprehensively [33]. 102 Accordingly, the application must be dismissed. The Applicant is ordered to pay the Respondent's costs of the application. | judicial review protection visa refugee review tribunal failure to afford procedural fairness failure to identify the scope of the inquiry failure to identify the elements of the applicant's claim for a well-founded fear of persecution for a convention reason failure to conduct a review and failure to exercise the statutory jurisdiction by failing to properly consider all elements of the convention definition of refugee applying a finding on credibility to a determination of all relevant factual questions alleged fear of persecution due to political opinion, membership of a group hostile to ugandan government authorities allegations of forced capture and forced engagement with government authorities on behalf of lords resistance army (lra) rebels. migration |
As explained in Review 2 Pty Ltd v Redberry Enterprise Pty Ltd [2008] FCA 1588 (" Redberry" ), Review acquired the Review Design from Review 2 Pty Ltd (in liquidation) ("Review 2") on 28 February 2007 as part of a corporate restructure. 2 This is an action for design infringement and a cross-claim for design invalidity. For the reasons stated below, I would uphold the claim for design infringement and dismiss the cross-claim for invalidity. 3 In its statement of claim, Review alleges that the respondents --- New Cover Group Pty Ltd ("New Cover"), Maco Collection Pty Ltd ("Maco") and/or Biguang Pan --- have made, imported and sold garments in infringement of the Review Design. Since Mr Pan has never been served with the initiating process (or any other document in the proceeding), Review now seeks no relief against him. Various forms of relief are sought against New Cover and Maco, including declaratory and injunctive relief, and damages. As in Redberry , there are three principal questions: (1) have the respondents infringed the Review Design? (2) Is the Review Design valid? (3) If yes to these two questions, how should damages be assessed? 4 In accordance with orders made on 13 December 2007, the evidence in proceeding VID 286 of 2007 ( Redberry ) in so far as it relates to the Review Design is also evidence in this proceeding. The trials in Redberry and that part of the present proceeding that concerns the Review Design took place together. This leaves for the future the trial in this proceeding with respect to the alleged infringement of registered design No 306802. 5 New Cover and Maco were unrepresented at trial. The Court gave Ms Yasemin Dolcel leave to tender on their behalf the affidavits, with exhibits, that had already been filed (subject to Review's objections as to admissibility). These affidavits were the affidavit of Ms Dolcel sworn on 5 November 2007, and the affidavits of Wei Hong Meng (also known as Jim Meng) sworn on 5 November 2007, 24 September 2007 and 4 February 2008. The following were not relevant in this part of the proceeding: paragraphs 18 and 19 and parts of paragraphs 24 to 26 of Mr Meng' s 24 September 2007 affidavit; paragraphs 15 to 20 of Mr Meng' s 5 November 2007 affidavit; and paragraphs 8 and 9 of Mr Meng' s 4 February 2008 affidavit. The following paragraphs were inadmissible: paragraphs 21, 23 (parts), 27 and 28 of Mr Meng' s 24 September 2007 affidavit; paragraphs 24 to 38 of Mr Meng' s 5 November 2007 affidavit; and paragraphs 4, 5, 7 and 10 of Mr Meng' s 4 February 2008. Notwithstanding that Review gave notice that Mr Meng was required for cross-examination, Mr Meng did not attend Court. I bear this in mind in determining the weight to be given to his affidavit evidence. In January 2005, Review 2 operated 12 retail stores where it sold its clothing and accessories under the "Review" name. It also sold its clothing under the "Review" name at about 10 sites within the Myer Grace Bros stores. At trial in February 2008, Review operated 17 Review retail stores and 23 Myer concessions. Review clothing was sold exclusively in these stores and sites, and was not available elsewhere. Review designed 95% to 97% of the goods that it sold. 8 In July 2005, Ms Jayne Ellis, then a director and designer for Review 2, designed a dress with style number R7811 for retail distribution by Review 2. The design for the dress ("the Review Dress") was included in a number of representations that were the subject of a design application made by Review 2. The application, which was made on 11 August 2005 pursuant to s 21 of the Designs Act , resulted in the grant of registration for the Review Design. The Registrar recorded the product to which the Review Design related as "ladies garments". There was no statement of newness and distinctiveness provided. The Review Design was certified as examined on 25 October 2006. A dress made to the Review Design retailed for $169.95. 9 On 14 September 2006, at a warehouse at 140 Langridge Street, Collingwood in Victoria, an employee of Review purchased garments labelled "Spicy Sugar" with style numbers 050620-2SS and 050620SS ("the Spicy Sugar garments") from New Cover. The price paid for style 050620-2SS was $20.00 and, for style 050620SS, $17.00. Review alleges that the Spicy Sugar garments are substantially similar in overall impression to the Review Design. 10 Maco is the registered proprietor of the business name "Spicy Sugar". Ms Dolcel described Maco as "an Australian designer, importer and wholesaler of [ladies'] fashion garments". Her evidence was that "[p]reparation, styling and research of [Maco's] clothing ranges is [sic] done in Australia and the sampling, grading and manufacturing of the garments is [sic] carried out at the Maco Collection Guangzhou, China office". Ms Dolcel said, and I accept, that Maco subsequently sold its garments through its wholesale outlet store in Australia. Mr Meng also described New Cover as a designer, importer and wholesaler of ladies' fashion garments. His evidence as to the operation of New Cover was equivalent to Ms Dolcel's evidence about Maco: see Mr Meng's affidavits of 5 November 2007 and 24 September 2007. 11 The business operations of New Cover and Maco are evidently intertwined to such an extent as to justify the two companies being treated in the same way in this proceeding. The labels under which New Cover and Maco sold their garments were evidently the same or virtually the same, including Spicy Sugar, Rose Burg, Tea Berry, Tea Berry Gold and New Cover: compare Ms Dolcel's affidavit of 29 October 2007 (filed in Redberry ) and Mr Meng's affidavit of 24 September 2007 (filed in this proceeding). Ms Dolcel described herself as the business development manager for Maco (29 October 2007 affidavit) and as New Cover's full-time business development manager (5 November 2007 affidavit). In evidence in chief, Ms Dolcel described herself as "[b]usiness development manager for the New Cover Group, aka Maco Collection Group", having the same identity. This was consistent with Mr Meng's affidavit of 24 September 2007 (par 3). Ms Dolcel's evidence was that she promoted New Cover/Maco styles to New Cover and Maco customers. These clients included "other fashion boutique retailers, fashion agents and major chain retailers". Ms Dolcel did not suggest that New Cover's customers were different from Maco's customers. 12 The solicitors for Review wrote to New Cover about the sale and purchase of the Spicy Sugar garments on 26 September 2006 and 9 January 2007, before this proceeding was begun. They also wrote to Maco on 6 December 2006 and 24 January 2007. In a statement of claim dated 10 April 2007, Review specifically alleged that New Cover and Maco had, without its licence or authority, made, imported and sold garments embodying a design that was substantially similar in overall impression to the Review Design. 13 The Spicy Sugar garments are sleeveless fixed-wrap or cross-over dresses. The fabric from which they are made crosses over at the neckline (creating a V-neck) in the same way as the Review Design and falls down to the left side of the waist, where the fabric is gathered. The dresses have gathering at the shoulders just like the Review Design. The Spicy Sugar dresses each have a fitted waist and a square high back. Each has a satin ribbon as a waist tie. The Spicy Sugar dresses all have the same skirt. This skirt has three panels at the front and back and is figure hugging for over half the way to the hem, when it expands, so that the dress at the hem has a ruffled effect. The skirt is to or just below the knee. The Spicy Sugar garments differ in two respects only. Style 050620-2SS is in a black 'sunflower' on white background fabric, with a black satin ribbon waist tie. Style 050620SS is all black, with a red satin ribbon waist tie. 14 A defence was filed only in New Cover's name. It was, however, evident from their conduct of the proceeding that the defence was intended to relate not only to New Cover but also to Maco. I have treated it this way, as, indeed, Review, in substance, invited me to do. 15 New Cover/Maco admits that New Cover/Maco has imported the Spicy Sugar garments into Australia, where New Cover/Maco sold or offered to sell them; and that this has been done without the licence or authority of Review. New Cover/Maco denied the balance of Review's claims, including that New Cover/Maco made the Spicy Sugar garments and that the Spicy Sugar garments were substantially similar in overall impression to the Review Design. Further, New Cover/Maco claimed that, at the time of the alleged infringements, New Cover/Maco was/were not aware and could not reasonably have been expected to be aware that the Review Design was registered. New Cover/Maco further alleged that New Cover/Maco had not sold the Spicy Sugar garments or offered them for sale since around October/November 2006. In a cross-claim, New Cover/Maco alleged that the Review Design was invalid and that the registration should be expunged from the register. The Designs Act provides for a system of registration for products whose appearance is new and distinctive. 17 The registered owner of a registered design has a number of exclusive rights during the term of the registration of the design, including to make a product, in relation to which the design is registered, which embodies the design; to import such a product into Australia for sale; and to sell such a product: see the Designs Act, s 10. Design, in relation to a product, is defined in the Designs Act as "the overall appearance of the product resulting from one or more visual features of the product": see s 5. In the Designs Act, visual feature, in relation to a product, includes shape, configuration, pattern and ornamentation of the product: see ss 7 and 8. These are the features to be borne in mind in forming a view about the overall appearance of the product (in this case, a garment) as it appears on the design register. The Designs Act (in s 7(3)) specifically provides that neither the feel of the product nor the materials used in the product are visual features of the product. 18 Under the Designs Act, a design is a registrable design if the design is new and distinctive when compared with the prior art base for the design as it existed before the priority date of the design: see s 15(1). The prior art base, which is defined in s 15(2), includes designs published within and outside Australia. A design is new unless it is identical to a design that forms part of the prior art base for the design, and distinctive unless it is substantially similar in overall impression to a design that forms part of the prior art base for the design: see s 16(1) and (2). 19 Under the Designs Act, a design is a registrable design if the design is new and distinctive when compared with the prior art base for the design as it existed before the priority date of the design: see s 15(1). The prior art base, which is defined in s 15(2), includes designs published within and outside Australia. A design is new unless it is identical to a design that forms part of the prior art base for the design, and distinctive unless it is substantially similar in overall impression to a design that forms part of the prior art base for the design: see s 16(1) and (2). 20 Review alleges, and New Cover/Maco denies, that New Cover/Maco made, imported and sold the Spicy Sugar garments. The respondents' position was that New Cover/Maco imported and sold women's clothing. As noted in Redberry , the question whether New Cover/Maco made Spicy Sugar garments, as opposed to importing and selling them, does not affect the outcome of Review's principal allegation that New Cover/Maco has infringed the Review Design. It affects the discussion of s 75(2) of the Designs Act, below. 21 The Spicy Sugar garments will infringe the Review Design if they embody a design that is substantially similar in overall impression to the Review Design: compare the Designs Act, s 71(1)(a). In determining whether a design is substantially similar in overall impression to a registered design, the factors in s 19 fall for consideration: see s 71(3). (4) In applying subsections (1), (2) and (3), the person must apply the standard of a person who is familiar with the product to which the design relates, or products similar to the product to which the design relates (the standard of the informed user). (5) In this section, a reference to a person includes a reference to a court. In considering whether a design embodied in the Spicy Sugar garments is substantially similar in overall impression to the Review Design, the Court is therefore obliged to consider the appearance of the Review Design as a whole, considered by reference to the standard of the informed user. 22 I refer to my discussion of the standard of the informed user in Redberry . As stated in Redberry , the informed user must be a person who is familiar with the product to which the design in question relates. The informed user must also be a user of the class of product in question, in this case, ladies' garments, or perhaps, more narrowly, ladies' dresses. A designer or manufacturer of such garments is not an informed user merely because he or she designs or manufactures them. Further, this user is not simply an ordinary consumer: the user must be an informed user. 23 As also noted in Redberry , the Australian Law Reform Commission's Report No 74 , Designs (Sydney, 1995) ("ALRC Report No 74") and the Designs Act which implemented it (see Explanatory Memorandum to the Designs Bill 2002 at 1) borrowed the concept of the informed user from the European Community design law: see ALRC Report No 74, at 5.17 - 5.21, 6.12 and 6.13. ALRC Report No 74, at 5.17, described the informed user as "a person who is reasonably familiar with the nature, appearance and use of products of the relevant kind". I refer to but do not repeat the other parts of the Report's discussion of the informed user standard, which are set out in Redberry : see ALRC Report No 74, at 5.18, 5.19, 5.21 and 6.13. 24 Since the informed user standard has been adopted by the Registered Designs Act 1949 (UK), the explanation of the standard by courts in the UK provides some guidance. In Redberry , I referred to the exposition of the informed user standard in Woodhouse UK Plc v Architectural Lighting Systems [2006] RPC 1 (" Architectural Lighting "). He could thus be a consumer or buyer or be otherwise familiar with the subject matter say, through use at work. The quality smacks of practical considerations. In my view the informed user is first, a person to whom the design is directed. Evidently he is not a manufacturer of the articles and both counsel roundly rejected the candidature of 'the man in the street'. 'Informed' to my mind adds a notion of familiarity with the relevant rather more than what one might expect of the average consumer; it imports the notion of 'what's about in the market? ' and 'what has been about in the recent past?'. I do not think it requires an archival mind (or eye) or more than an average memory but it does I think demand some awareness of product trend and availability and some knowledge of basic technical considerations (if any). In connection with the latter, one must not forget that we are in the territory of designs and thus what matters most is the appearance of things; as Mr Davis reminded me, these are not petty patents. Therefore, focus on eye appeal seems more pertinent than familiarity with the underlying operational or manufacturing technology (if any). I feel uncomfortable with analogy to the 'man skilled in the art' whose 'nerd-like' (and other) attributes seem too technical: Technip France SA's Patent [2004] EWCA Civ 381 ; [2004] R.P.C. 46 at [6-12] (CA). 25 As noted in Redberry , in Proctor & Gamble Co v Reckitt Benckiser (UK) Ltd [2006] EWHC 3154 ; [2007] FSR 13 (" Proctor & Gamble Co v Reckitt Benckiser ") at [31] et seq, where Lewison J (Chancery Division --- Patents Court) considered and approved the Architectural Lighting observations, as did the Court of Appeal: see Proctor & Gamble Company v Reckitt Benckiser (UK) Ltd [2007] EWCACIV 936 ; (2007) 73 IPR 605 (" Proctor & Gamble ") at [24], [25], [32] per Jacob LJ, with whom May and Dyson LJJ agreed. Jacob LJ noted (at [28]) "the informed user is alert to design issues and is better informed than the average consumer in trade mark law". 26 As also noted in Redberry , in January 2007, the Design Registrar of the UK Intellectual Property Office had cited and applied the Architectural Lighting 'informed user' analysis in ruling on the validity of a clothing design registration: see Application by Pauline Ann Walton to invalidate UK Registered Design in the name of Zap Ltd (UK IPO, 0-027-07, 22 January 2007) (" Walton "). 27 In Walton , the applicant sought to invalidate a poncho design registered by Zap Ltd ("Zap") on the grounds that it lacked novelty, in part because it copied her earlier poncho designs: see Walton at [3], [32]. Zap defended on the grounds that the basic design of the poncho had long been known, and thus there was limited freedom to design: see [15]. Applying his Honour Judge Fysh QC's definition of informed user, as approved by Lewison J in Proctor & Gamble Co v Reckitt Benckiser ( Walton at [36]-[37]), the Registrar accepted Zap's submissions, concluding "I believe that an informed user would be aware that there is limited freedom to design a poncho which is not basically square or rectangular in shape": see Walton at [40]; also at [43]. Based primarily on a difference in neck design, the Registrar found that the Zap design would in fact create a different overall impression on an informed user and thus it was validly registered: see Walton at [39]-[45]. 28 As noted in Redberry , the Australian Designs Office ("ADO") considered the informed user standard in Re Application in the name of Apple Computer Inc (2007) 74 IPR 164 (" Apple ") and Icon Plastics Pty Ltd [2007] ADO 2 (5 July 2007) (" Icon "): see Icon at [19], [21] and Apple at [11], [14]. I refer to, but do not repeat, the more detailed discussion of Apple and Icon in Redberry . 29 In summary, the standard of the informed user is an objective one. In this case, the assessment must be that of a user of ladies' garments, which would include a potential purchaser, either in retail sales (such as a buyer for a fashion store) or at the ultimate consumer level. A designer or manufacturer of ladies' garments is not, on account of design or manufacturing knowledge alone, an informed user. The notional user must be informed, in the sense that the user is familiar with ladies' garments. The informed user is not an expert, but must be more than barely informed. The focus for consideration is on eye appeal and not on internal or less visible manufacturing features. 30 As noted in Redberry , there may be a difference in the discussion to date as to what is needed to have the requisite product familiarity. On one view, this familiarity is greater than the information possessed by the average user; on another view, this familiarity is that which is possessed by the ordinary user: compare Architectural Lighting at [50] with Apple at [14]. I indicated in Redberry , for the reasons stated there, that I preferred the former approach. I doubt that, generally, the ordinary user will be appropriately regarded as an informed user. 31 Review's claim that the Spicy Sugar garments (see PS 10 and PS 11 to the affidavit of Peter Strain of 20 September 2007) are substantially similar in overall impression to the Review Design should be upheld. In reaching this conclusion, I have had regard to the evidence of Ms Ellis, particularly that referred to in Redberry at [29]-[30]. As noted in Redberry , as a designer rather than an informed user, Ms Ellis's evidence assists in identifying the basis of Review's claim on infringement and, to a limited extent, the similarities and differences between the Review Design and the design embodied in each of the Spicy Sugar garments --- although, in this case especially, a great deal is self-evident. For present purposes, however, I disregard her evidence about points of construction and interior similarities and differences as not relevant to the issue of infringement. 32 In this connection too, I have also had regard to the evidence of Ms Ella Mudie, since this was, pursuant to order, also to be treated as evidence in this proceeding: see Redberry at [31]-[34]. As stated in Redberry , Ms Mudie was in the nature of an informed user and was a careful and truthful witness. As explained in Redberry , I found her evidence helpful, notwithstanding the criticisms leveled at it by the applicants in that case. Although some of Ms Mudie's evidence was specifically directed to an analysis of the Redberry garment as compared with the Review Design (and this is plainly not relevant here) other parts of her evidence assist in placing the Court in the shoes of the informed user. Thus, Ms Mudie's evidence was that, from her perspective, the overall appearance of a dress was principally determined by style, cut, fit, colour/print, and materials. This led Ms Mudie to identify two distinct differences between the Review Dress (and indirectly the design that it embodied) and Redberry dress, being their skirts, and the patterns and colours. Of course, as I stated in Redberry , the Court does not simply adopt Ms Mudie's assessment as its own, but makes its own objective determination. The Court must, of course, make the same sort of assessment in this case. 33 Considered by reference to the standard of the informed user, in deciding whether the design embodied in each of the Spicy Sugar garments is substantially similar in overall impression to the Review Design, the Court must: (1) give more weight to similarities between the designs in question than to differences (s 19(1)); (2) have regard to the state of development of the prior art base for the Review Design (s 19(2(a)); and (3) have regard to the freedom of the designer to innovate (s 19(2)(d)). There are, plainly enough, differences between the patterns as depicted in the design as compared with the two styles of the Spicy Sugar garments. Hence, only part of the design embodied in each style of the Spicy Sugar garments is substantially similar to the Review Design, with the consequence that the Court must have regard to the amount, quality and importance of that part in the context of the design considered as a whole (s 19(2)(c)). Furthermore, since the design application for the Review Design did not include a statement of newness and distinctiveness, the Court must have regard to the appearance of the Review Design as a whole (s 19(3)). 34 The similarities between the Review Design and the design embodied in each of the two styles of the Spicy Sugar garments are self-evident. The cross-over bodice and V-neck is identical, or virtually identical. All have a fixed waist, with a satin ribbon tie. All have the same high back. In this case too, the Review Design skirt and the skirts in the designs embodied in the Spicy Sugar garments are identical, or virtually so. The Review Design and the designs embodied in the Spicy Sugar garments differ only as to pattern (including colour). 35 Similarities between the designs are to be given greater weight than the differences (s 19(1)). As noted in Redberry , however, in deciding whether the design embodied in each style of the Spicy Sugar garments is substantially similar in overall impression to the Review Design, the Court must also have regard to the prior art base, considered by reference to the standard of the informed user. That is, the significance of the similarities and differences between designs falls to be considered in light of the prior art, as discussed in Redberry . In that case, I concluded that, having regard to the prior art and the freedom of the designer to innovate, what gave the Review Design its different overall impression from the prior art, from the perspective of the informed user, was the shape and configuration of the skirt, combined with differences in pattern and ornamentation. 36 Redberry stated that this conclusion was significant for the question of infringement, more particularly as the Court, by reference to the informed user standard, reaches its conclusion on infringement having regard to the amount, quality and importance of that part of the challenged design that is substantially similar to the Review Design in the context of the Review Design as a whole. As noted above, in this case in contrast to Redberry , save for the pattern (and colour), each of the styles of the Spicy Sugar garments embodies a design that is substantially similar (if not identical) to the Review Design. In this case, having regard to the directions in ss 19(1), (2)(a), (c) and (d), 19(3) and 19(4), the informed user would conclude that the design embodied in each style of the Spicy Sugar garments is substantially similar in overall impression to the Review Design considered as a whole, principally because of the identity in the shape, configuration and ornamentation. Whilst, for the reasons explained in Redberry , differences in pattern (including colour) cannot be ignored, having regard to the statutory directions, these differences are insufficient in this case to create a different overall impression. Review's case on infringement therefore succeeds. 37 As I said in Redberry , the fact that a design is registered in colour through the use of colour photographs (unaccompanied by a statement of newness and distinctiveness) is relevant to determining the extent of the monopoly sought and given. Everything that is shown in the registered design (unless disclaimed in some way) forms part of the subject matter protected by registration. The pattern (including colour) that is shown on the Review Design as registered is thus part of what is protected, and is to be accorded some weight. In this regard, I refer to my discussion in Redberry at [47]-[52]. How much weight is to be given to pattern (and colour) will depend on the nature of the product and the relative importance of the different visual features of the registered design, as viewed by the informed user standard, having regard to the prior art, and the freedom of the designer to innovate. If colour is important, it will be so because the factors relevant to the registered design lead to this conclusion. As indicated in Redberry , pattern, including colour, is a feature that an informed user would consider important in creating the overall impression of the Review Design, a conclusion borne out by the use of colour photographs to depict the design in the registration application. In the case of the two styles of the Spicy Sugar garments, however, the differences as regards this feature are overborne by the identity of other visual features, with the result that the design embodied in each style is substantially similar in overall impression to the Review Design. 40 Damages or an account of profits may, at the plaintiff's option, be granted for infringement: see s 75(1)(b) of the Designs Act. (4) It is prima facie evidence that the defendant was aware that the design was registered if the product embodying the registered design to which the infringement proceedings relate, or the packaging of the product, is marked so as to indicate registration of the design. secondary infringement means infringement of a kind mentioned in paragraph 71(1)(b), (c), (d) or (e). Save for an exercise of discretion under s 75(2) of the Designs Act, Review is entitled to an amount representing general damages for the infringement. The measure of damages here is the diminution in the value of the design as a chose in action, which is reflected in loss of sales and injury to reputation and the like: see Prior v Lansdowne Press Pty Ltd [1977] VR 65 (" Prior v Lansdowne ") at 70 per Gowans J. 42 Review claimed general damages in an amount of $103,509.20 upon the basis of lost sales. As in Redberry , Review invited the Court to calculate general damages on the assumption that every sale by New Cover/Maco should be treated as if it had been a sale by Review of the Review Dress (and on the assumption that New Cover/Maco sold all 730 imported Spicy Sugar garments in style 050620-2SS). If the Court were to assess damages on this simple assumption, then the ultimate figure would need to be discounted to reflect the likelihood that Review would have made the additional sales had the New Cover/Maco garments not entered the market. Mr Meng and Ms Dolcel said that New Cover/Maco sold garments to "boutique fashion shop buyers" and "exclusive development customers". That is, New Cover/Maco made wholesale sales to retailers in probable competition with Review. Mr Meng also said that New Cover/Maco customers made retail sales at "a mark up of anything between 100 to 250% on top of a garments wholesale price". If this were true, then the Spicy Sugar garments sold at substantially less than the Review Dress. In weighing this latter statement, I bear in mind that Mr Meng failed to attend for cross-examination. The result is that I find that the likelihood of a retailer buying the New Cover/Maco garments and the garments being purchased by a retail customer instead of the Review Dress (if available: see below) relatively high. If I assessed damages on the assumption that Review invited me to make, I would discount the figure of $103,509.20 by about 30% to reflect this, resulting in the amount of $72,456.44. 43 As it happens, however, Review's analysis does not withstand scrutiny. This is because there is no evidence of lost sales. Review fails to establish any lost opportunity for sale. As stated in Redberry at [68], there is evidence of sales of the Review Dress in August 2005 but, whilst there is evidence of repeats of the garment being made and presumably sold, there is no evidence that the Review Dress was on sale a year later, when New Cover/Maco imported the Spicy Sugar garments from China. There is, therefore, simply no evidence that sales by Review 2 and/or Review were in any way adversely affected by the availability of the Spicy Sugar garments. The assumptions that Review invites the Court to make cannot overcome the fundamental difficulty that there is no evidence that, at the relevant time, the Review Dress was available for retail sale to customers. Furthermore, since Review did not acquire the business of Review 2 until February 2007, it might be thought that, as at August 2006, Review could not in any event have suffered any lost opportunity for sale. 44 Review sought damages on an alternative basis, which is made out in the following way. I accept that the infringement resulted in a probable diminution in the value of the design as a chose in action because the infringement resulted in some probable diminution in the commercial value of the design in respect of its future use. Further, the reproduction of the design by New Cover/Maco under the Spicy Sugar label and the wholesale distribution of garments embodying the design to New Cover/Maco's various retail customers is likely to have had some adverse effect on the reputation of the design and its "exclusivity" (or "freshness" as Gowans J said in Prior v Lansdowne at 70; applied by von Doussa J in Milpurrurru v Indofurn Pty Ltd (1994) 30 IPR 209 at 243). See also Review Australia Pty Ltd v Innovative Lifestyle Investments Pty Ltd [2008] FCA 74 (" Innovative Lifestyle ") at [31] per Jessup J. That is, on the evidence before the Court (to which I am about to refer), the reproduction of the Review Design under the cheaper Spicy Sugar label had the distinct potential to diminish customer interest in the Review Design and, in consequence, consumer demand for garments embodying the Review Design. 45 The evidence was that New Cover/Maco imported 730 units of Spicy Sugar garments style 050620-2SS. As noted above, these garments were distributed by wholesale to retailers in competition with Review. There was also an importation of a quantity of Spicy Sugar garments style 050620SS. The evidence left the precise quantity uncertain since New Cover/Maco produced no documents and adduced no evidence concerning the details of the importation of style 050620SS. In his affidavit of 24 September 2007, however, Mr Meng stated that the minimum quantity produced for a style is "at least 200 to up to over 1500". Taken overall, the evidence indicates that, on the balance of probabilities, the importation of style 050620SS was at least comparable to style 050620-2SS . The work that this entailed was attested to in some detail by Ms Ellis. The evidence was to the effect that Review put substantial value on its image as "very feminine, girly, sort of romantic" --- an image achieved through its designs. Mr Strain's evidence was that Review sold its products through stores that dealt exclusively in its products or through concessions in a large department store. Although Mr Strain said that he was "not sure" about the significance to Review of the fact that its clothing was available only at Review outlets, it was plain enough that "exclusivity" (and design "freshness") was of commercial value since, as Mr Strain explained, Review did not sell through other branded stores because it was not seen as "part of [its] business strategy". Bearing the above considerations in mind and doing the best I can, having regard to the effect of the infringement on the commercial value of the Review Design in respect of its future use and reputation, I assess the effect of the infringement on the value of the Review Design as a chose in action at $35,000. 47 In this circumstance, a further question arises as to whether New Cover/Maco can successfully rely on s 75(2)(b) of the Designs Act. The evidence of Mr Meng and Ms Dolcel was that New Cover/Maco prepared the companies' clothing range in Australia and carried out sampling, grading and manufacturing in China, after which they imported the garments into Australia. If the garments had been made in Australia, then I would be bound to find that New Cover/Maco had made the garments in contravention of s 71(1)(a) of the Designs Act. They would have been liable for a primary infringement: compare Innovative Lifestyle at [21]. Section 75(2)(b) would not have been available to them. 48 The evidence establishes, however, that the infringing garments were made in China and were thereafter imported into Australia and sold here. Section 21(1)(b) of the Acts Interpretation Act 1901 (Cth) provides that, in any Act, unless the contrary intention appears, "references to localities jurisdictions and other matters and things shall be construed as references to such localities jurisdictions and other matters and things in and of the Commonwealth". This provision reflects the common law presumption that statutes are read "as being prima facie restricted in their operation within territorial limits": see Jumbunna Coal Mine NL v Victorian Coal Miners' Association [1908] HCA 95 ; (1908) 6 CLR 309 at 363 per O'Connor J, discussed in DC Pearce and RS Geddes, Statutory Interpretation in Australia (6 th ed, 2006) at [5.5]. The effect of s 21(1)(b) of the Acts Interpretation Act 1901 (Cth) is implicitly acknowledged in s 4 of the Designs Act. Section 21(1)(b) of this Act operates to confine the making or offering to make, with which s 71(1)(a) of the Designs Act is concerned, to a making or an offering to make in Australia (as s 4 of the Designs Act reflects): compare Hella-Australia Pty Ltd v Quinton Hazell (Aust) Pty Ltd (1967) 10 FLR 86 (" Hella-Australia "), which Gummow J cited with approval in Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 120 ALR 495 (" Carnival Cruise ") at 509. In Hella-Australia , Street J refused an interlocutory injunction on the basis that an article did not infringe a registered design under s 30(b) of the Designs Act 1906 (Cth) unless the design had been applied to the article in Australia. Following Hella-Australia , Parliament amended s 30, with the result that the importation and sale of articles to which the design had been applied outside Australia were also infringements: see Designs Amendment Act 1967 (Cth) ("the 1967 Amendment") and Polyaire Pty Ltd v K-Aire Pty Ltd [2005] HCA 32 ; (2005) 221 CLR 287 at 293. Although Hella-Australia concerned a provision in the former Act, nonetheless it and the authorities referred to in Carnival Cruise and Carnival Cruise itself, establish that, absent contrary statutory intent, infringements must occur within Australia. Accordingly, on the evidence, the liability of New Cover/Maco could not arise under s 71(1)(a) but only under s 71(1)(b), (c), (d) or (e). 49 In written submissions filed at the Court's request, the applicants argued that s 71(1) of the Designs Act should be construed to have the same effect as under the 1967 Amendment. The text of s 30 as it stood after the 1967 Amendment is significantly different from the text of s 71(1) of the Designs Act. Furthermore, the expression "such a product" in pars 71(1)(b)-(e) of the Designs Act refers to "a product, in relation to which the design is registered, which embodies a design that is identical to, or substantially similar in overall impression to, the registered design" and does not pick up the territorial limitation in par 71(1)(a), which only applies to making or offering to make. Accordingly, the difficulty that the 1967 Amendment sought to overcome with respect to s 30 of the former Act does not arise with respect to s 71(1) of the current Designs Act. 50 For present purposes, I accept that the public was unable to view representations of the Review Design on the Australian Designs Data Searching facility prior to 6 July 2006: see Redberry at [79]. For present purposes, I also accept that, as Mr Meng deposed, no-one at New Cover/Maco knew that the Review Design had been registered until so advised by Review's solicitors. The infringing Spicy Sugar garments in style 050620-2SS were imported into Australia over a month later and presumably sold afterwards. As noted earlier, both this style and style 050620SS were being sold by New Cover/Maco on 14 September 2006, when an employee of Review purchased both styles of the Spicy Sugar garments. I reject the proposition that New Cover/Maco could not reasonably have been expected to have been aware that the Review Design was registered, given the lack of any evidence from New Cover/Maco to the contrary and the passage of time following the posting of the Review Design on the data searching facility. In these circumstances, New Cover/Maco failed to establish that they could not reasonably have been expected to be aware that the Review Design was registered, as required by s 75(2)(b) of the Designs Act. 51 If (contrary to the conclusion stated here) they were to be regarded as primary infringers, they could not satisfy s 75(2)(a), because there is no evidence that, before the time of the infringement, they took any steps, let alone any reasonable steps, to ascertain whether the design was registered. 52 Review also sought additional damages under s 75(3) of the Designs Act, which permits the Court to award such additional damages as it considers appropriate, having regard to the flagrancy of the infringement and all other relevant matters. Additional damages are not therefore confined to cases of flagrancy. 53 Additional damages may be awarded on principles similar to those that govern aggravated and exemplary damages at common law: compare Aristocrat Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (2007) 157 FCR 564 (" Aristocrat ") at 570 per Black CJ and Jacobson J. There are elements of penalty and deterrence in making an award of additional damages: Aristocrat at 570; also Venus Adult Shops Pty Ltd v Fraserside Holdings Ltd (2006) 70 IPR 517 at 557 per Finkelstein J. A purpose of additional damages is to "strip the infringer of all pecuniary benefits received from the infringement" and the sufficiency of the compensatory damages may be a relevant matter: see Aristocrat at 571-72. 54 I am not satisfied that the infringement was flagrant. In the circumstances discussed above, I am inclined to accept that, at the time of the infringement, no-one at New Cover/Maco knew that the Review Design was a registered design. Further, for the reasons stated in Redberry at [80], I reject the applicants' submission that a swing tag on the Review Dress provided notice to persons such as New Cover/Maco that the Review Dress embodied a registered design and attracted s 75(4) of the Designs Act. New Cover/Maco did not, therefore, deliberately infringe Review's design rights: see Microsoft Corporation v Goodview Electronics Pty Ltd (2000) 49 IPR 587 at 591 per Branson J. Further, Review did not contest the claim made by New Cover/Maco that they ceased their infringing conduct in October/November 2006, after becoming aware of Review's claim. 55 Review's case on additional damages was similar to its case for additional damages in Redberry . It rested largely on "the closeness of copying" and allegations that it was the apparent business practice of New Cover/Maco to engage in copying the garment designs of other designers. The similarity of the Spicy Sugar garments to the Review Design and the Review Dress that embodied it is self-evident. The closeness of the similarity makes it more probable than not that someone on the "[p]reparation, styling and research" side of the respondents' business copied the design embodied in the Review Dress in order to make the Spicy Sugar garments. Ms Dolcel's explanation that the similarity was mere "coincidence" was unconvincing. Furthermore, Ms Dolcel's evidence was to the effect that New Cover/Maco bought other designers' garments and incorporated aspects of them in their own garments. In response to the proposition that New Cover/Maco did not originate designs but merely copied them, Ms Dolcel accepted that "[t]hat's what fashion is". On the basis of Ms Dolcel's evidence, I accept that New Cover/Maco created garments by copying the designs of others, to a greater or lesser extent, depending on the garment in question. In the designs context, copying per se is not, however, unlawful and does not establish a design infringement. There is nothing relevantly reprehensible in this business practice providing it does not result in design infringement. Accordingly, copying alone does not attract additional damages. Copying resulting in design infringement can, of course, justify an award of general damages, but, in general, such copying must be flagrant to justify additional damages. I have found, however, that the copying in this case was not flagrant: see [54] above. 56 Review also relied on the affidavit of Keith Richards of 22 January 2008, which was filed shortly before the trial. Mr Richards' affidavit amounted to an allegation of copyright infringement against New Cover, based on the facts to which he deposed. Ultimately, for the reasons stated in Redberry , I would regard this evidence as irrelevant and, therefore, inadmissible. Furthermore, in contrast to Redberry , at best this evidence amounted to one instance of suspected copying. On its own, it could not amount to evidence of relevant propensity; and could not satisfy s 97 of the Evidence Act 1995 (Cth). 57 Review also referred me to its infringement allegations with respect to registered design No 306802. These allegations are the subject of the second part of this proceeding. At this stage, they can rise no higher than this. 58 I would, however, award additional damages upon the following basis. The affidavit evidence of Mr Meng, together with the evidence of Ms Dolcel, established that the fashion business conducted by New Cover/Maco was a substantial operation. Having regard to this evidence and to Mr Meng's failure to attend for cross-examination, I give little weight in this connection to the proposition that New Cover/Maco was unable to afford legal representation. Neither of Mr Meng's nor Ms Dolcel's statements in this regard was corroborated by any evidence. As noted above, New Cover/Maco discovered no relevant documents concerning the manufacture, importation and sale of Spicy Sugar style 050620SS. This omission was not satisfactorily explained. I did not find Ms Dolcel's evidence in this regard credible. Further, Ms Dolcel's explanation about New Cover/Maco's inadequate response to Review's notice to produce was also unsatisfactory and not credible. As already noted, Mr Meng did not attend Court in answer to a notice for cross-examination. 59 In addition, the deficiencies in discovery, response to notice to produce, and evidence of New Cover/Maco indicate that there is a very strong possibility that the extent of the infringement has been underestimated. Indeed, Ms Dolcel admitted that it was possible that infringing garments were produced in different fabric beyond those that have been disclosed in these proceedings. Moreover, as already noted, New Cover/Maco produced no documents concerning the details of the importation of style 050620SS and gave no adequate explanation for this failure, when one was plainly called for. 60 New Cover/Maco might also readily have given evidence as to the commercial benefit that they obtained in selling the infringing garments, but they did not choose to do so. In its absence, I assume that this evidence would not have advanced their case: see Jones v Dunkel (1959) 101 CLR 298. In the circumstances, I assume, therefore, that New Cover/Maco ran a profitable operation and that the sales of the infringing garments contributed to this operation. 61 Considered together, the foregoing considerations illustrates that a case of design infringement in the fashion industry can be expensive and difficult to prosecute if a defendant chooses to make it so. To adapt what Stone J said in Microsoft Corporation v Ezy Loans Pty Ltd (2004) 63 IPR 54 at 78, "[i]t is important to more than the applicants that [design] infringers are not encouraged to think that by ignoring court proceedings they can escape the consequences of ... infringements of the rights of others in the pursuit of profits". 62 In these circumstances, I would award an amount of additional damages. Any assessment is necessarily unscientific, but the figure of $50,000 reflects the relevant matters. 63 In summary, for the reasons stated, I would uphold Review's infringement claim regarding the Review Design and dismiss the cross-claim. Judgment in favour of Review should be given in the sum of $85,000. In the circumstances of this case, including the respondents' attitude and conduct in these proceedings, I would grant the injunctive and declaratory relief sought. 64 The trial of this proceeding is, however, not yet concluded. There remain the claims regarding registered design No 306802 to be determined. Accordingly, at this stage I would order merely that the parties file and serve submissions as to the future conduct of the proceeding. I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | the registered owner of a design registered under the designs act 2003 (cth) of a ladies' garment (applicants' design) respondent allegedly designed ladies' garment in australia and had them made in china for importation and wholesale in australia whether the respondent infringed applicants' design meaning of "the informed user" relevance of colour in claimed design rights substantial similarity in overall impression between respondent's garments and the applicants' design claim of design infringement upheld whether registration of applicants' design valid as being new and distinctive when compared with the prior art base before priority date informed user would not consider applicants' design to be substantially similar in overall impression to designs published prior to registration priority date applicants' design valid whether damages for actual sales loss or diminution in value of design should be awarded whether defence under s 75(2) is available whether additional damages under s 75(3) should be awarded registered design validity of registered design damages |
