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The plaintiffs seek an order varying the terms of two deeds of company arrangement, each of which was entered into on 15 September 2006 between the deed administrators and Croesus Mining NL, and Central Norseman Gold Corporation Limited respectively. 4 The evidence of one of the deed administrators, Mr Vincent Anthony Smith, is that since entering into the deeds of company arrangement, the deed administrators have sought expressions of interest for the purchase of the assets of the companies or participation in the restructure of the companies. Mr Smith deposed that there were expressions of interest submitted to the deed administrators by 99 parties, and they ultimately reduced those expressions of interest down to three parties. Mr Smith deposed that some difficulty developed in the negotiations with one of those three parties, which was at that time the preferred party. The consequence was that the deed administrators had to revert to another of the three short listed eligible parties. He went on to depose that the deed administrators, by a deed known as the Share Sale Agreement dated 3 January 2007, have entered into an agreement with that party. 5 Mr Smith said that the deed administrators have also been working on complying with their reporting requirements under the deeds of company arrangement referred to above. However, according to Mr Smith, the preparation of the reports has taken longer than expected. He said that it is necessary to advise the creditors of the terms of the agreements entered into and the implications of the agreements for the creditors. This task is complex. Further, the deed administrators wish to ensure that the proposed varied deeds of company arrangement, referred to in para 4.1.4 of the respective deeds, and creditors trust deeds, have been finalised prior to the reports being issued. The preparation of these documents is ongoing and, in Mr Smith's view, will take some time to finalise. 6 Mr Smith also deposed that there are other matters yet to be finalised. One of the matters is the ongoing discussions with representatives of one of the secured creditors, with a view to attempting to ensure that there will be a dividend paid to the general unsecured creditors of Central Norseman Gold Corporation Limited. 7 The deed administrators have already exercised the power in para 4.1.3 of the deeds, to extend the time for the issue of the reports by obtaining the written consent of the secured creditors. However, that extension of time was limited to a period of 60 days, and is due to expire on 5 February 2007. It is for that reason that the plaintiffs now seek an order varying para 4.1.3 in each of the deeds, so that the words "for a period of up to 60 days" are replaced with the words "not later than 20 February 2007". Mr Smith expects that within that period of time he and Mr Hughes will be able to comply with their obligation to issue the reports. 8 It is well established that s 447A of the Act can be used to vary a deed of company arrangement ( Mulvaney v Rob Wintulich Pty Ltd (1995) 60 FCR 81; Re Pasminco Limited (No 2) (2004) 49 ACSR 470). There is also evidence that the only member of the committee of creditors of Croesus Mining NL has consented to the bringing of this application and the orders proposed. I have been advised from the Bar table that all of the members of the committee of creditors of Central Norseman Gold Corporation Limited, who have been able to be contacted, also agree with the orders proposed. 10 It will not be possible to convene meetings of creditors of the companies, for the purpose of amending the deeds of company arrangement, prior to the expiry of the deadline. This is due to the notice requirements. In addition, the cost of convening such meetings would be significant. Given the extension sought is of a fairly limited duration, being only 14 days, in my view, there is unlikely to be any prejudice to the unsecured creditors in the making of the orders proposed. 11 Further, there are some potential advantages to the creditors in extending the time. Firstly, the extension of time has the potential to benefit creditors because there are still ongoing discussions with one of the secured creditors as to potential dividends to be paid to the general unsecured creditors of Central Norseman Gold Corporation Limited. Secondly, the creditors will be better informed when it comes to voting on the proposal which will be put by the deed administrators. 12 Accordingly, I will make orders in terms of the application, save that the costs of photocopying the annexures to the Share Sale Agreement being exhibit "VAS3" to the affidavit of Mr Smith sworn 31 January 2007, which were voluminous but unnecessary for this application, should be borne by the plaintiffs' solicitors and not by the creditors. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | application under s 447a of the corporations act 2001 (cth) variation to deed of company arrangement extension of time for deed administrators to issue a report corporations |
2 The Creditor was an assignee of debt from a firm of solicitors called Lennon Settle Mazzeo Lawyers (the Assignor). The learned Magistrate held at [62] that the bankruptcy notice was an abuse of process. His Honour found at [59] that it had been issued "solely for the purpose of securing payment of the debt". The Creditor had failed to take "appropriate action to otherwise recover the debt or even make demand upon the Debtor" (at [59]). There was, his Honour found at [62], a collateral purpose in that the Creditor and the Assignor had a "contrived arrangement" to circumvent the operation of s 44(3) of the Bankruptcy Act 1966 (Cth). The Assignor was said to be a secured creditor for a much larger amount. By "syphoning off" a small debt to the Creditor, the Assignor could bring about the Debtor's bankruptcy without having to surrender his security, as required by s 44(3) had it been the petitioning creditor (at [61]). The Master's Certificate was issued on 18 January 2006. The notice of assignment dated 1 May 2006 was in evidence, although not the assignment itself. 5 The Debtor swore an affidavit in support of his application. Leaving aside some grounds which were dismissed by the learned Magistrate and not raised on appeal, the Debtor deposed that he was solvent and that any creditor's petition against him would amount to an abuse of process in view of the fact that any such sequestration orders would be "foredoomed to failure based upon my solvency". He deposed that he had "assets which exceed $1 million in value and my liabilities are far less than that figure". Further I believe that the Bankruptcy Notice also amounts to an abuse of process by reason of the fact that the assignor of the relevant debt previously filed another Bankruptcy Notice against me in this Court arising out of another proceeding filed in the County Court and has not pursued any bankruptcy proceedings against me on the basis of that principal judgment debt. I believe it has not done so because it knows that I am a solvent person. The appeal proceedings brought against the assignor arose out of that principal County Court proceeding. The purported assignor of the debt was my previous solicitor in Family law proceedings, Messrs. Lennon Settle, and they know full well that I am a solvent person with ample assets. I believe that the Bankruptcy Notice has been filed as an illegitimate attempt to cause me stress and vexation, knowing full well that I am a solvent person. It smacks of an abuse of process designed to persecute me and designed to ulitise this Court s a debt collector when there are ample alternative remedies available to any judgment credit or assignee thereof to collect any judgment debt owed by me. No objection was taken. However, as this is an appeal by way of rehearing, the judgment appealed from can be set aside where there is legal, factual or discretionary error: Allesch v Maunz [2000] HCA 40 ; (2000) 203 CLR 172 at [23] (a case which concerned the Family Court but is equally applicable to appeals in the Federal Court: Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17 ; (2001) 205 CLR 507 at [75] ). It is not clear whether his Honour relied on this evidence, but if and to the extent that he did there would be an error of fact-finding: CSR Ltd v Della Maddalena [2006] HCA 1 ; (2006) 224 ALR 1 at [16] . Unsupported speculation of this kind has no probative value. 6 In an affidavit in opposition the Creditor set out the history of the Supreme Court proceedings. He deposed that the Debtor had not paid or offered to pay the claim in the bankruptcy notice or any part thereof. I deny that the bankruptcy notice has been filed to cause Etl stress and vexation knowing that he is solvent. I issued the Bankruptcy Notice in the hope that the Debt would be paid. If payment is not made, I intend to issue a bankruptcy petition. Based on Etl's failure to pay the amount set out in the bankruptcy notice, or even offer to pay what he admits to be the amount outstanding (approximately $15,500), I believe that he may be insolvent. He believed that the Creditor was a personal friend of Mr Mazzeo, a partner of the Assignor who had the carriage of his (the Debtor's) matrimonial proceeding in the Family Court. On 30 June 2006 Mr Mazzeo swore an affidavit in support of the issue of a warrant of seizure and sale out of the County Court of Victoria. The Assignor's debt sought to be recovered by this execution exceeded $235,000. If that warrant were executed the Assignor would recover all of their judgment debt. I believe that the Assignor and the Assignee know full well that I am a solvent person. I believe that the Bankruptcy Notice has been filed against me in order to cause me to suffer vexation and distress. Mr Mazzeo knows full well that a sale of the real estate in which I have an interest would give rise to more than sufficient funds to discharge the entire debt which I owe to his firm. However, I am very angry with Mr Mazzeo and I refuse to pay out the debt as I intend to file legal proceedings against his firm seeking substantial damages for negligence and conspiracy to cause me personal injury and loss and damage. He said that he had practised as a solicitor for about 19 years as a general practitioner with some experience in commercial litigation including the collection and recovery of debts. He was familiar with the summons for oral examination procedure. He said the assignment was offered to him by Mr Mazzeo in April. He had known Mr Mazzeo for about six or seven years. They had practised on the same floor at 179 Queen Street. He had never before taken assignments of debts owed to fellow practitioners. --- We didn't have a discussion as to why he was assigning the debt. He simply asked me whether I was interested in taking an assignment of a debt, on commercially favourable terms to me. He described the debt, how much it was for, and we proceeded to the assignment on that basis. In answer to further questions the Creditor said was not aware that Mr Mazzeo's firm had previously on 22 July 2004 issued a bankruptcy notice against the Debtor. He admitted he was curious as to why Mr Mazzeo was offering to assign the debt, but assumed he had his reasons for doing that, but "we didn't go into them". He had no knowledge of the family law background. Do you accept that? --- No, I don't. You think that would be a proper purpose, do you? Would it be a proper purpose if your sole purpose for filing a bankruptcy notice was to put pressure on the individual to pay the debt? Would that be a proper purpose, yes or no? --- No. You think that would be a proper purpose, do you? Would it be a proper purpose if your sole purpose in filing a bankruptcy notice was to put pressure on the individual to pay the debt? Would that be a proper purpose, yes or no? --- No. He had made no direct request of the Debtor for payment but relied on the notice of assignment and the bankruptcy notice itself. He was not aware that the Assignor had issued a Warrant for Seizure and Sale out of the County Court seeking recovery of $235,000. He had a "general understanding" of the operation of s 44(3) of the Bankruptcy Act 1966 (Cth) and that there was a danger of a creditor losing its security. He had no discussions with Mr Mazzeo at all in regards to the security over the Debtor's property. One of the purposes for issuing it was indeed to seek to put pressure upon him to pay the debt. Isn't that correct? --- I issued it in the hope that I would get paid. There was no intention to put any undue or improper pressure on him; just simply that we get paid. This aspect has not been pursued on the appeal. 16 His Honour at [57] thought that the Creditor had been "less than frank" with the Court in divulging the true circumstances leading up to the execution of the assignment. He noted that the assignment itself had not been produced and there might have been formal defects in it. In any event, applying the authorities to which reference has been made, I am satisfied that the bankruptcy notice has been issued as a means to secure payment of the debt and further that it has a collateral purpose. On that basis, I am satisfied it is an abuse of process and should be set aside. It is clear on the evidence before me that the Creditor has issued the bankruptcy notice solely for the purpose of securing payment of the debt and has failed to take any appropriate action to otherwise recover the debt or even make demand upon the Debtor for payment of the debt. The demand made on the Debtor was a demand made by the assignor prior to the assignment of the debt. The collateral purpose in my view having regard to the history set out in the court's earlier decision in Etl v Settle [[2004] FMCA 718] was to circumvent the operation of s.44 of the Bankruptcy Act . I am satisfied that the close relationship between the Creditor and the assignor illustrates that this procedure undertaken for the first time by the Creditor was a procedure which had as its collateral purpose a benefit to the Creditor's friend and professional colleague of avoiding the operation against the assignor of s.44 of the Bankruptcy Act . I am satisfied on the material before me, including the history set out in the Court's earlier judgment to which I have already referred, that there was a benefit to the assignor of 'syphoning off' a small part of the total debt allegedly owed by the Debtor to the assignor in a manner that would enable the current Creditor to pursue a sequestration order after the issue of a bankruptcy notice in a manner which would not attract the operation of s.44 of the Bankruptcy Act to the detriment of the assignor. The use of bankruptcy proceedings in this contrived manner in my view is an abuse of process, as it has clearly been undertaken at least in part to satisfy [the] collateral purpose of obtaining a benefit to the assignor of becoming a Creditor without sacrificing security. This contrived arrangement is an inappropriate use of bankruptcy proceedings and a blatant attempt to avoid the consequences of the operation of s.44 of the Bankruptcy Act . Even if the Magistrate did not find him a credible witness, disbelief of him could not found a positive conclusion as to the existence of the relevant purpose, proof whereof lay on the Debtor: Schellenberg v Tunnel Holdings Pty Ltd [2000] HCA 18 ; (2000) 200 CLR 121 at [53] , King v Collins [2007] NSWCA 122 at [42] . 18 To the extent that the finding was based on an alleged failure to take "appropriate" action or "even make demand", the notice of assignment to the Debtor demanded payment to then Creditor, as did the bankruptcy notice itself. In any event, a prior demand is not a statutory precondition for the issue of a valid bankruptcy notice. Before a bankruptcy notice is issued there must be a judgment of a court in favour of a creditor, which is sufficient to put the debtor on notice that he or she is legally obliged to pay the debt claimed. 19 An essential element of the judgment was a finding of a collateral purpose in the "contrived arrangement" to avoid the operation of s 44. The object sought to be achieved by the alleged arrangement was that the Debtor would be made bankrupt but the Assignor would avoid having to give up its security, which is required of a petitioning creditor under s 44(3). 20 However, as is now accepted, there was no evidence before the Federal Magistrate that the Assignor held any security over property of the Debtor, still less that the Creditor was aware of such a fact, if it was a fact. 21 It was not permissible to rely on evidence in the earlier proceeding. 22 Moreover, the collateral purpose found by his Honour at [60]-[62] was a common purpose to have the Debtor made bankrupt. Yet the learned Magistrate found the sole purpose held by the Creditor was to obtain payment of his debt, as distinct from invoking the bankruptcy jurisdiction of the Federal Magistrates Court. In other words, the finding was that the Creditor did not intend to issue a petition, so there would never be a bankruptcy. There is a fundamental inconsistency here. 23 The appeal will be allowed and the order of the Federal Magistrate made on 22 March 2007 set aside. Time for compliance with the bankruptcy notice will be extended to 7 September 2007. There will be an order that the Debtor pay the costs of the Creditor of the appeal and at first instance. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice HEEREY . | creditor served bankruptcy notice on debtor creditor was assignee of a debt from firm of solicitors no evidence that assignor had security over debtor's property no evidence that bankruptcy notice was issued solely for purpose of securing payment of debt no evidence of a collateral purpose in a contrived arrangement to avoid assignor giving up security bankruptcy |
The making of final orders in the subject interlocutory proceedings for joinder of Macquarie Underwriting Pty Limited and/or SVB Syndicates Ltd be stood over for 21 days with liberty to apply in the meantime on two days notice. The applicant to provide to Macquarie Underwriting Pty Limited and SVB Syndicates Ltd at their address for service in Australia within seven days the text of the orders it proposes for the purpose of giving effect to the reasons for judgment, including orders as to costs of the subject interlocutory proceedings, and in relation to the matter of costs supported by reasons in writing. Macquarie Underwriting Pty Limited and SVB Syndicates Ltd respond in writing within a further seven days. 3 Subsequently on 20 June 2006, two issues were further debated by the parties arising directly or indirectly out of matters recorded in those reasons, one being the circumstance that according to Australian Securities & Investment Commission ('ASIC') records, Mr Teves was not formally disclosed as a director of ARMA in relation to the period from July 2001 to July 2004, notwithstanding that he had been earlier recorded as a director of ARMA since 15 December 1988, and ARMA bears all the indicia implicitly of a private family company. His wife, Vivienne Teves ('Mrs Teves'), was recorded by ASIC as having been a director at least during that controversial period of three years, though she was apparently replaced by Mr Teves at the time of his re-appointment subsequently in July 2004. Mrs Teves had been in fact recorded in ASIC's records as a director of ARMA as early as 22 October 1990, and as remaining thus continuously in that office at all material times thereafter. Despite apparent attempts made by PCL's solicitors to obtain copies of ARMA's corporate returns and other documents filed with the Commission, no further official records have been further obtained by PCL's solicitors in relation to Mr Teves' formal appointments to any office in relation to ARMA during that interval of time. Nevertheless there was admitted on the pleadings by ARMA the circumstance that Mr Teves was a registered valuer who had undertaken valuations on behalf of ARMA 'at all material times'. As I recorded at [7] of my earlier reasons for judgment, Mr Teves apparently signed the valuations on behalf of ARMA which are presently in issue, by implication as author thereof. 4 Following the handing down of my reasons for judgment of 29 May 2006, counsel for ARMA further addressed issues as to the construction of the indemnity provisions of the policies, and in particular those of the first (or earlier) policy, during the term of which, or proximately so as above indicated, Mr Teves' name did not appear as a director of ARMA in ASIC records. It was submitted by ARMA that the relevant indemnity provisions of that first policy could not conceivably be construed as having a conjunctive operation, contrary to the submission of senior counsel for PCL; see in that regard what I have recorded in [41]-[42] of my earlier reasons for judgment of 29 May 2006. However I remain of the view that in the particular complexity of the controversial circumstances of this case which have already emerged at the interlocutory stages to date, I should not finally resolve that issue of construction raised by the now respondent insurers. It is I think more appropriate to do so at a time when all construction issues conceivably arising can be resolved, and hence all documentary records are available for tender at least in that context, and also when any available oral testimony conceivably bearing upon at least those issues can be considered by the Court. 5 I am therefore of the view that on the somewhat elusive if not confused state of the evidence presently available (being evidence which may conceivably assist also to resolve outstanding issues as to construction of the first and second policies), leave to join Macquarie and SVB as respondent insurance underwriters together in the subject proceedings may now be formally implemented, Macquarie of course in its capacity as originally disclosed agent for then undisclosed principals. The subject proceedings reflect the practical difficulties facing applicants for relief against undisclosed principal insurers, against whom there exists prima facie entitlement to indemnity pursuant to s 6 of the LR Act. 6 In the light of the complexity of the issues which have already arisen, the unresolved subject as to the costs of the interlocutory proceedings to date will remain reserved by the Court until further order. I perceive that there is further evidence yet to emerge from third party sources in particular, at or before the final hearing of the proceedings, which will throw more light on the contextual circumstances concerning the underwriting of the subject policies for the successive years of indemnity of potential relevance. I have accordingly made what seem to me to be appropriate orders in conformity with my reasons of 29 May 2006 and of today, including an order that the costs of the interlocutory proceedings to date be reserved. | professional indemnity relief by way of joinder of additional parties consequential to earlier reasons and orders insurance |
The issues for decision are those remaining from a number of notices of motion which came before me on 3 May 2007. However it is important to note as a preliminary point that Kabi Kabi #3 is one of a number of native title determination applications which have been before the Court, instituted by members of the Kabi Kabi community, and in relation to substantially the same land. The other native title determination applications include Lance Hill and Ors on behalf of the Kabi Kabi People #2 v State of Queensland QUD65 of 2006 ("Kabi Kabi #2") and Gubbi Gubbi #2 v State of Queensland QG6034 of 1999 ("Gubbi Gubbi #2") (discontinued on 22 February 2005). What (if any) orders should be made in respect of costs incurred by a non-party, namely the Kabi Kabi #2 Applicant, as a result of the discontinuance of a notice of motion filed on 29 June 2006 ("the 29 June 2006 notice of motion") by the applicant in Kabi Kabi #3 ("the Kabi Kabi #3 Applicant") to amend the Kabi Kabi #3 Application. As contemplated by my order of 9 March 2007, the 29 June 2006 notice of motion was listed to be heard. However, by amended notice of motion filed 27 April 2007, the Kabi Kabi #3 Applicant sought leave to discontinue the 29 June 2006 notice of motion. At the hearing, I gave leave to the Kabi Kabi #3 Applicant to discontinue that notice of motion. The Kabi Kabi #2 Applicant sought leave at that hearing to make submissions as to costs in respect of that discontinuance, and I gave that leave. 2. On 24 April 2007 QSNTS filed a notice of motion seeking to be joined as a party to the proceeding and seeking an order that the Kabi Kabi # 3 Application be dismissed. At the hearing, I ordered that QSNTS be joined as a party, and heard argument as to the dismissal of the Kabi Kabi #3 Application. 3. On 30 April 2007 the Kabi Kabi #2 Applicant filed a notice of motion seeking leave to be joined as a party to Kabi Kabi #3 pursuant to s 84(5) of the Act . However, the Kabi Kabi #2 Applicant did not press this notice of motion pending the decision by the Court in relation to the notice of motion to dismiss Kabi Kabi #3 (TS 3 May 2007 p 7 ll 13-18) and subject to being able to be heard on costs in relation to the 29 June 2006 notice of motion. I ordered that the hearing of that notice of motion be adjourned to a date to be fixed. 4. On 24 April 2007 QSNTS filed an amended notice of motion seeking orders that QSNTS be joined as a party to the Kabi Kabi #2 proceeding and seeking an order that the native title determination application in Kabi Kabi #2 ("the Kabi Kabi #2 Application") be dismissed. At the hearing, I ordered that QSNTS be joined as a party, but that the hearing of the notice of motion as to the dismissal of the Kabi Kabi #2 Application be adjourned to a date to be fixed. The reason for this order was that Mr Preston, Counsel for the Kabi Kabi #2 Applicant, stated that his clients had undertaken to discontinue the proceedings in Kabi Kabi #2 in the event that the Kabi Kabi # 3 proceedings were dismissed by the Court. (TS 3 May 2007 p 6 ll 37-41). Accordingly the determination of that notice of motion may not prove necessary, depending on the outcome of the QSNTS notice of motion for dismissal of the Kabi Kabi #3 Application. Note: The main application may still be amended even after a strike-out application is filed. The Court may receive evidence on the hearing of an application for an order under subrule (1). Accordingly the Courts approach such matters with caution, and on the basis that no court proceeding should be summarily dismissed except in a very clear case: Bodney v Bropho [2004] FCAFC 226 ; (2004) 140 FCR 77 at 89. The native title claim group was said to consist of the descendants of 12 named apical ancestors. The area covered by the Kabi Kabi #3 Application are to the north of Brisbane, and shown in a map that forms part of the application. The Kabi Kabi #2 Applicant consists of three persons, however 11 of the named ancestors whose descendants form the native title claim group are also named as apical ancestors in the Kabi Kabi #3 Application. There is also considerable overlap in the areas covered by the Kabi Kabi #2 Application and the Kabi Kabi #3 Application. 13 The Kabi Kabi #3 Application was not accepted for registration pursuant to s 190A of the Act by a delegate of the Registrar of the National Native Title Tribunal ("the Tribunal") on the basis that the delegate was not satisfied, pursuant to s 190C(4)(b) , that the Kabi Kabi #3 Applicant was authorised to make the application, and deal with the matters arising in relation to it, by all the other persons in the native title claim group. The notice of motion was supported by Gurang Land Council, the Kabi Kabi #2 Applicant and the State of Queensland. I note that QSNTS and Gurang Land Council were both represented at the hearing by Mr Rangiah of counsel. 15 The notice of motion was opposed by the Kabi Kabi #3 Applicant. Note 1: The person or persons will be the applicant: see subsection (2) of this section. Note 2: Section 251B states what it means for a person or persons to be authorised b y all the persons in the native title claim group. • In this case, the Kabi Kabi #3 Application and the affidavits filed in support of the application assert that the applicant was authorised to make the application in accordance with a process of decision-making under traditional laws and customs of the claim group, in that the authorisation was given by a number of unidentified persons who are described as "Elders" who conducted meetings between 17 November and 16 December 2005, and thus there was compliance with s 251B. The persons who comprise the Applicant are 10 Elders of the native title claim group and 2 persons authorised by the Elder of their families to represent their respective families... The Elders for our native title claim group have consulted with one another over the last two years about the need for a fully inclusive native title determination application to be made for all members of the native title claim group as described in Schedule A to assert the native title rights of the native title claim group as defined and to protect their cultural heritage interests. In particular, QSNTS referred to affidavits sworn 20 April 2007 by Ms Bessie Bond, Mr Tony Dalton, Mr Charlie Williams, Ms Karmen Hopkins, Mr Lance Hill, Mr Trevor Tabby, Ms Merlene Willie, Ms Lorraine Murray, Mr Laurence Wovat, Mr Albert Longwoodock, Mr Cliff Appo and Mr Nathaniel Minniecon, and to the affidavit sworn 24 April 2007 by Ms Cheri Yavu-Kama Harathumian. • Although the Kabi Kabi #2 and Kabi Kabi #3 applications cover a very similar area of land and there are eleven common apical ancestors, each application is asserted to be authorised by all the persons in the native title claim group. Both cannot be so authorised, and either one or both of the applications must not be authorised in accordance with s 61(1) of the Act . • In terms of s 251B of the Act , an agreed process of decision-making is applicable if there is no mandatory traditional process of decision-making under traditional laws and customs. Where a native title determination application is based upon an agreed process, the applicant must identify how the process was agreed upon, and how it was put into practice. • It is open to the Court to infer that the Kabi Kabi #3 Applicant cannot identify such a process in relation to that application, in that the Kabi Kabi #3 Applicant did not produce relevant evidence to the Court in response to the notice of motion to dismiss the application, and that it is also unlikely that any new material of relevance could be produced to the Tribunal. • There has been no consultation process in the case of Kabi Kabi #3 involving invitations, notice or discussions with people relevant to any native title claim concerning the Kabi Kabi people, and no evidence has been produced to establish eldership in relation to those people in Kabi Kabi #3 who assert eldership. Accordingly, the decision-making process is, on the Kabi Kabi #3 Applicant's own material, seriously defective to the point of being incurable. In my opinion the processes of decision-making referred to in the affidavits display some elements of the traditional decision-making process but do not appear to have had the level of collective interaction and discussion to be expected in the "traditional" context, nor may all relevant parties have been adequately consulted. • The affidavit of Ms Cheri Yavu-Kama-Harathunian filed 20 April 2007 who deposes that she is an Elder of a family group which identifies as Kabi Kabi people. I have never authorised or been part of any process whereby it was decided to amend the Kabi Kabi #3 native title claim. Elders and those persons, senior persons and their family and myself would have to participate in any process by which a decision was made to authorise a native title claim by the Kabi Kabi people. ... The Kabi Kabi number 2 authorisation meeting was attended by over 100 people. And it is clearly a significant group of Kabi Kabi people who do not appear to have been involved in the authorisation and consultation process for the number 3 claim. These affidavits were filed in Gubbi Gubbi #2, however there was consensus at the hearing that these affidavits were relevant as there is substantial correspondence between the Gubbi Gubbi and the Kabi Kabi native title claims. Mr Davidson deposes to a process decided upon by the Elders whereby authorisation should be via a meeting, advertised in the paper, and attended by everyone, where a vote can be taken to reach a majority decision. However, Mr Preston submits that it is clear from the affidavit evidence that as many people who attended did not attend and therefore it is implausible that the claim could be authorised (TS 3 May 2007 p 26 ll 38-43). • The affidavit of Ms Gaynor Macdonald, a consultant anthropologist, sworn 15 November 2004 and marked as exhibit 3 in these proceedings, in which Ms Macdonald points out that the Gubbi Gubbi people and the Kabi Kabi people are one and the same, both being anglicized versions of the spoken name of the Aboriginal people whose country is the subject of all three proceedings (para 2). However in my view it is appropriate to make an order pursuant to s 84C to strike out the Kabi Kabi #3 Application, on the basis that the claim does not comply with s 61 of the Act . 23 First, it is in my view clear that the Kabi Kabi #3 Application was not authorised by all the persons who, according to their traditional laws and customs, hold the common or group rights and interests comprising the particular native title claimed. The lack of identification of "Elders" in the Kabi Kabi #3 Application and the affidavit evidence of persons who appear to be well-respected members of the Kabi Kabi community that they neither authorised the application nor were consulted in relation to the application indicate that there is a serious issue of non-compliance with s 61 in relation to the membership of the group comprising the Kabi Kabi #3 Applicant. There is no indication that Ms Eve Fesl, a senior and locally prominent Kabi Kabi descendant of Maggie palmer, named as an apical ancestor on all three Forms 1, was consulted. There is no indication that the descendants of Kal-ma-kuta, named as an apical ancestor on the Forms 1 for both Kabi Kabi #2 and Kabi Kabi #3, were consulted. There is no indication that the descendants of the apical ancestors named as Annie Laurie and Lizzie on the Form 2 for Kabi Kabi #2 were consulted. There is no evidence that the descendants of Laurence Stanley, an apical ancestor named on the Form 1 for Kabi Kabi #2, were consulted. There is no indication that the descendants of Jimmy Isaacs and Duncan Crowe, named as apical ancestors on the Kabi Kabi #2 Form 1, were consulted. 26 Second, although it is asserted in the Kabi Kabi #3 Application that the authorisation of the application in this case was pursuant to a process of decision-making in accordance with traditional laws and customs, it does not appear to be in dispute that a traditional decision-making process involves, inter alia , appropriate consultation, and consensus of relevant persons in the group (Niblett affidavit paras 11-19, MacDonald affidavit paras 7- 8). Even if the decision-making process in Kabi Kabi #3 had elements of traditional law and customs, I note comments of Mr Niblett that the processes of decision-making referred to in affidavits of persons comprising the Kabi Kabi #3 Applicant did not appear to have had the level of collective interaction and discussion to be expected in the "traditional" context, nor may all relevant parties have been adequately consulted. In this respect I note from Ms MacDonald's affidavit that she predicated her comments concerning majority decision-making on adequate consultation of relevant persons, which is in serious dispute in this case as is clear from evidence of, for example, Mr Niblett, Ms Bond, Mr Dalton and Ms Yavu-Kama-Harathunian. 27 Third, as I have already noted, Ms MacDonald also deposed that a majority decision arrived at during a meeting held in accordance with Australian meeting rules and conventions conforms to the traditional values associated with Kabi Kabi decision meeting in appropriate conditions (cf similar comments of Mr Alexander Davidson in his affidavit of 11 October 2004 (para 11)). However in the absence of more precise evidence, I am not prepared to accept at this stage that majority vote is a method of decision-making in accordance with traditional Aboriginal law and custom in relation to the Kabi Kabi people. Mr Niblett in his report makes no reference to majority voting as conforming to traditional decision-making processes. Further, to paraphrase comments of Tamberlin J in similar circumstances in Booth v State of Queensland [2003] FCA 418 , there is no other evidence, oral or written, before me as to the constitution of the group or the basis on which it is claimed that a majority vote would be sufficient, or indeed as to who and how many persons are entitled to vote and precisely what is meant by the expression "majority vote" ( Booth [2003] FCA 418 at [11] ). 28 Fourth, if the authorisation process concerning the Kabi Kabi #3 claim was not in conformity with traditional law and customs, it is not clear to me on the evidence that the native title claim group agreed to and adopted any particular decision-making process in relation to authorising the Kabi Kabi #3 Applicant to make the Kabi Kabi #3 Application. I note and accept the submissions of Mr Rangiah for QSNTS in this regard concerning the lack of evidence or detail as to the authorisation process in that case. 29 Finally, I note that the submissions of Mr Poynton for the Kabi Kabi #3 Applicant in this matter are not that the application is authorised and in accordance with s 61 , but are confined to a request for more time to allow it to, in the words of Mr Poynton, take advantage of "an administrative window of opportunity" offered by the Tribunal in relation to testing the application. In my view this submission does not address the key issues before the Court in relation to the current notice of motion. However in my view this submission is of little weight, as I note from the undertaking of Mr Preston on behalf of his client that the effect of striking-out the Kabi Kabi #3 Application is that the Kabi Kabi #2 Application will be discontinued. 31 It is unnecessary in these circumstances that I deal with O 20 r 2 Federal Court Rules . The Kabi Kabi #3 Application does not comply with s 61 of the Act and accordingly should be struck out pursuant to s 84C. ISSUE 2: SHOULD THE COSTS OF PREPARATION OF THE AFFIDAVITS FILED 20 APRIL 2007 INCURRED BY THE KABI KABI #2 APPLICANT BE AWARDED AGAINST THE KABI KABI #3 APPLICANT? 34 At the directions hearing of 9 March 2007 Mr Preston for the Kabi Kabi #2 Applicant asked that orders be made that his clients also be served with relevant documents so that the Kabi Kabi #2 Applicant could be heard on the 29 June 2006 notice of motion. This was on the basis that, although the Kabi Kabi #2 Applicant was not formally a party to Kabi Kabi #3, it might wish to file something in relation to the 29 June 2006 notice of motion. This request was not contested and I made an order in those terms. Mr Preston also anticipated that his client would be seeking leave to be heard in relation to that notice of motion. Mr Preston did not make application on that day for his client to be formally joined as a party to Kabi Kabi #3. 35 On 3 May 2007 when the 29 June 2006 notice of motion came before me for hearing, the Kabi Kabi #3 Applicant sought leave to discontinue the 29 June 2006 notice of motion. I granted leave. 36 However, given the nature of these proceedings and the fact that the Kabi Kabi #2 Applicant had prepared and, on 20 April 2007, filed a number of affidavits in relation to the 29 June 2006 notice of motion, I granted the Kabi Kabi #2 Applicant leave to make submissions as to costs in respect of the preparation of those affidavits. However, the starting point is that each party will bear their own costs unless the Court determines that it is appropriate in the circumstances to make an order for costs. This does not mean however that the categories of third parties who may be made liable for the costs of litigation are limited to those articulated by their Honours in Knight : Gore v Justice Corporation [2002] FCA 354 ; (2002) 119 FCR 429 at 437. 40 The order sought by the Kabi Kabi #2 Applicant in this case may be distinguished however from such cases as Knight [1992] HCA 28 ; 174 CLR 178 and Gore [2002] FCA 354 ; 119 FCR 429 in that, in this case, costs are sought by a non-party against a party to the litigation. While claims by non-parties seeking costs in their favour against parties to litigation are rare, they are not unknown: for example Re Pan Pharmaceuticals; Selim v McGrath [2004] NSWSC 129 and O'Keefe v Hayes Knight GTO Pty Ltd [2005] FCA 1559. It follows from the terms of that section that the jurisdiction is conditioned by there being 'costs' and those costs being in 'proceedings before the Court'. Section 4 of the Act defines 'proceeding' to mean 'a proceeding in a court, whether between parties or not, and includes an incidental proceeding in the course of, or in connexion with, a proceeding...'. In Knight v FP Special Assets Limited [1992] HCA 28 ; (1992) 174 CLR 178 it was held by Mason CJ, Deane, Dawson and Gaudron JJ, McHugh J dissenting, that the discretion to award costs under O 91 r 1 of the Rules of the Supreme Court of Queensland was not confined to the parties in the proceedings. That rule provided for the costs of and incidental to all proceedings in the court to be in the discretion of the court or judge. Gaudron J at 205 stated that it was contrary to long-established principle and wholly inappropriate that a grant of power to a court should be construed as subject to a limitation not appearing in the words of the grant; that is, the words used should be given their full meaning unless there is something to indicate to the contrary. Therefore, her Honour stated the necessity for the power to be exercised judicially tends in favour of the most liberal construction. 18 In O'Keeffe Nominees Pty Ltd v BP Australia Ltd (1995) 55 FCR 591 at 597 Spender J stated that, in the absence of any express restriction on the orders for costs that may be made concerning intervention or associated with it, the unfettered discretion conferred on the Federal Court by s 43 of the Act applied in the context of awarding costs in favour of a non-party intervener. 19 In King v GIO Australia Holdings Limited [2001] FCA 1773 ; (2001) 116 FCR 509 at 515, after referring to what was stated by Spender J in O'Keeffe , Moore J said he was prepared to assume that s 43 of the Act is cast in sufficiently wide terms as to enable the Court to make an order for costs in the proceeding for the benefit of a non-party. 20 This line of authority, although not greatly developed, would support a conclusion that there is power in the Court pursuant to s 43 to make an order for costs in favour of a non-party. Section 43 of the Federal Court of Australia Act is cast in sufficiently wide terms to enable the Court to make an order for costs in a proceeding for the benefit of a non-party. 2. For such an order to be made there must be "costs" and they must be incurred in "proceedings before the Court". 3. Even if those requirements are met, the section requires an exercise of discretion in the particular circumstances in which the issue arises and the requirements of reason and justice. 4. The making of an order for payment of costs in favour of a non-party will be exceptional and therefore must be treated "with considerable caution". 5. The nature of the relationship between the non-party and the litigation will be relevant. In Pan Pharmaceuticals [2004] NSWSC 129 Barrett J took the view that "some very special factor outside the ordinary and expected course of events and engendering a justifiable expectation of compensation in the mind of the non-party would have to be found before any relevant aspect of the comprehensive jurisdiction with respect to costs might be regarded as properly and regularly invoked in favour of a non-party as against a party. In other words, such an award, if ever appropriate, will be extraordinary and exceptional" (at [20]). His Honour in that case declined to make an order in favour of the non-parties seeking costs. The directions made on 9 March 2007, where the Kabi Kabi #3 Applicant was ordered to serve the Kabi Kabi #2 Applicant with the relevant documents, did not require or otherwise oblige the Kabi Kabi #2 Applicant to file affidavits, outlines of argument or any other material, nor to do anything else at all. In this respect advancement of the Kabi Kabi #3 Application appears to have been afflicted by some ennui. 47 However, I also note that, while not determinative of the claim of the Kabi Kabi #2 Applicant, no orders have been sought by State of Queensland, Gurang Land Council or QSNTS, which were parties to the proceedings, for costs against the Kabi Kabi #3 Applicant in relation to its discontinuance of the 29 June 2006 notice of motion. Indeed, the Kabi Kabi #2 Applicant is not a party to the proceedings. The native title determination application Edna Van Hemmen and Ors on behalf of the Kabi Kabi People #3 v State of Queensland and Ors QUD136 of 2006 filed 7 April 2006 be dismissed pursuant to s 84C Native Title Act 1993 (Cth). 2. There be no order as to costs in respect of the collation and preparation of those affidavits filed in this matter on 20 April 2007 by the applicant in the proceedings known as Lance Hill and Ors on behalf of the Kabi Kabi People #2 v State of Queensland and Ors QUD65 of 2006. | application seeking dismissal of native title determination application pursuant to s 84c native title act 1993 (cth) whether application authorised by all the persons holding native title rights and interests substantial overlap with another claim eleven of twelve named apical ancestors named in both claims whether majority vote is a method of decision making in accordance with traditional laws and customs of the kabi kabi people whether all relevant kabi kabi people consulted whether applicant should be given further time to take advantage of an "administrative window of opportunity" presented by the native title tribunal to amend application application also brought pursuant to order 20 rule 2 federal court rules costs application by non-party for costs of preparing affidavit material in respect of notice of motion subsequently discontinued section 85a native title act 1993 (cth) section 43 federal court of australia act 1976 (cth) native title native title |
He applied to the (then) Department of Immigration and Multicultural Affairs for a Protection (Class XA) visa on 20 June 2006. A delegate refused that application on 29 July 2006. An application for review was thereafter lodged in August 2006 with the Refugee Review Tribunal and that Tribunal affirmed the delegate's decision on 20 December 2006. The Federal Magistrates Court dismissed an application for review but on 27 June 2008 this Court made orders remitting the matter to the Tribunal for determination according to law: SZKCQ v Minister for Immigration and Citizenship [2008] FCAFC 119 , 170 FCR 236. By way of a decision signed on 3 October 2008, the Tribunal differently constituted again affirmed the decision not to grant a Protection (Class XA) visa. An application seeking review of this later decision of the Tribunal by the Federal Magistrates Court was dismissed: SZKCQ v Minister for Immigration and Citizenship [2009] FMCA 216. The Appellant now appeals to this Court. He has appeared before the Court this morning unrepresented, albeit with the benefit of an interpreter. The grounds of the application are that the Tribunal failed to comply with a mandatory procedure prescribed by the Act, in failing to comply with section 424AA(b) (iv) of the Act. Failing to accord proper procedural fairness in accordance with the internal relocation within the country. The ground of review advanced before the Federal Magistrate was confined to a contention that it was " open to the Tribunal " to find that the now Appellant was a refugee. That ground was rejected. Moreover, the Grounds as are now sought to be relied upon are without merit. The appeal should be dismissed. Leave to argue a ground of appeal not raised before the primary judge should only be granted if it is expedient in the interests of justice to do so [references omitted]. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish. The Court may grant leave if some point that was not taken below, but which clearly has merit, is advanced, and there is no real prejudice to the respondent in permitting it to be agitated. Where, however, there is no adequate explanation for the failure to take the point, and it seems to be of doubtful merit, leave should generally be refused. In our view, the proposed ground of appeal has no merit. There is no justification, therefore, for permitting it to be raised for the first time before this Court. See also: SZIHX v Minister for Immigration and Citizenship [2007] FCA 1295 at [16] to [17] per Lander J. The leave of this Court is therefore required before reliance can be placed upon an argument on appeal that has not previously been raised for resolution. In considering whether or not to grant leave, it is necessary to give some consideration to the merits of the issues sought to be raised --- but it is not necessary to " enter upon a full consideration of the grounds ". To do otherwise would " make the requirement for leave meaningless ": Iyer v Minister for Immigration and Multicultural Affairs [2000] FCA 1788 at [24] per Heerey, Moore and Goldberg JJ. See also: MZXEN v Minister for Immigration and Citizenship [2007] FCA 829 at [10] , [2007] FCA 829 ; 240 ALR 582 at 584 to 585 per Jessup J. The volume and complexity of the cases presently required to be heard and determined by the intermediate appellate courts of Australia is such that it is increasingly important that such courts are able to devote their time to the genuine review of first instance decisions. It is becoming increasingly difficult, in our view, to establish that it is expedient in the interests of justice that the time of three or more judges should be spent giving original consideration to issues that ought to have been raised before the primary judge. The interests of justice in this sense extend beyond the interests of the parties to the appeal to encompass the interests of other litigants whose appeals require hearing and determination, and the broad public interest in efficient judicial administration. Many migration appeals to this Court from the Federal Magistrates Court are now resolved by a single Judge. But there remains the relevance of their Honours' observations as to the interests of other appellants. See also: Gomez v Minister for Immigration and Multicultural Affairs [2002] FCA 480 at [18], 190 ALR 543 at 548 to 549 per Hill, O'Loughlin and Tamberlin JJ; Lansen v Minister for Environment and Heritage [2008] FCAFC 189 at [3] to [5], 174 FCR 14 at 18 to 19 per Moore and Lander JJ. It matters not, in the present context, that the appeal is an appeal from a decision of the Federal Magistrate rather than a single Judge of this Court --- which would, of course, require a Full Court. Centrally relevant to a consideration of whether leave should be given in a case such as the present are the " serious consequences that may attend a wrongful refusal of a protection visa ": SZEPN v Minister for Immigration and Multicultural Affairs [2006] FCA 886 at [16] per Branson J. See also: Iyer [2000] FCA 1788 at [22] per Heerey, Moore and Goldberg JJ. These cases are perhaps authority for no broader proposition than this: the importance of any litigation to any of the parties concerned is a matter to be taken into account. Why there should be any different principle applied in migration appeals than is applied in other appeals is not self-evident. 2) Is there an acceptable explanation of why they were not raised below? 5) Will the resolution of the issues raised have any importance beyond the case at hand? 6) Is there any actual prejudice, not viewing the notion of prejudice narrowly, to the respondent? 7) If so, can it be justly and practicably cured? 8) If not, where, in all the circumstances, do the interests of justice lie? It has been said that " the practice which has been adopted in migration cases is that leave may be granted if a point has 'clear merit' and there is no prejudice to a respondent in permitting the point to be agitated; an adequate explanation for the failure to take the point below is required ... ": SZBJW v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1356 at [22] per Jacobson J. In the present proceeding, no explanation has been provided by the Appellant as to why the present Grounds of Appeal were not raised for resolution before the learned Federal Magistrate. And the proposed Grounds do not raise any issue which has a reasonable prospect of success. Without meaning any disrespect to the unrepresented Appellant, he was clearly unable to provide any explanation as to why the Grounds now sought to be advanced were not advanced before the Federal Magistrate. He was also unable to provide any assistance as to what was intended to be conveyed by each of the Grounds contained within his Notice of Appeal . A " friend " apparently had drafted the Notice of Appeal based exclusively upon the reasons for decision of the Federal Magistrate and without such benefit as may have been provided by any input from the Appellant. The lack of the friend's familiarity with the issues potentially involved in the case perhaps provides some explanation for why the proposed Grounds seem to have little (if any) relevance to the facts of the present case. One suspects that the " friend " was no " friend " at all. No " friend " would place an unrepresented Appellant in the position whereby he faced alone an appellate court without explaining to him the arguments to be advanced. The so-called " friend " has certainly provided no help or assistance to the Appellant. The plight of the unrepresented is only compounded by those who provide misguided and ill-informed " advice ". First, s 424AA was inserted by way of amendment of the Migration Act 1958 (Cth) by Schedule 1 item 18 of the Migration Amendment (Review Provisions) Act 2007 (Cth). That amending Act received Royal Assent on 28 June 2007 and came into operation the day after: s 2. Further, item 33 of Schedule 1 provides that the amendments made by the Schedule only apply to an application made under s 412 of the Migration Act 1958 (Cth) after the item commenced. The application as made in the present proceeding was received by the Refugee Review Tribunal on 25 August 2006. Section 424AA is thus not a provision upon which the now Appellant can rely. The Tribunal noted that it would explain to him the importance of that information and seek his comment/response. The Tribunal noted that the applicant may seek more time to respond to the issues and concerns raised by the Tribunal in the course of the hearing and it would consider any request he made in that regard. The Tribunal put to the applicant that he had a long time to organize to have documents provided to the Tribunal and asked him why he had not done it before now. The applicant claimed that he had been too busy. The Tribunal told the applicant that if it received any documents or other information prior to the handing down of its decision, then it would take them into account. On any view, it does not expose any request for further time in which to respond to information; it is a request for further time in which to provide " more documents ". And that request was accommodated --- further documents were provided by the now Appellant and considered by the Tribunal. Perhaps some degree of latitude is appropriate when determining what is sufficient to bring to the attention of the Tribunal that an applicant wishes to have further time in which to respond to " information ". There is certainly no requirement that a request need be in writing. Even a formal and express oral request for additional time may not be appropriate or necessary. The Tribunal, it is to be recalled, is given the mandate to conduct its review functions in a manner that is " fair, just, economical, informal and quick " ( Migration Act 1958 (Cth) s 420(1)) and in an " inquisitorial manner ": Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S154/2002 [2003] HCA 60 , 75 ALD 1 at [57] per Gummow and Heydon JJ and at [60] per Kirby J. In an appropriate case it may thus be manifestly apparent to the Tribunal that an applicant is in fact seeking additional time --- even though he has not said so. But there is nothing now before this Court to indicate that the Appellant was not willing to respond to all of the " information " then before the Tribunal. There was, for instance, no transcript of the hearing before the Tribunal from which any inference favourable to the Appellant may have been drawn. It may finally be noted that, even if there has been a failure to comply with s 424AA(b)(iv) , the consequence is that s 424A(2A) is not engaged and the Tribunal is not thereby excused from compliance with s 424A(1): SZMMP v Minister for Immigration and Citizenship [2009] FCA 233 at [55] per Lander J. Sections 424A and 424AA are complementary: SZMCD v Minister for Immigration and Citizenship [2009] FCAFC 46 at [2] per Moore J; SZMIS v Minister for Immigration and Citizenship [2009] FCA 167 at [10] per Marshall J. But no failure to comply with s 424A(1) is asserted by the now Appellant and none is otherwise discernible. This proposed Ground of Appeal is thus neither a ground available to the now Appellant nor, in any event, does it raise any issue which has reasonable prospects of success. First, and most fundamentally, it has not been possible to identify " section 4 , 5 , 8 , 9 , 10 ". Potentially these " sections " may have been intended as references to articles within the United Nations' Convention relating to the Status of Refugees (1951) or (possibly) guidelines contained within the United Nations High Commissioner for Refugees' UNHCR Revised Guidelines on Applicable Criteria and Standards Relating to the Detention of Asylum Seekers (1999). But, that seems unlikely. The unrepresented Appellant was unable during the course of the present hearing this morning to further clarify that to which he was intending to refer. Second, at best, whatever those " sections " may be, they would not appear to be provisions by which the Tribunal would be bound. And, third, this Ground does not appear to be directed to any fact as found by the Tribunal. A Statement of Claim annexed to the Application for a Protection (Class XA) visa in June 2006 asserts that the now Appellant " was beaten and tortured by government officials ". He further there asserted that " [h]e was released after six months of very painful period ". But the Tribunal concluded in its reasons for decision in October 2008 that his " account of his arrest and detention is vague, lacking in detail and implausible ". The Tribunal was " not satisfied that the applicant was arrested and detained as claimed ... ". It further concluded that other " incidents in which he claims to have been harmed were vague and lacking in detail ". This proposed Ground is therefore also without reasonable prospects of success. It was there concluded that a well-founded fear of persecution need not always extend to the whole territory of an applicant's country of nationality for the applicant to qualify as a refugee. It was further concluded that a person will be excluded from refugee status if, under all of the circumstances, it would be reasonable to expect the applicant to seek refuge in another part of the same country. There may be instances where differential treatment in matters of, for example, race or religion, is encountered in various parts of the one nation state so that in some parts there is insufficient basis for a well-founded fear of persecution. However, in other cases the conduct or attribute of the individual which attracts the apprehended persecution may be insusceptible of a differential assessment based upon matters of regional geography. This decision, however, has no application to the facts as found by the Tribunal. He told the Tribunal that the Muslim League was in power in many cities in Pakistan. The Tribunal put to the applicant that it was having difficulty finding that the applicant was of any interest to his political opponents given his profile. Despite his claims to the contrary, the Tribunal does not believe that it is unreasonable for the applicant to relocate to another part of the country despite the generalised instability of Pakistan at the moment. Be that as it may, as the Tribunal has found that the applicant is not of any interest to the authorities or his political opponents, it follows that the issue of relocation does not arise. Leave to now rely upon the Grounds of Appeal as set forth in the Notice of Appeal is refused. It cannot be regarded as being " expedient in the interests of justice " to raise new Grounds of Appeal which have no prospects of success. In any event, in forming the view that leave should be refused, the proposed Grounds have been considered in sufficient detail to further conclude, had it been necessary to do so, that each would have been rejected. Irrespective of the manner in which the Appeal is now sought to be pursued, the decision of the learned Federal Magistrate has also been separately considered. There is no discernible error in the manner in which the Federal Magistrate resolved the application as then advanced before that Court. The Respondent Minister seeks costs and there is no reason why costs should not follow the event. The Appellant is to pay the costs of the First Respondent. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | leave to place reliance on new ground on appeal refused relocation principle notification of information no request for further time to respond migration |
2 On 28 February 2007, as part of a corporate restructure, Review 2 transferred its business and ownership of the Review Design to Review Australia Pty Ltd ("Review"), which was at that time known as Review Holdings Pty Ltd. On 13 June 2007, Review 2 appointed liquidators for the purpose of a members' voluntary winding up pursuant to Div 2 of Pt 5.5 of the Corporations Act 2001 (Cth). This is an action for design infringement and a cross-claim for design invalidity. For the reasons stated below, I would dismiss both the action for infringement and the cross-claim for invalidity. 3 Review 2 and Review allege that Redberry Enterprise Pty Ltd ("Redberry") made, imported and sold a dress in infringement of the Review Design. Various forms of relief are sought, including declaratory and injunctive relief, and damages. (2) Is the Review Design valid? (3) If yes to these two questions, how should damages be assessed? 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. 6 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. 7 Redberry is an importer and wholesaler engaged in the wholesale distribution and sale of women's clothing. On 1 September 2006, an employee of Review 2 attended a store named "Daree Mae" located at the Metcentre on George Street in Sydney and purchased a garment labelled "Redberry" with the style number 63327 ("the Redberry garment") for $59. The applicants allege that the Redberry garment was substantially similar in overall impression to the Review Design. 8 The Redberry garment is a sleeveless fixed-wrap or cross-over dress. The fabric from which it is 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 it is gathered. The dress has gathering at the shoulders just like the Review Design. The Redberry dress has a fitted waist and a square high back. At the waist, it has a brown satin ribbon as a tie. The skirt is an A-line, being comprised of one piece of fabric at the front and one piece of fabric at the back. The skirt is not fitted and ends at or below the knee. The Redberry dress is chocolate brown with a bold floral pattern of leaves in light cream, peach and brown. 9 When this proceeding was instituted, the applicants joined not only Redberry but also Mitex Australia Pty Ltd ("Mitex") and Chisada Mimi Jamieson ("Jamieson"), the retailers allegedly involved in the retail sale of infringing garments. The claims against Mitex and Jamieson were later settled and the applicants discontinued the proceedings against them. 10 The solicitors for the applicants wrote to Redberry about the sale and purchase of the Redberry garment on 21 September 2006 and 22 December 2006, before this proceeding was begun. In its amended statement of claim dated 14 August 2007, the applicants alleged that Redberry 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. In summary, the applicants' case was that Redberry had bought the Review Dress, sent it to China where Redberry had had it copied, and imported the copied garments into Australia for sale. In opening and closing submissions, both oral and written, and in Amended Particulars of Loss and Damage, both applicants claimed damages (and not an account of profits). I assess their damages claim on this basis since this is how they conducted their case at trial. 11 Redberry admits that the Redberry garment was part of a consignment of 133 identical Redberry garments that Redberry imported and sold in Australia in July and August 2006. It admits a wholesale price of $20. In its Amended Defence dated 29 November 2007, Redberry denied the balance of the applicants' claims against it, including that it manufactured the Redberry garments and that the Redberry garments were substantially similar in overall impression to the Review Design. Further, Redberry claimed that, at the time of the alleged infringement, it was not aware and could not reasonably have been expected to be aware that the Review Design was registered. In its cross-claim, it alleged that the Review Design was invalid. 12 In accordance with orders made on 13 December 2007, the evidence in proceeding VID 287 of 2007 in so far as it relates to the Review Design was also evidence in this proceeding. The Designs Act provides for a system of registration for products whose appearance is new and distinctive. 14 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. 15 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). 16 A person infringes a registered design if, during the term of the registration of the design, and without the licence or authority of the registered owner of the design, the person: (a) makes a product, in relation to which the design is registered, being a product that embodies a design that is substantially similar in overall impression to, the registered design; or (b) imports such a product into Australia for sale; or (c) sells or offers to sell such product: see s 71(1). 17 The applicants alleged, and Redberry denied, that Redberry made, imported and sold the Redberry garments. Redberry's stated position throughout the case was that it was an importer and wholesaler engaged in the wholesale sale of women's clothing. This issue does not affect the outcome of the applicants' principal allegation that Redberry has infringed the Review Design. It affects the discussion of s 75(2) of the Designs Act, below. 18 Whether Redberry is a manufacturer, or simply an importer and wholesaler, the Redberry 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). Since there was no statement of newness and distinctiveness in the Review Design application, s 19(3) of the Designs Act applies. In considering whether the design embodied in the Redberry garment 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. 19 Who is the informed user? Plainly, the informed user must be a person who is familiar with the product to which the design in question relates. Moreover, the informed user must 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. 20 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". The EC proposed Council Regulation illustrates the concept of the 'informed user'. Under that Regulation it depends on the product as to who the informed user will be. For example, for car spare parts the informed user may be the mechanic or repairer who replaces the part. For consumer items it may be the consumer who buys the item. The EU has said that the informed user means the 'most appropriate assessor of distinctiveness is the person or group for whom the design is intended'. The EU takes the view that an informed user knows the product to which the design is applied or in which it is incorporated and the relevant trade or industry to which it belongs. ALRC Report No 74 considered that "[d]istinctiveness should be determined by users of the design rather than design experts" (at 5.19). The court decides the issue by placing itself in the position of an informed user. It is not a subjective test whereby an 'informed user' assesses distinctiveness by reference to his or her own knowledge and the court simply adopts the informed user's assessment. It is still a matter for determination by the court. The informed user describes the standard to be applied not who can give evidence. For example, the informed user of car replacement parts may be the mechanic who repairs the vehicle, but for domestic items it may be the consumer. 21 The Registered Designs Act 1949 (UK) adopted the concept of the informed user, with the consequence that UK courts can provide some guidance in this country. The first useful judicial exposition of the informed user standard in England appears to be that of his Honour Judge Fysh QC, sitting as the UK Patents County Court, 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). 22 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, Lewison J (Chancery Division --- Patents Court) considered and approved these 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. As Jacob J said (at [28]) "the informed user is alert to design issues and is better informed than the average consumer in trade mark law". 23 Relevantly to this case, in January 2007, the Design Registrar of the UK Intellectual Property Office 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 "). 24 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 has 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]. 25 In Australia, 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 "). In Icon , the ADO cited the ALRC Report but rejected the view that "a notional informed user is a melding of the (probably divergent) views of those who exemplify a range of informed users. A better approach is to say that, in dealing with this jury question, the legislation defines a standard, such that the registrar or the court should postulate the view of a typical member of a sample of informed users": see Icon at [19]. The Registrar concluded that "to apply the standard of the informed user for the purpose of s 19 would therefore be to postulate a user that is 'reasonably' informed; not either barely informed, on one hand, or fully expert on the other": see Icon at [21]. Apple cited the ALRC Report, this time for the proposition that the informed user standard is objective, and stated the view that an informed user is an ordinary intended user of the product made from the design, who is familiar with the product: see Apple at [11], [14]. 26 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. 27 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]. The former approach is to be preferred. I doubt that, generally, the ordinary user will be appropriately regarded as an informed user. In the present context, women as a class are the ordinary users of ladies' garments, but not all women have the requisite degree of familiarity to be described as informed users. Thus, whilst there will be some women who subscribe to fashion magazines (such as Vogue or Collezioni that illustrated the prior art in this case) and have particular knowledge of, and familiarity with, fashion trends, there will be many other women who lack such knowledge and familiarity. Precedent and the text of s 19(4) indicate that it is from the perspective of someone closer to the former group that the newness and distinctiveness of the Review Design and the similarity of the Redberry garments in terms of overall impression must be judged: compare Architectural Lighting at [50]. Her evidence was that she came up with a "fixed style" wrap dress, with a number of what she described as 'distinct' elements, including a fixed waist, gathering at the waist side seam and shoulders, lining, satin sash, and a knee-length skirt. The skirt flips out at the hem giving the garment a voluminous look. The skirt is then fishtailed back at the thigh so that the fabric can swing with the wearer and gives the garment a flowing effect. These features make the garment look like it has been manufactured for a large amount of fabric like a traditional 'wrap' dress. These features are achieved by manufacturing the skirt section from 6 gores which are fitted at the waist, tapered at the hip and then fishtailed out towards the hem of the garment. The Review Dress was made from a jersey knit fabric. 30 Although as a designer, Ms Ellis is not appropriately described as an informed user, her evidence assists in identifying the basis of the applicants' claim on infringement and, to a limited extent, the similarities and differences between the Review Design and the design embodied in the Redberry garments --- although much of these were self-evident. Further, her evidence about points of construction and interior similarities and differences not being part of the 'appearance' of the garments are not relevant to the issues of infringement or validity. 31 Ms Ella Mudie also gave evidence, upon which Redberry relied. Ms Mudie had varied experience as a retail sales assistant for a range of clothing and had, for a time, been employed as a fashion buyer and design assistant. Although not in the fashion industry at the time of trial, she was nonetheless in the nature of an informed user and was plainly a careful and truthful witness. Further, whilst Ms Mudie said that she was not in the market for dresses of a kind that did or might embody the Review Design since, as I understand her evidence, they were not to her taste, she fell within the age range of the class of female consumers to which the applicants marketed their garments. 32 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. First, the colour and prints of the dresses are very different. I consider that this is significant because the colour and the pattern make an important contribution to the overall impression that each dress creates. Second, due to their construction, the skirt sections of the dresses appear completely different. The panels on the Review skirt create a different type of cut, with the effect that the fabrics fall differently and create a totally different overall impression to what the Redberry dress does with its one panel skirt. Both of these differences are clearly apparent when the Review design is compared with the Redberry dress. 33 The applicants challenged the strength of Ms Mudie's evidence in a number of ways, including that her affidavit was a gloss on her statement as recorded by Clayton Utz on 16 October 2007; that her evidence was compromised by her wrongly comparing the Redberry garment to the Review Dress, rather than the Review Design; that this error was compounded by her trying on the dresses; that she did not allude in her affidavit to the sizing differences between the garments; and that her observation about panelling was a "construction" observation. Furthermore, according to the applicants, Ms Mudie gave undue weight to differences in fabric pattern. 34 I have taken account of the matters to which the applicants have directed my attention. They are matters to be borne in mind in assessing Ms Mudie's evidence, but I have nonetheless been assisted by her evidence. The role of Ms Mudie's evidence is to assist the Court to decide the issues of infringement and validity by reference to the standard of the informed user. I consider her evidence instructive in this regard. The Court does not, however, simply adopt Ms Mudie's assessment as its own. It must make its own objective determination, bearing in mind her evidence, subject to the matters to which the applicants referred, and the other evidence before the Court. 35 Considered by reference to the standard of the informed user, in deciding whether the design embodied in the Redberry garment 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)); (3) have regard to the freedom of the designer to innovate (s 19(2)(d)); and (4) since only part of the Redberry design is substantially similar to the Review Design, 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)). Further, 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)). 36 Plainly enough, there are clear similarities between the Review Design and the design embodied in the Redberry garment. The cross-over bodice and V-neck is virtually identical. Both have a fixed waist, with a satin ribbon tie. Both have the same high back. There are also two distinct differences. This is to be contrasted with the floppy or blousy appearance of the Redberry skirt from the waist to the hem. (b) The pattern (including colour) of the Review Design and the Redberry garment are different. Ms Mudie's evidence here was consistent with the fact that, in their internal business records, the applicants' specifically described the dress that embodied the Review Design by reference to the cut of its (gored) skirt. In any event, the difference to which Ms Mudie referred is apparent from a comparison of the Review Design and the Redberry garment. 38 If this were all, a finding of infringement might be readily made, since the similarities between the designs are to be given greater weight than the differences (s 19(1)). As noted already, however, the inquiry under the Designs Act is more complex and sophisticated than this. 39 Also, in deciding whether the design embodied in the Redberry garment is substantially similar in overall impression to the Review Design, the Court, standing in the shoes of the informed user, must also have regard to the state of the development of the prior art base for the design. The significance of the similarities and differences between these designs falls to be considered in light of the prior art. 40 There are numerous fixed-wrap or cross-over dresses in the uncontested prior art, including sleeveless dresses with V-necks and cross-over bodices gathered at the side of the waist, including with waist bands or ties: see Prior Art Book, 114, 127, 137, 139, 152, 155, 175, and 179. The applicants challenged the publication date for a Spicy Sugar Catalogue, depicting style J3182RB. Whilst there was some confusion in Ms Dolcel's evidence, I accept the effect of her evidence that the Catalogue was distributed not later than 2004; and that the garments represented in the Catalogue were sold prior to July/August 2005. The design embodied in garment J3182RB also depicted a figure-hugging cross-over bodice and V-neck, with a fitted waist and black tie. It depicted a hip-hugging straight skirt, and the whole garment was shown in a bold pattern of large white hibiscus flowers and leaves on a black background. 41 What differentiates the Review Design from the designs embodied in the prior art (including the Spicy Sugar J3182RB) is the shape and configuration of the Review Design skirt. Even so, the prior art discloses at least one skirt that is not dissimilar in shape to the skirt of the Review Design, although the overall impression between the design embodied in that garment and the Review Design is different. The prior art also makes it plain that pattern (including colour) can be an important visual feature in the designs embodied in the dresses said to exemplify the prior art. 42 Having regard to the prior art and to the Review Design, and taking into account the freedom of the designer to innovate, the informed user would, so it seems to me, be aware that there is limited freedom to design a cross-over or wrap ladies' dress (or similar ladies' garment) other than by reference to the shape of the skirt (as opposed to the cross-over itself), combined with differences in pattern (including colour). In addition, there are significant constraints on designer innovation arising from the nature of the product in question. Designs for ladies' garments are invariably limited by what women customarily wear. By and large, the "dress" has well-recognized conventional limits. 43 Having regard to the prior art and the freedom of the designer to innovate, what gives the Review Design its different overall impression from the prior art (discussed further below), from the perspective of the informed user, is the shape and configuration of the skirt, combined with differences in pattern and ornamentation. 44 This conclusion has significance so far as the question of infringement is concerned, more particularly as the Court, in the shoes of the informed user, must, if (as here) only part of the design is substantially similar to another design, have regard to the amount, quality and importance of that part in the context of the design as a whole. As noted above, save for the pattern (including colour), the top (to the waist) of the design embodied in the Redberry garment is substantially similar (front and back) to the Review Design. Having regard to the prior art and the freedom of the designer to innovate, this part of the Review Design is not the part that, to the informed user, differentiates the Review Design from the prior art in terms of creating a different overall impression. As previously mentioned, what creates the different overall impression is the distinctive Review Design skirt, combined with the pattern. 45 Notwithstanding the direction in s 19(1) and the clear similarities between the Review Design and the design embodied in the Redberry garment, having regard to the directions in ss 19(2)(a), (c) and (d), 19(3) and (4), the informed user would conclude that the design embodied in the Redberry dress creates a different overall impression to the Review Design considered as a whole, principally because of the difference in the shape of the skirts, combined with the differences in pattern (including colour). That is, in this case, s 19(2)(c), considered in light of s 19(2)(a) and (d), operates to modify the effect of s 19(1) of the Designs Act. 46 Accordingly, the informed user would not regard the design embodied in the Redberry garment as substantially similar in overall impression to the Review Design. The applicants' case on infringement therefore fails. 47 The parties differed on the importance of colour in assessing the appearance of the Review Design as a whole. The applicants submitted that, in considering whether or not there was an infringement, the Court should focus on similarity in shape and overall appearance of the garments as three-dimensional products. They submitted that colour was of little moment in this case. 48 Redberry argued that the Court should have regard to every visual feature, including colour, disclosed in the photographs depicting the Review Design as registered. If the Applicants did not want colour and print to be considered they could have lodged a black and white photograph, or a sketch. Since the applicants' monopoly was defined by the colour representations they have lodged, then, so Redberry argued, "the different colours and prints of the dresses are parts of the design registration that are [to be] taken into account in assessing substantial similarity". Redberry argued that, by choosing to lodge the design application as they did, the applicants defined their monopoly as including all the colours of the design, the print on the fabric, and the effect of these visual features on the appearance of the design as a whole. 49 What is protected when a design is registered? Design registration protects the overall visual appearance of the product (in this case, the garment) as it appears on the design register. As Ricketson and Creswell note, "'visual features' are clearly differentiated in s 7 from other features that might, in a non-legal sense, be thought to be parts of the concept of a design": S Ricketson and C Creswell, The Law of Intellectual Property: Copyright, Designs & Confidential Information at [20.10]. 50 The applicants placed some emphasis on the fact that Parliament did not adopt the recommendation in ALRC Report No 74 that "visual features" should include "colour and surface": see ALRC Report No 74, recommendation 8, at p 60. As the commentary to the recommendation noted, however, the addition of "colour" to the conventional list that included "pattern" and "ornamentation" was not strictly necessary. Whilst "colour" is not specifically mentioned in s 7 of the Designs Act as a distinct element of "visual feature", colour might in some instances be regarded as a "visual feature", having regard to the inclusive formulation of s 7(1) and the continued reference to pattern and ornamentation. 51 Ultimately, it seems to me that what was said in Smith, Kline & French Laboratories Ltd's Design Application [1974] RPC 253 at 261 is as true a guide as any. Colour may or may not make a material difference, depending upon the circumstances and nature of the design in question. I would adopt this approach in considering designs registered under the Designs Act. 52 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 registered Review Design is thus part of what is protected, and is, as the above reasoning indicates, to be accorded some weight. 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, 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 already, pattern, including colour, is a feature that an informed user would consider has some significance 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. 53 In the present case, an informed user would, as Ms Mudie's evidence and the prior art showed, regard colour as an element in the pattern that forms part of the overall look of the registered Review Design. The Review Design is depicted on the register in a colour photograph of a store dummy wearing a garment in a patterned fabric in natural tones with orange, brown and blue fine 'fronds leaf' pattern, giving it, as Ms Mudie and Ms Ellis agreed, an African or tropical look. This pattern (and the colour that is part of it) is, however, only one element in the overall impression of the registered design. It is, as previously observed, entirely different from the pattern on the Redberry garment. 54 The applicants claimed that Redberry had made, imported and sold garments copied from the Review Design. Copying is not, however, relevant to the issue of infringement: compare Proctor & Gamble at [4] per Jacob J. Copying from registered designs is permissible providing the copying does not result in a product that embodies a design that is substantially similar in overall impression to the registered design. The expression "prior art base" is defined in s 15(2) and includes designs publicly used in Australia and designs published in a document within or outside Australia. Redberry argued that the Review Design was not validly registered because it was not new and distinctive when compared with the prior art base: see s 16. The Redberry challenge was effectively to distinctiveness rather than newness: see s 16(2). Section 16(2) calls for a determination as to whether the design said to be registrable is distinctive, which means the design is not substantially similar in overall impression to a design or designs forming part of the prior art. The test of substantial similarity here again turns on the considerations set out in s 19 of the Designs Act, to which reference has already been made. 56 Given the previous discussion under the issue of infringement, it suffices to say that the effect of ss 15, 16(2) and 19 of the Designs Act is to frame the following basic test for validity, namely: would an informed user (giving more weight to similarities than differences) consider that the Review Design is substantially similar in overall impression to a design or designs published prior to the registration priority date? 57 As previously noted, however, the specific application of this basic test will vary according to the factors identified in s 19(2) of the Designs Act. For the reasons already stated, these factors will be the prior art base (s 19(2)(a)), the amount, quality and importance of that part of the Review Design considered as a whole that is substantially similar to a design in the prior art base, and the freedom of the designer to innovate. If the Court were not satisfied that the Review Design was a registrable design at the priority date, it would revoke the registration of the design pursuant to s 93(3)(a) of the Designs Act. 58 Redberry relied on the similarities between the Review Design and the designs embodied in the garments that made up the prior art. The evidence established that, for present purposes, the original cross-over wrap dress is attributed to Diane Von Furstenberg, a celebrated American designer. An examination of a depiction of this dress disclosed that, whilst there were some similarities between the design embodied in the so-called Furstenberg dress and the Review Design, there were clear differences, which meant that, from the informed user's perspective, the Review Design created a quite different overall impression to the Furstenberg dress. 59 As previously noted, having regard to the prior art to which reference has already been made and to the Review Design, and taking into account the freedom of the designer to innovate, the informed user would be aware that there is limited freedom to design a cross-over or wrap dress (or similar ladies' garment) and that, for the most part, what gives the Review Design its different overall impression from the prior art, from the perspective of the informed user, is the shape and configuration of the skirt, combined with differences in pattern: see [42]-[44] above. As already noted, there were numerous designs for V-necked fixed-wrap or cross-over dresses in the prior art, both with and without sleeves, but none was substantially similar in overall impression to the Review Design, when judged by reference to the informed user. Thus, for example, the design embodied in the Spicy Sugar garment J3182RB depicted a figure-hugging cross-over bodice and V-neck, with a fitted waist and black tie, but it also depicted a hip-hugging straight skirt, and a bold pattern of large white hibiscus flowers and leaves on a black background. Having regard to the factors to which s 19(2) and (3) direct attention, the informed user would not consider the Review Design to be substantially similar to it in overall impression. The Review Design might also be thought reminiscent of the design embodied in a garment pictured in the prior art book at 152, which disclosed a cross-over bodice and ruffled hem. Notwithstanding these similarities, differences in the shoulder straps and the overall 'look' of the design, including the skirt, combined with differences in pattern (including colour), would lead an informed user to conclude that this design and the Review Design were also essentially different in overall impression. This latter conclusion flows in part from an application of s 19(2)(c), which in each instance requires the Court to consider the amount, quality and importance of the part that is substantially similar in the context of the design as a whole. 60 In the context of ladies' cross-over dresses, it is very difficult to isolate one feature as new and distinctive in and of itself. In the case of the Review Design, everything that is shown in the registered design forms part of the subject matter protected by registration. As previously noted, this is the look --- shape, configuration, pattern and ornamentation --- of the whole of the Review Design as disclosed in a colour photograph of the Review dress on the tailor's dummy. It is these features in combination, particularly the shape of the skirt and the pattern, that make the Review Design different from the designs in the prior art and which satisfy the criteria for registration of newness and distinctiveness. Consideration of the prior art base, the freedom of the designer to innovate, and, in each case, the amount, quality and importance of that part of the Review Design considered as a whole that is substantially similar to designs in the prior art base would lead the informed user to conclude that the Review Design as a whole was nonetheless relevantly different in overall impression from the designs in the prior art base. It follows from this that the Review Design is validly registered, but that the monopoly conferred by registration is closely confined. 61 Indeed, Redberry acknowledged that, if differences between the Review Design and the design in the Redberry garment as regards the shape of the skirt and the pattern (including colour) avoided a finding of infringement, then the likely outcome was that the Review Design was valid but not infringed. This is the conclusion I have reached. Nor is it strictly necessary to consider the question of damages. Since the matter of damages was argued in some detail, however, I state my conclusions as briefly as I can. (Counsel for the applicants conceded, however, that the applicants had not intended to depart from the figure of $18,679.41 mentioned in opening and in the original Particulars: see transcript 384. (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). I accept that, as Redberry's counsel submitted, on the applicants' calculations, taking account of Mr Strain's evidence, this figure was probably closer to $15,000 to $16,000. As will be seen, nothing turns on this. 66 The applicants invited the Court to calculate general damages on the assumption that every sale by Redberry of the Redberry garment should be treated as if it had been a sale by them of the Review Dress. If the Court were to assess damages on the simple assumption that the applicants asked it to make, then the ultimate figure would need to be discounted to reflect the likelihood that the applicants would have made the additional sales had the Redberry garments not entered the market. I would accept that, as Redberry posited, the likelihood of a consumer who bought the Redberry garment buying the Review Dress instead (if available) was very low, probably less than 10% of the allegedly infringing sales. Furthermore, any assessment of damages would also need to take account of the fact that Redberry's wholesale sales were not in direct competition with the applicants' retail sales. 67 As it is, I reject the submission the applicants have made in this regard. First, on the evidence as it stands, I am not satisfied that the assumption that every sale by Redberry of the Redberry garment should be treated as if it had been a sale by Review is warranted. The evidence shows that the garments were available for purchase by the ultimate consumer at $59 in the case of the Redberry garment and at $169.95 in the case of the Review Dress and, in the latter case, only from Review stores or concessions. 68 There is, however, a more fundamental difficulty with the applicants' claim. There is no evidence of lost sales. There is evidence of Review 2's 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 Redberry imported the Redberry garments from China. There is, therefore, simply no evidence that the applicants' sales were in any way adversely affected by the availability of the Redberry garments. The assumption that the applicants invite the Court to make cannot overcome the more fundamental difficulty that there is no evidence that, at the relevant time, the Review Dress was available for retail sale to consumers. The applicants therefore fail to establish any lost opportunity for sale. 69 The applicants also sought general damages on an alternative basis. As I stated in Review Australia Pty Ltd v New Cover Group Pty Ltd [2008] FCA 1589 (" New Cover "), in a case of design infringement, general damages may be awarded on the basis of the diminution of the value of the Review Design as a chose in action. The manner in which such damages are to be assessed is discussed in New Cover and applies in this case as well. As in New Cover , there is no satisfactory evidence as to the sales history of the Review Design, but there is some evidence as to the value to Review of its designs and the image they created. Adopting the approach as outlined in New Cover , if it had been necessary to do so, I would have assessed the effect of infringement at the time it occurred (and had it been made out) on the potential market for the Review Dress at $3,500. 70 In the circumstances of this case, had the claim for infringement been made out, a further question would have arisen as to whether Redberry could successfully invoke s 75(2)(b) of the Designs Act. 71 Kun Ming Liu, Redberry's managing director, secretary and shareholder, gave evidence that Redberry sourced its garments from China, where other persons manufactured them, and imported them into Australia for wholesale sale. Mr Liu's evidence was that Redberry, through its buyer, bought ready-made garments or commissioned garments after having seen the manufacturer's sample. Mr Liu denied that Redberry arranged for the manufacture of any particular garment. He was unable to say, however, whether the Redberry garments in question in this case had been bought ready-made or commissioned after the buyer was given a sample. 72 Mr Liu stated that, at the time of trial, Redberry employed a buyer named Sui Qiang Ke to select garments from suppliers and manufacturers in Guangzhou, but that Mr Ke had not bought the Redberry garment. Mr Liu stated that, between February 2006 and February 2007, Redberry had employed another person based in China to assist Mr Ke, by the name of Qi Hong Wang. Mr Liu's evidence was that Ms Wang had not worked for Redberry since that time and he had been unable to contact her. By implication, it was Ms Wang who had been the buyer for the Redberry garments. 73 There was no evidence, documentary or otherwise, identifying the manufacturer in China of the Redberry garments. Mr Liu sought to explain what might be seen as an evidentiary deficiency by reference to the failure to find Ms Wang. Further, Mr Liu's evidence was that Redberry did not keep records beyond five years (a period corresponding with taxation law provisions). This did not, however, explain the lack of records that would have identified the manufacturer of the Redberry garments since the documents in question would presumably have related to a period less than five years ago. I accept that the deficiencies in the documentary record produced to the Court were thus not adequately explained. These deficiencies weighed against accepting Mr Liu's evidence. 74 On balance, however, whilst there were some unexplained deficiencies and inconsistencies in Mr Liu's evidence, I would ultimately accept his evidence as essentially truthful. The applicants failed to persuade me that I should not do so. As I have said, Mr Liu was (amongst other things) Redberry's managing director and was knowledgeable about the generality of his company's business. Difficulties with his evidence arose from the fact that he had virtually no facility in English language. I formed the impression that, overall, he gave his evidence truthfully even if this reflected his distinctive and perhaps culturally-conditioned understanding of what had occurred and what was required in answering the questions addressed to him. I accept that Redberry did not employ its employees to make the garments in question. Mr Liu's evidence left open the possibility, however, that Redberry commissioned another person to make the garments to a sample that Redberry's buyer had been shown. Accordingly, had the buyer's direction to make the garments and/or the making of the garments taken place in Australia , then Redberry might properly have been regarded as having made the garments in contravention of s 71(1)(a) of the Designs Act. In this event, Redberry would have been liable for a primary infringement, as opposed to a secondary infringement and Redberry would have been unable to rely on s 75(2)(b) of the Designs Act. I discuss below the significance of the fact that, on Mr Liu's evidence, the buyer commissioned the making of the garments in China , where the garments were manufactured. 75 Counsel for the applicants argued that, when Redberry called Mr Liu, it called the wrong witness, and that it should have called the buyer, Mr Ke. In relation to the absence of Mr Ke, he relied on the rule in Jones v Dunkel (1959) 101 CLR 298 (" Jones v Dunkel "). The applicants' counsel argued that the inference as to Redberry's status as a manufacturer might, in the absence of testimony from Mr Ke, be more comfortably drawn against Redberry. I reject this submission. The evidence was that Mr Ke had not bought the garments in question. This being so, it might fairly be thought unnecessary and even inappropriate to call him. In this circumstance, the absence of testimony from Mr Ke does not justify an application of the rule in Jones v Dunkel . 76 In this context too, counsel for the applicants relied on the similarity between the Redberry garment and the Review Design, as supportive of the fact that the manufacturer of the Redberry garments had copied the Review Design. This would not, however, provide any evidence that Redberry (as opposed to someone else) made the garments in question. Counsel for the applicants also sought to rely on evidence that the applicants and other persons had alleged on other occasions that Redberry had copied garments and thereby infringed copyright and trade mark. For the reasons explained below, however, I would not regard this evidence as admissible. 77 As noted above, however, if Redberry's buyer commissioned the making of the garments, the buyer did so in China, where the garments were manufactured. 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, Redberry's liability could not arise under s 71(1)(a) but only under s 71(1)(b), (c), (d) or (e). 78 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. 79 On the evidence before the Court, at the time of the infringement, Redberry was not aware, and could not reasonably have been expected to have been aware, that the Review Design was registered. Redberry thus satisfied s 75(2)(b), with the result that the Court had the discretion that s 75(2) conferred upon it, to refuse to award damages or to reduce the damages that would otherwise have been awarded. Mr Liu's evidence was that, at the time the Redberry garments were imported in July 2006, he was unaware that design registration was possible for garments such as dresses and that he did not become aware of the registered Review Design until December 2006, when he received a letter from the applicants' solicitors. I accept his evidence in this regard. The importation of the Redberry garments was around 13 July 2006. Counsel for the applicants conceded that it could not be said that within this time the register could reasonably have been searched and understood. 80 Further, I reject the applicants' submission that a swing tag on the Review Dresses provided a form of notice to Redberry in July 2006 that the Review Dresses might be subject to a registered design. First, the evidence leaves me in some doubt as to whether the Review Dress carried a swing tag claiming design registration when it was sold in August 2005. Mr Strain's evidence in cross-examination was that the applicants' garments carried swing tags from around May/June 2005 until around December 2007. According to this evidence, these swing tags noted that "Review Styles are Registered Designs". If Mr Strain's evidence were accepted as reliable, then the Review Dresses sold in August 2005 carried swing tags notifying registration. There are, however, difficulties in accepting Mr Strain's evidence as reliable. He was not specifically asked about the Review Dress and hence gave no specific evidence about the Dress. Also in cross-examination, counsel failed to draw Mr Strain's attention to the likelihood that there were other versions of the swing tag being used by Review in 2005, with different wording. Ms Ellis's evidence was even less persuasive. Ms Ellis said in her affidavit that, when it was sold, the Review Dress carried a swing tag notifying that it embodied a registered design. Ms Ellis conceded in cross-examination, however, that she could not in fact recall whether the Review Dress had in fact carried a swing tag of this kind. Her evidence in re-examination made it clear that the matter of swing tags was not within her field of responsibility and knowledge. She identified another person within the applicants' organization who would have had the relevant knowledge of and responsibility for swing tags but this person did not give evidence. In these circumstances, I am unpersuaded that the evidence establishes, on the balance of probabilities, the Review Dress was sold with a swing tag notifying registration. 81 Further, on the evidence of Mr Strain and Ms Ellis, Review 2 was claiming design protection for the Review Design well before it was entitled to do so and before a search of the design register would have disclosed registration of the Review Design. I doubt that notice prior to registration is effective to attract the benefit of s 75(4) of the Designs Act. That is, s 75(4) can operate to make a swing tag marked to indicate design registration prima facie evidence that the defendant was aware of the design registration only when the design has in fact been registered. It follows that the swing tag could not fix Redberry with prima facie awareness that the Review Design was registered prior to registration on 5 July 2006 (notwithstanding that the design had a priority date of 11 August 2005). Moreover, as noted below, there was no evidence that the Review Dress embodying the Review Design was on sale as at July 2006, when the swing tag notification would have attracted s 75(4). 82 In all the circumstances of the case, had I reached a contrary conclusion on infringement, I would have reduced the damages that would otherwise have been awarded to a lesser sum than $3,500 --- the defendant having established that at the time of the infringement (making an assumption contrary to the finding above) that it was unaware, and could not reasonably have been expected to be aware that the design was registered. 83 The applicants sought additional damages under s 75(3) of the Designs Act. I would not regard such additional damages as having been warranted, even if the infringement claim were made out. I refer to the general principles concerning additional damages as outlined in New Cover at [53]. 84 If Redberry infringed, its conduct in importing and selling the Redberry garments in July 2006 was in ignorance of Review 2's design rights and at a time when the existence of such rights had only briefly been a matter of public record. Redberry's infringing conduct (if this is what it was) could not on any view be considered flagrant: see also [79] above. Redberry apparently ceased the conduct of which the applicants complain when it became aware of their claim and, in any case, before the issue of proceedings. The amount of profit to Redberry was modest --- less than $2000. 85 In substance, the applicants' case on additional damages rested on allegations as to the "the closeness of copying" and that it was "the apparent business practice of Redberry and/or related entities to engage in copying the garment designs of other designers". Ultimately, notwithstanding the submissions of the applicants' counsel to the contrary, I would regard the evidence designed to support these allegations as irrelevant and, therefore, inadmissible. Put another way, the evidence that the applicants sought to have admitted under s 97 of the Evidence Act 1995 (Cth) is not so admissible because it would not have the significant probative value that the provision requires. Two of the applicants' other garments were the subject of specific cross-examination. PS 10 and PS 13 and PS 11 and PS 14 (being two sets of identical Review and Redberry garments) were put to Mr Liu in cross-examination and he conceded, as indeed he had to do, that they were very much the same. Indeed, they were plainly identical or virtually identical. At most, however, this evidence, if admissible, established that, on at least two occasions, Redberry had imported and sold by wholesale garments that were copies of Review garments. (Other labels were also canvassed in cross-examination, but nothing additional need be said about this. ) In the designs context, copying per se is not unlawful, however, and does not establish a design infringement. 86 Further, the applicants' allegations as to other infringements (whether or not the subject of previous settlements) remain simply that; none has been established. It is unnecessary to determine whether the terms of the release precluded the applicants' reliance on the claims the subject of the settlements. 87 The applicants sought to create a picture of interrelated corporate copyists. Whilst some of the companies to which reference was made had previously been related in a corporate sense, none was so related at the time of the alleged infringement, although individual officer holders or employees were related through family ties or marriage. None of this evidence assists with regard to any fact in issue, because even if interrelated business ventures were assumed (and there was no real evidence of this), the evidence rises no higher than showing a propensity to copy. As stated already, in a designs context, this is not conduct that of itself offends design rights. 88 The nature of the fashion industry and its products as disclosed in the evidence can also be borne in mind. The evidence indicates that copying and adapting the designs of other designers is the accepted modus operandi of designers, including reputable designers, within the industry; and that it is through this process that fashion products are created. Whilst evidence of repeated design infringements might well be a relevant consideration on the question of additional damages, evidence of mere copying is not. The applicants did not make out a case for additional damages. The parties shall be given an opportunity to make submissions on costs. I certify that the preceding eighty-nine (89) 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 commissioned for ladies' garment to be made or imported ready-made from 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 no substantially similarity in overall impression between respondent's garments and the applicants' design application dismissed 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 |