That application was unsuccessful. The case concerns a dam on the Burnett River known as the Paradise Dam the construction and operation of which, subject to conditions, was approved by a Commonwealth Minister under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the EPBC Act). Differences have emerged between the parties with respect to a number of issues of practice and procedure. 2. 3. Such further or other order as the Court deems fit. That the Applicant pay the Respondent's costs of and incidental to this application. I shall deal in turn with each of the issues raised. ) [1916] HCA 81 ; (1916) 22 CLR 490 , at p 517; they define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial ( Miller v. Cameron [1936] HCA 13 ; (1936) 54 CLR 572 , at pp 576-577; and they give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court. Apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings ( Gould and Birbeck and Bacon (1916) 22 CLR, at pp 517, 518 ; Sri Mahant Govind Rao v. Sita Ram Kesho (1898) LR 25 Ind App 195, at p 207 ). But where there is no departure during the trial from the pleaded cause of action, a disconformity between the evidence and particulars earlier furnished will not disentitle a party to a verdict based upon the evidence. Particulars may be amended after the evidence in a trial has closed ( Mummery v. Irvings Pty. Ltd. [1956] HCA 45 ; (1956) 96 CLR 99 , at pp 111, 112, 127), though a failure to amend particulars to accord precisely with the facts which have emerged in the course of evidence does not necessarily preclude a plaintiff from seeking a verdict on the cause of action alleged in reliance upon the facts actually established by the evidence ( Leotta v. Public Transport Commission (N.S.W. ) (1976) 9 ALR 437 , at p 446; 50 ALJR 666 , at p 668). To that end, in November last year it requested the Conservation Council to furnish particulars of the statement of claim. The Conservation Council answered that request but not in a way which Burnett Water submits was sufficient. That the Court has power to order the furnishing of further and better particulars of a statement of claim is not in doubt. Order 12 r 5 of the Federal Court Rules confers such power. The question is whether in the circumstances that power should be exercised or whether Burnett Water has sought to play what was memorably described in the 12 th (1975) Edition of Bullen & Leake and Jacob's Precedents of Pleadings (at 113-114) as "the particulars game"? There is a growing understanding among practitioners that giving the necessary particulars of pleading not only helps in preparing a case and in stating it with certainty and confidence but also manifests the strength of a party's case, while withholding particulars suggests a possible weakness in the case and a desire to spring surprise as to the oral evidence at the trial. On the other hand, practitioners are also aware, from their knowledge and experience, that particulars of pleadings beyond those that are really necessary may fetter the hands of a party too closely, or lay on him an increased burden of proof, or may disclose more than is tactically wise of his case at that stage. Hence there quite often develops a struggle, which goes under the popular title of the "particulars game," under which one party seeks to compel the opposite party to reveal more fully the case which he has pleaded and to tie him down to narrower issues, whereas the opposite party seeks to keep the issues as wide and as general as possible and to withhold as much of his own case as he can. There is no merit in this submission. A party can be ordered to furnish particulars or further and better particulars at any stage of a proceeding. Pleadings indeed have closed, at least for the present. Discovery and inspection have taken place in respect of particular classes of documents. Trial dates have been fixed, but the trial does not commence until 7 September 2009. It is axiomatic that, in preparing further for that trial, including preparing and filing such affidavit evidence as it may be advised, Burnett Water know the case it has to meet. If that presently requires the furnishing of further and better particulars then there is nothing oppressive about an order requiring the Conservation Council to do that. To put the particulars contest in context, it is necessary to set out exactly what was approved in, and condition 3 of, the Ministerial approval under the EPBC Act, as varied, para 2 of the claim for relief in the application and some excerpts from the statement of claim. The fishway will commence when the dam becomes operational. A mandatory injunction that, within 6 months of the date of this order, [Burnett Water] comply with condition 3 of the approval for the Paradise Dam granted under the EPBC Act by installing and operating continuously until 1 January 2052 a fish transfer device that is likely to allow any normal sized Australian lungfish ( Neoceratodus fosteri ) to move upstream and downstream of the dam without injury irrespective of the water level in the dam. (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. The respondent's contravention of condition 3 set out in paragraph 6 constitutes an offence or other contravention of sections 142 and 142B of the EPBC Act. The respondent's contravention of condition 3 set out in paragraph 6 constitutes an offence or other contravention of section 142A of the EPBC Act. (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. The particulars furnished in November last year by the Conservation Council in respect of para 6 and para 8 of the statement of claim were, to say the least, lengthy. It is though desirable, having regard to the way in which I have decided to dispose of the application, to set out those particulars in full. (ii) A relatively small volume of water is intermittently released by the respondent through the upstream fishway for the purpose of attracting lungfish to enter it. (iii) A larger volume of water is also intermittently released by the respondent adjacent to the upstream fishway from the Paradise Dam outlet works for the purpose of releasing water downstream from the dam and this water attracts lungfish attempting to move or migrate upstream away from the entrance to the upstream fishway. (iv) The applicant accepts that some lungfish will locate and enter the upstream fishway but having regard to the physical characteristics of its entrance, the presence of a larger attractant flow from the outlet works, its intermittent operation, and the behaviour of the lungfish, it is not likely (i.e. more than 50% probable) that lungfish attempting to move or migrate upstream will locate the entrance. (ii) The entrance to the downstream fishway is approximately 0.2 --- 0.4 m wide and 5.9 m high. (iii) The entrance to the downstream fishway is very small in comparison to the dam wall and there is little to channel or direct lungfish attempting to move or migrate downstream towards it. (v) The downstream fishway is not able to operate beneath water levels less than 62.5 m EL to allow 0.5 m of water to flow into the entrance sufficient for lungfish to enter it. (vi) Since the commencement of the operation of the dam and to the time of filing these further and better particulars, water levels in the dam have not been sufficient to enable the downstream fishway to operate and lungfish would be required to jump out of the water to locate the entrance (a behaviour the species is not known to exhibit). (vii) When water levels exceed 62.5 m EL, the downstream fishway is intended to be operated intermittently by lowering the sliding gate at its entrance to allow water to enter it and thereby attract lungfish into it. (viii) The water flow into the downstream fishway will be, at best, very small in comparison to the area of the dam wall and the larger volume of water entering the main water outlet for the dam. The dam wall is approximately 400 m wide by 37 m high which is much larger than the approximate 0.2 --- 0.4 m wide and 0.5 m high flow of water into the downstream fishway. In addition, the inflow into the downstream fishway occurs only at the top of the water column and adjacent to the much larger intermittent flow into the main dam water outlet. (ix) The intermittent release of water from the main water outlet of the dam will attract lungfish attempting to move or migrate downstream away from the entrance to the downstream fishway. (x) The applicant accepts that some lungfish may locate and enter the downstream fishway if water levels in the future are sufficient to allow it to be operated but having regard to the characteristics of the entrance to the downstream fishway stated in previous paragraphs, its extremely intermittent and unreliable operation, and the behaviour of the lungfish, it is not likely (i.e. more than 50% probable) that lungfish attempting to move or migrate downstream will locate the entrance to the downstream fishway. In the Burnett River the mean length of adult lungfish is approximately 0.9 m and their mean weight is approximately 8 kg. (ii) The size of fully grown lungfish particularised above in 4(a). (iii) The water heights at which the upstream fishway and the downstream fishway are operated or intended to be operated, including the intended provision of 0.5 m of water flow into the downstream fishway. (iv) The behaviour of lungfish attempting to move or migrate upstream or downstream. (c) The respondent's request to "identify the size that is alleged the entrance to the upstream fishway is required to be for fully grown lungfish to enter" misunderstands the case the applicant is required to prove. The applicant alleges that the upstream fishway and the downstream fishway are not "suitable for lungfish" within the meaning of condition 3. The respondent is responsible for installing and operating a fish transfer device that complies with this condition. The applicant is not required to prove, and does not allege, that any fish transfer device is "suitable for lungfish" within the meaning of condition 3 of the EPBC Act approval for the dam. (d) The respondent's request to "identify the size that is alleged the entrance to the downstream fishway is required to be for fully grown lungfish to enter" misunderstands the case the applicant is required to prove for the reasons set out in the preceding paragraph. The applicant is not required to prove, and does not allege, that any fish transfer device is "suitable for lungfish" within the meaning of condition 3 of the EPBC Act approval for the dam. (ii) The size of fully grown lungfish particularised above in 4(a). (iii) The behaviour of lungfish attempting to move or migrate upstream, including their behaviour in choosing not to enter the caged container of the size and construction installed by the respondent. (b) The respondent's request to "identify the size that is alleged the caged container in the upstream fishway is required to be to accommodate fully grown lungfish" misunderstands the case the applicant is required to prove. The applicant alleges that the upstream fishway and the downstream fishway are not "suitable for lungfish" within the meaning of condition 3. The respondent is responsible for installing and operating a fish transfer device that complies with this condition. The applicant is not required to prove, and does not allege, that any fish transfer device is "suitable for lungfish" within the meaning of condition 3 of the EPBC Act approval for the dam. (ii) Attractant water flows are not released from or through the upstream fishway continuously. (iii) The caged container installed in the upstream fishway is not operated continuously. (iv) During the periods when the attractant flows are released from the upstream fishway and the caged container is operated, there are extended periods when the caged container is lifted over the dam wall when lungfish cannot move through the fishway and it is, therefore, not "suitable for lungfish" within the meaning of condition 3 of the approval. Condition 3 requires the fish transfer device to be "suitable for lungfish" to pass through it at all times and the operation of the upstream fishway does not satisfy this requirement. (ii) Water levels have not reached 62.5 m EL and the fishway has not operated since the commencement of the operation of the dam in November 2005 and the filing of these further and better particulars. (iii) Even in future periods when water levels in the dam are above 62.5 m EL, the respondent intends to operate the downstream fishway only intermittently. (iv) During future periods when water levels in the dam are above 62.5 m EL and attractant flows are allowed to enter the downstream fishway and the fishway is operated, there are extended periods when the attractant flows will cease and the slide gates at the entrance to the fishway will be raised to allow the trap chamber in the fishway to be flushed and any fish within it released beneath the dam. During those periods lungfish in the dam reservoir attempting to move or migrate downstream cannot enter the downstream fishway and it is, therefore, not "suitable for lungfish" within the meaning of condition 3 of the approval. Condition 3 requires the fish transfer device to be "suitable for lungfish" to pass through it at all times and the operation of the downstream fishway does not satisfy this requirement. (c) The requirement for the upstream fishway to operate continuously is a matter of the proper construction of condition 3 of the approval for the dam. (d) The requirement for the downstream fishway to operate continuously is a matter of the proper construction of condition 3 of the approval for the dam. (ii) The small dimensions of the pipes relative to the size of fully grown lungfish particularised above in paragraph 4(a). (iii) Once lungfish enter the downstream fishway they are in total or near total darkness. (iv) The exit chute from the downstream fishway is position approximately 1 m above the water level in the release pool and lungfish are intended to fall that distance down the exit chute into the water. (c) The respondent's request to "identify the speed at which it is alleged that lungfish may be transported by the downstream fishway to avoid likelihood of injury" misunderstands the case the applicant is required to prove. The applicant alleges that the upstream fishway and the downstream fishway are not "suitable for lungfish" within the meaning of condition 3. The respondent is responsible for installing and operating a fish transfer device that complies with this condition. The applicant is not required to prove, and does not allege, that any fish transfer device is "suitable for lungfish" within the meaning of condition 3 of the EPBC Act approval for the dam. (ii) The behaviour of lungfish attempting to move or migrate downstream, including their behaviour in attempting to escape, swim against or avoid the current created when emptying the trapping chamber in the downstream fishway. (iii) The fact that other fish, debris and aquatic plants may be present in the downstream fishway (including the exotic weed Salvinia spp. that has grown prolifically in the dam reservoir forming dense, free-floating mats). (iv) The diameters of the pipes in the downstream fishway are approximately 1.2 m for the standpipe leading from the trapping chamber to near the base of the dam and 0.75 m for the flushing line leading through the dam wall to the release gate. (e) The respondent's request to "identify the dimensions of the pipes it is alleged are required to avoid the likelihood of injury to lungfish" misunderstands the case the applicant is required to prove for the reasons set out above in paragraph 7(c). The applicant is not required to prove, and does not allege, that any fish transfer device is "suitable for lungfish" within the meaning of condition 3 of the EPBC Act approval for the dam. (ii) The size of fully grown lungfish particularised above in paragraph 4(a). (iii) The exit chute from the downstream fishway is position approximately 1 m above the water level in the release pool and lungfish are intended to fall that distance down the exit chute into the water. (iv) The downstream release pool is approximately 6 m in width and the exit chute is located within 1 m of its side. (g) The respondent's request to "identify the dimensions of the downstream release pool it is alleged are required to avoid the likelihood of injury to lungfish" misunderstands the case the applicant is required to prove for the reasons set out above in paragraph 7(c). The applicant is not required to prove, and does not allege, that any fish transfer device is "suitable for lungfish" within the meaning of condition 3 of the EPBC Act approval for the dam. (h) The extent of injury that it is alleged lungfish are likely to suffer by transportation through the downstream fishway include abrasions, bruising, cuts, and loss of sight due to collisions with the walls of the downstream fishway. (ii) Having entered the upstream fishway, including while in the caged container, small lungfish have little or no places to hide from predators and are, therefore, susceptible to predation. (ii) Having entered the downstream fishway, including while in the trapping chamber, small lungfish have little or no places to hide from predators and are, therefore, susceptible to predation. (b) The particulars of the facts, matters, and circumstances relied upon in support of the allegation that due to the matters raised in paragraphs 6(a)-(h), the upstream fishway and downstream fishway are not likely (more than 50% probable) to allow any normal sized lungfish to move upstream or downstream of the dam without injury irrespective of the water level in the dam were set out above in these further and better particulars. (c) The 50% probability is a requirement imposed by the proper construction of condition 3 of the approval. The particulars set out above operate individually and cumulatively to reduce the likelihood to beneath 50% probability that lungfish will be able to move through either fishway without injury irrespective of the water level in the dam in comparison with unrestricted fish passage. (d) The matters in paragraphs 6(a)-(h) operate individually and cumulatively to reduce the likelihood to beneath 50% probability that any normal sized lungfish will be able to move through either fishway without injury irrespective of the water level in the dam; however, the matters raised in paragraphs 6(d) and (e) are the applicant's principal complaints against the respondent's conduct. (e) [This question appears to be a repeat of the previous question (10(d)) and the answer to it is the same as the preceding paragraph. If this understand is correct, the answers to the request are set out in the specific responses given above. If there are further specific particulars that the respondent requires to understand the case it is required to meet the applicant is willing to provide them if requested to do so. (ii) Prior to the construction of the dam and since its commencement the respondent has intended to operate the upstream fishway and the downstream fishway intermittently depending on water availability and operational demands in contravention of condition 3. (iii) At no time did the respondent intend to operate the upstream fishway or the downstream fishway continuously as required by condition 3. (iv) Prior to the construction of the dam and since its commencement the respondent has known it would operate the upstream fishway and the downstream fishway intermittently depending on water availability and operational demands in contravention of condition 3. (v) Since the commencement of the dam in November 2005 the respondent has known it was not operating the upstream fishway and the downstream fishway continuously and, therefore was in contravention of condition 3. (vi) In planning the construction and operation of the dam and prior to the commencement of the dam in November 2005 the respondent knew that water levels would vary and would at times be beneath 62 m EL, thereby not allowing the downstream fishway to operate. The respondent designed the main water outlet works of the dam in such a way as to allow release of water while storage levels are low, including allowing environmental flows to be maintained during dry periods that the respondent knew may occur during normal operation but failed to design the downstream fishway to operate in such conditions. (vii) At least since the Compliance Audit conducted by the Australian Government Department of the Environment and Water Resources in mid-2007, the respondent has known that the design and operation of the downstream fishway contravened condition 3 of the approval because water levels had not reached the operating height of 62 m EL and the condition required continuous operation from the commencement of the dam in November 2005. (ix) The allegation of recklessness relates to the respondent's conduct and no individual person within the respondent is alleged to have been reckless on behalf of the respondent. (c) It is not alleged that the respondent has been reckless as to the fact that the alleged contravention is likely to have a significant impact on the lungfish (i.e. a contravention of subsection 142A(3)). (II) Lungfish migrate up to 45 km and the longer migrations appear to be associated with movement upstream out of impoundments to suitable spawning habitats. (III) Adult lungfish home ranges (the area of river where most time is spent) are relatively small (usually less than 5 --- 10 km) and long migratory passages are therefore not critical for adult individuals to survive but are significant for breeding and maintaining genetic variability and viability in the population in the Burnett River. (B) The known behaviour of the lungfish relevant to design of fish passage through the Paradise Dam, including the fact that lungfish are known to move downstream in high-flow (flood) events. (C) During flood events and at other times when the dam spillway operates lungfish are likely to attempt to move or migrate downstream over the spillway thereby increasing mortality in the lungfish population due to the death or injury of lungfish falling approximately 37 m in highly turbulent and fast flowing water down the large concrete steps constructed in the spillway to dissipate water velocity. (D) The demographic variables that affect the natural movement or migration of lungfish, including age, sex, and size. (E) Variations in the movement or migration of lungfish with seasons, river flow and other naturally variable factors. (F) The evolutionary and ecological significance of the lungfish. (G) Why the lungfish has been listed as vulnerable to extinction under the EPBC Act. (H) The importance of connectivity in the lungfish population in the Burnett River and, in particular, the need for effective fish passage upstream or downstream on the Paradise Dam to provide breeding and feeding opportunities and to maintain the genetic variability and viability of the lungfish population. (I) The impacts that would be expected on lungfish population in the Burnett River from the construction of the Paradise Dam without a fish transfer device, such as changes in habitat and changes in the genetic variability and viability of the lungfish population. (J) Other than the Paradise Dam, the threats and impacts faced by the lungfish population in the Burnett River. (K) Other threats and impacts faced by the lungfish species outside the population in the Burnett River, including the proposed construction of the Traveston Crossing Dam on the Mary River using a fish transfer device modelled on the Paradise Dam. (L) The water flow regime, particularly periods of zero flow, at the site of the upstream fishway and the downstream fishway prior to the construction of the dam. (M) The extent that water levels in the dam in the future will obtain and remain above 62m AHD (57% of the dam capacity), thereby allowing the downstream fishway as currently constructed to operate. (N) The likelihood that the upstream fishway design will allow safe lungfish passage in comparison to unrestricted passage. (O) The likelihood that the upstream fishway will allow safe lungfish passage as actually operated by the respondent in comparison to unrestricted passage. (P) The likelihood that the downstream fishway design will allow safe lungfish passage in comparison to unrestricted passage. (Q) The likelihood that the downstream fishway will allow safe lungfish passage as actually operated by the respondent in comparison to unrestricted passage. (R) Restrictions in movement or migration of lungfish in the Burnett River caused by the design and operation of the upstream fishway and the downstream fishway causing changes in the genetic variability and viability of the lungfish population and the consequences of these impacts for the conservation of the lungfish species. (ii) The facts, matters, and circumstances relied upon in support of the allegation that the respondent's conduct will result in each of the impacts in paragraph 8(b)(i) and (ii), are the matters set out in paragraph 12(d)(i) of these Further and Better Particulars and noting that "will result" refers to future impacts that are more probable than not (i.e. more than a 50% chance). (iii) The facts, matters, and circumstances relied upon in support of the allegation that the respondent's conduct is likely to result in each of the impacts in paragraph 8(b)(i) and (ii), are the matters set out in paragraph 12(d)(i) of these Further and Better Particulars and noting that "is likely to result" refers to future impacts the occurrence of which is a real chance or possibility regardless of whether or not it is more or less than 50% probable. (ii) The respondent intends that the nominal engineering design life of the Paradise Dam is 50 years, though the respondent expects that it is likely to be maintained after that period provided that it continues to meet dam safety requirements and remains an integral part of the regional water supply strategy. Be this as it may, these particulars were not considered adequate by Burnett Water. Further correspondence ensued between the parties' solicitors. Indeed, they exhibit a number of inadequacies which place our client in an impossible position in attempting to answer the serious allegations your client has chosen to make. And in subparagraph 12(b)(I) the allegations of recklessness are said to relate "primarily" to paragraphs 6(d) and (e) of the statement of claim. Thus our client is faced with an avowedly incomplete statement of the case against it. This is manifestly inadequate. Our client is entitled to a complete statement of all of the particulars of the serious charges levelled against it. In the context of an allegation of recklessness, this is again manifestly inadequate. Your client cannot seek refuge in the statement that "no individual person within the respondent is alleged to have been reckless". The respondent is a corporation which can only act through human agents. Our client is entitled to know which individuals are alleged to have been reckless, and the respects in which they are alleged to have been reckless. Without being apprised of these essential particulars, our client will be prejudiced in the preparation of its defence. In the course of oral argument, the Conservation Council mollified its position somewhat. Of the particulars furnished under para 8 of the statement of claim in November 2008, it was conceded that the inexactitude introduced by the words "includes" in para 10(b) and "primarily" in para 10(b)(i) was not defensible. It is to be lamented that such self critical insight did not earlier manifest itself. It inevitably follows that, wherever the word "include" and its derivatives have been used in the particulars furnished in November 2008, they are, to that extent, embarrassingly imprecise, for all their length. It was further rightly conceded by the Conservation Council in oral submissions that, irrespective of whatever else it might be ordered to give by way of particulars of Burnett Waters' knowledge, its reference in para 10(b)(viii)(B) to "having regard to the circumstances known to the respondent" was likewise embarrassingly imprecise. Such language does violence to the concept of particulars, leaving the reader in ignorance of what the allegedly known circumstances might be. (b) There was "little utility" in particularising further [the Conservation Council's] allegations of recklessness due to the issues raised in [Burnett waters'] Defence. (c) Many of the requests are for evidence rather than particulars. (d) The request misunderstands the word "action" in the [EPBC Act]. It is true to say that Burnett Water did not have leave to deliver a second request for particulars. Given that, it would have been better if, in their letter of 24 February 2009, its solicitors had exclusively adopted the practice of seeking, on the basis of an explained alleged inadequacy of answer and by reference to particular paragraphs of the request which was made as provided for by interlocutory direction, further and better particulars. It may not be coincidence that, in respect of a subject where its solicitors did choose to adopt this practice in their letter of 24 February 2009, a concession was made by the Conservation Council, albeit belatedly in the course of oral argument. It would seem that the Conservation Council's notion that there is "little utility" in ordering further particulars in respect of the allegation in the statement of claim of recklessness is derived from Burnett Waters' pleading further or alternatively in its defence that it has acted honestly and reasonably at all times and not at any time acted recklessly. The fact that Burnett Water has alleged in its defence that it has at all times acted honestly and reasonably does not mean that, as to the contested element of recklessness, in respect of the proof of which the Conservation Council bears the onus, the Conservation Council is ipso facto excused from being ordered to furnish such particulars of its recklessness allegation as may be just. Further consideration of whether to order the furnishing of further and better particulars, including of the allegation of recklessness, requires the setting out of s 142A of the EPBC Act and of certain provisions of the Criminal Code which bear upon s 142A. Note 2: An executive officer of a body corporate convicted of an offence against this section may also be guilty of an offence against section 495. Note 3: If a person takes an action on land that contravenes this section, a landholder may be guilty of an offence against section 496C. (3) The law that creates the offence may provide different fault elements for different physical elements. (2) Conduct is only voluntary if it is a product of the will of the person whose conduct it is. (5) If the conduct constituting an offence consists only of a state of affairs, the state of affairs is only voluntary if it is one over which the person is capable of exercising control. (3) The question whether taking a risk is unjustifiable is one of fact. (4) If recklessness is a fault element for a physical element of an offence, proof of intention, knowledge or recklessness will satisfy that fault element. (2) If the law creating the offence does not specify a fault element for a physical element that consists of a circumstance or a result, recklessness is the fault element for that physical element. Note: Under subsection 5.4(4), recklessness can be established by proving intention, knowledge or recklessness. (3) The existence of strict liability does not make any other defence unavailable. Paragraph 8 is not, with respect, well pleaded in that it does little more than baldly to allege a contravention of the statute. It does not even condescend to specify whether it is s 142A(1) or s 142A(3) of the EPBC Act that Burnett Water is alleged to have contravened. That it is intended to be s 142A(1) may be inferred from the so-called particulars given under that paragraph. Strictly, these so-called particulars under para 8 in the statement of claim are material allegations of fact which ought to have featured in discrete paragraphs of the statement of claim. As Burnett Water correctly notes in its submissions, there is ample authority to support the striking out of a pleading of this kind on a strict application of a pleading rule such as O 11 r 2(a) of the Federal Court Rules : H 1976 Nominees v Galli [1979] FCA 74 ; (1979) 30 ALR 181 at 186-187; Trade Practices Commission v David Jones (Australia) Pty Ltd [1985] FCA 228 ; (1985) 7 FCR 109 at 114-115 and McKellar v Container Terminal Management Services Ltd [1999] FCA 1101 ; (1999) 165 ALR 409 at 418, [23] . Particulars are not a substitute for the allegation of material facts: H 1976 Nominees v Galli [1979] FCA 74 ; (1979) 30 ALR 181 at 186-187. Equally though, as Burnett Water fairly concedes, there is a discernable tendency in modern times against striking out when a pleading even with such a technical fault can be seen fairly to convey when read as a whole, including its so-called particulars, the case which a respondent has to answer: Queensland v Pioneer Concrete (Qld) Pty Ltd (1999) ATPR 41-691 at 42,827-9. Recklessness aside, the remaining complaints made in Burnett Waters' solicitor's letter of 24 February 2009 concerning the adequacy of the existing particulars are premised upon its preferred construction of the word "action" where it appears in s 142A(1) of the EPBC Act. Burnett Water contends that, where the word is used in paras (a), (b) and (c) of the subsection and in contrast to its use in the subsection's opening words, it does not bear the meaning given to the word in s 523 of that Act. Section 528 of the EPBC Act provides that, unless the contrary intention appears, the word "action" has the meaning given by Subdiv A of Div 1 of Pt 23. Burnett Water submits that it is necessary to distinguish between the "action" which was approved and the "action" or "omission" sought to be characterised as "reckless". Were it otherwise, it submits that an offence against s 142A could only be committed if the whole of the project were carried out recklessly. It observes that the Conservation Council has not framed its case this way as it alleges that particular aspects of the overall project are reckless. I have already described how the Conservation Council further particularised the alleged "action" in its letter of 25 February 2009. Having regard to how it has done that, there is merit in the observation made by Burnett Water as to the way in which the Conservation Council has framed its case. That this is indeed the Conservation Council's position is confirmed from its written submission, "The relevant action ... is the design, installation and operation of the fish transfer device on the Paradise Dam". There are vices in the statement of claim and they have translated into the consequential submissions of each of the parties with respect to particulars. The statement of claim ignores what precisely were the "actions" approved by the Minister. This, in turn, has occasioned each party difficulty; on the one hand in adequately particularising the statement of claim and, on the other, in determining whether such particulars as were furnished were adequate. Each of these is an "action" as defined by s 523 of the EPBC Act. The construction of a dam may be regarded as a "project", a "development" or an "undertaking", it matters not which. The operation of a dam is an "activity". The making of controlled discharges is a "series of activities". The "approval" to which s 142A(1)(b) of the EPBC Act refers is the approval of an "action", as described in the opening words of the subsection. Incorporating the effect of the Criminal Code , if that "action" is taken or omitted to be taken and so doing or omitting so to do contravenes a condition of the approval and the person is reckless to that fact, the physical elements of s 142A(1)(a) and the fault element of s 142A(1)(b) will have been met. If, for example, in taking the approved "action" of the construction of the dam, Burnett Water did not install a suitable fish transfer device, it would breach condition 3. Installation of such a device is not an approved "action" in its own right, as opposed to being a condition of an approved "action", the latter being the construction of the dam. It follows from this that I do not accept Burnett Waters' submission that "action" bears different meanings as between the opening words and the paragraphs of s 142A(1) of the EPBC Act. Paragraph 5 of the statement of claim contains the allegation, "in purported compliance with condition 3 of the approval the respondent has constructed a fish transfer device on the dam". (b) The approval of the taking of those "actions" is, materially, subject to condition 3 (again, a fact pleaded in an elliptical way in paragraph 4 of the statement of claim). (c) Burnett Water has taken an "action" namely, the construction of the dam. (d) In constructing the dam, Burnett Water has installed a fish transfer device. (e) The fish transfer device is not suitable for lungfish. (f) In the premises, the construction of the dam contravenes condition 3. If an "omission" or another "action", eg the operation of the dam, is to be relied upon these ought to be the subject of separate allegations of material facts. These is no substitute for a critical analysis of the elements of each alleged contravention and resultant identification of the material facts which must thereby be alleged and proved.. "Design" per se is not an "action" that the Minister has approved, although as a matter of common sense it doubtless preceded the approved activity of "construction". Though the Conservation Council has chosen to include "design" in its further particulars of what are said to constitute Burnett Waters' "actions", that is not an "action" which it has alleged in para 6 of its statement of claim. Ironically, para 4 of the statement of claim does refer to "actions" that were approved --- construction and operation of the dam. Paragraph 6 does not, in terms, engage with a ministerially approved action, instead treating aspects of condition 3, the installation and operation of a suitable fish transfer device, as if they were approved "actions" in their own right, as opposed to being conditions of the taking of approved "actions". Based on the allegations in para 6 of the statement of claim, but without any reflection upon precisely what material facts ought to be pleaded having regard to the constituent elements of a contravention of the respective sections, para 7 of the statement of claim makes a bald allegation of the contravention by Burnett Water of ss 142 and 142B of the EPBC Act. In short, even without turning to the subject of recklessness, the more one analyses the adequacy of the particulars and further particulars furnished to date by the Conservation Council having regard to the allegations made in the existing statement of claim, the more is exposed a lack of a comprehensive, accurate engagement by the statement of claim itself with the elements of a cause of action under ss 142, 142A(1) or 142B of the EPBC Act respectively in light of the terms and conditions of the Ministerial approval. The material facts necessary to ground such contraventions having regard to the terms of the Ministerial approval of actions subject to conditions and the alleged position so far as the suitability for lungfish of the installed fish transfer device have not been adequately pleaded. This seems to me to be the root cause of the differences that have emerged in relation to particulars. It may well be possible to apprehend the case that the Conservation Council seeks to make from its existing pleading, particulars and further particulars but so to do involves a degree of benevolent construction, speculation and assumption. Burnett Water has, in my opinion, approached the matter in this manner, hence it has pressed for further particulars. I do not criticise it for so doing. I note that Burnett Water's written submissions record that it has not "at this stage" sought the striking out of the statement of claim. Its oral submissions did though allow that, on the authorities, repleading may be an alternative to the ordering of particulars and its notice of motion sought such further or other orders as the Court deemed fit. If the prolixity of the requests and answers in respect of particulars demonstrate nothing else, they demonstrate that this is a case which should benefit from a more strict application of the pleading rule than has hitherto informed the drawing of the statement of claim. Giving due weight to authority which admits of a reading of allegations of material fact and purported particulars as a whole so as to judge the adequacy of a pleading, it is nonetheless preferable in this instance that the Conservation Council replead the statement of claim, incorporating or separately furnishing such particulars as it may be advised. It is important that alleged contraventions said to warrant the granting of mandatory injunctive relief be identified with precision. The ultimate hearing and determination of the proceeding will be advantaged by the repleading in a more disciplined and focussed way of the statement of claim and the consequential filing of an amended defence. That strikes me as a better alternative than seeking to cure deficiencies in the existing statement of claim by ordering the provision of yet further particulars. The discovery and inspection which has taken place will not, in my opinion, be wasted work if that course is adopted because Burnett Water has to date done its best to apprehend the likely case it has to meet and approached discovery accordingly. To order repleading of the statement of claim is, of course, fraught with the possibility of yet further interlocutory skirmishes. The drawing of an amended statement of claim will though be informed by the experience of the present application. So disposing of the application renders unnecessary the reaching of a concluded view as to whether some of the further requests made of the Conservation Council really sought evidence rather than the further particularisation of material allegations of fact. Because the subject was fully argued, some comment ought though to be made in relation to the pleading and particularisation of the fault element of recklessness. An allegation that a respondent is reckless as to the fact that an action or omission contravenes a condition of an approval is a necessary allegation of a material fact in the pleading of an alleged contravention of s 142A(1) of the EPBC Act. Paragraph 142A(1)(b) supplies a fault element for the physical element, set out in s 142A(1)(a), of taking an "action" or alternatively omitting to take an "action". Subsection 5.4(4) of the Criminal Code is therefore applicable. Thus, recklessness for the purposes of s 142A(1)(b) of the EPBC Act may be proved in a number of ways. It may be proved either by intention, knowledge or recklessness. Intention is the province of s 5.1 of the Criminal Code and knowledge the province of s 5.2. As to recklessness itself, the words "the action or omission contravenes a condition attached to the approval" in s 142A(1)(b) refer to a result. Therefore, it is s 5.4(2) which specifies the manner in which recklessness itself is to be proved. Such an analysis informed Burnett Waters' request for the furnishing of further and better particulars of the allegation that it had been reckless and its submission that it was entitled to an order for the same. What follows from this is that some care is needed in the pleading of the fault element of an alleged contravention of s 142A(1). Of these allegations, allegation (a) would at least require particulars of the alleged unsuitability of the installed device. Particulars may also be required of the facts, matters and circumstances by reference to which it was alleged that Burnett Water was aware of the risk concerned. Were such particulars not to be furnished, a modern pleading rule such as O 12 r 5(2)(a) of the Federal Court Rules would enable them to be ordered, as Fitzgerald J (as his Honour then was) highlighted by reference to English authority in Lyons v Kern Konstructions (Townsville) Pty Ltd (1983) 47 ALR 114 at 124-126. As to allegation (b), this would at least require particulars of the circumstances said to be known to Burnett Water. Again, given the disposition of the application, it is unnecessary to decide whether the Conservation Council should be ordered to furnish particulars of the individuals by whose conduct Burnett Water is said to have been reckless. However, the foundation for the request does require comment. That foundation was based on what one might describe as "reverse engineering", grounded in ss 498B(1) and 498B(2) of the EPBC Act. They have an evidentiary impact but they are not exhaustive of how either conduct or a state of mind may be proved. Particulars may be ordered of material facts but not of the evidence by which those facts are to be proved. Were, for example, allegations (a) and (b) to be particularised in the manner just described, I should, at least as presently advised, have difficulty in seeing how s 498B provided a charter for an automatic entitlement to an order for particulars of individuals who were alleged to have engaged in the approved action or who had an awareness. That is not to say that in some instances the furnishing of particulars of facts, matters and circumstances relevant to the allegation of corporate awareness might not incorporate as a particular that a named corporate officer was aware of a fact. Further, an inability either by the use of s 498B of the EPBC Act or otherwise to prove the elements that underlie an allegation of recklessness ought to give pause for thought as to whether to make such an allegation. It is not though necessary in the circumstances further to consider this aspect of the matter. Such precision also allows those concerned in his performance readily to ascertain whether the act has been performed as ordered. ) at p. 112. It is, however, a very important one. In conferring the jurisdiction under s 475 to grant mandatory injunctive relief Parliament has envisaged an exercise of the judicial power of the Commonwealth by a court that is one of law and equity. Where a contravention is proved, the granting of a mandatory injunction requires the exercise of a judicial discretion. However, the jurisdiction is statutory, not an incident of the general law of equity. There are features of the jurisdiction so conferred which set aside considerations which might, under the general law of equity, dispose a court not to grant injunctive relief at all. As Black CJ and Finkelstein J reminded in Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2006] FCAFC 116 ; (2006) 154 FCR 425 at 431, [18] , s 475 of the EPBC Act makes provision for a remedy of a kind that has come to be known as a public interest injunction. In this regard, the EPBC Act is not unique. It is an analogue of s 80 of the Trade Practices Act 1974 . Observations made by the members of the Full Court in ICI Australia Operations Pty Ltd v Trade Practices Commission [1992] FCA 474 ; (1992) 38 FCR 248 are pertinent. Contempt proceedings are not appropriate for the determination of questions of construction of the injunction or the aptness of the language in which they are framed: see Trade Practices Commission v Walplan Pty Limited [1985] FCA 389 ; (1985) 7 FCR 495 ; Trade Practices Commission v Glo Juice Pty Limited (1987) 73 ALR 407 at 412-414; and Commodore Business Machines Pty Limited v Trade Practices Commission (1990) 92 ALR 563. ... (The order sought) would create uncertainty and place the respondent in a position where it would not know with any precision what was required of it. It follows that, faced with an application to enforce such an injunction, the court would be in an equally difficult position. On appeal, reported [1972] HCA 69 ; (1972) 127 CLR 617 at 631-2, Barwick C.J. rejected an attack on the propriety of an order which enjoined a wholesaler 'from engaging in the practice of resale price maintenance in respect of tableware marketed ... under the trade name 'Mikasa'. Any practice of awarding injunctions in such a form is to be discouraged. Such injunctions conflict with the general precept, applicable to the exercise of power under s 80 of the Act as much as to the framing of injunctions in aid of legal and equitable rights, that a final injunction should bear upon the case alleged and proved against the defendant, and should indicate that conduct which is enjoined or commanded to be performed, so that the defendant knows what is expected of him as a matter of fact. Further, where the injunction is in the form of an interlocutory order, it is undesirable to frame the injunction in such a way as to leave the issues in the case open for determination on a contempt proceeding, rather than at a final hearing: see generally Epitoma Pty Ltd v Australasian Meat Industry Employees Union [1984] FCA 202 ; (1984) 3 FCR 55 at 65-6; 54 ALR 730 (Full Court); Trade Practices Commission v Glo Juice Co Pty Ltd (1987) 73 ALR 407 at 412-16 (Burchett J) and Queensland Wire Industries Pty Ltd v Broken Hill Pty Co Ltd (1987) 75 ALR 331 at 347 (Pincus J). In some cases it presents no difficulties to the draftsman, but in others the exercise is far from easy. 18.740, the view is expressed that whilst in concept the statutory remedy provided for in s. 80 of the Act is different from the equitable remedy of injunction as administered in the inherent jurisdiction of courts of equity, nevertheless "in many practical respects it is not, however, fundamentally distinct from the equitable remedy. " I agree with that observation. (a)-(f). The power of the Court to grant an injunction is controlled by the words "in such terms as the Court determines to be appropriate. The injunction should not prohibit conduct falling outside the boundaries drawn by s. 80: Thomson Australian Holdings Pty Ltd v Trade Practices Commission [1981] HCA 48 ; (1981) 148 CLR 150 at 161. The same limitation applies to mandatory injunctive relief. It is, in my view, no support for the grant of an injunction which, from the outset, has an operation outside the boundaries of s. 80, to say that it is open for the party enjoined to apply under sub-s. 80(3) to vary the injunction so as to bring its operation wholly within proper limits. The party in question should not be placed under any such obligation in the first place. In context, if a failure to do an act namely, the construction of a dam incorporating an installed fish transfer device suitable for lungfish constitutes an offence or other contravention of the EPBC Act because the dam as constructed does not have installed such a fish transfer device, thereby breaching a condition of the approval for the taking of that act, the Court may grant an injunction requiring the person to do the act, ie to incorporate in the dam a fish transfer device suitable for lungfish. There is no evidence that Burnett Water challenged condition 3 of the Minister's approval on the basis that it was manifestly unreasonable because it required the performance of a task that was impossible or was cast in terms that were so uncertain as to be devoid of sensible meaning. Indeed, had the installation of such a device been impossible, that may, given the objects of the EPBC Act and the protection afforded to the lungfish, have called into question whether the Minister should have approved the construction of the dam at all. The relief sought by the Conservation Council in para 2 of the application is cast in more precise terms than the terms of condition 3 of the Ministerial approval. It is enough at present that the relief sought bears a reasonably arguable relationship with that which the statute permits the Court to grant and the circumstances of the case. In my opinion, it does. The claim for this relief is neither frivolous nor vexatious nor an abuse of process either for the purposes of O 20 r 5 of the Federal Court Rules or for the purposes of s 31A(2) of the Federal Court of Australia Act 1976 (Cth). The proposed relief certainly does more than just recite the terms of the statute. It is more precise than that which in the circumstances of ICI Australia Operations Pty Ltd v Trade Practices Commission was regarded as appropriate. Whether it is appropriate to grant relief in terms of para 2 of the application, other terms (and that further or other relief was sought was foreshadowed in oral submissions by the Conservation Council) or at all depends on the proof of a contravention, on the construction of condition 3 and on the evidence led at trial. Given that para 2 does not warrant being summarily struck out, it is not appropriate to consider the issues mentioned in the preceding sentence either in the abstract or as a separate question divorced from the evidence at the trial. Morris v Redland Bricks Ltd and ICI Australia Operations Pty Ltd v Trade Practices Commission are not cases which compel the summary striking out of para 2 of the application. The statutory preconditions for the granting of a mandatory injunction are set out in s 475. It is up to the Conservation Council to prove that these are met. It is no part of so doing that it must prove that any particular fish transfer device is suitable, as opposed to proving, inter alia, that the device which has been installed does not meet condition 3, properly construed. To require proof of the former would be to invert the statutory preconditions. In this regard, I accept the submission made on behalf of the Conservation Council. If the Conservation Council proves those preconditions, a judicial discretion is enlivened. Considerations such as those set out in Morris v Redland Bricks Ltd are, in a non-exhaustive way, relevant to the formulation of injunctive relief in the exercise of that discretion. ICI Australia Operations Pty Ltd v Trade Practices Commission establishes that injunctive relief granted under a power akin to s 475 of the EPBC Act must bear a relationship with the case alleged and proved and must be cast in terms which admit of an understanding of what is expected of the party enjoined. It does not follow from this that the Conservation Council is obliged to give particulars of what is a suitable fish transfer device for lungfish. It may, if it chooses, lead evidence touching on that subject as part of its case as to why the existing, installed device is unsuitable. If so, that evidence, together with other evidence led at the trial, may well inform how any injunctive relief ought to be cast. The Conservation Council has also, in framing para 2 of the relief sought, specified a six month time limit. One reason why such a time limit might be reasonable may be that, on the evidence led at trial, it is possible, within that time, to install a particular device or to modify the existing one such that it is "suitable". If the Conservation Council leads no evidence on that subject, then, depending on the other evidence, if any, it may be unreasonable to specify such a time limit. Again, whether or not a, or any, particular time limit ought to be specified is not a question to be answered in the abstract. I decline to order that paragraph 2 be struck out or to order the Conservation Council to give particulars of what is alleged to be a suitable fish transfer device. It has not made it apparent from the pleadings, such as they are, the particulars, prolix though they are, the existing evidence or otherwise from the nature and circumstances of the case that documents touching on the subject specified in the application are directly relevant to an issue in the proceedings. In instituting these proceedings the Conservation Council engaged judicial, not administrative, power. Further, the proceedings are not inquisitorial in character. Order 15 r 8 of the Federal Court Rules confers a power to make an order for particular discovery. However, the occasion for the making of such an order pursuant to that power has not been demonstrated. The Conservation Council's application for further discovery must be dismissed. I shall therefore hear submissions on that subject and costs upon the publication of these reasons for judgement. I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. | pleading particulars purpose of pleadings and particulars generally application for further and better particulars underlying defects in statement of claim statement of claim struck out with leave to replead in lieu of order for further and better particulars claim for mandatory injunctive relief principles attending formulation of such injunctions meaning of "action" meaning of recklessness having regard to criminal code act 1995 (cth) practice and procedure environment law |
Australasian Mechanical Copyright Owners Society Limited controls in Australia the right to reproduce certain musical works. APRA administers licences issued by AMCOS. Between them, APRA and AMCOS own or control the right in Australia to communicate to the public or reproduce many works which are the subject of copyright under the Copyright Act 1968 (Cth). 2 In mid 2003 Monster Communications Pty Limited began a business of providing downloads of copyright works to mobile telephone customers through the use of telephone services provided by Telstra Corporation Limited and other telecommunications licensed carriers. Among other services that Monster has provided are downloads of monophonic and polyphonic ringtones. And, from late 2005 until June 2006 Monster also provided a service to its customers where they could download what are known as MP3 files onto their mobile phones. 3 Monster advertised its services nationally. The advertisements invited consumers to acquire downloads from Monster either by sending a short message service (known as SMS) text message or by making an interactive voice response (IVR) telephone call to a 1900 telephone number. Customers access the SMS services by sending a text message from their mobile phone to a telephone number together with a code requesting a particular product download. When the SMS message is received, Monster's telecommunications service provider processes the request by sending it to Monster and collects or arranges to collect Monster's advertised price from its customer. Next, Monster processes the request through its computer systems. The end result is that the consumer receives on the screen of his or her mobile phone a download of what was ordered: viz; a monophonic, polyphonic or MP3 ringtone, a colour message or a picture. 4 Customers access the IVR services by telephoning the 1900 number and progressing through a series of steps during the call with similar end results. In addition, if the customer makes an IVR call, he or she can place more than one order for downloads of any of Monster's advertised products. A telecommunications agreement between Monster and Telstra for IVR calls was in place between June 2003 and 1 May 2005. It provided that the first 24 seconds of any IVR call were free and thereafter the call was charged to Monster at an agreed rate. Monster's advertisements informed consumers of their ability to order more than one of its advertised download products in the same 1900 call. The advertisements made an offer that if the consumer ordered three downloads, he or she would get one free (with no limits and in any combination). 5 When a customer ordered a ringtone or image download through either the SMS or IVR services, Monster reproduced the image or ringtone thus attracting the royalties to which AMCOS is entitled. Each of Monster and its telecommunications service provider then communicated the ringtone or image download to the consumer thus generating the royalties to which APRA is entitled. In both cases the royalties became payable in respect of works the copyright in which either APRA or AMCOS controlled or APRA owned. 6 Ringtone services have developed into an important market for APRA and AMOCS since the year ended 30 June 2002, when they had 18 licensees. In subsequent years the numbers grew, peaking at 62 in the year ended 30 June 2004. There were 49 in the year ended 30 June 2005. As at 30 June 2006 there were 47 licensees although there had been 56 current at one point during that year. 7 Licensees are required to produce to APRA and AMCOS their telephone service provider statements of account. Those statements record, among other information, that total revenue collected by the provider from customers downloading licensees' ringtones and other services and the net amounts remitted to the ringtone licensee from those collections. Each licensee makes a return to APRA or AMCOS identifying what part of the revenues disclosed in the providers' statements are attributable to downloads of licensed works. A calculation is then made of the royalties due. Based on returns prepared by the licensees under their agreements with APRA and AMCOS, they calculated that, on their estimate, Monster's share of revenue from the ringtone services market in Australia was in the order of 8% of the market. 8 Shortly after Monster commenced its business in July 2003, it became aware that it was obliged to obtain licences from APRA and AMCOS for many of the copyright works used in its business. After some long negotiations, the parties entered into four different agreements dated 1 January 2005 which took effect as from 1 July 2003 for the IVR licences (cl 3) and 1 October 2004 for the SMS licences (cl 3) so as to provide for royalties during the preceding, as well as future, periods. Monster entered into an agreement with each of APRA and AMCOS respectively for the provision of IVR services and SMS services. Apart from the identity of the parties to each agreement, the relevant provisions of each IVR agreement and each SMS agreement were, in many respects, materially similar although there were some substantial differences. 9 In August 2005 APRA and AMCOS terminated the IVR licences for non-payment of interim invoices for royalties. Those invoices were issued after an audit by Deloitte of Monster's financial information following Monster's failure to provide to APRA and AMCOS relevant financial information under their IVR licences. The SMS licences were terminated in December 2005 because of Monster's failure to provide any statements from its telecommunications service providers from which royalties could be calculated. During the period covered by each of the licences before their termination, Monster paid no royalties at all. Subsequently Monster paid some royalties. 10 Monster's records were audited by Deloitte. The audit revealed substantial deficiencies in and unreliability of Monster's records. Monster's financial records for 9 May 2005 evince a very significant, two-thirds, decline at midnight on that date in the number of downloads it provided (i.e. from about 37,000 in its previous records to, about 13,000) (T 192.6) from which it never recovered. The expert evidence said there was no explanation for that fall or its magnitude. 11 Monster argued that APRA and AMCOS had failed to provide it with any specification of the financial information they required under each of the SMS and IVR licences and that accordingly, it was not in breach of any obligation under them. Monster argued that the termination of each of the licences was invalid. The parties entered into negotiations for the grant of new IVR licences to take effect immediately following the termination of the original ones. Monster argued that it was able effectively to accept that offer three months after it had been made in circumstances where, in the interim, the SMS licences had also been terminated and APRA and AMCOS were threatening to take it to court if it did not pay a substantial sum for past royalties. Monster has continued to provide downloads of copyright works relying on its argument that the terminations of each of the licences were invalid. 12 The construction of the SMS and IVR licences, and in particular the formulae for the payment of royalties, is at the heart of the present proceedings. APRA and AMCOS contend that Monster has not accounted properly for the royalties which are due under the IVR and SMS licences. Monster contends that it has in fact overpaid those royalties. In electronically transmitting ringtones to a mobile telephone, the ringtone supplier exercises the right of communication to the public in respect of those parts of the musical works embodied in the ringtones (s 31(1)(a)(iv) of the Act: s 10(1) contains a definition of the word 'communicate' as meaning to 'make available online or electronically transmit ... a work or other subject matter'). By providing an IVR service, a ringtone supplier authorizes the making of the copy of the ringtones which are created in the customer's mobile telephones upon electronic transmission of them (for the purposes of s 36 of the Act) (175 FLR at 4 [11]-[13]). Each SMS licence commenced on 1 October 2004 (cl 3). APRA was entitled to a fee for monophonic or polyphonic format ringtones of 1.1% (inclusive of GST) of the retail price subject to a minimum fee of 1.65cents (inclusive of GST) per sale. The fee for phonographic format (i.e. MP3) ringtones was 2.2% (inclusive of GST) of the retail price subject to a minimum fee of $3.30 per sale. At all times, Monster charged consumers, according to its advertisements $3.50 per ringtone downloaded via an SMS service. 15 AMCOS was entitled to a fixation fee of $11 in respect of each new AMCOS work added to the licensee's inventory in the quarter for which the fees were payable. In addition, the licensee had to pay AMCOS a fee for each ringtone of 11% inclusive of GST of the retail price subject to a minimum fee of 16.5cents (inclusive of GST) per sale. 16 Each SMS licence recited the capacity in which the relevant licensor acted. APRA owned or controlled for Australia the exclusive right of public performance and communication to the public in relation to the relevant work (Recital A). AMCOS controlled in Australia the right to reproduce the AMCOS works (Recital A). The licensee was described as being in the business of providing customised mobile telephone ringtones for sale 'at a fixed rate per sale ... by means of premium rate short message services ... and/or through the proprietary networks of telecommunication carriers' (Recital B). The licence then recited that the licensee required a licence from the relevant licensor to pursue that business activity. 17 The licensee was required to pay the licence fee calculated in accordance with the formula set out in schedule 1 (cl 4). The AMCOS SMS licence contained a clause 5 which was not in the APRA equivalent. That clause required the licensee to notify AMCOS within 14 days of the date of the agreement of the names of the ringtones it wished to reproduce (cl 5.2). 18 Monster was required, within 14 days after the end of each quarter, to provide to the licensor the revenue and music use information described in schedule 2 in the form 'prescribed by [the licensor] from time to time' (APRA cl 5, AMCOS cl 6). The licensee was required to keep accurate books of account and other records in sufficient detail to ensure that all amounts payable to the licensor under the agreement could be properly ascertained (cl 7). 19 Each SMS licence contained a provision entitling APRA (cl 10.1(a)) and AMCOS (cl 11.1(a)) to terminate it immediately by notice if Monster breached any term of the licence and failed to remedy the breach within 7 days of being required to do so. 20 In Schedule 2, each SMS licence required the licensee to supply within 14 days after the end of each quarter a detailed account of ringtone sales in that quarter for each separate ringtone service operated by the licensee, which was defined as a sales report. The sales report had to identify for each separate work offered for sale during the quarter among other things the title of the work, identifying whether the work was an APRA or AMCOS work or not and the price at which it was sold. As with the SMS licences, the AMCOS licence alone contained a cl 5 in similar terms to the AMCOS SMS licence. The licensee, as with the SMS licences, within 14 days after the end of each quarter had to provide the licensor with the revenue and music use information described in schedule 2 in the form prescribed by the licensor from time to time (APRA cl 5, AMCOS cl 6). 22 On receipt by the licensor of the information under cl 5 or cl 6, the licensor had to calculate the licence fee for the quarter in accordance with cl 4 (APRA cl 6.1, AMCOS cl 7.1). The licensee was then required to pay any invoice issued by the licensor within 14 days after the date of invoice. However, if the licensor received information pursuant to an audit or examination which could be required under cl 8 (or cl 9 for AMCOS), it was entitled to issue an invoice for any additional licence fee payable and the licensee had to pay that invoice within 14 days after its date (APRA cl 6.3, AMCOS cl 7.3). The licensee was again required to keep accurate books of account and other records in sufficient detail to ensure that all amounts payable to the licensor under the agreement could be properly ascertained (APRA cl 7, AMCOS cl 8). 23 Each IVR licence contained a termination clause in the same terms as the SMS licences (APRA cl 10, AMCOS cl 11). 24 Schedule 1 of the IVR licences provided for a formula for the payment of fees. In each formula, the APRA call revenue and AMCOS call revenue were defined as 'ACR'. ACR was calculated by multiplying what was defined as NCR (net call revenue) by the fraction comprised of the total number downloads of the licensors' works by the total number of downloads delivered by the IVR service. Relevantly, where, as is common ground here, the average price per ringtone was greater than $1.50, the licensee had to pay APRA a licence fee for monophonic ringtones of 1.1%, and for polyphonic ones 2.2% of the APRA call revenue (inclusive of GST) (Schedule 1, 2/105). Under the AMCOS agreement the licence fee, where the average price per ringtone was greater than $1.50, was 11% of the AMCOS call revenue (inclusive of GST). 25 The calculation in Schedule 1 was designed to identify the proportion of works within the control of APRA and AMCOS respectively in the overall revenue generated by the operations of the licensee. NCR was defined as meaning the gross call revenue 'less bad debts actually written off and less the connection fee actually charged by the telecommunication service provider responsible for providing the carriage of the IVR service'. Gross call revenue was defined as meaning the gross earnings of the licensee together with the earnings of any or all of its agents, partners, affiliates and income sharers (including without limitation any telecommunications company or service provider or bureau) directly or indirectly receivable during the quarter in respect of or otherwise in relation to the IVR service. 26 Thus, the concept behind gross call revenue was to capture the charge which the telecommunications company made its subscriber pay when accessing and arranging downloads from Monster's services. Consumers would be billed by or have payments deducted from their accounts by their telecommunications services provider. Thus, a consumer wishing to purchase a download from a Monster advertisement would telephone a 1900 number for an IVR service. Telstra provided Monster with the 1900 numbers. Not all Monster's customers were, however, Telstra customers. Thus, Telstra would have to collect, from the customers or their telecommunications providers, the money which Monster advertised was the cost of the relevant download. Telstra and Monster entered into a contract for the provision of the IVR services in June 2003. He has had extensive experience in the licensing activities of APRA and AMCOS. He first became aware of Monster's activities in about August 2003 and was the officer of APRA and AMCOS responsible for dealings with Monster. 28 Mr Jansen Chong (the second respondent) is Monster's sole director. He graduated a Bachelor of Laws with Honours from the University of Warwick in the United Kingdom in 1991. During the course of that degree he gained some understanding of intellectual property matters. Between 1993 and 1996 he held the rank of Inspector with the Singapore Police Force and performed both investigative and staff functions. After he left the Singapore Police Force he held positions as marketing and strategic development manager with a number of companies that introduced him to the download technology that Monster uses in its business. From January 2002 for about a year he was the general manger of Powercom which carries on a business in Australia similar to that of Monster. He was in charge of Powercom's marketing delivery systems. While there, he improved its ringtone products and developed graphic products to add to its principal business being a provider of chat room services. After leaving Powercom Mr Chong established Monster and commenced business in July 2003. 29 On 20 January 2005 Mr Mallett and two other representatives of APRA and AMCOS had a meeting during the course of which Mr Chong said that Monster could not provide sales figures for the last 18 months. Mr Mallett responded that he was sure that they could come up with a commercial solution to that problem. Discussion turned to the reporting requirements under APRA's standard form licence agreements. Mr Mallett said that APRA and AMCOS did not currently require some of the information that was referred to in Schedule 2, including the unique identifying numbers for works and IVR numbers. He said that APRA and AMCOS would make the calculation of net call revenue directly from the Telstra statements and that Monster did not need to provide additional supporting information. 30 Mr Mallett said at that time APRA and AMCOS did not have a fixed or prescribed format in their electronic data interchange (EDI) specification that they would send to Monster later that day. He said that those specifications were due to come into force in September 2005 and that some items in Schedule 2 (in the IVR licences) including identifying numbers and IVR numbers were not required for the moment. He told Mr Chong that in the meantime sales information should be provided in electronic format and they would work with Monster. Mr Mallett said that APRA and AMCOS would make the calculation of net call revenue directly from the Telstra statements and that Monster did not need to provide additional supporting information. Later that day Mr Mallett sent a letter to Mr Chong attaching the draft EDI specification which he said he was assured by the technicians made sense to them. The letter said that they expected the first reports to be in the format of the draft for the July-September quarter. 31 In his evidence, Mr Mallett agreed that the letter of 20 January 2005 conveyed that the template was a draft and that there would be no mandatory requirement till later that year (T 101.21-.25). He said the template in the EDI specification which was sent on 20 January 2005 by APRA and AMCOS to Monster was to be used as a form of guide as to how the specification should be completed (T 99.25-100.42). 32 On 11 February 2005 Mr Chong wrote to Mr Mallett. He enclosed copies of the IVR and SMS licences executed by Monster. In the letter Mr Chong requested a template from APRA/AMCOS of the correct layout required for the detailed sales report and information which Monster had to provide under the licence agreements. Mr Chong then set out what he called a detailed sales report for the quarter ending 30 September 2003. That simply listed the number of sales of mono and polyphonic ringtones for each of the three months. He also asked for the correct or accepted format with which to provide additional data, such as the song titles and artists, in order to be able to calculate the royalties due. 33 On the same day, APRA and AMCOS's solicitors (Banki Haddock Fiora) wrote to Monster's then solicitors (Griffith Hack Lawyers) noting that Monster had provided signed licence agreements relating to the ringtone service which Monster offered together with some sales information in relation to the September 2003 quarter. They said that Monster had not provided any revenue information. They drew attention to Monster's failure to provide, as required by each licence agreement, full details of sales of ringtones, including statements from telecommunication service providers. Banki Haddock Fiora also asserted that Monster's licence fee obligations were significant. They said it was expected to comply with the agreements. I also need you to tell me which of the ringtones are APRA/AMCOS works. We'll give you something. We'll give you a format later this year. You just provide all your sales figures and Telstra revenue returns. Please complete and return as soon as possible'. That included descriptive explanations of mandatory fields in the template and of information to be provided (such as the record type, work title, the writers, the performers and the quantity. Optional items included certain reference information identifying the downloaded work). 36 All other licensees of APRA and AMCOS have conformed to these requirements and reported without difficulty. 37 Mr Chong read the material in the email of 4 March, as he had the material with the letter of 20 January 2005, when he received them (T 133.8). 38 Mr Chong said that he did not want to give APRA or AMCOS a bare list of sales and core revenues from which they would unilaterally determine licence fees and in circumstances where he would not have any idea what figure they might determine was payable. After receiving both EDI documents, he said that he was concerned that they were both drafts which might change and that they appeared to describe a system specification to allow interchange of information electronically between APRA and AMCOS and its licensees such as Monster. 39 Mr Chong also asserted that the fact that these documents were drafts was significant to him because Monster's computer software would have to be altered to enable it to access the data and produce the specified reports. That would entail a cost and, he asserted, more importantly the testing of Monster's systems after they had been altered to ensure that the required changes did not create bugs or damage any part of the system. He also expressed concern that an alteration of the computer system to accommodate a draft specification created the real possibility that if the final specification differed, there would have to be a subsequent alteration at additional cost and with additional testing procedures. He understood that it was a computer industry rule and standard that computer systems not be altered by reference to draft specifications for those reasons. 40 Mr Chong was taken through the draft EDI specification attached to the email of 4 March 2005 in cross-examination. He was asked about his concerns to do with the draft EDI format by being taken to the requirements for different fields individually. For example, he was asked about whether he knew enough about the systems to know what a header row was. Mr Chong said that he did not know because APRA and AMCOS had never discussed it with him and he did not recognise the acronym 'HDR' as a symbol for the header row (T 132.45-133.5). When he was taken to the descriptive definition in the draft EDI specification, it was clear that the acronym referred to a file header record comprising seven fields of mandatory information identifying with precision what was required. Next, Mr Chong said that one of those fields was not readily available, namely the sender's identification number. Given that that was a number to be allocated to Monster, as sender, by APRA and AMCOS, his professed concern was transparently illusory (T 134.3-.14). 41 After being taken through the draft document in cross-examination, which he had read at the time he received it, he agreed that it was relatively straightforward for Monster to provide information in that format, after making obvious assumptions (T136.18-.22). He had made no investigation of the cost of attempting to comply with the draft format, despite what he had put in his affidavit to suggest this was a concern of his (T 136.39-.47). 42 Mr Chong is a very intelligent person. The draft EDI format was not difficult to understand and, when he was taken through it, it was obvious that he was readily able to understand it. I do not accept his evidence that the reason he did not implement the draft, notwithstanding the email of 4 March 2005, was because of any concerns or difficulties he had with the document. 43 Mr Chong also asserted that Schedule 2 of the licences required Monster to provide information about which works were APRA or AMCOS works, the unique identifying number of those works and the identifying telephone number of the IVR service. He listed the problems he had with complying with the quarterly requirements in Schedule 2 is each licence as being that he had no way of knowing whether or not any particular ringtone was an APRA or AMCOS work or had an APRA or AMCOS identifying number or was sold through a particular one or more of Monster's thirty or so IVR service lines. But Mr Mallett had told him on 20 January 2005 that the second and third items of this list were not required. I am not satisfied that Mr Chong had any difficulty concerning the identifying numbers or IVR phone lines. 44 It was Monster's obligation under the AMCOS IVR and SMS licences to provide a list to APRA and AMCOS of the musical works it wished to reproduce in the form of ringtones under the agreement within 14 days of the date of each licence agreement (cl 5.2). Whether the relevant works were those of APRA or AMCOS was for Monster to ascertain. I am not satisfied Mr Chong was concerned about this at all. Monster did not provide a list under cl 5 of the AMCOS licences. Other examples were put to Mr Chong in cross-examination of instances when he, or companies he controlled, including Monster, used works for which they had made no arrangements with the owner of copyright, but only ceased the user when the owner complained. By 31 March 2005 no royalties had been paid by Monster under the IVR licences, which were expressed to have commenced on 1 July 2003, some 21 months before and none had been paid under the SMS licences which had been expressed to commence on 1 October 2004. 45 I find that Monster and Mr Chong deliberately refrained from providing to APRA and AMCOS the information to the effect of that sought in the draft EDI specification as qualified by Mr Mallett so as to avoid paying for as long as possible what was due to the collecting societies. Mr Chong gave no explanation as to Monster's or his failure to communicate with APRA or AMCOS about any difficulties or concerns after the 4 March 2005 email. This deliberate default continued throughout 2005. The email of 4 March 2005 was the last relevant communication on the question of what APRA and AMCOS required to be provided. There was no basis on which Monster was entitled to ignore the requirements in the email to use the template provided and to return the information as soon as possible. Mr Mallett's earlier conversation had identified the Telstra revenue returns as being sufficient to comply with the telecommunications service provider information specified in Schedule 2. 46 I am satisfied that Monster was aware that APRA and AMCOS had specified to it the form in which the information required was to be provided for the purposes of each licence. I do not believe Mr Chong's evidence that he had any concerns or difficulties about the provision of that material in the form of the draft specification. Mr Mallett noted that that position was untenable. He said there had been a failure to provide APRA and AMCOS with the information required to calculate the licence fees. Acting on cl 8 of the agreements with APRA and cl 9 of the agreements with AMCOS, he informed Monster that on or after 25 April 2005 they would conduct an audit of the books of account and other records of Monster in order to obtain that information. 48 On 14 April 2005 Mr Mallett notified Mr Chong that the audit would commence on 27 April 2005 and that APRA and AMCOS had appointed Deloitte as auditors. Among other things Mr Mallett noted that Monster should have available to the auditor statements provided by Telstra in relation to all IVR lines operated by Monster for the purposes of supplying ringtones, computer records detailing the mix of ringtone and non-ringtone material ordered by calls using those IVR lines and all other relevant records including computer records and associated metadata detailing the ringtones ordered from the commencement of the service to 31 March 2005. 49 In late May 2005 Deloitte reported to APRA and AMCOS. This was consistent both with revenues disclosed in monthly revenue statements provided by Telstra and Monster's quarterly business activity statements. (b) Monster's financial records did not contain a breakdown of revenues per content type so as to enable identification of whether they were earned for the supply of ringtones, games, colour pictures or other categories of services which Monster offered. (c) There was no record of payment or of provision for licence fees due to APRA or AMCOS in Monster's financial records. (d) Revenue from ringtone and polyphonic downloads could not be conclusively calculated with the data provided by Monster. (e) Historical log files for the IVR server and database backup types were not provided or available in the information Monster provided to Deloitte. (f) While Deloitte had sighted the log file for the IVR server on 29 April 2005, it was missing from the system when analysed again on 3 May 2005 and Monster provided no explanation for the anomaly. (g) It was not possible to validate independently database records based on the information provided by Monster to Deloitte. This was said to be due to a number of factors including the masking of mobile numbers which purchased relevant services, the absence of or failure to provide log files and the absence of or failure to provide historical system backups. ones on which no royalties were due to APRA or AMCOS) unusually high frequencies of triple downloads were observed by Deloitte. Monster's internal reporting had rows of data entries arranged under a number of columns. The columns included a date and time column for the telephone call ordering the particular product or products. There was provision for the caller number (where it was available) to be given, the identification of a port, a telephone number on which the call was made to place the order, the mobile number to which the service was to be sent, the identity of the mobile operator, the content type, the identification number within Monster's records of the service provided, a commencement date and, critically, a column headed 'num_of_dl' (which was an acronym for the number of downloads). The triple download spike was contained in the num_of_dl column. 51 Deloitte had detected that out of a total of about 1.3 million downloads during the seven quarters they examined, there were about 700,000 entries in the number of downloads column with the recorded number 3. They understood this to mean that the relevant download against which the number 3 was placed was the third download by the customer in a sequence of downloads. However, only about 370,000 entries had the number 1 recorded in the number of downloads column and about 100,000 had the number 2. Thus, the apparent number of third downloads recorded exceeded the apparent numbers of single and double downloads. That did not appear to make sense, hence the explanation that was offered by Monster that there was a 'bug in the system'. 52 Deloitte also tallied Monster's total data with data for monophonic and polyphonic services, for which royalties were payable to APRA and AMCOS and compared the download numbers with the other services Monster was providing its customers. About 90,000, monophonic ringtones were recorded with one download in the number of downloads column, about 20,000 with two downloads and about 12,400 with three. Likewise, there were about 83,000 polyphonic downloads with one download recorded, 20,000 with two and 13,000 with three. So, while Monster's records indicated that its other services attracted a massive number of entries with the number 3 in the number of downloads column, for the two royalty generating services, monophonic and polyphonic ringtones, the number of 'third' downloads was quite out of proportion to the other entries in the database. The triple download spike thus occurred almost only in relation to non-ringtone sales. 