The threats are contained in a letter dated 4 April 2007 from the solicitors for SBriggs to Uniline and a letter dated 16 July 2007 from those solicitors to Uniline's Patent Attorneys. SBriggs accepts that the letters contain threats of infringement proceedings in respect of claim 13 of Australian Patent No. 706458 entitled "Spring Clutch" (the patent in suit). The specification recites that the invention "relates to a spring for a spring clutch and, more particularly, for a spring clutch for use with rollers for blinds and the like". SBriggs says the threats are not unjustified as Uniline has sold and offered for sale a product described as a Unidrive Spring Clutch Assembly (the "Uniline Spring Clutch") which contains each and every essential integer of claim 13 of the patent in suit. By an Amended Cross-Claim, SBriggs seeks a declaration of infringement of claim 13; an injunction restraining continuing infringement; an order for delivery up of all infringing products; and damages and related relief. Uniline in response contends that claim 13 of the patent claims as an essential integer of a spring clutch, a particular component described as a helical spring, wound according to any one of claims 1 to 12 of the patent which, properly construed, describes a helical spring of unitary construction, that is, a single unitary spring. Uniline says that since the spring clutch sold and offered for sale by Uniline does not embody a single unitary helical spring but operates by a section of the clutch device engaging, in a particular manner, separate helically wound springs, an essential integer of claim 13 is not present in the Uniline spring clutch and thus no infringement of claim 13 arises. Uniline concedes, subject to its Amended Further Cross-Claim, that if claim 13 of the patent describes a spring clutch that comprises, as a matter of construction of claim 13, three separate springs assembled within a spring clutch in the manner assembled within Exhibit 1, infringement of claim 13 of the patent is made out. By its Amended Further Cross-Claim, Uniline says that claims 1 to 13 of the patent in suit are invalid on grounds of lack of novelty; lack of sufficient clarity; failure to fairly base each claim on matter disclosed in the specification; lack of utility; obtaining the grant of the claims by false suggestion or misrepresentation; and obtaining on 23 March 2007 by false suggestion and misrepresentation, an amendment to claims 13 and 14 and the deletion of claim 15 of the patent. Lack of novelty is said to arise out of prior art information publicly available in Australia prior to the priority date by publication of United States Patent No. 5,375,643 (US Patent 643). As to lack of clarity, Uniline says that claims 1 to 13 are not clear as required by s 40(3) of the Patents Act as the amendment to claim 14, so as to claim the spring clutch of claim 13 "wherein the spring is of unitary construction", renders unclear whether claims 1 to 13 of the patent, claim an invention which includes helical springs assembled as multiple separate helically wound springs, rather than a unitary single spring. As to fair basis, Uniline says that if claim 13 claims multiple single helical springs, claims 1 to 13 of the patent are not fairly based on matter described in the specification. As to lack of utility, Uniline says that if claim 13 claims multiple single helical springs, claims 1 to 13 are not useful as the invention as claimed does not achieve its object as recited in the specification. Uniline says one object of the invention so recited is to be understood as providing for a bi-directional clutch that "avoids the need for a plurality of helical springs". Uniline says that if claim 13 extends to a spring clutch which includes multiple helically wound springs and is not confined, properly construed, to a spring of unitary construction, the invention so claimed does not avoid the need for a plurality of springs within a bi-directional spring clutch and thus is not useful as an invention as claimed. As to the object of the invention recited in the specification, SBriggs says, put simply, that the object of the invention, properly understood, is to solve the problem of the prior art by providing for a bi-directional clutch that avoids the need to use multiple separate springs in combination with a complexly configured element of a clutch that engages such springs. The invention as claimed is said to achieve the object as it avoids the need for recourse to multiple springs engaging a section of a clutch component configured in a complex manner. The object is said to be satisfied by a spring clutch that either uses multiple springs assembled according to the helical windings of claims 1 to 12 but which engage a simplified engagement device or, alternatively, by a single unitary spring wound according to claims 1 to 12 of the patent which engages a simplified engagement device within the clutch. Either way, the invention as claimed avoids, it is said, the prior art need in a bi-directional clutch for multiple springs engaged by a complexly configured second shaft. Uniline says such an approach misunderstands two things. First, claims 1 to 12 concern claims simply for a spring. That spring is said to be a unitary spring helically wound according to particular configurations described in the sequence of claims. Secondly, claim 13 claims a spring clutch that includes such a spring. Uniline says the object of the invention is to provide for a bi-directional clutch that avoids the need for a plurality of helical springs (e.g., the need for multiple helically wound springs) by use of the single unitary spring as described in claims 1 to 12. Uniline says a second object of the invention is to avoid the need for a complex engagement device. The object of the invention so understood is said to inform the construction of claim 13 with the result that the non-inventive skilled addressee in the relevant art would construe claim 13 as requiring the inclusion of a spring of unitary construction as an essential feature of the invention. Since that essential feature is not present in the Uniline spring clutch, no infringement of claim 13 is made out. As to false suggestion, Uniline says claims 1 to 13 should be revoked pursuant to s 138(3)(d) of the Patents Act on the footing that the claims of the patent as originally granted were obtained by false suggestion or misrepresentation as the inventor, in order to obtain the grant of the patent, represented that the invention claimed was an advance over the prior art by providing for a spring clutch consisting of a bi-directional clutch which avoided the need for multiple helical springs in favour of a single helical spring of unitary construction. Uniline says that this representation is contained in the body of the complete specification and is false to the extent that SBriggs now says that claims 1 to 13 should be construed so as to extend to "multiple springs wound in opposite directions which function as a single spring". Uniline also says that if claim 13 is construed in the way SBriggs contends, claims 1 to 13 of the patent ought to be revoked pursuant to s 138(3)(e) of the Patents Act on the footing that the amendment secured to claim 14 on 23 March 2007 was obtained by false suggestion or misrepresentation by the patentee representing that the aim of the amendment was "to include two claims of narrow scope for the purpose of better distinguishing the invention from the prior art". The representation to this effect is said to be contained in a letter from the solicitors for SBriggs to IP Australia dated 24 October 2006 and a request dated 24 October 2006 to amend the specification. In response to the cross-claim for revocation, SBriggs puts in issue all of Uniline's contentions and so far as lack of utility is concerned, SBriggs says that such a claim is bad in law on the footing that the invention as claimed includes a spring clutch which avoids the need for a plurality of helical springs, consistent with the objective recited in the patent. The central question between the parties is whether the Uniline spring clutch contains each and every essential integer of claim 13 of the patent. That question turns on whether the Uniline spring clutch includes a helical spring according to any one of claims 1 to 12 of the patent. That question is to be answered by determining whether, according to settled principles of construction of the language of the claims in the context of the specification, the phrase "a helical spring according to any one of claims 1 to 12" is confined to a unitary spring of single construction helically wound according to the claims, as Uniline contends, or whether claim 13 brings within the monopoly a spring clutch that includes unconnected multiple springs arranged within the clutch according to any one of the helical windings of claims 1 to 12, as SBriggs contends. SBriggs contends, having regard to the evidence of Mr William Hunter, an expert mechanical engineer and a person said to be skilled in what is said to be the relevant art, namely, the mechanical translation of rotational forces from one shaft to another by operation of a spring clutch device, that a spring clutch comprising multiple springs wound helically as described in claims 1 to 12 of the patent functions in the same way as a spring clutch comprising a single spring wound helically as so described. SBriggs says it follows that physically disconnected springs, where the separate springs reflect a winding sequence according to any one of claims 1 to 12 of the patent, are not excluded from the monopoly. SBriggs says that to the extent that the language of the claims in the context of the specification is to be construed as a reference to a single spring reflecting the particular windings of the claims, a single spring is not an essential feature of claim 13. The issues of construction, infringement and validity are by order made at a directions hearing, to be determined separately from damages and other relief. These proceedings only concern the former issues. SBriggs is the exclusive licensee of the patent. The patent claims a priority date of 2 February 1996. Mr Luxton swore an affidavit in the proceedings setting out the history of an amendment to the patent. On 24 October 2006, an application was made to IP Australia to amend the patent by making changes to claims 13 and 14 and deleting claim 15. Leave to amend was granted on 1 November 2006 and details of the request were advertised on 16 November 2006. On 28 February 2007, IP Australia requested the applicant to say whether any action of the kind contemplated by s 122 of the Patents Act was pending (that is, any claim for relief in respect of patent infringement). The applicant advised IP Australia on 1 March 2007 that no such action was pending and on 3 May 2007 the amendment was advertised in the Official Journal of Patents. The specification describes the invention as one that relates to a spring for a spring clutch and more particularly a spring clutch for use with rollers for blinds although the invention is not so limited. The specification describes the background to the invention and the mechanical role played by a spring clutch. Spring clutches are designed to translate rotational forces from one shaft to another coaxial shaft, smoothly. A typical illustrative example of one known type of spring clutch described in the background to the invention in the specification, as applied to roller blinds is this. A roller blind is necessarily mounted on a roller. That roller rotates in order to lower and raise the blind. The roller at one end is connected to a tubular shaft that rotates when a user pulls a pullcord in a particular direction thus initiating the rotational force applied to the shaft and therefore the roller. That shaft (to which the roller is connected) is typically located over and surrounds another inner tubular shaft which typically forms part of a housing (usually plastic) fixed to a wall or window surround. Thus, one end of the blind which contains the rotation device (that is, the spring clutch) is fixed in place together with an adjacent pull cord. At the other end of the blind, the roller sits passively in a catch. Rotational movement is effected by a user imparting rotational force by agitating the pullcord. The translation of rotational force from one shaft to another is effected by the device of the spring clutch. Interposed between the inner tubular shaft fixed by the housing to the wall or window surround (and thus stationary), and the outer tubular shaft carrying the roller (and attached blind) is a spring having a spiral or helical winding to enable the spring to be installed on, that is to say, wrapped around, the inner shaft and grip the shaft by frictional engagement. Such helical springs are often called "wrap springs". Typically, the helical spring has an internal diameter which is slightly smaller than the outer diameter of the inner shaft. The spring is installed by slightly expanding the spring and then sliding the spring onto the inner shaft which gives rise to the relevant degree of frictional engagement between the spring and the inner shaft. The outer shaft surrounding both the inner shaft (and thus coaxial with it) and helical spring, engages one end of the spring. Pulling the pullcord imparts a rotational force to the outer shaft. Any resistance to rotation of the outer shaft is initially absorbed by the engaged helical spring which grips the first shaft. Excessive resistance might cause a spring to deform as it continues to absorb rotational force. However, if the resistance absorbed by the spring exceeds a pre-determined level, the helical spring will slip about the inner shaft ensuring that excessive rotational force otherwise described as rotational "torque" is not applied to the roller blind. The specification also describes another type of spring clutch disclosed in Australian Patent No. 557825 ("AP825") which is said to address the problem of "stairstepping" and excessive torsional loads applied to the inner shaft: that is, a particular spring clutch that permits rotational force to be transmitted to the roller blind by a number of helical springs on the inner shaft, engaged in sequential steps. The specification identifies the particular features of that spring clutch; the disclosure by AP825 of a bi-directional spring clutch; the method of achieving such functionality; and perceived difficulties with that clutch as a solution to the problem of translating rotational force from one shaft to another in either direction of rotation, by such a spring clutch. In construing the language of the claims and thus the boundaries of the monopoly determined by the words of the claims, it will be necessary to have regard to the specification as a whole to understand the context in which words have been used; the problem in the prior art the invention seeks to address and the object of the invention; and to answer the question: What would a non-inventive person skilled in the art, as the notional addressee of the patent, have understood the patentee to mean by the language selected to define the monopoly? Plainly enough, evidence can be given by experts of the meaning those skilled in the art relevant to the field of the invention would give to technical terms, phrases and concepts accepted within the relevant discipline. Where the specification addresses and the claims contain, technical terms, the Court must have evidence before it of the technical meaning so as to understand the meaning a person familiar with the state of the art at the priority date would attribute to those terms. A proper understanding of how a relevantly skilled reader would understand such terms enables the Court to construe the claims in the context of the specification and attribute meaning to the claims in isolating the essential integers. In undertaking that exercise, the Court will determine what weight ought to be attributed to particular expert evidence. The construction of the patent is a matter entirely for the Court aided by evidence of the understanding of the skilled reader. The proper construction of the patent is not determined by findings preferring one expert's view of the construction of the patent, over another. The patent will be construed according to the ordinary meaning to be attributed to the language of the document informed by the Court's understanding of technical terms through evidence reflecting the understanding of a person skilled in the relevant art (as to these principles generally, see Sachtler GMBH & Co. v R E Miller [2005] FCA 788 ; (2005) 65 IPR 605 per Bennett J and particularly those authorities assembled at [20], [21] and [22]). Uniline called evidence from an expert, Dr Duncan Gilmore. Dr Gilmore holds the degrees of Bachelor of Engineering, Master of Engineering Science and a Doctor of Philosophy. Dr Gilmore is a Fellow of the Institution of Engineers Australia and the Society of Automotive Engineers Australasia and a member of other professional bodies in the engineering field. Dr Gilmore has undertaken design work in relation to "hand winders" for a participant in the blinds industry and has undertaken work for Uniline. Dr Gilmore has provided a number of affidavits with reports annexed. Dr Gilmore's evidence provides an analysis and explanation of the spring clutch assembly described in the patent in suit. Dr Gilmore describes the spring, the assembly of the components, the general utility of the assembly and the functional operation of the clutch. Dr Gilmore considers in detail claim 13 of the patent in suit and at page 12 of his report dated 11 February 2008, Dr Gilmore sets out his preferred interpretation of claim 13. Dr Gilmore also expresses views about the features of assembly of Uniline's spring clutch, its functionality and whether the Uniline spring clutch embodies each of the integers falling within claim 13 of the patent in suit. Apart from the question of construction of the patent in suit and matters going to functionality of each assembly, Dr Gilmore gives evidence as to the features of the spring clutch assembly described in US Patent 643 and expresses an opinion as to whether the disclosures in that patent anticipate essential features of the patent in suit. SBriggs called evidence from an expert, Mr William Hunter. Mr Hunter holds the degrees of Bachelor of Engineering Science (Hons) (Mechanical) and Master of Engineering Science. Mr Hunter has also provided a number of affidavits addressing the same field of issues Dr Gilmore addresses. Mr Hunter sets out his understanding of the problem of the prior art the invention of the patent in suit seeks to solve. Mr Hunter obtained a copy of AP825 to understand the subject matter of the patent and references in the specification to it. Mr Hunter construes the object statement recited in the specification in a particular way which assists him in reaching a construction of the claims. Mr Hunter, like Dr Gilmore, seeks to explain references in the specification to "surprising findings" and the true subject matter of those findings. Mr Hunter expresses his view of whether references in the claims to a helical spring comprehend a spring that includes a single spring wound according to claims 1 to 12 or several springs. Mr Hunter develops his functional analysis of the operation of the Uniline spring clutch to conclude that the use of three disconnected springs positioned on the first or inner shaft in the manner adopted by Uniline in its spring clutch, has the same functional operation as a spring clutch of the patent in suit containing a single unitary spring assuming the reference to a helical spring according to claims 1 to 12 is construed as a reference to a single spring of unitary construction. Mr Hunter says a spring clutch incorporating three separate springs aligned in the manner of the Uniline spring clutch of Exhibit 1 functions in precisely the same way as a spring clutch incorporating a single unitary spring wound according to the claims. This evidence is the foundation on which SBriggs says that incorporating a single unitary spring within a claim 13 spring clutch, if that is the proper construction of claim 13, is an inessential integer of claim 13. Dr Gilmore disagrees with Mr Hunter's view of the construction of the object statement and disagrees with Mr Hunter's comparative functional analysis of the spring clutch of claim 13 (incorporating a single unitary spring) and the Uniline spring clutch. Dr Gilmore contends that the Uniline spring clutch due to the very likely non-axial alignment of "tabs" (that is, end sections of a wound spring that protrude in an uplifted or radial way and engage components of the clutch), caused by a number of factors including manufacturing tolerances, does not operate in the same way as the clutch mechanism of the patent in suit comprising a single unitary spring. Uniline contends that Mr Russell Kaye, a Director of Uniline, is a person skilled in the relevant art and no objection was taken to Mr Kaye's evidence nor was Mr Kaye cross-examined. Mr Kaye holds a Bachelor's Degree in Business. He has not undertaken any formal course of study in engineering or design although Mr Kaye says that he has spent the past 18 years designing and selling window furnishing products. He says that Uniline specialises in the manufacture, supply and wholesaling of components used in products such as roller blinds and other classes of blinds. In 1998, he commenced the role of Research and Development Manager at Uniline in which he was responsible for product development, manufacturing process improvements and quality control of product manufacture. Mr Kaye says that he has read the specification and claims of the patent in suit. In Mr Kaye's affidavit of 11 February 2008 at paras 8, 9 and 10, he expresses a brief view of his interpretation of the construction to be given to the description of the spring in the patent in suit. He says that the point of differentiation between the assembly in the patent in suit and the Uniline spring clutch is that the Uniline assembly is formed from three springs rather than a single spring made up of sections. He says that by having three separate springs, the Uniline spring clutch is both visually and functionally different to the product described in the SBriggs patent. Mr Kaye swore a further affidavit on 26 March 2008. In that affidavit Mr Kaye describes a product known in the window-furnishing industry as a "sidewinder". A sidewinder is a product which controls the operation of a roller blind through the use of a clutching mechanism. The clutching mechanism is activated by plastic components within the mechanism engaging protruding tabs on springs so as to expand the spring reducing frictional engagement on the shaft holding the spring. Mr Kaye says that the Uniline spring clutch is an example of such a sidewinder. He says the spring clutch referred to in the SBriggs's patent is also an example of a sidewinder. Mr Kaye says that by 1994/1995 many companies such as Valectro Industries, RollEase Incorporated and JAI Products were selling a sidewinder clutch. The clutching mechanism sold by those companies incorporated either one, two or three springs mounted on the shaft designed to carry the spring. Mr Kaye says that at 2 February 1996 it was part of his common general knowledge as a product designer for components within the blinds industry and, in his view, also known to others engaged in the design and manufacture and sale of clutching mechanisms for blinds, that many forms of sidewinders had been developed over previous years, most with a similar design operation; these sidewinders included sidewinders sold by the three companies mentioned earlier; many of these sidewinders included clutch mechanisms that had multiple springs engaged and disengaged from a central shaft by operation of plastic components engaging with tabs protruding from the springs; and no sidewinders included clutching mechanisms that adopted a single spring with alternately wound sections. Uniline says that neither Dr Gilmore nor Mr Hunter bring to their evidence any experience in dedicated research into and development of components for mechanisms designed to enable a roller blind or any other blind to operate. Only Mr Kaye brings, it is said, to the Court industry experience in product development and manufacturing process improvements to the design of components for spring clutch assemblies. Thus, only Mr Kaye can be properly regarded as a person skilled in the relevant art. The relevant art is said to be specific industry knowledge relating to the component composition of clutching mechanisms designed to control the operation of roller blinds. I accept the unchallenged evidence of Mr Kaye. Whilst it is true that Mr Kaye has discharged the roles and functions he describes and has become familiar over a period of 18 years with spring clutch mechanisms commonly used to control the operation of roller blinds over that time, it seems to me that the Court, on the construction question, is best assisted by an understanding of the mechanical operation of the clutch mechanism described in the patent in suit and the operation of the Uniline clutch mechanism. That involves an understanding of the inter-relationship between the components in each clutch assembly, the role one or more springs incorporated within an assembly plays and the mechanical distribution of rotational forces effected by the particular clutch assembly. In other words, the relevant art is the art within the discipline of mechanical engineering as it is that skill which is apt to explain the way in which a mechanical device translates rotational forces from one shaft to another by means of a mechanism which is designed, through engaging a spring, to initially absorb rotational force and then translate that force from one component to another in facilitating the functional operation of an article such as a roller blind. It may be that Mr Kaye as a person experienced in the applied industrial development of components for clutch mechanisms used in roller blinds, can give contextual evidence of the range of spring clutch devices and spring components used in such clutches over the 18 years of his experience, as applied to roller blinds recognising that the patent in large part addresses a spring for a spring clutch "for use with rollers for blinds and the like". However, since the patent is concerned with the mechanical translation of rotational forces in the manner described, it seems to me that the relevant art informing construction of the patent falls within the discipline of mechanical engineering and each expert witness is a person skilled in that art. Mr Kaye does not seek to explain the operation of a sidewinder spring clutch, the operation of the spring clutch of claim 13 or the Uniline spring clutch. There is substantial disagreement between Dr Gilmore and Mr Hunter as to whether the Uniline spring clutch incorporating three separate springs in the manner of Exhibit 1 functions in the same way as the spring clutch of claim 13 of the patent in suit assuming for the moment that claim 13 is confined to a clutch mechanism incorporating a single unitary spring. Each expert has proffered a view of the preferred construction to be adopted of the language of the claims, the meaning to be given to sentences in the specification and the syntax of the object statement. In explaining the operation of each clutch mechanism, each expert has explained the mechanical concepts inherent in the operation of each clutch and the working of the preferred embodiment of the invention by reference to the drawings and the numbered components in those drawings. I have relied upon the evidence of the experts in explaining the functional operation of each clutch mechanism and the underlying mechanical forces at work when the clutch is engaged, rather than the opinion of the experts as to questions of construction. The Court is aided in its task by the evidence of the experts going to functional and operational matters. It is now necessary to turn to the construction of the language of the patent in the light of the evidence given by Dr Gilmore and Mr Hunter and the relevant weight to be attributed to aspects of that evidence. KG v R E Miller Pty Ltd [2005] FCA 788 ; (2005) 221 ALR 373 ; (2005) 65 IPR 605 per Bennett J ( Sachtler ); Fresenius Medical Care Australia Pty Ltd v Gambro Pty Ltd [2005] FCAFC 220 ; (2005) 224 ALR 168 ; (2006) 67 IPR 230 , per Wilcox, Branson and Bennett JJ; K D Kanopy Australasia Pty Ltd v Insta Image Pty Ltd [2007] FCA 481 ; (2007) 71 IPR 615 per Kiefel J; Clorox Australia Pty Ltd v International Consolidated Business Pty Ltd (2006) 68 IPR 254 per Stone J; Nufarm Ltd v Jurox Pty Ltd [2008] FCA 178 ; (2008) 75 IPR 341 per Middleton J; Ranbaxy Australia Pty Ltd v Warner-Lambert Co. LLC (No. 2) [2006] FCA 1787 ; (2007) 71 IPR 46 per Young J; Pfizer Overseas Pharmaceuticals v Eli Lilly & Co. (2006) 68 IPR 1 per French and Lindgren JJ and Crennan J agreeing). I have had particular regard to the decision of the Full Court in Pfizer , the statement of ten principles of construction identified by Sheppard J in Décor Corporation Pty Ltd v Dart Industries Inc. (1988) 13 IPR 385 at 400, the judgment of the Full Court in Insta Image Pty Ltd v K D Kanopy Australasia Pty Ltd [2008] FCAFC 139 ; (2008) 78 IPR 20 at [82] , the judgment of the Full Court in Kinabalu Investments Pty Ltd v Barron & Rawson Pty Ltd [2008] FCAFC 178 at [44] and [45] and the judgment of the Full Court in PAC Mining Pty Ltd v Esco Corporation [2009] FCAFC 18 at [26] to [29]. As Lindgren J observed in Breville Pty Ltd v Warehouse Group (Australia) Pty Ltd [2005] FCA 1893 ; (2006) 67 IPR 576 at [41] , the Court is frequently called upon to refer to the principles which govern the construction of claims and "on each new occasion it seems that the same authorities plus the last preceding one are reviewed. And so the list lengthens. " I propose to simply state the propositions to be applied derived from these authorities and some others in construing claim 13 of the patent in suit and any claim upon which it rests. The principles are these. The claims define the monopoly. When determining the boundaries of a claim, the specification must be read as a whole. It describes the patentee's best known method. If the language of a claim is clear and unambiguous, it is not to be rendered ambiguous, obfuscated or qualified by statements extracted from the specification as if those statements form part of the language of the claim defining the monopoly ( Flexible Steel Lacing Company v Beltreco Ltd [2000] FCA 890 ; (2000) 49 IPR 331). Although the language of the claim defines the monopoly, the claim marks out the boundary of a particular solution to a problem not solved by the prior art and thus has a context. Reference should be made to the specification to understand that context, to explain the background to the claims and to ascertain the meaning of technical terms ( Minnesota Mining and Manufacturing Co. v Beiersdorf (Aust) Ltd [1980] HCA 9 ; (1980) 144 CLR 253). Although the clear language of a claim should not be diluted, qualified or obfuscated by reference to the specification, unclear language used in a claim might usefully be made clear by reference to words used in the specification, in the relevant context ( Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Limited [2001] HCA 8 ; (2001) 207 CLR 1). The specification will, among other things, describe aspects of the prior art, unresolved problems in the prior art, the object the invention seeks to achieve and preferred embodiments of the invention and will recite a claim or claims staking out the patentee's exclusive ground. The Court reads that document in the logical sequence of its contentions and seeks to construe the claims, according to the words chosen in the claims, taking account of those matters, recognising that an identified embodiment or a preferred embodiment does not limit the natural language of a claim yet, the patentee may by clear language choose to limit the scope of the monopoly. In that sense, the Court does not first construe the claims without reference to the specification and then determine whether ambiguity exists ( Sachtler ). The document is read in its entirety and clear meaning is to be given to the clear words of a claim. Although the Court seeks to construe the language of the claims taking account of the skilled reader's (e.g. a person skilled in the relevant art) practical and commonsense understanding of terms and particular language, clear language ought to be given its natural and apparent meaning and not read down as though the evidence of the skilled reader imported a qualification upon a claim inconsistent with that meaning. No doubt evidence of particular applied terms of art in any given field or discipline may make the construction of the language of a claim using those terms a difficult question of balance between the natural expression of the language of the claims and the conditioning influence of terms of art. Adopting a purposive approach to construction of the claims does not mean that clear limitations in the scope of the monopoly contained in the language of the claims can be avoided or the reach of the monopoly extended beyond the clear limits of the language selected. A purposive approach to construction as opposed to a purely literal one will raise the question of whether persons with practical knowledge and experience of the kind of work in which the invention was intended to be used, would understand that strict compliance with the descriptive words or phrases used in a claim was intended to be an essential requirement of the invention. If so, as a matter of construction, a variant would fall outside the monopoly claimed even though it could have no material affect on the way the invention works. That question does not arise where the variant would in fact have a material affect upon the way the invention works ( Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183 ; Kirin-Amgen Inc. v Hoechst Marion Roussel Ltd (2004) 64 IPR 444). The construction of the language of a claim, adopted by the Court, ultimately determines infringement. The question is whether the alleged infringement is comprehended by the clear language of the claim ( Sachtler applying Catnic and PhotoCure ASA v Queen's University at Kingston [2005] FCA 344 ; (2005) 216 ALR 41). The specification explains that spring clutches are designed to provide smooth translation of rotational movement of one shaft to another coaxial shaft and that in the absence of such types of clutches, "a direct translation is provided which can make the rotation difficult to initiate and control". The specification at p 1, ll, 9 to 28 describes one known type of spring clutch described at [20], [21] and [22] of these reasons. At p 2, ll, 1 to 6, the specification describes another type of spring clutch described in AP825. The specification of the patent in suit recites that the problem of "stairstepping" and "excessive torsional loading" of spring clutches is discussed in AP825. a blind) in graduated steps to allow for a slower acceleration of the load than is the case when the maximum rated torque is applied suddenly to the load. Each of the helical springs have tabs affixed to their ends which engage in openings in the surrounding coaxial second shaft. The openings have a configuration such that upon rotation of the first shaft, and consequently the helical springs, the tabs are sequentially engaged. This arrangement allows the first helical spring to contract to transmit torque to the second shaft prior to a second helical spring doing likewise. Further, the frictional engagement between the first helical spring and the first shaft is such that the second helical spring will not engage the second shaft unless the first helical spring is caused to slip about the first shaft. This will occur if the torque applied to the first helical spring exceeds a predetermined limit. The second helical spring operates in a similar way as does a third helical spring and so on. Accordingly, a number of helical springs are sequentially used to transmit torque loads from the first shaft to the second shaft. First, the spring clutch is characterised by having at least two helical springs frictionally engaging the first shaft. Secondly, each of the helical springs have tabs or end sections which engage with openings in the second shaft that surrounds the first shaft and each spring on the first shaft. Thirdly, the openings on the second shaft that engage each spring, have a particular configuration so that on rotation, in this particular spring clutch, of the first shaft (and thus each helical spring) the end sections of each spring are engaged in a sequence. The sequential engagement is said to allow the first helical spring to contract and transmit rotational force to the second shaft before the second helical spring contracts and transmits rotational torque to the second shaft. This sequential transmission of torque loads by use of a number of helical springs , from one shaft to another, is further effected in this way. The frictional engagement between the first helical spring and the first shaft is such that the second spring will not engage the second shaft unless the first spring is caused to slip about the first shaft. The first spring will so slip if the rotational force applied to it exceeds a predetermined limit. As the specification says, the second helical spring operates in a similar way as does a third and so on . As the specification also points out, what emerges is that a number of helical springs are sequentially used to transmit torque loads from the first shaft to the second shaft. At p 2, ll, 20 to 26, the specification describes a "bi-directional clutch" disclosed by AP825. To achieve this, both ends of each helical spring are provided with upstanding tabs. All the helical springs are provided with a common winding direction. Different ends are engaged depending upon the direction of rotation of the first shaft. A complex configuration of openings and barriers is necessary in the second shaft to achieve this functionality. Consequently such a bi-directional clutch is expensive to manufacture and assemble. First, both ends of each spring have upstanding tabs and all helical springs are wound in a common direction. Secondly, different ends of each spring are engaged depending upon the direction of rotation of the first shaft. To achieve this bi-directional functionality, a complex configuration of openings and barriers is necessary in the second shaft engaging the tabs of each spring. What follows is that consequently, such a bi-directional clutch is expensive to manufacture and assemble. SBriggs reads the word "and" in the object statement as conveying the meaning "with". Those claims are in these terms. The helical spring of claim 1, wherein the tabs project outwardly. The helical spring of claim 1 comprising at least two of the left hand wound sections, wherein at least one of the right hand wound sections is positioned between the left hand wound sections. The helical spring of claim 1 comprising two of the right hand wound sections, wherein at least one of the left hand wound sections is positioned between the right hand wound sections. The helical spring of claim 1 comprising two of the left hand wound sections, wherein at least one of the right hand wound sections is positioned between the left hand wound sections. The helical spring of claim 1 comprising two of the left hand wound sections and two of the right hand wound sections, wherein the right hand wound sections and the left hand wound sections are positioned so that the spring has alternate left and right hand wound sections. The helical spring of claim 1, wherein at least one right hand wound section abuts at least one left hand wound section. The helical spring of claim 1, wherein at least one right hand wound section abuts at least one left hand wound section and one of the tabs connects each abutting right hand wound section and left hand wound section. The helical spring of claim[s] 1 to 9, wherein the tabs are substantially radial projections. The helical spring of any one of claims 1 to 9, wherein at least two of the tabs are axially offset from each other. The helical spring of claim 1 to 9, wherein at least two of the tabs are axially substantially aligned. The spring clutch of claim 13 wherein the spring is of unitary construction. However, preferably the tabs project outwardly from those sections. Likewise, preferably the tabs are directed substantially radially. A description of the spring of Figure 1 is set out at [84]. Figure 1 is described as a perspective view of a spring according to one form of the invention. At the lower end of the helical spring 1 is tab 2 which extends radially from the helical spring 1. The upper end of the helical spring 1 also has a tab 3 which extends radially from the helical spring 1. These tabs 4 and 5 are formed by reversing the direction of rotation of the helical spring 1 during its formation . The number of winding sections may varying [vary] depending upon the application required for the helical spring 1. The winding sections are connected by radially extending U shaped tabs 40 and 41. These tabs 40 and 41 are formed by reversing the direction of rotation of the helical spring 1 during its formation and are axially aligned respectively with tabs 42 and 43. The direction of winding of the sections of indefinite length will alternate. Whilst in figure 3 the tabs are aligned, the person skilled in the art will appreciate that the tabs need not be in alignment. Similarly, at least two of the tabs may be axially substantially aligned to distribute the application of any force to the spring more evenly. In this arrangement, one of the tabs connects each abutting right hand wound section and left hand wound section. The preferred embodiment of the spring exhibits left hand wound sections alternating with right hand wound sections and preferably at least one right hand wound section and at least one left hand wound section abutting each other. In such an abutting arrangement one of the tabs connects each abutting right and left hand wound section. This description of the arrangement of the sections of a helical spring suggests a single continuous spring unifying and connecting wound sections of the spring. The spring is formed by machinery which is programmed to form (for example) the left hand wound section A in the spring material. It then reverses the winding adjacent one end of the left hand wound section A to form the tab 5 and then forms the right hand wound section B. Thereafter, tab 4 is formed followed by a left hand section C. A final tab 2 is formed at the end of the left hand wound section C. As depicted in figures 2 to 5, the formation of the tabs and the windings can be repeated for a predetermined number of times depending on the length of the hub [shaft] on which the spring will be mounted and the load of blind. That construction of claim 1 is consistent with figure 1 which depicts a single helical spring of three united sections, A, B and C and figure 2 that demonstrates united infinite sections of a single spring. The utility of such a single spring so configured was found to be surprising in its facilitation of the smooth transmission of rotational forces between the input and output shafts of a spring clutch. No part of claim 1 uses language which suggests that a helical spring comprised of sections wound as described, comprehends a plurality of springs or multiple springs or a sequence of springs assembled in a way that reflects the windings of claim 1. The method of construction of the helical spring of claim 1 describes a continuous process of forming connected sections of a single wire spring of reverse winding. What is required by the natural meaning of the language of claim 1, in context, is a single united spring comprised of at least the sections wound as described in claim 1. Claims 2, 3, 4, 5, 6 and 7 also prima facie describe a single united spring according to the windings described by those claims. Claims 8 and 9 introduce into the language of the claims the word "abuts". Claim 1 describes a helical spring "comprising" sections and claims 3, 4, 5, 6 and 7 describe "the helical spring of claim 1" comprising sections "positioned" in a particular way. Claim 8 describes "the helical spring of claim 1" where at least one right hand wound section abuts at least one left hand wound section. Claim 9 also recites the helical spring of claim 1, adopts the same additional words of claim 8 and adds the words "and one of the tabs [that is, the tabs projecting from each wound section as required by claim 1] connects each abutting right hand wound section and left hand wound section". The word "abut" means "to be next to or have a common boundary with" ( The New Oxford Dictionary of English , 2 nd Ed., 2001). The use of the word "abuts" in claim 8 might suggest contiguous proximity but not necessarily singularity or unity. The use of the word "abuts" might convey the notion of a helical spring made up of at least one right hand wound spring next to at least one left hand wound spring and thus refer to multiple springs. The term does however include the notion of a common boundary. Claim 8 begins by reciting the helical spring of claim 1 as an element of claim 8. Claims 3, 4, 5, 6, and 7 describe the helical spring of claim 1 comprising "at least" particular nominated sectional windings and the particular positional relationship of the required windings one to another. Claim 3 for example speaks of at least two right hand wound sections where at least one left hand wound section is positioned between the right hand wound sections (at least, R L R). Claim 4 contemplates "at least" L R L. Claim 5 contemplates two right hand wound sections (as opposed to "at least" two such sections (as in claim 3)) and "at least" one left hand wound section positioned between those two sections (R L R but possibly L R L R or R L R L). Claims 6 and 7 are also concerned with specific relational positions of particular sectional windings within a spring comprising at least but possibly more than, three sections (or at least four sections in the case of claim 7). Claim 8 does not, in terms, deal with the relational position of sectional windings within a group of wound sections. Claim 8 requires simply at least one right hand wound section to abut one left hand wound section. Claim 9 describes such a spring where one of the tabs connects each abutting right hand wound and left hand wound section. Claim 9 describes the connection by one of the tabs of each abutting section. Claims 10, 11 and 12 describe a helical spring of claims 1 to 9 reflecting radial tab projections; axially offset tabs; and axially substantially aligned tabs. It seems to me that the language of claim 1 describes a single unitary spring of at least two sectional windings, one to the right and one to the left. Although claim 8 uses the term "abuts", claim 8 also incorporates a reference to the helical spring of claim 1 and a requirement that at least one right hand wound section of the claim 1 spring is next to or in common boundary with at least one left hand wound section. Claim 9 requires that one of the protruding tabs connects each section. Claims 8 and 9 are consistent with a single unitary spring. The language of the claims does not adopt terms or phrases otherwise used by the author of the specification to describe a sequence of springs, a number of springs or a plurality of springs so as to clearly state boundaries of the monopoly that include, within the references to a helical spring wound according to the claims, multiple disconnected (and hence separate) springs assembled so as to reflect the directional windings described in the various claims. There is another basis for suggesting that the patent addresses a single unitary spring of reverse winding. between Sections designated as A and B), and also again at tab 4 (ie. between Sections designated as B and C), in order that the spring behave correctly as a clutch. If for example, the wire tab 5 continued on in Section B in the same winding direction as Section A, then as tab 5 was pushed by Plastic Component Number 10 [the second shaft] to unwind Section A and loosen its grip on the shaft [the first shaft], then tab 5 would also tighten the grip of Section B ... The single spring is specified to be constructed according to Figure 1 [75#] so as to achieve a clutching action . This in turn dictates Claims 1 to 9 of the Patent in order that a single spring achieve a clutching action. If multiple springs are used there is no need to alternate the winding of adjacent springs from, for example left hand wound to right hand wound or vice versa. Multiple springs will work successfully as a clutch if they are all wound in the same direction, rendering Claims 1 to 9 inapplicable. However, for a single spring interpretation, Claims 1 to 9 are vital to achieve a spring clutch operation. ... As stated at paragraph 12 [of the Hunter statement dated 15 January 2008, Annexure B to Mr Hunter's affidavit of 11 February 2008], with reference to the invention of the [AP825], the principal advantage of having multiple springs is to provide sequential engagement of the springs with the shaft, so the clutch loading is applied to the shaft in a progressive manner and avoids drawbacks which the patent refers to as "stairstepping". It seems to follow that if the single unitary spring is broken into three separate sections, the reverse winding of the sections would not be necessary. The patent in suit specifies a single spring with reverse winding, an embodiment of which is reflected in figure 1, so as to achieve a clutching action. In oral evidence, Mr Hunter was asked to explain why a plurality of springs with alternate windings could avoid stairstepping. However, Mr Hunter was not able to do so. I accept Dr Gilmore's evidence in this regard ([69]). That leads Mr Hunter, as a person skilled in the art, to the problem the spring clutch of claim 13 seeks to solve and therefore the object statement for the invention. The object statement is read by Mr Hunter in the context of the preceding discussion of the prior art, to properly understand the object of the invention and thus throw light on the meaning and construction to be given to the spring described by claims 1 to 12 and the spring clutch of claim 13. Mr Hunter noted the reference to the problem of "stairstepping" discussed by AP825. He was not familiar with that term or AP825. Mr Hunter obtained a copy of the patent to better understand that term of art and the method discussed in that specification for transmitting rotational torque in graduated steps. Uniline says it was not open to Mr Hunter to have regard to AP825 in giving evidence as a person skilled in the art, of the method used in the patent in suit, because AP825 was not known to him at all and there is no evidence that the art of AP825 formed part of the common general knowledge of such a person. Dr Gilmore also had regard to AP825. Whilst that patent and the references to stairstepping as a description of the abrupt transmission of rotational forces otherwise described as "intermittent" or "jerky" transitional movement, was not known to either expert, reference to AP825 by each expert assisted them in understanding the discussion of the prior art spring clutch disclosed in AP825, set out at p 2, ll, 7 to 25 of the patent in suit. The correct approach to the use of AP825 for the purposes of construction, is not to read the document and substitute into the patent in suit the content of the prior art disclosures made by the document. The prior patent may be read by a person skilled in the art of the patent in suit to give context to and better understand the particular discussion selected by the author of the patent in suit in the specification, concerning the device or method the subject of the prior patent. The author of the patent in suit refers to AP825 to identify a type of spring clutch which permits rotational forces to be transmitted in graduated steps thus avoiding stairstepping and excessive torsional loading. The author isolates the characteristics of such a clutch and emphasises the use of at least two and possibly three or four or more helical springs sequentially engaged by the configured openings in the surrounding coaxial second shaft of the clutch by tabs at the end of each helical spring. The manner of that sequential engagement of those springs is described at p 2, ll, 13 to 19 of the specification ([49] of these reasons). The author then describes features of the bi-directional clutch of AP825. Emphasis is given to each helical spring wound in a common direction with upstanding tabs engaged depending upon the direction of rotation of the first shaft. The author notes that a complex configuration of openings and barriers is necessary in the second coaxial shaft to achieve bi-directional functionality. Mr Hunter sees this description of the prior art spring clutch of AP825 as isolating two particular features, the sequential functional engagement of a number of helical springs deployed in a spring clutch and the need for a complex configuration of openings and barriers in the second shaft to achieve bi-directional functionality. This leads Mr Hunter to conclude that the object of the invention of the patent in suit as recited in the object statement is to eliminate the need for multiple springs engaging a complex configuration of openings and barriers in the second shaft of a spring clutch. Mr Hunter says that since this is the object of the invention, all references in the claims, relevant contextual descriptive or explanatory statements in the specification or embodiments depicted in drawings, to a helical spring comprised of sections wound according to the various claims, necessarily include a reference to both a single spring of unitary construction and to multiple springs or a plurality of springs engaged by a non-complex engagement shaft or shafts. That follows because the object statement tells the skilled addressee that the author sought to exclude a plurality of helical springs from the field of the invention engaged by a complex series of openings and barriers in the engagement shaft. Where that complexity is not part of the invention (as it is not, in this invention) the skilled addressee would understand that a single unitary spring or a plurality of separate springs satisfies the object. It follows that the language of the claims and any other contextual references in the specification properly taken into account in construing the claims, should be understood (and construed) as including within the monopoly of the claims, a reference to a single unitary helical spring and a plurality of helical springs assembled in a way which reflects the windings of claims 1 to 12 of the patent. Thus, the Uniline spring clutch falls within the monopoly of claim 13. The object statement logically takes up two features identified by the author of the patent in suit in the author's discussion of the prior art spring clutch of AP825. That discussion identifies the functionality of sequentially engaged multiple springs in effecting the transmission of torque loads and the need, dictated by the presence of a number of helical springs within the spring clutch, for complex openings and barriers in the engagement shaft engaging those multiple springs. The object statement suggests that the object of the invention is to avoid each of these features. That is to say, the object of the invention is to provide for a bi-directional clutch which avoids the need for the presence of a number of springs within a bi-directional clutch (and hence the reference in the object statement to avoiding the need for a "plurality of helical springs") and avoids a complex configuration of openings and barriers in the second shaft. That object statement suggests that both advantages of the invention need to be present to achieve the object of the invention which suggests that the object statement contemplates a monopoly to be defined by the claims in terms of a bi-directional clutch that has the advantage of simply a single spring (rather than many) and a second advantage that complex openings and barriers in the configuration of the second shaft (traditionally associated with the use of multiple springs, at least as identified by the author of the specification in the author's discussion of the spring clutch of AP825) engaging that single spring, are avoided. An examination of the language defining the claims suggests that claims 1 to 12 are consistent with the avoidance of a multiplicity of springs. The claims address a single spring united by U shaped tabs reflecting the reverse helical windings of the particular claims. The language of those claims is consistent with the monopoly suggested by the object statement as construed at [77] and [78] with the result that a single spring is required by the claims; multiple springs are outside claims 1 to 12; and the inclusion of multiple springs in a spring clutch takes such a spring clutch outside the monopoly of claim 13, as a matter of construction. However, the language of claim 13 and the functional operation of a spring clutch described by claim 13 might suggest another construction. It depicts the disassembled components of a spring clutch. Both Dr Gilmore and Mr Hunter have provided an explanation of the operation of the spring clutch of claim 13. Whilst the oral evidence and reports of each expert depart on the question of construction of the object statement; functional similarity of operation when comparing the spring clutch of claim 13 (assuming a single unitary spring reflecting the windings of claims 1 to 12) and that of Uniline incorporating multiple springs; and the description of the method of engagement of spring tabs in the process of unwinding a blind using such a clutch, each expert essentially agreed about the operation of the claim 13 clutch and its method of transmitting rotational forces, at least so far as the clutch engages a spring configured according to figure 1 of the patent as one embodiment of a claim 1 spring. That evidence reveals this. Figure 6 (Schedule 3) depicts a number of principal components of a claim 13 spring clutch and one spring. The principal components are a housing (7) which has a central hub or shaft (14) which will bear the helical spring; a pulley cover (8); a pullcord (9); and a pulley base (10) which has a tubular extension (23) described as the second shaft of the clutch. That shaft has a portion of the circumferential wall removed to form an opening. That opening is important as the tabs of the spring (numbered (1) in figure 6 and being the spring depicted in Schedule 1 to these reasons), loaded on to the first shaft (14) forming part of the housing (7), are positioned so that each tab of the spring is located within the opening in the second shaft (23) overlaying or coaxial with the first shaft (14) and a third shaft called a roller cover (11). The relevance of the position of the tabs will be examined shortly. The inner roll of a roller (which ultimately holds the blind) sits on or over the exterior of the third shaft. That third shaft is configured in such a way that it has an inwardly protruding section called a "keyway" (25). When the roller cover (11) surrounds or encircles the second shaft (23), the inwardly extending keyway section (25) is located in the opening created in the second shaft (23). When the spring clutch is assembled with the first shaft and loaded spring surrounded by the second shaft (with tabs positioned within the opening in the second shaft), in turn surrounded by the third shaft, the keyway section of the third shaft is located between the sets of tabs of the spring, aligned so that the keyway sits between tabs 3 and 4 of the spring on one side and tabs 5 and 2 on the other. That alignment can be seen in figures 7, 8 and 9 which are Schedules 4, 5 and 6 to these reasons. As to the spring, figure 6 depicts a spring according to figure 1. That spring comprises three sections, A, B and C formed from one piece of wire (as described). Sections A and C are wound in the same direction (clockwise). Section B is wound in the reverse direction to those sections (anti-clockwise). As figure 1 shows, tabs 2 and 3 are unconnected end sections which project radially. The other two tabs (tabs 4 and 5 of figure 1) between sections A and B (tab 5) and sections B and C (tab 4) are formed by bending the wire back against its direction of winding, projecting the wire outwards radially and then inwards so as to form a U shape with the wire then wound in section B in the reverse direction of section A. Section C is wound in reverse direction to section B thus creating the U shape of tab 4 of figure 1. As a result, tabs 5 and 4 each connect two sections of a single spring and sections A, B and C are integrated by tabs 5 and 4. The spring has an inside diameter slightly smaller than the outside diameter of the first shaft (14). The spring must be slightly unwound so as to slide over the first shaft and frictionally grip it. The spring attempts to compress the cylindrical first shaft along the length of the spring forming a tight fit and frictional engagement causes the spring to resist rotational movement. Once the spring is loaded, the pulley cover (8) is fitted into the housing (7) with pullcord. The pulley base (10) is located within housing (7) so that the second shaft (23) forming part of component (10) surrounds the first shaft (14) with the tabs of the spring positioned in the circumferential opening. The third shaft (11) with its keyway, surrounds the second shaft extending the keyway between the tabs of the spring through the longitudinal opening in the second shaft. If rotational force is applied by means of the pullcord component (8) and thus component (10) to lower the blind, rotation of components (8) and (10) also causes the second shaft (sometimes described as the control element) to rotate. As the second shaft rotates, the edge of the opening in the second shaft pushes against tabs 4 and 3 of the spring. That causes expansion and therefore unwinding of the spring on the first shaft. When that happens, the keyway (25) comes into operation and engages tabs 2 and 5 of the spring which results in a contraction of each section of the spring thereby providing a breaking or clutching engagement of the spring with the first shaft (14). Consequently, the rotational force applied by the pullcord (9) to lower the blind must exceed the frictional torque which results from the static weight of the blind to enable the blind to be lowered. In a counter-intuitive sense, the application of rotational force (for example, in lowering the blind) has the effect of applying at one and the same time, by operation of control element (23) and the engagement of keyway (25), both release of the spring on the first shaft as tabs 4 and 3 are engaged and contraction of the spring on the first shaft as the keyway engages tabs 2 and 5. Mr Hunter points out that the clutch can also hold the blind. When no force is applied to the pullcord, the weight of the blind exerts a rotational force on the roller cover (11) connected to the blind roller. Keyway (25) pushes against tabs 2 and 5 in an anti-clockwise direction thus causing the spring to tighten on the first shaft (14) and hold the blind in position. When the pullcord is engaged to wind up the blind, rotational force is exerted on the spring in the opposite direction. When holding the blind, the keyway (25) exerts a force in an anti-clockwise direction against tabs 2 and 5 causing the spring to tighten on the first shaft (14). When the pullcord is activated to wind up the blind, the applied rotational force is exerted in the opposite direction to the holding force. When the applied rotational force to wind up the blind exceeds the holding forces applied to the spring, the spring releases from the first shaft. The whole assembly can then move in the opposite direction. When the pulling force applied to the pullcord ceases, rotational force is no longer applied and the clutch holds the blind to stop it rolling up or rolling down. I have accepted the evidence of Mr Hunter in describing these features at [82] to [88]. More particularly, the helical spring will slip if the amount of load applied by the first shaft exceeds predetermined limits. Preferably, the spring has four sections which will occupy the substantial length of the first shaft. The frictional engagement may be lessening [ed] in either or both directions by removing sections . In this way the feel of the blind rolling movement may be stiffened or softened as desired. Each of the U shaped tabs have radial portions and a longitudinal portion. Each of the radial portions engages the edge of the opening in the second shaft or control element (23). The longitudinal portion connects together the two counter-wound sections of the spring. That three spring arrangement would also still satisfy the outcome at page 4 lines 8 to 10 "that smooth transmission of rotational movement in either direction can be achieved in a spring clutch without adopting complex shapes for the tubular second shaft" . Such arrangement would also still be consistent with the object stated at page 2. ... Consequently, when the specification refers to the single spring in the clutch of the [patent in suit], it could be referring to a unitary spring (that is, a single spring), or a spring arrangement that can function as a unitary spring in the clutch. Both arrangements are consistent with a spring clutch which would satisfy the object statement. That language is consistent with the "surprising finding" [90] that use of a helical spring having sections of opposing windings, in a spring clutch, without adopting complex shapes for the second shaft, achieves the smooth transmission of rotational movement in either direction. That construction is also consistent with the object of the invention which suggests finding within the monopoly defining the invention of a claim 13 spring clutch, both identified advantages of the invention. Those objectives are achieved by what is apparent in claim 13, namely, the inclusion of a single unitary spring engaging a tubular second shaft which avoids the need for complex shapes. Moreover, the advantage of the invention, expressed in the claims defining the invention, of avoiding use or recourse to multiple springs in a bi-directional spring clutch can only be regarded as central to the invention, that is, the proper construction suggests that avoiding the need for a plurality of springs is an essential integer of the invention. There seems very little room for concluding that claims defining the invention which command a single unitary spring as an integer of the monopoly, thus giving expression to the avoidance of the need for a plurality of helical springs, can be construed as including a plurality of springs or that the presence of a single unitary spring is an inessential integer. Mr Hunter says that there is a further powerful consideration. Mr Hunter says that even if the claims properly construed are confined to a single unitary spring, the longitudinal portions of tabs 4 and 5 might simply be removed or treated as "snipped" off in which event the spring clutch would include a sequence of springs or a multi-spring arrangement which would function in precisely the same way as a spring clutch of the patent in suit. In such a case there would be three springs reflecting the winding arrangement of sections A, B and C of the unitary spring. Mr Hunter says that there is simply no point of differentiation between the functional operation of a spring clutch of the patent in suit and a spring clutch including three springs as described. Because there is no functional differentiation between the two, the requirement that a spring clutch of claim 13 include a single unitary spring ought to be regarded as an inessential element of claim 13. Mr Hunter makes that point at para 29 of his statement of 15 January 2008, at paras 22, 23, 27, 52, 53 and 54 of his affidavit of 11 February 2008 and paras 10, 28 and 29 of his affidavit of 14 March 2008 and in his oral evidence. So whether the spring clutch included a single spring comprising alternate windings, or separate springs of alternate windings it would still work the same. Due to the geometry of the control element and keyway, the springs cannot move independently and are forced to operate as a single spring . Specifically, within the spring clutch assembly they cannot be moved independently and cannot be moved tangentially to tighten or loosen the complete helical spring. Dr Gilmore, in his affidavit of 11 February 2008, describes the components and assembly of the Uniline spring clutch. The assembly comprises three individual and separate helically wound springs with "tabs" that start and end each of the windings resulting in six tabs in all with tabs projecting radially outwards from the circular cross-section of the spring. No spring in the Uniline spring clutch exhibits integrated reverse winding with connecting tabs. Two springs are wound in the same direction (clockwise) and one in the opposite direction (anti-clockwise). The spring wound in the opposite direction is placed between the two springs wound in the same direction. The direction of winding of the three individual springs thus alternates. The three springs are loaded sequentially and adjacent one after the other on the first shaft so as to frictionally engage that shaft. A second shaft with a hollow cylindrical section and longitudinal opening surrounds the first shaft such that all six tabs of the three springs are positioned within the opening. Accordingly, when the second shaft is rotated, the edge of the opening will engage one tab on each spring, that is, three tabs will be engaged by one edge in one direction of rotation and three other tabs by the other edge in the opposite direction of rotation. A third tubular shaft is fitted over shafts 1 and 2. That shaft also contains a keyway that slides into the longitudinal opening of shaft 2 and sits between each set of three tabs. This provides the physical effect of marginally reducing the frictional grip of the springs [on the first shaft]. This action of loosening the three springs will physically occur for both directions of rotation of [shaft 2]. The springs all act in the same manner to loosen whether the three individual tabs on one side are pushed say clockwise or the three on the opposite side are pushed anti-clockwise as [shaft 2] is rocked one way or another. Thus, rotating [shaft 3] in either direction is more difficult. By virtue of this action, the Unidrive assembly [the Uniline spring clutch] is able to resist any rotational force induced by the blind itself ... . This enables [shaft 2] to rotate under the action of the pullcord and drive [shaft 3] by pushing the same set of spring tabs against the key on [shaft 3]. When little or no force is applied to the beaded cord, the three individual springs hold the blind in place by frictional grip and resist any force applied to the blind that would tend to wind it in either direction. Three tabs are engaged by either side of the opening in the second shaft upon rotation and the key engages one set of three tabs to tighten the winding on all three springs. Mr Hunter says these observations of Dr Gilmore confirm that the three springs are forced to act as a single spring, cannot move independently and "the three springs operate together as a set of components" (para 30, Hunter, 14 March 2008). Dr Gilmore in his later affidavit of 14 March 2008 disagrees that each spring clutch would operate in the same way, for these reasons. Although each radial side of tab 4 (see figure 1, Schedule 1) (that is, the two straight limbs of the U shape) and the two radial sides of tab 5 may not be in perfect alignment (due to manufacturing variations), movement of one radial limb or side of each tab must cause equal movement in the other limb. In other words, the two joined radial sides of each tab act together to increase or decrease frictional grip of the spring sections. Independence of operation of each radial limb of tab 4 or tab 5 cannot occur. Although, tabs 2 and 5 and tabs 3 and 4 of the single reverse wound spring may be in alignment (and all are shown to be aligned in one of the drawings of the patent in suit), Dr Gilmore says that misalignment is the probable result due to manufacture. Dr Gilmore says tabs 2 and 5 and tabs 3 and 4 are inevitably constrained to move in unison as they are joined. Dr Gilmore says that when the assembly operates, the "clutching operation will ... generally be achieved [as generally described]" although the method of operation will vary because the rotating second shaft (10) (see figure 6, Schedule 3) will engage either tab 3 or tab 4 or tabs 3 and 4 (and in the other direction, tab 2 or tab 5 or tabs 2 and 5). Therefore, if tabs 3 and 4 or 2 and 5 of the single spring are not perfectly aligned (and Dr Gilmore considers this unlikely in practical assemblies) the spring sections attached to the tab engaged first will begin to lose frictional grip. As more rotational force is applied, further tabs will be engaged. Only once all tabs are engaged will the clutch operate (as generally described) by loosening all sections of the spring (and contracting upon engagement of the key). Dr Gilmore says the clutching action will be "unpredictable" and "changeable" because engaging a tab will loosen either one spring section or two simultaneously as sections A and B are joined and B and C are joined. If tab 3 is first engaged, one third of the spring will be loosened. If tab 4 is engaged, two sections will be loosened. The conclusionary point Dr Gilmore makes is that this problem of unpredictability or changeability of engagement can only be resolved by ensuring that tabs 4 and 3 and tabs 5 and 2 are either "perfectly aligned or all misaligned". Dr Gilmore says that the two sets of three tabs of the three adjacent separate springs are, in some examples in evidence shown to be misaligned and, as a general matter of manufacture, not likely to be aligned. That follows because springs are individually made from different sections of wire of different strength on potentially different machines and thus variations will exist in the "angular spacing of the tabs on either end of each spring". Dr Gilmore says that it follows that as the angular spacing between the tabs on either end of each spring is going to be slightly different due to practical manufacturing processes or "because of design intent", the tabs will never align exactly. Dr Gilmore says that if three tabs on one side align in parallel with the axis of the shaft (on shaft 1) then the three tabs on the other end of each spring would not be expected to align in parallel with the axis of shaft 1. Dr Gilmore says that when the Uniline assembly is operated as described in paras 4.3 and 4.4 of his report of 11 February 2008 ([90] to [93]), "clutching operation will still generally be achieved as described" although a "distinct variation" in the method of operation will be present. This one spring of the three individual springs in total will begin to lose frictional grip as it is unwound. Once all three tabs are contacted, the operation will be exactly as described in [paras 4.3 and 4.4, Gilmore, 11 February 2008]. However, by this time, two of the springs will have been slightly loosened. The operation will be more gradual than if the three tabs on one side of the spring are all contacted simultaneously and rotated uniformly (if all three tabs are aligned), or if two tabs are contacted simultaneously (as in the Patent drawings where adjacent sections of a single spring are connected by a "U" shaped bridging tab). The necessary applied torque (rotational force) to achieve the clutching action will increase in three steps rather than increase more rapidly in either one or two steps. This will provide a gradual and potentially more subjectively attractive clutching action in my opinion i.e., more well-developed and fine-tuned. Mr Hunter responds to this analysis in his further affidavit sworn 20 March 2008. Mr Hunter agrees with Dr Gilmore that it is quite possible that in the patent in suit tabs 2 and 5 and tabs 3 and 4 may be misaligned due to "manufacturing tolerance variation". However, it is not possible in Mr Hunter's view, to state with any certainty that misalignment is of any functional significance. Mr Hunter notes that the patent acknowledges (p 5, l 27) that such variations are to be expected and in such a case certain of the tabs will be engaged first and the section of the spring immediately associated with that tab will then be made subject to torsional compression or expansion. Mr Hunter disagrees with Dr Gilmore that there will be any material difference in the feel in operation under an aligned set of tabs and a misaligned set of tabs. Mr Hunter says that if the tabs are aligned (or there is a unitary spring), the spring(s) or spring sections will release gradually as the contraction torque applied by the weight of the blind is overcome by the expansion torque being applied by activation of the pullcord. There is no reason to assume that this is not a smooth operation, in Mr Hunter's view. Mr Hunter also agrees that perfect alignment of single adjacent springs would be unusual having regard to normal manufacturing tolerances. The question is whether "such tolerance in any one of many of the components ... makes any material change to the operation of the spring clutch" (para 36, Hunter, 20 March 2008). Mr Hunter says Dr Gilmore's view is based simply on assumption and speculation. Mr Hunter although agreeing that the tabs of the three springs in the Uniline product are unlikely to align exactly, says that there is no basis for inferring that the manufacturer has sought to misalign the tabs "because of design intent". Mr Hunter accepts that engineering tolerances are fundamental to mechanical engineering and knowledge of them is part of an engineer's "basic stock of knowledge". Mr Hunter says that for a spring clutch assembly there would be "myriad tolerances" and the tolerances will vary from one spring to the next and within a spring. Mr Hunter says engineers are familiar with the consequences of all tolerances that might affect the assembly of such components and Dr Gilmore has not taken account of all of these tolerances in formulating his views. Mr Hunter refers to professional literature governing the range of tolerances accepted for torsion springs, free angle of ends and other matters. Mr Hunter concludes that the Uniline assembly accommodates well understood and well accepted tolerances for spring assemblies. Mr Hunter refers to Dr Gilmore's view that misalignment of the tabs in the Uniline spring assembly results in sequential engagement of three spring tabs in three steps giving rise to a smooth clutching operation. If the tabs are aligned (or there is a unitary spring), the spring(s) or spring sections will release gradually as the contraction torque applied to the weight of the blind is overcome by the expansion torque applied via the pullcord. The point of this discussion is that it may tell the Court something about construction of the claims. If the claims are confined to a single unitary reverse wound spring, might that integer be regarded as an inessential integer if there is no functional difference between a spring clutch that includes such a spring and a spring clutch that incorporates three separate springs in adjacent alignment reflecting alternate winding. Would persons with practical knowledge and experience in the subject matter addressed by the invention understand that strict compliance with a particular descriptive word or phrase appearing in a claim was intended by the patentee to be an essential requirement of the invention so that any variation would fall outside the monopoly claimed even though it could have no material affect upon the working of the invention. Lord Diplock in Catnic Components Ltd v Hill & Smith Ltd (supra) noted that such a question would not arise where the variation would in fact have a material affect upon the working of the invention. The Improver or protocol questions ( Improver Corporation v Remington Consumer Products Ltd [1990] FSR 181) pose questions, the answers to which assist construction . That is to say, the questions test whether a reasonable person skilled in the art reading the language of the claims in context would think that the patentee was intending to confine the monopoly to the natural or primary meaning of the words selected or, alternatively, would such a person think that the patentee was intending to include within that meaning a variant of no material functional difference ( Root Quality Pty Ltd v Root Control Technologies Pty Ltd [2000] FCA 980 ; (2000) 177 ALR 231). The difficulty is this. Although it is true that the initial affidavit of Dr Gilmore made no reference to the points of differentiation, by reference to questions of misalignment of tabs, in the functional operation of a spring clutch incorporating three separate springs as compared with the functional operation of a spring clutch of claim 13 incorporating a single unitary reverse wound spring, the evidence of Mr Hunter and Dr Gilmore in its totality, as persons skilled in the relevant art, is such that it is simply not possible to conclude that a variation from the language of the claims of the patent in suit constituted by the use of three separate adjacent springs loaded onto shaft 1 in the manner of Exhibit 1, has no material affect upon the way the invention of claim 13 works, for the purposes of question 1 of the Improver questions. If two experts emblematic of persons skilled in the relevant art (at least for the purposes of these proceedings), cannot agree that a spring clutch incorporating three separate adjacent springs positioned on shaft 1 of a spring clutch in the manner of Exhibit 1, functions in a way which would reflect no material affect upon the evident functionality of a spring clutch incorporating a single unitary spring of reverse winding, the Court cannot be satisfied that the variation has no material affect upon functionality. The question is not to be resolved by simply accepting one person skilled in the art over another but by approaching construction taking account of the total evidence of those skilled in the art. The weight of the evidence having regard to Dr Gilmore's evidence is such that it cannot be said or found that no material affect by the use of the variant is established. That being so, Improver questions 2 and 3 do not arise. Even if I accept entirely the evidence of Mr Hunter and reject the evidence of Dr Gilmore on this aspect of the case (thus answering Improver question 1, yes) and assume or accept that the variant of adopting three adjacent separate springs of alternate winding was obvious at the date of publication of the patent in suit to a reader skilled in the relevant art (thus answering the second Improver question, yes), the answer to the third Improver question must necessarily be, no. Here, the patentee has selected language that defines a monopoly in terms of a single spring engaging a non-complex single longitudinal slot and key configuration of two shafts (coaxial with a first shaft) to achieve identified advantages of the invention. A single spring is essential to the claims. It is the integer which enables the spring clutch to discharge its clutching function. A skilled reader would understand from the language of the claims in the context of the specification that the patentee intended that strict compliance with the primary meaning of the language of the claims was an essential requirement of the invention. Moreover, Mr Hunter acknowledges that multiple springs can work in a spring clutch when they are all wound in the same direction. Having adopted the construction of the claims reflected in these reasons, that construction determines infringement. The Uniline spring clutch does not incorporate a single unitary spring of reverse winding and thus no infringement arises. Claim 14 claims the spring clutch of claim 13 where the spring "is of unitary construction". Claim 14 was introduced into the patent by amendment by leave granted by IP Australia on 1 November 2006 consequent upon an application made by the patentee on 24 October 2006. Amendments to claim 13 were made at the same time (see [17] and [18] of these reasons). Mr Hunter gave evidence that claim 14 does not add anything to the scope of claims 1 to 13 as those claims comprehend a helical spring of unitary construction with reverse winding and a plurality of helical springs of alternate winding which operate in the same way as a spring clutch incorporating a spring of unitary construction with reverse winding. In that sense, it is not said by Mr Hunter or SBriggs that claim 14 aids in the construction of claims 1 to 13 on the footing that claim 14 prescribes a monopoly directed to the integers of claim 13 limited to a unitary spring and thus claim 13 must address something other than a spring clutch incorporating a unitary spring. It is not said that, by inference drawn from claim 14, claims 1 to 13 are directed to multiple adjacent separate springs of alternate winding. SBriggs says claims 1 to 13 bring within the monopoly a helically reverse wound unitary spring and a plurality of springs that cause the spring clutch of Exhibit 1 to operate in the same way as a spring clutch incorporating a reverse wound unitary spring. As Mr Hunter points out, it is then difficult to see exactly what claim 14 adds to the scope of claims 1 to 13, on that view of those claims. Mr Hunter is correct in this respect. The language of claim 13 requires as an essential integer of the monopoly, the presence of a single reverse wound unitary spring. The introduction into the patent of claim 14 (in its current amended terms) with the result that selective engagement of the tabs of the helical spring of claims 1 to 12 , was elevated into an amended claim 13 as part of a redefined control means (see claim 13(3)(a) and (b)), does not say anything about the helical spring of claims 1 to 12. In order to construe the language of claims 1 