53 Monster received a copy of Deloitte's report in June 2005. Based on Deloitte's report, APRA and AMCOS raised invoices on Monster on an interim basis for royalties on the IVR agreements. APRA claimed an interim fee of $16,079.94, while AMCOS claimed an interim fee of $188,867.35. APRA and AMCOS also claimed the audit costs of $37,400 as due under the relevant licences. When Monster failed to pay any of these invoices, AMCOS caused a creditor's statutory demand under s 459E(2)(e) of the Corporations Act 2001 (Cth) to be served on Monster alleging non-payment of the $37,400 debt for the audit fee. Ultimately, Monster paid that fee in late July 2005, within the time permitted under the statutory demand. 54 On 22 July 2005 Banki Haddock Fiora wrote to Monster's new solicitors, CG Gillis & Co, demanding full payment of the licence fee invoices by 29 July 2005. Monster did not pay any money for licence fees within that time. Thus, APRA and AMCOS had received no IVR royalties at all from Monster for the term of the IVR licences commencing on 1 July 2003. On 17 August 2005 AMCOS and APRA terminated each of the IVR licences. 55 Soon afterward Banki Haddock Fiora wrote to Monster saying that they were instructed that APRA and AMCOS would withdraw the notice of termination if Monster paid the full amount of the licence fee invoices by 25 August 2005. CG Gillis & Co responded on 25 August 2005 raising a number of arguments that the notice of termination was invalid. Only one of those arguments is still pressed. That is that APRA and AMCOS had over claimed because they had applied gross call revenues of about $8.34 million instead of the amount of net call revenue of about $7.2 million to the calculation of royalties. 56 After APRA and AMCOS had given the notice of termination of the IVR agreements on 17 August 2005, Bank Haddock Fiora sent a facsimile to CG Gillis & Co threatening to initiate 'take down' procedures which involved seeking to have Telstra disconnect Monster's IVR services. Ultimately, Telstra did not act on a notice that was served, although had it done so it would have considerable impact on Monster's overall business. 57 On 14 September 2005 Monster offered to pay the full amount of the outstanding interim IVR royalties invoices in consideration of APRA and AMCOS granting new licences together with certain other conditions. Thereafter, the solicitors for the parties communicated with each other exchanging draft new IVR licences. 58 On 16 September 2005 Monster paid APRA and AMCOS $150,000 and on 14 October 2005 the balance of $54,947.29 owing under the two IVR licence invoices issued earlier that year was paid. 59 On 24 October 2005 Banki Haddock Fiora sent for execution by Monster a draft agreement settling their present dispute on the old IVR licences, together with draft new IVR licences commencing with effect from 18 August 2005. CG Gillis & Co responded on 27 October 2005 with some proposed variations to the draft documents. The next day Banki Haddock Fiora responded with a set of draft documents which simply incorporated the changes suggested by Monster's solicitors. No response to that letter of 28 October 2005 was received from Monster until 7 February 2006 when CG Gillis & Co returned the three executed agreements to Banki Haddock Fiora. In the meantime, the parties had had a substantial dispute over the SMS licences, which, as will appear shortly, were terminated by APRA and AMCOS on 12 December 2005. In addition, the letter stated that the revenue and music use information required to be provided within 30 days after the end of each quarter under schedule 2 of the SMS licences had not been provided. It demanded, pursuant to cl 10.1(a) of the APRA SMS agreement, and cl 11.1(a) of the AMCOS SMS agreement that Monster provide each of APRA and AMCOS with its music use and revenue information in respect of the 3 quarters specified. The references to the two clauses were to the termination provisions in each SMS agreement which entitled the licensor to terminate it immediately by notice to the licensee if the latter had breached any term of the agreement and failed to remedy the breach within 7 days after being required in writing to do so by the licensor. APRA and AMCOS demanded, pursuant to their rights under the SMS agreements, that within 7 days Monster provide them with its music use and revenue information in respect of the three quarters. On 26 September 2005 Banki Haddock Fiora wrote to CG Gillis & Co, confirming that the SMS agreements remained on foot, but made a further demand for the music use and revenue information for the three quarters ending 30 June 2005. 61 Banki Haddock Fiora wrote again on 30 November 2005, this time in noting that APRA and AMCOS had not received Monster's revenue and music use information for the 4 quarters to 30 September 2005. A further demand was made, invoking each of the termination clauses, for that information to be provided within 7 days. It is common ground that Monster did not provide any SMS licence information in answer to any of the 3 letters of demand. Thus, on 12 December 2005 Banki Haddock Fiora wrote to CG Gillis & Co terminating each of the SMS agreements. It is in that context that consideration needs to be given as to whether the offer of APRA and AMCOS to enter into new IVR agreements, which had been made on 28 October 2005, continued to remain open for acceptance up to 7 February 2006. 62 In late January 2006 Monster made a payment of $15,000 to APRA and AMCOS said to be on account of amounts due under the SMS agreements. Monster paid a further $15,000 on 16 February 2006. On 7 April 2006, Monster paid a further $80,891.76. That was the last payment which Monster has made to either of the applicants. The January 2006 payment was said to be on account of amounts due under the SMS licences. The money paid in February 2006 was not able to be allocated to any particular obligation of Monster by Mr Mallett. 63 On 17 February 2006 APRA and AMCOS commenced these proceedings. What is the proper construction of the expression 'retail price' in the SMS licences? 2. Did APRA and AMCOS validly terminate the SMS licences on 12 December 2005? 3. What is the proper construction of the expression 'net call revenue' or 'NCR' in the IVR licences? 4. Did APRA and AMCOS validly terminate the IVR licences on 17 August 2005? 5. Is Monster entitled to an order that APRA and AMCOS grant it an IVR licences or its equivalent? 7. What is the quantum of licence fees payable by Monster for sales of ringtones or, APRA and AMCOS having elected to sue for damages, the damages payable for the infringements which occurred by sales at such times as Monster was not licensed? 8. Are APRA and AMCOS entitled to additional damages under s 115 of the Copyright Act 1968 (Cth)? Rather, Monster argued that 'retail price' was, in effect, what it received after Telstra or Monster's other telecommunications service providers and others had deducted their fees and charged from the advertised price which they had collected from the customer. 66 Such a construction would defeat one of the principal purposes of the SMS licences. The APRA SMS licence was expressly granted for the purpose of communicating the ringtones via telecommunication services (cl 1.1). The licence operated to authorise Monster's use of telecommunications networks to deliver an SMS download to its customer. If Monster's construction were correct, part of the advertised price paid by the customer to receive the download would not be caught for royalty purposes. The licence authorised Monster to enter into the transaction through the use of the telecommunications networks by which Monster provided the download. The result of Monster's construction would be that the telecommunications carrier would communicate the downloaded ringtone but would not be subject to any royalty for that act of communication and Monster would only be charged for its act of communicating the work via the telecommunications network to the customer. There would thus be a lacuna in APRA's collection of royalties because that part of the price charged to Monster's customer which represented the fee or charge of the telecommunications network would be excluded. The position is analogous under the AMCOS SMS licence. 67 A commercial purpose of the SMS licences was to enable APRA and AMCOS to receive a percentage of the earnings of those seeking to exploit copyright works over which they had rights. The SMS licences authorized Monster to use telecommunications networks to communicate and reproduce the copyright ringtone. In ordinary English usage, 'retail price' is the amount paid by the customer for the goods or service. It is not the net amount the retailer receives after paying a sum not disclosed to the customer for the right to sell the goods or service. The term 'retail price' should be construed so as to avoid it making commercial nonsense or working commercial inconvenience, as Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ said in Zhu v Treasurer of NSW [2004] HCA 56 ; (2004) 218 CLR 530 at 559 [82] . They also said that the commercial purpose of reasonable persons in the position of the parties was relevant, as were the genesis of the transaction, the background, the context and the market in which the parties were operating, as known to each of them (218 CLR at 559 [82]). 68 A significant commercial purpose of the SMS licences was to enable the whole download procedure to be authorised by the licensors and for the money generated by the exploitation of the rights they granted to be used as the basis for calculating the royalty fee due respectively to each of APRA and AMCOS. 69 Moreover, it would be a very odd construction of the ordinary English language term 'retail price' to divorce the price advertised by Monster to the public as the price payable for the download, from the price on which Monster was liable to account for royalties. Monster organised through its various telecommunication contracts and licences with APRA and AMCOS, a situation in which members of the public could use their own telephones to obtain a service Monster had for sale. Monster contracted with the public by offering to sell the SMS download to them for the price of $3.50 in its advertisements. That involved Monster becoming an agent, or using agents, to ensure that the transaction was carried out so the consumer received that for which he or she paid. Monster needed to charge its customer a price to cover its costs of delivering the download. 70 The use of agents raises issues concerning privity of contract in commercial dealings where people buy and sell goods and services over the internet, by use of the telephone or SMSs. No doubt many of these arrangements hide, in their simplicity, a web of underlying contractual relationships. But the customer who read an advertisement such as Monster placed in magazines, and sent an SMS would believe that they were paying Monster for the service, even if it be by the agency of the telecommunications network. As part of that arrangement, Monster entered into contracts which entitled the telecommunications network to retain a certain part of the price Monster advertised for the sale of the download. Nonetheless, that arrangement between Monster and the telecommunications network does not change the fundamental character of the advertised price from being the retail price. 71 The use of the concept of agency to overcome the need for privity is a technique which was described in Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52 ; (2004) 219 CLR 165 at 193 [79] by Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ adopting the words of Lord Bingham of Cornhill (in Homburg Houtimport BV v Agrosin Private Ltd [2003] UKHL 12 ; [2004] 1 AC 715 at 744) as 'a deft and commercially-inspired response to technical English rules of contract, particularly those governing privity and consideration'. As their Honours went on to note in the case of a stevedore seeking the benefit of a Himalaya clause against a consignee of damaged cargo, courts have been ready to conclude that the carrier was acting with the stevedore's authority. As Lord Wilberforce said in his classic opinion in New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd [1975] AC 154 at 167E, the law of contract takes a practical approach in commercial situations '... often at the cost of forcing the facts to fit uneasily into the slots of offer, acceptance and consideration'. Even if Monster be correct to say that at the end of the day it received a lesser sum than that which the customer paid for the download, that was a result of Monster entering into arrangements with the telecommunications networks, perhaps on behalf of the customer or perhaps on its own behalf, it matters not, for the purposes of ensuring that the customer bought the download at the overall price Monster advertised that it was charging. 72 For these reasons, I am of opinion that 'retail price' has its ordinary and natural meaning, namely the price at which Monster advertised the downloads for sale. QUESTION 2: DID APRA AND AMCOS VALIDLY TERMINATE THE SMS LICENCES ON 12 DECEMBER 2005? 74 On 2 September 2005 Banki Haddock Fiora wrote to CG Gillis & Co referring to requests from APRA and AMCOS that Monster provide its revenue and music use information for the quarters ending 31 December 2004, 31 March 2005 and 30 June 2006. Nothing had been provided previously. 75 I am of opinion that APRA and AMCOS were entitled to terminate and validly terminated each of the SMS licences on 12 December 2005 because no actual revenue statement of Monster's telecommunications carrier or service provider for its SMS services referred to in schedule 2 to each SMS licence had been supplied by Monster. 76 Moreover, as I have found above, Monster had not provided APRA and AMCOS with the draft EDI format information, contrary to the requirements specified in the email of 4 March 2005. I am satisfied that this was a breach of cl 5 of the APRA and cl 6 of the AMCOS SMS licences. 77 Monster pointed out that there was an apparent anomaly in the SMS licences. They provided that the licensee must within 14 days after the end of each quarter provide (e.g. ) APRA with the revenue and music information described in Schedule 2 'in the form prescribed by APRA from time to time'. However, Schedule 2 provides that while 8 particular items had to be provided within 14 days, the copies of the actual revenue statements of the telecommunications carriers and service providers and others had to be provided within 30 days. Reading the licences as a whole, I am of opinion that the licensee's obligation in relation to those revenue statements in Schedule 2 and cl 5 of the APRA (or cl 6 of the AMCOS) SMS licences should be read as allowing the licensee 30 days to provide those revenue statements as specifically referred to in Schedule 2. 78 Next, Monster argued that if APRA and AMCOS had not prescribed a form, no obligation arose under either of the respective cll 5 or 6. That obviously is correct. But, for the reasons I have already given, I am of opinion that the form was sufficiently prescribed by either Mr Mallett's conversation with Mr Chong in February or March 2005 and or by the email of 4 March 2005. Monster submitted that the demand of Banki Haddock Fiora to CG Gillis & Co made on 2 September 2005 for revenue and music use information did not refer to the form prescribed. In my opinion that was not necessary. I find that a form had been prescribed for the provision of the information by Mr Mallett saying that Telstra statements and Monster's sales records could be given. Mr Mallett's reference to Telstra would have been understood by Mr Chong to relate to whatever entity was Monster's telecommunications service provider for each of the IVR and SMS services. APRA and AMCOS had performed their contractual obligation. Monster was entitled to present them with information in any particular compilation which met the form Mr Mallett described in the conversation. 79 Monster also argued that because no password was given to it, APRA and AMCOS had not prescribed the form. I am of opinion that that argument has no substance. The absence of the password did not prevent Monster from supplying the information in the format required. It would be APRA's and AMCOS' problem that there was no password. Monster never sought a password or raised this issue as a difficulty. Leaving aside any implied duty of parties to a contract to co-operate, it seems to me that there was no necessity for a password to be provided to enable Monster to comply with its contractual obligations. 80 The difficulty suggested by Monster that it was necessary to know whether the material had to be provided in a document or in a particular electronic format, in my opinion, is of no moment. If I am wrong in my view that the email of 4 March 2005 and Mr Mallett's earlier conversation with Mr Chong were specifications for the purposes of the licences, if APRA and AMCOS left open the way in which the information could be supplied, by requiring only that they have particular pieces of information, Monster was free to select whatever means fell within that description with which to discharge its obligation to provide the relevant material. By reference to the items set out in Schedule 2, Monster would be able to know what sales information had to be included. It was free to select the particular arrangement and presentation of that material in any way it chose. APRA and AMCOS could not complain that it did so. It could not cause Monster inconvenience to supply such information. 81 Next, Monster argued that in some way the communications of 20 January 2005 concerning the draft EDI specification and the fact that the email of 4 March 2005 resent the draft EDI specification led to the result that the 4 March 2005 specification could be ignored by Monster. It also relied on Mr Mallett's evidence that there was no prescribed format as at January, February or March 2005 (T 101.27-.29). That statement cannot override the legal effect of the 4 March 2005 email which was not the subject of discussions between the parties. At best it may reflect Mr Mallett's lay understanding. I reject that argument. The communications in January 2005 were made in a context in which the parties were negotiating draft licence agreements. By 4 March 2005 the licences had been entered into and contractual obligations then existed between the parties. The 4 March 2005 email required implementation or a response. None was given by Monster. 82 I am satisfied that Monster had no bona fide reason for failing to provide the information required. As I have explained above, the conversation between Mr Mallett and Mr Chong which occurred between 11 February and the 4 March 2005 email prescribed a form and format. Even if Mr Mallett, in giving evidence, may not have understood the legal effect of what he had said and APRA and AMCOS had done, I find that there is no evidence that he communicated to Monster or Mr Chong his understanding after the email of 4 March 2005 was sent. In Mr Mallett's earlier conversation with Mr Chong, he was seeking to get the relevant information. He told Mr Chong how to provide it. And the email of 4 March 2005 also specified what would suffice. That was prescription enough. APRA and AMCOS did not suggest or give encouragement to Monster that it delay providing the information. 83 At the time the contracts were entered into both parties knew that there was no prescribed form in the sense of a document with mandatory fields for the provision of the required information. But they also knew that the draft EDI specification identified, as the 4 March 2005 email said, each mandatory field for which Monster was required to provide information. That sufficed to make it a form prescribed by and a format acceptable to APRA and AMCOS. QUESTION 3: WHAT IS THE PROPER CONSTRUCTION OF THE EXPRESSION 'NET CALL REVENUE' OR 'NCR' IN THE IVR LICENCES? Monster advertised that a IVR service would cost, say, $3.96 per minute. A customer who telephoned and placed an order accepted liability for that charge in return for the service of receiving, among other things, the download. But the relationships were far more complex, as the definition of gross call revenue recognised, although few customers would have appreciated this themselves. First, the customer's telecommunication service provider's network would be used to collect from the customer the charge of $3.96. The telecommunication service provider may or may not have been Telstra. That service provider would have had to pay Telstra or Telstra would have had to account for that money internally. Needless to say, each telecommunication service provider participating in this arrangement would be expected to take some part of the $3.96 per minute fee for itself. Then, pursuant to the contract between Telstra and Monster, Telstra had to account for an agreed sum to Monster. 85 It is clear that the commercial purpose behind the definition of gross call revenue was to capture the fact that the customer of Monster would be paying more than ultimately would be made available to Monster after it had passed through the complex of telecommunication company service providers. Next, net call revenue was to be calculated by making 2 deductions about which the parties disagree. 86 The first issue is this. When the definition of net call revenue referred to deducting 'bad debts actually written off' the parties recognised that some allowance needed to be made to take account of the difference between the revenue which accrued from customers making orders and those customers who, in due course, would not pay for those services. Monster contends that this phrase should be construed as requiring a calculation in each quarter that identifies every defaulting customer to the telecommunications suppliers which must then be deducted from the gross call revenues. On the other hand, APRA and AMCOS point to the fact that in Monster's contract with Telstra an allowance or provision of 5% for bad debts is made in each account Telstra sends. Mr Mallett's evidence was that all other licensees have similar arrangements with their telecommunications provider. In the other licensees' returns to APRA and AMCOS they deduct the contractual allowance or provision percentage for bad debts in their contracts with their telecommunications supplier. Again, it is common ground that if Telstra ultimately made an adjustment to the amount of bad debts the subject of the 5% provision in each bill, that adjustment could be reflected in a calculation of net call revenue at the time it was made. 87 The effect of Monster's construction of the requirement to calculate net call revenue has to be considered in the commercial context in which the parties were dealing. Mr Mallett said that the industry reported bad debts written off by applying, universally in his experience, the bad debt provision charged in the telecommunication services provider agreement with the licensee, in the matter in which it is sought by APRA and AMCOS to apply the 5% provision actually charged by Telstra on Monster's telephone services. 88 Mr Mallett said that APRA and AMCOS had never had a licensee who had sought to have a later adjustment, based on actual bad debts, made to the contractual percentage figure used as a provision for bad debts by the telecommunication service providers and licensees. He said that the amount of the provision might vary from licensee to licensee and from month to month for licensees. He said that it was a rolling provision and that it provided the best way of calculating the sum. And so far as Mr Mallett was aware neither APRA or AMCOS had ever been provided with a figure other than the contractual provision (T87.1-.42). But he said that if the actual experience were different to the amount of the provision, then there might be an adjustment further down the track (T86.45-87.15). 89 The use of the provision in the telecommunication service providers contract, which is actually the subject of a payment or an actual deduction from the revenue of the licensee by the provider, makes good business and commercial commonsense. Moreover, it appears, from Mr Mallett's evidence, to be the practice in the industry. After all, he was the person who was responsible within APRA and AMCOS for dealing with these issues from time to time. I accept his evidence. 90 A consequence of Monster's argument is that no deduction should be made from gross call revenue for the 'provision' being the actual money deducted from Monster's receipts by Telstra. Rather, Monster says that the net call revenue should be increased, hence increasing the quantum of its prima facie liability for licence fees, by adding back the 5% provision. Monster would then be assessed for royalty on the false basis that it had received money in fact when Telstra had retained it Monster would thus pay royalty on money it did not receive. Unless and until Telstra ultimately provided some definitive calculation of the actual adjustment, Monster would be out of pocket. That would postpone contractual certainty as to what was due and payable as a licence fee for, perhaps over 12 months until, for tax or other purposes, a decision was made by Telstra and possibly Monster, to write off particular debts. And, Monster's construction involves difficulty of calculation and inconvenience which again suggests that it is not likely that a reasonable person in the position of the parties would have adopted it as against the one which in my opinion is appropriate. 91 I am of opinion that the proper construction of the expression 'bad debts actually written off' in the definition of net call revenue is the sum for bad debts which Monster was required to pay to Telstra under its contract as and when Telstra issued bills for that amount. There is no doubt that Telstra actually reduced the amount of the money it paid to Monster pursuant to its contract by the amount of 5% in accordance with the bad debt write off provision. That being so, Monster actually incurred and paid to Telstra that 5% for bad debts. 92 Like all provisions in accounts, bad debts having been provided for they reduced the amount of profit or revenue in the period of account. But in the way in which Monster's contract with Telstra actually worked, Monster paid cash (by receiving 5% less) when Telstra accounted to it. Because it was in the nature of a provision, the bad debt payment was capable of being reversed when, perhaps happily, the debtor paid even though at the time of the original write off, it was not expected that such a result would occur. Telstra had bargained with Monster for the provision of its services subject to the 5% deduction from every payment Telstra made for the supply of the ringtones and other downloads which Monster had sold to consumers. Telstra was, in effect, a collection agency for Monster entitled to take its own share of revenues and bearing some risk as to uncollectible debts from Monster's end customers (hence the concept of gross call revenue to which I have referred). 93 The second disputed question of construction is the meaning of the words 'the connection fee actually charged by the telecommunication service provider responsible for providing the carriage of the IVR service'. It is common ground that Telstra retained 15cents per call for every IVR service and that this sum should be deducted in the calculation of gross call revenue. APRA and AMCOS say that that 15cents charge was within the definition of the connection fee so as to be a deduction from gross call revenue to produce net call revenue. Mr Mallett said that APRA and AMCOS calculated gross call revenue after deducting the 15cents (T 85.16-.35). 94 Monster contends that there are four further sums which fall within the definition of a connection fee. Each of those is found in the schedule of charges in the info [sic] call service provider agreement between Telstra and Monster. 95 The first two are against the marginal heading 'Connection Charge'. They are the new info call service provider establishment charge of $1,000 and the cost of $50 per number for the allocation of each new info call plus number. The info call numbers were the 1900 numbers. I am of opinion that charges to establish the telephony service through which the business is conducted which are described in the agreement itself as connection charges within are the ordinary and natural meaning of the words 'connection fee actually charged' in Schedule 1 of the IVR licences. Accordingly, I find that each of the amount of $1,000 as an establishment charge and the $50 per number for each 1900 number used by Monster was a connection fee actually charged by Telstra to Monster and should be deducted from gross call revenue to calculate net call revenue. 96 The third item which Monster argued falls within the meaning of connection fee in Schedule 1 is the call the charge of $0.003 per second for an info call service excluding the first 24 seconds. Of its nature this charge could only be incurred 24 seconds after a connection was made. Connection of a call to Telstra's service thus was not a consequence of and did not depend upon the payment of this charge. It was simply payable after a certain time elapsed (24 seconds) for the duration of the subsequent part of the telephone call. I do not consider this to be within the ordinary and natural meaning of a connection fee. The call would be free of this charge if it lasted for less than 24 seconds. 97 The fourth item which Monster said should be included as a 'connection fee' was described in its written submissions as 'non-telecommunications service charges, calculated according to a scale of average monthly gross revenue for a 3 month period'. This referred to charges which the info call service provider agreement described as including Telstra's expenses for billing, marketing and administration. These charges are not within the meaning of a 'connection fee'. Their nature is accurately described as 'non-telecommunications service charges' --- that is, as a charge for services outside telephony connection. 98 Had the parties intended that charges of the latter kind should be excluded from net call revenue, it would have been easy to do so by leaving out the word 'connection' from the description of the amount to be deducted. Then all the telecommunications service provider's fees actually charged would be excluded from net call revenue. General fees payable to the providers for their overall services in relation to provision of telephony services are not within the meaning of 'the connection fee actually charged'. 99 The commercial context in which APRA's and AMCOS' IVR licences operated was one in which the consumer was being charged by Telstra (or other telecommunications service provider) on a time basis for IVR calls. The charge was at a rate advertised by Monster in connection with the pricing of the download services Monster was offering to customers. Moreover, it was known to both parties at the time the licences were entered into that there were connection charges which were readily identifiable and easy of calculation. They were the 15cents per call or like fee charged by the telecommunications provider directly to the customer (which it is common ground should not be included in net call revenue) and what the telecommunications carrier said was such a fee. 100 Monster's expert accounting witness, Mr Peter White, was a partner of Bentleys MRI Sydney. He was instructed to use Monster's construction of 'connection fee actually charged' in calculating the net call revenue. He said that to calculate the actual net call revenue for the 3 years ended 30 June 2006 using this construction would involve in excess of 10,000 calculations and he had not had time to do that exercise. More revealing was his observation that it was not possible to calculate that net call revenue '... as it is unclear what charges have been made by Telstra'. 101 Mr White's evidence showed that if net call revenue were to be calculated so as to take account of the third and fourth items suggested by Monster, the exercise would be commercially and practically highly inconvenient if not impossible. 102 The words 'connection fee' were used in the commercial context of a telecommunications service provider's fees for IVR services for the purpose of retaining, all revenue on which royalty was chargeable gained from end customers that both the licensee and its telecommunication service provider earned from selling the downloads on a time cost for the phone call to the end customer except for two items. The first, bad debts actually written off, excluded revenue not received by the licensee. The second exclusion was what the telecommunications service provider was entitled to retain as, in effect, flag fall charges to Monster and the end customer for establishing the connection by which it and the licensee then earned revenue from the duration of the call. It would be contrary to the purpose of the IVR licences to exclude as a 'connection fee' any portion of the time based earnings of the licensee and its telecommunications service provider derived from the exploitation of the copyright works. Moreover, the complexity and difficulty of calculating Monster's last two suggested deductions tells against an objective intention that they be included in the concept of a 'connection fee'. 103 In my opinion Monster's construction would lead to a result contrary to common sense (cf: Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36 ; (1996) 186 CLR 389 at 400 citing Oliver LJ in Exxon Corporation v Exxon Insurance Ltd [1982] Ch 119 at 144 where recourse to commonsense in construing an expression in a statute was allowed). A similar approach is apposite in construing agreements: cp: Miramar Maritime Corporation v Holborn Oil Trading Ltd [1984] AC 676 at 682E-F per Lord Diplock). The more unreasonable the result the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they shall make that intention abundantly clear: L Schuler AG v Wickman Machine Tool Sales Ltd [1973] UKHL 2 ; [1974] AC 235 at 251E. In that case, of course, there was an obvious mistake. The question was how should the Court construe the language used. Indeed it is the only method by which inconsistencies of expression may be reconciled and it is in this natural and commonsense approach to problems of construction that justification is to be found for the rejection of repugnant words, the transposition of words and the supplying of omitted words (cf. After all, the purpose of construction of contracts is to ascertain by reference to the words used in the factual matrix in which the parties dealt with one another what an objective person would reasonably understand the parties to have intended. See also the remarks of Mason J in Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24 ; (1982) 149 CLR 337 at 350-352, and of Lord Bingham of Cornhill in Bank of Credit and Commerce International SA v Ali [2001] UKHL 8 ; [2002] 1 AC 251 at 259): "the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract. " That knowledge may include matters of law, as in this case where the obtaining of intellectual property protection was of central importance to the commercial development of Mr Allen's ironing board (cf Bank of Credit and Commerce International SA v Ali [2001] UKHL 8 ; [2002] 1 AC 251 at 282, per Lord Clyde). The commercial purpose of the definitions, that is to say the purpose of a reasonable person in the position of the parties to the contract, is relevant. That in turn requires attention to the genesis of the transaction, the background, the context, the market in which the parties were operating, as known to both parties: Zhu v Treasurer of New South Wales [2004] HCA 56 ; (2004) 218 CLR 530 at 559 [82] . 109 Accordingly, the $0.003 per second and non-telecommunications service charges should not be deducted from net call revenue. QUESTION 4: DID APRA AND AMCOS VALIDLY TERMINATE THE IVR LICENCES ON 17 AUGUST 2005? By cll 6.2 and 6.3 of the APRA IVR licence (cll 7.2 and 7.3 of the AMCOS one) Monster had to pay any invoice issued by the licensor within 14 days after the date of the invoice. An invoice for additional licence fees issued after APRA received information under cl 8 (cl 9 of the AMCOS IVR licence) had also to be paid within this time (cll 6.3 and 7.3 respectively). 111 On 30 May 2005 APRA and AMCOS served Monster with interim invoices which had been raised following the audit. The letter to Mr Chong and Monster enclosing the interim invoices said that APRA and AMCOS had calculated a minimum amount payable under the IVR licences based on the information provided to the auditors by Monster. The interim invoices were said to be 'not for the full amount that APRA/AMCOS will be claiming under the agreements. By issuing the enclosed invoices we in no way waive of our rights to claim the full amount of licence fees owing'. 112 On 22 July 2005 Banki Haddock Fiora wrote to CG Gillis & Co demanding full payment of the 30 May licence fee invoices by 29 July 2005. Although the letter did not nominate the clauses of each IVR licence dealing with termination, it did say that if Monster failed to comply with the demand APRA and AMCOS would have no hesitation in enforcing their respective rights. 113 On 17 August 2005 Bank Haddock Fiora wrote to CG Gillis & Co terminating each IVR agreement pursuant to cl 10.1 of the APRA IVR agreement and cl 11.1 of the AMCOS IVR agreement, on the basis that no payment had been made of either of the interim fees the subject of the audit. Since cl 6.3 of the APRA IVR agreement (cl 7.3 of the AMCOS one) had required the licensee to pay within 14 days after the date of an invoice the full amount of the invoice issued on receipt by APRA of information from an audit under cl 8, Monster was in breach of that obligation by the middle of June 2005. The letter of 22 July 2005 to Monster's solicitors made clear that the breach needed to be remedied within 7 days. It was not. That enlivened the powers of APRA and AMCOS to terminate each licence. 114 Under the IVR licences, Schedule 2 is in a different form to its counterpart in the SMS licence. Items (i) and (j) are additional in the IVR licences. In the IVR licences the licensee had to provide within 14 days of the end of each quarter a statement or statements from Telstra detailing gross call revenue and the necessary information to assess net call revenue. The effect of item (j) in Schedule 2 is to make the statement or statements from Telstra, being its account, a document from which gross call revenue may be calculated and will provide the necessary information to assess net call revenue. 115 Monster argued that if APRA and AMCOS did not provide a format, a licensee in the position of Monster would not know how to supply the information to APRA and AMCOS in a form that was acceptable for the purposes of cll 5 and 6 of the respective licences and item (i) of Schedule 2. I have found that Monster was aware of the requirements of APRA and AMCOS from 4 March 2005. Monster argued that it would not know whether to provide the information in documentary form or electronically or if it did in what particular format. I am of opinion that since Mr Chong never complained to Mr Mallett after Mr Mallett told him what APRA and AMCOS would be satisfied with, the parties understood what it was that had to be provided, namely Telstra accounts and the sales information. The sales information could be in the form in which Monster produced it for its internal purposes. Exhibit 1, for example, is a printout of the detail of Monster's computer records of sales. It gave sufficient information needed to analyse the sales, albeit that when the auditors actually analysed that material they discovered the treble download spike. 116 In cross-examination Mr Mallett acknowledged that his calculations, including those for the invoices dated 30 May 2005, invariably used the provision of 5% for bad debts in Monster's info call service provider agreement with Telstra, rather than an exact calculation of the final adjustment for bad debts (T 86.44-87.10). In that context, Monster sought to rely upon Mr Mallett's concession in cross-examination that the invoices of 30 May 2005 had not been calculated strictly in accordance with the formula in Schedule 1 (T 91.40-.44). However, I have found that the method of calculation using the 5% percentage figure did accord with the requirement in Schedule 1 to deduct 'bad debts actually written off'. 117 Monster argued that there had to be, first, a form prescribed under cl 5 of the APRA IVR licence (cl 6 of the AMCOS one) for Monster to have any obligation to provide its revenue and music use information. Next, it argued that any invoice which APRA calculated had to be calculated in accordance with Schedule 1. APRA and AMCOS had relied on the material in Deloitte's audit conducted in May 2005 to calculate the invoices rendered on 30 May 2005. Monster said that if those invoices were not prepared in accordance with Schedule 1, there was no basis on which APRA and AMCOS could terminate the IVR licences. Monster pointed to the fact that it was common ground that in performing the audit Deloitte did not apply Monster's construction in its analysis. Relevantly, on my findings this means that the IVR interim invoices were calculated without deducting any connection fees other than the 15cents per call charge. Thus, Monster argued that the calculations performed by APRA and AMCOS on the basis of the audit report were not undertaken in accordance with cl 4 and Schedule 1. Therefore, it said that the interim invoices were not valid. 118 It follows from my findings that there was a minor error in the way APRA and AMCOS approached the calculation of the IVR licence invoices dated 30 May 2005 because they did not take account of the initial connection fee of $1,000 or the $50 per 1900 number. The invoice adjustment sheet for the two invoices explains how each was calculated. They were arrived at after deducting 5% of gross revenue received by Monster in accordance with the provision in the Telstra info call service provider agreement. That led to a calculation of net call revenue of $8,344,634.82 derived from Telstra's statements for the period from August 2003 to March 2005 inclusive. This represented the total revenue paid by customers less the amount of Telstra's bad debt provision. It did not include the 15cents per call which Telstra had separately debited to the customers and had not shown in its statements. 119 The figure for net call revenue, however, should be reduced by the $1,000 connection fee and $50 per 1900 number connection fee which I have held to be properly deductible from gross revenue. However, those amounts are quite immaterial in the overall total of net call revenue used in the interim fee calculations. Even if there were 100 of the 1900 numbers, that would mean that the net call revenue figure used was overstated by $6,000 (being $1,000 for the connection fee and $5,000 ($50 x 100) for the 1900 numbers) that is a small fraction of 1% of the total of $8.345 million. 120 The adjustment sheet makes assumptions, because the data provided by Monster did not make clear how many downloads represented monophonic and polyphonic ringtones. There was a uniform assumption applied to the whole of the data that 18.44% of all of the downloads Monster provided to its customers were of ringtones on which APRA and AMCOS were entitled to royalties. The AMCOS interim fee was calculated using a factor that 90% of those downloads were works the subject of the AMCOS IVR licence, although AMCOS' analysis indicated that 97% of the items were in that category. The 10% licence fee of $138,487.59 (before GST) actually invoiced thus represented a sum that was substantially smaller than it would have been had the 97% figure been used. 121 A similar adjustment was made in the APRA interim fee of $14,618.13. For that calculation it was assumed 95% of the works for which Monster supplied downloads in the period were covered by the APRA IVR licence. APRA's analysis had indicated that the examination of Monster's records showed that 99% of the relevant items downloaded was a closer approximation. Mr White and the expert accounting witness for APRA and AMCOS, Mr Woodley of Deloitte, agreed that there was nothing to show that the use of the 90% and 95% figures in the calculation in the adjustment sheet for the interim invoices was in error. 122 While cl 4 of the IVR licences required the licensee to pay the licence fee calculated in accordance with the formula in Schedule 1, cl 6.3 of the APRA IVR licence (and cl 7.3 of the AMCOS one) permitted APRA to issue an invoice for any additional licence fees payable on receipt of the audit information. The audit information indicated that Monster's record keeping did not allow precise calculation. Monster argued that the new calculation under cl 6.3 must be mathematically precise. It referred to the obligation under cl 6.1 that APRA was obliged to calculate the licence fee for the quarter in accordance with cl 4 on receipt of information under cl 5 (that is in accordance with the formula in Schedule 1). The information under cl 5 was what Monster was obliged to provide in accordance with Schedule 2 in the form prescribed by APRA. Once an audit had to be conducted, and additional fees became payable, the IVR licences contemplated that some degree of approximation or estimation may be required. The IVR licences recognized that it may not be possible for APRA and AMCOS to be precise, for the very reason that an audit was required. 