to 13 post-amendment in a way which extends the integers of those claims to multiple separate springs of alternate winding, further amendments would have been necessary to claims 1 to 13 to adopt clear language that brought a plurality of springs within the boundaries of the monopoly. That result does not arise simply by inference from an amendment to claim 14 (and related amendments to claim 13). The express reciting in claim 14 of a spring of unitary construction adds nothing to claims which address a single unitary spring of reverse winding. Having regard to the construction adopted in relation to claims 1 to 13, it follows that the threats of infringement proceedings made by SBriggs by the letter from its solicitors to Uniline dated 4 April 2007 and the further letter dated 16 July 2007 from those solicitors to the patent attorneys for Uniline are unjustifiable as no infringement is made out. The Amended Cross-Claim for infringement of the patent in suit fails. The parties in written and oral submissions have emphasised that questions of validity only arise for determination in the event that the claims are construed to include a plurality of springs of alternate winding and Exhibit 1 is found to infringe the claims of the patent. That is not the construction I have reached. However, the parties put validity in issue as part of the controversy and I will deal with each issue. I will do so in a less detailed way than would have been the case had I adopted a different view of the preferred construction. In addressing questions of validity, I will assume where relevant, the "counter-factual" (a general term used to describe an hypothesis of a construction of the claims that includes a plurality of reverse wound springs, although the construction question is a question of law). Uniline says that the invention as claimed by the terms of the monopoly might well be narrower than the disclosures contained in the specification but the claims cannot travel beyond the disclosures in the body of the specification. Uniline asks, consistent with Lockwood Security Products Pty Limited v Doric Products Pty Limited [2004] HCA 58 ; (2004) 217 CLR 274 , whether there has been a real and reasonably clear disclosure in the body of the specification of that which is claimed or, put another way, whether the claims travel beyond the disclosures in the specification ( Olin Corporation v Super Cartridge Co. Pty Ltd [1977] HCA 23 ; (1977) 180 CLR 236). I have construed the claims to require a single unitary reverse wound spring as an essential integer. Those claims so construed are consistent with the disclosures in the specification. If, however, an assumption is made that the proper construction of the claims brings within the scope of the monopoly a plurality of springs of alternate winding, do the claims travel beyond the specification? The specification contemplates an invention answering the problems of the prior art by providing for a bi-directional spring clutch that confers the advantages of a single spring engaging a non-complex slot and key engagement mechanism or control means. The specification plainly discloses the use of multiple springs sequentially engaged in prior art spring clutches by a complex configuration of openings and barriers as an aspect of a prior art bi-directional clutch. If the counter-factual hypothesis is adopted that the claims include use of a plurality of springs, that hypothesis would seem to follow necessarily from an acceptance of the proposition that the object of the invention, properly construed, is to avoid a plurality of springs in combination with a complex configuration of openings and barriers. Therefore, on that hypothesis of construction, a plurality of springs engaging a slot and key control means (that is, a non-complex control means) is sufficiently disclosed by the specification by reason of the description of the object of the invention and the claims are thus, upon the counter-factual, fairly based. However, neither the object nor the claims contemplate a plurality of springs as an integer of the claimed invention. If the object of the invention is construed to require the presence of the two identified advantages (within the invention and thus the monopoly), claims which, upon the counter-factual hypothesis, include a plurality of springs of alternate winding, travel beyond the disclosure. Uniline says the invention claimed by the patent is not useful and thus not a patentable invention (s 18(1)(c) of the Patents Act ) because the invention as claimed , adopting the hypothesis that the proper construction of the claims includes a plurality of springs engaging a non-complex slot and key device, does not achieve the object of the invention. That follows for all the reasons earlier mentioned derived from the construction of the object clause, namely, the object of the invention is to confer, in a bi-directional spring clutch, the advantages of a single spring reverse wound engaging a non-complex engagement mechanism and once the claims comprehend the engagement of a plurality of springs, an essential element of the object of the invention is unsatisfied. Thus, the invention is not useful in terms of its overt object. Lack of utility rises or falls on the construction of the object of the invention recited in the specification. Since the object clause has the construction I have attributed to it, it follows that claims defining the monopoly, upon the hypothesis that the monopoly includes a plurality of springs of alternate winding, do not express the object and thus the invention as claimed is not useful. If, however, the hypothesis of the counter-factual is also extended to the object clause such that the object clause is construed to contemplate an invention that avoids the need for a plurality of springs engaging a complex configuration of openings and barriers, claims defining a spring clutch incorporating a plurality of springs engaging a non-complex slot and key device would be consistent with that hypothesis of the operation of the object clause. However, the object clause does not bear that hypothetical construction and claims which include, within the monopoly, a plurality of springs would define the boundaries of an invention that is then not useful in terms of the object for it. The clutch includes a shaft, at least first and second helically wound axially mounted springs for making frictional contact with the shaft and engaging means corresponding to each of the first and second springs for selectively applying a tightening force to one end of the springs in order to prevent rotation with respect to the shaft. Each of the engaging means is radially and symmetrically disposed along the shaft for eliminating radial bearing force induced by the spring ends. Figure 12 shows two helical springs of reverse winding. At column 7, line 8 of US Patent 643, a reference is made to a complex arrangement of interleaved springs which will afford the advantages of the invention. An example is given of three springs which could be interleaved and used with a housing engaging three keys placed in a particular way. At line 13 of column 7, another way is described to bring the tabs of a spring close together. FIG 12 depicts a possible spring configuration for such a spring. These springs could be used in place of springs 95 and 97 of the clutch of FIGS 10 and 11 to provide the benefit of our invention for loading in one direction. Figures 10 and 12 are Schedules 7 and 8 to these reasons. This can be accomplished by redesigning the elements that interface with the spring tangs so as to provide interfacing surfaces symmetrically disposed about the axis of the device. Claim 2 incorporates a reference to a spring clutch of claim 1, with particular features. Each claim is then dependent upon the spring clutch of the previous claim subject to particular additional matters addressed by each claim. Claim 7 is such a dependent claim where each end of each spring comprises a tang or tab element for selective operative engagement by the housing engagement mechanism during relative rotational movement of the housing with respect to the shaft. Therefore, Uniline says it follows that claims 3, 4, 5, 6 and 7 of the patent in suit are anticipated as they address multiple helical springs wound in a clockwise and counter-clockwise direction as described in those claims. That seems to be so. Claim 12 of the patent in suit ([55] of these reasons) claims the helical spring of claims 1 to 9 where at least two of the tabs are axially substantially aligned . Figure 12 of US Patent 643 shows tabs of each spring axially offset . Perhaps that led to the concession by SBriggs of anticipation in relation to claim 11 of the patent in suit. Claim 11 addresses the helical spring of any one of claims 1 to 9 where at least two of the tabs are axially offset from each other. Uniline says claim 12 is also anticipated by Figure 12 of US Patent 643 and so too is claim 13 of the patent in suit for these reasons. Figure 12, it is said, clearly shows two springs with tabs axially offset. Those springs can therefore be used in a spring clutch which has an engagement mechanism with two longitudinal and opposite openings. The two springs of Figure 12 of US Patent 643 are plainly not united or connected. Uniline says that it follows that one spring could be independently rotated on the shaft holding the springs so that the tabs would rotate to a position where the tabs of that spring were in axial alignment with the second spring. Uniline says that the depiction in Figure 12 of US Patent 643 of disconnected springs with axially offset tabs is sufficient to teach independent rotation which would lead to axial alignment of tabs and thus teach the disclosure of an integer of substantial axial alignment for the purposes of claim 12 of the patent in suit. Uniline says that a further consideration is this. First, the author of US Patent 643 directs the addressee to Figures 1 to 13 of the US Patent. Figures 1 to 6 depict what is described by the specification as the "prior art". Figure 4 shows a shaft (otherwise described as Shaft 2 for the purposes of comparison with the spring clutch of the patent in suit) with a circumferential longitudinal slot with edges that engage spring tabs. Secondly, Figures 1 to 11 of US Patent 643 are drawings typical of devices where the first or innermost shaft is fixed and the second shaft rotates around that shaft. Thirdly, because US Patent 643 directs the addressee to Figures 1 to 13, the addressee is led expressly to an assessment of the disclosures in the prior art drawings (Figures 1 to 6) in a sequence of drawings including drawings 7 to 13 which reflect an embodiment of the invention claimed. Therefore, Uniline says it is artificial to isolate, as SBriggs does, disclosures drawn from drawings 1 to 6 from disclosures in other drawings in that sequence. In other words, in determining whether a claim of the patent in suit is anticipated by US Patent 643 that which is shown in the first six drawings is properly to be considered in conjunction with the other drawings contained in the patent depicting embodiments of aspects of the invention. Uniline says that a consideration of the prior art drawings and drawings depicting embodiments of the invention is a legitimate source of instruction and does not involve "mosaicing", as SBriggs contends. Uniline does not seek to draw together disparate disclosures in a range of documents. It seeks to have regard to all of that which is disclosed in the particular document. What follows, it is said, is that US Patent 643 by Figure 12 in conjunction with claim 15, discloses a plurality of reverse wound springs as something novel . The addressee could take that disclosure and incorporate a number of springs of reverse winding in a spring clutch consisting of, in part, a shaft as depicted in Figure 4 of US Patent 643 containing a longitudinal slot with a circumferential opening with edges that engage the spring tabs of springs of reverse winding. Figure 4 is Schedule 9 to these reasons. Uniline says that if the addressee took that course and applied the disclosure in that way, the tabs on rotation of the second shaft would be substantially axially aligned so as to enable the spring clutch to work . Thus, it follows, it is said, that claims 1 to 12 (although excluding claim 9) are anticipated by the disclosures contained within US Patent 643. Uniline says it follows that dependent claim 13 falls away to the extent that it relies upon claims 1 to 12 (excluding claim 9). Uniline further says that US Patent 643 "suggests" the use of multiple reverse wound springs in spring clutches. More particularly, the addressee is led to the use of multiple springs of reverse winding in springs depicted in the prior art, that is, the conjunction of multiple reverse wound springs with an engagement mechanism that exhibits a single longitudinal slot or opening in the circumference of a second coaxial shaft, as depicted in the prior art (Figure 4). Uniline says it is legitimate for an uninventive skilled person to read US Patent 643 as a whole as disclosing that combination. Uniline says Figure 4 clearly discloses a circumferential opening in the second shaft creating a single longitudinal slot. It follows, it is said, that claim 13 can only be novel to the extent that it claims a combination of the prior art and a novel spring. If claims 1 to 12 in relation to the spring (excluding claim 9) are anticipated by US Patent 643 it follows, it is said, that claim 13 lacks novelty except to the extent that claim 13 combines a single longitudinal opening in a second shaft with a unitary spring of claim 9. The question to be determined is whether US Patent 643 discloses to a skilled addressee with common general knowledge of the relevant art, each of the integers demanded by the claims defining the monopoly ( Fresenius Medical Care Australia Pty Ltd v Gambro Pty Ltd (supra) at [128] to [152]) and in that sense, the test of anticipation is the reverse infringement test. Would use of a spring clutch in accordance with the disclosures in US Patent 643 infringe claim 13? The skilled addressee must be able to read and understand the document as disclosing all of the integers of the monopoly in the combination without the exercise of "inventive ingenuity and the taking of an inventive step" ( Nicaro Holdings Pty Ltd & Ors v Martin Engineering Co. & Anor (1989) 91 ALR 513 , per Gummow J at 531 and 532) and without deducing an integer as part of a combination claim, by taking an obvious and non-inventive step to reach the combination. The disclosure in the document must be clear in the sense that the language of the document must provide unmistakable instruction to the addressee as to how the combination claimed is used, although the language of the disclosure need not be that of the claim. An anticipation of a claim is not determined merely by a textual comparison of the disclosure and the claim. The language of the disclosure might well be different to the language of the claim but the disclosure must teach the skilled addressee the invention (the combination of integers) and its use ( Pfizer (supra) at [311] to [324]; Evans Medical Ltd Patent [1998] RPC 517 at 576; Nicaro Holdings (supra)) Claim 13 of the patent in suit demands the presence of a single unitary reverse wound spring engaging a longitudinal slot and key device. Plainly, that invention is not anticipated by US Patent 643. If claim 13 extends to the inclusion of a plurality of multiple springs of alternate winding with tabs engaged by the control device of claim 13, is that invention disclosed by US Patent 643? Each expert has sought to answer that question by applying a different method of analysis. Mr Hunter isolated the essential features of claim 13 (and other claims upon which it depends) and compared those features with the invention disclosed by US Patent 643, that is, the novel elements claimed for the invention (Table A, para 38, Hunter affidavit, 6 March 2008). Mr Hunter could not see all the integers of claim 13 in the integers of the invention of US Patent 643 (claims 3, 4, 5, 6, 7, 9, 12, 13 (as to a helical spring for the purposes of claims 3 --- 7, 9 and 12; and as to the feature of a single longitudinal opening defined by edges selectively engaging one or more of the tabs of the spring) and 14). Thus, no anticipation arises in his view. Mr Hunter separately considered the essential features with the prior art disclosures identified in US Patent 643 (Table B, para 38, Hunter affidavit, 6 March 2008). Mr Hunter could not see all of the integers of claim 13 in the prior art (claims 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, claim 13 (because the prior art does not disclose alternate wound springs, but otherwise all essential elements of claim 13 disclosed) and 14). Mr Hunter did not accept as correct, the methodological approach adopted by Dr Gilmore to determining anticipation by looking to the prior art disclosures of US Patent 643 and the disclosures in that part of US Patent 643 which identify features of novelty in the invention (and ultimately the integers of the claims of that patent) so as to put the disclosures together to see and understand whether the combination of claim 13 of the patent in suit is disclosed in US Patent 643. SBriggs says that, unremarkably, US Patent 643 discusses the prior art and then distinguishes the invention from it. It does so, in part, by depicting embodiments of the invention in drawings 7 to 13 and distinguishing the invention from the prior art depicted in drawings 1 to 6. The specification describes the shortcomings of prior art clutches manifested in variations in frictional drag due to differential radial loads at bearing surfaces of prior art clutches (see [127] and [128] of these reasons). SBriggs says that the specification teaches away from the prior art and combinations evident in the prior art. It says Mr Hunter, as a skilled addressee, is led away from the prior art configuration of a single longitudinal slot to the particular features of US Patent 643 in which novelty is claimed as determined by the integers of those claims. Mr Hunter cannot see the combination of a plurality of springs of alternate winding engaging a non-complex single longitudinal slot and key device, in any of those claims. Mr Hunter separately compares the prior art of Figures 1 to 6 with the discussion of the prior art and concludes that the integers of claim 13 are not disclosed in the prior art. In particular, the prior art does not disclose springs of alternate winding. Moreover, US Patent 643, it is said, does not claim a clutch that includes a second shaft with a single longitudinal opening with edges of that opening that selectively engage one or more of the tabs, as claim 13 of the patent in suit requires. The method adopted by Mr Hunter might usefully lead the skilled addressee to an answer to the question of whether the integers of claim 13 are anticipated by US Patent 643. Mr Hunter has sought to find that answer by looking to the prior art disclosures. He has looked to the discussion of the invention, the assertions of novelty and the integers of the claims of US Patent 643 to see if he can find the integers of claim 13 revealed in those claims. If the answer to either inquiry conducted by Mr Hunter is yes, the method would usefully reveal anticipation. If the answer to either inquiry is no, the method may simply reflect an impermissibly restricted inquiry. In determining whether a document, in this case US Patent 643, discloses the integers of claim 13, it is legitimate to look to the whole of the document to isolate the presence or disclosure of elements of the combination of claim 13 in the prior art (and relevant drawings) and in the discussion of the advantages of the invention over the prior art, the integers of the claims recited in the patent and drawings embodying the invention. The disclosures in the patent taken as a whole may reveal to a skilled addressee, the combination of the claim in the patent in suit. If, however, the combination is to be found in a combination of disclosures rather than a disclosed combination , the skilled addressee must see and reach the combination without calling in aid his own inventive skills or ingenuity in making the combination. Nor will the disclosures anticipate the combination of claim 13 (assuming the counter-factual) even though putting together the combination might be obvious to a person skilled in the relevant art (whether Dr Gilmore or Mr Hunter or any other skilled addressee). US Patent 643 does not disclose the combination of a plurality of springs of alternate winding engaging a non-complex single longitudinal slot and key configuration to facilitate smooth transition of rotational forces between the input and output shafts of a spring clutch. The patent addresses use of multiple springs (some of which may be reverse wound in one embodiment) to support the output load in a way that overcomes an asymmetrical application of supporting forces (that produces reaction forces at the bearing surface within the clutch) by configuring a clutch employing a multiplicity of springs so as to support the load with very nearly a pure couple of forces without producing reaction forces in the bearings as a direct result of the forces produced by the springs. The invention thus eliminates frictional drag and US Patent 643 is entirely directed to that objective. The discussion in US Patent 643 of firstly the disadvantages of prior art clutches and secondly, the manner of overcoming frictional drag by a pure couple of forces, does not disclose the combination of claim 13 of the patent in suit. To the extent that such a combination might be revealed to a person skilled in the art, such a person would need to apply an inventive step in doing so. Thus, applying the counter-factual, US Patent 643 does not anticipate the combination of claim 13 of the patent in suit. The question is whether the conduct of SBriggs said to bear the character required by the section, materially contributed to the Commissioner's decision to grant the patent or amend the claims. It is sufficient if the conduct is a material inducing factor which led to either of those outcomes ( Prestige Group (Australia) Pty Ltd v Dart Industries Inc. (1990) 26 FCR 197 ; Pfizer (supra); JMVB Enterprises Pty Ltd v Camoflag Pty Ltd (2005) 67 IPR 68). Sections 138(3)(d) and 138 (3)(e) do not require proof of a deliberate intention on the part of the applicant for the patent (or amendment) to deceive the Commissioner ( Pfizer ). If the representation is based upon a belief, it is relevant to consider whether the belief is false or not held reasonably ( NSI Dental Pty Ltd v University of Melbourne (2006) 69 IPR 542). In this case, the representations made to the Commissioner are said to be these. First, that the invention claimed was an advance over the prior art by providing for a spring clutch consisting of a bi-directional clutch which avoided the need for multiple helical springs in favour of a single helical spring of unitary construction. The representation is said to be contained in the body of the complete specification and is false to the extent that SBriggs now says that claims 1 to 13 should be construed so as to extend to or include "multiple springs wound in opposite directions which function as a single spring". Uniline says that this construction fundamentally changes the character of the representation put to the Commissioner in the specification in describing the advances over the prior art, the object of the invention and that which is claimed as the monopoly. The second representation relied upon by Uniline is a representation that the amendment to delete claim 15; incorporate elements of claim 14 within claim 13; and amend claim 14 was necessary so as "to include two claims of narrow scope for the purpose of better distinguishing the invention from the prior art". This representation is contained in a letter from the solicitors for SBriggs to IP Australia dated 24 October 2006 and a request to amend the specification also dated 24 October 2006. As to the first representation, the falsity of the representation turns upon a construction of the claims. Uniline says that the object of the invention and the claims defining the invention as described in the specification are inconsistent with the construction SBriggs now adopts. It follows, so the argument goes, that if SBriggs is correct in its construction, the plain language of the specification and the claims must constitute a misrepresentation. However, the construction put by SBriggs is that the object of the invention, taking account of the discussion of the prior art, reflects a construction which is consistent with the claims. That consistency reveals, it is argued, the use of a multiplicity of alternately wound separate springs engaging the control mechanism of claim 13. It is difficult to conclude that a false representation arises out of an applicant putting its view or opinion of the construction of the patent to the Commissioner. SBriggs simply puts its view of construction which, it says, is consistent when the specification, the discussion of the prior art, the object and the claims are properly read in context. As to the second representation concerning the amendments, the statements in the documents dated 24 October 2006 concern the effect of the prior art. A statement made by an applicant in good faith to the Commissioner concerning the effect of the prior art is unlikely to provide a basis for concluding that such a statement of opinion is false, when that opinion is subsequently shown to be incorrect ( ICI Chemicals & Polymers Ltd v Lubrizol Corporation Inc. (2000) 106 FCR 214). A statement made expressing an opinion about the relationship or otherwise between disclosures in the prior art and changes to the scope of the monopoly defining the claims, so as to address differentiation of the invention from elements of the prior art, simply reflects a debate between the Commissioner and the applicant about the scope of the claims and the effect of proposed changes to the language of the claims judged against the prior art. Statements about those matters are simply, as in this case, argumentative statements going to matters of opinion about which minds might, in good faith, differ. There is no suggestion of bad faith on the part of SBriggs. The suggestion in this case is that SBriggs proposed an amendment which had the effect of impermissibly broadening the scope of claims 1 to 13 by reference to the express limitation contained in claim 14. Claim 14 is limited in its terms to a spring of unitary construction. Claims 1 to 13 are not said to bear an inclusive construction of multiple springs of alternate winding as a matter of inference from claim 14. They are said to bear that construction for the reasons earlier identified. The amendments proposed by SBriggs either narrow the scope of two claims to better differentiate the invention from the prior art or not. Whether that statement is true or correct is simply a matter of debate between the applicant and the Commissioner. As Mr Hunter says, claim 14 adds nothing to claims 1 to 13. No false statement or misrepresentation arises out of putting a view of the effect of the changes. Accordingly, declarations will be made that threats of patent infringement proceedings made by SBriggs on 4 April 2007 by its solicitors and a further letter by its solicitors dated 16 July 2007 are unjustifiable. SBriggs shall be restrained from further threats of patent infringement. The Amended Cross-Claim of SBriggs by which relief is sought for infringement of claim 13 of the patent in suit, is to be dismissed. The Amended Further Cross-Claim by Uniline by which revocation of the patent in suit is sought, which only arises if infringement is found, is to be dismissed. I certify that the preceding one hundred and forty-four (144) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | patents construction of claims consideration of the relevant field of art consideration of expert evidence consideration of the skilled addressee consideration of grammatical questions and syntax of the object statement contained in the specification consideration of whether a contended infringing spring clutch achieves the same functionality of a spring clutch of claim 13 of the patent in suit consideration of grounds of revocation including lack of clarity, inutility, lack of novelty and false suggestion intellectual property intellectual property |
The Scheme is for the acquisition by Aevum Limited (ACN 087 648 691) of all of shareholders' shares in the plaintiff. If the Scheme is approved by the shareholders the Court may approve the Scheme at a second hearing; s 411(4)(b). The Court's order takes effect from the date specified in the order but only once a copy of the order is lodged with the Australian Securities and Investments Commission (ASIC); s 411(10). At the conclusion of the first hearing on 1 December 2009, I made the orders sought by the plaintiff and undertook to provide reasons at a later date. These are my reasons. If approved, the Scheme will effect a merger in that the IOR shareholders will transfer their shares to Aevum and in return will receive eight Aevum shares for every nine IOR shares. The Scheme is unanimously recommended by the directors of IOR in the absence of a superior offer. The Scheme has been assessed by an independent expert, Deloitte Corporate Finance Pty Limited (Deloitte), which has concluded that the Scheme is fair and reasonable and therefore in the best interests of shareholders. The equity value of IOR is estimated to be between $66,915,000 and $88,915,000 which yields a share value of $1.23 to $1.64 per share. The Deloitte report establishes that a fair market value of the Aevum shares (that is the consideration offered for the merger) is between $1.24 and $1.42 per share. The plaintiff's submissions summarised the factors on which the Deloitte recommendation was based. Having reviewed the relevant material I accept the plaintiff's summary as an accurate list of those factors. (b) The fair market value of IOR's retirement village business and development portfolio is estimated using the discounted case flow method. (c) The value per IOR share is $1.23 to $1.64. (d) The consideration offered per IOR share is $1.24 to $1.42. (e) This lies within the range of Deloitte's estimate of fair market value. (f) Accordingly, the Scheme is fair and reasonable and in the best interests of IOR shareholders. Evidence about the process for verification of the Scheme Booklet was given by Carl Della-Bosca, a partner of Blake Dawson, the solicitors for IOR. Mr Della-Bosca described the composition of the due diligence committee set up by Blake Dawson and the responsibilities of each person to verify allocated sections of the material. Each member of the committee provided a signed verification certificate in respect of the material for which each was responsible. The due diligence committee provided a report to the board of IOR confirming the process and, based on that process, their belief in the accuracy and comprehensiveness of the Scheme Booklet with the exception of the sections of the Scheme Booklet for which Aevum was responsible, the Investigating Accountant's report and the Deloitte report. Those three sections of the Scheme Booklet were independently verified, in the case of the Aevum material in an affidavit sworn by Peter Homan on 30 November 2009. The Investigating Accountant's Report and the Deloitte Report were each confirmed by separate affidavits. IOR is not a listed company. As a condition precedent to the Scheme, however, a "window" of listing on the Australian Stock Exchange (ASX) will be created. This will be achieved by listing IOR on 30 December 2009 and is intended to allow shareholders to sell their shares before the time for acquisition by Aevum. The IOR Board has reserved its right to decide not to proceed with the listing before the proposed meeting. If the IOR Board decides not to proceed with the listing of IOR prior to the current scheduled date for the Scheme Meeting then the IOR Board will consult with Aevum in relation to what implications this will have for the Scheme, including whether the Scheme Meeting should be adjourned to a later date. In considering a proposed scheme the Court will look to both the explanatory material and to the substantive legal mechanisms of the scheme itself. The way in which the scheme operates must be presented fairly at the meeting. This does not require that every possible argument for and against the proposal be canvassed in the material. In Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 at 468, the Full Court observed that the need to give a full and fair account of the scheme "must be tempered by the need to present a document that is intelligible to reasonable members of the class to whom it is directed". This necessarily involves looking forward to the second hearing date and considering the legal and commercial operation of the provisions of the scheme. In the case of the present Scheme the plaintiff has drawn my attention to a number of factors that are considered below. It submits, however, that no aspect of the Scheme, including these factors, should be of any concern to the Court. It is in the nature of a scheme that this warranty binds all shareholders in IOR including any who do not consent to the Scheme. His Honour referred at [22] of his reasons to a "vesting free of encumbrances" term that he had considered in WebCentral Group Limited (No 2) [2006] FCA 1203 ; (2006) 58 ACSR 742 and to his concerns that third parties having interests in the shares might be given the impression that their interests were being adversely affected. The relevant clause in WebCentral did not contain the qualification emphasised in the above quotation of cl 8.3(b). This qualification did appear in the "vesting free of encumbrances" term his Honour considered in Investa . ... I regarded the opening words "To the extent permitted by law" as giving adequate notice that a third party would not suffer the extinguishment of an interest in shares if [the transferee] had had notice of that interest. I therefore took the view that those words overcame the difficulty referred to in WebCentral [2006] FCA 1203 ; 58 ACSR 742 , which was that the presence of a vesting free of encumbrances term might give the impression to third parties that their interests had been extinguished by the presence of the term where they would not have been in its absence. This clause had appeared in a number of schemes to which Mr Oakes, senior counsel for the plaintiff, drew my attention. I do not have any concerns about this clause. This is supported by the deed poll referred to in (c) of [6] above. In my view, together these arrangements give adequate protection to IOR shareholders from any risk of non-performance by Aevum. These matters were addressed respectively, in the affidavits of Mark Lindsay Standen made on 26 November 2009 and Mr Jacob made on 30 November 2009. Mr Standen testified that apart from acting on the demutualisation of IOR, in the period from 2007 to June 2009 he had acted only for a subsidiary of IOR in the acquisition of a retirement village in Queensland. In the present matter his only contact with the directors or management of IOR had been in his capacity as legal adviser to Aevum. I am satisfied that this limited contact does not give rise to any conflict. Mr Jacob's evidence was to the effect that he is the appointed tax agent for Aevum (but not IOR) and, since 2001, has provided advice to IOR from time to time in relation to discreet projects. He has also been instructed by both Aevum and IOR to provide them with specialised tax advice in relation to the Scheme. This dual role has been fully disclosed to each of Aevum and IOR and each has consented to the arrangement. It is also disclosed in the Scheme Booklet at 11.17. Ultimately I am persuaded that there is no conflict of concern here primarily because the taxation implications discussed at 9.2 of the Scheme Booklet are general and not specific. They do not purport to advise Scheme participants as to their individual circumstances; in fact there is a specific warning to the contrary in 9.1. In general terms it is payable if the Scheme does not proceed in certain circumstances. Importantly the fee is not payable merely because the shareholders vote against the Scheme. For this reason it does not place any pressure on shareholders to vote in favour of the transaction. In her second affidavit sworn in this proceeding on 30 November 2009, the chairman of IOR, Ms Campbell, stated that during the negotiation of the Scheme IOR was represented by external legal and commercial advisers and separately from Aevum. She stated that in relation to the break fee IOR had regard to the Takeovers Panel Guidance Note 7 --- Lock Up Devices . She pointed out that the break fee amounts to 0.948% of the implied value of scheme consideration and that, using the equity value estimations in the Deloitte Report it amounts to 0.78% of the equity value, using the highest equity value estimated; or 1.046% using the lowest equity value estimated. Ms Campbell pointed out that, unusually, the Scheme also provides for Aevum to pay a break fee, also $700,000, if it terminates the Scheme in certain circumstances. She stated that in all the circumstances she believes that the IOR break fee "is a genuine and reasonable pre-estimate of the costs that Aevum will suffer if the proposed transaction does not proceed". Although the break fee, on one analysis, exceeds the 1% referred to in Guidance Note 7 , it is only slightly over 1% even if the highest estimate of equity value is accepted. I am prepared to accept that in all the circumstances, particularly given that Aevum has accepted a break fee in the same amount, the break fee is fair and reasonable. The no-shop and no-talk periods are not excessive or unusual. As with the break fee, they were agreed in an arms length commercial negotiation with the parties being separately advised. In a letter dated 30 November ASIC indicated, in accordance with its usual practice, that it did not intend to appear at the first hearing or to make any submissions or intervene to oppose the Scheme. The evidence also establishes that Ms Campbell has consented to chair the meeting of shareholders and failing her being able to do so the meeting will be chaired by Christopher Leslie Henderson, director and company secretary of IOR. On the basis of the above information and for the reasons given I concluded that it was appropriate to make the orders sought by the plaintiffs for the convening of a meeting of IOR shareholders. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone. | corporations act 2001 (cth) s 411 scheme of arrangement application for order that company convene meeting of members to consider proposed scheme of arrangement corporations |
If so, the effect of s 124 of the 1988 Act is that Comcare would not be liable to pay lump sum compensation under s 24. 2 Under s 24 of the 1988 Act, Comcare is liable to pay compensation to an employee where they suffer an injury that results in permanent impairment. Section 124 is a transitional provision setting out the compensation payable under the 1998 Act in respect of impairment occurring prior to its commencement. Section 124(3) provides that a person is not entitled to compensation under s 24 of the 1988 Act in respect of a permanent impairment where there was no entitlement to receive lump sum compensation under the legislation in force at the time the impairment occurred. Under the previous legislation relevant to the applicant, the Compensation (Commonwealth Government Employees) Act 1971 (Cth) (the 1971 Act), no lump sum compensation was payable for permanent loss arising from a psychiatric condition because such a condition was not among the various forms of "loss", such as loss of hearing or loss of an arm at or above the elbow, specified in s 39. It was thus accepted that the applicant's impairment, once it had become permanent, would be compensable by way of lump sum under the 1988 Act but not the 1971 Act. The time at which the applicant's impairment became permanent --- and the legislation in force at the time --- therefore determines whether the applicant is entitled to compensation: Brennan v Comcare (1994) 50 FCR 555 at 570. 3 An impairment is permanent if it is likely to continue indefinitely: 1988 Act, s 4. That state of affairs must have been reached before the commencement date of the 1988 Act for s 124(3) to apply: Brennan v Comcare at 570. In the present case, the degree of the applicant's impairment was not in issue. It would be a matter for primary assessment by Comcare in the event of the applicant succeeding on this appeal. 5 The applicant is aged 52. From the age of 19 she worked in a clerical position with the Commonwealth Public Service. In 1981 she transferred to the Social Security branch office at Glenorchy working in clerical and counter duties. Later she was promoted to a position involving regular face to face contact with benefit recipients and applicants. From time to time some of these individuals became stressed and angry and would be abusive and threatening. Sometimes such individuals recognised the applicant when she was away from the office and would insult her and behave offensively. 6 An incident in 1986 particularly affected her. A man called Hicks came to the office and shouted in the applicant's presence that he would "get a shotgun and shoot the lot of you". Police were called but Hicks had left the building. It was later reported to the applicant that Hicks had assaulted somebody with a shotgun and been arrested by the police. Hicks was subsequently convicted and sentenced to imprisonment. 7 On 16 February 1988 the applicant consulted her general practitioner Dr Ian Beltz. She was referred by him to Dr Warwick Ashley, a psychiatrist, in June of that year. 8 On 9 March 1988 the applicant made a claim for compensation in respect of "stress" attributed to a "high workload, working long hours, lack of staff and no backup". Liability was accepted for anxiety and depression with a date of injury of 16 February 1988, the date on which she first presented to her general practitioner with symptoms of stress. 9 Another incident occurred in June 1988 when the applicant was told by a client that a security guard who worked at Glenorchy after the Hicks incident had been selling information to clients who were being investigated. The applicant realised that as a result her name and address would be known to the people she was investigating, some of whom had criminal records and a history of violence. It was on this occasion that she had her first major panic attack. I could not think. I was shaking. When it (the attack) stopped I was exhausted. 10 The applicant eventually retired from the public service and was granted invalidity on 21 April 1989. In 1990 she undertook a return-to-work program. This continued through to late 1992. Subsequently she obtained a Diploma of Remedial Massage and now operates a small practice on a part-time basis. 11 On 8 February 2005, on the applicant's application, the description of her condition was changed from "anxiety/depression" to "post-traumatic stress disorder". 12 The applicant by her solicitors applied for a lump sum permanent impairment payment under s 24. This claim was rejected by Comcare on the basis that her impairment was permanent before 1 December 1988 and no lump sum payment would have been payable under the 1971 Act. Comcare decided that disentitling provisions of s 124(3) of the 1988 Act applied. 14 In a report of 25 July 1988 Dr Ashley referred to the applicant's fluctuating symptoms since he had first seen her and recorded a "fairly clear diagnosis of post-traumatic stress disorder, these stresses being work related". 15 In a report of 19 August 1988 Dr Ashley's opinion was to the effect (as summarised by the Tribunal) that her very stressed condition was not improving and was becoming well entrenched. On 25 August he certified her as unfit for work "from 3/9/88 indefinitely and should be retired/superannuated etc on health grounds". On 15 September 1988, having seen her the previous day, he thought she was "slowly healing". On 13 December he suggested to Dr Beltz that she had "relapsed somewhat, recently" due to hold-ups in the retirement process. 16 On 16 December 1988 Dr Ashley gave a report to the Director of Social Security, having seen the applicant on 14 December. 17 Dr Weatherly (a psychiatrist, now deceased) had seen the applicant on 2 September 1988. He diagnosed her as suffering from "chronic anxiety disorder with both panic and phobic elements". 18 In the course of 1989 Dr Ashley provided further reports to Dr Beltz, the gist of which was that the applicant was continuing to improve. However, in February 1990 there was a relapse of symptoms and signs of post-traumatic stress disorder. In April 1990 she had "obviously improved". In October 1991 she was "somewhat better than twelve months ago". By October 1992, in a report to Comcare, Dr Ashley thought that her health had gradually improved and that she could work at the Department for up to five hours per week. In the last of his many reports to Comcare, in November 1994, Dr Ashley said that the applicant "remains vulnerable to any conflict and it is most unlikely that she could work for pay in any meaningful sense". 19 Two consultant psychiatrists gave evidence on behalf of the applicant at the Tribunal hearing. 20 Professor Saxby Pridmore saw the applicant for assessment in February 2005. He diagnosed her as then suffering from a panic disorder with agoraphobia, social phobia and general anxiety disorder together with residual symptoms of post-traumatic stress disorder. He said she had "lived with her condition for sixteen years, and change is unlikely". 21 Professor Pridmore said that if he had been treating her he would probably treat her for "a couple of years" before he was willing to say her condition was permanent. 22 Dr David Weidmann examined the applicant on 17 July 2006. By that I mean sometime in the early 1990s. It seems to me to represent illogical thinking to now say that her condition was permanent prior to the 1st December 1988. Whilst Dr Ashley may have been implying that, and saying words to that effect, clearly no-one else was agreeing with or listening to his opinion. Viewed without the benefit of hindsight, and viewed in the systemic sense (the labelling of impairment and [sic --- as? ] permanent or otherwise, is to a large degree systemic in nature) she was not totally and permanently impaired prior to 1st December 1988. 23 He thought that looking back to 1988 it would have been "bordering on negligent not to view her as potentially treatable. She was potentially treatable...". 24 In cross-examination Dr Weidmann accepted that notwithstanding the applicant was a lot better, the more significant symptoms have persisted from 1986 through to the time of the examination and those significant symptoms are permanent. They were permanent because they have not disappeared and come back again. But faced --- back then, nearly two decades ago, one doesn't have hindsight and at that time I don't think it would have been considered permanent. 26 Dr Ian Sale, a consultant psychiatrist, gave evidence for Comcare. He had examined the applicant on the instructions of Dobson, Mitchell and Allport in July 1990 in connection with a motor vehicle accident in February of that year. 27 The history the applicant gave then included her stress problems at work and the Hicks incident. Dr Sale thought she had a significant anxiety disorder having features of both a generalised anxiety disorder and post-traumatic stress disorder. He concluded that there was no psychological impediment to a return to work. 28 Dr Sale examined the applicant again, on the instructions of the Australian Government Solicitor for the purpose of the Tribunal proceeding, on 12 December 2006. He was provided with most, if not all, of the medical reports of the other practitioners. There had been various diagnoses made, sometimes multiple diagnoses, but the common theme is of a propensity to experience anxiety symptoms, more so when away from the safety of her home, and especially in situations which do not allow ready escape (e.g. planes, buses, crowded supermarkets). Ms Excell is understandably keen to attribute these difficulties entirely to her workplace situation with the Department of Social Security circa 1988. Other factors of possible relevance include a motor vehicle accident during 1986, an earlier medical history of recurrent pneumothorax (a frightening condition) and a marriage break down (there has also been a further road accident in 1999. When Ms Excell was asked about this she said it was an extremely trivial matter that was of no consequence). ... Overall, the impression gained is that she has learned to live within the limitations her difficulties present her. Her difficulties coping with travel seem to be the greatest source of distress to her in that they make it difficult for her to spend time with her only child, a son now in his 20's who left home about eight years ago. 30 Dr Sale said that he believed it likely that the applicant's condition "was established prior to the 1 st December 1988". --- Well, you might not have been able to do so at the time when you first met this person because you did not have the advantage of seeing what happens with the passage of time, but when you look back, if a condition is permanent, it had to have become permanent at some stage. It did not become permanent some significant time later just because you say it has; it had to be permanent at some stage before that. Although this [Dr Sale's diagnosis of panic disorder with agoraphobia] differs from the diagnosis of Dr Ashley, Dr Weidmann and Professor Pridmore, I do not regard his disagreement as significant. Dr Sale conceded in cross-examination that her condition could be given a differential diagnosis of generalised anxiety disorder. I do not believe anything turns upon the label or labels which are attached to the applicant's condition. All doctors have been talking about what is essentially the same chronic disorder which has impaired the applicant's functioning since 1986. That impairment increased until shortly after mid-1988, but although there have been fluctuations produced by situational variations in the applicant's lifestyle and her perceptions thereof, there have not been any such changes which can properly be characterised as new or increased changes to her levels of permanent impairment since 1 December 1988. I do not accept Dr Weidmann's approach to the question of when the impairment became permanent. I think his approach is not logical and I think that his responses to counsel during cross-examination tend to confirm this. I accept the approach of Dr Sale which accords with my own views. 31. Looking at the whole of the evidence I am left in no real doubt that however the applicant's psychological condition may be defined it was well entrenched before 1 December 1988 and had resulted in substantial impairment to the applicant before that date. Indeed, although there have been fluctuations in the intensity and duration of symptoms since 1 December 1988, the applicant's overall condition of impairment has not increased since that time, and viewed generally, she is now much improved and is likely to continue at about her current level. At the present she has managed to adapt her lifestyle to ameliorate many of her earlier symptoms. However her underlying injury/disease remains and all indications suggest that it will continue indefinitely into the future. Although it has been reasonable for doctors who have treated her to have made attempts to reduce her traumatised condition with massage and medication, the fact that they have done so, and have succeeded in reducing her level of impairment somewhat as a consequence, in no way militates against the conclusion that the impairment resulting from her condition was likely to continue indefinitely from the time of its establishment prior to 1 December 1988. 32. There certainly has been no new situation that has arisen since 1 December 1988 which, when assessed quantitatively or qualitatively can be characterised as a further or new impairment. There is no sensible basis that I can see for concluding that an improvement in the applicant's condition from its original level of impairment can avail her claim under the transitional provisions of the Act. In my opinion it would be a nonsense to say that although her impairment now is less than it was before 1 December 1988, she has a "new" impairment which entitles her to claim lump sum compensation. 33 These conclusions need to be seen in the context of an earlier observation at [13]. The Tribunal there accepted the submission of Comcare that the mere fact that doctors may feel a need to observe and assess a person's condition over an extended period of time before feeling confident that the condition was "permanent" does not mean that the condition only became permanent at the time the diagnosis was made. In other words, medical practitioners could look back, and take into account the applicant's subsequent history, in coming to a conclusion as to whether or not her impairment was "permanent" as at 1 December 1988. In a case such as the present, that is Comcare in the first instance, or this Tribunal upon review. A question of law? 35 On its face the notice of appeal does raise a question of law as required by s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). Whether facts fully found fall within the provisions of a statute properly construed is usually a question of law: Hope v City of Bathurst [1980] HCA 16 ; (1980) 144 CLR 1 at 7. The formal requirement for a notice of appeal specified in O 53 r 3(2)(b) of the Federal Court Rules has been satisfied. Such grounds should show "the links between the question of law, the circumstances of the particular case and the orders sought on the appeal": Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232 ; (2003) 76 ALD 321 at [18] per Branson and Stone JJ (with whom Marshall J at [61] agreed). 38 Before going to the detail of the arguments of counsel for the applicant, I should say that on its face the question of law in the notice of appeal must be answered: Yes. It is implicit in the question as stated that the impairment only "bec(ame) permanent" after 1 December 1988; it therefore must not have been permanent before that date. 39 The Tribunal's reasoning is completely consistent with answering the question in the affirmative. The Tribunal, correctly, saw its task as determining whether or not the applicant's impairment was permanent before 1 December 1988. Both parties conducted their cases accordingly. However, although there is a question of law properly stated in the applicant's notice of appeal, the answer to that question as stated does not assist her. Her problem is that the Tribunal found, as a matter of fact, that her impairment was permanent before 1 December 1988. 40 In the light of the case presented to this Court, probably what the drafter of the notice had in mind was a situation where, before 1 December 1988, an impairment is permanent, or assessed by medical opinion as such. Then after that date there is an improvement, but still later a relapse with the result that the person again has a permanent impairment. 41 In such a situation one conclusion would be that, viewed with hindsight (as the learned Deputy President, correctly in my view, held to be legitimate) the impairment was in truth always permanent. Alternatively, it might be found that what happened after 1 December 1988 was a new impairment, in which case the employee would be entitled to compensation under the 1988 Act. 42 But in the present case there was ample evidence for the Tribunal to conclude that the applicant's impairment was permanent before 1 December 1988. Any dispute on that finding can only raise questions of fact, which this Court has no jurisdiction to consider. In that case the employee had suffered a compensable injury to his back before 1 December 1988 which resulted in impairment, but not a permanent impairment. After that date the impairment became permanent. The Full Court held that he was not excluded from receiving compensation by s 124(3). 44 Counsel for the applicant contended that, by a parity of reasoning, the same result would follow if the applicant's injury was not permanent before the relevant date, improved thereafter, but still later became worse and permanent. Counsel pointed to Dr Sale's opinion already noted that in his examination in 1990 the applicant was not incapacitated for work. Counsel said that it was "a startling non sequitur" that since the applicant was permanently impaired in 2007 she must have been permanently impaired on 1 December 1988 even though she was not impaired in 1990. This arose, counsel said, from confusion between the concepts of injury and impairment. Section 24(2)(b) of the 1988 Act requires, for the purpose of determining whether an impairment is permanent, regard to be had to the likelihood of an improvement. Therefore it is not possible to say with the benefit of hindsight that because the worker is now impaired she must have been always impaired. 45 However, as previously noted, the impairment must have been permanent, that is to say likely to continue indefinitely, and that state of affairs must have been reached before the commencement date of the 1988 Act, if the applicant is to be excluded from lump sum compensation under that Act. 47 That was entirely a matter of fact. In essence the medical evidence uniformly (including Dr Weidmann's concessions in cross-examination) was to the effect that, in the light of subsequent events, it was at the time of the Tribunal hearing clear that the condition was permanent before 1 December 1988, whatever the prognosis may have been at that time. 48 The appeal must be dismissed with costs. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | appeal from administrative appeals tribunal commonwealth employee psychological condition initial diagnosis then improvement followed by deterioration whether permanent impairment became permanent prior to or after commencement of safety, rehabilitation and compensation act 1988 (cth) whether question of law workers' compensation |
The deed administrators are conducting an examination into the company's affairs pursuant to ss 596A and 596B of the Corporations Act 2001 (Cth). During the course of the examination the deed administrators obtained orders for the production of documents from three firms of solicitors. The deed administrators now seek to inspect those documents. The clients object to the inspection of many of those documents on the ground of legal professional privilege. The deed administrators contend that the solicitors were used to implement a scheme to defraud TEAC's creditors and the documents over which privilege is claimed came into existence in that process. Thus they say the documents are not privileged. That is the issue that must be resolved. 2 It is convenient to begin with a brief sketch of the background, most of which is uncontroversial. I should mention that the evidence from which the background is drawn is that which would be admissible on a final hearing. In Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3 ; (1996) 188 CLR 501 , 556 McHugh J said: "Legal professional privilege is a legal right. Its prima facie application to a communication can only be displaced by admissible evidence. " The view to the opposite effect expressed in several New South Wales cases, including Re Doran Constructions Pty Ltd (in liq) [2002] NSWSC 215 ; (2002) 20 ACLC 909 and Re Southland Coal Pty Ltd (receivers and managers appointed) (in liq) [2006] NSWSC 899 ; (2006) 59 ACSR 87 , is not likely to be correct. The New South Wales cases hold that it is the nature of the proceeding in which the issue of privilege arises which governs whether or not the fight about privilege is interlocutory. The other (and preferable) view is that it is the character of the dispute itself that is determinative. 3 TEAC was an importer and distributor of electrical equipment manufactured by the Teac Corporation of Japan. Its shareholders were TEAC Corporation and Gavin Muir Pty Ltd (GMPL), with each holding 50% of the issued capital. GMPL held its interest as trustee of the Muir Family Trust. The late Mr Muir controlled GMPL and was the managing director of TEAC. 4 In March 2005 TEAC was placed into administration. At the time GMPL was indebted to TEAC in the amount of approximately $3,200,000. This was the aggregate of sums advanced and interest accrued under a loan agreement dated 1 April 1998. On 15 July 2005, the administrators wrote to GMPL demanding repayment of the debt. They threatened action if the debt was not repaid within 14 days. GMPL did not comply with the demand. So, having removed Mr Muir from office on 16 September 2005, the administrators served a statutory demand on GMPL on 19 September 2005. This led to an application by GMPL to have the demand set aside. That proceeding was ultimately dismissed by consent and the statutory demand was left unsatisfied. 5 While these events were being played out GMPL began to dispose of its assets. Its only substantial asset was a house in Moule Avenue Brighton, which it held on behalf of the Muir Family Trust. The house was worth over $6 million and was subject to a first mortgage in favour of Perpetual Trustee Company to secure a debt of around $3.5 million. Mr Muir's wife, Betty, lived in the house. She had separated from her husband in 1993, but had been allowed to live in the house. In the meantime, GMPL paid all the outgoings. 6 The next stage in the disposal of trust assets occurred on 14 September 2005. On that day GMPL granted a second mortgage over the house to Stevpan Nominees Pty Ltd to secure a loan of approximately $550,000. Most of the loan money was applied toward discharging Mr Muir's personal liabilities. 7 On 16 September 2005 GMPL entered into a contract to sell Moule Avenue for $6,700,000. Settlement was due on 17 October 2005. 8 On 20 September 2005, GMPL's solicitor, Mr Lewin of Mills Oakley Lawyers (MOL), telephoned Mr Groppi, a solicitor at DE Jones & Associates, to enquire whether Mr Groppi's firm would act on behalf of Mrs Muir in relation to a matrimonial property settlement. Later that day, Mr Lewin and Mrs Muir met Mr Groppi at his office. Mr Groppi agreed to act on Mrs Muir's behalf. Three days later DE Jones & Associates lodged on behalf of Mrs Muir a caveat over the title to Moule Avenue in which she claimed to be the equitable owner of the property "pursuant to a constructive trust". 9 By 11 October 2005 (that is, about a week before the settlement of the sale of Moule Avenue) DE Jones & Associates and MOL had reached agreement on behalf of their respective clients that Mrs Muir would receive the proceeds of sale after payment of the debts due to secured creditors and the deduction of reasonable selling expenses. A Deed of Settlement recording this agreement was executed by Mrs Muir, Mr Muir and GMPL. Without any admissions of liability and for the sole purpose of avoiding litigation the Ex-husband and the Trustee have agreed to pay money to the Wife and the Wife and TVC have agreed not to commence any legal action against the Trustee in respect of the Constructive Trust Claim and the Trust Debt ... in accordance with the terms of this Deed. 10 I have the transcript of the examination of Mrs Muir. It is clear from her evidence that each of these recitals is untrue. For example, Mrs Muir admitted that: (1) Mr Muir offered her "an amount left over" from the proceeds of sale; (2) she was unaware of any basis upon which GMPL owed her and TVC over $4 million; (3) there was no dispute between any parties about her possible entitlement to the net proceeds of sale pursuant to a constructive trust; and (4) there was no litigation on foot and Mrs Muir had not contemplated bringing an action to enforce her purported entitlement to the proceeds. Nonetheless, following the settlement of the sale on 18 October 2005, Mrs Muir was paid $1,713,473.13. 11 Another caveat was lodged over Moule Avenue on 20 September 2005. The caveators were Brian and Helen Patterson. They had advanced $339,750 to Mr Muir on 18 February 2005 to be used by him in a development in Port Melbourne. In their caveat the Pattersons claimed that they had "an equitable interest [in the form of a] Charge [over Moule Avenue] [p]ursuant to a Deed of Charge in writing dated 18th February 2005 between [GMPL] and [the Pattersons]. " There was no written guarantee or charge. In a letter to State Solicitors, who were acting for the Pattersons, Mr Lewin pointed this out and demanded that the caveat be removed. This did not happen. Instead, on 6 October 2005, Mr Lewin prepared an agreement for execution by the Pattersons, Mr Muir and GMPL in which GMPL and Mr Muir acknowledged the existence of the guarantee and charge. Mr Lewin sent the agreement to Messrs Alderuccio, a firm of solicitors that acted for Mr Muir from time to time. The cover sheet suggested the Deed had been drawn up by Messrs Alderuccio. Mr Lewin did, however, arrange for the agreement to be executed. In due course the Pattersons received their money out of the proceeds of sale. 12 A significant portion of the proceeds (approximately $485,000) was paid to MOL. The firm acted for GMPL as well as for Mr Muir and Bay Street Corporation Pty Ltd (BSC), another of company controlled by Mr Muir. On 18 July 2005, MOL was granted a charge over Moule Avenue to secure the payment of its fees for work performed for GMPL, Mr Muir and BSC. The work related to the sale of properties owned by BSC, investigations by ASIC into alleged breaches by Mr Muir of the Corporations Act and liaising with the deed administrators on behalf of Mr Muir and GMPL. A portion also related to the claim made against GMPL by TEAC. 13 The result of these transactions was as follows. First of all, not one cent from the proceeds of sale was available to discharge the debt due to TEAC. Secondly, hundreds of thousands of dollars out of the proceeds were used to discharge debts owed by Mr Muir or his companies. Third, the money paid to Mrs Muir may have been money to which she was entitled. In an affidavit Mrs Muir described briefly the properties she and her former husband had purchased and sold during the course of their marriage. On the basis of this evidence it is possible to conclude that she had a tracing claim to some part of the proceeds. It is also possible that she had a claim to the proceeds under the Family Law Act 1975 (Cth). But her claim has never been tested or subjected to close scrutiny. 14 It was no accident that none of the proceeds ended up with TEAC. That is what Mr Muir had intended. To achieve his object he needed the assistance of solicitors. The deed administrators seek access to the documents the solicitors brought into existence in relation to the transactions that led to the disposal of the proceeds. No doubt they wish to ascertain whether it is worthwhile bringing any recovery proceedings. 15 The issue to be resolved is whether in these circumstances legal professional privilege can subsist over the documents. The answer will depend on the ambit of the so called "fraud or crime" exception. 16 For reasons of public policy there is no privilege in a communication which is a part of criminal or unlawful conduct: Bullivant v Attorney-General (Vic) [1901] AC 196 , 201. The rule is not confined to a communication in pursuance of fraud or illegality. In Attorney-General (Northern Territory) v Kearney [1985] HCA 60 ; (1985) 158 CLR 500 , it was applied to a public body that had exercised its powers in bad faith. It was not suggested that the authority had acted fraudulently or dishonestly. The allegation was that the authority had exercised its powers for an ulterior purpose. That was sufficient because the word "fraud" is wide enough to include "fraud on justice" ( Kearney 158 CLR at 514) or conduct that would "frustrate the processes of law" ( R v Bell; Ex parte Lees [1980] HCA 26 ; (1980) 146 CLR 141 , 156). The exception includes a communication to further any abuse or misuse of power or deliberate breach of a legal duty: Southern Equities Corporation Ltd (in Liq) v Arthur Anderson & Co (1997) 70 SASR 166 , 174. 17 There is a strong prima facie case that Mr Muir deliberately organised the affairs of GMPL to ensure that its principal creditor, TEAC, would not recover its debt. This was in circumstances where GMPL was entitled to be indemnified against that liability from the trust assets. Indeed, for purposes of enforcing the indemnity GMPL had a charge or right of lien over those assets. The payments out of the proceeds of sale could only be made because GMPL had relinquished its charge. To allow GMPL to give up its charge was a deliberate breach by Mr Muir of his duties as a director. It may have been much more than that if Mr Muir was acting in concert. An agreement to cause financial prejudice by dishonest means is a common law conspiracy to defraud: Peters v The Queen [1998] HCA 7 ; (1998) 192 CLR 493 , 522-525. The relevant mens rea is the intention to prejudice the interests of a creditor. Dishonest intention is not an element of the offence. 18 In my view the public interest that supports legal professional privilege must give way in respect of the documents in light of Mr Muir's ostensibly illegal conduct. 19 This conclusion is in line with the cases: see Barclays Bank Plc v Eustice [1995] 1 WLR 1238 (communications relating to a transaction entered into at an undervalue for purposes of defeating a creditor); Gartner v Carter [2004] FCA 258 (advice sought to restructure a corporate group to put assets beyond the reach of a secured creditor); Australian Securities and Investments Commission v Mercorella (No 3) (2006) 58 ACSR 40 (advice obtained about the grant of securities to one class of creditors that would defeat the rights of other creditors). 20 My ruling is not intended to cover all the communications between Mrs Muir and her solicitors, DE Jones & Associates. There is no evidence to suggest that Mrs Muir had any involvement in Mr Muir's scheme. In R v Central Criminal Court, Ex parte Francis & Francis (1989) AC 346 , the House of Lords held that where a person intent on fraud uses an "innocent tool" to further his criminal purpose, the communications between the innocent person and his lawyers are not privileged. That must be a very exceptional case. Here I think it is appropriate to draw a distinction between, on the one hand, communications between Mrs Muir and her solicitors which ought remain confidential and, on the other hand, communications between her solicitors and MOL in respect of which privilege could not attach. I also think that communications between Mrs Muir and her solicitors which relate to or pass on the discussions between her solicitors and MOL are not privileged. 21 I will leave it to the parties to make arrangements for the documents to be provided to the administrators. I will order that the deed administrator shall have the costs of the hearing. I certify that the preceding twenty one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | legal professional privilege exceptions debtor put assets beyond reach of creditor possible conspiracy to defraud deed administrator seeking to inspect documents over which privilege is claimed scope of the "fraud or crime" exception practice and procedure |
The second applicant is the company in liquidation as trustee of the Jade Trust. The applicants contend that a sole director of the company, Mr Ross Hastings, caused Riby to make a disposition of real property of the company to the first respondent, Kym Hon Yoke Ng ("Ms Ng"), his wife, on 17 May 2006 pursuant to a transfer arrangement made with her on 21 April 2006, at a transfer price of $254,914.16 which was, they contend, approximately $76,000.00 below its true value of $330,000.00. The property is described as real property situated at 15 Brookvale Drive, Underwood in the State of Queensland, more particularly described as Lot 188 on RP 826135, County of Stanley, Parish of Yeerongpilly, bearing the reference 50176037, together with all improvements thereon (the "Underwood property"). The applicants contend that the disposition is void pursuant to s 468 of the Corporations Act 2001 (Cth) ("the Act") as it occurred after the commencement of the winding up by the Court on 26 April 2006. The winding up is taken to have commenced on that day: s 513A(e) of the Act. The applicants also say that the transfer; a document described as the "Terms of Settlement" relating to consent orders made by the Family Court of Australia on 10 April 2006, related to the transfer; and the ultimate transfer registration all represent transactions of the company (so defined by s 9 of the Act) rendered voidable by s 588FE(2) of the Act as insolvent transactions; s 588FE(3) as insolvent and uncommercial transactions; s 588FE(4) as insolvent transactions made with a related entity; s 588FE(5) as insolvent transactions of the company made for the purpose of defeating the rights of creditors; s 588FE(6) as insolvent transactions constituting an unfair loan to Ms Ng; and, s 588FE(6A) as unreasonable director-related transactions. Sections 588FE(3) , (4), (5) and (6A) contemplate relevant events occurring during particular periods, that is, two years, four years, 10 years and four years respectively, ending on a day called the "relation-back day". That day, in relation to a winding-up that is taken by operation of Division 1A of Part 5.6 (in this case, by operation of s 513A(e) of that Part) to have begun on the day when the order that the company be wound up was made , is, by s 9 of the Act, the day on which the application for the order was filed , namely 24 March 2006. The second respondent is the trustee of the estate in bankruptcy of Mr Hastings. He entered bankruptcy on 21 February 2007. The third respondent, RAMS Mortgage Corporation Limited ("RAMS") is a lender to Ms Ng in relation to the purchase transaction for the Underwood property. It is a registered mortgagee of the property. Its title is not called into question by the claims of the applicants asserted in these proceedings although an early version of the Statement of Claim challenged the validity of the mortgagee's title. The only issue between the applicants and RAMS now alive on the pleadings is whether the costs incurred by RAMS in responding to the action in order to, so it contends, resist any steps that might have the effect, by reason of orders sought against Ms Ng, of "impeding" or "preventing" the exercise of its rights (as those terms are used by Palmer J in Liberty Funding Pty Ltd v Steele-Smith [2004] NSWSC 1100), are costs falling within cl 20 of the mortgage. If so, those costs form part of the secured monies. The applicants seek orders under s 588FF(1) declaring particular transaction instruments to be voidable and an order that the Underwood property be transferred to the applicants, as liquidator. The applicants seek a declaration that the transfer from Riby to Ms Ng is void by operation of s 468 of the Act. The applicants frame their claims by a Third Further Amended Statement of Claim filed on 28 October 2009. Ms Ng filed a defence to an earlier Amended Statement of Claim, on 24 July 2009. She has been represented in the proceedings generally by Lillas & Loel Lawyers. On 26 October 2009, the applicants were given leave to deliver a Third Further Amended Statement of Claim. Ms Ng was to provide, by Order 3 of the directions, to the applicants, copies of all documents disclosed in her List of Documents, by Tuesday, 27 October 2009. Ms Ng and RAMS were to file an Amended Defence (if any) by 2 November 2009. The proceeding was set down for trial on 24 and 25 November 2009 and the following directions were made: the applicants were to provide Ms Ng and RAMS with witness statements by 30 October 2009; Ms Ng and RAMS were to provide their witness statements by 9 November 2009; applicants were to provide Ms Ng and RAMS with a List of Documents to be included in an agreed trial bundle by 10 November 2009; Ms Ng and RAMS were to respond with additional documents, if any, by 12 November 2009; and the applicants were to file an agreed trial bundle by 17 November 2009. The parties had suggested that mediation might be helpful and Order 9 of the directions of 26 October 2009 provided that the applicants and Ms Ng were to attend and engage in a mediation to be conducted by the Federal Court by no later than 16 November 2009. The proceeding was listed for review on Wednesday, 18 November 2009. The mediation was unsuccessful. On 18 November 2009, the matter came before Collier J for review. On that day, her Honour made directions for trial. The trial date of 25 November 2009 was confirmed although the proceeding was then listed for one day only. The directions were these: the evidence at the trial would be given by affidavit; the applicants were to provide RAMS with a List of Documents for inclusion in the agreed trial bundle by 18 November 2009; RAMS was to respond by 19 November 2009; the trial bundle was to be filed by the applicants by 23 November 2009; any further affidavits on the question of whether the costs of RAMS fall within the terms of the mortgage were to be filed by 23 November 2009; and the parties were to file written submissions by 24 November 2009. On that day, Lillas & Loel sought leave to withdraw as the lawyers representing Ms Ng. By Order 11 made on 18 November 2009, the Court ordered: The court grants leave to Lillas & Loel Solicitors of West End to cease acting for the first respondent as of 18 November 2009 in accordance with Order 45, rule 7 of the Federal Court Rules without derogating from the obligations of Lillas & Loel Solicitors in paragraphs 9 and 10 of these Orders. The reference to paragraphs 9 and 10 of the orders referred to these matters: Where this order requires provision of any document to the first respondent, service may be effected on Lillas & Loel Solicitors for transfer of such documents to the first respondent within 24 hours of receipt by Lillas & Loel Solicitors. A copy of this Order shall be provided by Lillas Loel Solicitors to the first respondent by 5.00pm on 19 November 2009. Lillas & Loel accepted as a condition of leave to withdraw an obligation to notify Ms Ng of the matters mentioned in Order 10 and an obligation to forward documents to Ms Ng. The matter came before the Court again on 24 November 2009. The trial date of 25 November 2009 was vacated and a new date, 14 December 2009, was allocated for the trial of the action. The applicants were ordered to file an agreed bundle of trial documents by 12 noon on 10 December 2009 and the parties were ordered to file and serve written submissions by the same time. By Order 5, service of the orders by the applicants on Ms Ng was to be effected by service on Lillas & Loel Lawyers with such orders to be transferred to the first respondent within 24 hours of receipt of the documents. Ms Ng was directed to file and serve a Notice of Address for Service within three days of service of the order upon her by Lillas & Loel Lawyers. By Order 7, in the event that Ms Ng failed to file a new address for service, service of any documents upon her could be effected upon her at her last known residential address. Please advise if you do and also whether you will be attending the hearing on 14.12.09. If we do not hear from you by 4pm today, we will presume that you do not require any witnesses available for cross examination and that you do not intend to attend the hearing on 14.12.09 either by yourself or by a representative. I was not able to respond to this late lodgement due to my having to attend a funeral in Bundaberg. I filed my affidavit before 12pm on Thursday 10 December 2009 as directed by the Court. I perused electronically any lodgements made between 12 midday and 9pm on Thursday 10 December 2009 and found no new submissions. I considered therefore that no new lodgements had been made. On Friday 11 December, 2009 between 6am and 10pm, I was travelling to, attending, and travelling from a funeral at Bundaberg and was not present to respond to this late submission. Please advise urgently by Reply All. RAMS did not require any of the applicants' witnesses for cross-examination. The applicants had not heard from Ms Ng as to whether she would appear at the trial either by herself or together with a representative. Lillas & Loel had withdrawn from the proceedings by 18 November 2009. Ms Ng did not appear at the trial of the action. However, on 10 December 2009 she had filed an affidavit of four pages attaching the Terms of Settlement document relating to consent orders made in the Family Court of Australia on 20 December 2005. The applicants do not seek orders against Ms Ng in default of her appearance. Rather, they seek a determination of the matter on the merits. The applicants rely upon an affidavit of Mr Peter Mills, the solicitor for the applicants, filed 1 February 2008; an affidavit of David Stimpson, on behalf of the liquidators, filed 12 December 2007; a further affidavit of David Stimpson filed 23 June 2009; an affidavit of Craig Lawson, a valuer, filed 28 October 2009; a further affidavit of David Stimpson filed 2 November 2009; and, the trial bundle of documents (marked Exhibits 1, 2, 3, 4, 5 and 6 respectively). A question arose as to whether the Court should receive into evidence the affidavit of Ms Ng filed 10 December 2009. The applicants resisted the admission of the affidavit into evidence on the footing that Ms Ng had failed to appear at the trial of the action. Thus, she did not formally rely upon the affidavit and she was not available to be cross-examined on the affidavit. During the course of the proceeding I indicated that I was of the view that the affidavit ought not to be admitted into evidence particularly since Ms Ng had not appeared and she was not prepared to submit herself to cross-examination on the affidavit. At the conclusion of the proceeding on 14 December 2009, I reserved the matter to consider all of the issues. Having considered that matter further, it seems to me that the interests of justice are served by the Court receiving Ms Ng's affidavit into evidence. I propose to direct that Ms Ng's affidavit be marked "Exhibit A" for separate identification. In considering the issues raised by the proceedings, I have taken Ms Ng's affidavit into account in reaching the findings reflected in these reasons. The first group of issues goes to the claims made by the applicants against the first respondent as earlier described. The second group of issues goes to the question of whether the costs incurred by RAMS fall within the scope of the RAMS mortgage as reasonable expenses reasonably incurred in enforcing the mortgage consequent upon default by the mortgagor. I propose to deal with the first group of issues as a separate question and give judgment and make orders in relation to those claims whilst reserving for later determination the separate question of whether the costs of the proceeding incurred by RAMS fall within the terms of the mortgage. The applicants and RAMS agree that this is an appropriate course of action. Accordingly, pursuant to Order 29, rule 2 of the Federal Court Rules , I order that those questions of fact and law arising out of the claims made by the applicants in the Third Further Amended Statement of Claim filed on 28 October 2009 against Ms Ng shall be decided separately from those questions of fact and law in issue between the applicants and the third respondent in relation to the construction of the terms of the RAMS mortgage and whether the costs of the proceedings incurred by the third respondent fall within the terms of that mortgage. Having regard to all of the evidence, I make the following findings of fact. On 26 April 2006, the Supreme Court of Queensland ordered that Riby be wound up in insolvency and that the first applicants be appointed liquidator for the purposes of the winding up. The application was filed on 24 March 2006. At the date of the appointment of the liquidator, Riby had no unencumbered assets of any value apart from Riby's claim to an interest in the property the subject of these proceedings. At 26 April 2006, Riby had eight unsecured creditors owed $262,702.55. On 13 January 2006, Drake Australia Pty Ltd ("Drake"), obtained judgment in the Magistrates Court of Queensland against Riby for $46,630.09. Another creditor, Australasian Property Holdings Pty Ltd "("APH"), a lender to Riby, was owed $68,536.43. Riby was unable to raise funds to pay its debts as and when they fell due primarily because the relationship between APH (through Mr Graeme Ewart, a director of APH) and Mr Ross Hastings for Riby had deteriorated. At 26 April 2006, Riby was insolvent. Riby had also failed to keep its books of account up to date after 30 June 2005 in contravention of s 286 of the Act, giving rise to a presumed insolvency. Riby had failed to lodge up-to-date taxation documents and had failed to pay its group tax and sales tax on time. On 19 May 2005, Perpetual Trustees Victoria Limited ("Perpetual") as Riby's mortgagee of another property, issued a Notice of Exercise of Power of Sale based on a Default Notice of 5 May 2005 issued for a failure to pay arrears of $11,406.50 and the debt that became due and owing under the mortgage, being the accelerated amount of $463,759.70. Those accelerated monies became due and owing arising out of Riby's default. Having regard to the unpaid arrears based on the default notice of 5 May 2005, the unpaid accelerated debt, the unpaid Drake debt and the loan arrangements with APH, Riby was unable to pay its debts from 26 February 2005. On 24 March 2006, Drake applied for a winding-up order based on its unpaid judgment debt obtained on 13 January 2006. On 3 April 2006, Mr Ross Hastings entered into a document described as "Terms of Settlement" with Ms Ng, his wife, by which Mr Hastings agreed to transfer the right, title and interest of Riby in the property to Ms Ng. The Terms of Settlement became the subject of consent orders under the Family Law Act 1975 (Cth) of 10 April 2006. Mr Hastings was the sole director of Riby from 24 December 1997 and sole shareholder from 27 January 2004, when the arrangements with Ms Ng were struck. She was at that time his spouse. On 17 May 2006, Riby was the registered proprietor of the Underwood property. On that day, Riby transferred all its right, title and interest in the property to Ms Ng. The transfer was registered in the Queensland Land Title Office on 17 May 2006. Riby had been registered as the sole registered proprietor of the Underwood property since 12 May 1999. The transfer was for an amount of $254,914.16. The property was valued at $330,000.00 at the date of transfer. No other consideration was paid by Ms Ng. The Terms of Settlement between Mr Hastings and Ms Ng and the consent order of 10 April 2006 reflects terms advantageous to both Mr Hastings and Ms Ng. Those arrangements conferred clear benefits upon them. No benefit was conferred upon Riby by those arrangements. The transfer was ultimately made in consideration of the discharge of the existing mortgage held by Perpetual of $254,914.16. The transfer took place at an undervalue of approximately $76,000.00. The creditors of Riby have been prejudiced by the disposition at an undervalue as, but for the disposition there would have been at least some dividend paid to the creditors of Riby. Between 10 August 2005 and 26 September 2005, several loan agreements were made between Riby and APH. By September 2005, Riby was insolvent. On 31 October 2005, APH lodged a caveat over property at 58 Brookvale Drive, Underwood ("No. 58") previously registered in the name of Riby. That property was sold by the mortgagee. On 8 November 2005, Ms Ng lodged a caveat over the Underwood property (ie. No. 15). On 22 November 2005, Mr Hastings and Ms Ng entered into an agreement by which Riby agreed to transfer its interest in the Underwood property to Ms Ng. On 20 December 2005, consent orders were made in the Family Court of Australia at Southport. On 23 December 2005, Mr Hastings signed a transfer. The Terms of Settlement document by which Riby undertook to transfer the property to Ms Ng was signed by Mr Hastings and Ms Ng on 3 April 2006. The settlement of the transfer took place on 17 May 2006 with funds provided to Ms Ng by RAMS, of approximately $256,000.00. On 14 September 2007, the liquidator lodged a caveat against dealings in the Underwood property claiming an interest in the whole of the fee simple. Under the Terms of Settlement of 22 November 2005, Ms Ng was to lend Riby money to pay out a caveat lodged by APH supporting its claims. Under the April 2006 settlement terms and consent order, Riby was to transfer its interest in the property to Ms Ng. Ms Ng acquired a beneficial interest in the Underwood property pending completion. The transfer on 17 May 2006 took place after the commencement of the winding-up. A non-exempt disposition of property occurred upon registration. That registration occurred pursuant to events along a continuum consisting of the agreement of 22 November 2005; the consent orders of 20 December 2005; the execution of the Terms of Settlement on 3 April 2006; the consent orders of 10 April 2006; and, the transfer of 17 May 2006. All of those arrangements took place after 26 September 2005, being the date on which Riby was unable to pay its debts as and when they fell due. In any event, Riby was ordered to be wound up on 26 April 2006, based on an application of 24 March 2006. During the six-month period ending on the relation-back date of 24 March 2006 (that is, from 24 September 2005 to 24 March 2006), Riby entered into all of the above transactions as defined (s 9 of the Act, "Transaction") in circumstances where the transactions constituted insolvent transactions within s 588FC as the transactions conferred an unfair preference on Ms Ng to the prejudice of the creditors of the company who could not then be paid when debts fell due and owing, by transferring the whole of the value of the Underwood property to her in satisfaction of her claim both on Mr Hastings personally and, more importantly, in respect of the creditor aspects of her relationship with Riby. The transaction consisting of the agreement to transfer and the transfer is an uncommercial transaction as a reasonable person in the circumstances of Riby would not have entered into a transaction to transfer the Underwood property to Ms Ng at an undervalue of $76,000.00 as Riby obtained no benefit from the transaction. The agreement to transfer and the transfer of the Underwood property to Ms Ng are unreasonable director-related transactions as they constitute a disposition of property of the company brought about by Mr Hastings, to Ms Ng, a close associate of Mr Hastings; and, at the time those transactions were entered into, it was within the expectation of a person standing in the shoes of Riby, that Riby would derive no benefit from the disposition. A "close associate" of Mr Hastings is defined to include a "relative" of the relevant "director" and a "relative" in relation to a person includes the spouse of the person. The agreement to transfer and the transfer of the Underwood property was entered into by Riby, through Hastings, for a purpose of removing the Underwood property from the reach of creditors and thus for a purpose of defeating the rights of creditors on a winding-up of the company, having regard to the circumstances of Riby at the time those transactions were struck. The agreement to transfer and the transfer were insolvent transactions made with a spouse of a director of a company and thus transactions made between the company and a "related entity" as that term is defined in s 9 of the Act. I am satisfied therefore that the agreements to transfer and the transfer of the Underwood property to Ms Ng involved contraventions of ss 588FE (2), (3), (4), (5) and (6A) of the Act. The "transaction" is thus rendered voidable by operation of those provisions. In addition, the transfer of the property to Ms Ng on 17 May 2006 is rendered void by operation of s 468 of the Act. Accordingly, the Court will make the following orders. The Terms of Settlement being a document signed between Ross Hastings and the first respondent on 3 April 2006 and attached to orders of the Family Court of Australia as Exhibit "I' to orders made on 10 April 2006 constitutes an agreement for transfer of the Underwood property rendered voidable by operation of s 588FE of the Corporations Act 2001 (Cth). The first respondent shall pay the first and second applicants' costs of and incidental to these proceedings including the costs incurred by the first and second applicants in implementing these orders. The parties shall have liberty to apply. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of whether particular arrangements for the transfer of a property and the ultimate transfer of that property constitute transactions rendered voidable and by operation of s 588fe of the corporations act 2001 (cth) and whether the transfer of the property is rendered void by operation of s 468 of the act consideration of an application for judgment upon the failure of the first respondent to appear at the trial of the action corporations practice and procedure |
The applicant sought relief pursuant to Pt A para 7 of the application filed 13 May 2007. After delivering judgment I ordered the parties to file and serve separate submissions as to costs incurred in respect of hearings leading to the judgment. Except as provided by any other Act, the award of costs is in the discretion of the Court: s 43(2) of the Federal Court of Australia Act 1976 (Cth). Two clear issues for determination arise from these submissions. They are: Whether costs should be reserved until the conclusion of the substantive proceedings; and In light of the concession of the applicant that costs should follow the event --- whether the respondents' costs should be awarded on a party-party basis or an indemnity basis. 1. Should costs be reserved? The applicant has submitted that costs should be reserved to the trial of the balance of the proceedings, when the Court will have a more extensive understanding of the parties' conduct, and will be able to form a more informed and balanced view of where costs should ultimately fall. In my view however there is no advantage to either the Court or the successful respondents in reserving costs until this time, nor circumstances justifying such an order. Following agreement of the parties, the Court had ordered that the claims of the applicant in Pt A para 7 of the application be heard and determined separately. The judgment constituted the Court's orders and reasoning in respect of these discrete claims. The discretion to be exercised by the Court in relation to these claims relates to matters relevant to these claims, and not to other parts of the substantive proceedings. The litigation is complex. It is unlikely that final judgment will be given until late 1996 or even later. The successful parties to the appeals before this Court will therefore, in the ordinary course of events, not recover their costs for a long time. The parties entitled to the benefit of the order for costs which this Court has made in appeals from interlocutory orders should not be deprived of that benefit until the case has been finally disposed of. The respondents, who were successful in respect of issues arising in relation to Pt A para 7 of the application, have incurred costs to which they are now entitled. The applicant's claims in the substantive proceedings will not be heard until early 2010. There is no justification for leaving a determination of costs arising from the separate hearing of Pt A para 7 of the application until that time. 2. However the respondents submit that: It is well settled that 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 , De Alwis v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 77. Although the usual rule is that costs be awarded against the unsuccessful party on a party-party basis, the Court has a discretion to award costs on an indemnity basis in appropriate cases: Colgate-Palmolive v Cussons [1993] FCA 536 ; (1993) 46 FCR 225 at 231-234. Circumstances where the Court may consider awarding costs on an indemnity basis include: While it was clear at the hearings of 11 June 2009 and 22 June 2009 that there was substantial identity of interest between the respondents, nonetheless I accept the submission of the respondents that Mr Troy Thomas incurred costs separately from Mr Rhys Thomas. Further, I consider that there is a sound basis for an order awarding Mr Troy Thomas his costs incurred in these proceedings on an indemnity basis. As I observed in the judgment, notwithstanding that Mr Troy Thomas was required to meet the proceedings, HFAT did not open a case against him, nor did HFAT produce evidence in support of its claims against him in terms of Pt A para 7. Indeed, the applicant conceded in its submissions that, given the state of the evidence, there was no sufficient basis for an order against Mr Troy Thomas in relation to this aspect of the application. I consider that the claims against Mr Troy Thomas in terms of Pt A para 7 were of the nature described in Colgate-Palmolive (1993) 46 FCR and InterTAN [2005] FCAFC 54 , namely allegations which ought never to have been made, and which had no chance of success. Taking this view, and particularly in light of the fact that Mr Troy Thomas was required to take steps to defend himself against the applicant's case including engaging legal representation, I consider that the case against Mr Troy Thomas exhibits special features justifying the Court exercising its discretion to order costs incurred by him to be paid on an indemnity basis. In relation to costs incurred by Mr Rhys Thomas however I do not consider an award of costs on an indemnity basis is warranted. I do not consider that the claim against Mr Rhys Thomas had no chance of success or was hopeless or groundless, nor do I consider that the case against him exhibited special features so as to warrant the Court exercising its discretion to award indemnity costs. I form this view because I consider that: I consider that the appropriate order is that the applicant pay costs incurred by Mr Rhys Thomas on a party-party basis. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | s 43(2) of the federal court of australia act 1976 (cth) applicant's claims in relation to aspect of application dismissed whether costs should be reserved whether indemnity costs warranted applicant conceded no case made out in respect of the first respondent whether first respondent incurred separate costs whether case against respondents hopeless or groundless applicant raised undisclosed bases of liability in written submissions after the hearing costs |
If the Tribunal in this matter had been able to deal with the applicant's claim on the basis of what was understood to be the true construction of s 4 of the SRC Act at the time of Mr Wiegand's first appeal to the Tribunal, he would have been awarded the compensation he claimed. As the law is now to be understood in light of the decision of the Full Court in Hart v Comcare [2005] FCAFC 16 , the Tribunal acknowledged it had no option but to dismiss the application to it given its findings. 2 At the hearing of this application before me I permitted Mr Wiegand, with the concurrence of Comcare, to raise a new question of law. That new question impugned two critical findings of the Tribunal on the basis that there was no evidence to support either of them. To anticipate what I have to say, I am not satisfied that the Tribunal erred in the way suggested. In these circumstances, as Mr Wiegand reluctantly conceded, I would be obliged to apply Hart and dismiss the application. In May of 1998 he made his claim for compensation attaching a medical certificate from a psychiatrist which contained a diagnosis of major depression with the stated date of injury as approximately January 1998. I further find that he was suffering from this condition, or an aggravation of this condition, as at 2 January 1998, when he failed to return to work at the ATO, and that this condition was materially contributed to by his employment": Reasons par 48. Only one of these was not employment related. 4 Later in its reasons the Tribunal observed (at par 51) that a large number of the asserted stressors took place prior to October 1995; that Dr Coyte's opinion --- Dr Coyte was Mr Wiegand's treating psychiatrist --- was that they had an increasing and compounding effect; and that the pre October 1995 stressors materially contributed to the subsequent development of Mr Wiegand's depression. 5 Having reached this conclusion, the Tribunal was confronted with the proviso to the definition of injury in s 4 of the SRC Act . In arriving at this conclusion the Tribunal appears to have applied unexceptionably the decision of the Full Court in Treloar v The Australian Telecommunications Commission (1990) 26 FCR 316 at 323 in determining whether the above two events contributed in "a material degree" to his disease. 8 The Tribunal dealt with such evidence as related to the former of these at [69]-[74] of its reasons. These paragraphs (other than par [74]) refer to evidence which suggested the promotion matter "aggrieved", or had a "significant impact" on, Mr Wiegand, or else reflected conduct of the ATO that concerned him. More significant is the following passage in the oral evidence of Dr Coyte on which the Tribunal relied in par [74]. Do you have that there? It was part of exhibit 24 tendered this morning, I think. I wonder if you would go to paragraph 10 of that report and you will see a series of dot points within paragraph 10?---Yes. I wonder if you would just take a moment to read through those particular dot points?---How far would you like me to go with this? I think continue to the end of paragraph 10?---Okay. I didn't realise there were so many pages but if I just ask you a general question --- perhaps to the end of paragraph 10 and then paragraph 11 which is very brief. That. Thank you. Now, you understand from having read that, that that is a summary prepared by the Federal Court Judge of the concerns which Mr Wiegand had about events that had happened in the course of his employment?---Yes. And which he thought contributed to his ill health. Paragraph 10 contains what are described as the major events, but not necessarily all of the events. The question is, in the course of his consultations with you has he mentioned those events to you?---I could say, yes, he has. Not in as much detail as some of these. No. Certainly, apart from matters of detail, there is nothing new in there that you haven't heard about before?---No, there is nothing new. Did all of those matters appear to be of concern to Mr Wiegand?---When he related them to me? Yes?---Yes. Do you consider that all of those matters contributed to the onset of his depression, or alternatively, to the aggravation of his depression?---Yes, I do. I find from the above evidence that this event was one of the causative factors for his developing major depression and that it was not an insignificant factor. This factor was an excluded event within the proviso to the definition of 'injury' . When asked if that upset him, Mr Wiegand said: 'I was extremely upset. Yes. Extremely. ' (transcript 25.2.02, page 63, line 1). This matter was the subject of a further grievance by Mr Wiegand contained in a letter dated 9 December 1996 (exhibit A11, exhibit R11). In this letter, Mr Wiegand said that at a meeting on 2 October 1996 his then manager had refused his request for leave, even though his manager was fully aware that his 77 year old father, whom he had not seen for eight years and whom he might not see alive again, was about to visit him. His letter continued: 'This has caused me great anguish and my health has been affected by this. I have been ov (sic) for three days. ' The letter ended with a comment that he thought he was probably wasting his breath as the result of the grievance would be another 'white wash' . The Tribunal concluded of the event that it caused additional significant distress to Mr Wiegand further compounding the effect of the many early stressors he had experienced and it was a causative factor in his suffering major depression as at January 1998. 12 The Tribunal acknowledged as a result of Hart's case, it was not open to it to evaluate the relative significance of contributing causes in order to determine which factor or factors were predominant so that if non-excluded factors were predominant, the proviso to the definition of "injury" would be held not to apply. However, it did express the view that if it was able to discount the two excepted matters noted above, it would find that the various other employment related stressors were in combination the dominant cause of Mr Wiegand's major depression. 13 Accordingly in light of Hart , it confirmed Mr Wiegand's disentitlement to compensation. 14 In Hart , a claimant for compensation under the SRC Act complained of depression, anxiety and adjustment disorder caused by events associated with three applications for promotion in the Department of Defence. The Tribunal in that matter found that the adjustment disorder was first suffered during the events at the time of, and connected with, the procedures employed in relation to three promotions for which the appellant had applied unsuccessfully. It found that her condition was materially contributed to (a) by the failure to obtain promotions and (b) by the events at the time of, and connected with, the procedures employed in the process leading up to the decisions as to the promotions. While it recognised that any disease suffered as a result of the failure to obtain promotion was excluded by s 4(1) , disease resulting from the other concurrent cause was not. Accordingly it determined that compensation was payable to the applicant in that case. 15 An appeal to this Court resulted in the appeal being allowed and the decision of the Tribunal being set aside. The primary Judge found that the distinction drawn between the two causes was in the circumstances "spurious". On appeal to the Full Court, the appellant argued that the distinction was a valid one: where there were two operative causes, one being compensable and the other not, given the beneficial purpose of the legislation, the approach taken by the Tribunal in that case ought be adopted. For its part on the appeal Comcare raised by way of Notice of Contention that the findings made by the Tribunal were sufficient to meet the words of the proviso, such that there was no "injury" as defined. 16 The Full Court in a joint judgment agreed with that contention. This is a beneficial statute. Nevertheless, comformably with that, it is necessary to construe the words used by the Parliament. The so-called proviso in the definition does not exclude causes. It provides that if a disease of injury which would otherwise fall within the definition ('any such') is one which answers a description (relevantly here: 'suffered as a result of ... the failure to obtain a promotion'), the disease or injury is not an 'injury' as defined. The words are satisfied here. There was no debate that the factual findings made by the Tribunal amount to a conclusion that the disease or injury suffered was as a result of the failure to obtain the promotions. In order to succeed, the appellant must assert, as she does, that operative causes are not excluded and that given the provision's purpose some modifier should be read into the words to restrict the effect of the exclusion to circumstances where there were no other employment related causes. We do not agree. The operation of the provision had the evident purpose of removing from the field of compensation a disease, injury or aggravation which was a result of something. We see no evident purpose to remove from the field of compensation a disease, injury or aggravation which was only a result of that thing. The words do not readily admit that construction. The cases on multiple causes in tort or general law do not assist that enquiry. It will in any case be for the Tribunal to examine the facts, assess the reasons for the disease, injury or aggravation and come to conclusions in respect thereof. Whether in any given case, those findings allow a conclusion that the condition was suffered as a result of one or more of the matters referred to in the proviso, may be a factual question, or perhaps a legal question. Here, however, the findings were clear. The failure to obtain the promotions materially contributed to the condition and there is no issue but that the condition was suffered as a result of the failure to obtain the promotion. While I am obviously bound to apply Hart , I consider that it produces a harsh outcome in cases such as the present where a psychiatric condition is the product of the cumulative effect of quite some number of stressors experienced over a long period of time, which stressors happen to include a very small number that fall within the s 4(1) exclusion. He challenges both of those findings on the basis that there was no evidence to support them. 19 I should state at the outset, as has been acknowledged by others: see Schmid v Comcare [2003] FCA 1057 at par [53] ; there is a high threshold for treating a finding of fact as giving rise to an error of law. 20 Mr Wiegand's complaint in relation to the promotion incident centred in large measure on the fact that it was only towards the very end of a protracted hearing in the Tribunal that Hart's case became an issue (it having just been decided by the Full Court). Up until then the case had been run by him on grounds suggested by the earlier decision of von Doussa J which related to the reality of his "perceptions". For this reason little attention was given to the 1989 promotion in the course of the proceedings. He contends that his psychiatrist, Dr Coyte, was reluctant to assign diagnostic significance to individual past events such as the 1989 promotion event. Equally Mr Wiegand sought to explain away the significance of the transcript referred to above by saying that, while Dr Coyte agreed that the factors referred to by von Doussa J, including the failure to be promoted, contributed to the onset of his depression, Dr Coyte did not agree that they contributed in a material degree. Given the decision of the Full Court in Treloar's case on the significance of the word "material" in this context, I do not consider there is any substance in this supposed difference. As the Full Court observed in Treloar at 323, once a causal connection is established between an employment event and the ailment suffered "it matters not that the contribution be large or small". 21 Given Dr Coyte's evidence, there was some evidentiary basis for the Tribunal making the finding that it did. Whether that finding was in fact erroneous or not is not a matter of present relevance. I have referred above to the threshold posed by a no-evidence case. Mr Wiegand in the circumstances is unable to cross it. This conclusion of itself would be sufficient to dismiss the application. 22 I should add for the sake of completeness that I have reached a like view on the compassionate leave question. The evidence of its contributing effect might be considered slight but there nonetheless was evidence of such a contribution before the Tribunal. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. | appeal pursuant to s 44 of the administrative appeals tribunal act 1975 (cth) claim for compensation under safety, rehabilitation and compensation act 1988 (cth) proper construction of s 4 of the src act tribunal held that two of the relevant events that materially contributed to the applicant's disease were excluded under the act applicant not entitled to compensation whether no evidence to support tribunal's findings in respect of excluded events administrative law |
The decision made by the Tribunal was to affirm a decision of the respondent, the Australian Federal Police, refusing a request for documents by the applicant under the Freedom of Information Act 1982 (Cth) ('the FOI Act'). 2 The applicant's challenge is made by way of an application under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('the ADJR Act'). It seems that the applicant had a right of appeal on a question of law from the decision of the Tribunal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ('the AAT Act'), but he has not exercised that right. Although the respondent accepts that the decision falls within the terms of the ADJR Act (see, eg, Pancontinental Mining Ltd v Burns (1994) 52 FCR 454 at 462-464 per von Doussa J), it submits that because the applicant had a right of appeal on a question of law under the AAT Act, I have a discretion not to entertain the application under the ADJR Act. However, the respondent has asked me not to exercise the discretion to decline to entertain the application, because it submits that it is in the interests of justice that the application be determined as expeditiously as possible. I am prepared to proceed in this way because, irrespective of the form of the challenge, the applicant must show a breach of the rules of natural justice or an error of law and I am satisfied that he is unable to do this. 3 The applicant represented himself both in this Court and in the Tribunal. He believes that the respondent has certain documents and, as will become clear, his attempts to obtain those documents have a long history. I seek all materials and including a Queensland Police file (including the Special Branch files) that I provided you in 1990. The applicant refused to narrow his request. 6 On 6 May 2005, the respondent advised the applicant that his request was refused under s 24 of the FIO Act. Speaking generally, that section enables an agency to refuse to process a request if the agency is satisfied that processing the request would substantially and unreasonably divert the resources of the agency from its other operations. 7 The applicant sought an internal review of the decision under s 54 of the FIO Act. The review was conducted by Mr Peter Norman of the respondent who, on 21 June 2005, advised the applicant that he had concluded that the decision to refuse his request was correct, albeit for different reasons. The request was refused under s 24A(a) and (b)(ii) of the FIO Act. That question was addressed by Finn J in Chu v Telstra Corporation Ltd [2005] FCA 1730 ; (2005) 147 FCR 505 and, for the reasons his Honour gives (with which I respectfully agree), the judgment as to the requirement in s 24A(a) is for the agency or Minister in question and, upon review, for the Tribunal, and not ultimately for the Court. 9 Under s 55 of the FIO Act, the applicant sought a review of the decision by the Tribunal. As I have said, the Tribunal affirmed the decision under review. 10 On 17 August 2005, the applicant limited his application to the Tribunal to his request for documents said to have been provided by him to the respondent in 1991. Australian Federal Police wanted to know about my involvement with Operation Maitita an undercover role that I had played to trap some members of the Ananda Marga sect implicated allegedly in the 1978 Hilton Hotel bombings in Sydney. The Tribunal referred to the history of the applicant's requests. On 17 April 1985, the applicant sought from the respondent 'all or any documents relating to [the applicant] and his involvement with the Federal Police, in particular those sections dealing with narcotics and security intelligency [sic]'. In 1991, the applicant made another request to the respondent for 'all records from 1978 until now'. Both these requests were the subject of applications to the Tribunal. On 11 December 2003, the applicant caused a Tribunal summons to be issued, but it was set aside as being too wide. The applicant was given leave to issue a new summons in an amended form. 2. The Tribunal said that the only relevant section of the FOI Act for the purpose of the application for review was s 24A. 3. The Tribunal found that the request for access represented the third attempt by the applicant to obtain what appeared to be essentially the same material. 4. The Tribunal found that, based on the evidence of Mr Norman and the affidavits of Ms Darlene Grech, which were tendered at the hearing and which detail the searches carried out by the respondent in response to the summons issued on 9 January 2004, the respondent had taken all reasonable steps to locate the documents sought by the applicant and, if the documents are in the respondent's possession, they cannot be found or do not exist. I found some of the submissions difficult to follow. There was a suggestion by the applicant in his written submissions that the Tribunal member was guilty of bias or apparent bias. That submission was not pursued in his oral submissions, but, in any event, I have considered the transcript of the hearing and other material, and in my opinion any suggestion of bias or apparent bias on the part of the Tribunal member is clearly untenable. 13 In essence, the applicant raises two grounds of challenge. 14 First, he submits that he was denied procedural fairness or natural justice by the Tribunal. He submits that he should have been given the opportunity by the Tribunal to challenge Mr Norman's evidence about the searches conducted by the respondent of its electronic databases. He did not articulate his submission clearly, but I take him to be saying that, although he was not deprived of an opportunity to call evidence at the hearing, and did not ask for an adjournment of the hearing so that he could gather and present evidence challenging Mr Norman's evidence, nevertheless, the Tribunal should have given him an opportunity to challenge Mr Norman's evidence by suggesting an adjournment or perhaps adjourning of its own motion. 15 Secondly, the applicant submits that the Tribunal should have applied the provisions of the Freedom of Information Act 1991 (SA), even though the request for access was not made under that Act, nor was the possible operation of the State Act raised before the Tribunal. The applicant refers to s 79 of the Judiciary Act 1903 (Cth). 16 As to the first submission, I have read the transcript of the hearing before the Tribunal carefully and I am satisfied that the Tribunal afforded the applicant a full and proper opportunity to present his case. 17 Section 33(1)(b) of the AAT Act provides that a proceeding before the Tribunal shall be conducted with as little formality and technicality, and with as much expedition, as the requirements of that Act and of every other relevant enactment and a proper consideration of the matters before the Tribunal permit. The Tribunal has a duty to act judicially. Ordinarily, it is for the parties to define the issues in the proceedings and to decide how they wish to conduct their respective cases. As Deane J (with whom Fisher J agreed) noted in Sullivan v Department of Transport (1978) 20 ALR 323 (at 343), undue interference by the Tribunal with how the parties conduct their cases may prove counter-productive. At the same time, there may be cases where the Tribunal's duty to act judicially may require it to advise a party of his or her ability to seek an adjournment, or even to adjourn a hearing of its own motion. It is not possible to catalogue the circumstances in which either of these courses may be appropriate. They are likely to be rare and to involve a party who does not have legal representation. 18 In this case, the applicant was aware before the hearing that the respondent was asserting that the documents could not be found or did not exist. There is nothing in what occurred before the Tribunal to suggest that it would have been appropriate for the Tribunal to intervene in some way so as to enable the applicant to launch what is even now an unparticularised challenge to the evidence of the searches conducted of the electronic databases of the respondent. I reject the first submission. 19 As to the second submission, this could be rejected on a number of grounds. It is sufficient for me to say that the State Act does not apply to the applicant's request for access according to its terms and is not 'picked up' by s 79 of the Judiciary Act 1903 (Cth), because the Commonwealth has 'otherwise provided' in the FIO Act: see McLeod v Australian Securities and Investment Commission [2002] HCA 37 ; (2002) 211 CLR 287 at 302 [44] . I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | application for order of review of decision of administrative appeals tribunal freedom of information request request refused on basis that documents could not be found or did not exist freedom of information act 1982 (cth) s 24a whether applicant denied procedural fairness or natural justice by tribunal whether tribunal should have applied provisions of freedom of information act 1991 (sa) judiciary act 1903 (cth) s 79. administrative appeal |
The Federal Magistrate dismissed an application for review of a decision of the Refugee Review Tribunal ("RRT") dated 22 September 2005 which affirmed a decision of a delegate of the Minister not to grant a protection visa. 2 The appellant failed to appear on 11 April 2006 and I dismissed the proceeding pursuant to section 25(2B)(bb)(ii) of the Federal Court Act 1976 (Cth) ("the Act"). 3 My order was entered on 3 May 2006. The appellant filed a notice of motion on 3 May 2006, that is to say the same day on which the order was entered. The motion relied on order 35 rule 7(2) of the Federal Court Rules in seeking to set aside my orders. However, that power may not be exercised by a court when exercising its appellate or related jurisdiction under Division 2 of Part 3 of the Act. 4 Nevertheless, I am satisfied that I have power to set aside the order on either of two bases; the first is order 35 rule 7(1) if the motion was filed before entry of the order. The second is an implied power under section 23 of the Act to overcome the court's failure to provide a party with a hearing; see Yevad Products Pty Limited v Brookfield [2005] FCAFC 263 at [26] - [33] and the authorities there cited; see also DJL v Central Authority [2000] HCA 17 ; (2000) 201 CLR 226 at [189] . 5 The appellant filed an affidavit in support of his notice of motion which states that he could not attend the hearing on 11 April 2006 because he was ill and he attaches a medical certificate. That medical certificate was dated 24 April 2006 from a medical practitioner at the International Health and Medical Services at Villawood. 7 I am satisfied that the appellant has given a satisfactory explanation for his delay. However, the exercise of my discretion to set aside the orders depends not only upon the sufficiency of the explanation but also on whether I come to the view that the appellant has a properly arguable case to go to a hearing of the appeal, see NAGP v Minister for Immigration, Multicultural and Indigenous Affairs [2004] FCA 709 at [3] - [4] ; NALO v Minister for Immigration, Multicultural and Indigenous Affairs [2003] FCA 113 ; NADF v Minister for Immigration, Multicultural and Indigenous Affairs [2003] FCAFC 71 at [16] - [17] . On 21 August 2005, that is to say nearly seven years later, he lodged an application for a protection visa claiming a well-founded fear of persecution because of his political opinion, namely his association with and participation in the Awami League. 10 The applicant claims to be a local leader of the Awami League and said that that led to him being physically harmed and he said that this was the reason why he left Bangladesh. He said he feared that BNP activists would kill him if he returned. 11 At the hearing in the RRT, the appellant described a knife attach which he said he suffered on 15 August 1997 at the hands of BNP activists. He showed the RRT scars on his right arm and abdomen. In its reason for decision the RRT observed that the appellant's evidence was generalised and vague and that he tended to blur his personalised claims and experiences with broad assertions containing treatment of Awami League activists in Bangladesh. 12 The RRT accepted that the appellant supported the Awami League in a low profile manner and that his political knowledge was broadly commensurate with that of a reasonably well-informed person. The Tribunal is not satisfied that he was a leader or activist in any lesser function, that he had any profile or influence as an Awami League supporter, or that he has any serious commitment to the party and its politics. The Applicant's knowledge of the party and its policies, and electoral arrangements, fell short of what might reasonably be expected of a person who has been involved in campaigning and ongoing political organisation. His familiarity with and his responses about the Awami League and its processes were mediocre and therefore at odds with his claim to have been an active, influential local Awami League campaigner and leader of the party's 200 strong youth club. Finally, the Applicant's scan lack of interest in and contact with the Awami League since his arrival in Australia reinforces the Tribunal's conclusion that he has neither a formal association with nor a genuine commitment to the Awami League nor or in the past. 14 The RRT noted that its doubts about the 1997 attack were reinforced by the appellant's subsequent conduct in remaining in Bangladesh for a further year before departing for Australia. In all the circumstances, the RRT is not satisfied that the Applicant was attacked by BNP activists or anyone else for political reasons which are relevant to his current refugee application. It is also not satisfied that he suffered any harm --- persecutory or otherwise --- arising from political or any other factors, prior to departing from Bangladesh. However, it is not satisfied that this is for reason of any fear of persecution in Bangladesh. According to the Applicant's evidence at hearing, in the seven years after his arrival in Australia, he did not articulate any fears of persecution in his home country, let alone make enquiries about or seek to obtain refugee protection. These matters emerged only following his immigration arrest. This prolonged period of silence and inactivity are strong evidence that the Applicant did not leave Bangladesh for his safety, and does not have a well-founded fear of prospective persecution, but rather has brought forward refugee claims as a last-ditch effort to achieve his goal of permanent residency. The learned Magistrate rejected each of the grounds. 17 One of the grounds of the application asserted a breach of section 424A of the Migration Act 1958 (Cth) ("the Act "). The learned Federal Magistrate observed that to the extent that the appellant raised a general issue of procedural fairness, there was in the Federal Magistrate's opinion no want of procedural fairness. 18 The Federal Magistrate found that the appellant in his application for review invited the RRT to refer to the Minister's Department's file which included his original protection visa claims. He found that the application for review in the RRT adopted the claims made in the protection visa application. 19 The learned Magistrate at [7] then referred to an additional issue which was not raised by the appellant in his application for judicial review but which occurred to the Magistrate as a possible ground of review. This was that the RRT may have breached section 91R(3) of the Act in placing reliance upon the appellant's conduct in Australia without making an express finding that the appellant had satisfied the RRT that the conduct was engaged in otherwise than for the purpose of strengthening his claim to refugee status. Ultimately, however, a fair reading of the decision as a whole leads me to the view that the RRT was not satisfied that the applicant's accepted political involvement in Bangladesh exposed him to a well founded fear of persecution should he return there. If I am wrong in that finding then I am nevertheless prepared to infer into the presiding member's reasoning a satisfaction that the applicant's conduct engaged in Australia was not engaged in for the purpose of strengthening his claim to be a refugee. On page 56 of the court book the presiding member noted a concession by the applicant that he wished to stay in Australia and that he preferred to achieve this goal by completing a series of education courses, ultimately leading to permanent residency. In my view, the acceptance of that concession can be taken to be acceptance of an explanation offered by the applicant for his conduct in Australia. Having so satisfied itself, the RRT was entitled to take into account the applicant's conduct in Australia. It raises two unparticularised grounds of appeal, namely failure to find "error of law, jurisdictional error and procedural fairness and relief under section 39B of the Judiciary Act " and that there was a failure to take into account the appellant's well-founded fear of persecution. 23 The appellant supplemented this with written submissions prepared by counsel. The written submissions rely upon the section 91R(3) issue and to the extent necessary to amend the notice of appeal to add this ground of review. 24 The submissions state that this is the only question raised on the appeal. The appellant submits that the credibility concerns were inextricably linked with the RRTs overall findings and had a pervasive influence on the RRTs approach to its reasoning. 27 The appellant also argues that the Federal Magistrate erred in concluding that the RRT was entitled to have regard to the appellant's conduct because the appellant had satisfied the RRT that the conduct was not for the purpose of strengthening his refugee claim. The appellant submits that though this accords with a literal interpretation of the section, it is inconsistent with a purposive construction. 28 The appellant's argument as to the proper construction of section 91R(3) may be summarised as follows. It is said that the section is designed to exclude evidence of conduct supporting a person's claim for persecution if that conduct was merely motivated by a desire to strengthen the claim the onus being on the appellant to satisfy the Minister that the conduct was not so motivated and it makes no sense to require the appellant to discharge the onus only to have the evidence then used against him. Thus the appellant submits that evidence of the appellant's conduct in Australia, if unhelpful to the claim, should be disregarded. 29 The effect of the respondent's written submissions is that I should reject the approach of the appellant because the clear purpose of section 91R(3) is to provide a disincentive to applicants for refugee status from taking steps while in Australia to make them more likely to be persecuted on return to their country of origin. 30 The effect of the submission is that section 91R(3) is only enlivened where an applicant seeks to rely on conduct in Australia to support a claim to have a well-founded fear of persecution. In my opinion this is plainly the effect of section 91R(3) and the subsection is not enlivened in the present case. 31 Accordingly, in my view it is clear that there was no error in the RRT having regard to that conduct in making the findings which it did. This is particularly so in the present case where the appellant did not rely on his conduct in Australia to support his claim for refugee status. 32 The Minister fairly raises another issue which was not addressed by the appellant. The issue is the question of whether section 424A was breached. The Minister concedes that in light of a decision of a Full Court in SZEEU v Minister for Immigration, Multicultural and Indigenous Affairs [2006] FCAFC 2 (" SZEEU") , the Federal Magistrate's finding that a protection visa application had been adopted in writing was no longer sustainable the Minister concedes that the information contained in the appellant's protection visa application was not "information" falling within the exception contained in section 424A(3)(b) of the Act . 33 However, it seems to me to be clear that the observations of Allsop J in SZEEU at [206] and [207] are applicable. That is to say, "information" does not encompass the RRT's subjective appraisals, thought processes or determinations nor does it encompass gaps, defects or lack of detail or specificity in evidence or to conclusions arrived at by the RRT in weighing the evidence by reference to those gaps. 34 Thus, applying the approach adopted by Allsop J at [216] of SZEEU, the RRTs reasons in the present case went to the appellant's manner of giving evidence and the vague and generalised claims which he made it was those factors which informed the RRTs decision and not the information in the protection visa application itself. I therefore decline to exercise my discretion to set aside the orders which I made on 11 April 2006. 36 The order I will make is that the notice of motion be dismissed with costs. I certify that the preceding thirty six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | notice of motion to set aside order dismissing appeal where appellant failed to appear orders made in appellate or related jurisdiction order entered power to set aside order under section 23 of federal court act 1976 (cth) so as to overcome the court's failure to provide a party with a hearing sufficiency of explanation for failure to appear whether arguable case effect of section 91r(3) consideration by rrt of applicant's conduct in australia appellant's conduct while in australia did not assist his claim to be a refugee therefore section 91r(3) does not apply s 424a "information" does not encompass subjective appraisals, thought processes or determinations "information" does not encompass identified gaps, defects or lack of detail or specificity in evidence s 23 migration act 1958 (cth) s 91r , 424a practice and procedure migration migration federal court act 1976 (cth) |
The federal magistrate ordered, inter alia , that a sequestration order be made against the estate of the applicant. When the hearing commenced before me at 10.15 am this morning there was no appearance in Court by the applicant. $8360.00 to Porter Davies Lawyers. That the Respondent pay the costs of and incidental to Porter Davies's appearance in the application to be assessed if not agreed. 3. That the Respondent pay the costs for today of the Applicant Creditor to be assessed if not agreed. 4. That Derek Rowan Andrew and Daniel Peter Juratowitch be appointed as trustees of the bankrupt estate of Kevin Darley pursuant to s 156A of the Bankruptcy Act 1966 . On 4 June 2008 Burnett FM ordered the application filed 14 May 2008 be dismissed. Accompanying the application was an affidavit deposed by the applicant and sworn on 30 June 2008. The affidavit did not annex a draft notice of appeal, although the affidavit itself included what appear to be draft grounds of appeal. The applicant deposed that he did not know that he had only 21 days after the order made 14 May 2008 to file and serve an application for leave to appeal. Mr Darley believed his 21 days began after the conclusion of the stay, or so it appeared. 5 This matter was first listed for directions before me on 29 July 2008. By a letter dated 23 July 2008, the applicant requested, for various health and personal reasons, that the directions hearing be vacated to another date. After consultation with the respondent, the matter was vacated and relisted for hearing on 26 August 2008. 6 By a letter dated 24 August 2008, the applicant requested leave of the Court to appear at the hearing of 26 August 2008 by telephone. The request of the applicant was allowed. At the directions hearing on 26 August 2008, despite numerous attempts, the Court officer could not contact the applicant on the mobile telephone number provided to the Court. Following a short delay, I made directions taking the matter to hearing in the applicant's absence. 7 Included in the orders made on 26 August 2008 was an order that the matter be set down for hearing on 25 September 2008. Moreover, I also directed that the parties file and serve respective submissions and the applicant file and serve a draft notice of appeal. A stamped copy of the orders of 26 August 2008 was posted to the applicant's postal address by the Federal Court Registry under cover of letter dated 1 September 2008. This letter also drew the applicant's attention to aspects of the orders that required his specific attention or action. There is no suggestion that the applicant did not receive this letter. 8 On 12 September 2008 the Court informed both parties that the hearing date of 25 September 2008 was to be moved to 26 September 2008. All orders made on 26 August 2008 remained unchanged. 9 The applicant did not comply with any of the orders of 26 August 2008. On four occasions between 9 September 2008 and 17 September 2008 my associate unsuccessfully attempted to call the applicant with respect to non-compliance. Four messages were left on the applicant's mobile phone messagebank requesting him to contact the Court. 10 On 24 September 2008, one day before the scheduled hearing of this matter, the applicant telephoned my associate requesting that the hearing be vacated for one month. The applicant cited illness of family members and personal reasons for the request of the extension. The respondent did not oppose adjournment of the hearing. The matter was again vacated and relisted for trial at 10.15 am on 21 October 2008. I made orders from chambers updating the existing directions. Signed and sealed copies of the orders of 25 September 2008 were posted to the applicant's postal address by the Registry. Furthermore, in a telephone conversation on 25 September 2008, my associate verbally informed the applicant of dates by which he was required to file documents to the Court and also of the hearing date. 11 On 13 October 2008 my associate attempted to call the applicant regarding his non-compliance with orders of 25 September 2008. On this occasion the applicant's phone was disconnected. On that same day, the respondent's solicitors contacted the Court relating to the applicant's continuing non-compliance. 12 I understand that the respondent has attempted to contact the applicant on several other occasions by telephone, fax and postal address, but to no avail. An affidavit filed in Court this morning by Mr Morgan gives evidence of the endeavours of the respondent to contact the applicant. 13 At the hearing this morning at 10.15 am there was no appearance by the applicant. I asked the Court officer to call the matter outside. There was no appearance by the applicant. I then asked the Court officer to contact the applicant on the mobile telephone number provided to the Court. The Court officer informed me that, upon calling the number, there was a Telstra message to the effect that the telephone number had been disconnected. At this point the respondent requested that the application be dismissed for non-attendance, or otherwise pursuant to O 35A r 3(1) Federal Court Rules . I agree with the respondent's submissions that the applicant has failed to comply with an order of the Court pursuant to O 35A r 2(1)(a) Federal Court Rules . I also consider the applicant has failed to prosecute this matter with due diligence pursuant to O 35A r 2(1)(f) Federal Court Rules . 16 The respondent has also requested costs of the proceedings on an indemnity basis today. 17 As a general proposition, costs follow the event. However costs are usually awarded on a party to party basis. Making allegations of fraud knowing them to be false. Evidence of particular misconduct that causes loss of time to the court and to other parties. 3. Making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions. 4. The fact that proceedings were commenced or continued for some ulterior motive or unlawful disregard of known facts or clearly established law. Any prudent refusal of an offer to compromise. 19 These principles, as articulated in Colgate-Palmolive , are well known and were recently reinforced by the Full Court of the Federal Court in InterTAN Inc v DSE (Holdings) Pty Ltd [2005] FCAFC 54 at [11] . The categories of cases I have listed are not closed. The Court clearly has wide discretion under s 43 Federal Court of Australia Act 1976 (Cth) to order costs in any particular matter. In this particular case I am not persuaded that the circumstances of the case are such as to warrant a departure from the usual practice of the Court in awarding party to party costs so far as the costs of the respondent are concerned. There is no evidence before me that this case exhibits special or unusual features so as to justify the Court exercising its discretion so as to award indemnity costs. Further, notwithstanding the failure of the applicant to attend on numerous occasions there is no evidence before me that the applicant's case against the respondent was "hopeless" or had no chance of success, or that the applicant's case was not based on evidentiary or factual foundations. 20 Accordingly, in my view, the appropriate order is that the respondent is entitled to its costs on a party to party basis. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | application for extension of time for leave to appeal whether applicant in default non-appearance of applicant at hearing of application non-appearance of applicant at directions hearing applicant has history of non-compliance with court orders whether application should be dismissed pursuant to o 35a r 3 federal court rules application for indemnity costs principles guiding discretion of court to award indemnity costs whether case exhibited special or unusual features practice and procedure costs |
2 Section 593 is the first section in Subdivision A of Division 1 of Part 2.12 of the Act. Part 2.12 is entitled 'Newstart allowance'. Division 1 is entitled 'Qualification for and payability of newstart allowance' and Subdivision A is entitled 'Basic qualifications'. Section 593 is itself entitled 'Qualification for newstart allowance'. 3 Under s 635(1) of the Act a person who wants to be granted a newstart allowance must make a proper claim for that allowance. 4 In the present case the respondent ('Mr Joss') made a claim for newstart allowance covering the period from 24 July 1997 to 22 January 1998. At the outset, the applicant ('the Secretary') was not satisfied that throughout the period in question Mr Joss qualified for a newstart allowance. However, when the matter was before the Administrative Appeals Tribunal the Secretary only submitted that Mr Joss was not qualified for a newstart allowance in respect of the period from mid September 1997 to 22 January 1998 ('the relevant period'). 1 of 1996, but the reference to it in s 593(1) was not removed from the Act until the Act was amended by the Social Security and Veterans' Affairs Legislation Amendment (Family and Other Measures) Act 1997 (Cth), Act No. 202 of 1997, Schedule 21 of which, containing the amendment, commenced on 15 December 1997. 7 Between 15 December 1997 and 22 January 1998 s 593(1) was expressed to be 'Subject to sections 596, 596A, 597 and 598' instead of 'Subject to sections 594 and 598'. 8 As it transpires none of the sections to which s 593(1) was subject had any application to the facts in the present case and no submission was advanced by either party to the effect that any of them qualified the meaning of the word 'unemployed' in s 593(1)(a). 9 In the instant case the Secretary does not contend that Mr Joss was required to satisfy the activity test. ... When regarded in the context of the apparent legislative intent and the other terms and expressions used in the sub-section, it seems to us that the word "unemployed" bears its colloquial or popular meaning of not being engaged in work of a remunerative nature. This meaning must ... be modified to allow for those special cases where a person is not engaged in work of a remunerative nature but whose commitment to some activity ... demonstrates a preference for that activity rather than employment. out of work, especially temporarily and involuntarily; without work or employment. Not put to use; not applied to some end or purpose. ... Not engaged in any work or occupation; idle; ... temporarily out of work. 15 Such a connotation is consistent with 'not being engaged in work of a remunerative nature' as suggested in Re McKenna . That expression which the Tribunal in Re McKenna said must yield to special cases might be better stated as 'not being engaged in work of a potentially remunerative nature'. Undoubtedly a person will be unemployed when they are without work or employment and that situation is both temporary and involuntary. A self-employed person, in particular, may be engaged full-time in activities intended to earn him a living, but which, despite his diligent efforts, fail to do so. Thus in Re Brabenec and Director---General of Social Services (1981) 3 ALN No 39, a self-employed miner engaged unsuccessfully in full-time prospecting for opals was held not to be "unemployed" within the meaning of the Act. As the Tribunal commented in that case, the opal miner was no more "unemployed" than any person setting himself up on his own in a profession, trade or business ... . However, in the relevant period he earned no income whatsoever. 19 In Re Weekes and Director-General of Social Services (1981) 3 ALN 141 a three member bench of the Administrative Appeals Tribunal held that a person who was seeking to establish a business and who was not in receipt of any net income could not be regarded as 'unemployed'. There are many self-employed businesses, including professional businesses, which would not be "profitable" in this sense in the early stages of their establishment. Prior to the first period he had been engaged in an upholstery business in partnership with his brother. After he withdrew from the business, which continued to be operated by his brother, he repaired some seats for a cinema under a contract entered into by the brothers' business with the cinema during part of the first period. In the second period Mr Malaj had an arrangement with another upholstery business under which he organised for the upholstering of seats under contracts obtained by that business. He did not personally carry out the upholstery work, but arranged for others to do it. For his efforts he received payments from which he in turn paid the workers. In the third period Mr Malaj, after a gap of some eight months, renewed the arrangement with the upholstery business. On this occasion he attended the premises of the upholstery business on a regular basis, supervising the upholstery work. 21 The Tribunal found that during that part of the first period when he was repairing seats for the cinema and throughout the whole of the second and third periods Mr Malaj had not been unemployed because he had been committed to income-earning enterprises. It was further held that the Secretary's discretion to disregard his work and treat him as unemployed should not be exercised. The legislation, in that case the Social Security Act 1947 (Cth), was held not to exist so as to provide a support scheme for people who were inadequately remunerated. 22 In Re Malaj the Tribunal referred with approval to the question asked by the Tribunal of itself in Re Vavaris and Director-General of Social Security (1982) 5 ALN 16. The applicant was fulfilling a contract that had been entered into ... whilst he was still a member of the partnership. In any event, the applicant was engaged in full-time work in repairing those seats and was not able to undertake alternative employment. 27 In relation to the third period the Tribunal found that it was obvious that the applicant was engaged in an economic enterprise to which he was committed. It considered there to be no doubt that in the third period he was involved in a subcontracting business. Furthermore, there was no doubt that as he attended the workshop almost on a daily basis, he was incapable of obtaining other suitable employment. At 614 the Full Court cited with approval the last-mentioned passage from the judgment of Von Doussa J. 30 McAuliffe was cited with approval by Mansfield J in Devriadis v Secretary, Department of Family and Community Services (2000) 62 ALD 145 at [36]. In Devriadis an appeal had been brought from a decision of the Administrative Appeals Tribunal affirming a decision of the Social Security Appeals Tribunal that the applicant in that case was not unemployed. The applicant and his wife were the directors and shareholders of Zorba Structural Steel Co Pty Limited. The applicant was described as a 'working director' of the company. The appeal from the decision of the Tribunal was dismissed. Other situations which must be considered are those of the self-employed whether they be engaged in endeavours on their own account or as members of a partnership or of a joint venture. One might say that if a person is carrying on business or engaged in work with a view of profit, that person could not be considered to be unemployed. 32 In the present case the Social Security Appeals Tribunal was satisfied that Mr Joss was unemployed in the relevant period. On the hearing of an appeal by the applicant the Administrative Appeals Tribunal affirmed the decision under review. The Tribunal consisted of Senior Member Hunt. I have found there is insufficient evidence before me to conclude that Mr Joss was not unemployed when the applicant alleges. The Secretary has not put before the Tribunal sufficient evidence to substantiate its allegation that Mr Joss was not unemployed during the period for which it seeks recovery of an alleged debt. This would not prevent him from being regarded as unemployed. With great respect to the Senior Member this proposition does not bear analysis. In the case of people who undertake paid work during a period the Secretary may, under s 595, disregard the work undertaken and treat them as being unemployed throughout the period by reference to the matters for which the section provides. However, that would be a case of a statutory power being invoked which contemplates that the Secretary can, in special circumstances, act in a manner which is inconsistent with the facts. I would understand the power conferred on the Secretary to so treat a person as being unemployed, disregarding the paid work that the person may have undertaken, as one which could be invoked in respect of both paid work as an employee and also paid work as a self-employed person whether on that person's own account, or as a member of a partnership or of a joint venture. 35 It may well be that viewed as a question of fact and degree and having regard to the intensity with which a person applies him or herself to a particular enterprise, one may conclude that a person is not self-employed at all. But, once it be found that the person is self-employed it seems to me impossible to conclude that such a person was, at the same time, unemployed. 36 The example provided by the Senior Member to support her proposition is Re Te Velde. As can be seen from the above analysis of that case it does not support the proposition that a self-employed person could still be regarded as unemployed. The quotation attributed to Senior Member Hall simply does not appear in the report of the case. It may be that the Senior Member was endeavouring to paraphrase, albeit unsuccessfully, what Senior Member Hall had said in Re Te Velde. Such a person may, in the exercise of the Secretary's discretion under s 595, be so treated , but that is because such a person is not unemployed in fact. He also admits he spent some time organising repairs to the boat and received some repayment of expenses in connection with these activities. ... Mr Joss's applications ... show that Mr Joss sought a declaration or order that the contract entered into between him and the defendants on or about December 1996 was an unfair contract. He said he had marine qualifications which equipped him to do this and he went to the boat every day over a lengthy period working out what was needed to prepare the boat for survey . He said he spent time in the boat's office ringing people to discuss getting things fixed. He denied receiving any wages for this activity but gave evidence that he had received money for expenses. He incurred expenses by making many telephone calls from his mobile phone from the boat. He also needed petrol money for driving his vehicle to and from the boat. His understanding was that Mr Steenbuck would supply funds and Mr Joss would get the boat ready for survey. They would then share the boat in partnership. ...They [referring to Mr Joss and Mr Steenbuck] went to Hamilton Island and also to Western Australia where they saw the boat that Mr Steenbuck, or his company, purchased. They then arranged to bring it back to Sydney. Mr Joss said he was not paid anything over that period and did not expect to be paid, at least not there and then. Somewhere down the line, he expected to receive 50 per cent. Mr Joss looked at the boat and listed the damage. He also had observed some things that needed attention when he saw the boat in W.A. He had already discussed with a broker certain repairs to be done before the boat came to Sydney. These repairs included fixing a leaking exhaust system. The leak was fixed but other repairs had not been attended to before reaching Sydney. Mr Joss said he arranged for repairs in Sydney sometime around the middle of August [1997]. He then worked on the boat or in the office on board the boat sourcing equipment , except when he had his hernia and hip operations. ... He agreed that he had instituted his claim on 2 January 1999 when he and Mr Steenbuck had parted company. ... He had advised Centrelink around that time [referring to late January 1998, but later identified as 22 January 1998] that he was no longer entitled to disability support pension (sic) . He said that his employment became a major job in 1997 when they purchased the boat and it was damaged in an accident. ... When asked again if Mr Joss told him when he was no longer unfit, Mr Steenbuck said Mr Joss had received wages before the date 22 January 1998. He [referring to Mr Steenbuck] told the Tribunal he had made cash payments to Mr Joss. He said he made some extra cash payments which were about $150 per week before the boat went into survey. He had later paid outstanding tax. He said that Mr Joss had specifically asked him to pay cash as he had a problem with his need for hip replacements. This might give rise to an inference that Mr Joss was employed or self-employed as a partner in a venture in a similar way to claims made in his court pleadings. ... The orders are ... no basis for reaching any conclusion as to the reasons why Mr Steenbuck and/or his company agreed to compensate Mr Joss. ... He [referring to Mr Steenbuck] has told the Tribunal that he employed Mr Joss and paid him wages throughout the period of concern to the Secretary but has produced no substantiation of these payments occurring until after Mr Joss declared to the Secretary that he no longer qualified for assistance. He denied that he was paid wages or that he was employed during the period the Secretary suspects he was overpaid Newstart allowance. Mr Joss said that he was finding something to do while he was unable to look for work due to his problems with his hips and hernia. He did not consider he was employed and had not sought wages until he was ready for real work but had received reimbursement for telephone calls made on his own phone and for petrol which he used in driving to and from the boat and activities connected with the boat project. The employer's [referring to Mr Steenbuck's company, Hirena Pty Limited] records ... show that Mr Joss was paid wages only after the time that the Secretary claims Mr Joss was overpaid. On the other hand, Mr Steenbuck gave conflicting evidence about the position and told the Tribunal that he employed Mr Joss in 1997 onwards and paid him wages. Mr Steenbuck did not give evidence that Mr Joss was his partner. ... the accounts before the Tribunal suggest that Mr Joss was not paid wages. There is stronger evidence that Mr Steenbuck reimbursed Mr Joss for expenses as both Mr Joss and Mr Steenbuck gave evidence to this effect. There is no evidence one way or the other whether Mr Joss actually achieved any income over the period in question when investigating or preparing the boat for survey. ... It is not clear that Mr Joss was either employed or self-employed . Mr Joss's evidence suggests that he might have been self-employed whereas Mr Steenbuck says he was employed. There is before me no conclusive evidence one way or the other. Mr Joss told the Tribunal that when he was going into the office on the boat he was using crutches and was unable to perform work other than making telephone enquiries and light duties. The strongest indications are that Mr Joss received only small amounts of reimbursement for the expenses he had outlaid for telephone, petrol and the like. The Summons sought, amongst other things, an order that a contract entered into between Mr Joss and Hirena Pty Limited or Mr Steenbuck was 'unfair, harsh or unconscionable'. Other relief was sought in respect of that contract or arrangement. However, no amendment was made to the pleading of the contract in respect of which relief was sought. In addition the principal relief sought was once again a finding that the contract was 'unfair, harsh or unconscionable'. 42 In an affidavit sworn 11 May 1999 in the Industrial Relations Commission proceedings Mr Joss provided the foundation for the alleged contract in respect of which relief was sought in paragraph 5. Over the years we have often discussed the possibility of a partnership or a joint venture in a charter vessel. If we had the right Vessel we could do a variety of different types of work, for example, Reef Fishing, Game Fishing, Harbour Cruises, Whale Watching, Salvage and Survey. You're not getting any younger and it's time for you to settle down. This could be good for the both of us if you were to get involved. Gerry immediately started looking for a Vessel. In or about March of 1997 we flew together to Hamilton Island to inspect a Vessel which was not suitable for our purposes. He continued searching for a Vessel which would be suitable and on the 30 th May 1997 we flew to Perth and inspected a Vessel which was then known as "Nightmoves" which was a 48ft Tecknicraft Class Vessel built of Fibreglass. She is powered by twin general motors, six 92 Turbo charged Diesel motors. She was currently in survey in Western Australia and had been previously used for catching live Cray Fish. Gerry and I agreed that the Vessel would be suitable for our purposes however, I advised him that major modifications were needed to make the Vessel pass NSW Survey. . Gerry then proceeded to purchase the Vessel subject to certain repairs being made for a purchase price of $320,000.00, which sum was arranged through Gerry's Bank. Five minutes after we agreed to purchase the Vessel he said the word to me "Partner". I shook his hand and said the word "Partner" to him. I was off work for five days. In the middle of September 1997 I picked the Vessel up from Lewis' Marina at Botany Bay and brought it back to Watsons Bay where it was placed upon Gerry's mooring. I then re-commenced work on the Vessel. For the next twelve months I worked on the Vessel seven days a week for a minimum of 10 hours per day (with the exception of the period of time referred to in paragraph 13 herein) to bring the Vessel into the survey requirements of the NSW Water Ways Authority. During this period of time I was drawing sickness benefits from the Department of Social Security. I had the operation on the 21 st October 1997 and 14 days later I recommenced work on the vessel. In January of 1998 I had a conversation with Gerry who said that he could afford to pay me the sum of $430.00 per week commencing on the 2 nd February 1998. Accordingly from the period of time from the 2 nd February 1998 to the 2 nd October 1998, Gerry paid me the sum of $430.00 per week less tax. I received the sum of $350.00 per week net. Whilst I was in hospital on or about April 1997 the applicant and I first spoke of looking for a commercial boat. The information in para. 5 of the applicant's affidavit is denied. Reference is made to para. 5 above relative to the first conversation we had regarding the matter. I left hospital on 17 April, 1997. On or about two (2) weeks later we had a further discussion regarding the purchase of a vessel. No discussion took place about a financial arrangement. On the trip to Hamilton Island the applicant and I had our first discussions regarding the applicant's involvement in the boat. I will bring up some ideas. You can use your skipper's licence to run the vessel, and get paid for your work done". How about when I make some money from skippering your boat, I use part of that money to buy into a partnership ". 5 of the applicant's affidavit that I said he could take a small wage and accrue a share of the profits towards the partnership. On no occasion did I tell the applicant his share of the work would be put in as equity. I paid the applicant in cash for the work he did. I refer to para. 8 of the applicant's affidavit. We did say the word "partners" but did not back up its use with any contractual arrangement, written, oral, or implied on my part. I used the word "partners" because I did anticipate that a proper partnership might be negotiated in the future. I certainly did not intend that this single excited remark constituted any legal agreement between us. Any agreement between us of any partnership, if it was to happen, was to be arranged in the future. Were you on Newstart allowance? During that period I was on Newstart with a disability except for --- you said 27 January? It was 22 January when I saw the specialist and he asked me how I was feeling. I told him all right. He said: go back to work. I advised Centrelink that day, in that afternoon, on the 22 nd that the specialist had said I could return to work. When did you officially become --- sorry, when did you officially begin to obtain wages as an employee from Hirena Pty Ltd? The first payment I got I believe was 28 January. What year? '98. I advised him that my Sickness Benefit --- sorry, Disability Benefit was ceased and I would from now on requires wages to maintain working. With respect to the period of time that the vessel came into survey, or just prior to it, did you have any operations at all? Had a hernia operation and I had a left hip total replacement. Do you remember when that was? My hernia operation was in September. Of that year? What year? In September '97 I went in the morning, out in the evening and I had four additional days recuperating before returning to work on the vessel. Early October I went into hospital for my hip replacement. I was in hospital for 7 days. My daughter picked me up from the hospital and took me to her premises in the mountains for another 7 days and after that I went back to work on the vessel on crutches. I was required to wear two crutches for one month. One crutch for one month and then the last month, no crutches. This was in 1998, you say? Yes. Did you say that the vessel didn't come into survey until September 1998, is that what you said? Sorry, that sickness time --- the actual hospital time --- the actual hospital time was '97 . The vessel came into survey in '98. You worked on the vessel prior to it coming into survey? The whole time. So from July '97 until January '98, that is the period of time in question that is before this Tribunal? Yes. Did you work for Mr Steenbuck in that period of time? Yes. I picked the vessel up mid-August, after Appleton had finished. I took the vessel back to Watson's Bay and went every day to the office to look at arranging who was going to supply what. There was a vast array of equipment required and we started on the telephone looking for water tight doors, moon pools, all the different things that would be required to enable the vessel to do the variety of jobs which were planned for the vessel. Did you ever receive any wages for any work, say, that you may have done? No. Over that period of time, I should say? If you're talking between July and January, I received no moneys other than the $50 per week that I was given for the phone and the cost of getting myself to and from the office and the vessel, $50 a week. Mr Joss, am I right to think that once you commenced wages in, was it January --- sorry, I will ask again. Was it late January, or late February that you commenced receiving wages from Mr Steenbuck? On the 22 nd I advised him that I was no longer receiving Sickness Benefit, as the specialists had told me to go back to work and from that day on he said he would pay me 350 a week to allow me to live while I was working on the vessel. I didn't class it as wages because the arrangement that we had was that I would be a partner in the business. It was money for me to survive on for the period of time that it took to get the vessel up and running and start produce --- and the vessel then start to produce an income. Is that a true claim, Mr Joss, that you had a contract commencing on 1 December 1996? I won't swear to the date of the 1 st , but in general speaking terms we came to an arrangement on that date and I finished operation on 31 December '98. At 1 December 1996, how did you see the contractual arrangement with Mr Steenbuck? Contractual arrangement which I understood, he was going to supply the money, I was going to supply the expertise. We were going into partnership. He would supply the funds to procure a suitable vessel. I would bring the vessel into survey and operate it, and it would be a half share arrangement. A half share of what? Partnership in the business. Now, how long did Appleton have it for repair? I honestly can't give you the days, you know, how long he had it. I was advised that the vessel was complete and ready to go around the middle of August. So was it from the middle of August that you took over the day to day management of the vessel? Correct. And would you say it was from the middle of August until the end of your contract that you were working flat out on that vessel one way or another? Except for the period I was having the hernia operation and the hip replacement operation and 7 days after I came out of hospital with the hip operation so there was 5 days with the hernia and 13 days with the hip and I think there were about three or four Sundays where I did not work in that 4 or 5 month-period. How many Sunday's did you say? Four or five. There was a total of nine Sunday's I believe, during the whole period when I didn't work on a Sunday. So in the period from mid August, when you get the boat to the date in January when you were considered fit to return to work, are we saying you have only had about 12 days and five --- 12 recuperation days and five Sundays when you weren't at work on the vessel? No, that is not correct. So what are you saying? I am saying 5 days for the hernia operation. Yes? I went in and out the same day. Have five further days off so that is 5 days I wasn't at work. Then the following, I think it was 5 or 6 weeks later, I went in for a hip operation. I had 7 days in hospital, 7 days at my daughter's place, that is a total of 14 days in relation to the hip and I am saying that there were four or five Sundays between the time I picked the vessel up in the middle of August and the time of 22 January when I did no work. Those Sundays, the reason for not working on the Sunday was we never had the required equipment and what have you to do it and it wasn't convenient to go to the office and be using the phone. The office was shut. During that period I did a lot of time at the office and not a great deal of time on the boat. The time in the office was that spent sourcing materials? So it is full on from mid August every day bar about 26 days? Something like that. For two operation, recuperations and about five Sundays off? That's correct. Okay. Is that right? Well, my normal employment is captain. I wasn't being a captain. I was looking at problems involved in getting a particular vessel that Mr Steenbuck purchased, how to get it into survey to be able to do the things that he wished to do with it. From middle of August through to 22 January i was doing it in an advisory capacity and instructing the shipwright what to do and trying to find out about the different equipment. That is not what I normally do. I normally simply run a vessel or assist in the running of a vessel or repairing or whatever. You did understand that you were employed by Mr Steenbuck, didn't you? No, I didn't class it as employment. Like I said before, what we did, we agreed on a partnership. He was supplying the money. I was supplying the expertise. From that vessel's operation, I was going to be a partner with him and the moneys derived from the business would be split between the two of us. So did you understand it as business? I understood as a partnership arrangement, that is what I understood right up until I went to see Mr Cassim and he said: well, this is legally this that and the other and we discussed different ways of submitting the claim. That was when I believed the partnership thing was sunk. It was the case, wasn't it, that Mr Joss had told you that he is no longer --- was no longer unfit for work and that you would have to commence payment of wages after 22 January 1998, that is the case, isn't it? Mr Grant Joss received wages before that date. Did Mr Goltham keep a full and accurate record of all payments made to Mr Joss since Mr Joss became employed by Hirena Proprietary Limited? Yes. Did he? I assume so. That was his job. The business records from your company, Hirena Proprietary Limited, reflect from 2 February 1998 that the company commenced to pay Mr Joss an amount of money per week which was a gross amount, that is right, isn't it? Net amount. A net amount. That commenced on 6 February 1998, didn't it, and that net amount was $350, wasn't it? $80 tax from memory. It included a payment of tax of $80. It was a net amount and $80 tax was paid on top of it. Those records are a full and accurate reflection of the payments that were made to Grant Joss from the time he began employment with Hirena Proprietary Limited, that is right, isn't it? It was made by an account- by a bookkeeper I paid for so I assume it was correct. 50 Mr Joss and Mr Steenbuck had conversations before the relevant period about the nature of the business relationship which would exist between them in relation to the exploitation of the Zane Grey. These included conversations in which both parties used the word 'partner' or 'partners'. That such a concept was raised was the subject of evidence from both Mr Joss and Mr Steenbuck. 51 Mr Joss was of the opinion that the conversations had the effect of constituting the parties as partners in a business exploiting the Zane Grey. 52 Mr Steenbuck disputed that the legal effect of the conversations was the constitution of a partnership. His understanding was that throughout the relevant period Mr Joss was a person who performed work for his company for wages. 53 Mr Joss sought relief in respect of the contract he propounded in the Industrial Relations Commission of New South Wales. That matter was settled with the payment to Mr Joss of $75,000. 54 Applying the above principles in relation to what constitutes a person being 'unemployed' within the meaning of s 593(1) of the Act to the findings of fact as made by the Tribunal, the only issue could have been whether Mr Joss was an employee of Mr Steenbuck or his company, or, a partner or joint venturer of Mr Steenbuck and/or his company throughout the relevant period. 55 Plainly, Mr Joss was not, during the relevant period, without work or employment in a situation that was temporary and involuntary. If he was not an employee, he was undoubtedly carrying on business or engaging in work with a view of profit. He was undertaking work on the ship with intensity. His physical disabilities may have precluded him from personally performing heavy duty work for much of that time, but that was not his responsibility. He was responsible for arranging for the boat to be repaired and brought into survey in New South Wales. His normal work was as a boat's captain, but that is not work that he was pursuing in the period in question. He was applying himself with great vigour to the job in hand. This is wrong in principle and the cases referred to by the Tribunal at [22-23] are contrary to that finding. Dornan v Riordan concerned a decision of the Pharmaceutical Benefits Remuneration Tribunal, rather than the Administrative Appeals Tribunal, however, the principles there enunciated are equally applicable to decisions of the Administrative Appeals Tribunal (see the Full Court's decision in McAuliffe at 614-617). The reasons of an administrative body are not to be subjected to a minute analysis with "an eye keenly attuned to the perception of error", to adopt the phrase of Lockhart J in Politis v FCT 88 ATC 5,029 at 5,032 .... The reasons of an administrative body are meant to inform and not to be reviewed by an eye seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed. However, the reasons which were provided were sufficient to enable question (b) to be answered as I have indicated above. Whilst compliance by the Tribunal with its obligations to give reasons may have been marginal in this case, I am inclined to the view that the deficiencies in those reasons did not, of itself, amount to an error of law. 61 In the foregoing circumstances the appeal should be allowed, the decision of the Tribunal set aside and the case remitted to the Tribunal to be heard and decided again without the hearing of further evidence. 62 I note that the applicant does not seek costs in respect of the appeal. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. | claim for newstart allowance meaning of 'unemployed' in s 593(1) of the social security act necessity for administrative appeals tribunal to provide sufficient reasons to enable a court to ascertain whether there have been errors in the decision-making process social security |
While counsel for the appellant, Graham Shingles, took issue with comments made by the Tribunal Member during oral submissions, the two principal questions which arise in this appeal are, first, whether counsel nonetheless waived his right to object after the determination of the appeal to the Tribunal and, secondly, whether the Tribunal's decision itself bespeaks grounds for a reasonable apprehension of bias in the making of the decision. I need only deal with the latter matter in any detail, though I am satisfied that there was no election made to waive bias in any event. As I will note below, two claims of denial of procedural unfairness hang off the matters founding the bias allegations. The appellant was discharged from the Army on 26 October 1971. It is for this reason that the law governing his application for invalidity benefits is the Defence Forces Retirement Benefits Act 1948 (Cth). Part 5 of that Act provided invalidity benefits for members of the scheme established by the Act who had been retired on the ground of invalidity or physical or mental incapacity to perform their duties. Section 51(6) provided for the Authority to treat members as if they had been retired on the grounds of incapacity. The initial classification of a member is made pursuant to s 51 of the Act. A member classified Class C is not entitled to the payment of an ongoing pension. Section 53 of the Act gives the authority power to review from time to time a member's classification according to matters set out in s 53(1A) and s 53(1B). A member initially classified Class C is not entitled to be reclassified at any later date: s 53(4). On 26 February 2002, the Tribunal ordered by consent that, pursuant to s 51(6) of the 1948 Act, the appellant should be treated as if he had been retired from the Defence Force, on the ground of invalidity or physical or mental incapacity to perform his duties. On 30 April 2002 the appellant provided an "Application for invalidity benefits & Superannuation Productivity". On 18 June 2002 the appellant was classified as Class C with effect from 27 October 1971. On 6 December 2002, following reconsideration, the Authority confirmed the decision and the appellant applied to the Tribunal for review of that decision. On 17 May 2004 the Tribunal affirmed the decision under review. That decision was set aside on appeal by the Federal Magistrates Court and the matter remitted to the Tribunal. On 2 March 2007, following a further hearing, the Tribunal again affirmed the decision, finding that the appellant had an incapacity of 25%. An appeal to the Federal Magistrates Court was dismissed and it is from that decision that the appellant now appeals. The appellant, at the time of his discharge, suffered relevantly from os calcis exostosis (heel spurs) and from alcohol dependence either as a sequelae of Post Traumatic Stress Disorder or as a separate condition. The appellant gave an account of his service in Vietnam and of his work history on his return to Australia. He gave evidence about the effect his alcohol dependency had on his ability to obtain and more importantly retain employment. The effects of alcohol dependence (which existed at the time of discharge) on the appellant's capacity for civil employment was a critical issue before the Tribunal. The Tribunal addressed the appellant's psychiatric impairment, which comprehended his alcohol dependence, at paras [60] to [68]. Although the Tribunal appears to have accepted that the appellant had many jobs and could only retain them for a short period, it apparently did not accept that the alcohol dependence was the cause or was significant. Rather, the Tribunal concluded that the appellant had exaggerated the effects of his alcohol dependence. The Tribunal's reasons and decision were heavily influenced by its view of the appellant's credibility. Relevantly for present purposes, the Federal Magistrate found that the judgment of the Presiding Senior Member was affected by bias in that he was, from an early stage, inherently sceptical of Mr Shingle's evidence about his experiences both in Vietnam and as to his capacity to work in Australia. In the Tribunal's reasons, para 47, his Honour considered the Senior Member's bias about that evidence was based "upon his own experiences in Vietnam". His Honour went on to observe that the Senior Member's experience overbore his better judgment and objectivity. Nonetheless, his Honour concluded that notwithstanding the Senior Member's comments to which I will later refer were such as to cause reasonable apprehension on the part of the lay observer that his judgment would be affected by bias, the appellant waived the right subsequently to object. Further, the bias was not "repeated" in the Tribunal's decision itself. The claim that Mr Shingles was denied procedural fairness because he was not given the opportunity to be heard on the question whether he exaggerated his capacity to retain employment was rejected by the Federal Magistrate. His Honour was of the view that the Tribunal's conclusions were ones it was entitled to reach following consideration of the material and that it was not necessary for the Tribunal to put each and every proposition to a witness as the evidence proceeds, not least because the Tribunal may only arrive at its conclusions once the evidence is concluded. In order to illuminate the basis upon which the appeal is being prosecuted, it will be necessary to refer in a little detail to particularly the transcript of the evidence before the Tribunal. It is only by reference to what was said there that the underpinning of the bias claim is manifest. The denial of procedural fairness appeal has three bases: (1) the Tribunal decided the matter on the basis of the appellant's credit when this was not attacked by the respondent but rather was expressly disavowed; (2) the Tribunal found the appellant's account of his service in Vietnam was exaggerated and that he exaggerated the facts of his disabilities on his capacity to obtain and retain employment when this was not part of the respondent's case and was not put to the appellant in cross-examination; and (3) the Tribunal relied on its own knowledge and experience about Vietnam which was not in evidence and was not put to the appellant. The inquiry is whether a fair minded lay observer might reasonably apprehend that the Tribunal might not bring an impartial mind to the resolution of the question it is required to decide: Ebner v Official Trustee in Bankruptcy [2000] HCA 63 ; (2000) 205 CLR 337 at [6] . It objectifies what otherwise would be a wholly subjective inquiry and it poses the relevant question in a way that avoids having to predict what probably will be done, or to identify what probably was done, by the decision-maker in reaching the decision in question: Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17 ; (2001) 205 CLR 507 at [184] . It is accepted that they are as stated in the joint judgment of Brennan, Deane and Gaudron JJ and in that of Toohey J in Vakauta v Kelly [1989] HCA 44 ; (1989) 167 CLR 568. By standing by, such a party has waived the right subsequently to object. The reason why that is so is obvious. In such a case, if clear objection had been taken to the comments at the time when they were made or the judge had then been asked to refrain from further hearing the matter, the judge may have been able to correct the wrong impression of bias which had been given or alternatively may have refrained from further hearing. It would be unfair and wrong if failure to object until the contents of the final judgment were known were to give the party in default the advantage of an effective choice between acceptance and rejection of the judgment and to subject the other party to a situation in which it was likely that the judgment would be allowed to stand only if it proved to be unfavourable to him or her (at 572). The appellant's failure to object to the comments made in the course of the trial cannot, in our view, properly be seen as a waiver of any right to complain if comments made about Dr Lawson in the judgment itself would, in the context of those earlier comments, have the effect of conveying an appearance of impermissible bias in the actual decision to a reasonable and intelligent lay observer. ... the line between comments which would be likely to have that effect and comments which would not is necessarily an imprecise one. That is not to say that the litigant in such a position must expressly call upon the judge to withdraw from the case. It may be enough that counsel make clear that objection is taken to what the judge has said, by reason of the way in which the remarks will be viewed . It will then be for the judge to determine what course to adopt, in particular whether to stand down from the case. For counsel to invite the judge to withdraw from the case may be quite premature, particularly if the judge acknowledges the apparent bias in what has been said and thereafter takes steps to dispel that apprehension. But, as Dawson J noted in Re J.R.L. ; Ex parte C.J.L. [(1986) [1986] HCA 39 ; 161 CLR 342 at 372], suspicion of bias based on preconceptions existing independently of the case "may well be ineradicable". In that situation there will be no option but to ask the judge to disqualify himself. In any event objection must be taken: see Re McCrory; Ex parte Rivett [(1995) 21 VLR 3 at 6]. (Emphasis added. Rather it is that the Tribunal made it a critical issue in the matter that the appellant "[had] attempted to exaggerate the facts of his disabilities in his obtaining and retaining employment" and that this was not put to him. Rather, the argument proceeded, for the most part, by reference to what had been said by the Full Court of the Federal Court in [ Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd [1994] FCA 1074 ; (1994) 49 FCR 576]. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material. Subject to these qualifications however, a decision-maker is not obliged to expose his or her mental processes or provisional views to comment before making the decision in question. Was that a conclusion "which would not obviously be open on the known material"? Or was it no more than a part of the "mental processes" by which the tribunal arrived at its decision? There are two reasons to exercise considerable care in approaching the problem in that way. First, it is far from clear that the two categories that are identified (conclusions not obviously open on the known material, and mental processes of decision-making) encompass all possible kinds of case that may fall for consideration. Secondly, there is a very real risk that focusing upon these two categories will distract attention from the fundamental principles that are engaged. That would ordinarily require the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material. Mr Shingles gave a deal of evidence of his history of obtaining and retaining employment and of the difficulties his alcohol abuse posed in both of those respects. His evidence was that he had 28 jobs in 18 years and that many of these were in the early years after discharge. I should note that the Tribunal was constituted by two members --- a Senior Member who had had service experience in Vietnam, and a Member who was a medical practitioner. As the bias claim relates to comments made by the Senior Member, I will for ease in exposition refer only to that member. So, I'm looking at your statement, paragraph 17, you're saying, "Many patrols went out each night and many soldiers were brought in injured as a result of booby traps and clashes with Vietnamese"?---Yes, sir. I actually helped carry him to the hospital. Let me honest. You look at some of the early psychiatric matters; either they were very poor history-takers or else he was completely confused as to what he was doing. Mr Dinnen said this morning that it was not uncommon that people wouldn't say things unless on direct question. He had him with 7 and 8RAR. He had him as a menswear shop assistant. I mean these are little anomalies. Whether or not they ultimately go to credit is a different question. In my submission they don't. The only danger to any Australian soldier in Vung Tau was booze and bar girls. Secondly, the Tribunal is prohibited from relying on its own knowledge. I'm certainly very conscious of the laws of evidence and that Tribunals particularly should not place their own opinions or experience in the place of evidence and as you've pointed out there has been no challenge. What I am saying is though that I have certain views as to over-emphasis in the affidavit and what we term or have termed are very confusing histories taken by various medical practitioners, so that it would not --- and I want to hear you on this --- I can certainly for myself take into account that some of the histories are of themselves inconsistent and any evidence must be taken into account that the applicant for many reasons, PTSD plus his alcoholism, etcetera he's a poor historian. So in my submission it's not just the applicant being a poor historian for whatever reason but what was asked I think has changed over the years as well. (Emphasis added. I mean what were all the surrounding circumstances? Apparently he threatened the CSM, but we don't have his service documents. Apparently he was never charged with any military offence. Yes, I certainly take your point. I set these out in order: On 10 September 1970 the Applicant commenced his Vietnam service, being posted to 2 nd Australian Ordnance Depot at Vung Tau. Although the Applicant has given accounts of his service in South Vietnam, we regard that account as exaggerated. It is unfortunate that the Respondent did not investigate the Applicant's claims more thoroughly. Had the services of a research organisation such as "Writeway" been engaged, their report would have been of material assistance to the Tribunal. Following discharge from the Army the Applicant returned to live at Woodonga with his wife. For a period of months he did not work but contented himself with going to the hotel each day and drinking until he had run out of money. Asked about his source of income at this time, he told this Tribunal that his wife was working, whereas he had told the previous Tribunal his wife was not working. (Emphasis added. We find it difficult to believe that the Applicant would have been peremptorily dismissed from employment with a Commonwealth Authority without first being subjected to a formal warning. Apparently after voluntarily terminating his employment with the Department of Army the Applicant and his wife moved to Sydney. They lived on the Northern Beaches, and we know from the Applicant's Record of Service that at a time he was in the Army, his mother was living at Fairlight which is a suburb of the Northern Beaches. Upon arriving in Sydney the Applicant did not initially seek employment but contented himself with attending hotels. After about one month, because he needed money, he obtained a paid job as a lube operator, lasting for some three months. The Applicant then purchased an orange juice run. This franchised business failed because the Applicant did not devote enough time and attention to it. He places the failure to properly attend to the business upon his frequenting hotels. (Emphasis added. Whereas document T97, p221, is a reference from the Secretary Manager of the Cowra Services Club Ltd which reads inter alia, "Graham carried out his duties in a satisfactory and competent manner and I would have no hesitation in recommending him for a similar position". We are not persuaded to take those expressions as to his worth at other than face value. In cross-examination the Applicant conceded that when he obtained the job at Bandiana he was able to perform the tasks required of him, and that at any time he needed to get a job he was able to get one. We are therefore satisfied that the Applicant has attempted to exaggerate the effects of his disabilities in his obtaining and retaining employment. Post discharge the Applicant did not immediately seek work but on his account was drinking heavily. However, he did ultimately obtain a job and although he says he left before he could be sacked, there is no evidence of any official warning that his behaviour was placing his job in jeopardy. He and his then wife moved to Sydney and again he was able to obtain employment when he felt of the need. The Applicant claimed that his real problem was the inability to retain employment due to his alcohol abuse. This statement does not fit with the very positive references the Applicant obtained from the Cowra Services Club and the Galloping Grape Restaurant. Whereas it is not now disputed that the Applicant does have PTSD and alcohol dependence, the evidence is that the symptoms of PTSD, if they affected the Applicant at all at time of discharge, were mild in the extreme. Likewise, his alcohol dependence was present but given the references referred to above and his ability to obtain employment whenever he needed to, we find that he has exaggerated it effects upon him at time of discharge and thereafter until probably about 1979 --- the time of his first conviction for an alcohol-related offence. Though the Federal Magistrate appears to have made a finding of actual bias because of the Senior Member's comments at the hearing, my own view is that the proper characterisation of the matter at that point in the Tribunal's review was that the circumstances would have founded a reasonable apprehension of bias in the Senior Member. The parties to the appeal have accepted the appropriateness of this characterisation of the position. Where the parties part company is on the question whether the appellant waived its right to object. The respondent contends that the appellant had reasonable time after the hearing within which to raise the bias issue but did not do so. He was legally represented. He merely waited until the decision was made and, finding it to be adverse, objected. It was too late. The right, it is said, had been waived. The appellant's case in contrast is that, notwithstanding the Tribunal's comments at the hearing, counsel did challenge the senior Member who then appeared in the comments he made (at Tr 74) to have retreated. It was in these circumstances not unreasonable not to object to the Senior Member continuing to sit. While it is not strictly necessary for me to express a final conclusion on this difference, my own view accords with the appellant's submission. The appellant, having raised the issues of Mr Shingles' credit not having been challenged and of the impropriety of the Senior Member relying on his own knowledge, the response made by the Senior Member was sufficient to make it unnecessary to object to his continuing to sit: cf Vakauta at 587 per Toohey J. The Senior Member's comments could reasonably be taken to signal a retreat to the confines of what was permissible to an administrative decision-maker. I am in consequence not satisfied that the right to object was waived. I consider the Federal Magistrate erred in so concluding. The fundamental issue raised in Mr Shingles' bias appeal is whether the Tribunal's decision, considered in the context of the comments made at the hearing, has the effect of conveying "the appearance of impermissible bias in the actual decision". I consider that it does. The reasonable and intelligent lay observer might reasonably apprehend, in light of the Senior Member's comments, commentary and attitudes revealed at the hearing relating to Mr Shingles' war service, that Mr Shingles' claim might have been prejudged and that the evidence of this in the decision itself was afforded both in how the Tribunal characterised (disparagingly) Mr Shingles' own evidence on his obtaining and retaining employment and in the tone of some of the language used to describe his evidence (eg "For a period of months he did not work but contented himself with going to the hotel" ). I am satisfied that the decision arrived at might reasonably be said to have been contrived by a preconceived view taken of Mr Shingles with the consequence that the case he advanced might not have been fairly addressed on its merits. I am not concerned to analyse the Tribunal's actual thought processes or to identify what was done by the Tribunal in reaching its decision: Jia , at [185]. Nonetheless, against the background of the Tribunal's conceded apparent bias at the hearing stage, I am satisfied the reasonable observer might well conclude that the attitudes and predisposition to Mr Shingles there manifest, were not curbed as the Senior Member's retreat might have suggested. This leads to the second basis of the Appellant's case before me. Rather, the Tribunal was calling into question Mr Shingles' credibility directly: he was attempting to create a misleading picture of his disabilities. That was not an issue that was ever raised with him. The Authority, while relying upon conclusions to be drawn from inconsistencies, disclaimed any attack on Mr Shingles' credibility. Yet the Tribunal, without warning, made it "an issue critical to the decision": Alphaone , at 591-592. In the course of final submissions counsel for the Authority accepted that the Tribunal did not bring home to the appellant that this was a critical issue in the matter. In this Mr Shingles clearly was denied procedural fairness. Given the conclusions at which I have already arrived, I do not consider it appropriate to grant the leave sought. I would, though, venture the view that where the Parliament amends a provision of an Act (here s 53) but does not expressly amend another which deals with a precursor, but like, provision to that amended (ie s 51) so that the two are no longer harmonious, a Court is likely to be slow to assume in the absence of clear contextual justification that there was a legislative intent manifest to impliedly amend that provision or to so change the purpose of the Act through the amendment as to change via contemporary principles of statutory construction the meaning of the unamended provision. I am satisfied the Federal Magistrate erred in concluding both that the appellant waived its right to allege bias and that bias was not revived in the decision itself. I equally am satisfied that his Honour erred in finding that there had been no denial of procedural fairness. I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. | reasonable apprehension of bias waiver of right to object at hearing right to object not waived revival of bias in decision decision contrived by preconceived view of appellant denial of procedural fairness issue critical to the decision not put to applicant by tribunal administrative law administrative law |