123 If the licensee failed to keep proper accounts by reference to which fees could be precisely calculated, APRA or AMCOS would have to work on an estimation based on the information from the auditor. And, of course, a licensee could frustrate the issue of any invoices by APRA and AMCOS by failing to provide some or all of the information necessary to make the calculation in Schedule 1 of the IVR licences. That is just what Monster did before APRA and AMCOS exercised their right to have an audit in April 2005. A licensee in Monster's position could hardly rely on its own default in providing, or even recording, accurate information from which mathematical precision was possible ( New Zealand Shipping Company Limited v Societe des Ateliers et Chantiers de France [1919] AC 1; Suttor v Gundowda Pty Limited [1950] HCA 35 ; (1950) 81 CLR 418). 124 Monster made no complaint at the hearing about the estimation processes used in the calculation of the interim invoices. That was a commonsense approach. I am not satisfied that there was any error in the calculation of the two interim invoices. The process involved, necessarily and without complaint by Monster, the need to make estimations. In my opinion any failure to include in the calculations in the interim invoices of 30 May 2005 the two deductions for connection fees which I have found ought to have been included had no effect on the validity of the invoices. The connection fees were for sums which were immaterial to the result. Having regard to the assumptions used by APRA and AMCOS in calculating them, I am not satisfied that the interim invoices overstated the exact amounts which would have been due had precise calculations then been possible. There was no basis upon which Monster could have failed to have paid the interim invoices in accordance with the requirements of each IVR licence within 14 days of their date. 125 I am satisfied that no less than the sum claimed in each interim invoice was owing by Monster to APRA and AMCOS respectively on 30 May 2005. 126 Accordingly, I am of opinion that APRA and AMCOS were entitled to terminate the IVR licences when they did on 17 August 2005. QUESTION 5: WAS THE OFFER OF APRA AND AMCOS MADE ON 28 OCTOBER 2005 TO ENTER INTO NEW IVR LICENCES AND TO SETTLE THE DISPUTE OPEN FOR ACCEPTANCE BY MONSTER AS AT 7 FEBRUARY 2006 AND, IF SO, WAS IT VALIDLY ACCEPTED BY MONSTER ON THAT DATE? When the letter from CG Gillis & Co of 7 February 2006 (Ex 2) was received, Mr Mallett's lay understanding was that Monster, by Mr Chong as its managing director, had executed all three forms of agreement which had been sent with Banki Haddock Fiora's letter of 28 October 2005. I am satisfied that a reasonable person in the position of the parties would have understood the new IVR licences to have been executed by Mr Chong on behalf of Monster. It was the only client on whose behalf CG Gillis & Co appeared to have written on 7 February 2006. 128 Monster argued that the offer of 28 October 2005 was open to be accepted over three months later on 7 February 2006. In general, the law implies that when no time limit for the exercise of a right is stipulated, the right may be exercised within a reasonable time unless there are indications to the contrary: Reid v Moreland Timber Co Pty Limited [1946] HCA 48 ; (1946) 73 CLR 1 at 13 per Dixon J. I am of opinion that this statement of the rule, coming from a case in contract, is just as applicable to a case where an offer to enter into a contract is made. Ordinarily in contract, absent an express provision to the contrary, where no time is fixed for performance, the parties are, or the party upon whom the obligation is cast is, obliged to perform within a reasonable time: see e.g. Perri v Coolangatta Investments Pty Limited [1982] HCA 29 ; (1982) 149 CLR 537 at 545-546 per Gibbs CJ, 567 per Brennan J (with whom Stephen J agreed). And, in Ballas v Theophilos [No 2] [1957] HCA 90 ; (1957) 98 CLR 193 at 197 Dixon CJ (with whom McTiernan J agreed) said that the implication of law, where a partnership deed limited no time for the exercise of an option, is that the option had to be exercised within a reasonable time. Dixon J observed that the stipulations contained in the relevant clause itself affected what a reasonable time was. Williams J, came to a like conclusion (at 98 CLR at 199). 129 At the time the letter of 28 October 2005 was sent, the parties were negotiating to resolve a dispute. Monster needed certainty that it had valid IVR licences. APRA and AMCOS had asserted that their terminations of the IVR licences on 17 August 2005 were valid and that Monster needed the new licences which were being offered. The offer included a proposed agreement, inter alia, to effect a transition from the disputed termination of the IVR licences by the grant of new IVR licences to commence on 18 August 2005. Clause 4.2 of that draft agreement acknowledged that APRA and AMCOS could at any time in the future make further claims for the payment of licence fees due under the terminated IVR licences (Ex 2). 130 Monster claimed that it made the payments of the sums claimed in APRA's and AMCOS' interim invoices of 30 May 2005 in consideration of the grant of new IVR licences. Given that this was money already owing, and at the time Monster had paid nothing under the SMS licences, no consideration can be inferred to have been given by Monster for the grant of new licences. 131 Banki Haddock Fiora's letter of 24 October 2005 to Monster's solicitors enclosing draft documents for execution referred to a conversation on 21 October 2005. Significantly it requested that Monster's solicitors have its client sign and return both sets of agreements as soon as possible to Monster. And then Banki Haddock Fiora would have their client sign them and return one set. Monster's solicitors responded on 27 October 2005 seeking amendments to be made. The response on 28 October 2005 was immediate that the amendments were accepted. So, at that time both parties knew of the dispute, the potential for uncertainty and of the existence of an offer to resolve the dispute on terms which, on 28 October 2005, appeared to be acceptable to each of them. No impediment to immediate execution of the draft documents was apparent. There was no reason why either side, or a reasonable person in the position of the parties, would think that any lengthy time to respond to the offer in the letter of 28 October 2005 was needed. Indeed, the letter of 24 October 2005 had asked Monster's solicitors to return all the signed agreements 'as soon as possible'. That requirement for timeous signature and return would have been understood by a reasonable person in the position of the parties to have remained a part of APRA's and AMCOS' renewed offer of 28 October 2005 even though it sought the documents 'in due course'. 'Due course', in the context, conveyed timeousness rather than open endedness. 132 After that, in the intervening three months to 7 February 2006, new and significant disputes emerged between Monster and its actual or putative IVR licensors. Certainly when APRA and AMCOS terminated the SMS licences on 12 December 2005 a reasonable person in the position of the parties would have perceived that APRA and AMCOS were no longer prepared to enter into new contracts with Monster. APRA and AMCOS point to the additional feature reinforcing such a conclusion that the IVR licences themselves involved dealing with large numbers of works and substantial sums of money, in a context where Monster, in the intervening period, had failed to execute the offered documents so as to evince a position of being contractually bound. Between 16 October 2005 and 20 January 2006 it had not paid any royalties at all to APRA and AMCOS. During this period Monster was not providing accounting material under the SMS licences or the IVR licences (which Monster was asserting had not been terminated). 133 Indeed, in late January 2006 the parties were negotiating a different and inconsistent offer being put forward by APRA and AMCOS (Ex 2). At a conference between the parties and their solicitors on 31 January 2006, APRA and AMCOS announced that they would accept $450,000 in full and final settlement of any unpaid royalties due during the period the subject of the audit and, failing payment, they would commence proceedings claiming breach of copyright, damages and costs. This was clearly an ultimatum. It was also a new and obviously significantly different offer to that put on 28 October 2005. In its solicitors' letter of 7 February 2006 Monster replied to that offer, refusing it. They sought more time and returned the executed IVR licences to take effect on 18 August 2005. Monster then asserted that it did not believe that it owed any money for the audit period covered by Deloitte's May 2005 report. Monster also asserted that the one week which APRA and AMCOS were prepared to allow it to investigate the new claim for $450,000 was an unreasonably short time. 134 The rights and liabilities of the parties to a contract are determined by a reference to what each party by words or conduct would have led a reasonable person in the position of the other party to believe ( Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52 ; (2004) 219 CLR 165 at 179 [40] ). I am of opinion that the same principle should be applied to the evaluation of whether an offer, the acceptance of which would bring the parties into an actual contractual relationship, is capable of acceptance. A reasonable person in the position of the parties would have regarded the offer of 28 October 2005 as not remaining open for an indefinite time. Such a person would have said on 7 February 2006 that the offer of 28 October 2006 had lapsed some considerable time before. 135 For these reasons, I am of opinion that the offer made on 28 October 2005 was no longer open for acceptance when the SMS licences were terminated on 12 December 2005. A reasonable person in the position of the parties would have considered that, if the offer had been open before the termination of the SMS licences, that event indicated that the offer could not be accepted thereafter. If I am wrong in that view, I am of opinion that a reasonable person in the position of the parties would have had no doubt that the offer made in late October 2005 was no longer on foot at the time of the meeting of 31 January 2006 and was therefore incapable of acceptance thereafter. WERE APRA AND AMCOS ESTOPPED FROM REFUSING TO GRANT NEW IVR LICENCES? Monster argued that at no stage did APRA or AMCOS seek to disabuse it from its assumption that those new licence agreements would be granted until Haddock Banki Fiora's letter of 8 February 2006 suggested to the contrary. It argued that APRA's and AMCOS' conduct prior to that time 'was consistent only with the proposition that new IVR licences would be granted. If their position had changed after October 2005, then it argued that it was incumbent, upon them to inform Monster of that change. Instead, Monster carried on its business, secure, so it said, in the knowledge that new IVR licences would be granted. 137 Monster then argued that it would be unconscionable for APRA and AMCOS to resile from that representation. Monster conceded that its argument for estoppel was weaker than its argument that it had new IVR licences based on the 7 February 2006 purported acceptance. Accordingly, Monster conceded that if it failed to succeed on its case in contract, its case for estoppel could not succeed. The concession was in my opinion correctly made. I am of opinion that this argument has no substance for the reasons that I have given above. 138 There was no objective basis on which Monster could have believed that new IVR licences would be granted. It chose for reasons it left unexplained not to return for over 3 months the executed IVR licences and agreement sent to its solicitors on 28 October 2005. APRA and AMCOS did nothing to encourage or condone this inactivity. Rather, Monster's inaction was quite consistent with its commercial behaviour, as demonstrated during Mr Chong's cross-examination, of deliberately exploiting other persons' copyright material without accounting for royalties or having a legal right to do so for as long as the owners did not take action against Monster for so acting. 139 I am not satisfied that Mr Chong had any belief, after the SMS licences were terminated on 12 December 2005, that APRA and AMCOS would grant Monster new IVR licences effective from 18 August 2005. Mr Chong was, to my observation, far too astute to have any such belief. He chose not to return, for over 3 months, the new proposed IVR licences executed by Monster which would have given certainty. I do not believe that he, as the controlling mind of Monster, thought for a moment that APRA and AMCOS were, in effect, representing that the termination of the old IVR licences and the grant of new ones was a formality and was being held open indefinitely. DID APRA AND AMCOS ENGAGE IN UNCONSCIONABLE CONDUCT? Under s 51AC(1) a corporation, such as APRA and AMCOS, is prohibited from engaging in conduct in trade or commerce, in connection with the supply or possible supply of services to a person or corporation, such as Monster, that is, in all the circumstances, unconscionable. Monster argued that APRA and AMCOS' refusal to grant the licences to it would contravene s 51AC(1). It referred to the non-exclusive specified considerations in s 51AC(3). 141 In Australian Securities and Investments Commission v National Exchange Pty Ltd [2005] FCAFC 226 ; (2005) 148 FCR 132 at 142-143 [43] - [44] Tamberlin, Finn and Conti JJ said that the primary emphasis of an analogue of s 51AC was on the conduct of the person in the position of the supplier of the services. They said that the law was not, of course, intended to protect the reckless or the unreasonable and approved a statement by Spigelman CJ in Attorney-General of New South Wales v World Best Holdings Ltd [2005] NSWCA 261 ; (2005) 63 NSWLR 557 at 583 [121] that '[u]nconscionability is a concept which requires a high level of moral obloquy'. 142 No extrinsic material was put before me by the parties as to the statutory meaning of 'unconscionable' in s 51AC. However, Tamberlin, Finn and Conti JJ referred to the second reading speech introducing s 51AC into the Trade Practices Act 1974 (Cth). They identified that its purpose was to better protect the legal rights of small business and to ensure that small business could confidently deal with large firms. They said that the concern of the Parliament was that there should be improved enforcement rights and access to remedies for small business (148 FCR at 143 [48]-[49]). Earlier their Honours had said that the question posed by a claim under s 51AC was whether the conduct complained of was 'unconscionable' according to the ordinary and natural meaning of that term, having regard to the list of statutory considerations. 143 Monster submitted that for conduct to be regarded as unconscionable, serious misconduct or something clearly unfair or unreasonable had to be demonstrated. It said that the factors which were of particular relevance in this case arose under s 51AC(3)(a) , (j) and (k). Monster pointed to the relative strengths of the bargaining positions of AMCOS and APRA as effective monopolists of copyright material in respect of or the power to grant licences for the performance in public throughout Australia. It argued that it was not practically possible for Monster to carry on business in Australia involving the provision of ringtones to telephone users without a licence from APRA and AMCOS to communicate to the public the works in their repertories. Monster alleged that contrary to s 51AC(3)(j) , APRA and AMCOS are not willing to negotiate terms and conditions of a contract for the supply of services with it and that they did not act in good faith (s 51AC (3)(k)) (RCWS 89 ). 144 In Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Limited [2003] HCA 18 ; (2003) 214 CLR 51 the High Court considered the incorporation into s 51AA of the Trade Practices Act 1974 (Cth) the concept of unconscionability in the unwritten law. While s 51AC is a separate and freestanding statutory provision, the word 'unconscionable' is undefined in both s 51AA and s 51AC. The latter section identifies a range of factors to which the Court may have regard in considering whether in all the circumstances the relevant conduct is unconscionable. The factors identified in s 51AC(3) are, of course, not exhaustive, but they have similarities to the features of unconscionability or unconscientious behaviour identified in decisions of Blomley v Ryan [1954] HCA 79 ; (1956) 99 CLR 362 and Commercial Bank of Australia Ltd v Amadio [1983] HCA 14 ; (1983) 151 CLR 447. In ACCC v CG Berbatis Holdings Pty Limited [2003] HCA 18 ; (2003) 214 CLR 51 at 64 [11] Gleeson CJ observed that a person was not in a position of relevant disadvantage simply because of inequality of bargaining powers. He said that many, perhaps even most, contracts are made between parties of unequal bargaining power, and good conscience does not require parties to contractual negotiations to forfeit their advantages, or neglect their own interests. And the Chief Justice continued that unconscientious exploitation or another's inability, or diminished ability, to conserve his or her own interests is not to be confused with taking advantage of a superior bargaining position for the purposes of s 51AA (214 CLR at 64 [14]). 145 However, a difference in bargaining positions is a factor which is one of the relevant circumstances that can be taken into account under s 51AC(3)(a). In ACCC v CG Berbatis Holdings Pty Limited [2003] HCA 18 ; (2003) 214 CLR 51 at 65 [15] - [16] , Gleeson CJ pointed out that the critical disadvantage from which the lessees in that case suffered was that they had no legal entitlement to a renewal or extension of the lease; that depended upon the lessors' willingness to grant such rights. In that context there was a compulsion to deal with the lessors which created a distinct disadvantage on the lessees, but not such as to attract the unwritten law of unconscionability to their position. 146 Monster gave no explanation for its failure to accept the offer of new IVR licences in the period following 28 October 2005. Nor did it identify any conduct of APRA and AMCOS as being unconscionable while Monster did not reply to the 28 October 2005 letter. Monster saw its own interests were served by it not pursuing that matter. That only changed on 31 January 2006 when APRA and AMCOS made a threat to commence proceedings if Monster did not pay what they said was due by 8 February, the day after the letter of 7 February 2006 was sent. 147 I do not see any element of unconscientiousness or moral obloquy on the part of APRA and AMCOS in this situation. Monster was advised by solicitors. Mr Chong was well able to make commercial decisions in what he saw as being Monster's and his own best interests. For Monster's and his own reasons, about which he gave no evidence, he chose not to take up the offer of new IVR licences at a time when it was obvious APRA and AMCOS were prepared to grant them in late October 2005. And, because Monster had no licences, and was not continuing to trade without them, APRA and AMCOS were entitled to act as they did in seeking to enforce their rights to prevent infringement of copyrights in which they were interested. 148 I am of opinion that after 12 December 2005, not only did Monster have no IVR or SMS licences with APRA or AMCOS, it did not believe it had them either. QUESTION 6: IS MONSTER ENTITLED TO AN ORDER THAT APRA AND AMCOS GRANT IT AN IVR LICENCES OR ITS EQUIVALENT? Monster has committed serious breaches of the IVR and SMS licences in the past. I do not think that it is appropriate to force APRA and AMCOS into a contractual relationship in the circumstances. I am not satisfied that they would not negotiate the granting of new licences to Monster in good faith. If Monster cannot obtain in such negotiations new licences from APRA, the Copyright Tribunal has power to settle their terms. It is liable to APRA and AMCOS for damages for infringement. APRA and AMCOS exercised their election to claim damages rather than an account of profits. It is agreed that the appropriate sum by which compensatory damages should be fixed is what would have been payable under the licences had Monster been licensed. That is a reasonable approach and I will adopt it. 151 Mr Mallett identified four licensees of ringtones from APRA and AMCOS which he said were comparable to the business operated by Monster. The trading names of the licensees were Jamster, Bugal, Blue Sky Frog and Powercom. He concluded that the proportions of ringtone downloads of all downloads in each of those competitors' businesses over the periods he examined were between 40.94% and 66.17%. This was based on the amount of licence fees paid to APRA and AMCOS by each of those licensees during the relevant licence periods. Mr Mallett estimated, based on his comparison with the four competitors, about 41.31% of Monster's revenue over its period of trading was attributable to ringtone services. This led to a claim that total licence fees due to 30 June 2006 were $1 million of which only about $315,000 had been paid. 152 Mr Mallett agreed that there was no industry norm for the percentage of ringtones as part of the overall business of providers in the download industry. So much is clear from his confidential material analysing the returns and licence fees paid by the four selected comparable licensees. Each of those four was shown to be operating under different business models and using different marketing strategies to Monster. None remained in business throughout the whole of the period under examination. And, since July 2003, there had been two significant changes in the market. First, in late 2004, SMS downloads began to be offered by Monster. Secondly, in about October 2005 MP3 downloads began to be offered by Monster. The introduction of each of those different methods of delivery affected Monster's sales, revenue overall and its IVR business. Once SMS downloads were commercially available, customers used them more often and in preference to IVR downloads. No doubt this is due to the fact that the SMS calls are for a fixed price, whereas the price of IVR calls depends upon the length of time spent on the telephone ordering the relevant download or downloads. 153 Mr Chong identified Jamster's marketing model as having a subscription customer base, which explained why its advertising expenditure dropped in 2006 once that subscription base had been established. Jamster had a 'ringtone club' which allowed subscribers to download ringtones, logos and music news by paying a small sum per month to Jamster. For that reason he did not regard Jamster's business as being comparable to Monster's. He also showed that Bugle's, Blue Sky Frog and Powercom's advertising expenditures had become relatively minimal by 2006 which meant that each of them was not relevantly comparable at the present time. 154 Monster marketed its products exclusively through print media, particularly weekly and monthly magazine publications. Mr Chong said that Monster's most significant expense was advertising. Mr Chong said that each advertisement created a short term demand for the products advertised. He said that Monster had been the fourth largest advertiser in dollar terms in magazines for the providers of mobile downloadable products in the calendar year 2003. In the following year, he said that Monster was the largest advertiser of such products in magazines, but had fallen to second in 2005, behind Jamster. In the six months to June 2006 Monster had again become the largest advertiser in this area. 155 Mr Chong asserted that the introduction of MP3 ringtones created a demand that did not have any substantive impact on the sales of non MP3 ringtones. In other words, he asserted that monophonic and polyphonic ringtone downloads remained a constant 18% of Monster's revenue even after the introduction of the MP3 products which accounted for 14% of Monster's download revenue after October 2005. However, Mr Mallett's analysis and summary of Monster's monthly revenues shows no identifiable changes in its gross revenues for all downloads (including ringtones) until about May 2006 when Monster ceased offering MP3s. 156 Mr Chong explained in his evidence that draft financial statements for the year ended 30 June 2006 reflected a change in the organization of Monster's business. He wanted to segregate the IVR and SMS functions in the business and had split the revenues earned by them. The draft financial statements recorded about $1 million as revenue for Monster's receipts from its IVR business and about $2.75 million of revenue as 'management fees' in respect of the SMS business. The management fee was received from Nomad Systems Pty Limited, a company which Mr Chong wholly owned and controlled. Nomad derived income from SMS sales in the year ended 30 June 2006 and Monster extracted the management fee from Nomad. Mr Chong said that Nomad had an IP platform for potential partners in an SMS business, but Monster did the marketing and advertising for that business. He noted that Nomad had no staff (see Ex K). Mr Chong acknowledged even though these accounts recorded Monster receiving IVR services revenue from Telstra, in fact the revenues were generated under a contract between Telstra and Chucky Communications Pty Limited entered into on 1 May 2005 in substitution for Monster's previous contractual relationship for IVR services with Telstra (see Ex J 'Chunky' is a typographical error for 'Chucky', see transcript). Even though Telstra had contracted with Chucky, it continued to pay the IVR revenues directly into Monster's bank account. Mr Chong said that Monster was the trading business. Mr Chong realised that since September 2005 he had been aware of the desire of APRA and AMCOS to understand the role which Chucky had played in the activities of Mr Chong's businesses and how it could receive revenue from Testra for the sale of IVR services without an IVR licence. 157 The experts' need to indulge in competing hypotheses was caused by Monster's record keeping. They agreed that the triple download spike during the period October 2003 to April 2005 was unlikely to represent actual sales. They said that there was a likelihood that it was caused by a system bug. It was effectively removed from Monster's system after 23 April 2005. They identified that there was no evidence of data tampering with the IVR 'quicks log files' kept by Monster, but they were not able to examine all its relevant MySQL data files to verify the data (Ex A, pars 1-7). The experts observed that in Monster's records the proportion of download content represented by ringtones during the period between October 2003 and April 2005 was in the order of 18% (Ex 4 A8). 158 In addition, the experts observed that on 9 May 2005 at about midnight there was a significant decrease in the recorded download of all content types for which they agreed 'no logical reason could be put' (Ex 4, par A9). That decrease has continued ever since (T 192.11). What is more, the decrease was differential in its application to different types of downloads. The experts agreed that there 80% less pictures, 70% less coloured pictures and about 23% less polyphonic ringtone downloads. Thus, the number of database records for pictures declined from 3,500 in April 2005 to 698 records in May 2005. While there had been some teething troubles in the introduction throughout the industry of SMS, by May 2005 it had become established. The experts could provide no explanation for the way in which the triple download spike occurred, why it was removed just before the audit was to commence, or why the radical change in reporting of downloads and Monster's business occurred at midnight on 9 May 2005. No-one from Monster explained any of these matters. 160 APRA and AMCOS argue that the inconsistencies and deficiencies in Monster's record keeping, and the lack of explanation for the way in which its records were kept in relation to the number of downloads, suggest that not all of the ringtone downloads or their relative proportions in relation to total downloads were being accurately recorded in the period between October 2003 and April 2005. Therefore, they said, the financial information necessary to calculate all royalties due on Monster's copying or communicating their copyright material was not being properly kept. 161 Monster argued that the triple download spike was a 'bug' which applied both to ringtone and non-ringtone products. It sought to demonstrate this by reference to examples, taken from its database which, certainly, showed that this could be so (Ex 1). It said that the number of downloads column was clearly wrong and could be ignored because it was possible to search electronically and allocate types of sales to royalty and non royalty chargeable categories without any need to refer at all to the number of downloads column. Monster denied any suggestion of wrongdoing in the recording of its information. 162 Monster did not call any evidence from its own internal resources (whether employees or outside computer consultants) who set up its computer software or were responsible for the input or analysis of data within Monster for the purposes of explaining why the software was set up in the way it was or how it operated in the way it did. Most significantly, no explanation was given as to what function the number of downloads column was supposed to serve or how it came to work in the very odd way in which it did. 163 There is no actual evidence that any tampering had occurred with the Monster data records. Mr Chong denied that he had altered the system to produce the anomaly of the triple download spike. And he said, to the best of his knowledge and belief, no such alteration had taken place (T 175.19). However, he emphasised, and I find, that he had a great understanding of Monster's system and would know if somebody changed it significantly (T 175.25-.30). 164 Mr Chong was an astute businessman. He would have wanted for his own commercial purposes an explanation of what was going on from those who reported to him in late April and early May 2005 when Monster's records began showing radical changes in customer behaviour. If the number of downloads column was a management tool, the correction of its operation on 23 April 2005 was significant. And, the dramatic fall of 9 May 2005, differential as it was across Monster's product lines, also went to the fundamentals of Monster's business. Mr Chong said that Mr Yap, Monster's technology manager, left Australia in November 2005 with his family and Mr Chong has neither seen nor heard from him since and he does not know to contact him in Singapore. That may be so. But, I am of opinion that the absence of any explanation by Mr Chong as to what he understood, before Mr Yap's departure, had occurred to his data base around the time of the audit is signal. He must have perceived the significance of the problem with the triple download spike when the Deloitte audit report arrived. The sudden and significant decline in the IVR business must also have come to his attention. Mr Chong was conscious that nothing that he could say on this topic could assist his or Monster's case ( Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298). 165 In evidence he also claimed not to agree that there was such a thing as the triple download spike (T 176.15). I reject that evidence. Mr Chong was quite aware of the issues in the case and had read not only Deloitte's May 2005 audit report but also the expert evidence. As he said, he would know if somebody had changed his system significantly. The triple download spike disappeared from Monster's records after 23 April 2005. Likewise, there was a significant fall in Monster's recording of downloads on 9 May 2005. The coincidence of both these occurrences with Deloitte's audit cannot be ignored. I find that Mr Chong was aware of these occurrences and that on the balance of probabilities they were due to some alteration of Monster's computer systems of which he was fully aware. Neither expert could explain either change. They were significant, not to only Monster's own record keeping but also to the calculation of its liability for royalties due under the IVR licences. The only explanation which Mr Chong sought to give in his evidence was that Mr Yap had left the country six months later in November 2005. These issues were clearly flagged by the time Mr Chong came to give oral evidence yet he provided no explanation. 166 The most natural inference is that Mr Chong feared giving any explanation about these significant changes in the recording of data within Monster's systems: Commercial Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418F-G per Handley JA; Temora Shire Council v Stein (2004) 134 LGERA 407 at 427 [52] per Giles JA with whom Hodson JA and Pearlman AJA agreed. I am not prepared to draw any inferences in favour of Monster and Mr Chong who have left entirely unexplained by evidence what happened within Monster's own record keeping in its computer system. I am not prepared to infer that Monster's records of ringtone downloads or their proportions as part of the overall downloads to its customers for the period between October 2003 and April 2005 are accurate or reliable. 167 The number of downloads could not possibly have dropped from 37,000 to 13,000 at midnight on 9 May 2005 without Mr Chong being aware that that had occurred (see T 192.4-.13). As Mr Woodley said, this was a significant decrease in anyone's language and it was not something that a business could undergo in virtually a day (T 192.32). The experts agreed that there was no logical reason that could be given for that change (Ex 4 par A9). About 97% of the triple download spike affected non ringtone content. The dramatic fall in sales in May 2005 differentially affected ringtones and other downloads, ringtones suffering only a 23% fall while others suffered over 70%. This differential related to the quantum of Monster's liability for royalties. 168 I find that not all entries in Monster's data base prior to 9 May 2005 reflected actual sales. Like the experts, I am not able to analyse how these two substantial changes in Monster's data records, which occurred in April and May 2005, affected Monster's actual sales for IVR downloads over the period between October 2003 and April 2005. 169 Between July and September 2003, ringtone downloads accounted for about 40% of Monster's IVR revenue. While Monster may have introduced more graphics for customers to download in October 2003 and following, I am not persuaded by Mr Chong's evidence that that accounted for the radical decline from October 2003 and thereafter from 40% of downloads being polyphonic or monophonic ringtones to only 20%. It is probable that, over time, Monster's IVR business developed and other products came to form a larger proportion of its IVR downloads than the 60% evident in its first quarter of operations. There was also a gradual reduction in the number but not the proportion of IVR service downloads generally, not just of ringtones, once the introduction of the SMS service occurred in late 2004. 170 The number of IVR calls recorded on Monster's Telstra revenue accounts increased between August 2003 and February 2004 and then gradually declined thereafter. The decline became more marked at around February 2005 and quite sharp thereafter. Monster's net call revenue followed the growth and then slow decline of the actual number of IVR calls. That indicated that the total number of downloads on IVR calls is likely to have been greater during the period between October 2003 and February 2005 than subsequently. This is shown by a graph in Mr Woodley's first report comparing from IVR data base records of Monster, the number of Telstra calls and the net call revenue recorded by Telstra. 171 Monster argued that Mr Mallett was wrong to base a claim for IVR royalties during the period between October 2003 and April 2005 on Monster's overall ringtone downloads of 41.31% in January to March 2006. It argued that although those results included MP3s, the introduction of the MP3 downloads added a new and significant line of business which substantially increased the proportion of ringtone downloads overall. Monster pointed to the fact that there was no issue of corruption of data of SMS downloads. These had remained relatively constant for monophonic and polyphonic downloads at about 20% of the total SMS downloads (when MP3 downloads were excluded). It said that this suggested that the similar observation of the experts that ringtone downloads, excluding MP3s, were about 18% to 20% the IVR totals after April 2005 was an accurate reflection of the amount of downloads for those two types of ringtone throughout the relevant period between October 2003 and April 2005. There is some force in that contention. However, the proportion of about 40% for ringtone downloads in both the periods between July 2003 to September 2003 and January 2006 to March 2006, together with the absence of explanation as to what happened to affect the IVR records of Monster, justifies an inference of a higher figure. It is likely that some part of the current market for MP3 ringtones must have been present earlier in the then market for available ringtones, in addition to the 18% to 20% of IVR downloads recorded by Monster as sales throughout the period between October 2003 and April 2005. I am of opinion that it is likely that customers downloading what then were the only two forms of ringtone, monophonic and polyphonic, would have downloaded a larger proportion of ringtones than 18% to 20%. 172 The experts agreed that the proportion of downloaded IVR content, included in Monster's records of all downloaded data represented by ringtones throughout the period October 2003 to April 2005, was in the order of 18%. They said that data analysis of IVR content type by reference to the content identification field in Monster's data base yielded a relevantly consistent ringtone download proportion of 18%-20%, excluding MP3s (Ex 4 A8 and A13). 173 Monster criticised Mr Woodley for asserting that some of its IVR records for the period between October 2003 and April 2005 did not represent actual sales. He said that there were differences between Monster's MySQL records to which he had access and its Telstra revenue statements. He considered that if the MySQL entries were not of actual sales, then there were only two possible explanations for the discrepancies: a 'bug' or deliberate tampering with the data base. He accepted that each of those explanations was a theoretical possibility. Both experts agreed that there was no issue of data tampering in Monster's IVR Quicks logfiles (Ex 4 par A7). They agreed that there was a likelihood that the triple download spike was caused by a 'bug' (Ex 4 par A6) and that it was unlikely to represent actual sales (Ex 4 par A4). This indicated that no tampering had occurred. Mr Woodley observed that any tampering would have had to be done in a sophisticated manner. Nonetheless, neither expert could explain how the triple download spike originated, operated or ceased, other than to observe its presence in the data. And they could not explain why Monster's business records changed so radically on 9 May 2005. 175 Mr Woodley's analysis showed that after May 2005 there was a correlation between the ringtone proportions downloaded using IVR and SMS. This included MP3s after their introduction by Monster in October 2005. There was a slight decrease from the 20% in May 2005 to 15% in about August 2005, increasing to over 40% (including MP3) by January 2006. These changes show that it is not possible to ascribe any constant value to the proportion of downloads of ringtone products during this period. And, the unreliability of Monster's data over the 19 months to April 2005 makes scientific precision for that period impossible. I am not satisfied that it would be a true reflection of Monster's business to ascribe 41% of its revenue as being attributable to ringtone downloads for that period as is suggested by APRA and AMCOS. On the other hand, I am not satisfied that the ringtone content of about 18%-20% for that period contained in Monster's records is reliable. I am of opinion that it is more likely than not that the figure was considerably larger than 18%, particularly towards the earlier part of the period. Because each of the removal of the triple download spike bug and the 9 May 2005 fall differentially affected the proportion of ringtone downloads recorded in Monster's system, I am satisfied that the figure of 18% is an understatement. 176 I formed the impression that both the experts were impressive, helpful and objective witnesses. Mr Woodley had, however, a greater familiarity with a deal of the evidence than Mr White because the latter had done no analysis on some areas in issue where Mr Woodley had. That is not a criticism of Mr White. Rather it reflects that Mr White's instructions and the material to which he was given access were more circumscribed. 177 In The Commonwealth v Amann Aviation Pty Limited [1991] HCA 54 ; (1991) 174 CLR 64 at 83, Mason CJ and Dawson J said that mere difficulty in estimating damages does not relieve a court from the responsibility of estimating them as best it can. Where precise evidence is not available the Court must do the best it can ( Biggin & Co Ltd v Permanite Ltd [1951] 1 KB 422 at 438 per Devlin J)' See too at 174 CLR at 119 per Deane J, 138 per Toohey J. Thus it is apt to do the best I can in assessing damages on the material available to me: Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10 ; (2003) 77 ALJR 768 at 774 [38] per Hayne J with whom Gleeson CJ, McHugh and Kirby JJ agreed. The IVR method of delivery of ringtones was then the only one employed by Monster. SMS only commenced to be used 1 year later. Monster's business was expanding in October 2003 and its revenues were increasing. It is highly unlikely that within the month of October 2003 ringtone downloads fell from 40% to around 18% of all of Monster's downloads. While the expansion of the range of non ringtone downloads offered by Monster after September 2003 many explain a change in the proportion of ringtone downloads, such a change is more likely to have been gradual. By May 2005, when Monster was the subject of the audit by Deloitte, both IVR and SMS ringtone downloads accounted for about 18%-20% of all of Monster's download revenue. Later, when MP3 ringtone downloads were offered, overall ringtone revenues were closer to 40%. Part of the explanation for the percentage of ringtone downloads in any pereiod must be what was on offer. But no evidence was led, apart from the effect of introducing MP3 ringtones, as to whether and when new ringloads were actually offered by Monster in its advertisements and what impact that had on demand. 180 Mr Chong did an analysis which showed that in the period between December 2004 and March 2005, 26% of the SMS downloads were ringtones. Some caution must be given to these figures because of the teething problems experienced generally by the download industry with the introduction of the SMS platform. In the same period, he said that ringtones represented, on Monster's data, only 12% of IVR downloads. The latter figure is implausible. It shows that Monster's IVR data at that time was unreliable given that its subsequent trading has shown a rough correspondence between IVR and SMS ringtone downloads as a proportion of Monster's overall revenues. There is no reason on the evidence why customers would distinguish between ringtone and non ringtone downloads in this period when making IVR and SMS orders. 181 In my opinion, the proportion of IVR downloads which were ringtones in the December 2004 to March 2005 period is likely to have been closer to Mr Chong's 26% SMS figure, making due allowances for the possible unreliability of SMS data at that time. 182 Precise calculation of the proportion ringtones in Monster's IVR downloads during the period between October 2003 and April 2005 is not possible. I find that there was a gradual decline from about 40% to about 20% over that period. By March 2005 the proportion was about 25%, roughly in line with Mr Chong's analysis of Monster's SMS business results at that time. 183 I find that APRA's and AMCOS's entitlement to IVR royalties for the period between October 2003 and April 2005 should be calculated on the basis that 30% of Monster's net call revenue was derived from the use of copyright works the subject of the IVR licences. ISSUE 8: ARE APRA AND AMCOS ENTITLED TO ADDITIONAL DAMAGES UNDER s 115 OF THE COPYRIGHT ACT 1968 ? It not only failed to pay any royalties under the SMS licences prior to their termination in December 2005 but it also did not provide even the simplest information in the form of its telecommunications service provider's revenue statements. Monster's argument that these failures were based on its bona fide misconstruction of the licences in relation to whether or not a form was prescribed by APRA or AMCOS for the purposes of the licences has been rejected by me (cp DTR Nominess Pty Limited v Mona Homes Pty Limited [1978] HCA 12 ; (1978) 138 CLR 423 at 432). Indeed, I am not satisfied that Monster has provided the Court with full information as to the true position during the period between October 2003 and April 2005 for the reasons that I have given earlier. 