As will be seen in these reasons, from the outset of the litigation the issues have not been framed in a way that accurately identifies the dispute between the parties. This has resulted in excessive costs and consumption of Court and party resources which could have been avoided. 2 With that preamble, I set out the background and circumstances of the case. The applicant in WAD 189 of 2007, Liquid Engineering 2003 Pty Ltd ("LE 2003"), alleges that by trading under the names "Liquideng Farm Supplies" and "Liquideng", the first and second respondents, William Michael Edwards ("Edwards") and Liquideng Farm Supplies Pty Ltd ("LFS"), have infringed LE 2003's trade mark registration No. 760645 "Liquid Engineering". The same conduct is said also to constitute passing off and to constitute misleading or deceptive or false conduct in contravention of ss 52 or 53 of the Trade Practices Act 1974 (Cth) and ss 9 or 12 of the Fair Trading Act 1999 (Vic). (It is convenient to refer to these last claims as "the misleading conduct claims"). LE 2003 claims an account of profits for the alleged trade mark violation as well as exemplary damages in connection with the passing off claims. However, counsel for LE 2003 conceded in final oral submissions that the misleading conduct claims added nothing to its case and that no additional or independent relief was sought. Given that concession and the fact that none of the parties directed more than passing reference to the misleading conduct claims during the course of the trial or closing submissions, I will not refer further to them in these reasons. 3 In addition to the infringement and passing off claims with respect to the "Liquid Engineering" mark, LE 2003 claims that the Register of Trade Marks should be rectified pursuant to s 88 of the Trade Marks Act 1995 (Cth) ("the TMA") to reflect that it, and not Edwards, is the owner of registered trade marks Nos. 941989 ("Fuel Set") and 941987 ("Exit Rust"). It submits that Edwards should be deemed to have held the marks on constructive trust for the true owner LE 2003. On that basis, LE 2003 also seeks an account of profits from Edwards, LFS, and the third respondent, SK Rural Supplies Pty Ltd ("SK Rural") (collectively, the "respondents"), for infringement of these marks. 4 Edwards was employed by the predecessor in interest of LE 2003, Liquid Engineering Limited ("LEL") from 1998 to 8 April 2003, last holding the position of National Sales Manager. LEL sold (and LE 2003 still sells) a variety of engineering products including Fuel Set (a chemical additive to motor fuel) and Exit Rust (an anti-corrosive preparation). Edwards travelled through various parts of rural Australia selling LEL's wares mainly to farmers. Around the time he left LEL, Edwards began trading as LFS, selling many of the same products, including Fuel Set and Exit Rust, to many of the same customers. 5 The undisputed evidence showed that LFS was essentially a one-man operation in which Edwards drove around in a truck loaded with goods making sales for the most part by making cold calls at individual farms and businesses, but also at local fairs and market days. Although LFS was incorporated on 4 May 2004 with Edwards and his wife both as directors, Edwards agreed that he had complete control over the business and that there were no other employees, save that his wife occasionally assisted with the paperwork. There was no suggestion that any relevant distinction was to be drawn between the liability of Edwards and LFS. It was submitted on this evidence, and I accept, that LFS was effectively the alter ego of Edwards, and the case was conducted by both sides on the basis that to the extent that either or both of Edwards and LFS was found liable, each should be held jointly and severally liable: see Hall v Poolman (2007) 215 FLR 243 at [466] and authorities cited therein. 6 On 3 February 2003, while still employed at LEL, Edwards lodged applications for registration of "Exit Rust" and "Fuel Set" as trade marks under s 27 of the TMA. On 5 February 2003, a receiver was appointed to LEL, and its assets were ultimately sold to LE 2003 by an agreement dated 8 April 2003. At the request of the receiver, Edwards remained in employment of LEL until 8 April 2003. Edwards' applications under the TMA were accepted and registered on 4 December 2003, without opposition from LEL or LE 2003. Over a year later, on 4 February 2005, LE 2003 filed an application for removal of the marks from the Register. The application was made pursuant to s 92(4) of the TMA, which allows for removal where the applicant did not intend at the time of application to use, and has not since used, the mark in good faith. On 31 July 2006, a delegate of the Registrar of Trade Marks upheld the application and directed that Edwards' name be removed as the registered proprietor of the marks. On 18 August 2006, Edwards lodged an appeal in this Court (VID 934 of 2006) against that decision seeking restoration of his name to the Register. 7 The "appeal" (which, strictly speaking, is not really an appeal: s 104 of the TMA) came on for hearing on 3 May (at which time LE 2003 was self-represented) and again on 12 September 2007 (when LE 2003 was represented by counsel). The principal question presented in those hearings was whether evidence of a bona fide intention to use a mark for trading purposes is sufficient to demonstrate good faith even where the applicant for registration gained knowledge of the mark as an employee of the owner of the unregistered mark and in circumstances tending to suggest a breach of fiduciary duties or even (malicious) intent to block a competitor. 8 Having considered the evidence led, and submissions made, I was poised to answer that question in the affirmative and uphold the appeal, on the basis that "good faith" for the purposes of s 92(4) requires no more than genuine intent to use a mark for commercial purposes; it does not involve any element of honesty or subjective good intentions: see generally E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2008] FCA 934 at [187] - [192] (examining the meaning of "good faith" under related provisions of the TMA). However, during the course of the hearings it became apparent that what LE 2003 really wanted, and should have applied for in the first place, was the expungement of the registrations by Edwards under s 88 of the TMA on the basis that Edwards was not the owner of the unregistered marks: ss 52 and 58 of the TMA. I therefore delayed giving judgment in VID 934 of 2006 so that a separate application could be brought on that basis and the matters resolved together. 9 On 24 September 2007, such an application (ie the present application, WAD 189 of 2007) was in fact brought. (Subsequently, by an amended statement of claim dated 22 October 2007, the infringement claim with respect to the "Liquid Engineering" mark was added. ) Trial of the matter in WAD 189 of 2007 proceeded over a four-day period from 21-24 April 2008. Having carefully considered the submissions and arguments of the parties made in relation both to WAD 189 of 2007 and the earlier matter of VID 934 of 2006, I conclude for the reasons that follow that LE 2003 is entitled to the relief it seeks under s 88 of the TMA. In particular, LE 2003 is entitled to orders requiring rectification of the Register of Trade Marks by removing Edwards' name from the Register as owner of the marks "Fuel Set" and "Exit Rust" and substituting LE 2003 as owner of each of those marks. It therefore follows that the s 92 application by Edwards has been rendered moot. Even if the application were successful, the Court would not now grant Edwards the relief he sought: see Allan v Development Allowance Authority (1999) FCR 264 at [41]. 10 Accordingly, I will dismiss the application in VID 934 of 2006, but I will order that LE 2003 pay Edwards' reserved costs of those proceedings (ie costs not already addressed by the Court's orders of 17 September 2007 in VID 934 of 2006). That order for costs should be made on the basis that the application would have been successful but for the supervening application in WAD 189 of 2007. To put it another way, I am of the view that Edwards' costs in VID 934 of 2006 were effectively costs thrown away due to the failure of LE 2003 to bring its s 88 of the TMA application in the first place. 11 LE 2003 contends that such an approach would have the effect of discouraging parties from availing themselves "of the opportunities afforded by the TMA to resolve [trade mark disputes] by application to the Registrar, rather than by the more expensive alternative of Federal Court litigation. " That submission, while perhaps unobjectionable as a general proposition, is not appropriate here, where it was apparent that s 92 of the TMA was not apt to raise the real issue between the parties in this case. Parties should not be encouraged to bring inapposite claims on the grounds that they are cheaper; such a strategy may, as this case shows, backfire and if that occurs, it will result in more costs being incurred than if the best claim was brought in the first place. If a dispassionate analysis suggests that the client's only realistic chance of success requires resort to a more expensive forum, then that is the advice an independent adviser should give. Whether the client in those circumstances wishes to pursue the claim is then a matter for the client. If it chooses not to follow that course or the advice, then it does so at its own risk. In the present case, that risk was realised in the form of the costs of the unsuccessful proceeding or application. " The respondents concede that the "Liquid Engineering" mark is validly registered and owned by LE 2003. There was, however, some dispute as to how the mark was to be defined. Although it is difficult, given the generality with which the argument is put, and the lack of any reference to authority, to understand the precise nature of the submission, I assume that one of the following submissions was put. First, it may be possible that the submission should be interpreted literally as a contention that word phrases are not subject to trade mark registration as word phrases , but if that is what was intended, it is not right and need not be further considered. Secondly, it is possible that the submission was that the claim to a mark is limited to the mark as represented in a particular way: see in that regard, Koninklijke Phillips Electronics NV v Remington Products Australia Pty Ltd [2000] FCA 876 ; (2000) 100 FCR 90 at [10] , [12] (stating that an image mark including a word does not cover use of that word in a different graphical configuration). 15 However, the evidence here does not support a submission that "Liquid Engineering" was registered as an image or as an image containing a word. As listed in the Register, the mark is defined only as the words "Liquid Engineering. " The spaces in the Register for "Image" and "Image Constituents" are blank. There is no evidence that the mark is confined, or was intended to be confined, to a particular graphic representation of the text phrase rather than the text phrase itself, however represented graphically. 16 It is also possible that counsel intended to advance the proposition that a word mark must be considered in the context of any associated (albeit separate) image trade mark. There are some circumstances in which "a combination of a word and an image may ... strip, in the mind of a consumer, the association with a trade source previously associated with the word alone": See Gallo at [186]; see also at [24]-[38] and [183]-[186] (considering when and how a sign should be defined to include both a word and an associated image, as well as the impact of any associated image in determining similarity). In this case, the "Liquid Engineering" mark was generally, if not always, used in combination with the separately registered image or device of a whirlpool. Similarly, in Gallo the registered word "barefoot" was used in combination with the image of a bare foot, and the respondent in that case submitted that the image could not be divorced from the word in assessing the similarity of the allegedly infringing mark: at [185]. 17 In Gallo , Flick J rejected the respondent's submission on the basis that "the addition of the image of the bare foot did not have the consequence that the word itself as a trade mark was not also being used": at [186]. The same is true here --- that LEL and LE 2003 used the mark "Liquid Engineering" in conjunction with a small whirlpool image does not mean that the text phrase is not also being used. Accordingly, the absence of the associated whirlpool in the respondents' allegedly infringing usage is merely one factor to be considered in deciding whether there has been an infringing use. Whether the absence of use of the whirlpool mark is such as to defeat a finding of deceptive similarity in the use of the word mark is a question of fact that must be viewed in light of all the circumstances which I will address presently. 18 The next step is to consider the class of goods the mark is registered in respect of. In this case, "Liquid Engineering" is registered with respect to four classes of goods: (1) chemicals used in industry; (2) chemicals for the prevention of rust and corrosion; (3) cleaning and degreasing preparations; and (4) lubricants, industrial oils, and industrial greases. Save for a few goods which I will come to in relation to the issue of quantum, there is no dispute that all of the goods in relation to which Edwards used the allegedly infringing mark were goods falling into the four classes of goods in respect of which the "Liquid Engineering" mark is registered. 19 Accordingly, in deciding whether Edwards and LFS infringed that mark, the principal question is whether the marks that Edwards and LFS used --- "Liquideng" and "Liquideng Farm Supplies" --- are deceptively similar to "Liquid Engineering". On that point, I again turn to Flick J, who helpfully reviewed the case law in his recent judgment in Gallo at [53]-[55]. Thus, a side by side comparison is inadequate, and too narrow a test. It is the impression or recollection which is carried away and retained that is necessarily the basis of any mistaken belief that the challenged mark is the same: Australian Woollen Mills Ltd v F S Walton & Co Ltd [1937] HCA 51 ; (1937) 58 CLR 641 at 658 per Dixon and McTiernan JJ. See also: Global Brand Marketing Inc v YD Pty Ltd [2008] FCA 605 at [84] - [89] per Sundberg J. The " recollection " may be imperfect: Crazy Ron's Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196 at [87] , [2004] FCAFC 196 ; 209 ALR 1 at 21 per Moore, Sackville and Emmett JJ. 55. Whether a mark is likely to deceive or cause confusion is, in the end, a question of impression and common sense: Murray Goulburn Co-operative Co Ltd v NSW Dairy Corporation [1990] FCA 32 ; (1990) 24 FCR 370 at 377 per Lockhart, Pincus and von Doussa JJ. (On appeal, see: NSW Dairy Corporation v Murray Goulburn Co-operative Co Ltd [1990] HCA 60 ; (1990) 171 CLR 363). It was not disputed that LEL, on its website, brochures, and invoices, among other places, prominently displayed "Liquid Engineering. " Edwards conceded that he issued invoices under the names "Liquideng" and / or "Liquid Engineering Farm Supplies", and also used those words on his cheques and business cards. There was also evidence that Edwards, at least on one occasion, displayed his wares under a large banner bearing the words "Liquid Engineering Farm Supplies. " The same was also written out in large print on the side of his vehicle for at least some of the relevant time period. 21 Before proceeding any further, I first note in Brother Industries Ltd v Dynamic Supplies Pty Ltd [2007] FCA 1490 ; (2007) 163 FCR 530 at [53] - [54] , Tamberlin J pointed out that under ss 7 and 9 of the TMA, a trade mark is taken to be used in relation to goods and services if it is applied to, among other things, packaging labels, signs, invoices, business letters, and business papers. Here, the word "Liquideng" was applied by Edwards and LFS in just such ways. It follows that application of that word was its use as a trade mark. 22 The question which then arises is whether its use is as a trade mark "that is substantially identical with, or deceptively similar to" the trade mark "Liquid Engineering"? I consider as a matter of impression and common sense that a person of ordinary intelligence would be likely to be confused or deceived by the "Liquideng" mark. The essential and distinguishing feature of the registered mark "Liquid Engineering" lies in the use of the word "liquid". By using that same word, as well as the first syllable of the word "engineering," I find that the impugned mark "Liquideng" would leave ordinary persons with the impression or recollection that the goods sold under the mark were associated with, or stemmed from, the same source as goods sold under the "Liquid Engineering" mark. To put it even more bluntly, my view is that the overall impression that would be formed by an ordinary person is that "Liquideng" is simply the short form of "Liquid Engineering", in the same way that an ordinary person would assume that "Vic" is short for Victoria. 23 The fact that Edwards' mark also contained the additional descriptive phrase "Farm Supplies" does not alter my conclusion that it is deceptively similar to LE 2003's registered mark. It is settled that the presence or absence of an otherwise bland descriptive term, such as the word "club" added after "Polo," will not diminish a deceptively similar impression engendered by the use of the distinctive part of the mark: Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd [1993] FCA 203 ; (1993) 42 FCR 227 ; see also Gallo at [58]. In my view, the equally bland descriptor "farm supplies" is not distinguishable from "club" in this sense. Moreover, even if it were, I share the view of Flick J that even the addition of a more distinctive descriptor will not necessarily defeat a finding of deceptive similarity: Gallo at [61]-[63] (concluding that the addition of the distinctive Germanic word "Radler," not in English usage, did not remove the likelihood of deception where the infringer had borrowed an essential feature --- the word "barefoot" --- of the registered mark). 24 I also consider that the absence of an associated whirlpool device in the usage of the impugned mark is not sufficient to strip the association in the mind of the ordinary person between "Liquideng" and "Liquid Engineering". Again, the dominant element of "liquid" is maintained in both marks, along with the syllable "eng. " I consider as a matter of impression that the association between a whirlpool and liquid in the context of engineering or farm supply products is not strong. That is to say, I doubt that an ordinary customer of LEL attached much significance to, or carried away any lasting impression of, the small whirlpool device in the same way that he or she might have if LEL sold, for example, spa pools; or if, for example, the name of the company or the registered mark was in fact "Whirlpool. LEL's invoices contained a reference to the company's website address www.liquideng.com.au in the upper right-hand corner just above the salesman's signature block. Edwards acknowledged that he had signed hundreds of LEL invoices, but he boldly claimed never to have noticed the website address and specifically the term "liquideng" in that address. However, I consider it more probable than not that Edwards, whether subconsciously or consciously, was influenced by and was attempting to trade on, the association "liquideng" had with Liquid Engineering, which association he was aware of from the invoices. Indeed, counsel for the respondents conceded that a subconscious borrowing was "perfectly possible. " The alternative --- that he independently conjured up the same distinctive term "liquideng," which he agreed can be found in no dictionary and no other usage --- is simply too implausible to be accepted. 26 It is axiomatic that neither proof of intent nor any element of culpability is required to make out a case of trade mark infringement: Coca-Cola Co v All-Fect Distributors Ltd [1999] FCA 1721 ; (1999) 96 FCR 107 at [39] ; see also Gallo at [58]. However, it is also true that where intent to deceive is established, "it should be presumed" that the impugned mark is in fact likely to deceive or confuse: Australian Woollen Mills Ltd v F S Walton & Co Ltd [1937] HCA 51 ; (1937) 58 CLR 641 , 657. In such a case, the onus to rebut the presumption then falls upon the alleged infringer. Similarly, the last sentence of s 120(2) of the TMA creates an affirmative defence if the alleged infringer is able to establish that although there may be a general likelihood of confusion with respect to the marks, the particular way in which the alleged infringer used the impugned mark did not give rise to such likelihood of confusion: Gallo at [89]-[93]. 27 In this case, I find that an independent basis for a finding of deceptive similarity is that Edwards' intent to deceive, established as a matter of fact, raises a presumption that his use of the "Liquideng" mark was likely to confuse, and he has failed to rebut that presumption. In his evidence, Edwards acknowledged that some customers recognised him as the "Liquid Engineering person," but he would attempt to disassociate himself from LEL in such cases because some customers "didn't like" LEL due to the fact that they had made investments in LEL which had failed. 28 However, Edwards went on to acknowledge in cross-examination that customers generally had a positive view of LEL's products (ie the products had a good reputation), whatever their views of the company itself. Moreover, he was unable, when confronted, to provide any explanation (much less a plausible one) for why, if he really wished to disassociate himself from LEL, he just happened to decide to trade under a name that had, on any view, at least some similarity to Liquid Engineering. Finally, the evidence showed that the manner in which he used the Liquideng mark, and the goods in relation to which he used it, did not dispel any likelihood of confusion: he continued to sell basically the same goods out of the back of his truck to many of the same customers using the same primary method of door-to-door cold calls: Gallo at [92] (accepting the proposition that the closer the relationship between the goods sold under the registered mark and the goods sold under the impugned mark, the more likely any similarity in the marks will prove deceptive). On that evidence, I am not satisfied that Edwards successfully rebutted the presumption that he was at some level intending to trade on an association with LEL (or at least its products) by using the "Liquideng" mark, nor am I satisfied that ordinary customers would not have been confused by the use of the "Liquideng" mark due to the particular manner or goods in relation to which he used it. 29 In short, I consider that LE 2003's prima facie case for liability for trade mark infringement against Edwards and LFS is made out. It remains only to consider Edwards' and LFS's affirmative defence of estoppel (which is also framed as a cross-claim for misleading and deceptive conduct) to the effect that Edwards is entitled to use the term "Liquideng" in light of his reasonable reliance on the acts and omissions of LE 2003 and its agents. As noted earlier, LE 2003's claim for infringement of the "Liquid Engineering" mark was not formally made until the amended statement of claim filed on 22 October 2007, long after LE 2003 first became aware in April or early May 2003 that Edwards was trading using the "Liquideng" mark. First, it is not the case that LE 2003 simply stood silent for the four plus years until the filing of its amended statement of claim. Farm Supplies [sic] which is obviously an attempt to pass off an association with my client. Unless you cease using this name immediately the use by you of the name will be reported to the ACCC. A similar demand was again made in a letter from LE 2003's solicitors dated 8 December 2004. 32 The respondents submit that because LE 2003 did not raise the "Liquid Engineering" claim in every communication between the parties, they were entitled reasonably to rely on the interspersed silences to the effect that no claim was being pressed. I reject this submission. The correspondence history demonstrates no affirmative statement or conduct by LE 2003 to the effect that an infringement claim was abandoned or disclaimed. The fact that the infringement claims were raised only intermittently does not change this analysis. The respondents cited no authority, and I am aware of none, for the proposition that a party who fails to press an infringement claim in every (or even most) piece of correspondence with an alleged infringer is thereby estopped from later asserting such claim, or is thereby liable for misleading and deceptive conduct. Even to state the proposition is to recognise its absurdity. 33 There is another fundamental defect with the respondents' estoppel claim. At its heart lies the thesis that a party is somehow under a duty to bring a claim for trade mark infringement promptly or not at all. Thus, the argument seems to run, LE 2003's four-year delay in bringing its infringement claim is in itself fatal even assuming (contrary to fact) that it had rattled the infringement sabre in every letter and statement of counsel from May 2003 until the filing of the amended statement of claim. I reject this submission on the basis that a complete answer to it is found in s 129 of the TMA. That section provides that any person threatened with an infringement action "may bring an action" against the party making the threats (provided that the threatener has not brought the promised infringement action with due diligence: s 129(5)) in order to enjoin the threats and recover damages where such threats are shown to have been groundless. If there is a "cloud" over the title to a registered mark, any aggrieved party can bring proceedings to dispel that cloud. 34 In the circumstances, I consider that to the extent that the respondents felt themselves unjustifiably threatened by the threat of litigation dangling overhead and thereby fettered in the conduct of their business, the proper response was not to bury their heads in the sand and then plead estoppel four years down the track. Rather, they could and should have brought proceedings for injunctions and damages under s 129 of the TMA if they considered the infringement threats unjustified. In other words, to the extent that it may be said that LE 2003 was less than diligent in bringing its infringement claim (whether for strategic reasons or otherwise), the respondents had a perfectly adequate remedy at law and equity will not now come to their aid: see Bond Brewing Holdings Ltd v National Australia Bank Ltd (1990) 1 ACSR 445 (stating that generally a Court must be persuaded that there is no adequate remedy at law before equity will intervene). 35 Based on the foregoing, the cross-claim with respect to the "Liquid Engineering" and "Liquideng" marks must be dismissed with costs. 36 That brings us to the passing off claims. In its opening submissions, LE 2003 pressed these claims in some detail, on the basis that it intended to seek exemplary damages. Because exemplary damages are not available in trade mark actions ( Paramount Pictures Corporation v Hasluck (2006) 70 IPR 293 at [34]-[36]), the claims thus appeared to have some independent relevance. However, despite the promise to address the Court orally regarding exemplary damages, no such oral submissions were forthcoming from counsel for LE 2003. Moreover, LE 2003's written closing submissions make only incidental reference to the passing off claims and no reference at all to exemplary damages. On that basis alone, I conclude that, even if not formally abandoned, the claim was not pressed. 37 A further consideration in this regard is that, in the peculiar circumstances of this case (which I will explain in the discussion on damages below), even an accounting of profits in trade mark will inevitably be punitive to some extent, and thus likely to have a deterrent effect: see XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd [1985] HCA 12 ; (1984) 155 CLR 448 , 471 per Brennan J (stating that the purpose of exemplary damages is to teach the wrongdoer a lesson and deter the commission of like conduct in the future), cited with approval in Lamb v Cotogno [1987] HCA 47 ; (1987) 164 CLR 1 , 9. Moreover, the evidence is that Edwards has not traded using the "Liquideng" mark or under the name LFS since April 2006, and neither he nor SK Rural has used the "Exit Rust" or "Fuel Set" marks since July 2007. In the circumstances, the need for deterrence is low. Finally, I note that Edwards made no attempt to conceal or disguise his trading from LE 2003, and the basis on which he asserted a right to do so. For those additional reasons, I would in any event be reluctant to find that any of the respondents had acted with the contumelious disregard necessary to justify exemplary damages in tort. Whether on the basis that the passing off claims are no longer pressed or on the basis that even if pressed no different relief would result, there is thus no reason to consider those claims further. The first is that LE 2003 is not the owner of those marks. The second is that, even if LE 2003 is the owner of those marks, Edwards registered them "with the permission of Mr [Peter] Spry and the knowledge of Mr [Paul] Andrews and whatever his status, he has permission to use [them]. " I should add that the second submission is couched both in permissive use (licence) and estoppel terms. For the reasons that follow, I reject both submissions. 39 The uncontested evidence of Andrews was that he created both of the Exit Rust and Fuel Set products and trade names in approximately 1989 or 1990, at which time he was doing business on his own account (ie Paul Andrews trading as Liquid Engineering). In about 1996 or 1997, Andrews incorporated Liquid Engineering International Proprietary Limited ("LEI") with him as a sole shareholder and director. A number of other Liquid Engineering companies were incorporated at about the same time, including Liquid Engineering (Australia) Pty Ltd ("LEA") and various international entities such as Liquid Engineering UK. Within Australia, LEA handled manufacturing and product development while LEI handled sales and marketing. The assets and liabilities of the business that had until then been conducted by Mr Andrews as sole proprietor were acquired by the new companies for market value. Andrews attempted to register the marks "Exit Rust" and "Fuel Set," but those attempts were rebuffed by IP Australia on the basis that the words were descriptive. 40 After falling into financial difficulties by early 2001 and entering into voluntary administration and a deed of company arrangement executed 24 September 2001, in November 2001 LEI became a public company. It changed its name to Liquid Engineering Limited ("LEL"), and LEA was folded into that public company. The deed of company arrangement stated that Andrews was required to cause LEA to transfer all of its intellectual property rights to LEL. Although Andrews could not recall ever signing an assignment or other document in fact effecting such a transfer on behalf of LEA, an undated but executed "Deed of transfer of intellectual property" between LEA and LEI, signed by Andrews and purporting to transfer, free of any encumbrance or charge, all of LEA's rights in and titles to, among other things, Exit Rust and Fuel Set, was tendered by LE 2003. This includes all product formulations, signage, packaging, manufacturing plant and contracts with key personnel. However, as pointed out by the respondents, the prospectus was not wholly consistent as to whether the transfer of rights had already occurred in that it also stated that Andrews was required (in the future) to "[a]rrange for LEA to transfer its intellectual property rights" to LEI. 43 When LEL also fell into financial difficulty and went into receivership, it was sold to LE 2003, pursuant to a sale agreement dated 8 April 2003. That agreement provided that all intellectual property rights, including any trade mark rights in "Exit Rust" and "Fuel Set," would be transferred to LE 2003, subject to LE 2003's acknowledgement that its rights in those marks might not be accepted due to, among other things, attempts by Edwards to register them in his own name: cll 7.8, 16.10. Relevantly for present purposes, these clauses demonstrate: (1) that both the receiver and LE 2003 were well aware of the trade mark dispute with Edwards as of 8 April 2003; and (2) the receiver took no action in respect of LEL's rights, if any, deferring instead to the new owner. 44 Andrews gave evidence that some of the international Liquid Engineering entities are still trading and still selling products bearing the "Exit Rust" and "Fuel Set" marks. He further added that he did not understand himself in 1996 to have transferred any rights in the two marks to the incorporated company, mainly because he considered them to have no value and did not at the time understand the concept of an unregistered trade mark. In the case of Liquid Engineering UK, Andrews stated that he still receives a small royalty from sales of Exit Rust and Fuel Set marked products. 45 Based on the foregoing facts, the respondents submit that LE 2003 is not the owner of the two marks because: (1) when Andrews incorporated as LEI he transferred to that company only a license to use the marks, not full ownership; and (2) further or in the alternative, there is no evidence that LEA ever in fact transferred its rights in the marks to LEI as provided for in the 2001 deed of company arrangement. 46 With respect to the first submission, I note that no documentary evidence was put before the Court of terms of the incorporation and transfer of assets between Andrews and LEI in 1996. LE 2003's managing director Anthony Fels deposed that he "searched the records of LEL as acquired by LE 2003 and [was] unable to locate any ... documentation regarding this transaction in 1996. " While Andrews gave oral evidence at trial that the assets were purchased at market value, there is no evidence of how the term "assets" was contemporaneously defined and understood for purposes of the transfer. There was also no evidence of an oral or written licensing agreement between Andrews and LEI (or LEL) in respect of the marks at issue. 47 Counsel for the respondent failed to demonstrate, whether by reference to authority or otherwise, the purported relevance of Andrews' testimony about his understanding of what it was that he had transferred to the company in 1996. However, as best as I can discern, the contention was that the Court should infer that the asset transferred in 1996 with respect to the two marks was a license only, and that this inference was to be based on both Andrews' subjective belief at the time and the objective evidence of his conduct post-dating 1996, that he was and still is entitled to use the marks himself, to permit others to use them, and to receive royalties for overseas use. 48 Any question with respect to overseas rights may be put to one side, if only because, it is not relevant to the present dispute, which concerns registration and use of the marks within Australia. 49 With respect to the domestic issues, however, it is established as a matter of contract law that: (1) "post-contractual conduct is not admissible on the question of what a contract means"; and (2) the subjective beliefs of the parties are irrelevant in the absence of a rectification or an estoppel by convention argument: Sudojo Consulting Pty Ltd v Africa Pacific Capital Pty Ltd [2008] NSWSC 353 at [20] . In this case, there is no plea for rectification nor could any estoppel by convention argument be put given the lack of any evidence that Andrews ever attempted to seek, much less has ever received, any royalty payments or license fees from any Liquid Engineering entity since 1996 in respect of the marks at issue. 50 Accordingly, I find that the evidence of Andrews as to his subjective beliefs and the evidence about his conduct since 1996 is neither admissible nor relevant in determining what was transferred from Andrews as sole proprietor to LEI upon its incorporation in 1996. 51 In the absence of any contrary contemporaneous written or oral evidence as to the nature of the right conveyed, I conclude that it is more probable than not that the effect of the transaction then made was that Andrews conveyed full title to the then unregistered marks to LEI. ... [S]o I thought I'd start with a clean sheet. So Liquid Engineering International Proprietary Limited was formed with me as a sole shareholder and director. It bought materials and stock, office furniture, vehicles, anything from Liquid Engineering --- Paul Andrews trading as Liquid Engineering. Paul Andrews trading as Liquid Engineering proceeded to settle its debtors and creditors and we started off with clean books because we'd had a bit of a computer problem, so I wanted to start off with a new system. (Emphasis added. That Andrews may not have understood at the time that the unregistered marks had value does not mean that they were not included as part of the general transfer of assets. 53 The second submission --- that there is no evidence that LEA transferred its intellectual property rights to LEL as required in the deed of company arrangement --- is without merit and should be rejected. Notwithstanding the respondents' vague allegation that the evidence of the asset transference (by which they presumably mean the deed of transfer of intellectual property between LEA and LEI) is "unsubstantiated," there was no challenge to the authenticity of the deed, nor was any witness examined or cross-examined as to its contents or accuracy. The deed is what it purports to be, a duly executed deed consistent with the terms stated in the September 2001 deed of company arrangement and November 2001 prospectus. It is to be given effect according to its terms. 54 Moreover, as counsel for LE 2003 noted, the relevance of LEA's rights is in itself highly doubtful. It was LEI (and later LEL) that performed the role of marketing and selling the marked products, not LEA. As such, there is no reason to assume or find by implication that the trade mark rights in question ever passed to LEA in the first place such that they needed to be transferred to LEI in order to make good the chain of title. Accordingly, I find that domestic rights to the "Exit Rust" and "Fuel Set" marks passed from Andrews to LEI in 1996, then to LEL in 2001 under the deed of transfer, and finally to LE 2003 under the sale agreement in 2003. 55 With that, I now turn to the license or estoppel point. As noted earlier, the respondents submit in the alternative that Spry (then general manager of LEL), with the tacit approval of Andrews, on behalf of LEL, gave Edwards what amounted to a licence to register or conditional ownership of the marks during a telephone call prior to February 2003. Edwards gave affidavit evidence that Spry gave such permission while Andrews listened on conference phone and did not object. Regrettably, neither side made any direct attempt to lead oral evidence regarding this allegation. Andrews, however, can be said to have implicitly denied participating in such a call when he testified on direct examination that he did not find out about any trade mark applications being lodged by Edwards until Spry told him after that he (Andrews) had been ousted from the business due to the appointment of receivers and after the registration had been successfully made. 56 However, Andrews added that even if he had known, he would not have taken any action to object because he lacked the funds, he did not consider the marks to have any value in light of his earlier failed registration attempt, and in any event he had effectively been booted from the business such that it was really no longer his concern. Finally, he added that he did have discussions with Edwards regarding a potential licensing agreement (prior to finding out about the registration but after being ousted by the receivers) for use of the marks but did not pursue it because he "had no interest". Spry was not called by either side and Edwards was not cross-examined regarding the alleged conversation. Thus, the only facts firmly established are that Edwards lodged the trade mark applications on 3 February 2003 and LEL went into receivership on 5 February 2003. It should also be remembered that the receivers, as well as LE 2003, were aware of Edwards' registration attempts as evidenced by the clause in the 8 April 2003 sale agreement stating that the seller made no warranty as to its title to the marks in light of Edwards' activities. 57 The evidence that was said to bear upon this issue was unsatisfactory. Doing the best I can with that evidence, I conclude that it is equally probable that one of two things happened. But neither would assist the respondents' case. First, it is possible that Edwards informed Spry, but probably not Andrews (although the analysis would be the same even if I were to consider that Andrews had been informed as well), of his intent to lodge applications for registration of the "Exit Rust" and "Fuel Set" marks, but that Spry (as agent of LEL) neither affirmatively nor unconditionally consented to such applications being lodged. Rather, Spry simply considered that the marks had no value and thus considered that there was no harm in letting Edwards try at his own expense, provided (explicitly or implicitly) that, if successful, Edwards would compensate the company or the directors in some way. The expectation that compensation would be paid is supported by the subsequent meeting between Edwards and Andrews to discuss a licensing fee. The respondents accept that this finding is open. In effect, there may have been an agreement to agree to the subsequent sale or license of the marks, but that is of course no agreement at all in law: eg Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd [1982] HCA 53 ; (1982) 149 CLR 600 at 604. 58 Alternatively, the person or persons informed by Edwards (whether that was Spry or Andrews or both) may have raised no objection or condition of compensation on behalf of LEL, whether because they considered Edwards' efforts doomed to fail or because they simply had bigger fish to fry in light of the impending collapse of the company into receivership. Again, however, such facts would not support the existence of a legal agreement (whether assignment, license, or otherwise) or the imposition of a legal duty between Edwards and LEL because silence or failure to object in the face of an unsolicited proposal does not constitute acceptance at law (ie there is no duty to positively reject the proposal): Winterton Constructions Pty Ltd v Hambros Australia Ltd [1992] FCA 582 ; (1992) 39 FCR 97 at 112-115. 59 In short, I am not persuaded that Edwards obtained any licence or concurrent use agreement at law from LEL, the then-owner of the unregistered marks "Exit Rust" and "Fuel Set". 60 In other circumstances it may have been arguable that the continued silence of the directors might have given rise to an equitable estoppel argument: Pegela Pty Ltd v National Mutual Life Association of Australasia Ltd [2006] VSC 507 at [565] (stating that an estoppel by convention may be found "where a party remains silent if that silence was understood to be an acceptance of the state of affairs"). However, the question of an estoppel does not arise here. Both Spry and Andrews lost control of the company only two days after the applications for registration were lodged and very shortly after any conversation between Edwards and Spry might have occurred. The receivers then, in the April 2003 sale agreement, expressly handed over the trade mark question to the new owner of the business, LE 2003. LE 2003 in turn promptly asserted its rights in the 9 May 2003 letter from its solicitors to Edwards demanding that he desist from using the marks. 61 Given that LEL's management remained in charge for only two days after the applications for registration were lodged and given the ongoing upheaval in management between at least January and April 2003, I do not consider that any failure of Spry and Andrews to object would support a claim of reasonable reliance on the part of Edwards, particularly where the new owner of LEL's assets so promptly registered its objection. Again, if the respondents at any point felt that LE 2003's threats of infringement were unjustified (whether because they had a licence, because LE 2003 was not the owner of the marks, or for some other reason), the proper response was to file an action under s 129 of the TMA. Again, I do not consider that equity will intervene in such circumstances. 62 Based on the foregoing, the cross-claim with respect to the "Exit Rust" and "Fuel Set" marks must also be dismissed with costs. 63 Before proceeding to a consideration of quantum, I should deal with a number of minor issues necessary to the conclusion that LE 2003's application under s 88 of the TMA (and consequent infringement case) is made out. First, it is settled that ownership of a trade mark arises from first use, and only that first user or his or her successor-in-interest may apply for registration: Colorado Group Ltd v Strandbags Group Pty Ltd [2007] FCAFC 184 ; (2007) 164 FCR 506 at [4] - [5] . 64 Second, it follows that where a person such as Edwards, who is neither the first user nor the successor-in-interest, successfully registers a mark any person who can demonstrate a reasonable possibility of being the true owner or successor-in-interest (here, LE 2003) is a person aggrieved by that registration within the meaning of s 88 of the TMA: s 58 of the TMA; see also Assa Abloy Australia Pty Ltd v Australian Lock Co Pty Ltd [2005] FCAFC 246 ; (2005) 147 FCR 126 at [19] (stating that the expression "would include any person in respect of whom there is a reasonable possibility of his or her being 'appreciably disadvantaged in a legal or practical sense' by the entry not being expunged"). 65 Third, where an application for registration is made by other than the true owner, the Court may rectify the situation by imposing a constructive trust on the application and subsequent registration from the date on which the application was lodged and additionally or alternatively rectifying the Register through substitution of the true owner's name: Figgins Holdings Pty Ltd v Registrar of Trade Marks (1995) 59 FCR 147 at 149. It follows that I need not consider LE 2003's alternate grounds for rectification under ss 42(b) and 60 of the TMA. 66 As the true beneficial owner of the registered marks from 8 April 2003, LE 2003 is entitled to assert claims against the respondents for any unauthorised, infringing use under the s 120 of the TMA principles identified earlier. I consider that an ordinary person would likely be confused or deceived by the respondents' use of the "Fuel Set" and "Exit Rust" marks in relation to the same goods as LE 2003. Evidence was led that in some cases SK Rural added the word "sure" before Exit Rust and Fuel Set and that the respondents used a different background colour than LE 2003 with respect to the labels on its Exit Rust and Fuel Set products. For generally the same reasons given earlier in connection with the "Liquid Engineering" mark, I do not consider that the addition of the bland adjective "sure" or a change in the background colours of the label would affect the overall impression of the ordinary person that the products were likely from the same source. Again, this conclusion is buttressed by the finding that Edwards affirmatively intended to appropriate the mark of LE 2003 and its predecessor-in-interest by using it in relation to the same goods in order to take advantage of the positive association between those goods and LEL. 67 In light of the foregoing conclusion, it is unnecessary to accept LE 2003's alternate submission that as the registered owner of trade mark No. 1037362 "Fuel Set" since 11 January 2005, the respondents' use of the mark "Fuel Set" was an infringing use of that mark. Similarly, I note but do not consider as relevant the application of LE 2003 No. 1037163 to register "Exit Rust," the fate of which application is pending the outcome of these applications. 68 Finally, I do not accept the respondents' submission that if they "are liable as alleged for infringement of trademark, they are entitled to the Court's discretion under [ss] 89, 122, 123, and 124" of the TMA. Section 89 of the TMA provides that the Court may decide not to grant rectification if the registered owner satisfies the Court that an application is made under s 88(2)(c) or on the ground that the registered mark is liable to confuse or deceive arises through no act of fault of the registered owner. This section is not engaged in the present case because LE 2003's application is not made on a ground that would enliven the Court's discretion. Instead, the application is made on the basis that Edwards is not the owner of the mark. 69 With respect to s 122 of the TMA, the respondents' submissions did not identify any particular ground in the statute that would entitle Edwards to relief from a finding of liability. No ground for relief under the section being shown, it need not be further considered. 70 Section 123 of the TMA excepts from liability uses that would otherwise be infringing but for the application by or with consent of the trade mark owner of the mark to similar goods. However, I have already rejected the respondents' claims that any of them had the permission or consent of an authorised person to use the mark. To the extent that Edwards relies on authorised purchases of Liquid Engineering products (including Exit Rust and Fuel Set) from LE 2003 from 26 March 2003 to September 2003, I am not satisfied as to either of: (1) the amounts of the sales (and subsequent resales, if any); or (2) the nature of Edwards' permission to resell the products, if any (ie whether it included permission to sell the goods under a mark the same as or similar to "Liquid Engineering", "Exit Rust" or "Fuel Set"). Particularly in the absence of any facts to suggest that LE 2003 consented to the resale of goods under a potentially infringing mark (to the contrary, the correspondence from LE 2003 shows consistent denials of any permission to deal in the goods, as well as demands to return or otherwise account for sales of the goods), I conclude that the defence afforded by s 123 of the TMA is not made out. 71 Finally, s 124 of the TMA provides a defence to infringement of a registered mark where the person can demonstrate continuous use of a deceptively similar unregistered mark dating back to a time before the date of registration of the mark or the date when the registered owner (or predecessor in title) first used the mark. This defence has no application in this case. First, neither LFS nor Edwards demonstrated use, in his or its own right, of the unregistered "Liquideng" mark dating back to a time before "Liquid Engineering" was registered in 1998, much less its first use in 1989 or 1990. Second, none of the respondents demonstrated use of "Exit Rust" or "Fuel Set" marks prior to the date of registration on 3 February 2003 or prior to their first use in 1989 or 1990. Again, I conclude on those facts that the s 124 defence is not available. Particular difficulty is presented by one aspect of the conduct of the case in connection with questions of quantum of damages. 73 At the directions hearing on 26 November 2007, counsel for LE 2003, Mr Heerey, acceded to the request of the respondents' counsel that the trial not be split between trial of the issues of liability and trial of the issues of quantum. If the trial will not be split, then all questions of liability have to be determined on that date which means that we will require the affidavits which Mr Edwards puts on to address all those issues. It has to be done on the basis that we may [succeed] on our claims, so he will need to put on, in his affidavits, full sales records --- full records going to profits so that we can make an election. HER HONOUR: I understand. Dr Dean has now heard what you've said. MR HEEREY: He is on notice, yes. HER HONOUR: It is on the transcript. MR HEEREY: Yes. HER HONOUR: He understands he has to address those issues. MR HEEREY: Yes, and if there's any gaping holes in the evidence when they receive it, well we can address that at that time but I won't say anything further at this stage. The documents were to be produced on 9 April 2008, but that date for compliance was subsequently extended to 16 April 2008 by order of the Court dated 9 April 2008. Given that production of the evidence relating to quantum, which amounted to thousands of invoices, did not begin until five days before the start of the trial and continued until the day before the trial ended, LE 2003 was understandably not in a position to make any election on quantum. 75 Moreover, it came to light on the first day of trial that the respondents' advisers had refused to give confidentiality undertakings with respect to the evidence of LE 2003's financials and profit margins, such that LE 2003's confidential affidavits remained unread by the respondents despite the fact that they had been available since February 2008. No explanation was given for resisting the undertakings. I will return to this and related issues shortly. 76 In the meantime, the Court made clear to counsel that LE 2003 would not be required to elect between an account of profits and damages until at least the close of evidence: Dr Martens Australia Pty Ltd v Bata Shoe Company of Australia Pty Ltd (1997) 75 FCR 230 , 237 (stating that an applicant is "entitled to delay making an election at least until all the evidence is in"); see also GM & AM Pearce & Co Pty Ltd v Australian Tallow Producers [2005] VSCA 113 at [56] ; Acme Office Service Pty Ltd v Lundstrom [2002] NSWSC 277 at [39] . The respondents' counsel made it clear that he vigorously disputed that he had any burden of production with respect to quantum; in particular, he submitted that in the absence of any request from LE 2003 to produce records of the respondents' costs the respondents had no burden to do so. However, the Court indicated that while LE 2003 would be required to establish evidence of the respondents' gross sales in the event it elected for an account of profits, the burden would then shift to the respondents to lead evidence relating to overheads and cost of production of the infringing goods. 77 Reference was made to Dart Industries Inc v Décor Corporation Pty Ltd [1993] HCA 54 ; (1993) 179 CLR 101 , 118, where it was held that, because the relevant facts are likely to be within the knowledge of the defendant, the onus is on the defendant to establish that any item of costs or overhead was incurred in relation to the infringing goods. In establishing the infringer's profits, the plaintiff is required to prove only the defendant's sales; the burden then shifts to the defendant to prove the elements of costs to be deducted from sales in arriving at profit. Any doubt as to the computation of costs or profits is to be resolved in favo[u]r of the plaintiff. If the infringing defendant does not meet its burden of proving costs, the gross figure stands as the defendant's profits. (Internal citations omitted. 78 Ultimately, the respondents led oral evidence from Edwards as to his costs during the period from March 2003 to 30 June 2005, which was said to be the period during which Edwards traded as LFS. On cross-examination, Edwards was confronted with invoices showing that he traded as LFS until April 2006, as well as his earlier sworn declaration that he ceased trading as LFS in January 2005. It was also established by reference to the invoices that Edwards had begun trading as LFS in March 2003 while still employed by LEL, contrary to the evidence given in his statutory declaration and in probable breach of his fiduciary duties. However, as counsel for the respondents noted, no claim for breach of fiduciary duties was put. For the avoidance of doubt, I find as a matter of fact that Edwards traded as LFS from March 2003 until April 2006. 79 Returning to the evidence of costs, Edwards gave evidence that he had written down from memory the night before his testimony some notes regarding his rough monthly costs during the period in which he traded as LFS. Using those notes, he testified that his costs were: (1) transportation costs including car repayments, fuel, tyres, registration, insurance, general servicing; (2) food and accommodation costs incurred during the approximately 20 days per month he spent on the road making sales; (3) office overhead including mobile and office phone, stationery, invoice books, cheques, rent, accounting fees, a portion of mortgage interest and principal repayments said to be attributable to use of a portion of the home for business purposes; (4) storage fees for the goods; (5) wages paid to himself for sales efforts (approximately $4,000); and (6) costs of purchasing the goods to be sold (approximately $12,000). The rough total sum of these costs was said to be approximately $22,000 per month, but Edwards conceded that without "look[ing] at the books" this evidence could not be precise. 80 Edwards also gave written evidence that his total gross sales for the period from April 2003 to June 2005 totalled $635,010, for a monthly average of approximately $23,500. In other words, Edwards on his own evidence was doing only slightly better than break-even. However, it goes without saying that I am far from satisfied with the reliability or accuracy of the evidence. Moreover, there was no direct evidence, satisfactory or otherwise, of the gross sales or costs of LFS from July 2005 to April 2006. 81 In contrast to the break-even position suggested by Edwards' evidence, LE 2003 submitted that it was open to the Court to infer LFS had a profit margin of some 60 to 70% of gross sales. (It also sought 10 to 20% of the gross sales of items not falling within the class of goods covered by the trade marks, such as hammers and duct tape. The basis of this claim was that Edwards' misrepresentation that he was associated with Liquid Engineering assisted him in making such sales. I reject this submission on the basis that, with respect to non-infringing sales aided by a prior relationship, a claim could only be made out if Edwards were subject to a non-compete agreement that was a reasonable restraint of trade. In the absence of such, as in this case, it is settled that there is no property in a customer. ) LE 2003 contended that this figure was in fact quite generous because, given that the respondents failed to discharge their burden of establishing costs, LE 2003 was entitled to claim the whole of the gross sales as profits. 82 To support its figure, LE 2003 relied on the evidence of Fels. Fels testified that he proposed that Edwards become an employee of LE 2003 under a 50% commission agreement. Exactly what was meant by this did not emerge in the evidence. In particular, neither party clarified whether this was meant to be 50% of the gross retail price, 50% of the gross profits, or something else. Counsel for LE 2003 proceeded on the basis that it was an offer to share 50% of the gross sales and thus asked the Court to infer that, in rejecting the offer, Edwards intended to make and presumably did make, a profit margin of more than 50% of gross sales revenue. Counsel for the respondents, on the other hand, submitted that the offer should have been understood as 50% of gross profits rather than 50% of gross sales. 83 Notwithstanding the parties' failure to clarify the terms of the offer with Fels or Edwards, I think it more probable that the respondents' submission is right than the submission on behalf of LE 2003. Fels gave evidence that since his acquisition of the company (ie since LE 2003 took over the business in April 2003), it had more or less been breaking even or making a slight profit. In the period just prior to acquisition, the company had been running at an $800,000 loss. I consider it inconsistent with the extremely low or even negative net profits of the company that Fels would offer Edwards 50% of gross revenue on sales made by him. In other words, I do not consider that the 50% offer in any way opens an inference that Edwards or LFS had or expected a net profit margin at or above 50%. To the contrary, I find that the evidence of Fels regarding LE 2003's own profitability is consistent with and supports the otherwise scant evidence of Edwards that profits were not much above break-even. 84 The bottom line is that the evidence of profits and costs with respect to LFS is anything but complete and it is for that reason unsatisfactory. On the one hand, I agree with the submission from LE 2003 that it was for the respondents to establish their costs, which they failed to do, and thus on that basis it would be open to me to simply award LE 2003 the full amount of its 70% claim. 85 LE 2003 proposed that one way to deal with the gaps in the evidence of quantum would be to order that the parties go through the invoices, and exchange schedules between themselves as to the dates and amounts of individual sales in an attempt to reach an agreement as to the precise account of profits. In the event that the parties were unable to agree between themselves, LE 2003 suggested that the dispute could be referred to a Registrar of the Court for resolution. I do not consider either proposal is appropriate. 86 First, costs of the proposed exercise, which would span some 80 days according to the schedule devised by LE 2003, would likely be significant. Given the history of this litigation to date, I find it unlikely in the extreme that the parties would be able to agree between themselves as to an appropriate figure for quantum. The probable, if not inevitable result, would be appeals to the Registrar and then to the Court, as well as applications for the costs of those proceedings. In short, I consider that any benefits resulting from a more precise quantification of damages would be far outweighed by the costs to the parties and the Court of obtaining that precision. 87 Instead, I consider that the better approach is simply to do the best I can to quantify the profits on the evidence available, even if such quantification necessarily involves a degree of speculation and guesswork: eg Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10 ; (2003) 196 ALR 257 at [37] ; Adidas-Solomon AG v Turner (2003) 58 IPR 66 at [4]-[5]; Enzed Holdings Ltd v Wynthea Pty Ltd [1984] FCA 373 ; (1984) 57 ALR 167 , 183; Sony Computer Entertainment Australia Pty Ltd v Stirling [2001] FCA 1852 at [7] . Applying that approach, I consider that it is fair, based on the evidence to which I have referred, to find that LFS had average gross sales from March 2003 through April 2006 of $23,000 per month with average costs of $21,000 per month. This yields a net profit of $2,000 per month, or approximately 10%. Multiplying that monthly figure by 38 gives a total profit of $76,000. That figure is not inconsistent with the evidence of Fels. It is a figure that recognises that the business was not making large profits. At the same time it is a figure that recognises that it was for the respondents to lead evidence that would show that they made no profits. 88 That leaves only the account of profits with respect to SK Rural for infringing sales of "Exit Rust" and "Fuel Set". LE 2003 established that between 30 June 2005 and 1 July 2007 (the date by which SK Rural ceased sales of the infringing products on advice of counsel), SK Rural had gross sales with respect to Fuel Set of $278,967.47 and gross sales with respect to Exit Rust of $22,789.61, for a total of $301,757.08. 89 Again, the respondents led no evidence as to the costs of SK Rural in relation to the infringing sales. Edwards accepted in cross-examination that John Browner, the person at SK Rural with knowledge of those costs, is presently in Western Australia and could have been called to give evidence. Because no explanation was given for the failure to call Browner, LE 2003 argues that according to the rule in Jones v Dunkel (1959) 101 CLR 298 it is open for the Court to draw an adverse inference to SK Rural to the effect that Browner's evidence would not have been of assistance. 90 Again, it would be open to the Court under authorities referred to earlier to award LE 2003 the whole of the gross revenue generated by the infringing sales. Nevertheless, LE 2003 submitted that it would be more reasonable and fair in the circumstances to infer, based on the evidence of costs in relation to Exit Rust and Fuel Set provided by LE 2003 in the confidential affidavit of Fels, that SK Rural's costs were similar or the same. 91 I am prepared to accept that LE 2003's costs with respect to Exit Rust and Fuel Set would likely be similar, and therefore of some relevance in the absence of direct evidence from SK Rural. However, a review of the confidential affidavit materials reveals that the evidence of LE 2003's costs is incomplete, to say the least. Without disclosing the details, Fels' affidavit identifies the costs of materials, packaging, and labelling. However, it does not disclose the costs of storage, transport, sales, marketing, or any percentage of general overheads that might reasonably be allocated to infringing sales. In the absence of such evidence, I do not consider that there is a sufficient basis for using the proved costs of LE 2003 as a basis for estimating the costs of SK Rural. 92 Under the circumstances, and again applying the approach referred to earlier, I consider that the same 10% margin estimated with respect to LFS should be applied to SK Rural. The evidence showed that there was little, if any, difference between the method of sales, clientele, product range, and personnel of LFS and SK Rural. Taking 10% of $301,757.08, I arrive at a net profit of $30,175.71. 93 In addition to monetary relief, LE 2003 also seeks injunctions restraining the respondents from using the marks "Liquideng", "Liquideng Farm Supplies", "Exit Rust" and "Fuel Set" in the future. These reasons for decision make clear what conduct the respondents are and are not permitted to engage in with respect to the use of the disputed marks. In light of the fact that the respondents are shown to have voluntarily refrained from engaging in any infringing conduct since at least July 2007, I am not satisfied that injunctive relief is appropriate: see, by way of example, Microsoft Corporation v TYN Electronics Pty Ltd (in liquidation) (2004) 63 IPR 137 at [36]. The prayers for injunctive relief are denied. 94 LE 2003 sought orders that Edwards and LFS take all necessary steps to remove the word "Liquideng" from LFS's corporate name. No basis for making such orders was established. LE 2003 does not have ownership rights at large with respect to the "Liquid Engineering" mark. Its rights are limited to the particular classes of goods specified: Colorado Group at [6]. As such, LE 2003 would not be entitled to prevent LFS from trading in, say, goods such as stuffed animals under the mark "Liquideng", much less is it entitled to have "Liquideng" struck from LFS's corporate name generally. I have already dealt with the costs of the proceedings in VID 934 of 2006. 96 With respect to the costs of WAD 189 of 2007, I consider that they should follow the event under the ordinary rule. LE 2003 sought costs on an indemnity basis after 26 November 2007. While it is true that the conduct of the respondents' legal advisers after that time, particularly with relation to quantum, led to the difficulties that have been described above, I do not consider that those difficulties warrant the making of the order sought. 97 LE 2003 also asks for interest under s 51A of the Federal Court of Australia Act 1976 (Cth), to be calculated with effect from the end of each financial year in which each sale occurred to the date of the judgment. Needless to say, under the estimated approach to damages I have taken, no finding has been made as to number and value of the infringing sales made by the respondents in each financial year, nor would I consider it a beneficial use of either the Court's or the parties' time to undertake such a calculation at this stage. 98 Fortunately, however, s 51A gives the Court power to order interest at a rate it sees fit on the whole or any part of damages and for the whole or any part of the period from when the cause of action arose until entry of judgment. In this case, the cause of action under s 88 of the TMA arose on or about 3 February 2003 and the cause of action for infringement of the "Liquid Engineering" mark arose in about March or April 2003. Infringing conduct ceased in or about July 2007 and April 2006, respectively. That creates a window of approximately 12 to 63 months dating back from the date of this judgment to the times when the first and last infringing sales occurred. In the exercise of my discretion, I consider it appropriate to split the difference and apply interest for a period of 36 months (which I arrive at by rounding down from 37.5 months to the whole number of three years). 99 I cannot see any basis for a date more precise or reasoned than that calculated by proceeding on the basis that half the infringing sales occurred in the first two years and the other half occurred in the last two years. Counting back three years from the approximate date of this judgment (the end of June 2008) one arrives at the final date of 30 June 2005 as the date from which interest should be calculated. I will order that the rate be determined by reference to the rates set down by the Penalty Interest Rates Act 1983 (Vic). 941987 "Exit Rust" and No. 941989 "Fuel Set" on constructive trust for Liquid Engineering Ltd (ACN 074 772 697) from 3 February to 8 April 2003 and for Liquid Engineering 2003 Pty Ltd (ACN 104 341 657) since 8 April 2003. The application in VID 934 of 2006 be dismissed. 2. The respondent in VID 934 of 2006 pay the applicant's reserved costs of and incidental to the proceedings, such costs to be taxed in default of agreement. 3. The first and second respondents in WAD 189 of 2007 pay the applicant $76,000 within 28 days, with liability for such payment to be joint and several. 4. The third respondent in WAD 189 of 2007 pay the applicant $30,175.71 within 28 days. 5. Interest be paid on the sums in orders 3 and 4 under s 51A of the Federal Court of Australia Act 1976 (Cth) calculated with effect from 30 June 2005 to the date of judgment by reference to the rates set down in the Penalty Interest Rates Act 1983 (Vic). 6. Pursuant to s 88(1)(b) of the TMA, the Register of Trade Marks maintained under the TMA be rectified by amending the entries for registered trade mark No. 941987 "Exit Rust" and registered trade mark No. 941989 "Fuel Set," being entries wrongly made or remaining in the Register as being owned by the first respondent in WAD 189 of 2007, and recording that the true owner of each of those registrations has been Liquid Engineering Ltd (ACN 074 772 697) from 3 February to 8 April 2003 and Liquid Engineering 2003 Pty Ltd (ACN 104 341 657) since 8 April 2003. 7. The cross-claim in WAD 189 of 2007 be dismissed. 8. The respondents pay the applicant's costs of the proceedings in WAD 189 of 2007, including the costs of the cross-claim, on a party-party basis, such costs to be taxed in default of agreement. I certify that the preceding one hundred and one (101) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon. | whether post-contractual conduct is admissible on the question of what a contract means relevance of the subjective intentions of the parties to a contract whether contract may be formed where there is an agreement to agree as to price or other substantive term whether silence or failure to object to an unsolicited offer may constitute acceptance whether costs should be awarded in favour of applicant where application is dismissed as moot but would otherwise have been successful on the merits estoppel whether silence between intermittent threats of infringement may give rise to estoppel whether equity will intervene when there is an adequate remedy at law whether silence or failure to object to an unsolicited offer may give rise to an estoppel whether wrongfully registered proprietor of a trade mark holds the mark on constructive trust for true owner whether injunction should be granted where there is no showing of likelihood of future infringement appeal from decision of registrar of trade marks that registered proprietor's name be removed from the register due to lack of intent to use the mark in good faith whether appeal should be dismissed as moot where court cannot grant relief sought even if applicant is successful how mark is to be defined whether mark includes or is associated with an image or particular graphic representation whether ownership rights with respect to a mark are limited to goods of the same description infringement action based on deceptive similarity whether side-by-side comparison is required whether presence or absence of additional descriptive word or associated image will avoid finding of deceptive similarity where distinctive or essential feature of the mark is borrowed whether evidence of intent to deceive raises rebuttable presumption of consumer confusion ownership of unregistered mark right to register meaning of "person aggrieved" under s 88 of the trade marks act 1995 (cth) power of court to direct amendment of register by substitution of registered proprietor's name with the applicant's power and discretion of the court under ss 89 , 122 , 123 , and 124 of the trade marks act 1995 (cth) to refuse relief where a party would otherwise be liable for infringement quantum election whether applicant must elect between damages and account of profits before the close of evidence in non-split trial whether applicant has the burden of establishing the infringer's gross sales whether respondent in non-split trial has burden of establishing costs incurred in relation to, including portion of general overhead reasonably attributable to, infringing goods whether profits may be calculated using a measure of guesswork and estimation contracts costs equity trade marks |
The defendants are Mining Projects Group Limited (MPG), a minerals exploration company, and two of its directors, Mr Frost and Mr Revelins. ASIC contends that in breach of s 1041H MPG made misleading public announcements about the mineralisation and exploration potential for uranium mining at Niue Island in the South Pacific. The nub of the complaint is that the potential was overstated. The directors are alleged to have knowingly procured the breach and thereby contravened ss 180 and 181 , the directors' duties sections. There are also claims that the directors engaged in insider trading (s 1043A) and improperly used company information (s 183). The only relief sought against MPG is a declaration that it contravened s 1041H. But ASIC seeks the imposition of pecuniary penalties against the directors (s 1317G) and an order that they be disqualified from managing a corporation (s 206C). Two procedural disputes have arisen: one, raised by ASIC, concerns the pleadings and the other, in which the defendants make the complaint, is about discovery. The resolution of each dispute is affected by this being a civil action in which penalties are sought. 2 The pleading dispute arises in the following way. ASIC has delivered a detailed statement of claim. Each defendant has filed a defence. ASIC contends that the defences are deficient in several respects and seeks orders for the provision of further and better particulars. The directors say that if their pleadings are deficient (a matter which is in dispute) they cannot be compelled to provide any further information because of penalty privilege or the privilege against self-incrimination. 3 The primary object of a defence is to inform the plaintiff what parts of the statement of claim are admitted, what parts are denied and on what grounds and facts the defendant intends to rely to defeat the claim. The defence should contain, in summary form, the material facts upon which the defendant will base his defence but not the evidence by which those facts are to be proved. Taken together, the statement of claim and defence define the issues to be tried and enable the parties to know what evidence they must call. A properly pleaded case will ensure an efficient trial that brings into focus the precise issues that are in dispute and will prevent the injustice that comes about when a party is taken by surprise. 4 By the defence that each director has delivered: (i) certain facts are admitted; (ii) some facts are denied; (iii) other facts are confessed but their effect is avoided by the assertion of further facts that may answer them; and (iv) a positive case in answer to the various claims is set up. The directors have gone into great detail in relation to categories (iii) and (iv) --- much more detail than one usually encounters in an action to recover penalties. They have also provided particulars of many of the allegations. No part of the defence, however, amounts to an allegation of the truth of the facts therein: Boileau v Rutlin (1848) 2 Ex 665 [154 ER 657]. The statements in the defence are only to be treated as statements outlining the case which each director wishes to raise for resolution by the court: Buckmaster v Meiklejohn (1853) 8 Ex 634 [155 ER 1506]. 5 When going into the detail they did in their respective defences the directors were mindful of penalty privilege. Each of their defences opens with a statement that the director "claims and reserves his right to claim penalty privilege in the proceeding. " No such statement was made by MPG for it is accepted that a corporation cannot claim the benefit of penalty privilege ( Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96) or self-incrimination privilege (see Environment Protection Authority v Caltex Refining Co Pty Ltd [1993] HCA 74 ; (1993) 178 CLR 477). That MPG cannot claim the benefit of either privilege may not be of much assistance to ASIC if it successfully attacks the company's defence. If MPG's defence is defective and it is required to provide further information, it may not be able to satisfy that requirement if the only source of its information is the director defendants and they are entitled to remain silent. 6 The pleading dispute raises two issues. The first is whether either privilege would ordinarily relieve the directors from any obligation to provide further details of their defence. Assuming the privileges can be relied upon, the second issue is whether the directors have waived, in whole or in part, their right to assert either privilege by filing detailed defences. 7 By way of introduction, it is necessary to say a word or two about each privilege. Each privilege operates to excuse a person from being compelled to answer any question or produce any document if doing so would have the tendency in one case to expose that person either directly or indirectly to a criminal charge and in the other to a penalty. Though often said to be analogous and based on the same rationale, the privileges are quite distinct. The privilege against self-incrimination is a "fundamental... bulwark of liberty" ( Pyneboard Pty Ltd v Trade Practices Commission [1983] HCA 9 ; (1983) 152 CLR 328, 340) that "protects personal freedom, privacy and human dignity" ( Caltex Refining [1993] HCA 74 ; 178 CLR 477, 500) and is "deeply ingrained in the common law" ( Sorby v The Commonwealth [1983] HCA 10 ; (1983) 152 CLR 281, 309). It applies in curial proceedings, including procedures related to curial proceedings, and non-curial proceedings: Pyneboard 152 CLR 328, 340-341; Sorby [1983] HCA 10 ; 152 CLR 281, 309. By contrast, the penalty privilege is different in several fundamental respects. The penalty privilege is not a substantive rule of law: Rich v Australian Securities and Investments Commission [2004] HCA 42 ; (2004) 220 CLR 129, 142 and 179. It is merely a procedural rule that applies in curial proceedings to require the plaintiff to prove his case without any assistance from the defendant: Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49 ; (2002) 213 CLR 543, 559. 8 In view of the claims made by ASIC, each privilege is engaged. Penalty privilege is engaged because ASIC seeks orders for pecuniary penalties under s 1317G and non-pecuniary penalties under s 206C (an order to disqualify a person from managing a corporation is a penalty for the purposes of the privilege: Rich [2004] HCA 42 ; 220 CLR 129, 147). Self-incrimination privilege is also engaged. ASIC's allegations of insider trading and breach of directors' duties suggest that the directors are exposed to criminal charges being laid. The kinds of charges available include obtaining property by deception, obtaining financial advantage by deception and fraudulently inducing persons to invest money: Crimes Act 1958 (Vic) ss 81 , 82 and 191 respectively. 9 In the case of self-incrimination privilege the defendant must establish that the provision of information or the production of documents in the civil case leads to a real and appreciable risk of a criminal prosecution before the privilege can be invoked: Rio Tinto Zinc Corp v Westinghouse Electric Corp [1978] AC 547, 574; Rank Film Distributors Ltd v Video Information Centre [1982] AC 380, 392; Sorby [1983] HCA 10 ; 152 CLR 281, 290 and 294. That will not be difficult to show when, as here, the proceeding is aimed at proving that the directors engaged in conduct which would establish, or go a long way toward establishing, that they had also committed criminal acts. 10 The manner in which penalty privilege is to be claimed depends upon the type of proceeding in which the claim is made. In R v Associated Northern Collieries [1910] HCA 61 ; (1910) 11 CLR 738, Isaacs J drew attention (at 742) to the "inherent distinction between a civil action to prevent or redress a civil injury on the one hand, and a civil action to recover a penalty on the other. In the latter case the whole and avowed object of the proceeding is the infliction of the penalty". See also Mayor of Derby County Borough v Derbyshire County Council [1897] AC 550, 552; Refrigerated Express Lines (A/Asia) Pty Ltd v Australian Meat and Live-Stock Corporation (1979) 42 FLR 204, 207. In an action to recover a penalty it is not necessary for the defendant to establish that there is a risk he will be subjected to a penalty by providing information to the plaintiff. The plaintiff is seeking the information for that very purpose. It does not matter that in the proceeding the plaintiff also claims other relief: Birrell v Australian National Airlines Commission (1984) 1 FCR 526, 530. In civil actions where no claim for a penalty is made the defendant must show that providing the information requested would tend to subject him to a penalty in separate proceedings before he can rely on the privilege. 11 The circumstances in which penalty privilege may be claimed are not settled. In the past penalty privilege has been raised to prevent a plaintiff obtaining an order for discovery of documents or the administration of interrogatories: see eg Naismith v McGovern [1953] HCA 59 ; (1953) 90 CLR 336, 341-342. It is clear, however, that the privilege has a wider scope. It will operate, for example, to prevent an order being made for the provision of witness statements ( Australian Competition and Consumer Commission v FFE Building Services Ltd [2003] FCAFC 132 ; (2003) 130 FCR 37) or for the production of documents on subpoena ( Caltex Refining [1993] HCA 74 ; 178 CLR 477, 560). In Refrigerated Express 42 FLR 204, 207-208 Deane J said that the privilege operates to prevent a plaintiff obtaining any information that will assist in establishing the defendant's liability to a penalty. 12 That the rule has a wider application than merely preventing a plaintiff from obtaining discovery or interrogatories reflects the broad object of penalty privilege. In Daniels Corporation [2002] HCA 49 ; 213 CLR 543, 559 Gleeson CJ, Gaudron, Gummow and Hayne JJ said that penalty privilege "serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it. " That is, the plaintiff must prove his case without any assistance from the defendant: Abbco Iceworks 52 FCR 96, 129; Rich [2004] HCA 42 ; 220 CLR 129, 142. So it has been held that although in a civil action a defendant is required to deliver a defence he cannot be compelled to make any admissions in relation to the matters alleged against him. That is, penalty privilege operates to relieve a defendant from the need to deliver a defence that complies with the pleading rules if the rules would override the privilege. To the extent that pleading rules purport to impose such an obligation they must give way to the privilege: Hadgkiss v Construction, Forestry, Mining and Energy Union (2005) 146 IR 106, 111-112; A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union (2005) 226 ALR 247, 251. 13 There is a potential problem if, as in this case, a defendant wishes to run a positive case. Ordinarily a positive case must be raised in the defence. Whether it must be raised in a defence in a civil action to recover a penalty is by no means clear. The view I favour is that there can be no such requirement as it would be inconsistent with the privilege. On the other hand, if a defendant who wishes to run a positive case is required to plead his case that can be accommodated while maintaining the privilege. What should occur is that the defendant should be entitled to rely on the privilege until the plaintiff's case is concluded. If at that point the defendant decides to run a positive case he can deliver an amended defence that will outline his case. In an exceptional case the judge may grant a short adjournment to allow the plaintiff time to prepare, if he is otherwise taken by surprise. In most cases that will not be necessary. By the time the plaintiff has closed his case the nature of the defence will usually be apparent. That is the experience of those who prosecute criminal cases. The advocate who runs a civil penalty proceeding should be equally adept at dealing with the defendant and his witnesses without knowing in advance every word they are about to say. 14 Nothing that I have said is inconsistent with Bridal Fashions Pty Ltd v Comptroller-General of Customs (1996) 17 WAR 499. That was an action to recover a civil penalty under the Customs Act 1901 (Cth). Section 255 of the Customs Act provides that an averment of the facts alleged in a statement of claim is prima facie evidence of those facts. Each defendant delivered a defence which, apart from pleading a limitations defence and dealing with a few mechanical matters, merely denied the remaining 507 paragraphs of the statement of claim. An application was made to strike out the defence on the basis that it did not comply with the pleading rules. A master held that the corporate defendant was required to deliver a proper defence, but the other defendant, the director, was not under a like obligation because of self-incrimination privilege. The company appealed to the Full Court. The grounds of appeal and the Full Court ruling on them are not relevant to the issue at hand. There was also an appeal by the plaintiff. One of the plaintiff's principal arguments was that the penalty privilege applied only to discovery and interrogatories but not to pleadings. The Full Court observed that a defence to a Customs Act prosecution had to take s 255 into account. The Full Court pointed out (at 516) that "it would not be open to the defendant simply to put the plaintiff to the proof of the allegations in the statement of claim, as a defence drawn in such terms would not enable the defendant to lead any evidence whatever in order to negate the impact of the operation of s 255(1). " The Full Court said that while it would admittedly be possible for a defendant simply to deny the allegations against him, such a defence would be of no benefit for it would not avoid a judgment. In other words "the practical effect" of s 255 was to require the defendant to plead and run an affirmative case. The Full Court went on to say (at 517): "Should the defendant set up an affirmative case [in its defence] it would not incriminate itself. In the circumstances, the privilege has no practical application in the pleading of a defence to the statement of claim in a Customs prosecution. Accordingly, the privilege against self-exposure to a penalty or self-incrimination does not preclude [the defendant] from pleading in the ordinary way to the allegations in the statement of claim. In a Customs Act case neither penalty privilege nor self-incrimination privilege is of any use to a defendant because, if either privilege is claimed and no positive case is run, the defendant will suffer an adverse judgment. For that reason, a positive plea could not be incriminating; it could only be exculpatory. 16 What the Full Court said will apply only where the plaintiff's case can be proven by averment. The Full Court's analysis was not intended to, and in any event does not, apply across the board. The reason is that both penalty privilege and self-incrimination privilege protect not only against the risk of exposure to penalty or incrimination by direct evidence but also by indirect or derivative evidence. Disclosing a positive case at the pleadings stage will often provide the plaintiff with an opportunity to follow leads and open up fresh fields of inquiry. A defendant cannot be required to provide information that may be the basis of an investigation that may lead to the discovery of real evidence: Reid v Howard [1995] HCA 40 ; (1995) 184 CLR 1, 6-7. If a defendant is required to plead a positive case there is a risk of that happening: Chief Executive Officer of Customs v Camile Pty Ltd (2004) 58 ATR 163, 169. 17 In any event even if, contrary to my view, Bridal Fashions stands for the proposition that a positive defence can never incriminate a defendant or expose him to a penalty, it says nothing about when the defence must be delivered. On my alternative approach a defendant can rely on the privilege up to the point he decides to go into evidence. It is only at that moment, if the defendant elects to run a positive case, that he must give up the privilege and file a defence that outlines the case he intends to run. 18 The second issue in the pleading dispute is waiver. As to penalty privilege, Bray on Discovery (1885), 337-338 and Phipson on Evidence (14 th ed, 1990), para 20-53 both state that penalty privilege may be waived expressly by contract and impliedly by conduct (see also Green v Weaver (1827) 1 Sim 404, 427-432 [57 ER 630, 639-640]). That is entirely consistent with principle and accords with the nature of the privilege: see eg Daniels Corporation 213 CLR 543, 559; Rich [2004] HCA 42 ; 220 CLR 129, 179. 19 The position is not so clear as regards self-incrimination privilege. This privilege is a substantive rule of law which operates to protect fundamental rights. Nonetheless, the privilege is not unqualified. It can be abrogated by statute: Sorby 152 CLR 281, 309; Pyneboard [1983] HCA 9 ; 152 CLR 328, 341. Because it is a personal privilege, it may also be waived: Reid [1995] HCA 40 ; 184 CLR 1, 5 and 12. What is not clear is what conduct will amount to a waiver. 20 It is self evident that self-incrimination privilege will be waived when a person who is entitled to claim the privilege voluntarily gives up information. The waiver will only operate to the extent of the information that has been provided. A person would also lose the privilege if he goes into the witness box to give evidence at his criminal trial. The various statutes that make a defendant a competent witness in a criminal trial provide that if he gives evidence he can be cross-examined in relation to the charge the subject of the trial: see eg Crimes Act 1958 (Vic) s 399. He can, however, claim the privilege in relation to other offences. 21 According to 8 Wigmore on Evidence (revised edition, 1961) SS2275, self-incrimination privilege may also be waived by contract or other binding pledge. Bray on Discovery (1885), 337-338 and Phipson on Evidence (14 th ed, 1990), para 20-53 take the opposite view, stating that self-incrimination privilege may not be waived by contract: see generally K Grevling, "Contracting Out of the Privilege Against Self-Incrimination" in F D Rose (ed), Consensus Ad Idem 28, 45-50. In reality, the position in England is uncertain. There is at least one nineteenth century case which arguably holds that the privilege can be excluded by agreement ( Robinson v Kitchin (1856) 21 Beav 365, 370 [52 ER 900, 902]; 8 De G M & G 88, 91-92 [44 ER 322, 324] (affirmed on appeal on other grounds)). Two other cases may be interpreted as authority for the same proposition: Green (1827) 1 Sim 404; Chadwick v Chadwick (1852) 22 LJ Ch 329 [20 LTR 272]). There is, however, contrary authority: see Lee v Read (1842) 5 Beav 381, 385 [49 ER 625, 627]. Recent authority has cast doubt on the correctness of the cases that support waiver by contract, both generally and as they apply to self-incrimination privilege: see Rank Film [1982] AC 380, 413-414 and 422; Bishopsgate Investment Management Ltd (in prov liq) v Maxwell [1993] Ch D 1, 34, 54, 66 and 71. Lee v Read has also been questioned: Bishopsgate [1993] Ch D 1, 37 and 51. The cases have left open for future argument what the correct position is: Rank Film [1983] AC 380, 421; Bishopsgate [1993] Ch D 1, 37. 22 Despite the uncertainty in England about the ability to contract out of the privilege, Australian authorities have not been hesitant to take a great leap forward. The cases have taken what once would have been an unorthodox view, namely that a person may impliedly waive self-incrimination privilege by his conduct. I say unorthodox because it is novel to say the least that self-incrimination privilege can be waived unintentionally or inadvertently. In Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412, 423, Kirby P indicated that self-incrimination privilege may be waived in the same way as legal professional privilege (that is, expressly or by implication). He did, however, go on to say (at 423-424) that "[i]t will be rare that a person is taken to have waived all rights and privileges in respect of any prosecution for any offence arising out of circumstances only generally defined. The point of difficulty will be presented by the definition of the subject matter of the waiver. " In Registrar, Court of Appeal (NSW) v Craven (1994) 126 ALR 668, Kirby P elaborated on his view about implied waiver. He said (at 685-686): "a witness may waive the privilege against self-incrimination. Waiver can be express and implied... If a witness intentionally discloses privileged material then the privilege is lost. For example, if the witness has in earlier court proceedings answered the same questions, he or she is not entitled, by claiming the privilege against self-incrimination, to refuse to answer the same questions when put. I will not elaborate upon the ways in which there can be an implied waiver as this case does not turn upon it. " In Bayeh v New South Wales [1999] NSWSC 1070 ; (1999) 108 A Crim R 364, 370, Ireland J said that "[w]aiver of [self-incrimination] privilege may be express or implied; it may be deliberate or inadvertent". 23 There is some suggestion locally that these cases have gone much too far. In Accident Insurance 31 NSWLR 412, Clarke JA doubted there could be an implied waiver of self-incrimination privilege. Although he declined to provide a definitive view, he said (at 432) that "[i]n principle it would seem to me that [the making of earlier statements] could not constitute a waiver of a right to decline to provide self-incriminating answers to questions put during the course of a trial. If it were otherwise it would... constitute an enormous infringement of an ancient and fundamental right of all citizens. " In my respectful opinion this view accords more closely with the rationale for self-incrimination privilege. 24 On the question of waiver, ASIC contends that the directors have waived each privilege by providing information in their respective defences which they were not obliged to provide. It may be accepted, indeed it was not disputed, that the directors have waived each privilege as regards the admitted and asserted "facts". But, in my opinion, the waiver is confined to what appears in the defences. First of all, what is conceded in each defence is not that the "facts" asserted or admitted are true "facts". The defences do no more than relieve ASIC of the need to prove those "facts". Second, there was no intention to waive privilege beyond what appears in each defence. The prefatory qualification makes each director's intention clear. Third, at least as regards self-incrimination privilege, I do not accept that it can be waived by the mere admission of some facts (other than, of course, the admitted facts). In Accident Insurance 31 NSWLR 412, Clark JA said that a defendant making a statement before trial could not constitute a waiver of a right to decline to answer questions put to him during the trial. He explained (at 432) that if "it were otherwise it would mean that persons who had made admissions to police could be taken to have waived the right to remain silent. " With respect, I agree with Clarke JA, subject to one qualification. A person who has made a statement before trial can be compelled to repeat that statement in court: Craven 102 ALR 668, 685-686. Putting the qualification aside, in my opinion a defendant who admits a particular fact in his defence does not thereby waive his right to claim the privilege for all other facts. That is to say, the waiver goes no further than what has been admitted or asserted: Accident Insurance 31 NSWLR 412, 424. There is nothing unfair in this result. By way of contrast, it has been said in relation to legal professional privilege that partial disclosure in court of privileged material might result in unfairness and the interests of justice rightly demand that there should be full disclosure. However, this rule cannot be carried over into pleadings, the purpose of which is merely to put the parties on notice about the scope of the trial. 25 The result is that ASIC is not entitled to require the directors to provide further particulars of their defences. 26 The second dispute concerns discovery. The defendants seek an order that ASIC make available for inspection the witness statements and affidavits it has obtained from third parties for use in relation to this action. While the affidavits are in a form that would enable them to be filed, I have been told that ASIC has not yet decided whether they will be used. ASIC contends that the defendants cannot inspect the witness statements and affidavits because they are covered by legal professional privilege. The branch of this privilege that is relied upon is colloquially referred to as "litigation privilege". 27 Litigation privilege covers communications passing between a legal adviser (or client) and a third party if made for the dominant purpose of use in, or in relation to, litigation then existing, or anticipated or in contemplation: Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority [2002] VSCA 59 ; [2002] 4 VR 332, 335. A brief description of the privilege is found in Trade Practices Commission v Sterling (1979) 36 FLR 244. In a passage that has been frequently cited, Lockhart J sets out various categories of communications covered by legal professional privilege. The communications protected by litigation privilege include affidavits prepared for litigation ( Southern Equities Corporation Ltd v West Australian Government Holdings Ltd (1993) 10 WAR 1), unsigned or signed proofs of evidence ( Kennedy v Lyell (1883) 23 Ch D 387, 404; Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526, 562-564) and draft pleadings ( Propend Finance Pty Ltd v Commissioner of Australian Federal Police (1995) 58 FCR 224, 236-237). 29 There is an unusual aspect to litigation privilege. It concerns the limited ambit of the requirement for confidentiality. In this case ASIC has not identified the witnesses from whom the statements and affidavits have been obtained. Nor has it explained the relationship, if any, that exists between ASIC and those parties. According to the evidence it is unlikely that the third parties are under any obligation to keep confidential the information they have provided to ASIC. Indeed, each of them has a copy of his affidavit or statement (as the case may be) and has not been asked to restrict its publication. 30 It is clear (or at least it seems to be clear) that an essential aspect of litigation privilege is that the communication in issue must be confidential. The unusual aspect is that the obligation of confidence need not bind the third party. The consensus in the cases is that it is sufficient if the communication be confidential only in the hands of the legal adviser. What does this mean for the third party? One line of cases holds that unless the third party is under some obligation of confidence, he can be compelled to disclose his witness statement. For example, in J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (No 1) (1992) 38 FCR 452 French J said (at 457): "The confidentiality which attends [the taking of witness statements] is of a limited character. There is nothing to stop a prospective witness who has given a statement to a solicitor from announcing that fact and the content of his statement to the world at large. In the ordinary course, neither the solicitor nor his client could do anything to prevent such disclosure. " To a similar effect are observations of McLelland J in Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 14 NSWLR 132. The question that arose in that case was whether a witness, a medical practitioner, could be cross-examined about the contents of communications between the witness and a representative of the plaintiff concerning the preparation of the witness' affidavit. McLelland J said (at 134) that in a situation where the independent witness does not owe a duty of confidentiality to the party, "the question whether a claim for protection from disclosure of the communications on the basis of legal professional privilege should be upheld would ... depend on whether the disclosure sought is, on the one hand, from the party or his solicitor or representative, in which case the claim should succeed, or, on the other hand, from the independent witness, in which case the claim should fail. In both cases it was held that the witness statement was privileged in the hands of the witness and that this was so whether or not the witness was under an obligation of confidence to the party taking the statement. On the other hand, the cases also decided that the privilege only protects the precise communications between the witness and the legal adviser. The rationale is to keep secret what was said by the legal adviser. The witness is otherwise entitled to disclose to the world the facts that had been disclosed to the legal adviser. 32 In the Federal Court, the point is covered by the Evidence Act 1995 (Cth). Section 119 provides that evidence shall not be adduced if it results in the disclosure of a confidential communication between a client or lawyer and a third party if the communication was made for the dominant purpose of the client being provided with legal services. Section 117 provides that a communication will be confidential if made in circumstances where either the person who made it or the person to whom it was made was under an obligation not to disclose its contents. Leighton Contractors [2007] WASCA 151 decided that the effect of those sections in that "only one of the participants to the communication must be under a duty not to disclose" the communication (at [30]). In almost all cases that duty will fall on the legal adviser. 33 If the matter were at large there might be a basis for holding that information provided to a regulatory authority for the purpose of prosecuting a civil proceeding for a penalty is not confidential. The view I find attractive is that such information is public property to be made available to the defendant so that it can be used to ensure that justice will be done: R v Stinchcombe [1991] 3 SCR 326, 333. That is, I would hold that a regulatory body that brings a civil proceeding to recover a penalty is under an obligation similar to that owed by a prosecutor to an accused. Prosecutors are under a duty of disclosure. The principal purpose for the duty is to ensure that the accused is aware not only of the case in chief for the prosecution but also of all other evidence that bears on his guilt or innocence. In discharge of that duty the prosecutor is required to deliver to the accused, among other things, all witness statements, notes of interviews with witnesses, evidence from experts and so on: see eg Attorney-General (UK), Disclosure of Information to the Defence in Cases to be Tried on Indictment (1982) 74 Cr App R 302; R v Ward [1993] 1 WLR 619; Stinchcombe [1991] 3 SCR 326; R v Davis [1993] 1 WLR 613; Whitehorn v R [1983] HCA 42 ; (1983) 152 CLR 657. 34 But the matter is not at large. In Adler v Australian Securities and Investments Commission [2003] NSWCA 131 ; (2003) 179 FLR 1 Giles JA, who delivered the judgment of the New South Wales Court of Appeal, rejected a submission that ASIC was required to act with the same degree of fairness and detachment as a prosecutor. Giles JA said (at 151) that the duties of prosecutors "have been developed in the particular circumstances of criminal proceedings. By declaring that these proceedings are to be conducted as civil proceedings, the legislature has plainly declined to pick up the concepts. " In Australian Competition and Consumer Commission v Visy Industries Holdings Pty Ltd (No 2) [2007] ATPR 42-157 Heerey J dealt with the same point in short order. He said (at 47,046): "This is a civil proceeding. These documents are either discoverable or not in accordance with the law relating to discovery and legal professional privilege. That law confers rights on all litigants, whether they are model ones or not. " This reasoning was affirmed on appeal: Visy Industries Holdings Pty Ltd v Australian Competition and Consumer Commission [2007] FCAFC 147 , [112]. 35 A lay person might be forgiven for thinking that in the present context the distinction between civil and criminal proceedings is somewhat artificial and that in both kinds of proceedings the regulatory authority or prosecutor (as the case may be) is under a duty to ensure that the decider of facts (judge or jury) is best placed to arrive at the proper and just result. Perhaps the reason courts have rejected this approach is that in a criminal proceeding a conviction may result in imprisonment whereas in a civil penalty proceeding the worst that can happen is that the defendant's career is ruined or his life is wrecked. 36 For the foregoing reasons each application will be dismissed. There will be no order for costs. I will hear the parties on what further direction should be given to prepare the case for trial. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | civil penalty proceeding pleadings request for further and better particulars of defence whether self-incrimination or penalty privilege apply to pleadings whether privilege waived by filing a defence extent of waiver discovery witness statements and affidavits obtained by plaintiff whether protected from inspection by litigation privilege practice and procedure |
The complete specification for the patent was published and became open for inspection on 3 September 2001. VIP Plastic alleged that B.M.W. Plastics Pty Ltd has infringed the patent in suit. In an amended defence and cross-claim filed on 26 February 2009, B.M.W. Plastics denied infringement and, in its cross-claim, alleged that the patent in suit was invalid. B.MW. Plastics sought an order that the patent be revoked pursuant to s 138 of the Patents Act 1990 (Cth). In its particulars of grounds of invalidity, B.M.W. Plastics alleged that the patent in suit and its claims were invalid on the grounds of lack of novelty and lack of inventive step, as well as various other grounds. VIP Plastic denied that the patent in suit was invalid. This is an application by the respondent/cross-claimant, B.M.W. Plastics, for an order under s 97(3) of the Patents Act that the Commissioner of Patents be directed to re-examine a complete specification of the patent in suit. The notice of motion originally dated 8 May 2009, by which this application is made, also seeks an order as to the documents to which the Commissioner must have regard in re-examination. VIP Plastic opposes the orders sought in the motion. Subsection 98(1) makes it clear that re-examination under s 97 is limited to the issues of novelty and obviousness. The re-examination provisions were introduced following the report of the Industrial Property Advisory Committee to the Minister for Science and Technology dated 29 August 1984. The report was entitled "Patents, Innovation and Competition in Australia", and recommended the availability of re-examination "so as to utilise the expertise in the Patent Office to decide appropriate questions in the hope that this may reduce the costs of, or in some cases avoid the need for, court proceedings": see the report as quoted in Emperor Sports Pty Ltd v Commissioner of Patents [2005] FCA 996 ; (2005) 146 FCR 159 at 179-180 per Lindgren J and Termite Tite (NZ) No 2 Ltd v Term-Seal (Aust) Pty Ltd [2007] FCA 1493 ; (2007) 74 IPR 16 at 28 [50] per Besanko J. These provisions are to be read against the patent regime established under the Patents Act , including the definitions of 'novelty' and 'inventive step' in s 7 , and the related definitions of 'prior art base' and 'prior art information' in the Dictionary in Sch 1. Where the Commissioner reports adversely on a complete specification, the applicant or patentee may, within 2 months from the day when the Commissioner reports under s 98 , file a statement disputing the whole or any part of the report, whether or not the applicant or patentee also takes steps to amend the complete specification or files a statement of amendments in accordance with a direction of the Commissioner: see s 99. Where the re-examination was directed under s 97(3) , a copy of the report under s 98 and any statement filed under s 99 must be given to the court that gave the direction: see s 100. The Commissioner cannot revoke a patent under s 101 where (as would be the case here) relevant proceedings in relation to the patent are pending: see s 101(3). As Besanko J said in Termite Tite at 28 [51], the Commissioner in this circumstance can only provide a report under s 100 , which may be of assistance to the parties, but ultimately "it is up to the court to determine the validity issue on the evidence before it and the commissioner's report does not in any way bind the court". Where re-examination has occurred pursuant to s 97(3) , the parties to the proceeding have no right of appeal to the Court from the report of the Commissioner on the re-examination. Plastics submitted that the Court should order re-examination because the matters in issue were appropriate to be determined by the expertise of the Patents Office and determination of these issues was likely to avoid expense. According to B.M.W. Plastics, resolution of the cross-claim would require: (1) the interpretation of the claims of the patent in suit to determine their scope; (2) the interpretation of the disclosure in a US patent known as the Hancock et al patent; (3) consequential on (1) & (2), determination of the novelty of claims; (4) determination of the content of the "common general knowledge"; and (5) consequential on (1), (2) & (4), determination of the inventiveness of the claims. B.M.W. Plastics argued that the interpretation of the patent in suit and the Hancock et al patent would require expertise in the relevant technological art, which the Commissioner (but not a judge) might be said to have. B.M.W. Plastics submitted that the Commissioner might exercise this technical skill without the need for evidence from expert witnesses, and that re-examination before the Commissioner was conducive to economy. At the hearing today, B.M.W. Plastics reiterated that the Hancock et al patent was the primary piece of documentation relied on for lack of novelty and inventive step. It proffered an undertaking that it would not, in effect, challenge the Commissioner's report if unsuccessful. It sought an undertaking in similar terms from VIP Plastic. VIP Plastic declined to give the undertaking sought and opposed re-examination by the Commissioner. In written submissions, VIP Plastic argued that this report could be no more than "an advisory opinion of limited forensic value and, even if relied upon by the Court, would not preclude or obviate the need for evidence on the issues of novelty or inventiveness". VIP Plastic argued that the report would not result in any reduction of expense or avoidance of litigation. In written submissions, VIP Plastic submitted that re-examination by the Commissioner would not relieve the Court of the task of deciding the questions of novelty and lack of inventive step for itself, assisted by expert evidence tested in the usual way. VIP Plastic went on to say that it did not anticipate that this would be a "particularly lengthy or involved matter" and would involve 3 or 4 witnesses. Some would give evidence about the development of the invention and others, expert evidence about the field of invention, the common general knowledge and the place of the Hancock et al patent, and brief evidence touching interpretation. VIP Plastic anticipated a trial of a couple of days. VIP Plastic submitted that the Commissioner's report on re-examination would be likely to raise further issues for debate and resolution. Moreover, the Commissioner's report would not be apt to resolve the remaining claims of invalidity and infringement. I doubt that the provision of a report by the Commissioner after re-examination would reduce the cost of this proceeding and expedite its determination. First, the Commissioner's report after re-examination is not binding on the Court. In the absence of an undertaking of the kind sought by B.M.W. Plastics from VIP Plastic, the provision of a report under s 100 will not necessarily relieve the Court of the task of deciding the issues of novelty and lack of inventive step by reference to the admissible evidence. If the Commissioner's report were unfavourable to VIP Plastic, it would desire to put on evidence and dispute the report. There may be additional issues for the Court to determine if it receives such a report. Further, both parties said that, regardless of the lack of novelty and inventive step grounds, there will be a need for evidence, including expert evidence, to be adduced before the Court on various other issues. In the circumstances, I am not persuaded that re-examination by the Commissioner would be most expeditious or reduce costs. Moreover, it does not seem that the anticipated trial will be a particularly lengthy or complex one. In these circumstances, I decline to make the order sought by B.M.W. Plastics. I would order that B.M.W. Plastics pay the costs of the motion. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | standard patent whether a direction should be given to the commissioner under s 97(3) of the patents act 1990 (cth) to re-examine the patent in suit whether commissioner's report under s 100 of the act will reduce cost of proceeding and expedite its determination application dismissed patents |
The notice of motion was argued at the same time as other notices of motion the subject of orders made on 14 February 2006. The respondent's remaining notice of motion was the subject of both written and oral submissions. 2 Various categories of documents are sought for discovery, 20 categories in all. Categories 26 and 40 are now conceded. Categories 35 and 37 are not pressed. Additionally, the description of the categories has been in some cases narrowed considerably by amendments to the description of the categories. 3 It is common ground that the Court must approach the respondent's notice of motion having in mind the context of O 15 of the Federal Court Rules ('FCR') and Practice Note No. 14 together with the general approach sanctioned by the common law. This policy is also expressed in Practice Note No 14 . They determine the issues, and from the issues may be identified the categories of documents the court should consider when deciding what orders to make in respect of discovery. Additionally, it should be noted that Practice Note No. 14 emphasises that any discovery will be moulded to suit the facts of the particular case and that the Court will have regard to the issues in the case and the order in which they are likely to be resolved, the resources and circumstances of the parties, the likely cost of the discovery and its likely benefit. The present regime governing discovery in this court has been described by Lindgren J in Australian Competition and Consumer Commission v Advanced Medical Institute Pty Ltd [2005] FCA 366 at [17] --- [21] and [23]. His Honour there explains the difference between the criteria for discovery under the court's former rules and the more restrictive approach to discovery reflected in the current form of O 15 r 2(3) of the Federal Court Rules and the Practice Note 14, para 3. This more restrictive approach can be contrasted with the earlier rules permitting discovery of all documents that directly or indirectly "lead to a train of enquiry which would, either advance a party's own case or damage that of an adversary" : see Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1980) 42 FLR 266 at 269; 29 ALR 261 at 264 and the earlier case there discussed. This does not however, make the question of relevance otiose. In fact, amendments to the Federal Court Rules were made in 1999 "manifesting a quite new and restrictive policy in relation to the discovery to be allowed in this Court". In [2] it is pleaded that that second and third applicants are and at all material times were directors of and sole shareholders in the first applicant. However the preceding pleading in [1] puts in issue the fact whether the first applicant carried the business in issue 'together with the second and third applicants'. 9 I therefore consider that this category, although new, is directed to an issue raised by the pleading and the respondent is entitled to discovery in relation to it. Therefore the respondent says that the issues of reliance on representations alleged, causation and damages all concern the involvement of South Winds in the business of the Vineyard and the nature and extent of its communications with the applicants. 12 Discovery to date comprises invoices, a few spray records, two costs quotes and three communications concerning the Vineyard in 2001, two in 2002 and one in 2003. There are no documents evidencing any directions to South Winds, any requests for information, any working notes, any reports of progress or other communications with the applicants evidencing any steps taken, any matters on which decisions are sought or the like. The respondent submits this paucity of documents is inconsistent with the business of the Vineyard being run by a manager reporting to the second and third applicants. 13 The applicants contend that the only matters of relevance are the agency of South Winds and the fact of the application of Tokuthion. It is submitted that matter is addressed by documents showing the first applicant's engagement of South Winds and documents showing that the Tokuthion was applied. 14 The effect of the category would be to entitle the respondent to advance discovery in relation to the general viticultural practices of the Vineyard. 15 In my view neither the issues in the further amended statement of claim nor the principles relating to discovery and its confinement, particularly the avoidance of fishing, entitles the respondent to so expand the range of discovery. For that reason I would not allow discovery in relation to this category. However in my view, if there are any documents in existence relating to the making of any decision to purchase Tokuthion, they should be discovered because they are relevant to the pleaded issues of reliance. The applicants say that the only fact in issue is whether the application occurred. The respondent seeks to discover documents in relation to the manner of application. Having in mind the provisions of FCR O 15 r 2(3)(b), I consider that discovery should be allowed under this category, at least in relation to 10 January 2002. 23 2003 is included because the respondent wishes to have evidence on the presence or absence of chlorophenols and 2,4 DCP in the wines produced in 2003 to test the applicants' claim that Tokuthion applied in January 2002 was the cause of the presence of those substances in the 2002 wines. In my view that is an issue which arises under category 21 and the application in 2003 of Tokuthion is not a fact in issue in the pleadings so that category 20(b) should not be the subject of discovery. One of these documents is DISC.O83, a redacted copy of a report by the Australian Wine Research Institute with a facsimile transmission date of 6 September 2002. The redactions are, on the applicants' submission, because the material referred to was irrelevant. In that respect reliance is placed on GE Capital Corporate Finance Group Ltd v Bankers Trust Co [1995] 1 WLR 172 at 176 per Hoffmann LJ. As was there stated an irrelevant part may be covered up provided it does not destroy the sense of the rest or make it misleading. I do not consider that the redaction in the Australian Wine Research Institute Report on the Porongurup Winery is in that precluded character. 25 Additionally the respondent relies on particulars in (b), (c), (e), (h), (o) and (p) to [20.1(2)] in the further amended statement of claim. Paragraph 20 states that in the premises the applicants have suffered loss and damage by the conduct of the respondent which is recoverable under s 82 of the Trade Practices Act 1974 (Cth). Paragraph 20.1 pleads that in the case of the first applicant, this includes lost revenue resulting from contamination. In [20.1(2)] it is pleaded that it also includes costs incurred in conducting investigations and making enquiries 'which costs were aggravated by the conduct of the respondent between in or about June 2002 and the issue of these proceedings'. Further, by email dated 24 January 2003 to D Gregor of Bayer CropScience (applicants' discovered document DISC.102), the second applicant asserted that there had been trials implemented using Tokuthion. The respondent says that it has not been able to identify the documents that evidence such testing, apart from the Labmark report. 26 Given the nature of the pleadings in respect of these matters I consider that discovery should be allowed in terms of these categories provided it is directed to the issues identified in [55]-[58] of the outline of respondent's submissions on this notice of motion filed on 4 October 2005. Further, the discovery is not applicable to documents falling within category 26. Therefore, the respondent's proposed category 25 is now irrelevant. 28 Categories 25A and 25B address the terms of the pleadings in [20.1]. Category 25A should be addressed so as to not include the applicants' inability to sell the wine in the relevant period because of the contamination alleged. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson. | discovery application of principles to categories procedure |
The right of appeal to this Court is limited to an appeal on a question of law: Administrative Appeals Tribunal Act 1975 (Cth) s 44(1). 2 Mr Ernest Boothman is the respondent to the appeal. In 2001 he made a claim for compensation under the Safety, Rehabilitation and Compensation Act 1988 ('Cth') ('the SRCA') in respect of an injury he sustained in a motor vehicle accident in 1980. The details of the injury are not important for present purposes; it is sufficient to say that the respondent sustained an injury to his neck. In February 2002 a delegate of the Military Rehabilitation and Compensation Commission ('the Commission') decided that the respondent was not entitled to compensation. The respondent applied to the Administrative Appeals Tribunal for a review of that decision. He was successful, the decision was set aside and an order was made that the respondent's application be remitted to the Commission with a direction that the applicant is entitled to compensation for the injury under the SRCA and that the amount of that compensation be determined by the Commission. 3 The Commission appeals to this Court against those orders. 4 It is not necessary to set out all the facts because only one aspect of the Tribunal's decision is challenged. The injury occurred before the 'commencement date' in the SRCA. In those circumstances, compensation could only be recovered by the respondent under that Act if compensation was or would have been payable to him in respect of the injury, loss or damage under the Compensation (Commonwealth Government Employees) Act 1971 (Cth) ('the 1971 Act'): SRCA s 124(1A). The Tribunal member held that the facts of the case fell within one of the journey provisions in the 1971 Act, s 34(2) and (4). There were other issues before the Tribunal, but that is the only issue before me. If the Tribunal member erred in law on that issue then the respondent was not entitled to compensation. If the Tribunal member did not err in law on that issue then the appeal to this Court must be dismissed. He joined the Australian Army in April 1980. He did three months of basic training at Kapooka, New South Wales, and three months of training as a driver at Puckapunyal, Victoria. 6 In September 1980 the respondent was posted from the Army base at Puckapunyal to the Army base at Holsworthy in New South Wales. There is accommodation within the Army base at Holsworthy. He was granted a period of leave prior to taking up his new posting. The respondent's family lived in Kalgoorlie in Western Australia. The respondent flew to Perth where he met his brother who had the respondent's motor vehicle. He then drove to Kalgoorlie where he spent most of his leave. He then set out to drive to Holsworthy in his own motor vehicle. On the night of 18---19 September 1980 he was involved in the accident in which he suffered his neck injury. That accident occurred while he was travelling across the Nullarbor Plain in South Australia. The respondent had expected to arrive at the Army base at Holsworthy on or about 21 or 22 September 1980. 7 The respondent was not entitled to have his own vehicle transported to the place where he was undertaking his initial training (ie Kapooka and Puckapunyal). However, he was entitled to have his own vehicle with him at Holsworthy and the Army would either meet the cost of transporting the vehicle to Holsworthy or would pay a cash allowance and grant days of leave to the respondent to enable him to drive his own vehicle to Holsworthy. The respondent was given permission by the Army to drive his own motor vehicle from Kalgoorlie to Sydney and he was paid a considerable amount of money to cover that cost and was granted some additional days' leave to cover the travelling time. 8 The posting order which relates to the respondent was dated 9 September 1980 and the effective date of posting in terms of his service at the Army base at Holsworthy was 24 September 1980. The respondent was granted leave from 5 September 1980 to 23 September 1980 and, as I have said, part of the leave granted was a period to cover travelling time. 9 To summarise to this point: the respondent set out to drive to the Army base at Holsworthy in New South Wales and he expected to arrive there on or about 21 or 22 September 1980. His effective date of posting at the Army base at Holsworthy was 24 September 1980 and the period of leave he had been granted expired on 23 September 1980. The accident occurred on the night of 18-19 September 1980. The respondent said that he left Kalgoorlie when he did so as to give himself plenty of time to travel to Holsworthy and to deal with any delays or mechanical trouble encountered along the way. The Tribunal member said that the respondent 'did not have a specific target time to arrive at Holsworthy but, assuming no delays, he expected to arrive on or about 21 or 22 September'. 10 Evidence was given to the Tribunal by a Mr Desmond March, who at the time of the hearing, was the Assistant Director of Entitlements in the Department of Defence. Mr March had been associated with the administration of entitlements for service personnel for approximately 35 years. The Tribunal member appears to have accepted Mr March's evidence. Mr March said that the posting order meant that a soldier in the position of the respondent would be expected to 'march in' and report for duty to the new base and be on parade by 7.30 am on 24 September 1980. He said that the respondent would not become a member of the unit at Holsworthy until the effective date of posting which was 24 September 1980. Until then the respondent remained a member of his relinquishing unit. Although the applicant would officially remain a member of the unit at Puckapunyal until 24 September he was, for practical purposes, in a kind of limbo period whilst he was between postings. A soldier who did so would always be given accommodation at the new base. He could remain on leave until the 'march in' or the effective date of posting or he could apply to the receiving unit to have the last few days of his leave cancelled so that he could take up duties earlier than the effective date. Mr March said that a soldier in the position of the respondent, who had only been in the Army for a few months, would not have accrued enough days leave credits to cover the amount of leave that he was granted at that time and the leave form indicated that he had gone into debit for approximately five days. This was permitted under Army rules at the time and it suggested to Mr March that had the respondent applied to have the last few days of his leave cancelled when he arrived at Holsworthy this would have been approved. Mr March said that in calculating leave for travel time in 1980 the calculation would have been based upon the time needed to travel by air or by rail, and for a soldier like the respondent who intended to drive a vehicle to or from leave, the amount of driving time would be roughly equivalent to the time taken for a rail journey. Between Western Australia and Sydney in 1980 that would have been approximately two-and-a-half days. Mr March said that if a soldier did not wish to drive his or her motor vehicle back to the place of posting, the Army would meet the cost of transporting the vehicle. 11 These are the relevant facts. At the time of his injury the respondent was employed by the Army but was on leave. He was travelling in his own motor vehicle to the Army base at Holsworthy to take up his new posting there. The question for the Tribunal member was whether the circumstances fell within one of the journey provisions in the 1971 Act. The question for me is whether he erred in law in deciding that they did. That section provides that the Commonwealth is liable to pay compensation in accordance with the Act in respect of personal injury caused to an employee if the injury arises out of or in the course of the employment of an employee by the Commonwealth. The Tribunal member held that the respondent's injury did not arise out of or in the course of his employment by the Commonwealth. 13 Section 32 is the general provision dealing with journeys to and from employment. Journeys which fall within the terms of s 32 are deemed to constitute part of an employee's employment by the Commonwealth. The journeys which fall within the section are journeys which are to and from the employee's 'employment by the Commonwealth'. In Commonwealth of Australia v Duncan (1982) 44 ALR 249 the Full Court of this Court said that the question posed by s 32 was whether the employee was journeying to or from a state of activity called employment and not whether he was journeying to or from his place of employment (at 259 per Kelly J; at 266 per Fitzgerald J). The Tribunal member held that the circumstances of the case before him did not fall within the terms of s 32(1) because although the respondent was travelling to his place of employment, he was not travelling to his duties of employment. 14 Sections 33 and 34 deem certain journeys to be journeys to the employee's employment by the Commonwealth for the purposes of s 32(1). I will focus on journeys to the employee's employment by the Commonwealth. Both of the sections are subject to the provisions of ss 35 and 36 but, subject to one matter which I will mention, those sections are not relevant for present purposes. 15 Section 33(1) provides that where an employee (other than an employee to whom s 34 applies) makes a journey to his place of employment within the period prescribed in the section or if the journey would have ended within the prescribed period then he is deemed to have made a journey to his employment by the Commonwealth. The prescribed period is a period of one hour immediately before he commenced work or would have commenced work. 17 Section 34 deals with three particular situations: the first is an employee who is provided with temporary living accommodation as an incident of his employment or an allowance as compensation for temporarily providing his own living accommodation (s 34(1)), the second is an employee who is provided with living accommodation within his place of employment as an incident of his employment (s 34(2)) and the third an employee who is provided with living accommodation situated outside his place of employment (s 34(3)). It is the second situation which is relevant in this case. He decided that they did. However, he found that the respondent's journey did not end or would not have ended within the prescribed period in s 34(2)(a) and the second decision he had to make was whether the respondent's journey fell within the terms of s 34(4). 20 The Tribunal member considered whether the use of the present tense in the first part of s 34(2) precluded a conclusion that the circumstances before him fell within its terms. In other words, he had to consider whether, because the effective date of posting was not until 24 September 1980, it was correct to say (as asserted by the applicant) that at the time of the journey, the Army base at Holsworthy was not his place of employment and therefore at that time he was not provided with living accommodation within that base. Furthermore, he had to consider whether, if the answer to the first question was yes, it was correct to say (as asserted by the applicant) that at the time of the journey he was not making a journey to a place from which he was at liberty to absent himself. The Tribunal member said that to give effect to the applicant's submissions would be to interpret the section in an unnecessarily narrow way given the context in which the section appears. It is apparent from Mr March's evidence that, although the applicant may have technically remained attached to the Puckapunyal base and was subject to the commanding officer of that base up until the effective date of his posting to Holsworthy, the practical reality was that he had severed his connections with Puckapunyal and was for all practical purposes expected and required to present himself at the Holsworthy base by a certain time in order to meet his obligations. The facts that he could quite reasonably have arrived at Holsworthy early (as Mr March said was quite usual), would have been provided with accommodation on his arrival, and in all probability granted approval to cancel the last few days of his leave had he wished to do so, lends support to that view. He said that where two constructions are possible, that which is favourable to the worker should be preferred. 22 The Tribunal member said that the respondent's journey would not have ended within the prescribed period in s 34(2)(a) and therefore he was required to consider if the circumstances fell within s 34(4). 23 The Tribunal member referred to two authorities: Maunder v Commonwealth of Australia (1983) 51 ALR 44; Re James and Commonwealth of Australia [1983] AAT, N81/272 (Unreported, R K Todd, 6 July 1983) and then turned to consider whether the means of transport adopted by the respondent (ie driving his own motor vehicle) satisfied the three requirements in s 34(4)(b)(i),(ii) and (iii). The applicant used his own personal vehicle as the means of transport in accordance with what was obviously a long established practice and entitlement of Army personnel. The Army accepted that a soldier in the applicant's position was entitled to use his private vehicle to travel to his new posting and the Army was prepared to grant time and money to the applicant to facilitate that. If the applicant were to return to Holsworthy by air travel it would have been necessary for him to return to Perth from Kalgoorlie in order to do so. I accept the applicant's evidence that it was necessary and desirable to allow some leeway in travelling time so as to cater for the possibility of mechanical trouble and I also accept the evidence of the applicant and Mr March that it was normal for personnel arriving at a new base to arrive early. I note in passing that the current Army practice of calculating travel time on the basis of driving about 600 kilometres per day would imply a reasonable travelling time for the applicant of approximately 5 days. In my opinion it would have been unreasonable for a person in the applicant's position to have attempted to time his arrival at Holsworthy after such a long journey to the period between 8.00 pm on 23 September and 7.30 am on 24 September --- especially as he was expected to be fit for duty at 7.30 am. He decided that it was, although as to public transport he said no more than that 'although public transport may have been an option for the [respondent], it was not an option that, in my opinion, satisfied the three provisos ...'. 25 For these reasons, the Tribunal member concluded that the journey was deemed to be a journey to the respondent's employment by the Commonwealth for the purposes of s 32(1) of the 1971 Act and therefore part of his employment by the Commonwealth for the purposes of s 27(1) of that Act. First, did the Tribunal member err in law in concluding that, at the time of his journey to the Army base at Holsworthy, the respondent was, as an incident of his employment, provided with living accommodation within his place of employment, being the Army base at Holsworthy, and was he at the time of the journey at liberty to absent himself from that place of employment? Furthermore, because he had not 'marched in' and reported for duty at the Army base at Holsworthy, in making his journey to the base, he was not making a journey to his place of employment during a period in which he was at liberty to absent himself from his place of employment. 28 Secondly, if the answer to the first question is no, did the Tribunal member err in law in concluding that in making the journey to the Army base at Holsworthy in his own motor vehicle the journey was made by the 'last means of transport' which satisfied the three criteria in s 34(4)(b)(i), (ii) and (iii) of the Act? 29 The applicant submits that because a person using their own motor vehicle may choose when they arrive at a destination, a journey by private motor vehicle could not satisfy the requirements of s 34(4)(b) of the Act. 30 Before considering the rival contentions, I mention three matters of a general nature which were the subject of submissions. First, the respondent referred to the well-established principle that I should not analyse the reasons of the Tribunal with an eye keenly attuned to the perception of error: Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280; Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259. That is certainly a matter which I must bear in mind, although I think the 'principle' is of limited relevance here because both the Tribunal's reasons and the points of construction raised by the applicant are reasonably clear. Secondly, the respondent submits that in construing the sections of the Act, I should bear in mind that it is remedial or beneficial legislation and is to be interpreted liberally. Workers Compensation legislation is often referred to as a prime example of such legislation. However, I must also bear in mind the limits on this approach to statutory construction. Although the purpose of the Act is beneficial, it does not follow that recovery is contemplated for every act of violence or every consequence that could be described as an injury. The numerous injuries set out in the table to Sch 1 (which extends over 12 pages) are identified with considerable precision. The clauses in Sch 1 which precede the table, too, are drafted with some attempt at precision. The legislation confers benefits, and no doubt it should not be construed restrictively, but in dealing with specific limited words like those of cl 5, it is not open to apply much liberality of construction. It is difficult to state the legislative purpose except at such extreme levels of generality that it is not useful in construing particular parts of the legislative language. As Spigelman CJ said,"The issue before the Court is the determination of the circumstances in which compensation is payable. " The legislation has endeavoured to define these circumstances in precise language which does not permit universal recovery; and hence "[t]he Court is not required to give the most expansive possible interpretation of such circumstances". I received detailed written submissions from each party as to the conclusions which could be drawn from this material. I will not set out the effect of those submissions; it is sufficient for me to say that I do not find the Second Reading Speech or Explanatory Memorandum of any assistance in resolving the points of construction raised in this case. 32 The respondent was employed by the Commonwealth at the time of his journey to the Army base at Holsworthy. The 1971 Act contains a provision which deals with a case of a person who makes a journey for the purpose of taking up employment with the Commonwealth. Nevertheless, it provides some indication of the intended scope of the journey provisions in the 1971 Act. A person travelling to a destination to take up employment with the Commonwealth is not precluded from relying on the journey provisions in the 1971 Act merely because he or she had not become an employee of the Commonwealth at the commencement of the journey. 34 A number of matters suggest that at the time of the respondent's journey the Army base at Holsworthy was not his place of employment. They were identified by the applicant. The respondent had not previously worked at the base. The respondent was required to 'march in' and report for duty at the base at 7.30 am on 24 September 1980. The respondent remained a member of his relinquishing unit at Puckapunyal until the effective date of posting which was 24 September 1980. Furthermore, if the Army base at Holsworthy had not yet become his place of employment, and if he had not previously worked at the base, the applicant submitted that it could not be said that the journey occurred during a period during which he was at liberty to absent himself from his place of employment. The applicant submitted that the use of the present tense in the first part of s 34(2) is decisive. 35 The key to the resolution of the applicant's first submission lies in the meaning to be given to the phrase 'place of employment' in the first part of s 34(2). More accurately, in light of the nature of the appeal to this Court, the question is whether it was open to the Tribunal member to conclude on the facts that the respondent's place of employment was the Army base at Holsworthy. Although he did not spell his reasoning in detail, the Tribunal member must have concluded that at the time of his journey the respondent's place of employment was the Army base at Holsworthy. In my opinion, it was open to the Tribunal member to reach that conclusion. The respondent had left Puckapunyal, and both the Commonwealth and the respondent envisaged and intended that he would not return there. Despite the fact that he remained a member of his relinquishing unit until the effective date of posting which was 24 September 1980, I think that in light of the posting order and, at least from the date of that order (that is, 9 September 1980), it cannot be said that the respondent's place of employment was Puckapunyal. In those circumstances, the respondent was employed by the Commonwealth and he either had no place of employment when he set out on his journey to the Army base at Holsworthy, or that base was his place of employment at that time. To my mind, the words 'place of employment' are wide enough to embrace the conclusion that at the time of his journey his place of employment was the Army base at Holsworthy. From 9 September 1980, being the date of the posting order, the respondent was required to report to the Army base at Holsworthy for employment duties and that was the place at which both the Commonwealth and the respondent envisaged and intended that he would next carry out active employment duties for the Commonwealth. Once the conclusion is reached that at the time of his journey the respondent's place of employment was the Army base at Holsworthy, I think the conclusion must also be reached that it was open to the Tribunal member to conclude that the respondent's journey took place during a period during which he was at liberty to absent himself from his place of employment. 36 In my opinion, having regard to the proper construction of the first part of s 34(2) it was open to the Tribunal member to conclude that the respondent's journey fell within its terms. I reject the applicant's first submission. 37 But for the accident, the respondent's journey would not have ended within the period prescribed in s 34(2)(a). In other words, it would not have ended between 8.00 pm on 23 September 1980 and 7.30 am on 24 September 1980. To succeed, the respondent needed to bring himself within the terms of s 34(4) and, in particular, paragraph (b). The Tribunal member held that he did, and the applicant's second submission challenges that conclusion. 38 It is likely that the provisions of s 34(4) were enacted by Parliament to avoid the rigours of the prescribed period in a case where the employee does not have access to a form of transport which means that he or she did or would arrive within the prescribed period. For example, employee A can catch a bus or train which will see him arrive at his place of employment within the prescribed period. Employee B lives in a different area, which is perhaps more remote, and she can only arrive at the same place of employment as employee A by bus or train at a time before the commencement of the prescribed period. Section 34(4) means that the journey provisions of the 1971 Act may apply to employee B. The temporal link remains because, if she is to fall within the terms of the 1971 Act, the means of transport taken by employee B must be the 'last' means of transport conveniently available to the employee. There is flexibility in this area as well because a means of transport may be available but in the circumstances it may not be a means of transport the employee could reasonably be expected to use. 39 The assumption behind these provisions appears to be that an employee will not choose to arrive at the place where he or she will commence employment duties at a time any earlier than is necessary. 40 The use by an employee of a private motor vehicle where that employee can choose when to leave and, unforeseen contingencies to one side, when to arrive, does not fit easily into this general notion of the purpose of s 34(4). Indeed the applicant submits that the use of a private motor vehicle in such circumstances can never be the 'last' means of transport within s 34(4)(b). The applicant draws, and to a point gains, support from the words of s 34(4)(b)(ii) which refer to a means of transport which would 'ordinarily' enable the employee to complete the journey before the commencement of the prescribed period. The use of the word 'ordinarily' is suggestive of a pre-determined timetable which cannot be altered by the employee's decision as to when he will commence his journey. 41 I was referred to the decision of the Full Court of this Court in Maunder v Commonwealth of Australia (supra). That case concerned a claim by Captain Maunder's widow for compensation in relation to the death of Captain Maunder from injuries he sustained in an accident in his own motor vehicle some time after he had left a regimental depot. The Administrative Appeals Tribunal rejected the claim on the ground that the means of transport used by Captain Maunder, having regard to his inebriated state, was not one he could reasonably have been expected to use within s 33(3)(b)(iii). It is true that the Court did not say transport by private motor vehicle could never be the 'first' means of transport (the case involved a journey from work) within s 33(3)(b), but the Tribunal had decided the case on a different ground and the only issue before the Full Court was whether the Tribunal had erred in law in doing so. The legislative intention seems to be that, if the employee delays in leaving his place of employment and commencing his journey until after the prescribed period, he must, to obtain the benefit of s 33, show that a means of transport was not available to him during the prescribed period. There is a good deal of force in this submission. However, I have reached the conclusion that if I were to accept the submission I would be reading words into the section which are not there. There is nothing in the section which requires the employee to show that there is no means of transport which would see him arrive within the prescribed period, or which provides that transport by private motor vehicle cannot be the last means of transport within the subsection because the employee can choose when to commence his journey and therefore, to a point in the case of a long journey, when he will arrive. 43 Once these conclusions are reached, a conclusion that it was open to the Tribunal member to find that in the particular circumstances of this case the journey by the respondent in his own motor vehicle satisfied the requirements of s 34(4)(b) is inevitable. The Army not only allowed him to drive his own motor vehicle to the Army base at Holsworthy but granted him leave to do so and contributed to the costs of doing so. In the particular circumstances of this case, transport in this way was not only a means of transport he could reasonably have been expected to use, but was the means of transport he could reasonably have been expected to use. I reject the applicant's challenge to the Tribunal member's conclusion that the case fell within the terms of s 34(4). I will hear the parties as to the costs of the appeal. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | entitlement to compensation appeal from decision of administrative appeals tribunal claim for compensation in relation to motor vehicle accident whether respondent would have been entitled to compensation under compensation (commonwealth government employees) act 1971 (cth) where respondent was a member of the army at time of accident where respondent was on leave between postings where respondent had never worked at location of next posting whether location of next posting was respondent's 'place of employment' within the meaning of s 34 of the act whether respondent was at liberty to absent himself from place of employment where respondent was travelling by private motor vehicle at time of accident whether respondent used 'last means of transport' within the meaning of s 34(4)(b) of the act. worker's compensation |
APRA alleges that Mr Siminton has engaged in a number of contraventions of the Banking Act 1959 (Cth) ("the Act "). These contraventions are said to have occurred in the course of the implementation of a scheme, devised by Mr Siminton, under which a "country", the Principality of Camside, was established and that country became host to a "bank" called the Terra Nova Cache. Members of the public were encouraged to make deposits in the "bank" in return for high interest payments. Deposits were solicited at public meetings, through material placed on the internet and by other means. It will be necessary, later in these reasons, to examine the activities of Mr Siminton and some of his associates in greater detail. 2 It is necessary first to examine the legislative provisions, on which APRA relies, to support its application. Most of the relevant provisions are to be found in the Act . 3 Section 7 makes it a criminal offence for a natural person to carry on any banking business in Australia unless APRA, acting under s 11 , by order, determines that s 7 does not apply to a particular person. Section 5 relevantly defines "banking business" to mean "a business that consists of banking within the meaning of paragraph 51(xiii) of the Constitution . Two definitional provisions should be noted. Section 65A(6)(a) confers standing on APRA to apply to the Court for the granting of injunctions. Certain specific provisions deal with the nature and extent of the Court's power to grant injunctions and other relief under s 65A. These other powers include the wide general power, conferred by s 23 of the Federal Court of Australia Act 1976 (Cth), to make such orders as it thinks appropriate and the power to appoint a receiver which is provided for in s 57(1) of that Act . His defence did not contain any assertion that any provision of the Act , on which APRA relied, was invalid for constitutional reasons. Nonetheless, at a number of directions hearings, counsel appearing for him contended that s 65A of the Act was constitutionally invalid. I directed that, if this contention was to be persisted with, the defence was to be amended and the notice, required by s 78B of the Judiciary Act 1903 (Cth), should be given to Attorneys-General. Eventually these steps were taken. No Attorney-General intervened in the proceeding. 8 Mr Siminton argued that s 65A of the Act was "unconstitutional" and could not be relied on by APRA. Mr Siminton accepted that provisions such as ss 7 and 66 of the Act were constitutionally valid: they were an exercise of the incidental power and were adopted to secure compliance with laws made under the banking power. Section 65A was not, it was argued, an exercise of the incidental power. Rather it was part of what was described as "a two step criminal proceeding" in which the first step under s 65A deprived those against whom orders were sought of the protection accorded those facing criminal charges. 10 This contention must fail. It is a matter for the Parliament to determine which measures it will adopt in order to secure compliance with legislation which is enacted pursuant to one of the heads of power conferred by s 51 of the Constitution . Parliament may determine to visit contraventions of an Act with criminal sanctions. It may also provide for civil remedies. It may determine to do both. In R v Smithers; Ex parte McMillan [1982] HCA 76 ; (1982) 152 CLR 477 the High Court dealt with a challenge to the validity of provisions of the Customs Act 1901 (Cth) which enabled certain office-holders to apply to this Court for an order that a person, who had been involved in the importation of narcotic substances, pay a pecuniary penalty to the Commonwealth. The application could be made whether or not the person had been charged or convicted of any offence under the Customs Act . The Customs Act also made importation of such substances a criminal offence. Similarly it would be a legitimate exercise of the power to make that conduct the occasion for liability to a civil action for penalties of the traditional kind. Section 243B, in providing for the imposition of pecuniary penalties of the class provided for in Div. 3, stands in no different position. It penalises dealings in narcotic goods that have been imported in contravention of the Act . In so doing it constitutes a deterrent to importation in breach of the statutory provisions and provides a further sanction with a view to ensuring compliance with the statutory provisions governing importation. Its importance in this respect is that it seeks to deprive the dealing in narcotic goods of the considerable financial rewards which are the chief inducement for importing them into Australia and for dealing in them. Only approved persons may conduct banking businesses. Persons providing other forms of financial services may not adopt the title "bank" and thereby mislead the public as to their status. People may thereby be induced to deposit funds with the "bank". If conduct which contravenes the Act is discovered charges may be laid. The prosecution of criminal charges, however, will do nothing to protect depositors' funds. Nor will a pending trial prevent the defendant continuing to advertise that he or she is conducting a banking business. Section 65A fills this void. It enables this Court to grant immediate and long term relief where contraventions of the Act have occurred, are occurring or, it is proposed, should occur. Injunctions may issue restraining persons from engaging in contravening conduct and may require such persons to take remedial action. Such provisions are, in my opinion, incidental to the enforcement of the regulatory regime which falls squarely within the banking power. 12 Acquisition Of Property Other Than On Just Terms. The "freezing order" to which Mr Siminton refers was made by Gray J on 10 January 2006 under s 65A of the Act . There were, in fact, multiple orders. Those orders prevented Mr Siminton from dealing with funds and property held by him including deposits held in the Terra Nova Cache. Mr Siminton argues that, under the order of Gray J, the Commonwealth has acquired his property, namely his money and other assets. He has effectively been deprived of that property while the order remains in force. This, he submits, involved a contravention of s 51(xxxi) of the Constitution . 13 Section 51(xxxi) empowers the Parliament to make laws with respect to the "acquisition of property on just terms from any ... person for any purpose in respect of which the Parliament has power to make laws. " Power to acquire property is thereby conferred on the Parliament but the power may not validly be exercised unless the relevant law provides for just terms. This restraint is recognised in s 69E of the Act which provides that any acquisition of property which other provisions of the Act might effect must be on just terms. 14 The first questions which arise, for present purposes, are whether s 65A of the Act empowered Gray J to make an order which had the effect of acquiring Mr Siminton's property and whether His Honour's orders, in fact, had that effect. 15 The words "acquisition of property" in s 51(xxxi) of the Constitution are not to be read in isolation. That phrase must be read in its entirety and, when so read, it indicates that s 51(xxxi) applies only to acquisitions of a kind that permit of just terms. It is not concerned with laws in connection with which "just terms" is an inconsistent or incongruous notion. Thus, it is not concerned with the law imposing a fine or penalty, including by way of forfeiture, or a law effecting or authorising seizure of the property of enemy aliens or the condemnation of prize. Laws of that kind do not involve acquisitions that permit of just terms and, thus, they are not laws with respect to "acquisition of property", as that expression is used in s 51(xxxi). The statutory power to order forfeiture was held not to be a law with respect to the acquisition of property within the meaning of s 51(xxxi). 16 In Smithers the High Court also upheld the constitutional validity of s 243E(2)(c)(i) of the Customs Act which empowered this Court to direct the Official Trustee to take control of specified property of a person if there existed reasonable grounds for the belief that the person had engaged in narcotics dealing and derived benefits therefrom. The Court held that s 51(xxxi) had no application because it did not involve an acquisition of property by the Commonwealth, much less an acquisition on just terms. The property was placed under the control of the Official Receiver in order to ensure that the pecuniary penalty provisions in s 243B could not be rendered nugatory by disposition of property. In Commissioner of Australian Federal Police v Cox (1986) 78 ALR 509 at 514-515 Pincus J held that the same reasoning supported the validity of s 243E(2)(c)(ii) which empowered the Court to make an order directing the Official Trustee to take control of all of the property of the person involved in narcotic dealings. 17 The "freezing order" made by Gray J was made under s 65A of the Act . It did not, in terms or in effect, cause the Commonwealth to acquire anything. His Honour's orders prevented Mr Siminton from dealing with certain identified property pending the hearing and determination of this proceeding or until further order of the Court. No alteration to the ownership of the property was effected. What will happen to it will depend on the outcome of this proceeding. Control of the property has not passed to any other person; nor has title. Under the orders Mr Siminton could obtain access to some funds in order to meet living and legal expenses. 18 This contention is without substance. 19 The Section 80 Point. Mr Siminton contends that, in substance, although not in form, an application under s 65A of the Act which is founded on the allegation that a person has engaged in conduct which would constitute a contravention of s 7 of the Act , is to be equated with a criminal prosecution under s 7. Mr Siminton contends that s 7 creates an indictable offence and that, therefore, any proceeding against him must take the form of a trial by jury. This, he says, is mandated by s 80 of the Constitution . 20 The hearing of an application, made under s 65A of the Act , is not a trial on indictment of any offence against a law of the Commonwealth and, in particular, of an offence against s 7 of the Act : cf Sterling v Trade Practices Commission (1981) 51 FLR 1 at 8. The application does not place Mr Siminton in jeopardy of a conviction for any offence or the imposition of any criminal penalty. 21 The Separation of Powers Point. It will be convenient to deal with the final two arguments advanced by Mr Siminton together. They allege that s 65A of the Act confers legislative and executive power on the Court contrary to the implied limitation recognised in R v Kirby; Ex parte Boilermakers Society of Australia [1956] HCA 10 ; (1956) 94 CLR 254. 22 As I understood the argument advanced by Mr Siminton it was that s 65A of the Act confers very wide powers on the Court. It is said that these powers are wide enough to enable the Court to act as a Royal Commission or Board of Inquiry, to award damages without the assistance of guiding criteria and to act as a surrogate or "collection service" for third persons who may wish to obtain damages from Mr Siminton. 23 Section 65A of the Act was inserted in 2000, see Financial Sector Legislation Amendment Act (No 1) 2000 , s 20. Under the former legislation, ss 7 and 66 of the Act contained penalty provisions only. The inclusion of s 65A was designed to allow APRA, subject to Court approval, to act pre-emptively to stop undesirable activities rather than simply acting to impose punishment after the damage had occurred: see Explanatory Memorandum, Financial Sector Legislation Amendment Act (No 1) 2000 . Many of its sub-sections are drafted in the same or substantially the same terms as provisions to be found in other Commonwealth legislation. Comparisons can be drawn with s 80 of the Trade Practices Act 1974 (Cth), s 12GD of the Australian Securities and Investment Commission Act 1989 (Cth), and s 1324 of the Corporations Law 1989 (Cth). The constitutional validity of these equivalent provisions has been upheld by Court decisions spanning many years. Section 80(1) of the Trade Practices Act , which corresponds with s 65A(1) was held by Lockhart J to be a valid law of the Commonwealth Parliament in Trade Practices Commission v Sterling (1980) 28 ALR 497 at 517-9. An appeal from his Honour's decision was dealt with by a Full Court. The appellant did not, on appeal, seek to argue that his Honour's decision as to the validity of s 80(1) was wrong. It was, however, argued that sub-ss (4) and (5) of s 80 which contained provisions equivalent to those to be found in s 65A(3) were invalid, being beyond constitutional power. These submissions were rejected by the Full Court: see Sterling v Trade Practices Commission (1981) 51 FLR 1 at 7-9. 24 Save for its first word s 65A(11) is in the same terms as s 1324 of the Corporations Law 1989 (Cth) (now s 1324 of the Corporations Act 2001 (Cth)). As the Full Court noted in Medibank Private Limited v Cassidy [2002] FCAFC 290 ; (2002) 124 FCR 40 at 50-51, provisions of this kind can be traced back to the Chancery Amendment Act 1858 (UK) ( Lord Cairns Act). The purpose of such provisions is expressly to empower a Court to award damages to persons who have suffered as a result of conduct which contravenes legislative requirements whether or not a curial power to grant a mandatory injunction might also support such an order. The exercise of the power is conditioned on the existence of a power to grant an injunction. That power is conferred by s 65A(1) which is a valid provision. In my opinion there is no reason, in principle, to distinguish between the power to grant injunctions and the power to require a respondent to pay damages occasioned by the same conduct which might justify the granting of an injunction. The granting of such relief does not cast the Court in the role of a "collection service" acting on behalf of third parties. It involves a judicial act in aid of a legislative purpose. Sections 65A(11) is valid law of the Commonwealth. No notice of motion seeking such an order had been filed but Mr Siminton had, prior to trial, filed and served a notice of preliminary objections which included a summary of the submissions which he desired to make in support of the strike-out application. Counsel appearing for APRA did not object to the application being made or argued in advance of the trial proper. 26 Mr Siminton submitted that the proceeding was an abuse of process because it had been brought for the collateral purpose of seeking information and evidence to substantiate or justify allegations that Mr Siminton had committed criminal offences under ss 7 and 66 of the Act. " (I take this to be a reference to the terms of order 2 of the orders made by Gray J on 10 January 2006 under which Mr Siminton was given liberty to apply on notice in writing to APRA, supported by affidavit evidence of his means, for an order that he be permitted to withdraw monies for living and legal expenses). Similar strike-out applications had been made to Merkel J on 30 March 2006 and to me on 18 October 2006. Those applications had been supported by substantially the same arguments and, in both cases had been rejected: see Australian Prudential Regulation Authority v Siminton (No 2) [2006] FCA 336 ; Australian Prudential Regulation Authority v Siminton (No 5) [2006] FCA 1340. There was no substance to the argument advanced in support of the permanent stay applications when they were first made. It was not improved by repetition. Most of the deponents were private citizens who had had dealings with Mr Siminton, associates of Mr Siminton and/or the Terra Nova Cache. There were also detailed affidavits from a Senior Analyst employed by APRA and the Managing Director of a company, Technocash Pty Ltd, which provides an internet based service to facilitate money transfers both within Australia and internationally. None of the deponents was required to attend for cross-examination. The evidence is, therefore, largely uncontroversial. It will not be necessary to recount the experiences of each of the persons who was induced to make contributions to the Terra Nova Cache. The stories which they recount have much in common. Examples will suffice. 29 Before embarking on a summary of the evidence I should note that, on the eve of the trial, on 4 June 2007, Mr Siminton's solicitor filed a document containing what were described as "preliminary objections" to APRA's application. That document contained, amongst other things, various complaints about the adequacy of the statement of claim filed by APRA. The principal deficiency alleged related to an absence of particulars of allegations made by APRA. I refused to postpone the commencement of the trial while APRA made good the alleged deficiencies in its statement of claim. I did so for a number of reasons. In accordance with pre-trial directions the bulk of the affidavit material on which APRA proposed to rely at trial had been filed and served on 28 February 2007. On 21 May 2007 APRA filed and served its outline of submissions. The outline restated the various elements of its claim and, in a series of detailed footnotes, it referred to the paragraphs in the various affidavits on which it relied to make good those claims. Mr Siminton could have been in no doubt as to how the case was being put. At no stage did he seek further and better particulars of any of the allegations contained in the statement of claim. The deponents of the affidavits were not subsequently required to attend for cross-examination. Two further affidavits were filed late in May 2007. These were affidavits from two more depositors which did no more than provide additional evidence to support claims already made and supported by evidence given by the depositors whose affidavits had been earlier filed and served. In addition, there were some pleading points which amounted to a contention that the statement of claim had failed to plead certain essential elements which were necessary for APRA to succeed. I deferred ruling on these points until I had heard final addresses. Having done so I have concluded that APRAs statement of claim pleads all elements necessary to support the case it advances against Mr Siminton. 30 On 15 January 2002 Mr Siminton registered a business name under Victorian legislation. That business name was "Principality of Camside". He was identified as the only person who was carrying on the business at that time. The registered address of the business, its mailing address and the address of Mr Siminton was, in each case, given as "189/199 Toorak Road, South Yarra 3141. " This was not the address of a unit within a complex situated at 199 Toorak Road. Rather it was a post box number (189) held at commercial premises which were situated at 199 Toorak Road. 31 There was no equivalent business name registration effected for the Terra Nova Cache. 32 Not long after the business name of the Principality of Camside was registered, on 5 March 2003, the Principality, under its "Great Seal" made what it described as a "Formal Declaration of War" against the Commonwealth of Australia. Mr Siminton was one of the signatories to the declaration. In a charade reminiscent of the screenplay in "The Mouse that Roared", the declaration was duly ignored by the Commonwealth government. It had, however, apparently, the effect desired by Mr Siminton. The website of the Principality thereafter contained an entry headed "Contacting Her Majesty's Government of Camside" and, on its first page, referred to "Dr David R Siminton" as "Governor --- State of Sherwood HM Government of Camside 189/199 Toorak Road, South Yarra 3141 Victoria, Australia. For this legal reason the "spoils of war", namely the Australian National Estate, Crown Land, roads and freeways, are now the property and responsibility of the Principality of Camside. Otherwise, this would have caused us to duplicate the current world banking behavioural rules, rather than offering our Citizens a new and legal banking alternative. Greater detail with respect to each benefit will gradually become available behind new buttons that will be added to the left of this web page. Depositors automatically become owners of the bank. Depositor's funds are guaranteed repayable to them at any time they call upon them, regardless of any "financial crash" that may be in progress. Depositor's funds will be backed by a 100% equivalent value of precious metals. Terra Nova Cache will not engage in fractionalize banking practices. Terra Nova Cache will not engage in lending funds in excess of its legitimate deposit asset holdings. Terra Nova Cache will not charge interest, account or transaction fees. As depositor's funds are cleared into Terra Nova Cache, these funds or precious metal equivalents will be stored outside any existing world bank or financial institution facilities. Owner/Depositors will receive pro-rata profit share on the distributable profit earnings of Terra Nova Cache. Terra Nova Cache will not affiliate with any other banks or financial institutions, and will report its trading activities to only HM Government of Camside. All accounts held with Terra Nova Cache will be numbered accounts, which will not carry any account name details. Soon Terra Nova Cache will be offering an opportunity to be trained and employed as Bank Treasury Traders. This business opportunity will offer Citizens, financial freedom, and a tax free home income earning business employment opportunity with the bank. It is envisaged that the next stage of Terra Nova Cache's development, once deposits are established, profitably traded and fully precious metal backed, that the bank will be offering interest free loans to its depositor/owners. The matching of account names to account numbers is not intended to be a need for either bank executives or its employees. These funds will attract a 10% p.a profit share, calculated on the value of the actual accounts deposited value. This profit share will be paid progressively as one/twelve of the 10% profit share p.a rate per month, into an account nominated by the depositor/owner. All profit share returns are paid to the depositor monthly, and for this reason, at this stage do not compound in their deposit accounts. No bank assets will be kept in any existing bank or financial institutions control, premises or facilities. The Citizens that have helped us build out new bank's concept, were also worldly enough to realise, that what we have created is going to be of world wide appeal. Mr Andrew Vella was an early depositor. He had had discussions with Mr Siminton about the establishment of the bank. On 29 January 2004 he made a payment of $100,000 to the credit of a Commonwealth Bank account held in the name of the Principality of Camside. The deposit was subsequently acknowledged in letters, written on Terra Nova Cache letterhead, and signed by Mr Siminton. In about August or September 2004 Mr Vella sought to recover the funds he had invested. He was unsuccessful. 39 Most of the later depositors who gave evidence traced their involvement with the Terra Nova Cache to local meetings which they had been invited to attend. One such depositor was Mr William Ketelhohn. In about August or September 2004 he attended a meeting at the CWA Hall in Bundaberg. He had been invited to attend by two friends. Mr Siminton addressed the meeting. He invited those present to become citizens of Camside and to deposit money with him and earn high interest rates. Mr Siminton introduced Ms Karen Holzheimer and told those present that she was going to handle all of the financial matters. About a month later Mr Ketelhohn paid a $200 membership fee for citizenship of the Principality of Camside. On 31 July 2005 he attended another meeting at the Bundaberg CWA Hall. The meeting was addressed by Mr Siminton and proceeded along the same lines as the meeting which Mr Ketelhohn had attended in 2004. Mr Siminton spoke about making deposits into the Terra Nova Cache and said that interest could be earned at rates up to 50% per annum. Mr Ketelhohn understood from what Mr Siminton said that the Terra Nova Cache was a bank owned by the depositors. (I interpose here that others who attended these meetings had a specific recollection of Mr Siminton referring to the Terra Nova Cache as a bank set up by the Principality of Camside. One of these deponents was Mr Bernard Barry who attended a meeting at the Bundaberg CWA Hall on 30 July 2005. Ms Christine Bosch was present at three meetings in Bundaberg which were addressed by Mr Siminton. At all of them she recalls Mr Siminton saying that the Terra Nova Cache was a banking system run by Camside). Ms Holzheimer was again present and Mr Siminton told those attending that they could contact her should they wish to make deposits. Ms Holzheimer wrote her contact details on a whiteboard and also wrote down details of the bank account into which deposits could be paid. As he left the meeting Mr Ketelhohn picked up a document which contained substantially the same information which appeared in the extract from the Principality of Camside website and which is set out above at [33]-[37]. Mr Ketelhohn decided to make a deposit of $3,000 in the Terra Nova Cache. He contacted Ms Holzheimer by telephone and she provided him with account details for an account in the name of Technocash Pty Ltd. He made the deposit at his local National Australia Bank on 1 August 2005. He received an acknowledgement of the deposit on Terra Nova Cache letterhead signed by Mr Siminton. The address on the letterhead was 189/199 Toorak Road South Yarra 3141. Adjacent to the address was the Principality of Camside's website details. The letter was addressed to Mr Ketelhohn and dated 24 November 2005. It is typical of letters which were received by other depositors. In most cases, utility accounts such as electricity, gas, telephones etc, can be made via any Post Office at which you may choose to pay by cash, or at which you may also have chosen to cash your money order/s. Attached to the letter, again on Terra Nova Cache letterhead, was an account statement for the period 2 August 2005 to 30 September 2005. Mr Ketelhohn received two postal notes each for the value of $98.63 which were said to be for interest earned on his deposit in August 2005 and September 2005. He did not receive any other interest payments. In 2006 he rang Mr Siminton three or four times asking about his account. On each occasion Mr Siminton said he couldn't help Mr Ketelhohn. 41 As already mentioned Mr Bernard Barry attended another meeting addressed by Mr Siminton at the Bundaberg CWA Hall on 30 July 2005. Mr Barry recalls Mr Siminton saying that the Terra Nova Cache was a bank set up by the Principality of Camside and that citizens of Camside could deposit their funds with the bank. The Terra Nova Cache was owned by its depositors. All profits would be distributed to the depositors. Mr Siminton advised the 15 or so people present that interest rates paid by the Terra Nova Cache would vary but that all those present could obtain a fixed rate of 40% regardless of how much they deposited. The offer was to be open for three weeks only. Mr Siminton said that deposits were for a minimum term of 30 days and that, after that, a deposit could be withdrawn. Withdrawals would be subject to a small administration fee. Mr Siminton continued that, in the near future, the Terra Nova Cache would be able to make loans to Camside citizens and he said that the interest rates on these loans would be between 0.5% and 1% to cover administration costs. After the meeting Mr Barry paid Mr Siminton $200 in cash to become a citizen of the Principality of Camside. On 8 August 2005 Mr Barry decided to make a deposit in the Terra Nova Cache. He obtained a money order worth $1,000 and then attended the house of a Ms Faye McGarry, the person who had invited him to attend the meeting. He gave her the money order in an envelope which he had addressed to the Terra Nova Cache post box. Ms McGarry told him that she would forward the envelope to Mr Siminton. This occurred and Mr Barry received a letter on Terra Nova Cache letterhead dated 28 September 2005 acknowledging receipt of the $1,000 on 15 August 2005. The first page of the letter was in substantially the same terms of that received by Mr Ketelhohn (above at [39]) down to the paragraph which concluded with the words "illegal Australian authorities. " Mr Barry subsequently received two profit share statements on Terra Nova Cache letterhead. The first covered the period between 15 and 31 August 2005 and the second the month of September 2005. The first was accompanied by a money order for $18.63 and the second by a money order for $32.88. The second statement was accompanied by a letter on Terra Nova Cache letterhead dated 24 November 2005 and signed by Mr Siminton. That letter was, apart from particulars peculiar to Mr Barry, in the same terms as the letter received by Mr Ketelhohn which is extracted above at [39]. Thereafter Mr Barry received no further interest payments. His deposit has not been recovered. 42 Mr Ketelhohn's experience and that of Mr Barry were similar to that of a score of other depositors who invested their funds with the Terra Nova Cache and who have filed evidence in this proceeding. In sum their deposits exceeded $1 million. All depositors have not been traced by APRA. 43 Some of the depositors reported making unsuccessful attempts to withdraw some or all of the funds which they had deposited in the Terra Nova Cache. Most were unsuccessful. An exception was Ms Janet English. Like Mr Ketelhohn she had attended a meeting at the Bundaberg CWA Hall which had been addressed by Mr Siminton. She was induced to purchase citizenship of the Principality of Camside and then to make a series of small deposits totalling $1,900 between September 2004 and February 2005. She received interest payments until February 2005 when they stopped. In September or October 2005 she was planning a trip to England. She telephoned Mr Siminton and asked to withdraw $600 to assist with her travel expenses. Mr Siminton told her he would look into it but he did not return her call. A money order for $600 arrived by post after she had left Australia in early December 2005. 44 The Technocash account into which Mr Ketelhohn and others made their deposits was held under the name "Dr David Siminton" and had a recorded trading name of "Terra Nova Cache" until at least 21 December 2005. At some time thereafter the account name was changed to "Lionsgate Savings and Loans". 45 Although, at the meetings which he conducted, Mr Siminton spoke about making loans available to citizens of Camside there was no evidence that loans had been made to those who had become depositors of the Terra Nova Cache. The Terra Nova Cache did, however, on one occasion lend money to Technocash Pty Ltd. This occurred in November 2005 when Technocash was in need of a short term loan to assist it in developing a business opportunity in Western Australia. In an email to Mr Paul Monsted, the Managing Director of Technocash, on 15 November 2005, Mr Siminton (who "signed" the email "Dr David R Siminton, President --- Terra Nova Cache") offered a short term loan of $100,000 to Technocash. That offer was accepted by Mr Monsted two days later. $100,000 was transferred from the Terra Nova Cache account to a Technocash account on 18 November 2005. Interest of 180% per annum was charged on the loan. The loan funds were later 'frozen' by an order of this Court and remain in the Technocash account. 46 Moneys deposited with the Terra Nova Cache in the early months of its existence were transferred to the account of a trader, a Mr Giuseppe Guglielmino who traded under the name of Overseas Investment Group. One of the earlier depositors, Mr Andrew Vella gave evidence that, in January 2004, he had placed $100,000 in the Terra Nova Cache and that this sum had been placed by Mr Siminton with the Overseas Investment Group. Mr Vella also gave evidence of a falling out between Mr Siminton and Mr Guglielmino in late 2004 or early 2005. When this happened depositors funds were withdrawn from the Overseas Investment Group and placed with Silverstone Global Investments Pty Ltd, a Queensland based company. In 2005 Mr Brook Monahan was a Director and Secretary of the company. In the course of 2005 Mr Vella spoke to Mr Monahan who told him that Mr Siminton "had an account with him (Mr Monahan) of six figures. 48 Section 7. There is no order in force under s 11 of the Act which determines that s 7(1) does not apply to Mr Siminton. 49 The critical question is whether Mr Siminton can be said to have carried on any banking business at relevant times. "Banking business" is defined in s 5 of the Act to mean "a business that consists of banking within the meaning of paragraph 51(xiii) of the Constitution . " Section 51(xiii) does not contain the phrase "business of banking". It confers power on the Commonwealth Parliament to make laws with respect to "banking". This word, has, however, been treated by the High Court as referring to "the business of banking". But his main functions appear to be the taking of deposits and current accounts, the issue and payment of bills and cheques drawn on him and the collection of bills and cheques for his customers. Some assistance in defining 'banking' can be obtained from the Bills of Exchange Act 1909-1936. In this Act the word banker includes a body of persons, whether incorporated or not, who carry on the business of banking, and though banking is not defined in this Act it seems reasonable to believe that one legislative interpretation of the word would be the business carried on by a banker. In the case of Commissioners of State Savings Bank of Victoria v Permewan, Wright & Company Limited Isaacs J ... said: 'the fundamental meaning of the term' (banking) 'is not, and never has been, different in Australia from that obtaining in England. Various writers attempt various definitions, more or less discordant and many of them referring to functions that are now very common and convenient, and even prominent, as if they were indispensable attributes. The essential characteristics of the business of banking are, however, all that are necessary to bring the appellants within the scope of the enactments' (s 83 of the Victorian Instruments Act 1980 and s 88 of the Bills of Exchange Act 1909 ) 'and these may be described as the collection of money by receiving deposits upon loan, repayable when and as expressly or impliedly agreed upon, and the utilisation of the money so collected by lending it again in such sums as are required. These are the essential functions of a banker as an instrument of society. The Court quoted the passage from the judgment of Isaacs J in Permewan Wright which Rich J had incorporated in his reasons in Melbourne Corporation. The Court treated what Isaacs J had said as constituting a "definition" of the "business of banking" (at 455). The power to lend money conferred on the Society by Rule 7 was limited to the making of loans to its members to enable them to acquire land or buildings to be used for residential or business and residential purposes and in fact none of the Society's moneys was used for the making of loans for that or any other purpose. The society had not made any loans. For this reason, the Court held that the trial judge had been correct to hold that the society had not carried on the business of banking and had not, therefore, contravened s 7 of the Act. 51 Mr Siminton created the "Principality of Camside" by registering it as a business name. He was the person who was instrumental in establishing the entity known as the "Terra Nova Cache" which he described as "Camside's new bank" in addresses at meetings and on the Principality of Camside's website. Mr Siminton solicited deposits in the Terra Nova Cache. In particular, he addressed public meetings in which he urged those present to make deposits. When they did he acknowledged receipt of those deposits in writing. He assured the depositors that they would receive a monthly payment, described as a "profit share", calculated as a percentage of the amount contributed. He offered contributors bill paying services. Depositors who had queries about their accounts and who telephoned the number given on the Terra Nova Cache letterhead were answered by Mr Siminton. The postal address for the Terra Nova Cache was a postal box maintained by Mr Siminton. Mr Siminton solicited and collected deposits from at least 22 persons. He did so between early in 2004 and December 2005. 52 Mr Siminton maintained accounts for each depositor and arranged for some payments in the nature of interest (although called "profit share") to be paid to the depositors by money order. 53 Most of the funds provided to the Terra Nova Cache by depositors was placed with third parties for investment, presumably in the hope that those investments would yield sufficient returns to pay the high rates of interest which the Terra Nova Cache had promised to its depositors. The only lending of depositor's funds about which evidence was given was the $100,000 loan made to Technocash. That loan was negotiated by Mr Siminton on behalf of the Terra Nova Cache. It was also Mr Siminton who caused the transfer of those funds from the Terra Nova account to a Technocash account. 54 Counsel for Mr Siminton, relying on what was said by Isaacs J in Permewan Wright and by the Full Court in Winter , submitted that Mr Siminton could not be found to have carried on a banking business because the Terra Nova Cache did not make loans on a regular basis. It is true that the evidence disclosed only one loan, albeit a substantial loan made by the Terra Nova Cache under Mr Siminton's direction. It is to be noted, in this context, that the decision in Winter turned on the fact that the society had not loaned members' funds to anybody. In any event, the Court is empowered, by s 65A of the Act, to grant relief where a person is proposing to engage in conduct which would constitute a contravention of s 7. When addressing meetings, at which he solicited deposits, Mr Siminton told those present that, once the Terra Nova Cache was established, loans could be made to citizens of the Principality of Camside. It is envisaged that the next stage of Terra Nova Cache's development, once deposits are established, profitably traded and fully precious metal backed, that the bank will be offering interest free loans to its depositors/owners. 55 For these reasons I conclude that Mr Siminton was a person who carried on and was proposing to carry on the business of banking in Australia. He had engaged and was proposing to engage in conduct which constituted or would constitute a contravention of s 7 of the Act. 56 Section 66. Section 66(1) of the Act makes it an offence for a person who "carries on a financial business" to use the words "bank" or "banking" in relation to such a business. A "financial business" is defined in s 66(4)(c) to refer to a business that consists of, or includes, the provision of financial services or relates, in whole or part, to the provision of financial services. The term "financial services" is not defined. The words should be accorded their ordinary and natural meaning. They comprehend the provision of services of a financial nature. The encouragement of people to deposit funds in a financial institution does not, without more, involve the provision of a service. On the other hand, I consider that the receipt of deposits, the holding of those deposits on account and the payment of interest on the moneys deposited is, collectively, conduct involving the provision of financial services. For reasons already given Mr Siminton engaged in such conduct. 59 The material on the website (above at [33]-[37]) and that part of it which was distributed as an information sheet at meetings conducted by Mr Siminton were replete with references to the Terra Nova Cache being a "bank" and there was also a reference to "banking with Terra Nova Cache". Mr Siminton referred to the Terra Nova Cache as a "bank" during his presentations at the meetings. 60 APRA did not give Mr Siminton consent to use the words "bank" or "banking" and it made no determination under s 11 of the Act that s 66(1) did not apply to him. 61 Accordingly, I conclude that Mr Siminton engaged in conduct which contravened s 66 of the Act. This power is conferred in wide terms. While the power must be exercised judicially, the exercise of the power is not rendered subject to the same principles which apply to the grant of equitable injunctions. 63 In Mikasa (NSW) Pty Ltd v Festival Stores [1972] HCA 69 ; (1972) 127 CLR 617 Gibbs J dealt with s 90AA of the Trade Practices Act 1965-1971 (Cth) (the forerunner of the present s 80 of that Act). It appears from the section that the object of granting an injunction is to restrain a person who has already engaged in unlawful practice from again engaging in that practice. To acquire, rather than permit, the Court to grant an injunction once the condition precedent to its grant has been established would deny the Court the power to adapt a remedy of the needs of a case and would lead to an injustice; moreover, an injunction is in its nature a discretionary remedy. Since the discretion is conferred on a court and is to be exercised in proceedings inter partes, it must be concluded, when there is no indication in the Act to the contrary, that it is to be exercised judicially. The existence of the discretion does not alter the conclusion that the power conferred by s 90AA is a judicial power. The principle contained in the penultimate bullet point in the passage quoted in this paragraph has equal force where application is made for a permanent injunction. 65 By s 8 of the Australian Prudential Regulation Authority Act 1998 (Cth) APRA is established, inter alia, for the purpose of regulating bodies in the financial sector in accordance with other laws of the Commonwealth, such as the Banking Act , that provide for prudential regulation. Section 65A of the Act is one of many provisions in the Act which enable APRA to take action designed to protect the interests of depositors and to promote the stability of Australia's financial system. Those objectives are to be borne in mind in exercising the discretion which is conferred on the Court by s 65A. 66 Mr Siminton has deliberately embarked on a course of conduct which has involved contraventions of the Act. He has established what he calls a "bank" and, with others, has been successful in encouraging a considerable number of people to make deposits in the "bank". They were promised high interest rates. They were told that interest payments would be made in ways which would facilitate evasion of income taxation payment obligations. Some depositors received some of the promised interest payments but then the payments ceased. Others received no interest. Some, who sought repayment of their deposits, were unsuccessful. 67 Mr Siminton has not acknowledged that any of his conduct has been unlawful. Nor has he expressed any willingness to desist from future conduct which would constitute a contravention of the Act. 68 In my view this is a case which requires the granting of injunctions which will restrain Mr Siminton from any repetition of his past misconduct. There is an appreciable risk that, unless restrained, Mr Siminton will resume the course of conduct which caused APRA to make this application. The granting of an injunction is also warranted as a means of marking the Court's disapproval of the flagrant breaches of the Act which had been perpetrated by Mr Siminton; see Trade Practices Commission v Mobil Oil Australia Limited (1985) 4 FCR 296 at 300. Mr Siminton should also be required to publish and maintain on the first page that any user views on relevant websites, a notice warning them that neither the Terra Nova Cache nor the Principality of Camside are entities which may lawfully conduct a banking business in Australia. 71 APRA proposed that any order under s 65A(11) should be made in favour of the depositors who gave evidence in the proceeding. The sum of the damages payable in each case would correspond with the principal sum of the deposit plus interest. In the circumstances I do not consider that it is appropriate to make orders under s 65A(11). APRA accepts that it is likely that there exist additional depositors who have yet to be identified. The evidence suggests that Mr Siminton, from time to time, drew on the depositors' funds for his own purposes. The precise extent of those drawings is not disclosed. Some of the depositors' funds were placed with Silverstone Global Investments Pty Ltd ("Silverstone Global") which, in turn, invested them in overseas entities. Reports to investors by Silverstone Global and some of its associated entities suggest that these investments may have significantly depreciated in value. There is, therefore, a considerable risk that the funds which have been "frozen" pursuant to the orders made by Gray J may not be sufficient to make the payments proposed to the known depositors. Even were they to be paid on a pro rata basis, no funds would remain which could be used to make payments to other depositors, who are presently unknown to APRA, but who may come forward. 72 Subject to hearing the parties I consider that the better course would be to appoint a receiver to deal with the funds which are subject to Gray J's order. This would seem to be an appropriate case for the appointment of a receiver, if not under s 57(1) of the Federal Court of Australia Act , under s 23 of that Act: see The University of Western Australia v Gray (No 6) [2006] FCA 1825 at [71] . This case bears many of the features which led Austin J, in Australian Securities and Investment Commission v Burke [2000] NSWSC 694 , to appoint a receiver. Where these circumstances exist in combination, and especially where there are allegations of serious fraud involved, the Court may conclude, as I do in this case, that the Mareva Orders are not enough to ensure that the assets are preserved and protected, and indeed identified and brought in for the benefit of investors. Were an order to be made under s 65A(11) requiring Mr Siminton to make payments, by way of damages, to individual depositors, the task of identifying, realising and bringing in the funds necessary to satisfy the orders would fall on Mr Siminton. Having regard to his conduct in dealing with the funds of depositors prior to the intervention of this Court, I cannot harbour any confidence as to his capacity to undertake these tasks in a manner which will best serve the interests of the depositors. I doubt also that he would have the business acumen and resources to do that which is required. 74 Another matter of importance is the fact that Mr Siminton is an undischarged bankrupt. He has failed, over the past six years, to submit a statement of affairs to his trustee in bankruptcy. He has been unwilling to co-operate with his trustee. 75 For these reasons it is my present view that a receiver should be appointed and charged with the responsibility of seeking to identify all those who have made deposits in the Terra Nova Cache, the getting in of the funds which are the subject of Gray J's order and any additional funds contributed by depositors and to provide for an orderly and equitable distribution of those funds to depositors. 76 I will hear the parties as to the nature of any additional relief and the terms of appropriate orders once they have had the opportunity of considering these reasons. The matter will be listed for mention at 10:15 am on 7 November 2007. On or before 5 November 2007 APRA is to file and serve draft minutes of any order for the appointment of a receiver which it contends should be made by the Court. | provisions relating to the carrying on of banking business where respondent establishes a "country" known as principality of camside where that country hosted a "bank" referred to as the terra nova cache where members of public deposit money in the terra nova cache where unlawful for a person other than a body corporate to carry on banking business unless exemption granted by apra where no such exemption granted to respondent whether the respondent's conduct constitutes the carrying on of banking business in contravention of s 7 of the banking act 1959 (cth) preliminary objections to application on constitutional grounds where s 65a of the banking act relates to breaches of ss 7 and 66 which are "criminal offences" whether alleged breaches of such provisions can be conducted as civil proceedings rather than criminal proceedings where interlocutory injunction imposed preventing respondent from dealing with his funds and property whether freezing order constitutes an acquisition of property by the commonwealth other than on just terms abuse of process whether evidence of collateral purpose argument ruled on in earlier judgment injunctions whether appointment of receiver appropriate parties to file submissions on appropriate terms of orders consistent with reasons for judgment "banking business" banking constitutional law constitutional law practice and procedure remedies words and phrases |