185 The claim for additional damages under s 115(4) requires an applicant to prove, that an infringement of copyright has been established. Once the IVR and SMS licences respectively were terminated in August and December 2005 Monster infringed the copyrights of APRA and AMCOS by continuing its business of supplying ringtone downloads. That infringement continues to the present time. Had the negotiations been successfully concluded this would have resulted in there being no infringement. There was no explanation by Monster as to why it failed until 7 February 2006 to return executed IVR licences and the settlement agreement forwarded with Banki Haddock Fiora's letter of 28 October 2005. The arguments may have occurred between the parties as to the quantum of APRA's and AMCOS' claim for further royalties from the period the subject of Deloitte's audit could not have affected entry into the new arrangements proposed in the 28 October 2005 letter which envisaged the right of each of the parties to contest the amount of royalties due or claimed. Monster's failure to return the executed agreements was, in my opinion, deliberate. It knew that it had no licence to use APRA's and AMCOS' copyright material while ever licences were not in place. 188 Mr Chong gave evidence-in-chief that, on the basis of the conduct and statements by APRA and AMCOS preceding the letter of 24 October 2005, he assumed they would grant Monster binding licences effective from 18 August 2005 in respect of IVR downloads of ringtones. Alternatively, he said, he assumed that in respect of IVR ringtones, Monster would be able to communicate to the public, APRA's and AMCOS' works for which they were entitled to grant licences. He said that on the basis of that assumption, Monster continued to operate its ringtone business. He also referred to APRA and AMCOS' willingness to accept the licence fees paid on 16 September 2005 and 14 October 2005 as part of that assumption. Given that those sums were due under the invoices rendered on 30 May 2005 it is unlikely that APRA and AMCOS would have refused to have received that money paid very substantially later after the invoices were rendered. That is, Mr Chong knew that there were no IVR licences in place but assumed that Monster would be granted them apparently, at any future time it chose, regardless of what it did in the interim. I do not believe this evidence. No businessman of his astuteness would have thought APRA and AMCOS would allow the licence position to remain unresolved indefinitely while Monster failed to provide information or prompt payment. 189 On the other hand, on and after 31 January 2006, APRA and AMCOS indicated to Monster that they were prepared to accept a sum substantially greater than I have found was due as the price for the grant of new IVR and SMS licences. In that situation, Monster would either have had to cease any ringtone downloads entirely as part of its business or accede to APRA's and AMCOS' demands. 190 By its infringing conduct Monster has benefited from sales of the copyright works. One of the purposes of an award of additional damages under s 115(4) is to penalise a defendant or respondent for its conduct of infringement. 191 I have considerable reservations about Mr Chong's credibility. Initially, he gave evidence that he believed that the downloading of the MP3 files that he had caused to be created was lawful and was absolutely sure about that. But, when confronted by correspondence Monster had received on that topic from Music Industry Privacy Investigation Pty Ltd, he then agreed that he was absolutely certain it was unlawfull (PCWS2 pars 27-28). It would obviously have been disadvantageous to Mr Chong to have said that he engaged in a business which he believed to be unlawful. Counsel for Mr Chong and Monster asked me to interpret his evidence as being directed to two different points in time, the first, being addressed to what he believed when he commenced the MP3 downloading and the second, to when he discovered what was happening was not legal. I do not accept that explanation. His evidence that what was done was lawful was given clearly and was unequivocal. Mr Chong had every opportunity to qualify it at the time. I formed the impression that he saw it to his advantage to portray himself as not having acted unlawfully. 192 Mr Chong said that he had been in Singapore and Taiwan establishing similar businesses for 13 weeks between March 2005 and November 2005. In the previous year he had given evidence to the Migration Review Tribunal. He claimed that his visa to remain in Australia ought be reinstated because his presence was material to the continued operation of Monster's business and its essential success. He agreed that nothing had changed in these respects between the time he gave his evidence to the tribunal and the period in 2005 when he was away overseas. But he claimed his activities overseas in 2005 had distracted him from Monster's business and he was unable to direct sufficient attention to consider how he might prepare proper returns to APRA and AMCOS. I do not accept that he was distracted as he claimed. 193 On 20 May 2005 the solicitors for a photographer, Anne Geddes, wrote to Monster and Mr Chong seeking undertakings that the use of one of her photographs in Monster's advertising for downloads would not be continued. I infer that Mr Chong ignored that letter because on 20 June 2005 Ms Geddes commenced proceedings for infringement in the Victorian Registry of the Court (Ex H). Monster's Victorian lawyers, Blake Dawson Waldron, wrote to Ms Geddes' lawyers on 17 July 2005 asserting that after receipt of the letter of 20 May 2005 Monster promptly removed the copy of the photograph from its systems some time in late May or early June 2005. Monster's explanation was that the photograph had been purchased in a CD-ROM in late 2003 from Integrated Marketing Communications Pty Ltd, a Singaporean company, and that Monster had understood that it was free to use images from that source in its services. It said that the Singaporean company now no longer operated (Ex H). The proceedings were settled in late August 2005. 194 Yet, in cross-examinaiton Mr Chong agreed that Monster was still advertising other images received from the same source. He claimed that he really believed that Monster had a legal right to sell those images. I want to give you as much opportunity as you need to respond to that? ... I can't give you a straight answer until deciding what is and what is not that we had a right to, if that is what you are saying. I am not understanding. ... Yes. ... Right. ... We can't be absolutely sure, your Honour. So in terms of confidence we don't know for a fact either way, one way or the other . ...That is right. ...I don't know how to answer that. I am just believing that they do have. ... No. ... I don't know how else to explain this point of what we believe is that they have a right to give us . I think that is what we are trying to get at. We looked at the pictures as I have just explained before. A lot of these pictures are what we use maxims or copy lines, nice lines one or two things, we don't know even if somebody owns the copyright and I could be infringing . But if I had to take off everything, but we try to create but we don't create as much as we do. A lot of them approach us. For instance, Ford. If Ford approaches us then we will talk to the company, Express Publications, and ask them and say you give us this, you say we can use it to advertise. That is how we work. ... We believed we do. ... We believe we do. If we are given a letter saying we don't then we will stop it immediately. I just can't explain it any other way. That is the policy we try to adopt so we don't fight with owners of intellectual property . ... No, not for that reason, no. Can I elaborate please? ... If I were to advertise anything and everything of any brand, I am just coming an example for Ferrari or Playboy or something then it is wrong because then we advertise everything. But there comes a time when what you have is what you have and the rest of it you stop doing it. In our world we stopped what we call backyard sales guys who doesn't give us the real rights, if I could use that word. So we have stopped doing that. So if I say I would advertise anything and everything that is ridiculous because I would be infringing every one on earth in terms of copyright. For example in 2005 Monster advertised and sold images of Australian Football League Club logos for downloading on to mobile phones. He said that after talking with representatives of the League he came to appreciate that Monster did not have the rights to offer those for sale. He also said that Monster was able to sell a download in relation to Ford, the car manufacturer, because there was a relationship with a publication that dealt in the motor industry from which that logo was obtained. He claimed to have understood that the magazine had the rights assigned from or licensed from Ford and that they were able to give Monster such a licence. It did not recognize the need to respect other people's commercial and legal rights in their property, including copyright, with which he and it dealt. I infer that his attitude was that he would continue marketing any material notwithstanding a belief that there was a real possibility that Monster had no rights to do so, just as he did with material on the CD-ROM from which Ms Geddes' photograph was taken. He deliberately closed his eyes to the lawfulness of this activity. That is consistent with Mr Chong's and Monster's apparent unwillingness to give any proper information or accounting to APRA and AMCOS for the copyright material which, again, Monster sought to exploit in its business. 198 In Raben Footwear Pty Ltd v Polygram Records Inc (1997) 75 FCR 88 at 93A-B, Burchett J (with whom Lehane J agreed at 104F) applied an earlier statement he had made in Autodesk Inc v Yee (1996) 68 FCR 391 at 394 that in Australia additional damages may be given upon principles corresponding to those governing awards of aggravated and also exemplary damages at common law. He said that the Act had objectives other than compensation (75 FCR at 93E-F). Each of the factors referred to in s 115(4)(b) is sufficient in itself to sustain an award of additional damages. It is not necessary that each of them must be proved, rather that the relevant conduct of the defendant or respondent in the circumstances warrants an award. Tamberlin J came to a similar conclusion (75 FCR at 102E-104E). He noted the importance of preserving a broad unfettered discretion in relation to additional damages so far as quantum was concerned (75 FCR at 104D) and, that broad discretion should not be formulated in any arithmetic or mechanical way (75 FCR at 104C). I do not think that this is a case of mere mistake or neglect (75 FCR at 93C; Prior v Lansdowne Press Pty Ltd [1977] VR 65 at 70; (1975) 12 ALR 685 at 90). 199 In FNH Investments Pty Ltd v Sullivan (2003) 59 IPR 121, at 127 [26]-[27], Whitlam, Moore and Kiefel JJ held that the new existence of a contractual relationship between a copyright owner and an alleged infringer did not preclude the award of additional damages under s 115(4). There, a contract existed for the provision of photographs and, provided that certain sums were paid, a licence would be granted to use the photographs. The infringement occurred before the full licence fee was paid. The situation in the present case is different because prior to the termination of the IVR licences on 17 August 2005 and the SMS licences on 12 December 2005 Monster was licensed to use APRA's and AMCOS' works but was in breach of the respective licences because it had not provided proper information or paid sufficient royalties. At the time of each licence's termination, no royalties whatsoever had been paid under it. Thereafter Monster continued to use, and Mr Chong continued to participate in Monster's use of, copyright works knowing of the lack of any licence to do so. I am conscious that there were negotiations ongoing between the parties, which had they been successfully concluded would have resulted in authorisation for the period of the use. Nonetheless, Monster for its own commercial purposes chose not to have that authorisation, particularly in respect of the IVR licences after 28 October 2005. I am of opinion that this behaviour showed a contumelious disregard of the rights of APRA and AMCOS in their copyright material. 200 I think that Mr Chong's attitude, which was also Monster's, towards the non-payment of royalties to APRA and AMCOS was quite flagrant. Mr Chong thought he could get away without paying for what was due just as he did with trying to get away with using other people's rights without having first made any, let alone, proper arrangements for their use. I think there should be an appropriate marking of the Court's disapproval by a significant award (see Raben Footwear Pty Ltd v Polygram Records Inc (1997) 75 FCR 88 at 102-103; cp: Australian Performing Right Association Ltd v Pashalidis (2000) 48 IPR 610 at 619 [32] per Moore J). 201 Monster's and Mr Chong's conduct merits a substantial amount of additional damages being awarded so as to mark disapproval of its infringing conduct and to deter others from engaging in similar behaviour. During the 3 year period to 30 June 2006 Monster's total revenues from all its telecommunications service providers accounts total over $19 million. These include considerable revenues generated by the infringements. But the use of ringtone downloads was a means of attracting Monster's customers to all its advertised products. In my opinion, on the basis of my findings, I should fix the amount of additional damages at $100,000. 202 An award of additional damages should not impose a punishment greater than would be imposed if the conduct were criminal ( XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd [1985] HCA 12 ; (1985) 155 CLR 448 at 463 per Gibbs J). The defendant's financial circumstances are a relevant consideration ( XL 155 CLR at 461 per Gibbs CJ, 472 per Brennan J) as has been the period of the conduct and its circumstances. It is appropriate to grant injunctive relief to prevent Monster's continuing infringements: Universal Music Australia Pty Limited v Cooper [2005] FCA 1878 at [13] . 204 Having regard to my findings, it is necessary for calculations to be made as to the precise sums to be awarded by way of damages. I will direct the applicants to bring in short minutes of order to give effect to my reasons. This will allow the respondents to check the calculation of any royalties. It follows that the respondents should pay the applicants' costs. I certify that the preceding two hundred and four (204) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | copyright infringement licence where company engaged in the marketing and supply of ringtones and related products to users of mobile telephones where licences required for the communication to public via short message service (sms) or interactive voice response services (ivr services) of the parts of the musical works embodied in ringtones and owned by the applicants whether licences on foot unlicensed communication of works found to infringe copyright copyright damages circumstances justifying award of additional damages flagrancy deterrence quantum of additional damages where reckless disregard for intellectual property rights of others copyright act 1968 (cth) s 115(4) general contractual principles construction and interpretation of contracts where licences required for the communication to public via short message service (sms) or interactive voice response services (ivr services) of the parts of the musical works embodied in ringtones and owned by the applicants whether licences on foot where meaning of licences terms in dispute meaning of "retail price" use of surrounding circumstances to assist in interpretation of written contract in case of ambiguity breach of contract proof of damages where evidence insufficient for trial judge to make precise calculation of damages where expert evidence inconclusive intellectual property intellectual property contract damages |
The Tribunal had affirmed a decision of a delegate of the then Minister for Immigration and Multicultural Affairs to refuse to grant a protection visa to the appellant under the Migration Act 1958 (Cth) ('the Act'). On 23 May 2006 the appellant lodged an application for a Protection (Class XA) Visa with the then Department of Immigration and Multicultural Affairs (now the Department of Immigration and Citizenship). In her protection visa application, the appellant claimed to be a Falun Gong practitioner. The appellant, who claimed that her entire family were involved in Falun Gong activities, stated that in 1999 they were called into the local police station and informed by police that they should no longer practice Falun Gong and that the reason for the sudden banning was that they were only carrying out orders from their superiors. The appellant claimed that when she and others continued with their practice of Falun Gong the next day, they were detained by the police, taken to the police station, charged and required to pay a heavy fine in order to be released. The appellant claimed that she continued to privately practice Falun Gong, that she was later reported by an unidentified person and that she was then sent to a detention centre where she was tortured and abused. A delegate of the first respondent refused to grant the visa and by letter dated 30 June 2006 wrote to the appellant notifying her of the decision and of her review rights. On 18 August 2006 the appellant lodged a written application dated the same day with the Tribunal for a review of that decision. For reasons which I explain below this was outside the time prescribed by the Act. The appellant sent a letter on 28 August to Department of Immigration and Multicultural Affairs ('DIMA') in which she requested that the decision letter from DIMA be re-sent, so that she could lodge her review application to the Tribunal within time. 4 On 1 September 2006 the Tribunal again wrote to the appellant advising her that it appeared that her application had been filed too late to be considered and stating why this was so. It invited her to write to the Tribunal by 26 September 2006 if she disagreed with its view and to provide further information if she wished. By written notice dated 4 September 2006 the applicant provided details of her new address. 5 The Tribunal then wrote to the appellant at her new address on 28 September 2006, in the same terms as its earlier letter dated 1 September 2006 except that it now invited the appellant to write to the Tribunal by 24 October 2006 if she disagreed with the Tribunal's view and requested that the appellant provided further information if she wished. The appellant replied to the Tribunal by letter dated 24 October 2006. I just gave them a call and they told me the application had been refused. I lodged my review straight away. I believe that I should be given another opportunity to review my application. Thank you! The Tribunal set out the relevant law in its written Statement of Decisions and Reasons to the following effect and with which I respectfully agree. 7 The Tribunal's jurisdiction arises if a valid application is made under s 412 of the Act for review of an RRT-reviewable decision. A decision to refuse to grant a protection visa is an RRT reviewable decision: s 411(1)(c). Section 412(1)(b) requires that such an application for review must be given to the Tribunal within the prescribed time period. 8 In respect of an applicant who has applied for review of an RRT-reviewable decision covered by s 411(1)(c) and is not in immigration detention when given notice of the delegate's decision, the application for review must be lodged at a registry of the Tribunal within a period not later than 28 days from the day on which such notice is received: s 412(1)(b) and regulation 4.31(2)(b) and (3) of the Migration Regulations 1994 ('the Regulations'). There is no provision for granting any extension of time for lodging such an application. An application sent to the Tribunal by post or by fax is not to be taken to have been lodged until it is received at a registry of the Tribunal: r 4.31(4). 9 The provisions relevant to this matter which deal with notification of a decision to refuse to grant a visa are contained in ss 66, 494B, 494C and 494D of the Act and r 2.16 of the Regulations. 10 Section 66(1) provides that when the Minister grants or refuses to grant a visa, he or she is to notify the applicant of the decision in the prescribed way. Regulation 2.16 provides that for the purposes of s 66(1), the Minister must notify an applicant of a decision to refuse to grant a visa by one of the methods specified in s 494B. Section 494B specifies a number of alternative methods for giving a document required or permitted to be given by the Minister to a person. 11 One of the methods specified in s 494B consists of the Minister dating the document and then dispatching it within 3 working days of the date of the document by prepaid post or other prepaid means to the last address for service or the last residential or business address provided to the Minister by the recipient for the purposes of receiving documents: s 494B(4). If a document is given to a person by this method and the document was dispatched from a place in Australia to an address in Australia, the person is taken to have received the document 7 working days (in the place of that address) after the date of the document: s 494C(4)(a). This will be so even if the document was never in fact received. Therefore, if the notice of a decision to refuse a visa was sent in accordance with s 494B(4), from a place in Australia to an address in Australia, the prescribed time period within which a review application must be lodged with the Tribunal commences 7 working days after the date of the notice. 12 Section 66(2) provides that notification of a decision to refuse a visa must contain certain information about why the visa was refused and, if there is a right of review, how to apply for review of that decision. 13 The Tribunal found, correctly, in my opinion, that the contents of the delegate's decision notification complied with the requirements of s 66(2) of the Act, and that the Department's file records indicated that the applicant did not give the Minister written notice of the name and address of her authorised recipient under s 494D of the Act. The Tribunal found that the decision notification letter, which was dated 30 June 2006, was sent by prepaid post on 30 June 2006 from a place in Australia to the applicant's address in Australia, which was provided by the appellant to the Minister for the purposes of her receiving documents. 14 The Tribunal further found that the decision notification letter, which was dispatched within 3 working days of the date of the letter to the applicant's correct address, was in accordance with s 494B(4) of the Act. The Tribunal noted that the notice was returned to the Department unclaimed and that the applicant was taken to have received the notice on 11 July 2006, being 7 working days after the date of the notice, despite the notice being returned unclaimed. 15 The Tribunal found that the appellant sought review of the decision of the delegate under s 411(1)(c) and that the 28 day prescribed period provided under s 412(1)(b) and r 4.31(2)(b) applied. Therefore, given the Tribunal's findings regarding when the applicant was taken to have been notified of the decision of the delegate and the applicable prescribed period, the Tribunal found that the last day on which the application for review could be lodged was 8 August 2006. The application for review was not received by the Tribunal until 18 August 2006, after the prescribed period had expired. 16 The appellant stated in her submission of 24 October 2006 that she "had not received the decision letter from DIMA at all" and that she "just gave them a call" and they told her that her "application had been refused. " However, as the decision notification letter was sent to the address provided to the Minister by the recipient, for the purpose of receiving documents under s 494B(4) of the Act, the appellant was taken to have received the document 7 working days after the date of the document in accordance with s 494C(4)(a), even if the document was never actually received by the appellant. 17 As the application for review was received by the Tribunal outside the mandatory time period, the Tribunal found that it was not a valid application and that it had no jurisdiction to review the decision of the delegate. DIAC failed to notify me the decision for my application for a protection visa. From the record of DIAC, the decision letter was return to DIAC unreceived. DIAC failed to notify me the decision, I lost the opportunity to have my application reviewed at RRT. DIA should resend the decision letter to me and my application should be considered at RRT. In her amended application, the appellant asserted that the Minister's Department failed to notify her of the delegate's decision against which she was seeking review by the Tribunal, and that she should receive a fresh notification letter. 20 The Federal Magistrate, who received as evidence the court book filed on 22 January 2007, observed that a letter dated 30 June 2006 was sent by the Minister's Department to the appellant which notified her of the delegate's decision. The letter was sent by registered post and was addressed to the applicant at her address for service disclosed in her protection visa application. The Federal Magistrate further observed that on the face of the letter was a handwritten notation stating "sent 30/6/06", which he concluded was evidence that the letter was despatched on the same date that it bore. The Federal Magistrate stated that the Department's letter was returned unclaimed, as indicated by an Australia Post sticker, and that the return notification was dated 4 July. 21 The Federal Magistrate found that the Department's letter, sent 30 June 2006, must have been despatched within three working days of the date that it bore. His Honour noted that the appellant conceded this in her letter appearing in the court book, and found that the Department met the requirements for effective notification of the delegate's decision. In these circumstances, it was held in effect, that the period of 28 days within which the application for review required to be given to the Tribunal [s 412(1)(b) and regulation 4.31(2)(b)] commenced on the 11 July being the date on which the appellant was deemed to have received the Department's notification of decision dated 30 June 2006. 22 The Federal Magistrate held that as the appellant had not given the Tribunal her review application within the prescribed period, her application was incompetent and that the Tribunal was correct in finding that it did not have jurisdiction to deal with the appellant's review application. 23 After outlining the relevant statutory requirements, the Federal Magistrate determined that the Tribunal was correct in finding that that it had no jurisdiction and consequently that there was no jurisdictional error in the decision of the Tribunal. 24 The Federal Magistrate correctly held that the decision of the Tribunal was a privative clause decision and that the application to the Federal Magistrates Court must be dismissed. The Notice of Appeal contains two grounds of appeal which in substance repeat the grounds before the Federal Magistrate. Department of Immigration and Citizenship failed to notify me the decision of my application for a protection visa. I was not notified the decision in writing. The Tribunal refused to accept my application because of the jurisdictional errors made by DIAC. The issue on appeal is whether there was any relevant error on the part of the Federal Magistrate in dismissing the appellant's application. 28 As the Federal Magistrate correctly observed the making of an application within the prescribed time is an essential preliminary to the exercise of the Tribunal's jurisdiction: Fernando v Minister for Immigration [2000] FCA 324 and further that the Tribunal did not have the power to override the time limitations prescribed by s 412(1)(b) of the Act: VEAN of 2002 v Minister for Immigration [2003] FCAFC 311. 29 The appellant asserts she did not in fact receive the letter of 30 June 2006 containing notification of the delegate's decision. Despite the fact that she, at that time, lived at the address to which the letter was sent the letter was returned marked "return to sender" on 4 July 2007 (see CB 44). However, this does not affect the operation of s 494C of the Act: Murphy v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 657 ; (2004) 135 FCR 550 per Spender J at [69], which was followed by the Full Federal Court in Xie v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 172 at [14] . 30 Further, a case such as this has not been affected by the recent Full Federal Court decision in Minister for Immigration and Citizenship v SZKKC [2007] FCAFC 105 , which considered s 477 of the Act and the time limits for judicial review applications in the Federal Magistrates Court. That decision is to be distinguished from the present case, which turns significantly on the terms of s 412 of the Act which provides for deemed notification whereas actual notification is required under s 477 of the Act. 31 It is, in my opinion, regrettable that there exists no power in the Court to extend the time for bringing such an application. The evidence of the appellant is that at the date (between 30 June and 4 July 2006) when the notification of the Minister's decision was sent and returned marked "Left Address/Unknown" she was in fact still at the address to which the letter was addressed. This fact does not appear to have been disputed by the first respondent. No explanation has been given, as to why the registered post was marked "Left Address/Unknown", despite the appellant remaining at that address. One possible reason is the need for a registered letter to be signed for and perhaps the applicant was not at home when the postal officer attended at her address. 32 This lack of power in the Court has the capacity to work an injustice upon an application for judicial review. Such indeed may well be the case here. For my part it gives serious cause for concern and should be reviewed by the legislature. In comparison, as I have noted, a Federal Magistrate has discretionary power under s 477 of the Act to grant an extension of time in certain circumstances where an application is made for a remedy to be granted in exercise of the Court's original jurisdiction under s 476 of the Act. I am satisfied that no relevant error has been established. In my opinion the appeal should be dismissed. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | appeal from decision of federal magistrate application for protection visa under migration act 1958 (cth) whether any legal error on the part of the federal magistrate in dismissing the appellant's application no power in the court on an application for judicial review before a federal magistrate for an extension of time for bringing such an application appeal dismissed. migration |
At the beginning of the 2003 academic year the applicant commenced a Bachelor of Commerce course of study at Curtin University ('Curtin'). The applicant was the holder of a student visa ('the visa') which was subject to Condition 8202. On 29 March 2004 a delegate of the first respondent cancelled the applicant's visa on the grounds that the applicant had breached Condition 8202 of the visa because of an unsatisfactory academic performance. The applicant now seeks judicial review of the decision of the Migration Review Tribunal ('the Tribunal'), which upheld the delegate's decision to cancel the applicant's visa. 2 The main issue which arises in this application is whether the Tribunal failed to deal with a significant element of the case made before it by the applicant, and thereby fell into jurisdictional error. 3 I join the Migration Review Tribunal as the second respondent. In the second semester the applicant passed one unit (being a unit he had failed in the first semester), failed another unit, Project Management 250, and did not complete the third unit, 'Development (Principles of Programming) 200'. 9 By a letter dated 11 December 2003, Curtin informed the applicant that his academic status was terminated and he was unable to continue in the course. The letter said: 'Terminated status applies where student progress had not been satisfactory'. The letter stated that the applicant had a right to appeal against the terminated status. 10 The applicant appealed Curtin's decision. In a letter to the appeal department of Curtin dated 12 December 2003, the applicant explained his reasons for not completing the unit, Development (Principles of Programming) 200 and advised the appeal department of his intention to take the same unit as part of the forthcoming Curtin Business School Summer Program. He also explained his reasons for performing poorly in the unit, Project Management 250. 11 By a letter dated 7 January 2004 Curtin advised the applicant that his appeal was unsuccessful and his academic status would remain as 'Terminated'. 44.57%) and there does not appear to be reasonable grounds to explain the poor performance in the units. Notwithstanding its letter of 7 January 2004, Curtin permitted the applicant to enrol in the summer program and to take the unit, Development (Principles of Programming) 200 as part of that program. The applicant completed the course and passed the unit. 13 By a letter dated 19 March 2004 Curtin sent the applicant a notice under s 20 of the ESOS Act ('the s 20 Notice'). The letter advised the applicant that he had breached a condition of his visa relating to satisfactory academic performance in the course in which he was enrolled. On that day, an officer of the department gave the applicant a notice of intention to consider cancellation of the applicant's visa. That notice invited the applicant to provide comments at an interview with a delegate of the first respondent ('the delegate'). 16 On 29 March 2004 the applicant attended an interview with a delegate. Shortly thereafter, on the same day, the delegate cancelled the applicant's visa on the grounds of a breach of Condition 8202 of his visa. Student appealed and appeal was dismissed. Breach of condition 8202 for failing to meet course requirements. The Review Applicant repeats that he did not fail to meet the course requirements. The tenor of the applicant's case in the affidavit was that the s 20 Notice was erroneous. He said that Curtin had permitted him to attend the summer program where he had passed the unit he had not previously completed, but Curtin had failed to take that result into account in the s 20 Notice. He also said that Curtin had offered him a place in the Bachelor of Science course. 21 By letter dated 4 October 2004, the applicant was invited to attend a hearing before the Tribunal to be held on 28 October 2004. 22 The applicant attended the hearing which was held by video conference. The applicant utilised the services of a Cantonese interpreter. The applicant gave evidence and made submissions at the hearing at which the Presiding Member was in Melbourne and the applicant was in Perth. 23 On 9 November 2004, the Tribunal handed down its decision. He thought that if this was taken into consideration, his overall performance would be 50 per cent. The Tribunal takes into account the review applicant's results for semesters one and two of 2003. The Tribunal takes into account his exclusion from the course and his unsuccessful appeal to Curtin. On the evidence before the Tribunal, the Tribunal is not satisfied that the review applicant achieved an academic result that is certified by the education provider to be at least satisfactory during his semesters of study at Curtin in 2003. 29 Whilst the Tribunal acknowledged in its reasons for decision, the applicant's contention that the impact of his result in the summer program was to render his academic performance satisfactory, the Tribunal did not thereafter address the merit of the contention. In particular, there is no reference to the applicant's contention in that part of its reasons set out at [25] above, which explains the basis for the Tribunal's decision to uphold the delegate's decision to cancel the visa. 30 The failure by the Tribunal to deal with a claim made by an applicant can amount to a jurisdictional error. However, not every failure by the Tribunal to consider a claim will result in jurisdictional error. This is a matter of substance, not a matter of the form of the Tribunal's published reasons for decision. 32 Counsel for the first respondent submitted that there was no jurisdictional error. Counsel submitted that by relying only upon the academic results in the applicant's academic transcript for semesters one and two and the evidence of the unsuccessful appeal, the Tribunal had asked itself the right question. Counsel submitted that there was no error in not dealing with the applicant's contention as to the impact of the result obtained in the summer program because the applicant's visa had been issued by reference to the Bachelor of Commerce course and the summer program was a different course. Therefore, the result in that course could have no impact on the result in the Bachelor of Commerce course. 33 Counsel for the respondent also argued that it was open to the Tribunal to ignore the applicant's contention because the s 20 Notice and the academic transcript which contained his summer program result were both dated 19 March 2004. This, said counsel, demonstrated that Curtin regarded the result obtained in the summer program as being irrelevant. 34 At the core of the applicant's contention before the Tribunal was that, after initially rejecting the appeal, Curtin had permitted him to enter the summer program and undertake the unit which he had not completed, and that he had passed the unit. This, he said, had transformed his academic results into an academic result which was 'at least satisfactory', with the consequence that the information in the s 20 Notice was out of date and could not be relied upon as being accurate. The applicant's contention before the Tribunal was, therefore, in effect that the documents which had been provided by Curtin were inconsistent. His academic transcript comprised a 'certificate' to the effect that his academic performance was 'at least satisfactory' and that document had to be preferred because the information reflected in the s 20 Notice had been superseded by the result obtained in the summer program. 35 In my view, the Tribunal's failure to deal with the applicant's contention was one which gave rise to jurisdictional error. The nature of the contention advanced by the applicant in this case was central to the claim made by the applicant before the Tribunal. Further, applying the criteria identified in WAEE , the applicant's claim, in effect, that the academic transcript on its proper construction, comprised a 'certificate' that his academic performance was at least satisfactory, would, if accepted have satisfied the 'relevant criterion'. Secondly, there was probative material in support of the claim because, notwithstanding the advice that his appeal had been rejected, Curtin had permitted the applicant to embark upon the summer program to undertake the very unit which he had not completed during the regular semester period. If it was Curtin's intention that the summer program result would make no difference to its earlier decision, the decision of Curtin to permit the applicant to embark upon the summer program, called for an explanation. In the case of Humayun v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 35 it was accepted by the Full Court that an education provider could change its mind for the purpose of certifying whether an academic performance was 'at least satisfactory'. Further, it is clear that the s 20 Notice was not signed by the Curtin official in whose name it was issued. This, together with the applicant being permitted to take the uncompleted unit at the summer program, raised the question whether the notice represented the product of a fresh inquiry by an officer of Curtin with the requisite authority or whether the notice was despatched as part of a routine exercise based on superseded information. Specifically, the notice referred to one course as not having been completed, which, once the summer program result is taken into account, was no longer correct. It is no answer to the applicant's complaint to say that the Tribunal might have found against the applicant had it approached the case correctly. It is not possible to conclude that on the material before it the Tribunal could not have found in favour of the applicant. However, it is also possible that had it addressed its mind to the issue, the Tribunal may have exercised its powers under s 359 of the Act to make inquiries of Curtin as to why Curtin had permitted the applicant to enter the summer program and the consequence for his academic result having completed and passed the outstanding unit. In my view, there was a constructive failure to exercise jurisdiction by the Tribunal and, therefore, the Tribunal fell into jurisdictional error. 38 Counsel for the applicant also sought to characterise the failure of the Tribunal to deal with the applicant's contention as a failure to ask itself the right question, and the failure to take into account a relevant consideration. However, in view of the conclusion I have reached above, it is unnecessary to address those issues. 39 The judgment in this case was delayed pending the outcome of the first respondent's appeal in Minister for Immigration and Multicultural and Indigenous Affairs v Zhou [2006] FCAFC 96 on the basis that if the first respondent's appeal was dismissed there may have been an additional ground for review available to the applicant. On 16 June 2006 the first respondent's appeal was upheld. | student visa failure by tribunal to deal with applicant's contention whether jurisdictional error migration |