The access regime was established by consent orders made 4 July 2006 which provided for access to be granted to BGC's legal representatives and its expert witness, Mr Gower. 2 The documents have previously been supplied to those persons pursuant to confidentiality undertakings in accordance with the consent orders. 3 The Motion seeks access for Mr Webster, Mr Kent, Mr Mikolaitis and Mr Herbert, who are all respondents in the proceedings. 4 The Motion also seeks access for BGC's General Counsel, Mr Bartlett. The circumstances in which the claim arises were set out in my interlocutory judgment dated 18 February 2005; [2005] FCA 130. 6 In brief terms, on 17 January 2005, fourteen employees of ICAP resigned en masse from their employment. They comprised the entire futures desk at ICAP's Sydney office. I was satisfied, at an interlocutory level, that the evidence pointed strongly in favour of an inference that what took place was part of a coordinated plan to take business away from ICAP. 7 All of those employees entered into employment contracts with BGC and were indemnified by BGC against liability arising out of legal proceedings brought by ICAP. 8 Later in January 2005, four employees of ICAP's "swaps" desk, and one employee from its "bonds" desk, also walked out and joined BGC. 9 I was also satisfied that there is an arguable case that Mr Webster, who was at the time a director of ICAP, induced many of the employees to breach their contracts with ICAP. It also appeared to me that Mr Kent, a senior ICAP employee, was involved in the recruitment of ICAP's employees. 10 The effect of what took place on 17 January 2005 and 28 January 2005 was that ICAP lost its entire futures desk as well as four members of its swaps desk. They included Mr Mikolaitis who was head of the swaps desk, and Mr Herbert. 11 As I have already mentioned, the persons for whom access is now sought are Messrs Webster, Kent, Mikolaitis and Herbert. BGC contends that without access being granted to these nominated persons, BGC cannot instruct its lawyers as to how the asserted facts upon which the damages claim rests can be challenged and answered. 12 The circumstances set out above make it plain that ICAP and BGC are bitter trade rivals. ICAP asserts that the information to which BGC seeks access for the nominated persons is highly sensitive and confidential. It relies on a well-established line of authorities that recognises that in these circumstances the Court has a discretion to mould an access regime which gives appropriate protection to the party whose confidential documents are at issue whilst enabling the other party such access as is necessary to properly conduct the litigation. They include Mobil Oil of Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34, Macquarie Generation v Coal & Allied Industries Ltd [2001] FCA 1349 , C7 Pty Ltd v Foxtel Management Pty Ltd [2002] FCA 1189 and Reebok v SOCOG [2000] NSWSC 295. 14 In Mobil Oil at 38, Hayne JA pointed out that ordinarily, the fact that documents are confidential is not a bar to inspection by the other party. He said, however, that where the parties are trade rivals, different considerations arise. 15 What underlies Hayne JA's analysis is his statement that the principles of a trade rival cannot forget the secret information once it is revealed. Thus, the value of the commercially sensitive information will be lost unless it is protected by an appropriate access regime. The implied obligation not to use the documents other than for the purpose of the proceedings is thought to be insufficient, as between trade rivals, to permit unrestricted access. 16 The balancing exercise to which Hayne JA referred in Mobil Oil at 39-40 involves weighing the needs of a party to litigation against the "legitimate concern" of a trade rival. 17 The principal factors which inform the exercise of the discretion have been stated in the authorities. A party to litigation is entitled to know the case it has to meet and to properly instruct solicitors and counsel. The nature and content of the documents, the degree of confidentiality of the information and the risk that the rival will use it to the detriment of the other party are important factors to be weighed in the balance; Mobil Oil at 39-40; Reebok at [43]; Hadid v Lenfest Communications Inc (1996) 70 FCR 403 at 410-411. It submits that without such access it cannot instruct its lawyers as to how to challenge essential facts on which the claim is based. Nor can it conduct the litigation or receive advice about it on a fully informed basis. 19 BGC puts forward the nominated persons as representatives with the requisite degree of knowledge and experience to look at the documents. It relies on evidence, on information and belief that there are no other BGC employees with the appropriate experience, apart from persons to whom similar objection would be taken by ICAP. 20 ICAP points to the bitter rivalry between the parties, as is evidenced by the subject matter of the litigation. It also relies upon the small number of participants in the relevant industry, namely inter-dealing broking in Sydney. The evidence establishes that ICAP and BGC are two of only five competitors in that industry. 21 Mr Webster is the President of BGC in the Asia-Pacific region. He appears to be responsible for recruiting staff and expanding BGC's business in Sydney. He had similar responsibilities when he was employed by ICAP. 22 Mr Kent is BGC's Director of Business Development for Asia-Pacific and reports to Mr Webster. He held a senior role at ICAP up to January 2005. 23 Mr Mikolaitis and Mr Herbert are both senior interest rate swaps brokers. ICAP suggests, though in a very general way, that they would be involved in the recruitment of swaps brokers for BGC. 24 ICAP relies on evidence which establishes that the success and financial performance of both ICAP and BGC is dependent upon the performance of individual brokers. Thus, each seeks to locate and identify people of talent within the available market. 25 There is evidence of continuing recruitment efforts by BGC. In April 2006, BGC recruited three swaps brokers from one of the market participants. Also, in December 2006, BGC appears to have made an unsuccessful approach to brokers employed by another competitor. 27 ICAP points to the fiduciary obligations of the nominated persons to BGC to advance BGC's business interests. ICAP submits that it is unlikely that the nominated persons could disregard the information once it is revealed to them. However, ICAP concedes in its evidence that it does not suggest that the nominated persons will consciously misuse the information. 28 There are six categories of documents in dispute. There were some minor differences between the parties as to the descriptions of the categories and the documents which fall under the particular categories. In my view nothing turns on the differences. ICAP has discovered the contracts of employment of those persons and has prepared summaries of some parts. 30 An issue will therefore arise at the final hearing as to whether the bonuses and salaries were reasonable or necessary. This will turn, at least in part upon the importance of the employees to ICAP and upon the terms of the contracts entered into for the purposes of retaining their services. 31 BGC submits that the information about the employees' remuneration, bonuses and term of employment is not confidential or commercially sensitive. I reject that submission for two reasons. 32 First, the contracts contain a confidentiality clause which would extend to those provisions. Second, the employees owe a duty of loyalty to their employer which, in my view, would be likely to preclude an employee from openly disclosing the information to a rival. 33 BGC pointed to evidence which suggests that this sort of information is routinely swapped between employees and other potential employers. I doubt whether this is an answer, particularly in light of the subject matter of the present proceedings. 34 Nevertheless, whether or not the information is sufficiently commercially sensitive to enliven the discretion to mould an order for access, I do not consider that access should be withheld from the nominated persons. 35 The nominated persons worked at ICAP until January 2005. They are well placed to give instructions necessary for an assessment of the issue of whether the terms of the contracts were reasonable. 36 I do not consider that it was necessary for BGC to spell out in more detail, the reasons why the nominated persons require access or the way in which they propose to use the material in the conduct of the litigation. In my opinion, the information in the documents going to remuneration and the other matters I have identified are a central part of this aspect of the claim. 37 It seems to me that without access to the information BGC would be prejudiced in its ability to defend the claim. 38 I have taken into account the circumstances of the walkouts in January 2005 and the general evidence of what seems to be ruthless recruiting of employees in the marketplace. Nevertheless, I am satisfied that disclosure to the nominated persons, on the restrictive conditions which have been discussed between the parties, would not pose a real risk of misuse of the information. However, ICAP has discovered its forecasts for the period from 1 October 2005 to 31 March 2006 to which it wishes to restrict access. 40 The forecasts are relevant to ICAP's loss of profits claim. ICAP contends that it lost profits as a result of the departure of the employees. Investigation of this issue involves a comparison between the position ICAP actually found itself in when the employees left as against the position it would have been in had the employees remained with ICAP for the terms of their employment. 41 ICAP has served an expert report which deals with the calculation of this loss. To meet this, BGC submits that it needs people with knowledge of the market factors as well as the reasonableness of the assumptions as to ICAP's likely performance. 42 There is force in the submission that the information is no longer current and therefore lacks the necessary commercial sensitivity. In any event, it seems to me that the forecasts are of central importance and that without access to the nominated persons, BGC would be prejudiced in its defence. 43 The other comments I have made under Category 1 also apply here. Access should be granted to the nominated persons on the terms that have been discussed. The spreadsheet contains allocations of overheads between the various different broking desks. 45 The spreadsheet contains material which goes to the issue in the proceedings of the reasonableness of ICAP's loss of profits claim. ICAP's expert report addresses this issue. 46 The observations I have made under Category 2 also apply here. Access should be made available to the nominated persons. 48 The acquisition consisted of 18 brokers but ICAP's case is that only four of them were employed to replace the four ICAP swaps brokers who left on 28 January 2005. No claim for damages is made in respect of any ongoing losses on the swaps desk after 30 September 2005. 49 ICAP's claim is said to amount to the percentage of the cost of acquisition that equals the percentage of the salaries of the replacement brokers relative to the salaries of all of the Prebon brokers on the desk that was purchased. 50 ICAP is prepared to grant access to Mr Mikolaitis and Mr Herbert to redacted versions of documents which disclose the salaries and bonuses of the employees who are said to be the replacement brokers. The term (ie the duration), notice periods and/or restraint provisions of the contracts for those persons would not be provided. Nor would any such details, ie salaries, bonuses, period of contract or notice period, be provided for the remaining thirteen brokers. 51 Issues which will arise on this aspect of the claim include whether the persons are in truth "replacement brokers", whether the salaries are reasonable and whether the ratio is correctly calculated. 52 I do not see how BGC could address these issues without access to all of the terms of contract for the "replacement employees". Moreover, investigation of these issues will involve a comparison of the terms of contract of those employees with the terms of contract of the remaining employees. 53 The Prebon employees are swaps brokers. Mr Mikolaitis and Mr Herbert are the appropriate persons to review the documents and give instructions. 54 ICAP is concerned to protect the revenue stream represented by the Prebon desk from unlawful poaching. I have taken into account the aggressive nature of the marketplace. However, I am not satisfied that the risk of misuse of the information is a realistic one, given the conditions which will be imposed. The material from 1 October 2005 onwards has been redacted. 56 The spreadsheets appear to summarise, for each calendar month, the number and dollar value of trades carried out by named brokers for particular identified clients. 57 But for a limitation on the way in which ICAP puts its claim for damages, the redacted information would be relevant to a comparison between ICAP's actual and hypothetical performance of the swaps desk. 58 However, ICAP has stated that it makes no claim for damages in respect of ongoing losses on the interest rates swaps desk after 30 September 2005. 59 Notwithstanding this limitation, I am satisfied that the redacted information is relevant to at least one other aspect of the damages claim. That is, the issue of whether the "replacement employees" acquired with the Prebon desk are in truth replacements for ICAP's former employees. 60 The comments I have made in relation to the other categories apply. Access should be given to Mr Mikolaitis and Mr Herbert. Information for the period 1 October 2005 to 31 March 2006 has been redacted. 62 For the reasons given under Categories 4 and 5, I would grant access to Mr Mikolaitis and Mr Herbert. I certify that the sixty-three [63] paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | discovery application to vary access regime for discovered documents to whom confidential business documents should be disclosed applicable principles need for procedural fairness in balancing the competing considerations access to individual employee respondents granted to most of the documents subject to the giving of a confidentiality undertaking practice and procedure |
He arrived in Australia on 7 September 1995 having travelled here on a Bangladeshi passport. He is a Buddhist who was actively involved in a number of Buddhist associations prior to his departure from Bangladesh in September 1995. On 27 October 1995 he applied for a Protection Visa (866). 2 The appellant sought protection in Australia so that he did not have to go back to Bangladesh. In response to the question 'What do you fear may happen to you if you go back to that country? The majority of the country's citizens are Muslim. Whilst the government is secular, Islam has been declared to be the State religion, the relevant declaration having been made in 1988. 4 The appellant claims to fear persecution by Muslims, who he says have targeted him because he is a Buddhist who is well-known in the community. The appellant does not claim that he fears persecution by reason of his political opinion. 5 Notwithstanding his status as a member of a religious minority, the appellant was able to gain a tertiary education, which included post-graduate qualifications, and to obtain employment and change that employment on several occasions. He described himself as having done well in his employment and as having money. 6 The appellant has been able to practise his religion as a regular weekly or bi-weekly attender at the Buddhist temple. 7 On 23 November 1994 he travelled to Thailand to attend a Buddhist conference. Thereafter, he returned to Bangladesh on 30 November 1994. 8 On 28 January 1997 a delegate of the Minister determined that the appellant was not a person to whom Australia had protection obligations under the Convention Relating to the Status of Refugees done at Geneva on 28 July 1951 as amended by the Protocol Relating to the Status of Refugees done at New York on 31 January 1967 ('the Refugees Convention'). 9 On 14 February 1997 the appellant applied to the Refugee Review Tribunal ('the Tribunal') for review of the Minister's Delegate's decision. A considerable amount of material was submitted by the appellant to the Tribunal, which had regard to that material and also to extensive country information. 10 After a hearing on 17 December 1997 at which the appellant and two of his friends gave evidence, the Tribunal handed down its decision on the application for review on 30 December 1997. The Tribunal was not satisfied that the appellant was a person to whom Australia had protection obligations under the Convention Relating to the Status of Refugees done at Geneva on 28 July 1951 as amended by the Refugees Convention. Accordingly, the Tribunal affirmed the decision of the Minister's Delegate not to grant the appellant a protection visa. 11 At that time Part 8 of the Migration Act 1958 (Cth) ('the Act') made provision for the review of decisions of the Tribunal by the Federal Court of Australia. The powers of the Federal Court in respect of applications for review of judicially-reviewable decisions were set out in s 481(1) of the Act. That application was amended on or about 6 April 1998. Procedures required by the Act or regulations to be observed in connection with the making of the decision were not observed. The decision involved an error of law, being an error involving an incorrect interpretation of the applicable law or an incorrect application of the law to the facts as found by the person who made the decision, whether or not the error appears on the record of the decision. The RRT is only obliged to and as the respondent submitted, did give proper weight to any credible account of the objective circumstances described by the applicant. It made a decision by reference to broad principles which are generally accepted within the international community as determined under Australian law. The decision referred to the relevant cases in respect of systematic persecution. The Tribunal was required to do and did consider whether the applicant could be the subject of persecution by reason of his membership of the Buddhist religion from the perspective of whether Buddists as a religious group were the subject of systematic harassment, such that it constituted persecution of the applicant for a convention based reason and was entitled to come to the conclusion that this applicant would not suffer some serious punishment or penalty or some significant detriment or disadvantage. She indicated that a 'reading of the decision as a whole reveals no error of law which would justify the orders sought'. Accordingly the application was dismissed with costs. 17 On or about 3 July 1998 the appellant sought to be added as a plaintiff in the Muin and Lie class actions in the High Court of Australia. After the delivery of the High Court's judgment (see [2002] HCA 30 ; (2002) 190 ALR 601), Gaudron J gave leave to any person named as a represented party to file an application for an order nisi in relation to that party's Tribunal decision. An application for an order nisi was filed by the appellant ('the second application'), the relevant matter being remitted, with many others, to the Federal Court pursuant to s 44 of the Judiciary Act 1903 (Cth). The orders nisi , including that sought by the appellant, were refused by Emmett J on 20 February 2004 (see Applicant S1174 of 2002 v Refugee Review Tribunal (2004) 80 ALD 325). 18 On 7 July 1998, that is to say when the Muin and Lie class actions were still before the High Court, the appellant invited the Minister to exercise his power under s 417(1) of the Act to substitute for the decision of the Tribunal another decision, being one more favourable to the appellant. On 13 April 1999 the Minister decided not to exercise his power under s 417(1) of the Act in the manner which the appellant requested. 19 Having failed to secure the grant of an order nisi in the remitted proceedings, the appellant instituted proceedings in the Federal Magistrates Court of Australia on 15 March 2004 seeking constitutional writ relief in respect of the decision of the Tribunal. I am not satisfied with RRT decision. RRT did not follow Migration Act 1958 properly. RRT took decision in BAD faith. RRT denied evidentiary proof of my claim. The tribunal deprived me of natural justice. I was the party of Lie class action. My Judicial Review application is late. I refer to recent High Court case plaintiff S157/2002 v Commonwealth of Australia. I will provide more details later. Then on 4 March 2005 the appellant filed another 'Amended Application'. 21 The third application came before Federal Magistrate Raphael on 25 May 2006. The Tribunal accepted that the applicant was kidnapped and held for ransom in 1987, but concluded that the applicant "was kidnapped not because he is Buddhist but because he was perceived to be an appropriate target for extortion" The Tribunal fell into jurisdictional error in making this finding. The Tribunal fond (sic) that "the treatment of Buddhists in Bangladesh is neither systematic nor serious enough to amount to persecution within the meaning of the Convention". The Tribunal fell into jurisdictional error in making this finding. Raphael FM proceeded to consider the estoppel point first, before dealing with the substantive application, so that if he came to a decision that the proceedings were barred it would be unnecessary for him to hear argument in relation to the application itself. His Honour proceeded to deal with the two aspects of the matter which were argued on the hearing of the present appeal, which may loosely be referred to as the 'systematic conduct' and 'dual motivation' points, by concluding that he was prevented from hearing them by virtue of the doctrine of Anshun estoppel arising from the decision of O'Connor J on the first application. Furthermore, he found that the matter did not fall within the 'special circumstances' exception to the Anshun estoppel rule. 25 Undaunted by the appellant's lack of success in respect of the first application, the second application and the third application, the appellant proceeded to file an application in the Federal Court of Australia on 2 June 2006 seeking an extension of time within which to appeal from the decision of O'Connor J of 10 June 1998. On the same day the appellant filed a Notice of Appeal in this Court appealing from the judgment of Raphael FM of 25 May 2006 (said to have been given on 26 May 2006). The application for an extension of time came before the Court constituted by Conti J on 29 June 2006. On 14 August 2006 his Honour ordered that the application for an extension of time be dismissed and that the appellant pay the Minister's costs of the application. 26 This leaves for consideration the notice of appeal from the judgment of Raphael FM filed on 2 June 2006. The appellant contended before Raphael FM that the Refugee Review Tribunal ("the Tribunal"), in its decision dated 30 December 1997, erred in relying on the proposition that "persecution involves systematic conduct" in the course of dismissing the appellant's application for a protection visa. In 1998 the appellant had applied to the Federal Court for judicial review of the Tribunal's decision. Following a hearing on 1 June 1998, O'Connor J dismissed the application. Raphael FM held that the appellant should have argued this point before O'Connor J and, in these circumstances, the principle of Anshun estoppel applied and barred the appellant from arguing this point in the Federal Magistrates Court proceedings. Raphael FM rejected the appellant's argument that the state of the law was such in June 1998 that it was unlikely that an unrepresented applicant could argue this point in the Federal Court. Raphael FM erred in applying the doctrine of Anshun estoppel in the present case. The appellant contended before Raphael FM that the Tribunal erred in failing to consider that extortion can have dual motivations. Raphael FM held that the appellant should have argued this point before O'Connor J, and, in these circumstances, the principle of Anshun estoppel applied and barred the appellant from arguing this point in the Federal Magistrates Court proceedings. Raphael FM rejected the appellant's argument that the state of the law was such in June 1998 that it was unlikely that an unrepresented applicant could argue this point in the Federal Court. Raphael FM erred in applying the doctrine of Anshun estoppel in the present case. The appeal be allowed. The decision of the Tribunal dated 30 December 1997 be quashed. The matter be remitted to the Tribunal to be determined according to law. Costs. I do not understand the respondent Minister to have opposed this course of action, if otherwise appropriate, given that consideration of the matter as a whole will likely lead to a minimisation of the overall costs that would otherwise by incurred. 29 The appellant has been represented by Mr B M Zipser of counsel and the respondent Minister by Ms D J Watson of the Australian Government Solicitor. They have brought to bear their customary professional discipline and precision in presenting both their written and oral arguments. 30 In the Tribunal's reasons for decision the Tribunal Member said 'persecution involves systematic conduct aimed at an individual or at a group of people'. 31 It is apparent that in expressing himself in this way the Tribunal Member had regard to what was said by Wilcox J in Periannan Murugasu v Minister for Immigration and Ethnic Affairs ('Murugasu') (1987) 217 ALR 17. The word "persecuted" suggests a course of systematic conduct aimed at an individual or at a group of people. It is not enough that there be a fear of being involved in incidental violence as a result of civil or communal disturbances. In a case where a community is being systematically harassed to such a degree that the word persecution is apt, then I see no reason why an individual member of that community may not have a well-founded fear of being persecuted. It is not necessary, however, that the conduct complained of should be directed against a person as an individual. A single act of oppression may suffice. As long as the person is threatened with harm and that harm can be seen as part of a course of systematic conduct directed for a Convention reason against that person as an individual or as a member of a class, he or she is "being persecuted" for the purposes of the Convention. Tribunals have read it as meaning that there can be no persecution for the purpose of the Convention unless there was a systematic course of conduct by the oppressor. That was not what I meant by using that expression in Chan . I used it as a synonym for non-random, and I think that in Murugasu Wilcox J intended to use it in the same way. Selective harassment, which discriminates against a person for a Convention reason, is inherent in the notion of persecution. Unsystematic or random acts are non-selective. It is therefore not a prerequisite to obtaining refugee status that a person fears being persecuted on a number of occasions or "must show a series of co-ordinated acts directed at him or her which can be said to be not isolated but systematic". The fear of a single act of harm done for a Convention reason will satisfy the Convention definition of persecution if it is so oppressive that the individual cannot be expected to tolerate it so that refusal to return to the country of the applicant's nationality is the understandable choice of that person. In my opinion the Tribunal did not require that there be more than non-random conduct for a finding of persecution to be made. Not every threat of harm or interference with a person's rights for a Convention reason constitutes "being persecuted". ... Harm or threat of harm as part of a course of selective harassment of a person, whether individually or as a member of a group which is subjected to systematic harassment, amounts to persecution if done for a Convention reason. In appropriate cases it may include single acts of oppression, serious violations of human rights, and measures "in disregard" of human dignity. Rather, it suggests that the discrimination and harassment which occur arise out of communal and religious tensions in the country. I also accept that [S1141 of 2003] was caught up in communal violence following the Babri Mosque incident, and that a member of his community was burned to death when his shop was attacked. However, because persecution involves systematic conduct aimed at an individual or at a group of people, "it is not enough that there be fear of being involved in incidental violence as a result of civil or communal disturbances". It is only in situations where "a community is being systematically harassed to such a degree that the word persecution is apt", that an individual member of that community may have a well-founded fear of persecution: Periannan Murugasu v Minister for Immigration and Ethnic Affairs ... Whilst I accept that Buddhists in Bangladesh are discriminated against and from time to time targeted in outbursts of communal violence, I accept the independent evidence set out above which indicates that the treatment of Buddhists in Bangladesh is neither systematic nor serious enough to amount to persecution within the meaning of the Convention. I therefore do not accept that the incidents of communal violence described by [S1141 of 2003] amount to persecution within the meaning of the Convention. I also accept the independent evidence that Islamic extremists have violently attacked women, religious minorities and development workers and that the Government has sometimes failed to denounce, investigate and prosecute perpetrators of these attackers. However, notwithstanding Dharma Bansha Sraman's claim that 70-80% of Muslims attack members of minority religions, the independent evidence suggests that support for Islamic fundamentalism in Bangladesh has decreased significantly in recent years. Rather, the Tribunal Member simply spoke of persecution involving systematic conduct. In this context, I consider that the above passages from the Tribunal Member's reasons for decision, and in particular the highlighted passages, indicate that the Tribunal did not approach the matter on the basis that the appellant could not succeed unless he was able to satisfy the Tribunal that there had been selective harassment as a result of a systematic course of conduct. The Tribunal did not apply the wrong test. 40 The other issue tendered for consideration by the appellant is the 'dual motivation' issue. The appellant submits that a determination may be made that a person has a well-founded fear of being persecuted for reason of his religion where at the same time there may be another non-Convention reason for his persecution such as a perception that the person has money. 41 The appellant submits that if the Tribunal considered that a person could not have a well-founded fear of persecution where there was more than one reason for the persecution, the second reason falling outside the Refugees Convention or that it was not open to it to find multiple reasons for a well-founded fear of persecution, then it would have committed jurisdictional error. 42 I am not satisfied that the Tribunal considered that such a dual motivation could or would provide a basis for concluding that a person did not have a well-founded fear of persecution within the meaning of the Refugees Convention; nor did the Tribunal close its mind to the possibility of there being multiple reasons for a well-founded fear of persecution. On the facts of this case the Tribunal simply rejected that there was any reason for the appellant's fear of persecution apart from the perception that he had money. He was asked to provide details of incidents which he claimed had occurred because of his religion. [S1141 of 2003] stated that in 1987 he was kidnapped and tortured by a group of Muslims, who he referred to as criminals. He was held for three days and then released when a ransom was paid. [S1141 of 2003] stated that he did not think he would have been kidnapped if he was not perceived as having money. [S1141 of 2003] said that the men were not the same men who had kidnapped him, but from the same group. These were people who generally caused trouble in the community. On this occasion [S1141 of 2003] did not give them any money, but went home and then went to where he was going using a different route. However, he did not go with them because he thought that they would hurt him. They wanted to stop the place being used as a burial ground. [S1141 of 2003] and some other people went to try to stop them. The group tried to take [S1141 of 2003] away, but the people he was with them (sic) protected him. [S1141 of 2003] said that the group destroyed the burial ground. By this he meant that they broke the surrounding walls. The graves were not desecrated. He stated after this occurred he was afraid for his life. He said that other people have been killed. In saying this, [S1141 of 2003] was referring to the man who died when his shop burned down. He stated that he would be killed because he used to work to help poor people. The group who previously harassed him has asked his wife where he is and demanded she give them money. This would be by people wanting money. As noted above, persecution involves an element of motivation for the infliction of harm. The phrase "for reasons of" serves to identify the motivation for the infliction of the persecution and the objectives sought to be obtained by it. The reason for the persecution must be found in the singling out of one or more of the Convention grounds. I note [S1141 of 2003] 's evidence that he would not have been kidnapped if he had no money. He also stated that the group which attacked him were criminals who caused trouble for other people in the community as well. I am of the opinion that [S1141 of 2003] was kidnapped not because he is Buddhist, but because he was perceived to be an appropriate target for extortion. I also consider that the incident described by [S1141 of 2003] when he was asked for money in 1988 was an extortion attempt carried out by a group of people who targeted [S1141 of 2003] because he was perceived to have money, rather than for reasons of his religion. Further, I am of the opinion that the harassment of his wife described by [S1141 of 2003] has also been motivated by the fact that the family is perceived as having money, rather than because of their religion. Further, even though [S1141 of 2003] 's fellow community member was burned to death in an incident of community violence in October 1994, [S1141 of 2003] returned to Bangladesh after going to Thailand in November 1994. I consider it implausible that he would have returned to Bangladesh if he had genuinely feared for his life. 45 In the light of the foregoing findings on the 'systematic conduct' and 'dual motivation' points, it is clear that had the learned Federal Magistrate not decided the application before him on an Anshun basis (see Port of Melbourne Authority v Anshun Proprietary Limited [1981] HCA 45 ; (1981) 147 CLR 589), he would, in all probability, have found that there was no jurisdictional error on the part of the Tribunal, as alleged. Certainly, were I to find that the appellant was not estopped from arguing the points, I would conclude that there was no relevant jurisdictional error to warrant the issue of constitutional writ relief. 46 Turning to the question of estoppel, the respondent argued before the Federal Magistrates Court, as indicated above, that the proceedings were barred by virtue of the doctrine of issue estoppel or alternatively the doctrine of Anshun estoppel. The learned Federal Magistrate declined to decide the estoppel question by reference to the doctrine of issue estoppel. He was content to find that he was prevented from hearing the matter by virtue of the doctrine of Anshun estoppel and that there were no special circumstances which would permit the appellant to raise the 'systematic conduct' and 'dual motivation' points before him. It was never suggested that the third application was the subject of res judicata and, on the hearing of the current appeal, no notice of contention was filed by the respondent in accordance with Order 52 rule 22(3) of the Federal Court Rules contending that the learned Federal Magistrate's judgment should be affirmed by reason of the fact that the third application was the subject of issue estoppel. In the circumstances, the only question is whether or not the learned Federal Magistrate correctly decided the matter on the basis of Anshun estoppel. 47 The relevant legal principles were set out by Emmett, Conti and Selway JJ in Wong v Minister for Immigration and Multicultural and Indigenous Affairs ('Wong') [2004] FCAFC 242 ; (2004) 146 FCR 10. In that case the Full Court had before it three separate appeals and one application for extension of time within which to file an application for leave to appeal and also for leave to appeal. The three appeals were from the decision of Wilcox J in [2002] FCA 1436 , the decision of Lindgren J in matter N297 of 2003 and the decision of Lindgren J in matter N298 of 2003, both of which were the subject of his Honour's reasons for judgment in [2004] FCA 51 , reported as Wong v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 204 ALR 722. The decision the subject of the application for extension time within which to file an application for leave to appeal and for leave to appeal was that of Lindgren J in [2004] FCA 422 , reported as Wong v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 422 ; [2004] 146 FCR 1. 48 The appeal against the decision of Wilcox J was dismissed. The appeal against the decision of Lindgren J in matter N297 of 2003 was dismissed. The appeal against the decision of Lindgren J in relation to matter N298 of 2003 was allowed and the application for leave to appeal the decision of Lindgren J [2004] FCA 422 was dismissed. The doctrines of res judicata and issue estoppel are founded on the broad rules of public policy expressed in the maxims nemo debet bis vexari pro una et eadem causa ('a person ought not to be vexed twice for one and the same cause') and interest reipublicae ut sit finis litium ('it is in the interests of the State that there be an end to litigation'). It would be an abuse of process to allow parties to litigate repeatedly matters that have been finally determined by the Court. Also, quite apart from any psychological detriment that might flow from an individual having to undertake litigation of the same issue a second time, the State has an interest in ensuring that, once an issue has been determined according to law and all rights of appeal have been exhausted, that should be an end of the matter. The resources of the community ought not to be expended in the litigation, more than once, of the same issue. A plea in bar may be raised in respect of an issue, not only if the Court in the earlier proceeding was actually required by the parties to form an opinion and pronounce a judgment, but also in relation to every issue that properly belonged to the subject of the earlier litigation and which the parties, exercising reasonable diligence, might have brought forward at the time of the earlier litigation: Port of Melbourne Authority v Anshun Pty Ltd [No 2] [1981] HCA 45 ; (1981) 147 CLR 589 at 598 and 602. Anshun estoppel arises where the issue, now raised for the first time, properly belonged to the subject of the earlier proceeding but, by negligence, omission or accident, was not raised in earlier proceeding. Nevertheless, where an issue has not actually been litigated and decided before, there must be exceptions to that general rule (cf the operation of res judicata and issue estoppel where the action/issue has been determined on a final basis). As foreshadowed in Anshun, there will be instances where, even though there is every reason why the matter should have been raised earlier but was not, there are special circumstances that prevail to permit a party to raise the issue in a subsequent proceeding. The Court therefore has a discretion, if it determines that special circumstances exist, to allow an issue to be raised, even where it is found that the point was unreasonably omitted from the earlier proceeding: see Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543 at 558. However, the circumstances in which that would be permitted must, because of the principles referred to above, be exceptional, constituting 'special circumstances' : see BC v Minister for Immigration & Multicultural Affairs [2002] FCAFC 221 at [30] . What will be sufficient to constitute special circumstances is by no means fixed and may involve consideration of a wide range of factors, all of which bear upon the general discretion of the Court where justice requires the non-application of the general principle: see BC v Minister for Immigration & Multicultural Affairs (2001) 67 ALD 60 (Sackville J) at [50] referring to Port of Melbourne v Anshun (No 2) [1981] VR 81; see also Bryant v Commonwealth Bank (1995) 57 FCR 287 at 296, 298-299, citing Yat Tung Investments Co Ltd v Dao Heng Bank Ltd [1975] AC 581. Anshun estoppel has been applied to proceedings in the nature of judicial review of administrative action, insofar as Anshun estoppel is aimed at avoiding abuse of process: Taylor v Ansett Transport Industries Ltd (1987) 18 FCR 342 at 355-356 and 365; Stuart v Sanderson [2000] FCA 870 ; (2000) 100 FCR 150, at 156-157, per Madgwick J. However, where the beneficiary of such a principle is a Minister of State, who has no personal interest in the outcome of a proceeding, such a principle may be of only secondary significance. However, the appellant contends that special circumstances existed to allow the points to be raised in the third application even though the appellant had unreasonably omitted the points from the first application. The appellant submits that the Federal Magistrate erred in finding that there were no special circumstances. That is essentially a finding of fact to which the rule in House v R has no application. ... If it were the case that a failure by a Minister to comply with a positive duty constitutes 'special circumstances' then it would seem every such failure would be sufficient to invoke the special circumstances exception, requiring the full ventilation of argument on the issue that would otherwise be estopped. Those circumstances alone, do not constitute the requisite special circumstances, such that it would not be an abuse of process for Mr Wong to ventilate issues that it was unreasonable for him not to have raised in either the First Proceeding or the Second Proceeding. There may be sound reasons of policy for arguing that Anshun estoppel not apply for the benefit of the executive government and its representatives, but only to individuals. This is because the executive is a respondent by force of statute or of the Constitution and is not subject to the same psychological burden that may weigh on individual litigants; they cannot be "vexed" in the same way by instigation of subsequent proceedings. That may be a more appropriate basis, namely that of accepted public policy, to ensure that representatives of the executive government cannot rely on the principle of Anshun estoppel to frustrate, in effect, the intended legislative mandate. However that proposition does not sit well with the authorities that apply the principle of Anshun estoppel equally to judicial review of administrative action (at [39]). Those circumstances need to be 'exceptional': (see also BC at [31] --- [33] and [38] and Thayananthan v Minister for Immigration and Multicultural and Indigenous Affairs ('Thayananthan') [2003] FCA 1054 ; (2003) 132 FCR 222 at [52] - [53]). 55 In BC seven 'special circumstances' were relied upon. In the context of this case, we would not regard any one of those four factors on its own as amounting to special circumstances. In the Court's view the first, third and fourth factors are of significantly greater weight than the second factor to which we would attach only marginal weight. In relation to the fourth factor (the state of the authorities), there may appear to be some contradiction in the proposition that for Anshun purposes it was unreasonable on the appellant's part to fail to raise jurisdictional unreasonableness in his first application, on the one hand and, on the other hand, to have regard to the degree to which the case law on jurisdictional unreasonableness had developed at the relevant time when considering whether special circumstances exist. However, the two points of view can be reconciled by treating the appellant's use of the word "reasonable" as meaning that mitigating circumstances existed. From a technical and procedural viewpoint, failure to raise jurisdictional unreasonableness was unreasonable in the Anshun sense, but in our opinion that is excusable partly because the concept of jurisdictional unreasonableness had only quite recently been the subject of judicial exposition and there was little guidance in the particular context of the Act. 58 It will be appreciated that BC was distinguished by Merkel J in Thayananthan at [53] on the basis that the availability of unreasonableness as a ground of jurisdictional error was in doubt at the time of the original proceeding in that matter. 59 In relation to the 'systematic conduct' point there was no universal misunderstanding of the meaning of that expression. All that McHugh J's judgment in Ibrahim did was to correct a misreading of the established law which had crept into some decisions of some Tribunals. 60 In relation to the dual motivation point it was submitted by the appellant that the possibility of dual motivations for relevant conduct, one of which was recognised by the Refugees Convention and accordingly sufficient to bring an affected person within the meaning of 'refugee' was not 'recognised' until after the first application came before O'Connor J. In this regard reliance was placed upon Perampalam v Minister for Immigration and Multicultural Affairs (1998) 158 ALR 609 (Hill J) and [1999] FCA 165 ; (1999) 84 FCR 274 (the Full Court) and also Rajaratnam v Minister for Immigration and Multicultural Affairs (1998) 60 ALD 217 (Branson J) and (2000) 62 ALD 73 (the Full Court). 61 Neither of these cases, at first instance, suggested that dual motivation could not be relied upon where one of the reasons for the relevant conduct was a Convention reason. 62 In my opinion the matters relied upon by the appellant in respect of the 'systematic conduct' point and the 'dual motivation' point, being paraphrases of factors (a), (b) and (d) which were relied upon in BC , do not individually or collectively amount to special circumstances which could be said to be 'exceptional'. 63 In my opinion the learned Federal Magistrate did not fall into error in dealing with the third application as he did. His finding of fact on the question of special circumstances should not be set aside. In the circumstances it is unnecessary to deal with the application on the assumption that he may have fallen into error. 64 However, as indicated above, the Tribunal did not commit any jurisdictional error. Accordingly, there were two bases upon which it would have been appropriate for the learned Federal Magistrate to dismiss the third application, had he wished to do so. 65 His decision should be upheld and the appeal dismissed with costs. I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. | whether anshun estoppel applicable whether tribunal's understanding of 'systematic conduct' and/or the possibility of a 'dual motivation' finding in respect of persecution erroneous migration |
The liquidator was also named as a respondent. The three directors are Peter Cornelius Beekink, Hersh Solomon Majteles and Gregory Phillip Gaunt (the directors). The proceedings against the liquidator have been discontinued. There are 11 applicants. Some are corporate and some are natural persons. They were investors in a scheme said to have been managed by KMF. The directors move to strike out a substituted statement of claim filed by the applicants in so far as it relates to the claims of the first to fifth applicants. For the reasons that follow, the motion will be dismissed. Alternatively, they sought an order that the statement of claim be struck out on the grounds that it disclosed no reasonable cause of action. 3 At a directions hearing on 30 January 2007 I ordered that the applicants file and serve an amended statement of claim on or before 20 February 2007 and that the directors file and serve revised submissions in relation to their strike out motion by 27 February 2007. Submissions in reply to the revised submissions were to be filed by 6 March 2007. The applicants were required to pay the directors' costs thrown away by reason of the amendments. 4 A substituted statement of claim was filed on 20 February 2007 in accordance with the directions and revised submissions filed subsequently. The revised submissions seek only to strike out the statement of claim in relation to causes of action pleaded by the first to fifth applicants. This was a registered management scheme pursuant to Ch 5C of the former Corporations Law. The investment strategy of the Scheme is said to have involved the making of loans secured by mortgages over property and otherwise on terms and conditions specified by KMF from time to time. KMF adopted a Constitution for the Scheme pursuant to the provisions of Ch 5C of the Corporations Law. 6 KMF lodged a prospectus with ASIC on or about 22 December 1999 for the issue of securities by way of interests in the Scheme. It also lodged with ASIC a Compliance Plan pursuant to the provisions of Ch 5C. 7 KMF is also said to have appointed Knightsbridge Pty Ltd, formerly known as Clifton Partners Pty Ltd, as the custodian of the assets of the Scheme within the meaning of the Constitution and the Compliance Plan and to act as KMF's agent in managing the Scheme, originating loans and ensuring compliance with the terms of any prospectus issued by KMF as well as complying with the lawful directions of KMF and ensuring compliance with the requirements of the Corporations Law. (It is referred to in the substituted statement of claim as Clifton Partners). The substituted statement of claim, outlines in [19], relevant elements of the Compliance Plan. It is not necessary to set all of those out here. 8 The duties of KMF are pleaded. It was required to operate the Scheme and perform the functions conferred on it by the Constitution and the Corporations Law. It was required to exercise a degree of care and diligence that a reasonable person would exercise if in KFM's position. It was required to act in the best interests of members of the Scheme and to comply with the Compliance Plan. Reliance is placed on ss 601FB and 601FC of the Corporations Law . These are the duties of care and diligence, to act in the best interests of the members of the Scheme and to take reasonable steps to ensure compliance with the Corporations Law and the Compliance Plan. Reliance is placed on s 601FD of the Corporations Law. The applicants also allege a common law duty to potential investors in the Scheme to exercise reasonable skill and care to ensure that they do not suffer economic loss. 10 The first to fifth applicants say that, as at 14 February 2000, they were each owed amounts totally $650,000 which had been part of a sum advanced to a company called Fieldmont Holdings Pty Ltd (Fieldmont) as part of an overall advance of $850,000. The remaining lender is not a party to these proceedings. The original loan is said to have been repayable on or about 30 November 2000 and to have been secured by a second registered mortgage over land owned by Fieldmont. 11 The applicants say that by a letter of 14 February 2000 to each of them, Clifton Partners recommended that the existing second registered mortgage be discharged and that Clifton Partners register a new second mortgage over the land in their favour and in favour of other proposed investors to secure an increased loan of $1.1 million in lieu of the existing amount of $850,000. The letter was written by Clifton Partners as an agent for KMF. It was an offer for subscription of securities of a corporation and, alternatively, an invitation to subscribe for securities of a corporation within the meaning of s 1018 of the Corporations Law (s/c 31). KMF is said to have failed to have lodged a prospectus in relation to these securities and in so doing to have contravened the requirements of s 1018 of the Corporations Law. 12 The first to fifth applicants allege six representations conveyed by Clifton Partners in its letter of 14 February 2000. These concerned the value of the land which was to be the basis of the security, the amount secured under the first registered mortgage in favour of the National Australia Bank Ltd (NAB), the "Loan to Valuation" ratio said to be 82.5% of the new second registered mortgage, the amount that would continue to be owed under the first registered mortgage and the absence of any reason to believe that it would be greater than $2.2 million. The various representations so made are said to have been false and the basis of that falsity is alleged in [34] to [39] inclusive. 13 Clifton Partners is said to have failed to inform the applicants that at the date of the offer Fieldmont intended to increase the amount owing under the first registered mortgage to $2.7 million effective from the end of February 2000. Clifton Partners is also said to have known that Fieldmont was, or had been, in default on its obligation to pay interest pursuant to the loan from NAB. It failed to inform the applicants of those matters. The applicants say that Clifton Partners engaged in conduct which was misleading or deceptive contrary to s 995(2) of the Corporations Law and that the first to fifth applicants are entitled to recover the amount of any loss or damage caused by that conduct. 14 The remaining applicants each plead misleading or deceptive conduct in respect of successive prospectuses issued on 11 February 2000, 13 March 2000, 11 May 2000 and 15 May 2000. It is not necessary for present purposes to set out those allegations. 15 The substituted statement of claim, additionally, and in the alternative, alleges breaches by the directors of the duties imposed upon them by s 601FD(1)(b), (c) and (f) of the Corporations Law. These breaches relate to their alleged failure to provide, or cause KMF to provide, any or any adequate training to staff members of Clifton Partners to ensure that they understood the requirements placed on them under the Corporations Law and the Compliance Plan in various respects. Each of the directors is also said to have failed to monitor or review, or to cause KMF to monitor or review, the compliance systems of Clifton Partners. It is said moreover that they failed to check, or failed to cause KMF to check, compliance by Clifton Partners with the Corporations Law and the Compliance Plan. They are said to have authorised Clifton Partners to originate loans and make offers for subscriptions or invitations to subscribe for interests in the Scheme without reference to them and to sign the various prospectuses without reference to them. Other breaches of s 601FD are alleged as well as particular breaches of that section by the first respondent, Mr Beekink. Each of the directors is also said to have been negligent in breach of their respective common law duties of care. 16 Relevantly to the first to fifth applicants, their loss and damage is pleaded in [143] to [151] of the substituted statement of claim. It is alleged that each of the original investors, who included the first to fifth applicants, discharged their existing second registered mortgage over the land and agreed to take an interest in the new registered mortgage securing a total sum of $1.1 million. They did so in reliance upon the six representations conveyed by the Clifton Partners' letter of 14 February 2000 and as a result of the directors' breaches of the duties imposed on them by s 601FD of the Corporations Law and as a result of their negligence. It is said that by reason of these matters the original investors were not repaid their respective outstanding advances towards the original loan. (c) Further, after 5 November 2000 Fieldmont and Monteath each failed to pay any interest on the outstanding monies. (d) On or about 12 April 2001 Monteath and Fieldmont were wound up in insolvency. (e) The applicants have not received, and will not receive any dividend in the winding up of Monteath or Fieldmont, nor any other amount in satisfaction of any part of the amounts owing to them, except insofar as the first to fifth applicants have received partial compensation as referred to in sub-paragraph (g) below. (f) The Land was sold by the first registered mortgagee, the National Australia Bank Ltd, in or about late 2001, and the total net proceeds of sale of the Land were insufficient to cover the total secured indebtedness to the National Australia Bank Ltd under the first registered mortgage. The applicants did not and will not receive any part of the net proceeds of the sales of the Land. (g) In or about July 2006 the first to fifth applicants recovered total net compensation in the sum of $208,759.32 from the professional indemnity insurer for Murie & Edward, solicitors, with respect to loss and damage caused by Murie & Edward's failure to register a second mortgage against another property, which amount the first to fifth applicants accept should go in reduction of their loss and damage as against the respondents herein. (h) The applicants each suffered the loss of opportunity to invest their monies elsewhere and earn interest or other returns. (i) The applicants will provide further particulars in due course. They also claim further, and in the alternative, damages and interest. The original loan was to be repayable on or about 30 November 2000 and was secured by a second registered mortgage. The first to fifth applicants' complaint against the directors is said to be encapsulated at [29]. It is that in February 2000 the first to fifth applicants were persuaded to roll over their loan into a new facility and to discharge their existing security and take out fresh security. 20 The directors say that the losses claimed by the first to fifth applicants are a consequence of releasing their existing second mortgage over the land and taking a new second mortgage over it for $1.1 million in lieu of the existing total advance of $850,000. Their $650,000 would form part of the new $1.1 million loan. 21 The directors say that the first to fifth applicants' claim depends on establishing that their position was worsened as a result of agreeing to the roll over proposal. That, it is said, would require them to establish that, had they retained the benefit of the original second mortgage security, it is likely that they would have recovered at least some of the moneys loaned. On the pleading, according to the directors, the first to fifth applicants would have made no recovery and their position has not been worsened by any conduct on the part of the directors. 22 The directors argue that, according to the substituted statement of claim, it was represented to the first to fifth applicants that the sum owing to NAB was $2.2 million in February 2000, whereas in truth the amount owing was $2.275 million. It is pleaded that as at February 2000 the true value of the land was $2,015,000. The pleaded claim at [34] is said to be to the effect that the value of the land was consistent from February 2000 to later in 2001. 23 The directors contend that on the pleaded case the first to fifth applicants would never have achieved a return of any of their loan moneys either by repayment on 30 November 2000 or as a result of a mortgagee sale because the value of the land was always inadequate to secure the priority of NAB. 24 In answer, the first to fifth applicants refer to [143] of the substituted statement of claim where they allege that they discharged their existing second registered mortgage securing $850,000 comprising the original investors' advance of $650,000 and a further $200,000 advanced by the remaining mortgagee who is not a party to the proceedings, and agreed to take an interest in the new second registered mortgage securing a total of $1.1 million. It is said that they did this in reliance on the misleading or deceptive conduct, breaches of statutory duty and/or negligence of the respondents. In [144] they say that they were not repaid their respective outstanding advances towards the original loan. They note that the directors do not seek to strike out [143] and [144]. Proof of these allegations is said to be a matter of evidence. 25 The first to fifth applicants argue that it is apparent from the pleaded facts that the borrowers, namely Fieldmont and Monteath, required a loan of $1.1 million in lieu of the existing loan of $850,000 secured by the registered second mortgage. That appears to have been the purpose behind the letter of 14 February 2000. It is said to be open to each of the first to fifth applicants to contend that had they not been misled they would not have agreed to the discharge of their existing registered second mortgage without being repaid the respective amounts then owing to them. It is therefore open to them to contend that the reasonable inference is that but for the conduct complained of Fieldmont and/or Monteath would have borrowed the entire amount from new investors rather than just the sum of $274,000 actually raised from new investors and would have paid out the first to fifth applicants. If that is the case then the first to fifth applicants are indeed worse off than they would have been but for the impugned conduct. In the alternative they say it is at least open to the first to fifth applicants to propound a case that there was a prospect that the registered second mortgage would have been refinanced on that basis. 26 In my opinion, having regard to the contentions advanced on behalf of the first to fifth applicants it cannot be said that their case as pleaded is manifestly untenable. Nor can it be said that it has no reasonable prospect of success (see s 31A, Federal Court of Australia Act 1976 (Cth)). In my opinion it is not necessary to say anything further at this stage. The motion will be 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 French. | strike out motion statement of claim whether no reasonable cause of action disclosed strike out motion dismissed no point of principle practice and procedure |
The challenge is on a number of grounds. To address them, it is necessary to refer in a little detail to the provisions of the ACC Act. 2 The Australian Crime Commission (the ACC) is established by s 7 of the ACC Act. Its functions under s 7A of the ACC Act include investigating, when authorised by the Board of the ACC, matters relating to 'federally relevant criminal activity'. The ACC consists of its Chief Executive Officer, the examiners appointed under s 46B(1), and the members of its staff. 3 The Board of the ACC is established by s 7B of the ACC Act. It comprises the Commissioner of the Australian Federal Police, the Secretary of the Department, the Chief Executive Officer of the Australian Customs Service, the Chairperson of the Australian Securities and Investments Commission, the Director-General of Security under the Australian Security Intelligence Organisation Act 1979 (Cth), the Commissioner or head of the police force of each State and of the Northern Territory and of the Australian Capital Territory, and the CEO of the ACC. A brief description of the governance of the ACC is given in P v Australian Crime Commission [2005] FCAFC 54 at [28] ( P v ACC ). 4 On 15 May 2003 the Board of the ACC made the Australian Crime Commission Special Investigation Authorisation and Determination (Established Criminal Networks) 2003 (the first Instrument). Clause 4 of the first Instrument expressly authorised the investigation of the specified matter until 31 May 2004 and requested a report by 31 May 2004. Clause 5 of the first Instrument expressly determined that the investigation should be a special investigation. It recorded that the Board had considered the matter required by s 7C(3) to have been considered. It also contained the information required by s 7C(4). The first Instrument on its face records that it was made at 8.02 am on 15 May 2003 and signed by the Chair of the Board on that date. 5 On 28 April 2004 the Board of the ACC made the Australian Crime Commission Special Investigation Authorisation and Determination (Established Criminal Networks) Amendment No 1 of 2004 (the second Instrument). The second Instrument comprised only three clauses: its name; its time of commencement (upon its making); and its operative clause. Clause 3 of the Second Instrument amended clause 4 of the first Instrument by substituting 31 May 2005 for 31 May 2004. 6 On 26 May 2005, the Board of the ACC made the Australian Crime Commission Special Investigation Authorisation and Determination (Established Criminal Networks) Amendment No 1 of 2005 (the third Instrument). The third Instrument was in the same form as the second Instrument. Clause 3 of the third Instrument further amended Clause 4 of the first instrument by substituting 30 September 2005 for 31 May 2005. 7 The third Instrument recorded that the first Instrument had been made on 13 May 2003 and signed by the Chair of the Board of the ACC on 15 May 2003. A footnote indicated that the resolution was made on 13 May 2003, and that the first Instrument was signed by the Chair on 15 May 2003 and incorrectly showed on its face that it was made on 15 May 2003. Nothing was made of that error in the submissions of the applicant. 8 On 14 July 2005 a summons to appear before the ACC was issued to the applicant requiring his attendance for examination on 22 July 2005 (the summons). That was during the currency of the first Instrument as extended by the second Instrument and as further extended by the third Instrument. By 24A, the power of an examiner to conduct an examination is confined to the purposes of a special ACC operation or investigation. Consequently, the power of an examiner under s 28 to summon a person to appear at an examination to give evidence and to produce documents is also confined to those purposes. The summons indicated it was issued under s 28(1) of the ACC Act. Section 28(2) requires the summons to be accompanied by a copy of the determination of the Board that (relevantly) the investigation is a special investigation. The summons was accompanied by a copy of each of the first Instrument, the second Instrument and the third Instrument. 9 The examination has been adjourned pending the outcome of the present proceeding. 10 The third respondent is the examiner who issued the summons. Section 28(1A) required him to be satisfied, before issuing the summons, that it is reasonable in all the circumstances to do so. 11 Section 28(3) requires that the summons, with a qualification, to set out so far as reasonably practicable the general notice of the matters in relation to which the examiner intends to question the applicant. Before issuing the summons, I was satisfied that it was reasonable in all the circumstances to do so. I considered the particular circumstances of the special ACC investigation to which the examination relates and decided that the terms of the summons do set out, so far as was reasonably practicable, the general nature of the matters in relation to which I intended to question the person to whom the summons is addressed. I also decided that it would prejudice the effectiveness of the special ACC investigation for the summons to set out any further details about the matters in relation to which I intended to question the person because doing so would have increased the risk that other persons being investigated by the ACC may have become aware of the nature of the ACC investigation and taken steps to impede or frustrate its progress. There was no challenge to his affidavit by cross-examination. 13 The application was heard on 24 November 2005. The parties were aware of the appeal before the Full Court in P v ACC , and that certain matters to be argued in that matter overlapped with contentions put forward in this matter. It was proposed that judgment in this matter would follow the decision of the Full Court in P v ACC , since delivered on 28 April 2006. Following the hearing, the applicant submitted a further proposed amended application filed on 8 December 2005. The respondents were given an opportunity to object to the proposed amendments, but did not do so. I give leave to amend the application in accordance with that document. 17 I first address the challenge to the constitutional validity of s 4A of the ACC Act (ground (d)). Section 4A identifies when State offences have a 'federal aspect'. That is relevant to whether there is a 'federally relevant criminal activity', as the investigative function of the ACC under s 7A(c) is confined to matters relating to a federally relevant criminal activity when authorised by the Board. The argument, put shortly, is that s 4A extends to conduct beyond the legislative competence of the Commonwealth. Its invalidity then infects the validity of the power to have made the several determinations and authorisations by the first Instrument, the second Instrument and the third Instrument, and in turn the power to issue the summons. 18 The Full Court in S v Australian Crime Commission [2006] FCAFC 5 has determined that issue adversely to the applicant. I must follow that decision. Consequently, I reject the challenge to the constitutional validity of s 4A. 19 The discrete challenge to the validity of the third Instrument (ground (a)) is that it does not comply with the requirements of s 7C(3) and (4) of the ACC Act because it does not itself express a determination in writing that the investigation is a special investigation, because it does not on its face record that the Board has considered whether ordinary police methods of investigation into the matters are likely to be effective, and because it does not itself contain the information required by s 7C(4). 20 The Full Court in P v ACC has decided those contentions adversely to the applicant. The third Instrument is to be read with the first Instrument and the second Instrument, and in that way it meets the requirements of s 7C(3) and (4). There is no requirement that a determination in writing must record that the Board has considered whether ordinary police methods of investigation into the matters are likely to be effective. There is no evidence to suggest, and so no reason to conclude, that the Board did overlook that issue at the time of making the second Instrument or the third Instrument, assuming that it was necessary for it to do so at those times bearing in mind that those Instruments extended the period of the authorisation under s 7C(1)(c) but may not have constituted a fresh determination under s 7C(1)(d). I must follow that decision. I note that Finn J in X v ACC [2004] FCA 1475 reached the same conclusion. 21 The challenge to the validity of the summons because it does not comply with the qualified obligation imposed by s 28(3) (ground (e)) must also fail. The obligation is to set out the general nature of the matters in relation to which the proposed questioning is to be directed, but only so far as is reasonably practicable to set out that information. The concept of reasonable practicability is part of the measure of the information required to be provided. The obligation to provide that information does not arise where the examiner who issues the summons is satisfied that setting out the required information would prejudice the effectiveness of the special ACC investigation. 22 In fact, the summons does contain some information. It identifies that the proposed evidence is to be of 'matters relating to federally relevant criminal activity, including your knowledge of the activities of [a described group] between [a specified year] and the present'. The reference to federally relevant criminal activity is, of course, necessarily rhetorical; it is a pre-condition to a valid determination and so to a valid summons. It does not usefully convey information about the topics of the proposed examination. The balance of that descriptive material does so. The use of the word 'including' might be read as suggesting that there are other matters to be the subject of questioning which have not been specified, but in context I think it merely preserves the position expressly permitted by s 28(3) that questions outside the scope of the nature of the specified matters is nevertheless permitted. 23 The affidavit of the third respondent set out in [12] above attracts some comment. Paragraph 3 (after the first sentence, which relates to s 28(1A)) asserts that the summons provides the information required by s 28(3). There would then be no need for the proviso in s 28(3) to be activated, but par 4 of the affidavit does so. It may do so because of the use of the word 'including' so as to refer to those matters which notice has not been given. If it does not, in my view, those paragraphs may not accurately reflect the operation of s 28(3) because the third respondent has treated the obligation to provide information about the general nature of the matters to be the subject of questions as qualified in a quantitative way by the proviso upon that obligation. In other words, the third respondent has treated the measure of reasonable practicability as dependent upon, or qualified by, any prejudice to the effectiveness of the special investigation. It is not clear that reasonable practicability is qualified in that way. The measure of reasonable practicability is an objective one, not in its terms dependent upon the satisfaction of the examiner, unlike the applicability of the proviso itself. see S v ACC at [16]. At a practical level, however, the determination of what is required to be disclosed is nevertheless made by the examiner: See S v ACC at [38]-[39]. 24 Be that as it may, in this matter, the summons in my view does disclose the general nature of the matters upon which the proposed examination is to occur. If, on the other hand, it does not adequately do so, the third respondent has formed the view that it should not do so. 25 The proviso in s 28(3), as I pointed out in S v ACC (2005) ALR 123 ( S v ACC at first instance ) at [38], puts the responsibility for deciding whether setting out the general nature of the matters in relation to which the examiner intends to question the examinee would prejudice the effectiveness of the examination upon the examiner. That is the meter by which is measured the existence of such prejudice. It is a meter which is to be used only after the examiner has been satisfied that the issue of the summons is reasonable in all the circumstances and has recorded in writing the reasons for the issue of the summons: see s 28(1A). 26 The applicant accepts that he bears the onus of proving the third respondent did not have the necessary satisfaction specified by s 28(3) and to which he has deposed. For the reasons I gave in S v ACC at first instance at [36]-[40], I am not persuaded that the third respondent did not have the level of satisfaction to which he deposed. No particular criticism of his affidavit was made in that regard. He gives a reason for his satisfaction. Although very generally expressed, it is comprehensible and rational. He was obliged to, and did (according to his affidavit), first satisfy himself that it was reasonable in all the circumstances to issue the summons. To form such a view necessarily involves a significant awareness of the nature and progress of the special ACC investigation. 27 Consequently, in my judgment, that line of attack upon the validity of the summons must also fail. 28 There remains the attack based upon the 'impermissible delegation' by the Board (grounds (b) and (c)). They can be dealt with together, as there is no claim by the respondents that the Board has delegated, or is entitled to delegate, its functions under s 7C(1)(e) of the ACC Act. 29 The applicant claimed that, with the exception of par 1 of Sch 2 of the first Instrument, the Board failed to comply with s 7C(1)(e) by failing to determine the class or classes of persons to participate in the investigation. 30 Clause 6 of the first Instrument provides that, pursuant to s 7C(1)(e), the classes of persons to participate in the investigation are those mentioned in Sch 2. The CEO. Members of staff of the ACC authorised in writing by the CEO or by a delegate of the CEO. The heads of the nominated agencies are not themselves subject to direction or control by the Board in making their nominations. The alternative contention arising from the way the Board has sought to comply with s 7C(1)(e) is that it has impermissibly delegated to the CEO and to the heads of the nominated agencies the selection of the class or classes of persons to participate in the special investigation. 31 The respondents have not invoked s 16 of the ACC Act as a response to the claim. That is presumably because they accept (at least for the purposes of this matter) that the applicant is entitled to challenge the validity of the summons by claiming that there is no valid determination. In adopting that position, they accept (for the purposes of this matter) that s 7C(1)(e) places an inviolable restraint upon the exercise of the power to determine that an authorised investigation is a special investigation: see Plaintiff S157/2002 v The Commonwealth [2003] HCA 2 ; (2003) 211 CLR 476 per Gaudron, McHugh, Gummow, Kirby and Hayne JJ at [76]. 32 The respondents' contention is that the Board did not, by cl 6 and Sch 2 of the first Instrument, delegate its function under s 7C(1)(e) but simply performed the function required by s 7C(1)(e). They accept for the purposes of this application that the function of determining the class or classes of persons to participate in the investigation is not delegable. 33 Consequently, the only issue is whether the Board by the first Instrument properly performed that function. 34 It is clear that the investigation referred to in s 7C(1)(e) is the subject of the determination under s 7C(1)(d) that it is a special investigation; and that the special investigation so determined is the investigation authorised under s 7C(1)(c). So much was common ground. 35 Counsel for the applicants stressed the words 'to determine' at the commencement of s 7C(1)(e). Consequently, it was argued, the first Instrument (or any determination under s 7C(1)(d) that an investigation authorised under s 7C(1)(c) is a special investigation) must itself result in there being a determinate class or classes of persons to participate in that special investigation. The argument runs that the Board otherwise denies itself 'the collective expertise' which its composition reflects in determining the class or classes of participating persons. Further, and (it is contended) contrary to s 7C(1)(e), the heads of the several agencies then decide who is to participate in a particular investigation and may do so remote from criteria set or approved by the Board, and indeed may do so whimsically (the example given was selection by hair colour). And, finally, that process (so it was argued) means that the determination of the participants in the investigation is made by those not accountable to the Board and without its collective expertise. 36 In support of that contention, counsel for the applicant referred to four cases which, he submitted, showed that the form of Sch 2 to the first Instrument did not simply leave the identification of individuals within a determined class or classes to the heads of the several agencies referred to, but left to the heads of those agencies the identification of the criteria by which the participating persons will be selected: 'the determination of a "class" is a determination of criteria' was the pithy submission. Counsel also argued that there are reasons within the ACC Act which support the applicant's construction of s 7C(1)(e). 37 I do not derive much assistance in addressing that issue from the cases referred to by counsel for the applicants. 38 King Gee Clothing Company Proprietary Limited v The Commonwealth [1945] HCA 23 ; (1945) 71 CLR 184 ( King Gee )concerned the process of price control by regulation during the Second World War. The issue was whether Prices Regulation Order No 1816 was a valid exercise of power by the Commissioner of Prices under the National Security (Prices) Regulations . Regulation 23(1) relevantly empowered the Commissioner of Prices by order 'to fix and declare the maximum price at which goods may be sold'. The Prices Order prescribed the prices at which certain items of men's clothing might be sold by a formula providing for an allowance of a percentage margin on cost; 'cost' was defined to include an amount for 'indirect labour', to be calculated as a percentage of the 'direct labour'; various terms then described how those elements were to be calculated. The High Court (Rich, Starke, Dixon and Williams JJ) held that the Prices Order was not a valid exercise of the power granted by reg 23(1) because it required estimates or discretionary apportionments as a matter of judgment. The controlling price could not itself be calculated. Obviously there is no direct analogy with the present issue. 39 In my view, the significant feature of the case is the observation for present purposes of Dixon J at 196 that the validity of the Prices Order depended upon the meaning and operation of reg 23(1). His Honour concluded at 197 that, in its context, reg 23(1) required that a Prices Order prescribe standards or criteria from which a price may be calculated. The context included the heavy criminal sanctions for its contravention, as well as reg 23(1A) which described various ways in which the fixing and declaring of maximum prices might be made. It therefore, as his Honour said at 197 required a 'certain objective standard'. 40 In Cann's Proprietary Limited v The Commonwealth (1946)71 CLR 210 the High Court (Latham CJ, Starke and Williams JJ) declared invalid a different Prices Order purportedly made under reg 23(1) of the National Security (Prices) Regulations for similar reasons, although Dixon J dissented in the result. I do not consider that the reasoning further informs my judgment in this matter, beyond the assistance to be derived from King Gee . 41 Counsel for the applicant also referred to Brudenell v Nestlé Company (Australia) Ltd [1971] VR 225. In that case, the defendant had been charged with selling instant coffee which was adulterated, contrary to s 238 of the Health Act 1958 (Vic). The adulteration was alleged because the instant coffee did not comply with the standard prescribed by reg 48(8)(a) of the Food and Drug Standards Regulations 1966 (Vic) that instant coffee should contain no more than a specified percentage of residue in boiling water. The prescribed standard was held to be ultra vires because it did not prescribe a standard for, or define, a food, drug or substance. The scientific evidence showed the percentage of residue varied depending upon the proportions of the coffee and boiling water used, and the regulation did not define the proportions of coffee and boiling water to be used to determine the residue. Consequently, Menhennitt J concluded at 235 in the light of the evidence that no standard had been prescribed, because it was impossible to ascertain to what extent the addition of any substance was prohibited. 42 Finally, counsel referred to Racecourse Co-operative Sugar Association Ltd v Attorney-General (Queensland) [1979] HCA 50 ; (1979) 142 CLR 460. The High Court held, inter alia, that in delegating to the Sugar Board the power to determine the value or price of certain acquired sugar by reference to discretionary matters, the Governor-in-Council had not 'determined and declared' the value or 'fixed' the price of the sugar as required by s 6 of the Sugar Acquisition Act 1915 (Qld). 44 The ACC Act is the outcome of the substantial amendments to the National Crime Authority Act 1984 (Cth) effected by the Australian Crime Commission Act 2002 (Cth). The Second Reading Speech for the Australian Crime Commission Establishment Bill 2002 (Commonwealth Parliamentary Debates House of Representatives, 26 September 2002, pp 7328- 7330) indicates that the ACC was intended by the Commonwealth, the States and the Territories to replace the National Crime Authority, the Office of Strategic Crime Assessments and the Australian Bureau of Criminal Intelligence; and the ACC was intended to result in more effective national law enforcement operations in conjunction with state and territory police forces. The ACC was intended thereby to enhance law enforcement co-ordination at a national level, by setting up a co-ordinated national criminal intelligence framework, and to improve the ability to combat serious and organised crime across jurisdictional boundaries. See S v ACC at [6]. 45 It is clear that the Board is constituted to reflect and have regard to those various interests. It is to be no mere cypher. Its functions under s 7C indicate that it has overall control of the ACC in the performance of its functions. It decides on national criminal intelligence priorities and it provides strategic direction to the ACC and determines priorities for the ACC: s 7C(1)(a) and (b). Its functions under s 7C(1)(c) and (d) are referred to above. The Board may determine under s 7C(1)(d) that an authorised investigation is a special investigation only if at least nine Board members (including at least two eligible Commonwealth Board members) vote for it: s 7G(4). Correlative provisions addressing the ACC's functions in s 7A reflect that. The ACC may only conduct an intelligence operation or an investigation into federally relevant criminal activity when authorised by the Board: s 7A(b) and (c). It must provide reports to the Board on the outcomes of those operations or investigations: s 7B(d). It must provide strategic criminal intelligence assessments to the Board and its advice on national criminal intelligence priorities: s 7A(e) and (f). The Board in turn may disseminate to the appropriate agencies the strategic criminal intelligence assessments made by the ACC. 46 The Board must also report to the Inter-Governmental Committee on the ACC's performance: s 7C(l)(h). The Inter-Governmental Committee constituted under s 8 comprises the designated Ministers of the Commonwealth and of each participating State. Its functions include monitoring generally the work of the ACC and of the Board, and the oversight of their strategic direction: s 9(1)(a) and (b). It is notified promptly of a determination by the Board that an intelligence operation is a special operation or that an authorised investigation is a special investigation under s 7C(2) or (3) respectively in the performance of the Board's functions, and it may then seek further information concerning the determination, and it may revoke the determination: s 9(2) and (7). Its oversight of the Board and of the ACC is thus at Ministerial level, but it is nonetheless a significant role. 47 The overall context of the Board's role is also enlightened by the further reporting obligations of the ACC when carrying out authorised intelligence operations or authorised investigations into federally relevant criminal activity. Evidence of offences obtained by the ACC must be assembled by the CEO and given to the relevant law enforcement agency or prosecuting authority of the Commonwealth or State or Territory: s 12. The ACC is obliged to work, so far as practicable, with other law enforcement agencies: s 17. It has information gathering powers: ss 19A and 20 . It has the right to apply for certain search warrants in respect of ACC special operations or investigations: s 22. That function is performed through or by an 'eligible person', defined as an examiner or a member of the staff of the ACC who is also a member of the Australian Federal Police or of the Police Force of a State. Also, in respect of special ACC operations or investigations, the ACC through an examiner may conduct an examination including the examiner summonsing a person to attend the examination for questioning: ss 24A and 28 . A person so summoned must attend and answer questions and produce documents as required, although the use that can be made of such answers or documents may be confined: s 30. 48 It is an offence for the CEO, the members of the Board, the staff of the ACC and an examiner to make a record of, or to disclose, any information obtained in the performance of duties or functions under the ACC Act other than for the purposes of the ACC Act or of a relevant Act: s 51. Section 59 prescribes when, and in what circumstances, reports and information may be provided to others, relevantly for present purposes that the CEO may give to law enforcement agencies or other prescribed agencies of the Commonwealth or of a State or Territory information which is relevant to the activities of that agency: s 59(7). The CEO may do so if it appears appropriate to do so and would not be contrary to a law of the Commonwealth or of the State or Territory that would otherwise apply. 49 The ACC is defined in s 7(2) to consist of the CEO, the examiners (appointed under s 46B), and the members of the staff of the ACC. Section 4 provides that a member of the staff of the ACC includes persons engaged under the Public Service Act 1999 (Cth) and, 'a person participating in an ACC operation/investigation', and certain other persons. 50 Section 58 contemplates administrative arrangements with the States whereby members of a Police Force of a State may be made available to perform services for the ACC. Section 48 provides that such persons, together with persons from the Australian Federal Police or other Commonwealth authorities whose services are seconded to the ACC, may assist the ACC in the performance of its functions, and they thereby become members of the staff of the ACC as defined. 51 The inclusion in the definition of the term 'member of the staff of the ACC' of 'a person participating in an ACC operation/investigation' clearly may extend its staff members beyond those persons who perform services for the ACC under s 58. The definition contemplates a broad range of persons who may be members of the staff of the ACC. Those participating in an ACC operation or investigation (and thereby becoming members of its staff) may extend beyond the categories identified by ss 47, 48 or 49 of the ACC Act. It is also apparent that the members of the staff of the ACC may, from time to time, include seconded persons under administrative arrangements under s 49. In their cases, their secondment would not specifically be authorised or supervised by the Board. The ACC Act contemplates those arrangements being made at an operational level rather than at the Board level of decision-making. 52 It is in that broad context that s 7C(1)(e) is to be addressed. It requires the Board to determine, in writing, the class or classes of persons to participate in an ACC special operation/investigation. Those persons then have imposed on them the obligation of secrecy under s 51, and depending on their also being members of a police force the right to apply for search warrants under s 22. Counsel for the applicant contends that the Board, because those persons have such responsibilities and powers, must specify definitively the class or classes of persons to participate in the operation or investigation so as to ensure both the integrity of the investigation and the protection of those subjected to the processes of the ACC. 53 The reason why the Board needs to specify the class or classes of persons to participate in the examination is not entirely clear. One clear purpose is so that those who thereby become members of the staff of the ACC can be identified. Those identifiable persons then have the powers and obligations referred to under the ACC Act. Another clear purpose is so that the Board must control the persons who participate in its particular operations or investigations, so that it must address the particular class or classes or persons who appropriately are to participate in the particular operation or investigation. It is almost a corollary of the authorisation and determination functions of the Board that it should determine those who should participate in a particular operation or investigation. That is fortified by the requirements of s 7C(2), (3) and (4). 54 The reference to a class or classes of persons is, no doubt, to avoid the requirement that the Board nominate each individual person to participate in a particular operation or investigation. That would impose very onerous and impracticable burdens upon the Board, having regard to the sort of investigations or operations which it might authorise. The inevitability of different persons moving in and out of its operations and activities is manifest. The determination under s 7C(1)(e) is not intended to require the Board to take account of such changes. 55 Paragraphs 2 and 3 of Sch 2 to the first Instrument do not individually specify the persons to participate in the special investigation. They describe the several classes of persons to participate in the special investigation by reference to their being officers or members of the staff of specified agencies, and then by being authorised in writing to participate by the CEO (or a delegate of the CEO) of the ACC or by the respective heads of the specified agencies. 56 The respondents point out that there are two steps required by those pars of Sch 2 to the first Instrument to identify the participants in the investigation: membership of the staff of a specified agency, and specific personal authorisation by the head of that agency. They also point out that it would be ironical if the exercise of the function under s 7C(1)(e) were valid if only the first of those steps were specified. For example, if the ACC could properly perform the function under s 7C(1)(e) by specifying as a class of persons to participate in the investigation the members of the staff of the Queensland Crime and Misconduct Commission (one of the nominated agencies), it would be ironical if the function was not properly performed because the Board then imposed the further refinement that the head of that agency must specifically authorise particular individuals to participate in the investigation. 57 More importantly, in my view, is that the Board under the ACC does not have the direct responsibility for, or oversight of, the selection of the members of the staff of the ACC. That is done at a managerial or executive level. The obligations of secrecy under s 51, and the performance of the functions under s 22 of issuing warrants, are not therefore in the context that the Board must definitively describe those persons or classes of persons who become members of the staff of the ACC. The secrecy obligations apply of their own force; they do not require any determination of the Board under s 7C(1)(e) to make them efficacious. Moreover, the disclosure of information authorised by s 59 is also confined to the CEO, so there is no special reasons apparent why the Board's determination under s 7C(1)(e) is significant to its operation or its effectiveness. The entitlement to apply for a warrant under s 22 must be undertaken by an 'eligible person' and the issue of a warrant by an 'issuing officer' is permitted only in the circumstances provided for by s 22(3), and only upon the terms prescribed by s 22(4) and (5). An 'issuing officer' as defined in s 4 must be an independent judicial officer. 58 I do not consider that s 7C(1)(e) requires a determination in terms that, upon its making all the persons who may participate in a particular ACC operation or investigation are then immediately capable of identification. There is no reason why that should be so. Such a construction would not reflect the operational reality that generally the direct selection of the staff of the ACC (other than the CEO and of examiners) is not carried out by the Board of the ACC. Section 7C(1)(e) does not impose that task upon the Board. It is required to address the class or classes of persons who may participate in a particular ACC operation or investigation. It did so. By its determination, at any point in time those who were to participate in the relevant special investigation could be identified. Until any authorisation by a head of a specified agency, only the CEO would be able to do so. The step which the determination required under pars 2 and 3 of Sch 2 of designation by the heads of the nominated agencies serves to confine those within the class or classes specified by the Board. Such designation does not itself alter the class or classes as specified by the Board. As the respondents pointed out, the designation by the heads of the nominated agencies or their subordinates of the individuals from their agencies who would participate in the special investigation would be done in any event. The determination of the Board specified the class or classes of persons in a way which required that designation to be done by the head of the nominated agency and to be done formally, that is in writing. It need not have done so. The applicant does not contend that the Board could not, for example, have specified "officers and members of the staff of the Queensland Crime and Misconduct Commission". The refinement of that class by requiring the head of that agency to authorise in writing the particular members of that agency to participate cannot be seen as the Board not fulfilling a responsibility imposed by s 7C(1)(e) in any way which would otherwise serve the purposes of the ACC Act. 59 I consider that the Board did determine in writing the class or classes of persons to participate in this special investigation. It bounded or limited the classes, or settled or fixed those classes (see SOED, 1993, p 651). It did so apparently having regard to the nature and purpose of the authorised investigation and to the fact that it should be a special investigation, including its consideration of whether ordinary police methods of investigation into the matters the subject of the investigation are likely to be effective. I see no reason why s 7C(1)(e) means that a determination of the class or classes of the form of pars 2 and 3 of Sch 2 to the first Instrument was not valid. 60 For those reasons, in my judgment, the Board should be regarded as having complied with s 7C(1)(e) by the form of cl 6 and Sch 2 of the determination in the first Instrument. 61 As each of the matters raised by the applicant has failed, the application is dismissed. The applicant should pay to the respondents their costs of the application. | australian crime commission special investigation determination of the class or classes of persons to participate in the investigation summons to appear before an examiner form of summons administrative law |