He came to Australia on a passport and student visa issued to his brother. He applied for a protection visa under s 36 of the Migration Act 1958 (Cth) claiming that he was a refugee to whom Australia owed protection obligations under the Refugees Convention. The application for a protection visa was refused by a delegate of the Minister. The delegate's decision was affirmed by the Refugee Review Tribunal. The appellant later applied to the Minister under s 417 of the Act, seeking a more favourable decision. The Minister declined to exercise his powers under that section. The appellant then became a member of the group represented by the plaintiffs in Muin v Refugee Review Tribunal [2002] HCA 30 ; (2002) 190 ALR 601. When judgment in that case was handed down in favour of the plaintiffs, directions were given to enable the appellant to challenge the tribunal's decision based on the reasoning of the High Court. This he did in an application to the High Court for the issue of constitutional writs. The application was remitted to the Federal Court and in due course was transferred to the Federal Magistrates Court, where it was dismissed on its merits: M1014 of 2003 v Minister for Immigration and Multicultural and Indigenous Affairs & Anor [2005] FMCA 1652. The appellant now appeals that decision. The appellant says that he fears being persecuted as a dissident if he returns to Sri Lanka. The appellant claimed that he was tortured and imprisoned by Sri Lankan authorities following the discovery, by police, of weapons stored at the house in which he lived. The weapons belonged to the LTTE. The appellant claimed that these weapons were stored, against his wishes, by his brother and a Tamil-Hindu friend. In its reasons, the tribunal found the appellant's claims that he was implicated in LTTE gun-smuggling, that he was threatened by the LTTE or its agents, that he was detained and mistreated by government security forces and that his brothers have been harassed on his account, to be 'contrived'. Amongst other things, the tribunal did not accept that LTTE operatives would entrust a Tamil-speaking Muslim with information about weapons. In support of this finding the tribunal referred to 'the radical political divide between Tamil-speaking Muslims and the LTTE'. The tribunal went on to find that, in any event, the appellant had not given evidence that he had been harassed in Sri Lanka for any Convention reason. The tribunal stated that: 'While [the appellant] speaks Tamil, the evidence cited by the delegate leads to the conclusion that language is the only common cultural activity shared between Muslims and other Tamil-speaking groups... There is no evidence to suggest that the [appellant] faces persecution because he speaks Tamil or because of his religion. On the other hand, the available information indicates that the Tamil-speaking Muslim population is aligned with government forces and policies and the [appellant] has not provided any acceptable evidence on which to base a conclusion he might be perceived to be a dissident, either as a supporter of LTTE or for any other reason'. The tribunal concluded that the appellant did not have a well-founded fear of persecution for Convention reasons. The appellant's complaint related to the procedures that were adopted by the tribunal in dealing with his application. As in Muin , the appellant contended that certain documents containing country information that were referred to in part B of the delegate's reasons for decision, and which are said to be favourable to the appellant's case, were not provided to the tribunal. The appellant alleged that as a result of correspondence he received from the tribunal to effect that '[the tribunal] would ask the Department for, and would look at, all of the material relating to [the appellant's] case', he was mislead into believing that the tribunal had considered the part B documents and, as a result, he had been denied the opportunity to put this information before the tribunal. Specifically, the appellant said that 'had [he known] that the tribunal had not looked at this material (especially the parts that would have helped [his] case) [he] would have tried to make sure that the tribunal was aware of that material. ' The appellant claimed that this failure to accord natural justice constitutes jurisdictional error and constitutional writs should issue. In his reasons, the Federal Magistrate made four findings which were fatal to the appellant's case. First, the Federal Magistrate concluded that 'the credibility findings against the applicant clearly stand alone in relation to [his] application. They are not dependent upon whether or not the tribunal did or did not have in its possession the part B documents'. Second, the Federal Magistrate was satisfied, on the balance of probabilities, that the tribunal did in fact have the part B documents before it. Third, the Federal Magistrate found that the appellant had 'failed to identify with sufficient clarity favourable material within the part B documents which he may have drawn to the tribunal's attention...'. Fourth, the Federal Magistrate found that the appellant had not 'identified with any degree of certainty the manner in which he was mislead into believing that the tribunal had received and considered all of the part B documents'. As a result the Federal Magistrate dismissed the application. Moreover, if it was reasonably open to the Federal Magistrate to find, as he did, that the tribunal had the part B documents, the appellant's other grounds of appeal cannot succeed. These documents are sequentially labelled 'B1' to 'B7'. It is not contested that the tribunal had been provided with, and may have referred to, documents B1 and B2. There are three reasons why the appellant says that it should be inferred that the tribunal did not receive the balance of the part B documents. First, the appellant relies on the fact that the tribunal did not directly refer to any of documents B3 to B7 in its reasons. It is common ground that the tribunal indirectly referred to information contained in documents B3 and B4, by reference to paragraphs of the delegate's reasons which extracted material from those documents. However, the appellant contends that this is no basis for concluding that the tribunal had the documents themselves. Further, the appellant contends that the part B documents are favourable to his case. Had the tribunal considered these documents, the appellant submits, the tribunal may not have relied on certain generalisations made by the delegate relating to the political divide between Tamil-speaking Muslims and the Liberation Tigers of Tamil Elam, the activities shared between Muslims and other Tamil-speaking groups and the alignment between government forces and the Tamil-speaking Muslim population. They are a grouping with a unique economic, socio-political structure, and cultural characteristics. Large sections of them live in the east, with pockets of them well entrenched all over Sri Lanka, but isolated from each other. The cohesive factor binding them is Islam, not Tamil. Not only do they have historical contradictions specific to themselves with the Sinhalese, but they have suffered during anti-Tamil "race riots" as well. Though the slogans and programmes of all movements paid lip service to the rights of Muslims, there has never been a concrete programme to realise their goals, or the articulation of their needs and objectives during the process of struggle. Be that as it may, not all documents that a tribunal reads must be referred to in its reasons. While a failure to refer to a document that is important to a particular claim may lead to the inference being drawn that the tribunal did not have or consider that document, it has not been shown that the documents in this case are sufficiently important to warrant such an inference. As evidence of this practice the appellant sought to rely on the agreed statement of facts in Muin in which it was agreed that the Department did not include copies of the part B documents in the file concerning the plaintiffs that was dispatched to the tribunal. The respondents do not make the same concession in this proceeding. There are at least two reasons why the appellant cannot use the agreed statement of facts in this way. First, and most obviously, the fact that the department may not have provided the tribunal with part B documents in other cases is irrelevant here. Each case must be decided on its own facts. Second, the appellants submission fails to take into account the nature and object of agreed facts which, like pleadings, aim to narrow the issues to be tried in a particular action: see by way of analogy Laws v Australian Broadcasting Tribunal [1990] HCA 31 ; (1990) 170 CLR 70, 85-86. The admissions are not transportable to other proceedings. Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298 permits the drawing of the inference that the documents were not provided. This submission fails to take into account s 435(1) of the Migration Act 1958 (Cth). That section provides that ' a member [of the Refugee Review Tribunal] has, in the performance of his or her duties as a member, the same protection and immunity as a member of the Administrative Appeals Tribunal '. This is the same protection and immunity as a Justice of the High Court: Administrative Appeals Tribunal Act 1975 (Cth), s 60. This immunity, which includes immunity from suit and compulsion to give evidence, will prevent any adverse inference being drawn from a failure by a member of the tribunal to give evidence: Muin v Refugee Review Tribunal; Lie v Refugee Review Tribunal [2002] HCA 30 ; (2002) 190 ALR 601, paras 25, 118, 196-199. The rule extends to a failure to give evidence in relation to any aspect of the decision-making process including whether or not the tribunal had read, obtained, considered or taken into account particular documents: Herijanto v Refugee Review Tribunal [2000] HCA 49 ; (2000) 170 ALR 379. While s 435(1) does not in terms apply to anyone other than members of the tribunal, Gaudron J said in Herijanto v Refugee Review Tribunal (No 2) [2000] HCA 21 ; (2000) 170 ALR 575 at [10] that the protection and privilege conferred by s 435(1) of the Act must extend 'not merely to disclosure by the individual member concerned, but [also to] the revelation, by whatever means, of any aspect of his or her decision-making process'. It follows that the Department's failure to give evidence cannot attract a Jones v Dunkel inference. It follows that the appellant's other grounds of appeal also fail. The appeal will be dismissed with costs. | application for protection visa refused by minister's delegate decision affirmed by refugee review tribunal application for review dismissed appeal claim that refugee review tribunal did not have part b documents referred to by the delegate refugee review tribunal rule in jones v dunkel [1959] hca 8 ; (1959) 101 clr 298 whether adverse inference can be drawn from tribunal / department's failure to give evidence migration evidence |
That determination is described as the Hopevale determination as, by its terms, the Court determined the native title rights and interests subsisting in 13 clans of indigenous people including the Dingaal People in land and waters on the eastern side of Cape York surrounding the community of Hopevale. The land the subject of the determination is described in the Deed of Agreement filed in support of the application for the Hopevale determination under s 87(1) of the Act as the "land and waters of the Hopevale Deed of Grant in Trust ('the dogit land'), to the high water mark" as detailed on a map attached to the Deed. It seems to be common ground that the land and waters of the Hopevale determination fall within Lot 35 on Crown Plan BS 222. Walmbaar is a registered native title body corporate in relation to the Hopevale determination, for the purposes of the Act (ss 253 and 193 (2)(e)) and is the prescribed body corporate and agent for the Dingaal People for the purposes of ss 57(2) and 57 (3) of the Act and the Hopevale determination. The proceeding was commenced by Walmbaar by filing a compensation application in the Court on 28 November 2006. Section 61(1) provides for compensation applications to be made to the Court by a registered native title body corporate. Division 5 of Pt 2 of the Act contains provisions addressing the criteria for determining compensation, limits on compensation and other matters relating to the determination of compensation. On 24 May 2007, Gareth Deeral, Linda Deeral, John Charlie, Pauline McLean and Phillip Baru, each on his or her own behalf and on behalf of the Dingaal People filed Form 5 Notices under the Act by which they elected to become respondent parties to Walmbaar's application for compensation. Brian Cobus also filed a Notice electing to become a respondent party on his own behalf and on behalf of the Nguuruumungawarra People. These respondents, described as the indigenous respondents, are represented by the Cape York Land Council Aboriginal Corporation ("the Land Council"). Those indigenous respondents acting on their own behalf and on behalf of the Dingaal People contend that Walmbaar is not authorised to make the compensation application. They say Walmbaar has not consulted the Dingaal People as it is required to do and Walmbaar has failed to comply with the Act and the objects and rules of the corporation, in making the application. Brian Cobus elected to become a respondent party in order to resist the application on the footing that Walmbaar, in part, claims compensation in respect of relevant acts affecting the native title, rights and interests subsisting in the Nguuruumungawarra People, in respect of particular lands. Brian Cobus says that Walmbaar has no standing to make such a claim in respect of his Peoples' native title rights and interests in respect of the relevant land. The other respondents to the application are the State of Queensland, Ports Corporation of Queensland, the Commonwealth of Australia, Hopevale Congress Aboriginal Corporation and Cape Flattery Silica Mines Pty Ltd. By Notice of Motion, Phillip Baru and Brian Cobus on behalf of the indigenous respondents seek an order, expressed to be pursuant to s 84D(4)(b) of the Act, that the application be dismissed and that Mr Gordon Charlie pay the costs of the indigenous respondents of the motion. The indigenous respondents seek a costs order against Gordon Charlie as they perceive him, as chairman of Walmbaar, to have caused Walmbaar to institute the application without the authority of or required consultation with the Dingaal People and in breach of Walmbaar's obligation to discharge the functions of a registered native title body corporate under the Act for the purposes of the Hopevale determination. The indigenous respondents say that Walmbaar's conduct in commencing this proceeding and the role played by Gordon Charlie in its so doing, must be seen in the context of orders made by the Court concerning other claims made and proceedings taken by Gordon Charlie in connection with or contended connection with the native title rights and interests of the Dingaal People as those controversies reflect a continuing intra-indigenous dispute which lies at the centre of the concerns of the indigenous respondents that Walmbaar is not acting, in these proceedings, with the approval or authority of the Dingaal clan members. Walmbaar says that the notion of "authorisation" is misconceived in the context of an application for a compensation determination under the Act. Walmbaar says that it has standing under the Act to apply for the relief and has done so consistent with the Hopevale determination and the Act. It says that to the extent that Walmbaar has not complied with its objects and rules, that is a question of internal governance within the corporation and not a matter the Court should enquire into for the purpose of determining whether the application was made in accordance with internal processes. In any event, Walmbaar says that the decision to file the application was made by the committee of the corporation. Walmbaar further says that s 84D of the Act is not relevant to an application for a compensation determination by a registered native title body corporate under s 61(1) of the Act and that the applicants on the motion ought not to be given leave to amend the application to identify any other source of statutory power to support the application. Further, Walmbaar says that the application ought to be adjourned as the Office of the Registrar of Indigenous Corporations is considering whether a special administrator ought to be appointed to Walmbaar. If a special administrator is appointed, Walmbaar says that the administrator will have and be able to exercise all necessary powers relevant to curing any deficiency in Walmbaar's failure to comply with any aspects of its objects and rules. The indigenous respondents say that the application is fatally flawed and no adjournment in order to take account of any steps a special administrator may be minded to take can cure the deficiencies in the application. The indigenous respondents say the application simply fails at the threshold. The chronology of relevant events reflected in the affidavits filed on the motion is this. The Court determined, consistent with a Deed of Agreement executed by all relevant participants, that the native title rights and interests the subject of the determination were held by the common law holders of the 13 clan groups, including the Dingaal clan, for their respective clan estates (cl 1 of the determination). Since the common law holders sought and the Court determined that the native title rights and interests were to be so held, no determination was made that those rights be held on trust by a prescribed body corporate. By cl 5 of the determination, pursuant to s 57(2) of the Act, Phillip Baru was required as representative of the common law holders of the Dingaal clan to nominate within six months a prescribed body corporate to perform the functions described in s 57(3) of the Act. The remaining 12 clans agreed to incorporate Hopevale Congress Aboriginal Corporation as a prescribed body corporate for those clans for the purposes of s 57 of the Act. Walmbaar was incorporated pursuant to the ACA Act on 28 August 1998 as a registered native title body corporate. Walmbaar is also governed by the Corporations (Aboriginal and Torres Strait Islander) Consequential, Transitional and Other Measures Act 2006 (Cth) and the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth). The "Rules" of the Walmbaar Aboriginal Corporation contain these provisions. Those listed in the schedule are all adult persons who hold native title under Federal Court determination QG 174 of 1997 , in the case of Deeral v Charlie . A "Dinagaal father" is a male person of patrilineal descent of the Baru, Yoren or Charlie families. There shall be a register of Elders maintained by the Public Officer. A purpose of this Corporation's existence is becoming a registered native title body corporate as set out under the Native Title Act (1993) and its Regulations. A register of members for the time being shall be kept by the Public Officer. The Elders Group shall confirm certifications of amendments to the genealogical record. If confirmation is not forthcoming, amendments shall be null and void. The Elders group shall confirm or deny certification within 30 days of receiving an application. Each of the indigenous respondents other than Brian Cobus is a member of Walmbaar. On 25 February 2002, Beaumont J made a further order in the Hopevale determination proceeding directing, by Order 5, that Walmbaar "is the prescribed body corporate which, after becoming a registered native title body corporate, will perform the functions mentioned in s 57(3) of the Native Title Act 1993 for the Dingaal Clan". The reason for the long delay between that order and the Hopevale determination of 8 December 1997 is not clear. Differences of opinion emerged between Gordon Charlie and others on the one hand and members of the Baru and Yoren families on the other as to whether the Dingaal People comprise descent members of the Baru and Yoren families notwithstanding the definitional matters contained in the Rules of Walmbaar ([16], Interpretation). For example, a notice convening a meeting for 21 June 2005 of "all Dingaalwarra and Biddi-Baru members" to be held at "Gungarde Office" in Cooktown was issued to Walmbaar members signed by Gordon Charlie at which meeting a resolution was to be proposed that Phillip Baru, Elaine McGreen and all Baru and Yoren members be expelled from Walmbaar and that "all Yoren and Baru descent members who are members of [Walmbaar] resign [their membership] as they belong to another clan and are not Dingaal clan descendents". The notice contained a pro forma notice of resignation and a commentary that Baru and Yoren family members are members of a separate clan called the Biddi-Baru clan. The meeting did not take place. Neither Phillip Baru nor Elaine McGreen nor any member of the Baru and Yoren families resigned their membership of Walmbaar. Consistent with the notion that Baru and Yoren family members form part of a different clan, steps were taken in 2005 to incorporate under the ACA Act a corporation described as Biddi-Baru Aboriginal Corporation which by rule 2 of its Rules defines native title holders in respect of relevant land as members of the Baru and Yoren families from the Cape Flattery area. Mr Testro, a legal officer employed by the Land Council, deposes in his affidavit that members of the Baru and Yoren families did not establish the Biddi-Baru Corporation; they continue to assert membership of Walmbaar on the footing that they are members of the Dingaal clan as recited in the Rules of Walmbaar; and they are seeking to establish who caused the new corporation to be formed on that footing. The position adopted in the notice signed by Gordon Charlie was consistent with Gordon Charlie's contentions before Cooper J in 2003 in Dingaal Tribe v State of Queensland and Ors [2003] FCA 999 that "under the traditional law and customs of the Dingaal people, he is the only person entitled, and thereby authorised, to make the claim for native title on behalf of the claim group" (at [14]). In that proceeding (QG6004 of 1998), Gordon Charlie and Jonathon Charlie as joint applicants sought a native title determination in respect of particular lands and waters on behalf of the Dingaal tribe. Gary Yoren, Ned Yoren, Elaine Baru and Louis Charlie applied pursuant to s 66B of the Act for an order that Yoren, Yoren and Baru replace Gordon Charlie and Jonathon Charlie as applicants on the footing that resolutions passed at a meeting at Hopevale on 14 April 2003 removed the authority of the existing applicants to maintain the claim on behalf of the claimant group. Cooper J found that notice of meeting had been given directly or indirectly to all members of the Dingaal claim group and that there was no traditional law or custom binding on the claim group preventing them from terminating the authority of Gordon Charlie and Jonathon Charlie (at [17] and [20]). Cooper J concluded that the authority of Gordon Charlie and Jonathon Charlie to continue to act as applicants had been withdrawn by resolution of the meeting of the Dingaal clan and accordingly orders were made replacing Gordon Charlie and Jonathon Charlie with Gary Yoren, Ned Yoren and Elaine Baru. Proceeding QG6004 of 1998 was a claim by the Dingaal People of native title rights and a claim of connection with Lizard Island and the islands offshore from Cape Flattery (and associated waters). On 28 February 2006, Dingaal clan members convened at the Church Hall in Hopevale to consider a presentation in relation to the claim by the National Native Title Tribunal, a report and presentation by a consultant anthropologist, Dr Fiona Powell, and a presentation on future tasks to be undertaken by the Land Council. The claim group members unanimously resolved to amend the claim to include other claimant groups asserting rights in relation to the land and waters, namely, the Thanil, Nguuruumungu, Gulaal, Ngaatha and Thittaar Peoples. That resolution made necessary an amendment to the application so as to alter the area of land and waters the subject of the claim and the composition of the claim groups. The Land Council sought to convene a meeting of Dingaal members on 31 October 2006 at 11.00am at Hopevale to authorise amendments to the native title application. Gordon Charlie sought to restrain the conduct of the meeting that morning on the footing that the Charlie family incorporates a sub-group family described as the Brim family and members of that family had not been invited to the meeting nor incorporated within the claim. The Brim family members were said to be in tension with the Baru and Yoren families. Gordon Charlie was unsuccessful in his application for an injunction ( Gordon Charlie v Cape York Land Council [2006] FCA 1418). The meeting did not proceed on 31 October 2006 due to the death of Mr Gary Yoren, an applicant member of the Dingaal claim group. The authorisation meeting was reconvened for 29 November 2006 and 30 November 2006 at Hopevale. Gordon Charlie sought to restrain the meeting on the morning of 29 November 2006. He did so based on the contention that the Baru and Yoren People are not part of the Dingaal clan. He contended that Brim family members are part of the Dingaal clan through Charlie family members and therefore seven identified members of the Brim family and some family members associated with some of those individuals, ought to have been invited to the meeting. Gordon Charlie contended that Brim family members ought to be joined in the claim; they derive their rights through identified Charlie clan members; and Baru and Yoren families are not members of the Dingaal clan. In that proceeding, Dr Fiona Powell swore an affidavit concerning her extensive anthropological research in relation to the Dingaal claim. Dr Powell said that she had revealed no evidence which suggested a connection between the Charlie family and the Brim family or connections on the part of the Brim family to the area claimed in the Dingaal application. Dr Powell identified the foundation for that view. The relevance of that proceeding for present purposes is simply that Gordon Charlie continued to assert a different composition of or foundation for the Dingaal clan notwithstanding the Hopevale determination and the terms recited in the Rules of Walmbaar adopted by Gordon Charlie and other Charlie family members. First, the Dingaal clan was said to properly embrace the Brim family and secondly, the Baru and Yoren families were said not to be part of the Dingaal clan. Gordon Charlie was unsuccessful in the injunction application ( Gordon Charlie v Cape York Land Council (No. 2) [2006] FCA 1683). In that proceeding, Gordon Charlie contended that a meeting of Dingaal native title clan members and some non-members took place at Cooktown at the "Lions Park" on 3 July 2005. The meeting was said to have passed a number of resolutions including a resolution that only Charlie family members have standing to maintain a Dingaal clan native title claim. The minutes of the contended meeting record the attendance of Vernon Yoren, Henry Baru, Elaine Baru, Phyllis Greenway (nee Baru) and Kevin Yoren. However, the evidence of a Hopevale Lutheran Minister, Reverend Jantke, who presided at the relevant burial services and who had possession of Lutheran Church records, demonstrated that all of those individuals had died well before 3 July 2005 which caused the Court to conclude that the minutes of the meeting and contentions in relation to the meeting were unreliable. That evidence, of course, was relevant only for the purposes of the proceeding in question. However, the fact of that controversy in that proceeding remains a relevant historical fact in explaining the subsequent chronology of events by which the resolution of the intra-indigenous issues concerning the composition of the Dingaal clan were sought to be resolved. As to proceeding QG6004 of 1998, the applicants sought and obtained leave of the Court on 24 June 2008 to discontinue that proceeding. On 28 November 2008, Walmbaar commenced this compensation proceeding in its capacity as a prescribed body corporate and agent for the Dingaal People and in contended conformity with ss 58(c) and 61(1) of the Act and its objects and rules. The lands and waters the subject of the application are not simply the lands and waters of the Hopevale determination. That determination comprises Lot 35 on Crown Plan BS222 which is the subject of the Land Trust created by the Queensland Government in 1986 under the Land Act 1962 as the Deed of Grant in trust described in the Hopevale Determination Deed as the Dogit land. The Walmbaar application extends to Lot 9 on Crown Plan BS222, Lot 10 on Crown Plan BS224 and Lot 11 on Crown Plan BS268. Actions of extinguishment or significant impairment of the native title rights said to be attributable to the State of Queensland are set out at Schedule I of the application including the grant of leases to Ports Corporation of Queensland and the grant of mining leases including a mining lease in favour of Cape Flattery Silica Mines Pty Ltd ("CFSM") over 584.6 hectares on part of Lot 35 of Crown Plan BS222. A compensation entitlement is asserted against the State of Queensland and the Commonwealth on just terms or by reference to the similar compensable interest test having regard to 15 heads of claim (Schedule J). Walmbaar also claims, for the Dingaal People, non-monetary compensation. The application was supported by an affidavit sworn by Gordon Charlie on 22 November 2006 also filed on 28 November 2006. In it, Gordon Charlie swears that he is the chairman of Walmbaar; Walmbaar as prescribed body corporate for the purposes of the Hopevale determination makes the application "for the compensation claim group ... as agent for the Dingaal People as common law holders [pursuant to the Act]"; and, by paras 6 and 7 he says this: The Walmbaar Aboriginal Corporation is authorised by the compensation claim group to make the application in accordance with Clause 9 of its rules and objects by way of a resolution passed by more than 75% of its member common law holders at an Annual General Meeting which took place at Cooktown on 3 July 2005. On behalf of the applicant corporation I am authorised to say and do believe that all of the statements made in the application are true. The issue of the composition of the Dingaal clan and thus the Dingaal claim group remained controversial. On 26 October 2006, in the context of the meeting convened by the Land Council for 31 October 2006 previously mentioned, Mr Peter Black, solicitor, had written to the Land Council advising that he acted for "the Charlie family who are the Dingaal People" and expressed concern that the Kuranda Charlies (that is, the Brim sub-group) had not been given notice of the meeting. Our client as agent of the Dingaal People has an obligation to hold any compensation gains in trust for the benefit of all Dingaal People including your clients. Accordingly, our client is prepared to include your clients as applicants in the compensation proceedings. By that plan, it undertook to complete the following steps in preparation for a mediation conference to be convened in March 2008 so as to resolve the intra-indigenous issues concerning the composition of the Dingaal clan and the process by which Walmbaar obtained its approval to commence the proceeding. Walmbaar's plan involved these steps. Our client does not accept that Dr Powell can bring an objective perspective to the Charlie/Brim issue in circumstances where it was her work in the first instance which led to the exclusion of those Brims who are related to the Charlies from the Dingaal group. He said "still further they impact on the authorisation process for which you require anthropological certification". On 24 April 2008, the Court made orders for the filing of affidavit material in relation to the intra-indigenous issue of the composition of the Dingaal clan in the expectation that the matter might be resolved as a preliminary question. The Applicant file and serve material which describes the connection between the Brim and Charlie families, by 23 May 2008. The Applicant file and serve material which details the process engaged in to include the Brim family as members of the Walmbaar Aboriginal Corporation, by 23 May 2008. Any party wishing to file and serve material in reply to the Applicant's documents filed in compliance with Orders 2 --- 4, do so by 6 June 2008. At the directions hearing the Court made the following orders: The proceeding is adjourned to 2:15pm on 5 September 2008 at Cairns to consider an application brought by the respondents that the proceeding be dismissed. Any further affidavit material to be relied upon by the respondent parties in support of an application for dismissal of the proceedings shall be filed and served by 31 July 2008. The Applicant in the proceeding shall file and serve any affidavit material upon which it proposes to rely in answer by 24 July 2008. The respondents shall file and serve any affidavit material responsive to any further affidavits of the Applicant on which they propose to rely by 8 August 2008. Any supplementary submissions shall be filed by 22 August 2008. Mr Black says that he has taken instructions from Mr Gordon Charlie and Ms Ruth Schaefer, the Public Officer of Walmbaar. Mr Black deposes to Mr Charlie's concern that Dr Powell has not sufficiently consulted with the Brim family or Mr Charlie to obtain an oral history of the relevance or relationship of the Brim family to the Charlie family. Mr Black refers to preliminary work of Dr Pannell which he says suggests such a connection. On 11 February 2008, Mr Black wrote to the Land Council in relation to the authorisation process. Mr Black enclosed a copy of Gordon Charlie's affidavit filed in support of the application on 28 November 2006 which "dealt with the authorisation process". Mr Black said that the applicant "relies on the matters set out therein". Those matters, at para 6, were that Walmbaar was authorised by the Dingaal claim group to make the application by reason of a resolution passed by more than 75% of the Dingaal common law holders at an annual general meeting which took place at Cooktown on 3 July 2005. On 28 May 2008, the applicant filed a further affidavit of Mr Black which annexed a letter from Mr Black to the Land Council dated 27 May 2008 (PZB-1) which sets out the content of the authorisation process adopted by Walmbaar (and the legal rationale for that process), for the purposes of the Court's Order of 24 April 2008. Neither Gordon Charlie nor Ruth Schaefer depose to the facts of the authorisation process. Mr Black, on behalf of Walmbaar, puts the authorisation process on this basis. Walmbaar is the registered native title body for the Dingaal People under the Hopevale determination. The common law native title holders of the Dingaal People nominated Walmbaar to be the prescribed body corporate to perform the functions described in s 57(3) of the Act. Thus, Walmbaar acts with the authority of the common law native title holders as agent for the Dingaal People. The authorisation process prescribed by s 251B of the Act does not apply, it is said, to a compensation application by a prescribed body corporate. The s 251B process is said to be required where there is no prescribed body corporate and the section is addressed only to individual persons who require authorisation to act as applicants for, relevantly here, a compensation claim group. The functions of Walmbaar as a prescribed body corporate and agent for the Dingaal People are set out in the Native Title (Prescribed Bodies Corporate) Regulations 1999 (Cth) ("NT (PB) Regulations"). Regulation 8(2) of those regulations provides that Walmbaar must consult with and obtain the consent of the common law holders in accordance with the decision-making process agreed or adopted by them for making a "native title decision", as defined by Regulation 8(1). The decision-making process adopted by the common law holders for Walmbaar when it makes a native title decision is set out in cl 9(1) of Walmbaar's Rules which provides that Walmbaar shall convene a meeting of common law holders and obtain the consent of 75% of them if "decisions regarding native title" are to be made. Walmbaar's decision to commence an application for a compensation determination is not a "decision regarding native title" or a "native title decision". The Rules of Walmbaar should be so understood by reference to Regulation 8(1). The decision to file and prosecute a compensation application does not involve a decision falling within Regulation 8 of the NT (PB) Regulations as the decision does not involve the surrender of native title rights and interests in relation to land or waters, nor is it an act which would impinge on or change the native title rights or interests of the common law holders, which, it is said, are the integers defining a native title decision for the purposes of Regulation 8 and Walmbaar's Rules. The claim for compensation does not affect native title rights and interests but simply seeks compensation for the effect of other acts upon those rights. Thus, the decision to commence and prosecute an application for a compensation determination, fell to be decided by the Committee of Walmbaar pursuant to its powers in cls 7 and 12(1) of Walmbaar's Rules. The Committee met on 4 July 2006 at Mantaka and passed a resolution to proceed with a compensation claim. The compensation application was then filed on 28 November 2006. These propositions represent Walmbaar's position. As to the Brim/Charlie connection, Mr Black said that the Charlie family had exercised traditional control over the northern region of Cape Flattery. The Charlie family is known traditionally as the Dingaal. The Baru and Yoren families are not Dingaal. The Guugu Yimidhirr family group known as the Birri Biddi Baru traditionally exercised control over the southern region of Cape Flattery and are the clan of the Baru and Yoren families. Mr Black says that the Charlie family recognises the Brim family as Dingaal People. Brim family members applied to Walmbaar in writing for membership of the Corporation. Walmbaar amended the genealogical record to incorporate the Brim family by a decision of Gordon Charlie and Patricia Charlie as Dingaal Elders. The letter from Mr Black does not identify any further facts relating to the decision taken on 4 July 2006 at Mantaka. Nor does the letter identify whether any members of the Baru or Yoren families were consulted in relation to the acceptance of Brim family members as Dingaal members of Walmbaar. The letter seems to abandon the claim made in the affidavit of Gordon Charlie sworn 22 November 2006 in support of Walmbaar's application that Walmbaar is authorised to bring the compensation application by reason of a resolution passed by more than 75% of Walmbaar's member common law holders, passed at an annual general meeting at Cooktown on 3 July 2005. Walmbaar now says that it was not necessary to consult with the common law native title holders nor obtain a resolution supported by 75% of those members in order to make a decision to institute the proceeding. Rather, the decision to file and prosecute a compensation determination application is a matter for the Committee exercising its powers under the Rules. Rule 9(1) is set out at [16] of these reasons. However, its terms provide that Walmbaar in relation to the performance of its functions as a prescribed body corporate shall make decisions regarding native title by notifying all common law holders of decisions to be made and after one week's notice, convene a meeting of common law holders and obtain the consent of 75% of them in relation to the performance of its functions and changing of the rules. Rule 9(2) provides that the consent of 75% of the common law holders, will constitute the consent of the Dingaal clan and this Corporation . For the purposes of the Rules of the Corporation and the Hopevale determination, the Dingaal clan means all persons born of a Dingaal father or Aboriginal children adopted by a Dingaal father and a Dingaal father is a male person of patrilineal descent of the Baru, Yoren or Charlie families. The Dingaal family means the Yoren and/or Baru and/or Charlie families of Hopevale and their patrilineal descendents. There can be no doubt that in performing its functions as a prescribed body corporate for the purposes of the Hopevale determination, decisions taken by Walmbaar "regarding native title" are to be made by notifying "all common law holders" of decisions to be made and securing, at a duly convened meeting, the consent of 75% of them to the decision. The Rules of Walmbaar do not define the phrase "decisions regarding native title". The Rules are to be construed and interpreted in a way which gives effect to the important practical consideration that decisions regarding the native title rights and interests of the common law holders as determined by the Hopevale determination are to be taken at all times with the interests of all common law holders kept firmly in mind. Decisions taken by Walmbaar regarding the native title rights and interests secured by the Dingaal People by the Hopevale determination are to be taken with the overwhelming support (75%) of the members comprising the Dingaal clan. Nothing could be more plain. A decision to institute a proceeding to seek and obtain a compensation determination in relation to those matters identified particularly at Schedules E, I and J of the application, under the provisions of the Act, and the analysis in that proceeding of the amount of compensation by reference to just terms or the similar compensable interest test in respect of acts said to have either extinguished or significantly impaired or otherwise affected the native title rights and interests of the Dingaal People as determined by the Court on 8 December 1997, is a decision "regarding" native title. The scope of an application under s 50(2) can be seen in the criteria to be applied under s 51(1) for determining compensation. Section 51(1) provides that subject to subsection (3) the entitlement to compensation under Division 2, 2A, 2B, 3 or 4 is an entitlement on just terms to compensate the native title holders for any loss, diminution, impairment or other effect of the act on their native title rights and interests . A decision to commence a proceeding for compensation and engage, on behalf of the native title holders, an analytical process which seeks to identify any loss, diminution, impairment or other effect of an act on their native title rights and interests is necessarily a decision regarding native title for the purposes of Rule 9(1). The use of the word "regarding" in the context of the Rules and the functions to be performed by Walmbaar is necessarily a word of wide application. It is intended to have a wide application, in its context ( DPP v Webb [2000] NSWSC 859 at [17] to[29] per O'Keefe J). There is no sound basis for importing the definition of "native title decision" in Regulation 8(1) of the NT (PB) Regulations into the construction of the Rules of Walmbaar either directly or analogically. The scope and operation of Regulation 8(1) is discussed shortly. Accordingly, the decision to institute a compensation application ought to have been made in accordance with the decision-making requirements of Rule 9 of Walmbaar's Rules. The decision to commence proceedings was taken by the Committee of Walmbaar on 4 July 2006. There is simply no evidence of whether the common law members were given notice of the proposed decision; or of whether they expressed views about it or were engaged by the Committee in any formal or informal consultation process. The Committee members are not identified. Neither Gordon Charlie nor Ruth Schaefer filed any affidavit on the motion notwithstanding that each of them might have spoken directly to the events in issue. No minutes of the meeting are produced. Walmbaar has changed its position by, in effect, abandoning Gordon Charlie's original contention that the decision to commence the proceeding was the subject of a resolution of 75% of the common law holders obtained at a meeting on 3 July 2005. That position that was relied upon not only by Gordon Charlie in his affidavit sworn on 22 November 2006 but also by him on 11 February 2008 by reason of Mr Black's letter of that date asserting reliance on the resolution. Walmbaar contends in submissions that there are two decisions which confer authority to institute the application. The first is the resolution at the meeting on 3 July 2005 and the second is the decision of the Committee made on 4 July 2006. Walmbaar says that the only evidence concerning a vote by common law holders is the evidence of Gordon Charlie contained in his affidavit of 22 November 2006. However, the primary contentions of Walmbaar which are recited in Mr Black's letter, rather than the subject of an affidavit by Gordon Charlie as to the facts, place reliance upon the authority of the Committee and the decision it took on 4 July 2006. The Committee cannot act independently of the decision-making process contained in Rule 9. Rules 6(1) and 6(2) of Walmbaar's Rules which set out the objects taken in conjunction with Rule 12 which sets out the powers of the Committee, do not confer power upon the Committee to make decisions regarding native title without complying with Rule 9(1). By s 57(3)(b) of the Act, Walmbaar "must perform" any functions given to it under regulations made under s 58 of the Act. There is no suggestion that the regulations made under that section are beyond the subject matter of the power in s 58. By Regulation 8(4), if there is a particular process of decision-making that, under the Aboriginal traditional laws and customs of the common law holders, must be followed in relation to the giving of consent in relation to a native title decision, the consent must be given in accordance with that process. If there is no such process, the consent must be given by the common law holders in accordance with the process of decision-making agreed to or adopted by them for the proposed native title decision or for decisions of the same kind as that decision (Regulation 8(5)). The process adopted by the common law holders of the native title rights and interests determined by the Hopevale determination is the decision-making process reflected in Rule 9(1) of the Rules of Walmbaar. Walmbaar must consult with and obtain the consent of the common law holders in accordance with that process before making a "native title decision". The decision in question is a decision to commence in the Court an application for a compensation determination. That decision is not one that involves the surrender of native title rights and interests in relation to land or waters (Regulation 8(1)(a)). However, is it a decision to do "any other act that would affect the native title rights or interests of the common law holders"(Regulation 8(1)(b))? Section 227 of the Act provides for the purposes of the Act and the NT (PB) Regulations that an act affects native title if it extinguishes the native title rights and interests or "if it is otherwise wholly or partly inconsistent with their continued existence, enjoyment or exercise". The filing of a compensation application does not extinguish native title rights and interests and is not, it seems to me, otherwise wholly or partly inconsistent with their continued existence, enjoyment or exercise. Engaging in an act of the kind described in s 226 of the Act may be wholly or partly inconsistent with the continued existence, enjoyment or exercise of native title rights and interests and may therefore have the effect contemplated by s 227 of the Act. However, a decision to file a compensation application simply seeks a compensation entitlement under the Act in respect of acts which are said to have either extinguished or significantly impaired or otherwise affected native title rights and interests. Accordingly, a decision to file a compensation determination application is not a "native title decision" for the purposes of Regulation 8 of the NT (PB) Regulations. It follows that no statutory obligation is cast upon Walmbaar by operation of Regulations 8(2) and 8(5) to consult the common law holders in accordance with the decision-process contained in Rule 9(1) of Walmbaar's Rules in relation to a decision to commence the compensation proceeding, as that decision is not a native title decision as defined by Regulation 8(1). However, Regulation 7(1)(a) requires Walmbaar to act as the agent of the common law holders "in respect of matters relating to" the native title rights and interests of the common law holders. Regulation 7(1)(b) requires Walmbaar to manage those rights and interests as authorised by the common law holders. Walmbaar must do so by operation of s 57(3)(b) of the Act. Regulation 7 expressly contemplates s 57(3)(b). The management by Walmbaar of the native title rights and interests of the common law holders as agent for them in respect of matters relating to those rights engages an obligation (by operation of s 57(3)(b) and Regulation 7(1)) to manage decision-making to commence a compensation determination application by ensuring compliance with the decision-making process contained in Rule 9(1), as the source of the authority in Walmbaar to commence the proceeding. The indigenous respondents also place emphasis upon s 251B of the Act which addresses the notion of "authorising" the making of particular classes of application. Section 61(1) of the Act recognises that a compensation application under s 50(2) may be made by a registered native title body corporate where such a body is in place. Section 61(1) also recognises that apart from a registered native title body corporate, "a person or persons" authorised by "all the persons (the compensation claim group)" who claim to be entitled to compensation, may make a compensation application to the Court provided that the person or those persons are also included in the compensation claim group. Section 61(1) of the Act contains a table which sets out applications that may be made under Division 1 of Part 3 of the Act to the Federal Court "and the persons who may make each of those applications". Section 251B(a) provides that all persons in a compensation claim group authorise a person or persons to make a compensation application if, where there is a process of decision-making under the traditional laws and customs of the persons in the compensation claim group that must be complied with, the persons in the compensation claim group "authorise the person or persons to make the application and to deal with the matters in accordance with that process". Section 251B(b) provides that where there is no such traditional decision-making process, the persons in the compensation claim group "authorise the other person or persons to make the application and to deal with the matters in accordance with a process of decision-making agreed to and adopted, by the persons in the ... compensation claim group, in relation to authorising the making of the application and dealing with the matters, or in relation to doing things of that kind". Section 251B is directed to the decision-making method by which authority is conferred upon a person or persons seeking to maintain a native title determination application or a compensation determination application under the Act, that is, by the application of traditional laws and customs or as otherwise agreed and adopted, where no traditional laws and customs determine a method of decision-making. Such persons are authorised as a function of compliance with the traditional laws and customs governing the conferral of authority or where no such traditional laws or customs exist, as a function of a decision-making process agreed to and adopted by persons comprising the compensation claim group. Section 61(1) of the Act however uses the term "the persons" in the primary part of subsection (1) as a description of the "persons who may make an application" as described in the schedule. In other words, the section itself seems to treat a registered native title body corporate as "a person" in which event s 251B(b) would contemplate authority being conferred upon Walmbaar as an applicant person in accordance with "a process of decision-making agreed to and adopted by the persons in the compensation claim group" recognising that at all times Walmbaar is acting as the agent of the common holders who comprise the persons in the compensation claim group. Having regard to the terms of the Hopevale determination and the statutory obligation upon Walmbaar to discharge the s 57(3)(b) functions including Walmbaar's obligation under Regulation 7(1) to manage the rights and interests of the common law holders in accordance with the process adopted by them for conferring authority upon Walmbaar, s 251B(b) may well have a role to play in determining whether Walmbaar, in commencing the compensation application proceeding, had authority to do so. The decision-making process conferring that authority is the process contained in Rule 9(1) of Walmbaar's Rules. However, it is not necessary to decide that question. I accept that the primary focus of s 251B is directed to the process by which individuals acquire an authority to commence and maintain the classes of applications contemplated by that section. Apart from s 251B(b), Walmbaar has failed to comply with Rule 9(1) of its Rules and has failed to discharge its functions arising under s 57(3)(b) and Regulation 7(1) of the NT (PB) Regulations. The decision to commence the compensation proceeding was thus taken without authority and in contravention of the Act. In addition, the claim as framed goes beyond the land and waters the subject of the Hopevale determination. Before a determination as to compensation can be made by the Court in respect of relevant lands and waters, there must first be a determination of native title in relation to those lands and waters ( Jango and Ors v Northern Territory and Ors [2006] FCA 318 ; (2006) 152 FCR 150 per Sackville J; Jango v Northern Territory [2007] FCAFC 101 ; (2007) 159 FCR 531 at [66] --- [74] and [83] per French, Finn and Mansfield JJ). To the extent that the compensation application goes beyond the land and waters the subject of the Hopevale determination, it must necessarily fail. Walmbaar concedes that the compensation application would need to be amended to remove any claim in respect of Lot 9 on Crown Plan BS222 Lot 10 on Crown Plan BS224 and Lot 11 on Crown Plan BS268. Having regard to Walmbaar's failure to commence the compensation application proceeding without authority and the considerations reflected in these reasons, the application is to be dismissed pursuant to s 84C of the Act. Walmbaar contends that the applicants on the motion are not entitled to an order dismissing the proceeding as the Notice of Motion recites s 84D as the source of power. Walmbaar contends that the applicants ought not be given leave to seek an order under s 84C. Walmbaar has not been able to identify any prejudice arising out of the applicant's relying upon an alternative source of power. I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application by indigenous respondents to dismiss an application for a compensation determination filed by walmbaar aboriginal corporation as registered native title body corporate for the purposes of the hopevale determination, pursuant to s 50(2) of the native title act 1993 (cth) consideration of the decision-making process by which the prescribed body corporate reached a decision to institute proceedings under s 61(1) of the act consideration of the rules of the corporation, the provisions of the native title act and native title (prescribed bodies corporate) regulations 1999 as the source of the corporation's authority to commence the proceeding native title |
The land was transferred to the Worimi Local Aboriginal Land Council ('the Land Council') pursuant to s 36 of the Aboriginal Land Rights Act 1983 (NSW) ('the Land Rights Act') on 23 September 2003. By s 36(9) of the Land Rights Act, the transfer was subject to any native title rights and interests existing in relation to the land immediately before transfer. The members of the Land Council have passed a resolution to sell the land and a contract for its sale has been signed and awaits completion. However, the land cannot be sold by the Land Council unless it is the subject of ' an approved determination of native title ' (s 40 and s 40AA of the Land Rights Act). An application may be made to this Court under Part 3 of the Native Title Act 1993 (Cth) ('the Act') for a determination of native title in relation to an area for which there is no approved determination of native title (s 13(1)(a) of the Act). A determination made on such an application will constitute an ' approved determination of native title ' (s 13(3)(a)) unless varied or revoked (s 13(4)). Mr Hillig, in his capacity as Administrator of the Land Council, brings an application pursuant to s 61(1) in Part 3 of the Act seeking a determination that native title does not exist in relation to the land. His application is a ' non-claimant application ' within the meaning of s 253 of the Act. Mr Hillig submits that he is entitled to bring the non-claimant application because the Land Council, as registered proprietor of the land, holds a non-native title interest in relation to the whole of the area in relation to which the determination is sought (s 61(1) of the Act). Mr Hillig also submits that the requirements of the Act for notification of the non-claimant application have been met (s 66 of the Act). Section 66(3) of the Act requires the Native Title Registrar ('the Registrar') to give notice of details of a non-claimant application to certain persons or bodies and to notify the public. Section 66(2) and s 66(2A) of the Act require the Registrar to provide the relevant State Minister and representative bodies a copy of the application and certain other documents. The evidence establishes that notice of the non-claimant application was advertised by the Registrar in three newspapers in February 2006. The period of notification under the notice expired on 31 May 2006. To date, no native title claimant has sought to appear or has otherwise notified the Court of any interest in the non-claimant application. A letter on the Court file from the Registrar describes the measures undertaken to comply with s 66(3) and I am satisfied that the notice required by s 66(3) of the Act has been given. I am also satisfied that s 66(2) and s 66(2A) of the Act have been complied with. The NSW Minister for Land and Water Conservation, in his capacity as the State Minister pursuant to the Act, informed the Court on 17 January 2006 that he did not wish to be a party to the non-claimant application. NSW Native Title Services ('Native Title Services'), the body funded under s 203FE of the Act to perform the functions of a representative body in New South Wales, notified the Court of its intention to become a party to the application on 5 April 2006 and was joined as a respondent on 15 June 2006. Mr Hillig submits that the application is unopposed and that the Court may make the order sought without holding a hearing. Native Title Services has notified the Court in writing that it does not oppose an order being made in the terms sought by Mr Hillig and has signed the proposed Short Minutes of Order. It is clear the application is unopposed within the meaning of s 86G(1)(a) of the Act. I am also satisfied that the Court has power to make an order in the terms sought by Mr Hillig (s 86G(1)(b) of the Act). Mr Hillig is the holder of a non-native title interest in the land and is entitled to bring the non-claimant application under s 61(1) of the Act. The Court has jurisdiction to make a determination under s 61(1) of the Act that native title does not exist in relation to the land provided no prior approved determination of native title has been made (s 81, s 13(1)(a) and s 225 of the Act). Searches conducted by the National Native Title Tribunal on 10 October 2005 and 1 June 2006 respectively did not find any approved determination of native title in relation to the land (s 13(1)(a)), or evidence of any native title determination application having been made in relation to the whole or a part of the land. There is no evidence before the Court of any native title rights or interests in the land. Nor, in circumstances where the provisions of the Act for notification have been complied with and the relevant searches undertaken, is there any evidence of persons who have asserted or might seek to assert such rights. Orders of the kind sought by the applicant have been previously made ( Kennedy v Queensland (2002) 190 ALR 707; Deniliquin Local Aboriginal Land Council [2001] FCA 609 ; Peter Hillig in his capacity as administrator of the Worimi Local Aboriginal Land Council v Minister for Lands for the State of NSW [2005] FCA 1712 ; Peter Hillig in his capacity as administrator of the Worimi Local Aboriginal Land Council v Minister for Lands for the State of NSW [2005] FCA 1713). I am satisfied that the application should be allowed and an order be made that no native title exists in relation to the land. | non-claimant application unopposed no native title exists in relation to the land native title |
The application is supported by the affidavit of Macaire Amanda Williams sworn on 12 May 2006. 2 The applicants are the liquidators of two companies, Reynolds Wines Limited and Reynolds Vineyards Pty Ltd ('the companies'), each of which is now in liquidation. The first respondent is the trustee in bankruptcy of the second respondent, Mr Peter Renwick Poolman, the latter having been a director of each of the companies for periods ranging over several years. 3 There is no appearance by either respondent today. Because this was unexpected, the applicants have not prepared an affidavit of service. However I have been provided with documents which satisfy me that both respondents have been served with the originating process in these proceedings, and are aware that the matter is to proceed this morning. Accordingly, I am prepared to determine the application in their absence. 4 On 4 August 2003 the applicants were appointed administrators of the companies pursuant to s 436A of the Corporations Act 2001 (Cth). On 25 November 2003 the creditors of the companies resolved pursuant to s 439C of the Corporations Act to wind up the companies and to appoint the applicants as liquidators. Between December 2003 and February 2004 the applicants examined the operation of the companies, including the role of Mr Poolman as director. The applicants subsequently commenced proceedings against him in the Supreme Court of New South Wales alleging that, whilst a director, Mr Poolman had permitted the companies to trade while insolvent ('the Supreme Court proceedings'). The debts sought to be recovered in the Supreme Court proceedings initially exceeded $5.8m and are now approximately $7m. The applicants in the Supreme Court proceedings also seek a declaration, pursuant to s 37A of the Conveyancing Act 1919 (NSW), that a transfer of property from Mr Poolman to Mrs Helen Poolman is void. 5 Mr Poolman was declared bankrupt on 26 July 2005. Accordingly, by virtue of s 58 of the Bankruptcy Act , leave of this Court is required to enable the Supreme Court proceedings to be continued against him. 6 The order sought by the applicants proposes that leave be granted on condition that any order made in the Supreme Court proceedings under s 37A of the Conveyancing Act is to benefit the bankrupt estate of Mr Poolman, thereby ensuring that Mr Poolman's creditors are not disadvantaged. 7 The affidavit evidence discloses that there are intricate factual and legal matters, involving numerous parties, arising in the Supreme Court proceedings. This Court may grant leave under s 58(3) of the Bankruptcy Act if it considers that the issues would be better and more comprehensively dealt with by a contested trial of the action in the Supreme Court than would be the case if the applicants were required to lodge a proof of debt in respect of the bankrupt estate: see Allanson v Midland Credit Limited and Anor (1977) 30 FLR 108 at 114 per Bowen CJ, Riley and Deane JJ; Macquarie Bank Ltd v Bardetta and Ors (2005) 216 ALR 670 at [19]-[21] per Conti J. 8 I am satisfied that these considerations apply in the present case and that leave should be granted under s 58(3). It will enable the complex issues to be resolved more thoroughly and more expeditiously than if the proof of debt procedure were adopted. The Court also notes there are several claims arising from these proceedings and the resolution of all of them at once is desirable. 9 For these reasons, the Court considers that leave should be granted. The applicants seek that leave be granted effective from 26 July 2005. This Court has power to make a nunc pro tunc order: see Re Veghelyi; Smith and Ors v Official Trustee in Bankruptcy (1993) 45 FCR 413. Accordingly, the Court will make the orders as sought. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. | proceedings against director for insolvent trading director declared bankrupt leave to continue proceedings against bankrupt director complexity of proceedings in the supreme court bankruptcy |
The relevant background facts can be stated shortly. 2 On 1 September 2006, a Registrar of the Court granted leave to issue a summons to Mr Trevor to be examined and produce documents pursuant to s 596B of the Corporations Act 2001 (Cth). On the same date, an order was made by the Registrar providing for BankWest to produce documents in the same terms as the examination summons. 5 On 7 September 2006, the solicitors for Mr Trevor and BankWest wrote to the solicitors for the applicants stating inter alia that the terms of the order as regards BankWest were too wide. They pointed to the fact that none of the documents sought pertained to the business or commercial relationship between BankWest and Allstate. They also stated that BankWest was very concerned that it would be put to considerable expense in reviewing the large quantity of documents which it held in respect of Allstate. 6 I should add here that Mr Trevor was the receiver of Beaconsfield Gold Limited which was a joint venturer of Allstate Explorations. Mr Trevor was appointed as the receiver by BankWest. The respondents submit that BankWest has never been a banker to nor had any commercial relationship as such with Allstate. 7 On 15 September 2006, the solicitors for the applicants proposed an amendment to the terms of [4] of the production order to BankWest. 8 On 22 September 2006, Mr Trevor filed an interlocutory application which sought inter alia an order that the examination summons be discharged. On the same day, BankWest filed an interlocutory application seeking an order that the order made by the Registrar on 1 September 2006 for the production of documents be set aside in whole or in part. 9 On 19 March 2007, I made consent orders which provided that the examination summons issued to Mr Trevor be discharged and that Mr Trevor's application be dismissed. My orders also provided for the order for production made in respect of BankWest to be set aside. The question of the costs in respect of the examination summons, including the costs of Mr Trevor's application of 22 September 2006, and the costs of the production order made in respect of BankWest together with the costs of its application to set aside the order were stood over initially to 16 April 2007. The date of the application to resolve the costs question was subsequently brought forward to today. 10 The gravamen of the application for costs made by BankWest and Mr Trevor is that the order for production of documents set forth in [4] was in each case so broad and unnecessary for the purpose of conducting examinations into the examinable affairs of Allstate, that BankWest and Mr Trevor were left with no choice but to seek to have the orders set aside. Mr Thawley, who appears for Mr Trevor and BankWest, points to the fact that his clients were obliged to either answer the orders or to move to set them aside within 21 days. Thus, he submits that on 22 September 2006, there was simply no other choice but to move the Court for the relief sought in the interlocutory processes. 11 The principles which relate to the production of documents for examination of an examinee under the provisions of the Corporations Act were dealt with by Bryson J in Re BPTC Ltd (in liq) (1993) 10 ACSR 756. His Honour referred to earlier authority which recognised the need for a relation between the order for production of documents and the purposes of examining persons under the then s 597. His Honour also observed at page 763 that "[an] order for production of documents which had the effect of compelling a production of documents which were not required for the examination would [...] be oppressive". 12 At page 766, his Honour remarked that it would not be appropriate in the case of a mandatory order directed to a person to perform stated acts that the validity of the order should be saved by some process of severance. He pointed out that it is unlikely the judicial officer who made the order would have intended that some severable part of the order would be valid if other parts of it were not valid. Thus, the contemplation must be that the whole of the order would stand in view of the consequences of failure to comply with such an order. 13 It does seem to me that in light of the observations of Bryson J in Re BPTC there is some force in Mr Thawley's submission that the category of documents sought by [4] was so broad that it could not have been necessary for the proper conduct of the proposed examination of the affairs of Allstate. 14 Mr Thawley conceded that [4] included documents relevant to the examinable affairs of Allstate but he submitted that its terms were not confined to relevant documents. I do not accept that the terms of the order were so broad that they extended beyond the examinable affairs of Allstate. Mr Thawley's concession must clearly be correct, particularly in light of the fact that Mr Thawley has not had access to the confidential affidavit which gave rise to the orders of the Registrar made on 1 September 2006. 15 Mr Lee, for the applicants, submitted that it is plain from the exchange of correspondence and the concession made on 15 September to which I have referred, that the applicants were prepared to limit the scope of production in a sensible manner. Whilst I think that is correct, nonetheless, it seems to me that in the absence of any actual agreement between the parties to limit the scope of [4] by the deadline of 22 September, Mr Trevor and BankWest had to file their applications on that day. 16 However, it is plain that each of the interlocutory applications of Mr Trevor and BankWest are not confined in the manner which underlies the basis upon which Mr Thawley seeks costs. The interlocutory applications each commence in [1] seeking an order that Mr Trevor and BankWest be granted access to the confidential affidavit filed by the applicants in support of their application to issue the examination summons. That is an issue which I have not had to determine simply because the orders of 19 March 2007 disposed of the interlocutory applications reserving for further consideration only the question of costs. 17 It seems to me, therefore, that the principles which were stated by McHugh J in Re The Minister for Immigration and Ethnic Affairs of the Commonwealth; Ex parte Lai Qin [1997] HCA 6 ; (1997) 186 CLR 622 at 624-625 apply. That is to say, the Court does not embark upon a hypothetical trial to determine what the result of the application would have been. Whilst it is true that in certain circumstances the Court can make an order for costs where proceedings have not proceeded to trial, the usual rule will be that there be no order as to costs; see also Chapman v Luminis Pty Ltd [2003] FCAFC 162 at [7] . 18 In my view, it is plain that Mr Trevor and BankWest needed to obtain an order in terms of [1] of their interlocutory applications. This is because, without access to the confidential affidavit, it would have been difficult, if not impossible, for them to properly address the Court on the question of whether the production order infringed the principles referred to by Bryson J in Re BPTC . 19 Thus, whether or not an order for access to the confidential affidavit was the primary relief that was sought, it was an essential part of each of the applications and without determining that issue, I cannot determine what the result would have been. It may well be that the result would have been adverse to Mr Thawley's clients. 20 The background to these proceedings may be seen in the decision of Gyles J in Ryan v Australian Securities and Investments Commission; in the matter of Allstate Explorations NL (Subject to Deed of Company Arrangement) [2007] FCA 59. It is to be noted that ASIC approved the applicants as persons who could seek examination orders. Nevertheless, in view of what I have said above, these are not matters which I need to consider in determining the costs question. 21 Mr Thawley also relied upon a submission to the effect that as non-parties, Mr Trevor and BankWest ought to have been entitled to costs orders, particularly where the orders for production were in as wide terms as were stated in [4] of the examination summons and production order. He relied on the observations of Heerey J in ACCC v Boral Ltd [1999] FCA 663. However, Heerey J was dealing there with the question of discovery by a non-party. 22 Different considerations seem to me to apply to an application to set aside an examination summons. In Re Struthers, Liquidator of Project Management, Architecture and Construction, Interior (PACI) Pty Ltd in Liquidation (No. 3) [2005] NSWSC 1113 ; (2005) 64 NSWLR 392 at [38] , Brereton J pointed out that an examination summons in analogous to a subpoena; "Both may, in appropriate circumstances, be set aside on the application of the witness or the examinee". The witness or the examinee does not become a party to the proceedings in which the subpoena or the summons is issued. Nonetheless, as his Honour observed at [59], the Court does have power to make a costs order against persons who are not parties to the proceedings. 23 For the reasons that I have given, it seems to me that it is appropriate that the application for the costs of Mr Trevor and BankWest be refused consistent with the principles stated by McHugh J in Ex parte Lai Qin , and applied by the Full Court. 24 The appropriate order seems to me to be that there be no order as to costs and I would indicate that I would make the same order in relation to today's application. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | examinations summons to attend order for production of documents recovery of costs by examinee recovery of costs by recipient of order where neither is party to proceedings relevant principles power of court to order costs no order for costs costs |
Because of the limitations in the Bankruptcy Act 1966 (Cth) (the Act) it must be seen as an application pursuant to O 52 r 17 of the Federal Court Rules which has been held to operate in circumstances such as the present. See for example Stedman v Commissioner of Taxation [1999] FCA 539 which referred in turn to Evans v Heather Thiedeke Group Pty Ltd (1990) 95 ALR 424. 2 The circumstances which give rise to the application are somewhat unusual. At least the bulk of the applicant's assets are the subject of an order made pursuant to the Proceeds of Crime Act 2002 (Cth). The effect of that order is that the proceeds are effectively frozen and can only be released on somewhat restrictive conditions. Because the original order was made in the Supreme Court of New South Wales, it is apparently thought desirable that any application pursuant to the Proceeds of Crime Act be made to that Court. I cannot say any more about what might happen on an application to free enough money to enable the applicant to pursue her appeal to be paid to the trust account of the solicitor for the applicant. 3 However, it is relevant to that application, and also relevant to the basis for a stay, for me to say that, in my opinion, the appeal is arguable. There are provisions of the Act which relate to the interplay between it and the Proceeds of Crime Act (see for example s 58A of the Act) and, no doubt, on some occasion it will be necessary to closely examine how the two Acts interrelate. It will be necessary to look at some of those issues in the course of the appeal in this case. 4 The Trustee in Bankruptcy, whilst accepting the case to be made in practice for the payment to be permitted, draws attention to the fact that vesting of property is effective by virtue of the operation of s 58 of the Act and there is no authority to establish that a stay would negate the effect of what has occurred to date. Indeed, as I read Stedman , the tendency may be rather to the contrary. However, it seems to me that a stay would operate from its date and the sequestration order would not have an effect upon events after that. Thus, the practical effect of the sequestration order would not lead to any moneys held pursuant to the Proceeds of Crime Act being vested in the Trustee to the exclusion of the bankrupt if released after the stay. In my opinion, if the Supreme Court of New South Wales were persuaded to make an order releasing some of those moneys, they would not vest in the Trustee but could be properly paid to the solicitors for the applicant for the purpose of conducting the appeal. 5 I can do no more than express my view about the way the law operates. The solicitor for the applicant seeks some comfort in relation to any claim that might be made in the event of the appeal failing. I think it is better that I say no more than I have said about that issue at the moment. 6 Under the circumstances, as the order under the Proceeds of Crime Act is in force, I therefore propose to grant a stay of proceedings under the sequestration order until the disposition of the appeal or earlier order on certain terms which have been discussed between the parties. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | application for stay of proceedings under sequestration order pending appeal where assets frozen by order pursuant to proceeds of crime act 2002 (cth) possible release of funds for costs of appeal stay granted bankruptcy |
The authority of Jianshe Southern Pty Ltd v Turnbull Cooktown Pty Ltd (No. 2) --- BC200704540 has been cited to me as a basis upon which leave ought not to be given pursuant to order 62 rule 3(3). The point of differentiation between that decision of Besanko J and the present case is that the circumstances confronting Besanko J involved default in the conduct of a proceeding. 2 The orders made in this matter ( Duus v Dalvella ) relate to orders consequent upon an independent application for leave to extend time for leave to appeal from an interlocutory judgment. The applicants for leave have failed to comply with the rules and seek to make out special grounds for leave. I am satisfied that that matter is a discrete matter rather than a costs order in the course of the resolution of step in the proceeding itself. Accordingly, I make a further order that the costs of the interlocutory proceeding shall be costs which the party having the benefit of that order is entitled to pursue and I give leave to deliver a bill of costs immediately. I certify that the preceding two (2) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application for an order in relation to costs pursuant to order 62, rule 3 of the federal court rules practice and procedure |
Jullia Light is the appellant. Ms Light filed a notice of appeal on 16 September 2009 nominating the Administrative Appeals Tribunal ( the AAT ) as the respondent. The notice of appeal related to a decision of the AAT given on 20 August 2009 refusing an extension of time under s 29(7) of the Administrative Appeals Tribunal Act 1975 (Cth) ( the AAT Act ). The SSAT reviewed a decision by Centrelink to cancel Ms Light's parenting payment and family tax benefit with effect from 9 July 2008. The SSAT affirmed Centrelink's decision. Under ss 29(1)(d) and 29(2) of the AAT Act the prescribed time for the making of the review application in the circumstances of Ms Light's case was 28 days from the date on which the SSAT's decision was given to her. Although not recorded in the AAT's decision refusing the extension of time it was (and remains) common ground that the SSAT's decision was posted to Ms Light on 9 June 2009 but she did not receive it, possibly due to an incorrect posting address. Be that as it may, Ms Light received the SSAT's decision on 19 June 2009 after she travelled to Sydney to collect a copy from the SSAT. Ms Light thus had 28 days from 19 June 2009 in which to file her application for review with the AAT (that is until 17 July 2009). Ms Light filed her application with the AAT on 27 July 2009. Accordingly, Ms Light applied to the AAT for an extension of time under s 29(7) of the AAT Act. The AAT refused to grant Ms Light the extension of time. Ms Light requested from the AAT a statement in writing of the reasons for the refusal to extend time. The AAT published written reasons in accordance with this request on 23 September 2009. The AAT's reasons (at [4]) record its application of the principles in Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176 ; (1984) 3 FCR 344 to Ms Light's application for an extension of time. The AAT correctly identified that, amongst other things, the merits of the substantive application are relevant to the exercise of the discretion to extend time. The AAT noted that the delay was "relatively minor" and therefore the factor of the length of delay was not an important consideration (at [5]). It also accepted that the prejudice of the respondent to the AAT proceedings (the Secretary, Department of Education, Employment and Workplace Relations) was limited to the time and cost which the respondent alleged would be wasted as the substantive application had no prospects of success (at [6]). As the force of this latter submission depended on the merits of Ms Light's substantive application, the AAT considered that factor (at [7]-[18]). The AAT explained in its reasons at [7]-[18] that Ms Light's daughter received Youth Allowance in November 2008 with payments backdated to 9 July 2008. Ms Light, between July and October 2008, was also receiving a parenting payment and family tax benefit on account of her daughter. To qualify for the parenting payment a person must have "at least one PP child" (s 500(1)(a) of the Social Security Act 1991 (Cth)). Section 500D of the Social Security Act defines the circumstances in which a person is taken to have a PP child. Relevantly, the person must be the child's "principal carer" (s 500D(1)(d)). This term is defined in s 5(15) by reference to a child under 16 who is a "dependent child" (s 5(15)(a)). A child cannot be a dependent child if the child receives a social security benefit (s 5(6)(b)). In terms of the Family Tax Benefit, s 21(1)(a)(i) of A New Tax System (Family Assistance) Act 1999 (Cth) provides that a person is eligible for the payment if the person has "at least one FTB child". Section 22 of this Act defines the circumstances in which a child will be an "FTB child". Section 22 is subject to s 22A which includes a table defining when a child cannot be an "FTB child". One excluded circumstance is where the child is of any age and receives a social security benefit. Ms Light's daughter received the Youth Allowance backdated to July 2008. The Youth Allowance is a social security benefit. It follows that from July 2008 Ms Light's daughter was no longer a "PP child" or an "FTB child". The AAT rejected Ms Light's argument that as her daughter only received the Youth Allowance from December 2008 it could not be said that she received a social security benefit before that date. It followed that from that date Ms Light had no entitlement to receive a parenting payment or family tax benefit. Because it found that Ms Light's substantive application had no merit, the AAT refused to extend time under s 29(7) of the AAT Act. At the first return date of the appeal a representative for the AAT appeared as well as a representative for the Secretary, Department of Education, Employment and Workplace Relations and the Secretary, Department of Families, Housing, Community Services and Indigenous Affairs. I made an order joining the Secretaries of these Departments as the second and third respondents to the appeal. The Secretary, Department of Education, Employment and Workplace Relations was the respondent to the AAT proceeding and thus a necessary part to the appeal. According to the solicitor for the second and third respondents, the Secretary, Department of Families, Housing, Community Services and Indigenous Affairs also has responsibility for the decisions in question and thus was also joined as a party. I excused the AAT's representative from any further attendance. Also at the first return date the solicitor for the second and third respondents foreshadowed the filing of a notice of objection to the competency of the appeal on the basis that the appeal documents did not disclose any question of law as required by s 44(1) of the AAT Act. Ms Light filed a document entitled "Reply to File a Notice of Objection to Competency" on 6 October 2009 but the second and third respondents maintained that no question of law had been identified and thus filed and served their notice of objection to competency on 27 October 2009. At the hearing on 12 November 2009 I gave Ms Light an opportunity to identify any questions of law that she said arose on the appeal. Insofar as I can understand the propositions that she put in response, Ms Light said: - (i) the AAT's decision was interlocutory and thus leave to appeal was required under s 24(1A) of the Federal Court of Australia Act 1976 (Cth), (ii) the test for leave to appeal is whether Ms Light would suffer a substantial injustice supposing the decision of the AAT to be wrong, (iii) Ms Light would suffer such a substantial injustice because the AAT had limited powers of review and could not make a decision based on all relevant factual circumstances, (iv) because the AAT has such limited powers its decision did not determine all of the rights between the parties, (v) only a court can consider all of the issues and determine the rights of the parties, (vi) for these reasons Ms Light had served notices under s 78B of the Judiciary Act 1903 (Cth), (vii) the Federal Court's powers include making orders as it thinks fit (in respect of which Ms Light referred to s 16 of "The Judicial Review Act 1997" which I identify as the Administrative Decisions (Judicial Review) Act 1977 (Cth), s 16(1) of which sets out the powers of the Federal Court and Federal Magistrates Court on a review under that Act). The difficulty for Ms Light is that although she believes her documents and oral submissions identify and explain the questions of law she says arise from the AAT's decision, they do not do so. It may be acknowledged that the AAT's decision was interlocutory; however, contrary to Ms Light's submission, leave to appeal is not required. Section 24(1A) of the Federal Court of Australia Act does not apply to appeals from decisions of the AAT. Section 44(1) of the AAT provides that an appeal to this Court may be made from any decision of the AAT. In any event, an appeal may only be brought from a decision of the AAT on a question of law. In a case such as the present, where the AAT made a decision not to extend the time for the filing of an application for review, the difficulty for a person in Ms Light's position is to identify a question of law in respect of a discretionary decision. An appellate court will not interfere with a discretionary decision unless some operative error of principle is found ( House v The King [1936] HCA 40 ; (1936) 55 CLR 499 at 504-505). Ms Light's written and oral submissions appear to relate to matters separate from the AAT's decision but which she believes form part of the relevant background. I accept the genuineness of her beliefs but that does not make them correct or relevant in law. As the second and third respondents submitted it is well established that in an appeal under s 44(1) of the AAT Act the appellant must identify a question of law on which the AAT's decision depended. This pre-condition must be satisfied in order to found the Court's jurisdiction. Failure to do so means that the Court does not have jurisdiction to determine the appeal. The AAT's statement in writing does not disclose any legal error. It appears to contain a correct analysis of statutory provisions which provide that Ms Light lost her entitlement to a parenting payment and family tax benefit from the time her daughter received the Youth Allowance back dated to the first notional payment date of 9 July 2008. In circumstances where the AAT considered that the substantive application had no prospects of success it was open to the AAT to decide not to extend time for the filing of the application for review despite its acceptance that the delay was minor. I see no possible basis upon which an appeal against the AAT's decision could succeed. Insofar as substantial injustice would be relevant on an application for leave to appeal (which, as noted, has not been filed by Ms Light), there can be no injustice in the AAT properly applying statutory provisions in order to found its decision that the substantive application had no prospects of success and that, in consequence, no extension of time should be granted. The other matters Ms Light raised (some of which I have referred to above and others of which I am unable to articulate in any meaningful way) appear to be unconnected to the AAT's decision despite Ms Light's beliefs to the contrary. Her concerns about the jurisdiction of the AAT appear to be misplaced given that the AAT is vested with the relevant power to review the decision of the SSAT. Her concerns appear to flow from the fact, noted by the SSAT in its own decision, that Ms Light considered many things to be relevant to her entitlement which could not be considered relevant under the applicable statutory regime. No question of law has been identified arising from the AAT's decision against which the appeal is brought. It follows that the notice of objection to competency must be upheld and the appeal dismissed with costs. | notice of objection to competency of an appeal from the administrative appeals tribunal no questions of law identified appeal incompetent administrative law |
Magistrate Calder thereupon committed the applicant to custody pursuant to s 19(9) of the Act. By application dated 3 April 2009 the applicant sought review of the Magistrate's decision pursuant to s 21(1) of the Act and applied for immediate bail pending review, pursuant to s 21(6)(f)(iv) of the Act. Under s 21(6)(f)(iv) of the Act, pending the determination of a review application in this Court, bail can only be granted if there are "special circumstances" justifying such a course. The decision of the High Court of Australia in the United Mexican States v Cabal (2001) 209 CLR 165, is on point and relied upon by both the applicant and first respondent. First, the circumstances of the individual case are special in the sense that they are different from the circumstances that persons facing extradition would ordinarily endure when regard is had to the nature and extent of the extradition charges. This means that the circumstances relied on must be different in kind from the disadvantages that all extradition defendants have to endure. To constitute "special circumstances", the matters relied on "need to be extraordinary and not factors applicable to all defendants facing extradition. "(109) Secondly, there must be no real risk of flight. Absence of a real risk of flight is ordinarily a necessary but not a sufficient condition of bail. When there is a real risk of flight, ordinarily bail should be refused. The Court said (113) that, "it can never be regarded as anything other than a special circumstance that a person should have to spend a year in prison unconvicted of any offence". With respect, this statement cannot be accepted as a general proposition. Whether or not a delay of one year or more constitutes special circumstances depends on the facts of the particular case. If the extraditing country has prosecuted the proceedings without undue delay, it is unlikely that length of delay would itself constitute special circumstances. No doubt it is a hardship for any innocent person to be held in custody for a lengthy period. But detention for a lengthy period - particularly when the charges are numerous and complex and the defendant exercises his or her right to appeal against the order of committal - is not so special that it constitutes special circumstances. In any contested extradition proceedings, delay is inevitable. For example, the defendant may pose a risk to the community or a particular individual. In addition, bail must become harder to obtain as the case proceeds through the judicial system. Once the magistrate has found that the defendant is eligible for surrender, public interest factors similar to those that require a convicted defendant to be imprisoned also require that a defendant in extradition proceedings be kept in custody. Before a Federal Court judge grants bail, the defendant ordinarily will need to show that the application for review has strong prospects of success as well as special circumstances and an absence of risk of flight. They are not special, in the sense that they are factors that one might say are generally applicable to all persons in the applicant's position facing extradition. There is no debate that the applicant left Ireland at a time when there were no charges against him. He came to Australia with his then family in July 2002 and since then he has worked in Australia and he and his wife have had three more children. The family, generally speaking, is dependent on him as the primary breadwinner. Being held in custody now as a result of the Magistrate's recent determination will have some very real effects on his family. All of those things are distressing no doubt from the family's and the applicant's viewpoint. The question of flight, and how real the risk of flight is, only arises where special circumstances have first been demonstrated. It is also important to observe though, as did their Honours in Cabal , that when an applicant proceeds to this advanced stage of extradition proceedings before a Federal Court judge, the stakes are raised and it is also important to show that the review application has strong prospects of success. In this case it is, in the final analysis, unnecessary to consider closely the question of flight risk or prospects of success, as "special circumstances" for bail are not made out in the first instance. In all of the circumstances, then, on the basis of materials currently before me, the application for bail pending the determination of the review must be dismissed. The application for bail under the Act is dismissed. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. | applicant committed to custody application for bail pending review of magistrate's order pursuant to s 21(6)(f)(iv) of the extradition act 1988 (cth) special circumstances not made out bail application dismissed extradition |
Subsets and Splits