My reasons for confirming the Scheme are set out below. 2 I also refer in this judgment to an order made on 29 November 2007 dispensing with compliance with the provisions of s 17C(2)(c) of the Act which requires an approved summary of a scheme to be given to every affected policyholder. On 20 February 2008 I varied my earlier order. This judgment contains brief reasons why I made those orders. 4 The relevant provisions of Division 3A and prudential standards determined by the Australian Prudential Regulation Authority (APRA) for the Transfer and Amalgamation of Insurance Business for General Insurers were referred to in some detail by Lindgren J in Re Insurance Australia Ltd [2004] FCA 524 ; (2004) 139 FCR 450 at [10] ff. It is unnecessary to repeat the details of those provisions or the relevant provisions of the standards which are contained in APRA Prudential Standard GPS 410. It was incorporated in New South Wales in 1878 but, after a number of corporate reorganisations, its insurance liabilities were ultimately assumed by MMIA Pty Limited ("MMIA"). 6 MMIA has had a long history of writing general insurance and reinsurance business in Australia. It managed all of the classes of business that it wrote or acquired until 1999. 7 In October 1999, MMIA entered into a joint venture with QBE Mercantile Mutual Limited ("QBEMM"). Under the joint venture MMIA transferred the management of its general insurance business, subject to certain exceptions, to QBEMM. 8 QBE Insurance (Australia) Limited ("QIA") is the main general insurer of the QBE Group. In June 2004 QBE purchased the general insurance interests of ING Australia which was a shareholder of both MMIA and QBEMM. From about that time, QBEMM became a business unit of QIA. 9 MMIA has not issued any contracts of insurance since 31 December 2004. It has been in run-off since January 2005. However, its liabilities include long-tail liabilities under policies of insurance for workers' compensation business underwritten during the period from 1950 to 1999. 10 A large number of policies with both short-tail and long-tail liabilities were underwritten during that period. Approximately 400 claims are expected to arise from dust diseases claims made by workers or their employers through the policies. The run-off is expected to continue for at least another 30 years. This is a significant feature of the Scheme and I will refer to it again below. Thus the Scheme is "in-house" and provides for the transfer of all existing insurance business from one member of the QBE Group to another. 14 Clause 3.1 of the Scheme provides for MMIA to transfer to QIA investment assets agreed by MMIA and QIA which have a market value equal to the "Transfer Amount". This is defined to mean the amount of the assumed liabilities (net of reinsurance recoveries) determined in accordance with Australian Accounting Standard AASB 1023. 15 Following the implementation of the Scheme, there will remain an investment balance of $196.4 million. The assets represented by that balance will be transferred to QBE, or a company within that Group for the use and benefit of the recipient. An independent actuarial report of Mr O'Dowd was also in evidence. Both reports addressed the question of the solvency coverage before and after the Scheme. They also addressed the question of minimum capital requirements for insurers under APRA's Prudential Standards GPS 110 and 310. 17 The actuaries' reports indicate that after the Scheme there will be a reduction in the capital coverage ratio from 4.78 to 1.91. However, both actuaries observe that the resulting level of coverage is well above APRA's minimum level of 1.2 and QBE's internal capital policy of 1.5 times APRA's minimum capital requirement. 18 Both the actuaries conclude that the interests of policyholders are adequately protected under the Scheme. Mr O'Dowd's conclusion is that "... no policyholders (or third party claimants who rely on their policies) would be adversely affected by the proposed transfer. 20 Section 17C(2)(c) provides that an application for confirmation of a Scheme may not be made unless an approved summary of the Scheme has been given to every affected policyholder. 21 The evidence was that approximately four million workers compensation policies were written by MMIA during the period from 1950 to 1999. Strict compliance with s 17C(2)(c) would therefore be onerous, if not impossible, and I considered it was appropriate to dispense with it provided that the applicants comply with a regime which was intended to bring the details of the Scheme to the notice of affected parties and relevant bodies including the Insurance Council of Australia and Work Cover and Motor Accident authorities. 22 I did, however, raise for consideration on 29 November 2007 the possibility of making a representative order for the appointment of counsel to represent a long-tail policy holder. I deferred consideration of that question but, ultimately, I decided it was not necessary to make such an order. It may be appropriate for an order to be made depending upon the facts and circumstances in another case. 23 On 20 February 2008 I varied the dispensation order to permit the applicants to send a copy of the approved summary of the Scheme to brokers or underwriting agents. It seemed to me that the terms of s 17C(5) of the Act do not preclude dispensation being granted on more than one occasion. 24 In exercising my discretion to make the dispensation orders, I took into account the fact that APRA did not object, that the Scheme is between companies in the same Group, and the widespread nature of the advertising: Re Calliden Group Ltd [2007] FCA 2019 at [62] (Lindgren J). 26 First, there was a typographical error in the date of the application to the Court for confirmation of the Scheme, in the Notice of Intention published in various newspapers on 18 December 2007. The error was not apt to cause confusion or to mislead the ordinary reader. 27 Second, the Notice of Intention was published in two of the approved newspapers after the Scheme was open for public inspection. This was a breach of paragraph 11 of Prudential Standard GPS 410 which therefore resulted in a failure to comply with s 17C(2)(b) and s 17E(2) of the Act. 28 Whether or not this results in a failure to strictly comply with the requirements of those subsections, the short answer is that they are not conditions precedent to the existence of the jurisdiction to confirm a scheme: Re Armstrong Jones Life Assurance Ltd (1997) 74 FCR 160 at 161---162 (Emmett J); Re Royal & Sun Alliance Assurance Ltd [2000] FCA 1259 ; (2000) 104 FCR 37 at [18] (Katz J); Re Insurance Australia Ltd [2004] FCA 524 ; 139 FCR 450 at [62] ---[63] (Lindgren J). 29 Third, there was a further timing issue arising from the delayed provision of a summary of the Scheme to some affected policyholders. This resulted in a failure to comply with paragraph 15 of Prudential Standard GPS 410 and s 17E(2). It is sufficiently covered by what I said above. 30 The principal issue arising on the application was whether there was likely to be any material detriment to policyholders affected by the Scheme: Re GIO Personal Investment Services Ltd [2000] FCA 1871 at [27] (Emmett J). This accords with the main object of the Act which is expressed in s 2A(1) , namely, to protect the interests of policyholders. 31 In the GIO case Emmett J was satisfied upon the basis of a joint actuarial report that there was not likely to be any material detriment to the owners of policies affected by the Scheme. His Honour therefore confirmed the Scheme under the provisions of s 194 of the Life Insurance Act 1995 (Cth). 32 Emmett J took a similar approach in Re Mercantile and General Reinsurance Company of Australia Ltd [2004] FCA 1773 at [19] ---[20] and Re PMI Indemnity Ltd (No 2) [2005] FCA 1842 at [71] ---[74]. In PMI [2005] FCA 1842 at [72] his Honour observed that even if the Scheme did not proceed, policyholders would not be guaranteed that the company would retain its excess capital because insurance companies are permitted to reduce their capital, subject to the approval of APRA. 33 It seemed to me that I should take the same approach in the present application in view of the conclusion reached by the actuaries as to the financial position of QIA after the Scheme and in view of the lack of opposition from any affected policyholder. 34 I also took into account the fact that APRA was represented before me and that it has expressed no objection to the Scheme. As Sheppard J said in The Application of Advance Insurance Ltd (unreported, Sheppard J, 18 February 1997) at 16---18, the Court relies on persons in the position now occupied by APRA, to place any evidence, including actuarial evidence, before the Court if it chose to do so. This is not to suggest that the Court abdicates the decision to APRA (cf, in a similar context, Re Metlife Insurance Ltd (2007) 63 ACSR 492 , [2007] FCA 1327 at [28] , [30] and [37]). 35 The relevant authorities were collected and referred to by Katz J in Re Royal & Son Alliance [2000] FCA 1259 ; 104 FCR 37 at [25] ---[27]. The same approach was taken by Hely J in The Application of Zurich Insurance Co [2003] FCA 1519 at [4] . I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | general insurance scheme for transfer and amalgamation of general insurance business from one general insurance company to another within the same group application to court for confirmation of scheme insurance |
2 The applicant contends, and the Australian Crime Commission ("ACC") admits, that the warrants were issued on the application of members of the staff of the ACC for the sole purpose of assisting a 'special investigation' being undertaking by the ACC under the Australian Crime Commission Act 2002 (Cth) ("the ACC Act "). The applicant contends that Pt 1AA of the Crimes Act does not authorise the issue of search warrants for that purpose. The ACC disputes that proposition. The proceeding therefore turns upon the proper construction of Pt 1AA of the Crimes Act and provisions of the ACC Act . The warrant applications were made by members of the staff of the ACC to the second respondent. The ACC is a body established by s 7 of the ACC Act . The second respondent is a Deputy Chamber Magistrate of the Local Court of New South Wales. The second respondent did not appear at the hearing, no doubt because he intends to abide the result of the proceedings. 4 The first warrant was issued to Roland Fleischer on 8 June 2005 as the executing officer in relation to the warrant. Mr Fleischer is a constable within the meaning of the Crimes Act and was so described in the warrant. The warrant authorised the executing officer to enter and search residential premises occupied by the applicant and to seize, inter alia , evidential material relating to the commission of offences against s 29D of the Crimes Act , ss 134.2(1) and 400 (4) of the Criminal Code Act 1995 (Cth) ("the Criminal Code Act") and/or s 82 of the Proceeds of Crime Act 1987 (Cth) ("the 1987 Proceeds of Crime Act "). After the warrant issued, the name of Brian John Healy and thereafter the name of Ren de Haas in his stead, each of whom is a constable within the meaning of the Crimes Act , was written on the warrant as the executing officer in accordance with ss 3C(1) and 3E (5)(d) of the Crimes Act . 5 The second warrant was issued on 8 June 2005 to Mr Fleischer as the executing officer. Again, he was described in the warrant as a constable within the meaning of the Crimes Act . The warrant authorised the executing officer to enter and search certain business premises occupied by a group of companies of which the applicant was a director, and to seize evidential material relating to the commission of one or more of the offences that were mentioned in the first warrant. After its issue, the name of Brian John Healy and thereafter the name of Grant Prosser, each of whom is a constable within the meaning of the Crimes Act , was written on the warrant in accordance with ss 3C(1) and 3E (5)(d). 6 Both warrants were executed on 9 June 2005. Material was seized pursuant to the warrants, including material which was the property of the applicant. 7 Under s 7C of the ACC Act , the board of the ACC may determine in writing that an investigation into matters relating to federally relevant criminal activity is a special investigation. Before doing so, it must consider whether ordinary police methods of investigation into the matters are likely to be effective. On 13 May 2003, the board of the ACC made a determination pursuant to this provision which was termed the Australian Crime Commission Special Investigation Authorisation and Determination (Money Laundering and Tax Fraud) 2003. The special investigation extends to activities that may have involved the commission of offences against s 29D of the Crimes Act , ss 134.2(1) and 400 (4) of the Criminal Code Act, and s 82 of the 1987 Proceeds of Crime Act . There is no challenge to the validity of this determination. 8 In its defence, the ACC explicitly admits that the warrant applications were made, and the warrants were executed, to assist with the ACC special investigation. 9 For the sake of completeness, I should mention that the pleadings disclose one aspect of the facts where the applicant and the ACC adopt slightly different positions. The applicant alleges that, while each person successively named in each warrant was both a constable and a member of the staff of the ACC, he was appointed as executing officer in his capacity as a member of the staff of the ACC. The ACC denies the latter part of this allegation, and pleads instead that each such person was appointed as executing officer in his capacity as a constable within the meaning of the Crimes Act . Mr Graham QC, senior counsel for the applicant, referred to these different positions, but confirmed that he did not rely upon the applicant's allegation as a ground for invalidating the warrant. He added that the applicant's contention supported the proposition that the warrants were executed for the purposes of the ACC special investigation. Given the ACC's explicit admission that the warrants were executed for the sole purpose of assisting the ACC special investigation, I consider that this minor difference in factual allegations is immaterial to the issues which I must consider. Pt 1AA was introduced into the Crimes Act by the Crimes (Search Warrants and Powers of Arrest) Amendment Act 1994 (Cth) ("the Crimes Amendment Act "), which commenced on 30 November 1994. The terms 'thing relevant to an indictable offence' and 'thing relevant to a summary offence' are defined in s 3. 13 Under s 3F, a warrant authorises the executing officer or a constable assisting to enter the specified premises and, inter alia , to search the premises for the kinds of evidential material specified in the warrant, and to seize things of that kind found at the premises. It also authorises the seizure of certain other things found at the premises. 14 There are no contentions in this proceeding that the warrants were defective in form, or that the issuing officer was not satisfied of the matters specified in s 3E(1), or that there was any deficiency or overreaching in the way in which the warrants were executed. 15 The application of Pt 1AA is addressed in s 3D. Proposed subsection 3D(1) preserves the operation of those other laws, but given that Part 1AA is the latest and most comprehensive legislation, and it is desirable that the police are able to use a single set of procedures, it was considered necessary to remove any doubt about that Part 1AA may be used as an alternative. The other laws have been preserved as they have yet to be fully reviewed to consider whether they are still needed, and if so, whether they should be changed to conform with the policy of the Bill. It is necessary to consider these issues with care as these other laws are primarily used by investigating officials from a variety of agencies other than the police. The ACC combined the functions of the National Crime Authority ("NCA"), the Australian Bureau of Criminal Intelligence and the Office of Strategic Crime Assessments. The functions of the ACC include the collection of criminal information and intelligence, the undertaking of intelligence operations, and the investigation of federally relevant criminal activity: see s 7A of the ACC Act . 19 The expression 'federally relevant criminal activity' is explained by several definitions in s 4 of the ACC Act . In summary, it refers to any circumstances implying, or any allegations, that a serious and organised crime may have been, may be being, or may in future be committed so as to give rise to an offence against a law of the Commonwealth or of a Territory, or a law of a State that has a federal aspect. 20 The ACC does not itself have the power to institute criminal proceedings. Under s 12(1) , if the ACC obtains evidence of an offence against a law of the Commonwealth or of a State or Territory, being evidence that would be admissible in a prosecution for the offence, it must assemble the evidence and provide it to the relevant law officer, law enforcement agency or prosecuting authority. 21 Section 22 of the ACC Act deals with the issue of search warrants. For present purposes, the most pertinent sub-sections are (1), (5) and (10). Although search warrants may now be obtained for intelligence operations, the existing threshold tests and the operation of the provision are not otherwise altered by the amendments. For instance, s 3E requires that the issuing officer must be satisfied that there are reasonable grounds for suspecting that there is, or there will be within the next 72 hours, any evidential material (as defined) at the premises to which the search warrant is to relate. Different pre-conditions are found in s 22(1) of the ACC Act . The applicant for a warrant under s 22 must have reasonable grounds for suspecting that a thing or things or a particular kind connected with a special ACC operation/investigation are at the specified premises and, in addition, the applicant must believe on reasonable grounds that if a summons were issued for the production of the thing or things they might be concealed, lost, mutilated or destroyed. It follows that a warrant could be obtained under s 22 in circumstances where none could be obtained under s 3E, and vice versa. But it does not follow that the mere fact that a warrant might be obtainable under s 22 precludes the issuance of a warrant under s 3E. First, the applicant argues that s 22 is a code or regime that sets out the ACC's powers in respect of search warrants, and represents the only source of power to issue search warrants when they are sought for the purpose of assisting an ACC special investigation. Second, the applicant argues that the purpose of search and seizure under s 3E of the Crimes Act is to obtain and preserve evidential material for use in the criminal prosecution process. According to the applicant, this means that Pt 1AA does not confer power to issue a search warrant whose sole purpose is to assist an ACC special investigation. In reality, these two arguments may be different dimensions of a single argument, namely that Pt 1AA should be read down by reference to s 22. Be that as it may, I propose to deal with the two arguments separately. 27 In summary, I consider that there is no justification for reading down Pt 1AA of the Crimes Act by reference to s 22 of the ACC Act . The conditions and limitations in s 22 apply when an application is made for a search warrant under that section. But if a staff member of the ACC can satisfy an issuing officer of the conditions set out in s 3E of the Crimes Act , nominates a constable to execute the warrant, and otherwise complies with all of the requirements of Pt 1AA , there is no reason why a search warrant cannot issue under s 3E. The fact that the sole reason for applying for a search warrant under s 3E may be to assist a special investigation that is being undertaken by the ACC does not render s 3E inapplicable. Section 3E does not impose any limitation of that kind. Nor does it impose any limitation upon the persons who may apply for a warrant under it. 28 Section 3D(2) puts the matter beyond doubt by making it plain that the search warrant power in s 3E may be used when Commonwealth offences are being investigated under another piece of Commonwealth legislation, notwithstanding the availability of a search warrant power under that other legislation. 29 I now turn to a more detailed discussion of my reasons for rejecting the arguments advanced by the applicant. In effect, the applicant argues that s 22 is the only source of power to issue search warrants when they are sought for the purpose of assisting an ACC special investigation. 31 In my opinion, the argument is not sustainable. In Ryder v Morley (1987) 16 FCR 257 (" Ryder v Morley "), the Full Court (Fox, Jenkinson and Wilcox JJ) rejected an identical argument in the context of s 22 of the NCA Act . The case concerned a search warrant that was issued to a detective sergeant in the Australian Federal Police. He had been seconded to the NCA to assist it with a particular investigation. The applicant argued that a search warrant that was to be executed for the purposes of the NCA investigation must be issued pursuant to, and subject to the restrictions of, the NCA Act , including in particular s 22 thereof, and that s 10 of the Crimes Act (the predecessor of s 3E) cannot be prayed in aid of the warrant. 32 At trial in Ryder v Morley (1986) 12 FCR 438, Toohey J held that the attachment of the detective sergeant to the NCA did not deprive him of his status as a constable within the meaning of the Crimes Act , and nor did it deprive him of the right to seek the issue of a search warrant pursuant to s 10 of that Act. Had a member of the Authority required a warrant for the purpose of a special function of the Authority, it was open to that member to apply to a judge of a prescribed court under s 22(1). But the warrant was sought by a member of the Australian Federal Police who satisfied a justice of the peace, by information on oath, that a warrant was justified in terms of s 10 of the Crimes Act 1914 . Counsel for the applicants argued that if a police officer seconded to the Authority could rely upon s 22(10) to justify the obtaining of a warrant under s 10 of the Crimes Act 1914 , the limitations in s 22 could be set at naught. But that is not so. The limitations in s 22 apply when the Authority relies upon a special investigation which it is conducting to obtain a search warrant in the terms of that section. But if a constable can satisfy a justice of the peace, in terms of s 10 of the Crimes Act 1914 , that a search warrant is justified, the justice may issue a warrant under that section. There is nothing uncertain or ambiguous about s 22(10) ; in my view the subsection is designed for the sort of situation that arose in the present case. We have in what we have already said attempted to show the different purposes and functions of s 10(1) of the Crimes Act 1914 and s 22 of the Act. In our view, it is not to be assumed that the latter negatives the operation of the former. Indeed, the contrary is expressly provided for: s 22(10). On the contrary, once an offence is known or suspected, s 10(1) acts as a convenient corollary to s 22 and other powers of the Authority. In my view, the supposed distinction is not made out. It is founded on a statement in the Full Court judgment that 'we do not know whether it was a "special investigation", which deals with a "matter relating to" a specified "relevant criminal activity", and is not confined to things used or believed to be intended to be used for the commission of a crime. ' It is not clear whether the Full Court was saying that it did not know whether it was a special investigation at all, or whether it was saying that it did not know that the special investigation had the particular features it mentions. However, it does not matter. The applicant's whole argument in Ryder v Morley invited the Court to assume that a search warrant could have been issued pursuant to s 22 of the NCA Act . In other words, the argument invited the Court to assume that the search warrant in question had been sought in connection with a special investigation by the NCA. The Court was well aware that the power conferred by s 22(1) of the NCA Act could only be exercised in connection with a special investigation. The thrust of the argument the Court was addressing was that, as s 22 was available, the legislative intention was that it should apply to the exclusion of s 10 of the Crimes Act . Both Toohey J and the Full Court addressed the merits of this argument on the assumption that s 22 was available and that its conditions could have been satisfied. It follows that the observations made both by Toohey J and the Full Court concerning the relationship between s 22 of the NCA Act and s 10 of the Crimes Act were premised upon an assumption, favourable to the applicant in that case, that the warrant had been sought in order to advance a special investigation by the NCA and so could have been obtained under s 22 of the NCA Act . 35 For the foregoing reasons, I consider that Ryder v Morley is Full Court authority directly contrary to the argument that the applicant advances in this case. Ryder v Morley was followed by Moore J in Malubel Pty Ltd v Elder [1997] FCA 1535 (" Malubel) . One of the submissions made by the applicant in Malubel was to the effect that it was not open to the second respondent to make application under s 3E of the Crimes Act given the special provisions of s 22 of the NCA Act . His Honour dismissed the application and in doing so he referred with approval to Ryder v Morley . Moore J's decision was upheld on appeal by the Full Court (Burchett, RD Nicholson and Madgwick JJ): see Malubel Pty Ltd v Elder (1998) 88 FCR 242. 36 Since Ryder v Morley was decided, s 10 of the Crimes Act has been replaced by Pt 1AA , and there have been minor amendments to s 22 of the ACC Act . However, s 22(10) is unchanged. In my opinion, none of these changes affects or in any way reduces the authority of Ryder v Morley . 37 When the ACC Act was enacted in 2002, s 22(10) was left in the form in which it was considered in Ryder v Morley , notwithstanding the introduction of Pt 1AA of the Crimes Act in 1994 by the Crimes Amendment Act . Viewed against the background of Ryder v Morley and the introduction of s 3D(2) into Pt 1AA of the Crimes Act , the retention of s 22(10) in unchanged form affords an indication that Parliament intended that in appropriate cases police officers who had been seconded to the ACC to assist it with a special investigation could apply for search warrants under Pt 1AA of the Crimes Act , provided of course that the requirements of Pt 1AA could be satisfied. 38 The applicant also submitted that significant safeguards are incorporated in s 22 that are not found in Pt 1AA. The most important of these was said to be that, under s 4 of the ACC Act , an issuing officer is defined to mean 'a Judge of the Federal Court, a Judge of a court of a State or Territory or a Federal Magistrate'. It was said that, in contrast, the Crimes Act confers power to issue a search warrant upon a Magistrate, a Justice of the Peace and various court officials. Mr Robberds QC, senior counsel for the ACC, pointed out that essentially the same differences existed at the time that Ryder v Morley was decided: under s 22 of the NCA Act a search warrant application had to be made to a judge of a prescribed court, whereas the search warrant under challenge in Ryder v Morley had been issued by a Justice of the Peace. 39 The applicant also submitted that sub-sections (3), (4) and (5) of s 22 contain further safeguards which have no direct equivalents in Pt 1AA. Particular reference was made to the provisions of sub-section (5). 40 The ACC submitted that the differences in safeguards between Pt 1AA and s 22 are marginal and no significant weight attaches to them in resolving the issues before the Court. I agree with these submissions. In particular, when ss 22(1) , (3), (5) and (7) of the ACC Act are examined, it is apparent that a similar range of protections can be found in ss 3E(1) , (5) and (6)(a) and 3F (1)(c) of the Crimes Act . 41 Even if there were significant differences between the safeguards attending Pt 1AA and those attending s 22 , any such differences could be relevant only to an argument that Pt 1AA should be read down by reference to s 22. The argument that the Crimes Act should be read down so as to prevent the safeguards in s 22 being subverted was explicitly rejected by the Full Court in Ryder v Morley . As will later appear, I also consider that any such reading down would be contrary to the plain language and intention of s 3D(2) of the Crimes Act . It is unclear whether this contention is put independently of the argument that the ACC Act contains its own code or special regime for the issue of any search warrants that are required for the purposes of a special ACC operation or investigation. But, in any event, I have concluded that the contention is not supported by the language, context or purposes of Pt 1AA. 43 The applicant's contentions about the limited scope of Pt 1AA are built upon the proposition that the purpose of search and seizure under ss 3E and 3F is to obtain and preserve evidential material for use in the criminal prosecution process. In my view, this is too narrow a description of the functions and purposes of search warrants under Pt 1AA. 44 The applicant relies on a statement by the responsible Minister in his second reading speech for the Crimes Amendment Bill that '[s]earch warrants will authorise the seizing of evidence of the offence to which the warrant relates as well as evidence of any other indictable offence': see Hansard, House of Representatives, 17 November 1993 at 3030. As I read his speech, the Minister was simply describing in general terms certain uses to which a search warrant can be put. His statement does not support the limitation that the applicant seeks to imply into Pt 1AA. 45 More importantly, the limitation that the applicant would import into Pt 1AA is negated by the language of ss 3E and 3F. Section 3E authorises the issue of a search warrant where there are reasonable grounds for suspecting that there is, or will be within 72 hours, any evidential material at the premises in question. Amongst other things, s 3F authorises the officer executing the warrant to search for and seize evidential material of the kind specified in the warrant, other evidential material found at the premises that relates to the offences specified in the warrant or other unspecified offences that are indictable offences, other evidential material or tainted property as those terms are defined in the 2002 Proceeds of Crime Act , or seizable items as defined in s 3C of the Crimes Act . Section 338 of the 2002 Proceeds of Crime Act defines 'evidential material' quite differently from the way in which it is defined in s 3C of the Crimes Act : it means evidence relating to property in respect of which action has been or could be taken under the 2002 Proceeds of Crime Act , benefits derived from the commission of an indictable offence, or literary proceeds (being benefits derived from exploiting a person's notoriety resulting from the commission of an indictable offence). Broadly summarised, s 338 defines 'tainted property' to mean the proceeds of an indictable offence, or property that was used, or was intended to be used, in or in connection with an offence. 46 The definition of 'evidential material' in s 3C does not support an implication that the material in question must be seized for use in the criminal prosecution process. When read with the definitions of a thing relevant to an indictable offence or summary offence in s 3 , the definition extends to anything with respect to which an offence is reasonably suspected to have been committed, anything as to which there are reasonable grounds for suspecting that it will afford evidence as to the commission of any such offence, or anything as to which there are reasonable grounds for suspecting that it is intended to be used for the purpose of committing any such offence. 47 On the face of these provisions, it is impossible to confine them to evidential material that is for use in the criminal prosecution process. Material that assists the investigation of suspected offences, but which is incapable of being used in the criminal prosecution process, falls squarely within the definition of evidential material. Material of this kind would constitute something with respect to which an indictable offence has been committed or is reasonably suspected to have been committed. The expression "with respect to" has a wide meaning: see Abebe v Commonwealth [1999] HCA 14 ; (1999) 197 CLR 510 at 526-527 and 556; and as to the cognate phrase 'in respect of', see Federal Commissioner of Taxation v Scully [2000] HCA 6 ; (2000) 201 CLR 148 at 171. 48 The definition of a 'thing relevant to an indictable offence' in s 3 refers to things that might 'afford evidence' as to the commission of an offence. This concept is not to be understood narrowly. In Adler v Gardiner (2002) 43 ACSR 24 at 29, in a passage quoted with approval by Branson J in Kennedy v Baker [2004] FCA 562 ; (2004) 135 FCR 520 at 543, Hely J rejected a submission that documents fell outside the scope of a warrant issued under s 3E because the documents could never be admitted into evidence at a trial in relation to the warrant offences. Bearing in mind that the power to issue a search warrant is in aid of a criminal investigation, a thing may afford evidence as to the commission of an offence, even though it may not be admissible in evidence at a trial: George v Rockett [1990] HCA 26 ; (1990) 170 CLR 104 at 119. A thing will afford evidence of the commission of an offence if it assists, directly or indirectly, in disclosing that an offence has been committed, or in establishing or revealing the details of the offence, the circumstances in which it was committed, the identity of the person or persons who committed it or any other information material to the investigation of those matters: George v Rockett (supra) at 120. The expression 'will afford evidence' does not import a requirement that the documents must necessarily be sufficient to achieve a conviction; it is sufficient that they have relevance to or probative connection with, an issue arising upon an allegation of the offence alleged: Parker v Churchill (1985) 9 FCR 316 at 326. That includes things which are adjectivally relevant as well as things which are of substantive relevance: Ozzy Tyre & Tube Pty Ltd v Chief Executive Officer of Customs [2000] FCA 891 at [30] - [31] . 49 In Hart v Commissioner of the Australian Federal Police [2002] FCAFC 392 ; (2002) 124 FCR 384 (" Hart ") at 399-403, the Full Court (French, Sackville and RD Nicholson JJ) explained the approach that should be adopted to the construction of Pt 1AA. The construction of statutes authorising the search of premises and the seizure of things from them begins with the ordinary meaning of the words considered according to their context and the legislative purpose. This reflects the primary object of all statutory construction which, according to Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1998) 194 CLR 355 at 381 per McHugh, Gummow, Kirby and Hayne JJ, is 'to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute'. The importance of purpose and policy was emphasised in that case by reference to the observation of Dixon CJ in Commissioner for Railways (NSW) v Agalianos [1955] HCA 27 ; (1955) 92 CLR 390 at 397: 'the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed. The purpose of search and seizure provisions is to provide for the gathering of information to determine whether offences have been committed and to facilitate proof of them: Rogers v Moore (1992) 39 FCR 201 at 217 per French J. Recognition of that purpose may yield a construction of the legislative words that is not necessarily narrowly defined. Remaining ambiguity or doubt whether of meaning or application will, in accordance with authority, be resolved in favour of the rights and freedoms of the subject. There is a significant emphasis in the case law on the need to apply a 'strict' construction to such provisions. This is because, as a general rule, the search of premises and the seizure of goods therefrom has always been illegal unless authorised by law. The manifestation of that authority has traditionally been in the form of a warrant. Where 'strict construction' is invoked it is necessary to keep in mind what that term means. It should not distract from the primary object of statutory construction enunciated in Project Blue Sky. The search and seizure provisions of the Crimes Act are not punitive. They are not to be treated as penal provisions. It is more appropriate to see them as subject to the general principles that govern statutory interference with established common law rights and freedoms: Potter v Minahan [1908] HCA 63 ; (1908) 7 CLR 277 at 304 per O'Connor J ; Bropho v Western Australia [1990] HCA 24 ; (1990) 171 CLR 1 at 18 per Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ; Coco v The Queen [1994] HCA 15 ; (1994) 179 CLR 427 at 437-438 per Mason CJ, Brennan, Gaudron and McHugh JJ. Notwithstanding these general considerations, effect must be given to the importance attached by the legislature to the use of search warrants as an important and legitimate tool in the detection and prosecution of criminal offences. Where the language of the statute authorising their use offers choices between one construction requiring fine legal judgments in the issue and/or execution of warrants and another which is more likely to be consistent with operational realities then the latter construction is generally to be preferred. The need to recognise the operational realities in which warrants are executed was acknowledged by the learned primary judge, who referred in that connection to Dunesky v Commonwealth (1996) 89 A Crim R 372 at 382-383 per Lockhart J. See also Baker v Campbell [1983] HCA 39 ; (1983) 153 CLR 52 at 83 per Mason J. The tension between the public and private interests involved in the issue and execution of search warrants was referred to by Lockhart J in Crowley v Murphy (1981) 52 FLR 123 at 141-142 (Northrop J agreeing at 132). Privacy is but one of the interests to be taken into account in construing legislation authorising the exercise of such power. I disagree. When the relevant passages in the judgment of the Full Court are read as a whole, it is plain that the Full Court was not suggesting that information can only be gathered under a search warrant if it serves the dual purpose of both determining whether offences have been committed and facilitating proof of them in a criminal prosecution process. Moreover, I do not consider that the Full Court was referring to proof in a criminal prosecution process, as distinct from proof in the broader context of a criminal investigation that may or may not result in a prosecution. 52 The limitation that the applicant seeks to import into Pt 1AA is inconsistent with other authorities. In Harts Australia Ltd v Australian Federal Police (1997) 75 FCR 145 at 153, the Full Court (Hill, Cooper and Whitlam JJ) recognised that search warrants can be sought and issued at an early stage of an investigation when it is unclear whether any criminal prosecution will occur. In Jilani v Wilhelm [2005] FCAFC 269 at [55] - [58] , the Full Court (Dowsett, Jacobson and Greenwood JJ) approved the statements in Hart that I have extracted and added that statutes such as Pt 1AA should not be construed narrowly but consistently with the operational reality applicable to the issue and execution of warrants. 53 In summary, I consider that the limitation that the applicant seeks to read into Pt 1AA has no basis in the language of Pt 1AA. Indeed, it conflicts with the text of both ss 3E and 3F . It is, moreover, inconsistent with the operational reality applicable to the issue and execution of search warrants. As a matter of history, statutory construction and authority, I consider that a search warrant can be issued under Pt 1AA in order to advance a criminal investigation, whether or not any decision has been made about the likelihood of a prosecution, and whether or not the material sought by the warrant is intended to be used, or is capable of being used, in a criminal prosecution. In my view, s 3D(2) is fatal to the applicant's argument. Section 3D(2) expressly confirms that, despite the power conferred by s 22 of the ACC Act , members of the staff of the ACC may apply for warrants under Pt 1AA , provided that the requirements of s 3E are otherwise satisfied. This interpretation of s 3D is supported by the Supplementary Explanatory Memorandum, as I have already mentioned. 55 The applicant asserted that s 3D(2) is of no assistance to the ACC in seeking to rely on Pt 1AA. This assertion rested entirely on the two contentions that I have already rejected, namely that s 22 is an exclusive code that precludes recourse to Pt 1AA , and that Pt 1AA does not confer any power to apply for, or to issue, a search warrant where the sole purpose of the warrant is to assist an ACC special investigation. The latter contention was advanced by the applicant without addressing the meaning and effect of s 3D(2). In that respect, the applicant's contention begs the question whether on the proper construction of Pt 1AA as a whole, including s 3D(2), it contains any limitation of the kind asserted. In my opinion, both for the reasons already given and because of the plain meaning and intended effect of s 3D, no such limitation can be imported into Pt 1AA. 56 The applicant attempted to minimise the significance of s 3D(2) by describing it as a non-limitation provision which operated in a similar fashion to s 3D(1). Section 3D(1) performs a different function from s 3D(2). It confirms that Pt 1AA does not limit or exclude s 22 of the ACC Act . It is not directly relevant in this case because the ACC did not invoke any powers under s 22. On the other hand, s 3D(2) declares that the search warrant powers under Pt 1AA may be used even if another law of the Commonwealth, such as s 22 of the ACC Act , provides for the issuance and execution of search warrants. In that way, as the Supplementary Explanatory Memorandum stated, the purpose and effect of s 3D(2) is to remove any doubt that the search warrant powers under Pt 1AA may be used when Commonwealth offences are being investigated under other Commonwealth legislation, even if that other legislation contains search warrant powers. In my view, the search warrants were validly issued under s 3E of the Crimes Act . There is no challenge to the way in which the search warrants were executed. 58 The application is dismissed. 59 I order that the applicant pay the first respondent's costs of the proceeding, including reserved costs. As to reserved costs, the parties informed me at the hearing that they agreed that all reserved costs should follow the event. I do not propose to make any order for costs that affects the position of the second respondent. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young. | validity of warrants warrants for purpose of australian crime commission special investigation whether power to issue and execute warrants limited whether for use in criminal prosecution process administrative law |
The amended petition pleads that the respondent owes the applicant $38,032,100.01. The alleged act of bankruptcy relied upon is the failure, by the respondent, amongst other things, to comply, on or before 18 September 2006, with the requirements of a bankruptcy notice deemed served on him on 4 August 2006. The bankruptcy notice was issued on 17 March 2006. An "Infomercial", according to the respondent, is an advertising film which is generally shown on television and promotes a product in an informative and objective style. Those tax deductions were disallowed by the applicant. 7 On 3 August 2001 the respondent commenced review proceedings in the AAT in respect of each of the applicant's decisions to disallow the respondent's objections to the assessments issued on 23 October 2000. In February 2005 the respondent withdrew the proceedings. Pursuant to s 42(A)1B of the Administrative Appeals Tribunal Act 1975 (Cth) the affect of the withdrawal was that the AAT proceedings were considered to have been dismissed. 8 In Australian Securities & Investments Commission v Infomercial Management Group Pty Ltd [2002] VSC 262 at [58] the Supreme Court of Victoria held that certain Infomercial schemes were a fraud on the investors, if not on the Australian Taxation Office. These schemes, so claims the respondent, were the ones in which he had invested. 9 Importantly, other than in relation to a very small sum comprised in the 1998 assessment, none of the November 2000 assessments concerned the respondent's investments in the Infomercial Schemes. The assessment for 1998 for $2,619,580.49 was subject to objections by the respondent. These objections failed, as did a subsequent review before the Administrative Appeals Tribunal (AAT). In February 2005 an appeal to this Court from the decision of the AAT was dismissed by consent. The November 2000 assessments for 1995 and 1996 have never been the subject of an application for review or legal challenge. 10 On 15 June 2005 the applicant obtained summary judgment in the Supreme Court of Western Australia against the respondent for the sum of $38,084,522.24, including interest. The respondent did not consent to the judgment but did not oppose it. 11 On 17 March 2006 the Deputy Commissioner issued a bankruptcy notice which was deemed served on the respondent on 4 August 2006 requiring payment, within 21 days after service, in the amount of $38,051,066.24. The amount demanded comprised the sum of the judgment less an amount of $33,456 described in the bankruptcy notice as "payments made and/or credits allowed since date of judgments or orders". The bankruptcy notice was in the form prescribed: Bankruptcy Regulations 1996 (Cth), reg 4.02, Form 1. Amount of judgments or order $38,084,522.24 plus 2. Legal costs if ordered to be paid and a specific amount was not included in the judgments or orders (see Note 1, below) $0.00 plus 3. Subtotal $38,084,522.24 less 5. In February 2007, the respondent's application was dismissed. The respondent filed an application for review by the Court of Appeal, which was ultimately dismissed: Cumins v Deputy Commissioner of Taxation for the Commonwealth of Australia [2007] WASCA 30. 15 The respondent also failed in proceedings in this Court by which he had sought to set aside the bankruptcy notice. This culminated in the dismissal of his appeal to the Full Court in December 2007: Cumins v Deputy Commissioner of Taxation [2007] FCAFC 207. 16 On 12 November 2007 the respondent's solicitors wrote to the AAT requesting it to reinstate the AAT proceedings abandoned by the respondent in 2005. This was shortly after the Court of Appeal dismissed the respondent's appeal against the decision refusing an extension of time within which to appeal. The Tribunal has yet to make a decision whether to reinstate the proceedings. The applicant has opposed the application for reinstatement. 17 Since then the respondent has filed a further application in the AAT. The application is to extend time for lodging an application for review of a decision. It concerns the sum of $9,375 which forms a part of the respondent's taxable income for the year ended 30 June 1998 and which was the subject of the amended tax assessment issued on 23 November 2000. It is yet to be determined. The respondent asserts that there is an understatement in item 5 of the Schedule to the bankruptcy notice of payments made and/or credits to which he is entitled relating to the period between the date of the judgment and the date of issue of the bankruptcy notice. 19 The alleged misstatements, by reason of missed credits and payments in item 5 of the Schedule to the bankruptcy notice, originally fell into the following four categories. The third and fourth of these were the subject of an earlier decision in this matter: Deputy Commissioner of Taxation v Cumins [No 4] [2008] FCA 558. The overcharge relates to the periods from the respective dates of receipt, as contended for by the respondent, to the judgment date. The respondent submits accordingly that the effective date of payment of $9,516 on his behalf was 14 August 2005 and that this amount relating to the 2005 tax year should have been included in item 5 of the Schedule to the bankruptcy notice, as "payments made". 22 The last two payments were received after the date of the judgment and before the issue of the bankruptcy notice. Each garnishee payment was in the amount of $1,050 and was said to have been mailed by the respondent's employer about the beginning of each month from December 2004 to June 2005 inclusive, to the applicant to an address - GPO Box 4596SS Melbourne Vic 3000. Each payment, the respondent submits, was, by virtue of s 160 of the Evidence Act 1995 (Cth), deemed to have been received on the fourth working day after posting and thereby, in each case to have been received by the applicant for the purposes of s 8AAZM of the Taxation Administration Act 1953 (Cth) . However, the applicant says that the amount of these seven payments, totalling $7,350 was not received until 22 September 2005 and was then credited to the respondent's account on that date. 24 It follows, the respondent submits, that the failure to account for the payments at the time each was received by the applicant, according to the respondent, led to an overstatement of general interest charges in respect of which a "credit" should have been "allowed" in item 5 of the Schedule. The respondent has not quantified the amount of the interest said to have been overcharged. 25 It follows, submits the respondent, that the amount of the "debt owing" in the Schedule was overstated, at least, by the amount of $9,516 and the amount of the general interest charge credit to which he says he was then entitled. (b) Alternatively, notice was given by means of par [36] of an affidavit of Mr Cumins sworn on 14 August 2006 and which is wide enough to cover all the missed credits and payments. (c) Alternatively, the par [36] notice is wide enough to cover at least the PAYG payments and the garnishee payments which give rise to the overcharge of interest. The bankruptcy notice in that case was identified as being defective in two respects. First, credits and payments totalling approximately $1.4 million had been omitted from item 5 of the Schedule to the bankruptcy notice. Second, the total amount due exceeded the amount in fact due to the extent of the omitted credits and payments. It was held that the defect in the bankruptcy notice was not " only that the sum specified in the notice as the amount due to the creditor exceeds the amount in fact due". There was another, albeit related, defect, namely, the omitted credits and payments under item 5. 30 In Robert Hudson (Junior) v Thomas James Donald [1997] FCA 852 , decided before St George , Lindgren J also considered the application of s 41(5). The case concerned a bankruptcy notice, the form of which, as in this case, was that set out in Form 1, Schedule 1, prescribed under the Bankruptcy Regulations 1996 (Cth), reg 4.02. Clearly, the expression in subs 41(5) 'the sum specified in the notice as the amount due to the creditor' is apt to refer at least to the amount shown as 'Total debt owing'. Does it also refer to the component parts of that amount, in particular, 'Amount of judgment or order'? Although the contrary is arguable, I think that it does, at least in a case such as the present, where the overstatement in the 'Total debt owing' is no more than a reflection of an overstatement in one of those elements. Except in a case of an arithmetical error of addition, an overstatement of the 'Total debt owing' will always predicate an error in one or more of the component elements. To confine the operation of the subsections to a case where there is an overstatement only of the 'Total debt owing' due to an arithmetical error of addition would be too narrow a construction. Where, as here, the overstatement of the amount of the 'Total debt owing' is attributable to an overstatement in the amount of one or more components in the Schedule, the excessive specification of 'the sum specified in the notice as the amount due to the creditor' to which subs 41(5) refers, extends to embrace the corresponding and causative excessive specification in the Schedule of an amount or amounts of the latter kind. 32 An appeal from that decision was dismissed: Robert Hudson (Junior) v Thomas James Donald [1998] FCA 227. 33 I respectfully consider that the wider construction in Robert Hudson Jnr is to be preferred to the narrow construction in St George . It would appear that the decision in Robert Hudson Jnr was not brought to the attention of the Court in St George , nor does it appear from his Honour's reasons that there was full argument on the question. Accordingly, I would respectfully adopt the reasoning on this point in Robert Hudson Jnr . In doing so, I am conscious that St George was followed by the Federal Magistrates Court in SGRO v Liberty Funding Pty Ltd (2004) 207 ALR 625. Once again, however, Robert Hudson Jnr was not cited by the parties or considered by the Court. Furthermore, s 41(5), in contrast to s 306, is not expressed in terms of the existence of a "defect" in a bankruptcy notice. Rather, it concerns whether the amount specified in the bankruptcy notice as due to the creditor exceeds the amount in fact due. Inevitably any overstatement will broadly be for one or two reasons. First, there is an error or errors in one or more of items 1-5 set out in column 2 of the Schedule to the bankruptcy notice. Then, when items 1-5 are added up they produce an excessive total at item 6. Second, there is an arithmetical error in adding up items 1-5. Of course there could be errors of both kinds occurring in the one notice. The intent of s 41(5) is, in my opinion, to consider the question of whether the amount stated is excessive as well as why that is the case. This approach to its construction is consistent with the observations of the Full Court in Seovic at [36] to which I have referred concerning the need for the debtor, when giving notice under s 41(5), to provide sufficient information to enable the creditor to identify the nature of the misstatement. I apprehend that this was intended to mean that information needs to be provided disclosing not just that the amount stated as due is excessive but the reason(s) why that is said to be so. 34 The question of the excessive amount requires then a composite analysis of the overstatement. It is not apt to characterise the composite parts as discrete "defects". Did the affidavit of Cumins contain a notice under section 41(5)? I verily believe that the credited amount may be the result of an amendment to a tax assessment. In addition during the period of May 2005 to 14 March 2006 I have paid to the Respondent an amount of $10,500 which I verily believe may not have been credited against the amount of the Judgment debt. Therefore I verily believe that the Bankruptcy Notice exceeds the amount of the Judgment debt due and payable relied upon for the Bankruptcy Notice. 36 The affidavit was filed in support of the respondent's earlier application to set aside the bankruptcy notice which was dismissed both at first instance and on appeal. 37 The respondent submits that this paragraph constitutes notice for the purposes of s 41(5) and is wide enough to cover all of the missed credits and payments; alternatively, it is wide enough to cover at least the alleged misstatements related to the PAYG payments and garnishee payments. I am satisfied that notice for the purposes of s 41(5) could be given by means of an affidavit served on a creditor. The section is silent as to the method of giving notice and it is not necessary in giving notice to expressly refer to s 41(5): Hussain v King Investment Solutions [2006] FCA 905 ; (2006) 153 FCR 428 at [19] - [20] . 38 Such notice must, by virtue of s 41(5), be given by the debtor within the time allowed for payment under the bankruptcy notice. The bankruptcy notice was deemed to have been served on the respondent on 4 August 2006 pursuant to orders made by Registrar Gilich on 14 July 2006 in the matter of PEG 177 of 2006. It was then amended on 19 July 2006 by a delegate of the Official Receiver such that the respondent was required to comply with the terms of the notice within 21 days after 4 August 2006. The affidavit was served on the Commissioner on 14 August 2006. Accordingly, notice was given within the time allowed. 39 However, in my opinion it does not constitute notice which is wide enough to cover the asserted misstatements in the bankruptcy notice as a whole or alternatively the two related to the PAYG and garnishee payments. 40 The Full Court in Seovic Civil Engineering Pty Ltd v Groeneveld [1999] FCA 255 ; (1999) 87 FCR 120 in obiter set out what, in principle, is required to constitute notice of a "misstatement" for the purposes of s 41(5). In so doing it considered but doubted the correctness of both Re Charles Murray (1959) 18 ABC 152 at 156 upon which the respondent here relies, as well as Re Wilhemsen; Ex parte Gould (1986) 11 FCR 107 at 108. The subsection requires the debtor to provide sufficient information in the notice to enable a creditor to identify what is said to be the alleged misstatement. Only then does the debtor's notice displace the general rule established by s 41(5), that the bankruptcy notice is not invalidated only by reason that the sum specified therein as the amount due to the creditor exceeds the amount in fact due. If the creditor is given no hint in the notice as to the nature of the misstatement, there is a considerable risk that the debtor will be able to take unmeritorious advantage of minor errors (such as the small mistake in the present case) and that unnecessary and wasteful litigation will eventuate. It is no answer to say that the creditor can ask for particulars, since the debtor would not be obliged to give any until after litigation had been instituted. Indeed, a debtor wishing to take advantage of the technicalities of the law of bankruptcy might be well-advised to say as little as possible for as long as possible about the true nature of the alleged misstatement in the bankruptcy notice. The requirement for some specificity did not, the Full Court considered, extend to require the identification of the misstatement with "complete precision" or that the debtor "specify the exact amount of the alleged excess". A debtor's notice should be given a "benevolent construction". 41 I respectfully agree with these observations made by the Full Court and adopt them here as apt to the proper construction of s 41(5). 42 The respondent and his solicitor, Mr Kevin Dundo, each swore affidavits on 29 April 2008 to the effect that the word "Judgment" in the last sentence of para [36] was placed there in error. The respondent submits that, in any event, that error, on a fair reading, is obvious as a matter of construction. For present purposes I will proceed on the assumption, without deciding the construction question that the last sentence should be read in the way the respondent contends. The written evidence as to the error made would not, in my opinion, affect the objective meaning at the time the affidavit was provided to the applicant. 43 The respondent submits that this sentence, read in that way, is sufficient to cover all four grounds of asserted misstatement. Re Charles Murray would support this. I have, however, declined to follow that decision. 44 Applying even the most benevolent constitution to the last sentence in para [36], I do not consider that it provides sufficient information to enable the applicant to identify the asserted misstatements presently relied upon. So far as concerns the alleged misstatements said to arise by reason of missed credits amounting to $31,007.72 as well as rounding credit of four cents I repeat what I said in Deputy Commissioner of Taxation v Cumins [No 4] , particularly at [16]. 45 The respondent then submits that para [36], taken as a whole, is sufficient to embrace the misstatements related to the PAYG and garnishee payments. He says that he was at a "severe informational disadvantage" during the period when a s 41(5) notice had to be given. I take this to mean, at least, that during the period in which notice was required to be given he did not have a copy of the taxation account maintained in respect to him by the applicant showing amounts received from him or on his behalf from time to time. A copy of this document was before the Court. It is discovered document No 1 in Part 1 of Schedule 1 in the applicant's list of documents made pursuant to orders 1 and 2 of District Registrar Jan made on 29 January 2008 filed on the 6 February 2008. It is described as the "Original income tax account history for Brian Cumins showing transactions and interest for the period 05.01.99 to 25.01.08" and is dated 31.01.08. 46 If the respondent had had a copy of this document during the period in which notice under s 41(5) might have been given by him to the applicant, he would have seen, for example, that, contrary to his understanding, the seven alleged garnishee payments of $1,050 each had not been recorded as received by the applicant in each month from December 2004 to June 2005 inclusive. Further, in relation to the $9,516 PAYG payments he would have seen that this amount in respect of the financial year ended 30 June 2005 was not credited to his account until 21 July 2006. This too would have been contrary to his understanding that it should have been credited to his taxation account in the period between the date of judgment and the date of the bankruptcy notice. He would have had sufficient information to give notice under s 41(5) in respect to both of those matters. 47 In this context the respondent submits that where a government body is involved and has the benefit of a statutory regime, the s 41(5) notice requirements should not be interpreted strictly or narrowly. There is, in my opinion, no basis to this submission. There is only one proper construction of the section. What will constitute sufficient notice will vary from one case to another. If a debtor does not have the necessary information to enable notice to be given under s 41(5) and could not have obtained it by reasonable endeavours, then this may well form a basis for seeking an extension of time under s 33(1)(c) for giving notice when that information, by whatever means, comes into the hands of the debtor: cf Deputy Commissioner of Taxation v Cumins [No 4] [2008] FCA 558 at [20] - [24] . I decided there that the respondent could, merely by making a request, have obtained a copy of his taxation account from the applicant. I would not revise that conclusion even after considering the content of paras [5]-[19] of the affidavit of Mr Kevin Dundo sworn on 29 April 2008. I do not accept that the respondent was at any disadvantage in this respect. If he was, it was occasioned by his own inaction. 48 The respondent points to the fact that the sum of $10,500 mentioned in para [36] is a multiple of $1,050 which was the amount garnisheed on a monthly basis in the hands of the respondent's employer. This, he submits, should have alerted the applicant to look closely at payments received and credits allowed in respect of the period after judgment and before the bankruptcy notice issued. I do not accept that submission. The onus is upon the respondent to sufficiently articulate the misstatements upon which it relies. 49 Even if para [36] were thought to have put the applicant on such a train of enquiry, it would have been unproductive. First, the period mentioned in para [36] concerning payments of $10,500 is said to be between May 2005 to 14 March 2006. However, what is now complained about concerns seven payments of $1,050 totalling $7,350 alleged to have been made between December 2004 to June 2005. This involves an overlap of but two months across a combined period of 15 months. Second, according to the applicant's records, the amount of $7,350 was received together with one other payment of $1,050, a total of $8,400, on 22 September 2005. This amount was included in the figure set out under item 5 of the Schedule to the bankruptcy notice. Paragraph [36] states that the $10,500 was paid to the applicant between May 2005 and 14 March 2006. Obviously 22 September falls between those two dates. The applicant did direct its attention to garnishee payments made by the respondent for the purposes of the bankruptcy notice and gave a credit in item 5 for $16,800, which amount includes the $7,350. The $16,800 comprises the following garnishee payments made according to the applicant's records, between the date of the judgment and the date of the bankruptcy notice. That figure also includes two other amounts according to an affidavit sworn by Nola Kathryn Rice, a public service employee with the ATO: Cumins v Deputy Commissioner of Taxation [2007] FCAFC 207 at [10] . The respondent acknowledges this in his affidavit sworn 6 May 2008. The amounts are set out under para [13] above. There was no reason, in my view, for the applicant to think that para [36] was directed to an overcharge of general interest charges related to seven of the garnishee payments totalling $7,350 allegedly made prior to the date of judgment. 51 Further, in my opinion, nothing in para [36] would have alerted the applicant to the matter of the PAYG payments. 52 In any event, the applicant's considered view was that the PAYG payments of $9,516 in respect of the 2005 tax year did not give rise to any entitlement in the respondent to have that amount included in item 5 of the Schedule to the bankruptcy notice. That view was vindicated by Siopis J at first instance: Cumins v Deputy Commissioner of Taxation [2006] FCA 1847 and on appeal: Cumins v Deputy Commissioner of Taxation [2007] FACFA 207 in proceedings in which the respondent sought to have the bankruptcy notice set aside for this very reason. 53 The respondent's further and better particulars of its grounds of opposition assert, in effect, that he did not have, at the times of the hearings at first instance and on appeal, the evidence disclosing the details of the PAYG payments made. This is of no consequence. Both cases dealt with the total amount of $9,516. It matters not, in the result, that some payments were received before, and some after, the judgment date. 54 The respondent submits that on this point the decision in Pedikaris v Deputy Commissioner of Taxation [No 2] [2007] FCA 2087 should be followed. Particular reliance is placed on para [99]. I do not agree. At that paragraph, Graham J was considering the relevance of PAYG payments in the context of recovery proceedings. Furthermore, his Honour, at paras [92]-[93], made findings on the issue of when the Commissioner was obliged to give credits for PAYG payments which are entirely consistent with the concurrent findings of Siopis J and the Full Court to which I have referred. As to the $9,516 PAYG payments, the respondent submits that an issue estoppel does not arise between these parties in the petition proceedings by reason of the matters decided by Siopis J and the Full Court. It is unnecessary to decide that question. In my view, the question of when the credit in respect of the PAYG deductions accrued to the applicant is to be assessed by reference to s 18---15(1) of Sch 1 of the TAA. There is no reason not to give effect to that statutory provision. It follows that the applicant only became entitled to the credit once the assessment was made for the tax year in respect of which the PAYG deductions were made. In those circumstances, I find that at the time of the issue of the bankruptcy notice on 17 March 2006, the sum of $9516 did not comprise an amount in respect of which a deduction should have been recorded in the bankruptcy notice, as either a payment made or a credit due. The bankruptcy notice did not, therefore, overstate the amount due and was not invalid. I decline to set it aside. 56 There was no challenge to this particular finding on appeal. Nonetheless, the Full Court at [39] noted its agreement with it. 57 The respondent further submits that the proper characterisation of the PAYG instalments in issue for the purposes of item 5 of the bankruptcy notice is as "payments made". This, he says, avoids the confusion generated by focusing on the phrase "credits allowed" and meshing that with the giving of administrative credits under the TAA when a tax assessment is made. 58 He submits that he is entitled to the benefit of those payments made on his behalf and already in the hands of the Commissioner for bankruptcy notice purposes. This, in effect, is an attempt to distinguish the above decisions at first instance and on appeal in relation to when it was that the respondent was entitled to a credit for the $9,516 PAYG payments for the 2005 financial year as being confined to tax purposes. However, it is to be remembered that those cases were concerned with an application to set aside the bankruptcy notice. The decisions sit in that context. I reject the submission. The respondent was not entitled to the credit during the period between the date of judgment and the date of issue of the bankruptcy notice. Whilst amounts totalling $9,516 were undoubtedly paid to the applicant on behalf of the respondent they did not constitute "payments made" for the purposes of the bankruptcy notice. 59 As to the garnishee payments of $7,350, it is unnecessary to decide when they were received by the applicant, whether on 22 September 2005 as the applicant contends, or on various dates between December 2004 and 6 June 2005 according to the respondent. Accepting for present purposes only that they were received on the dates asserted by the respondent, the resultant overcharge of general interest charges extends only to the date of judgment. The applicant did not claim interest in the bankruptcy notice for the post-judgment period. Accordingly, it is the amount of the judgment debt which would, to the extent of those overcharges, be incorrect. Such amounts were not credits or payments required to be included in item 5 of the Schedule to the bankruptcy notice. What I said in Deputy Commissioner of Taxation v Cumins [No 4] [2008] FCA 558 at [26] is apt on this point. The fact of such an overcharge would not operate to render, as a matter of law, the amount due under the bankruptcy notice as incorrect. Accordingly, the position of the respondent is, as is evident also from his outline of closing submissions, confined to reliance upon para [36] of Mr Dundo's affidavit as constituting notice under s 41(5) for the purposes of the alleged missed payments and credits. 61 If the respondent had sought such an extension of time, I would have refused to grant it on discretionary grounds as being futile for the same reasons as are set out under paras [55]-[59] above. This, he submits, is so on two separate grounds. First, the proper completion of item 5 in the Schedule to bankruptcy notices is a requirement made essential by the Act . Second, in this case, the missed payments and credits not reflected against item 5 could reasonably mislead a debtor in the position of Mr Cumins as to what is necessary to comply with the notice. The respondent, in this respect, relies upon Adams v Lambert [2006] HCA 10 ; (2006) 228 CLR 409 at [27] . He submits that as he had not personally made the garnishee and PAYG payments or done the ATO calculations for credits, he could have no idea of what was or was not comprised in the figure $33,456 in Item 5. 63 I do not accept these submissions. A bankruptcy notice is not liable to be set aside by reason only of an overstatement unless the debtor gives notice to the creditor under s 41(5). I have found that such notice was required but not given. Accordingly, in my opinion, s 306 does not arise for consideration. I agree with what Sackville J said in obiter in Re Murdoch; Ex parte Australia & New Zealand Banking Group Ltd [1994] FCA 737 at p 10 that where no notice under s 41(5) was given then the bankruptcy notice would not be invalid even if the overstatement of the amount due is capable of misleading the debtor. His Honour's remarks sat in the context of his consideration of s 306 of the Act in respect to an overstatement in a bankruptcy notice but where no notice under s 41(5) had been given. The parties had proceeded on the assumption that s 306 had application in those circumstances. His Honour doubted the correctness of the assumption but the case was decided on the basis of it. His Honour's doubt was in my opinion, soundly based. 64 In Adams v Lambert, upon which the respondent relies, the bankruptcy notice was said to have been invalid because it referred to the incorrect statutory provision under which interest was claimed. It did not concern any asserted overstatement in the bankruptcy notice of the amount due. Section 41(5) had no application. Section 306 did have application but the case is of no assistance in dealing with the nature of the interrelationship between s 41(5) and s 306. 65 Alternatively, even if relevant notice under s 41(5) had been given, s 306 would have no application. I have found that there was no overstatement of the amount due under the bankruptcy notice. No other formal defect or irregularity is relied upon by the respondent. 66 In the present case, the applicant either obtains "the benefit" of s 41(5) because no notice was given, or alternatively, if notice was given she has rebutted the allegations of misstatements in the amount stated to be due under the bankruptcy notice. Section 306 relieves against the invalidating consequences of mistakes in the preparation of a bankruptcy notice: Adams v Lambert at [18] and [34]. There were no mistakes in the present bankruptcy notice. The section assumes the existence of a defect or irregularity. This much was conceded by counsel for the respondent. None exists here. Re Florance; Ex parte Turimetta Properties Pty Ltd [1979] FCA 58 ; (1979) 28 ALR 403 , cited by the respondent is of no assistance on this question. Section 52(1)(c) of the Act --- is the debt relied upon proved? The amended petition relies on a debt of $38,032,100.01 owing by the Respondent. This debt, the respondent submits, is not "still owing" and the requirements of s 52(1)(c) of the Act have not been met. 68 I reject this submission. On 6 May 2008 the judgment debt was varied by the Supreme Court of Western Australia to reduce it by $31,007.72. This reflects the amount of certain payments and credits which, since the date of judgment, the applicant volunteered should be applied to the judgment debt by way of reduction. The bankruptcy notice claimed an amount that is calculated by reference to the amount of the original judgment. It is not to the point that the amount of that judgment has been reduced: Emerson v Wreckair Pty Ltd [1992] FCA 16 ; (1992) 33 FCR 581 at 587. The affidavit of Deborah Jayne Thiele sworn on 12 May 2008, on behalf of the applicant deposes that the amount of the outstanding debt as at that date was $37,983,152.29. This is the amount contained in the Amended Creditor's Petition less the amount by which the judgment debt was varied as well as the further amount of $17,940 in respect of credits applied after December 2007. It is the amount of the debt on which the applicant relies. This satisfies, as a matter of fact, the requirement under s 52(1)(c) of the Act . 69 The respondent further submits that the requirement under s 52(1)(c) has not been met because the judgment, as varied, has not been extracted and is accordingly presently unenforceable. Reliance was placed upon the decision of Re Hanby; Ex parte Flemington Central Spares Pty Ltd (1967) 10 FLR 378 at 381. That case concerns a circumstance where the judgment debt relied upon in the bankruptcy proceeding had actually been set aside. That is not the case here. Indeed the respondent's application to set aside the judgment debt was dismissed on 6 May 2008. The respondent has filed an appeal notice against the judgment. The grounds of appeal are not disclosed in this. I was not taken to the merits of the proposed appeal. Three matters arise. 71 First the respondent submits that, even if the PAYG payments of $9,516 did not give rise to an entitlement to a credit for that amount in the bankruptcy notice, I should take into account, as a discretionary consideration, the fact that these payments were made. No issue estoppel arises in this respect: Makhoul v Barnes (1995) 60 FCR 572 at 582. However, the fact that payments were received which did not, as a matter of law, give rise to any entitlement to a credit in that amount for a tax debt in respect of which judgment was given, does not commend itself to an exercise of discretion not to make a sequestration order in the overall circumstances of the case. I would not exercise my discretion to that end. 72 The second matter concerns the pending AAT proceedings. The respondent makes the following submissions. It cannot be said that the result of success by him in the proceedings before the AAT to have that matter re-opened and the interest deduction for borrowings in respect of the Infomercials allowed, would be that there was, in any event, still at least, part of the assessment, unaffected by the Infomercial interest, standing. If he succeeds in the AAT proceedings, the Commissioner must implement the findings of the AAT and a fresh assessment would have to be issued: s 14ZZL of the Taxation Administration Act 1953 (Cth) and s 170(1) of the Income Tax Assessment Act 1936 (Cth). Only if and when that assessment occurs would there be an enforceable liability against him. There is no liability on him to pay tax until the relevant notice of assessment has been given: White Industries Australia Ltd v Commissioner of Taxation [2003] FCA 599 ; (2003) 129 FCR 276 at [27] , 282. 73 The respondent further submits that even if it were to be accepted that he is presently facing an unshakeable claim of some $4.8 million in respect of the 1998 assessment, that figure raises very different issues in relation to possible payment or compromise of the claim than if he were to face the current $38 million claim in the bankruptcy notice. The figure of $4.8 million is, I infer, a reference to a finding made in an earlier decision that the total amount of the judgment debt which is not related to the AAT applications is in the order of $4.8 million: Commissioner of Taxation v Cumins [2008] FCA 353 at [63] . 74 Mr Kevin Dundo in his 29 April 2008 affidavit annexed a copy of the Outline of Submissions filed by the respondent in his application to the AAT seeking an extension of time for lodging an application to review the decision of the applicant made in an amended assessment in respect of the 1998 tax year pursuant to s 29(7) of the Administrative Appeals Tribunal Act 1975 (Cth) as well as his application in that matter for amendment or extension of the grounds of the objection lodged by him in respect of the amended assessment pursuant to s 14ZZK(a) of the Taxation Administration Act 1953 (Cth). 75 There was no argument before me as to the content of these submissions. I earlier refused to adjourn the hearing of this petition despite the currency of the respondent's two applications to the AAT. I was not then satisfied that the respondent had established genuine and arguable grounds in relation to either of his AAT applications: Commissioner of Taxation v Cumins [2008] FCA 353. That position has not altered. The respondent's submissions on the exercise of discretion are predicated upon his being successful, on the merits, before the AAT. The likelihood of that occurring has not been established. 76 Third, the respondent submits that, as found in St George at [41], the procedures provided by the Act are not intended to be used for the determination of complex accounting issues as between the petitioning creditor and debtor. This is not such a case. No complex accounting issues are present. 77 I would not exercise my discretion under s 52(2)(b) in favour of the respondent on any of these bases. I am also satisfied that there has been compliance with the Federal Court (Bankruptcy Rules) 2005 (Cth). 79 Mr Mark Anthony Conlan has consented to be the trustee of the respondent's estate in the event that a sequestration order is made. 80 A sequestration order should be made against the estate of the respondent. The applicant's costs including any reserved costs should be taxed and paid out of the respondent's estate. I certify that the preceding eighty (80) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | petition opposed on grounds that bankruptcy notice invalid as amount stated to be due was overstated whether notice under s 41(5) of the bankruptcy act 1966 (cth) on its proper construction required to be given to petitioning creditor if so whether notice under s 41(5) was given whether, in circumstances where notice under s 41(5) not given, the provisions of s 306 of the act have application whether proof of the fact that the debt relied upon was still owing s 52(1)(c) consideration of discretion under s 52(2)(b): "other sufficient cause". bankruptcy |
The motion was filed in the appeal proceedings in which Mr Zentai appealed to the Full Court against a decision of a judge of this Court dismissing his application for prohibition and injunctive relief against a magistrate to prevent the hearing determination under s 19 of the Extradition Act 1988 (Cth) of whether Mr Zentai is eligible for extradition. That appeal was dismissed by the Full Court and an application for special leave to the High Court is pending. 2 On 8 July 2005, Mr Zentai was arrested in Perth pursuant to a warrant for arrest under Section 12(1) of the Extradition Act . On the same day he appeared in the Perth Magistrates Court and was granted bail pending the outcome of proceedings to determine his eligibility for extradition. Bail continues on reporting terms. 3 The Republic of Hungary requested Mr Zentai's extradition based upon a warrant issued by the Military Division of the Metropolitan Court. The offence which Mr Zentai is alleged to have committed occurred in Hungary in 1944 during the Second World War. He has resided in Australia since March 1950 and is now 85 years of age. He opposed the extradition on grounds which included a challenge to the use of a State Magistrate to determine the eligibility for extradition. That challenge was made by way of proceedings for prohibition in this Court. 4 Initially a hearing before a magistrate to determine Mr Zentai's eligibility for extradition under s 19 of the Extradition Act was listed for 13 February 2006. On 6 February 2006, an application was made in this Court to enjoin the magistrate from proceeding with that hearing. The hearing was adjourned for mention on several occasions pending the determination of the Federal Court application. That application was heard by Siopis J on 28 July 2006. His Honour gave a judgment dismissing the application on 12 September 2006. A notice of appeal against his decision was filed on 21 September 2006. Pending the hearing of the appeal by the Full Court of the Federal Court, I made orders on 30 November 2006 restraining the Republic of Hungary from prosecuting the extradition proceedings. The appeal was heard in Perth on 13 February 2007 and judgment was handed down on 16 April 2007 dismissing the appeal with costs. 5 The proceedings in the Federal Court and the appeal raised the question of whether the Commonwealth Parliament is constitutionally authorised to impose an administrative duty on a state officer without legislative approval of the state. There were ancillary questions, and, in particular, the question whether the duty said to have been imposed under s 19 of the Extradition Act upon magistrates was covered by, or authorised by, s 6(3)(b) of the Magistrates Court Act 2004 (WA), which provides for approval by a State Governor for the imposition of functions on State magistrates. 6 In substance, the Full Court held that s 6(3)(a) of the Magistrates Court Act specifically contemplated the holding of additional offices by State magistrates including appointments made under the law of another place. The expression "another place" would naturally include other States, Territories and indeed, overseas jurisdictions. Section 6(3) was held by the Full Court to contain a clear indication that the expression "other public functions" in s 6(3)(b) was not to be restricted to public functions conferred by Western Australian legislation. The authority conferred by the Act coupled with inter-governmental arrangement was held to be sufficient to authorise the magistrate to proceed to deal with the extradition hearing. So the constitutional questions raised did not fall for consideration by the Full Court. 7 On 11 May 2007 Mr Zentai filed an application for special leave to appeal to the High Court against the decision of the Full Federal Court. The Commonwealth has notified Mr Zentai's solicitor that it intends to apply to the Magistrates Court for a continuation of the extradition proceedings on 30 May 2007, that is to say, tomorrow. I am informed by counsel for the Commonwealth that the matter before the magistrate tomorrow will be by way of a mention with a view to fixing a hearing date. 8 In the affidavit in support of the motion, Mr Zentai's solicitor says that if the extradition hearing were to continue on 30 May 2007, such hearing would take place prior to the hearing by the High Court of the application for special leave and the application would be rendered nugatory. This statement is dependant, of course, upon the proposition that the extradition hearing will, unless enjoined, continue on 30 May 2007. However it is clear from what I have been told by counsel for the Commonwealth, that tomorrow's appearance is a mention and that on the most recent advice from the Magistrates Court, the hearing would be listed for some time in September or October. There is a very high probability that, by that time, the special leave application will have been heard and determined. 9 I am not satisfied that this Court has the power to make an order of the kind which is sought by Mr Zentai. That is not a stay of proceedings under the judgment appealed from. The judgment appealed from was a dismissal of the decision of Siopis J, which was in turn a dismissal of the application seeking to challenge the validity of the proceedings before the magistrate. There is nothing to stay. In any event, as I held in Trade Practices Commission v Manfal Pty Ltd (1990) 27 FCR 284, the section is not applicable where there is a pending application for special leave to appeal to the High Court. The section relates to the institution of an appeal in the High Court. There are remedies for the applicant in this case. The applicant can, if there is any conflict between the time at which the extradition proceeding will resume before the magistrate and the hearing of the special leave application in the High Court, seek an appropriate adjournment or re-listing of dates by the magistrate. I am not to be taken as indicating any view on whether such an adjournment or re-listing should be granted. Alternatively, the applicant can, in the context of the special leave proceedings in the High Court, apply to that Court for a stay order in relation to the proceedings before the magistrate. 10 I have referred several times in the course of these reasons to the Magistrates Court and the magistrate. In so doing, I make clear that the proceedings to determine eligibility for extradition are not judicial proceedings. They are not a sitting of the Magistrates Court, they are an administrative proceeding in which the relevant magistrate acts persona designata . 11 The motion will be dismissed with costs. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | extradition unsuccessful proceedings in federal court challenging power of magistrate to determine eligibility for extradition full federal court appeal dismissed special leave application to high court application to restrain requesting country from prosecuting eligibility proceedings before magistrate no power to make order eligibility review unlikely to resume before special leave application heard and determined availability of alternative remedies appeals |
By the motion Macteldir had sought orders under s 43 of the Federal Court of Australia Act 1976 ('the FCA Act') and O 62 r 9 of the Federal Court Rules ('the FC Rules'), that the solicitor and the barrister who had represented Macteldir in the primary proceeding pay the costs that Macteldir had been ordered to pay to the respondents in that proceeding, and an order disallowing their own fees charged to Macteldir. The solicitor in the primary proceeding was James Roskov, whom, like Allsop J, I will call the 'Solicitor'. The barrister in that proceeding was John De Meyrick, whom, like Allsop J, I will call the 'Barrister'. 2 The primary proceeding was beset with procedural difficulties. Macteldir says that these were attributable to the fault of the Solicitor and the Barrister. Unfortunately, this present proceeding also suffered from procedural difficulties. Macteldir commenced proceeding NSD 2281 of 2005 by filing a notice of appeal on 23 November 2005. The Barrister filed a notice of motion in that proceeding seeking dismissal of the appeal as incompetent on the basis that Allsop J's decision was interlocutory and leave to appeal was required. The Registry wrote to Macteldir's solicitors, Petrovski Lawyers, the solicitors for Macteldir (providing copies of the letter to the solicitors for the Barrister and the Solicitor) advising that the notice of appeal had been wrongly accepted for filing by the Registry and had been 'voided', apparently on the view that Allsop J's decision was interlocutory. The letter also stated that the notice of motion filed on behalf of the Barrister was 'redundant' and that no affidavit in support of it need be filed. 3 On 23 November 2005, apparently against the possibility that Allsop J's order was interlocutory, Macteldir also commenced this present proceeding (NSD 2280 of 2005) seeking an order that the time be extended for applying for leave to appeal and the grant of leave to appeal. The application for leave to appeal was supported by an affidavit of Macteldir's present solicitor, Sasho Petrovski ('Mr Petrovski'), made on 23 November 2005, to which was annexed a draft notice of appeal (being a copy of the notice of appeal, the filing of which commenced proceeding NSD2281 of 2005). 4 There was correspondence between Mr Petrovski and McCabe Terrill Lawyers, who represented the Barrister, in which Mr Petrovski asserted that leave to appeal was not required, and McCabe Terrill asserted that it was, and that as a first step, an extension of time to seek to appeal would be required. McCabe Terrill referred to s 24(1A) of the FCA Act and O 52 r 10(2A) of the FC Rules. The latter fixes a seven day time limit for the seeking of leave to appeal, but provides for the extending of that period by the Court. It will be noted that the commencement of both proceedings NSD 2280 and 2281 of 2005 was on the last day of the 21-day time limit for appealing as of right if Allsop J's orders of 2 November 2005 were final: see O 52 r 15(1)(a) of the FC Rules. 5 In his written submissions filed on 22 March 2006, the Barrister stated that all that was before the Court for hearing was the motion seeking leave to appeal and that there had been no challenge to the Registry's statement that the notice of appeal should not have been accepted for filing and would be avoided. In response, Macteldir filed on the hearing an amended notice of motion by which it sought, first, a declaration that leave to appeal was not required; and, secondly, an order that if leave to appeal is required, the time for applying for leave to appeal be extended, and that leave to appeal be granted. It was not appropriate to seek a declaration that leave to appeal is not required, but the seeking of that declaration did have the salutary effect of making it clear that Macteldir's primary position is that it was entitled to appeal as of right. If it succeeds in that contention, its filing of the notice of appeal on 23 November 2005 was within time. WAS THE ORDER OF DISMISSAL FINAL OR INTERLOCUTORY? In Carr at 248 and in Luck at [4], it was observed that in applying this test, the Court must have regard to the legal effect, as distinct from the practical effect, of the judgment. In those cases, the full expression used was 'finally determine[s] the rights of the parties in a principal cause pending between them'. First, it was not suggested that either provision was invalid. Secondly, it is not determinative of the status (final or interlocutory) of the order of dismissal that Macteldir sought the order against the legal practitioners by motion in the primary proceeding. The question is one of substance, not of form. 9 Thirdly, the answer must be the same whether Macteldir's motion succeeded or failed. If an order in favour of Macteldir against the legal practitioners would have been final (or interlocutory), a dismissal of Macteldir's motion must be correspondingly final (or interlocutory). Accordingly, those cases to which I refer below in which a costs order was made against a legal practitioner are just as persuasive on the present question of those in which one was refused. 10 Several cases to which I was referred turned on the construction of a 'costs only' rule that has no counterpart in the FCA Act or the FC Rules. This provision is one to the effect that an appeal does not lie without leave from an order as to 'costs only'. The policy underlying such a provision is obvious enough: it should not be open to a party to appeal as of right from an order as to costs, unless the costs aspect was part of an appeal from a substantive order. 11 Since Re Bradford, Thursby and Farish (1883) 15 QBD 635 (' Bradford '), it has been consistently held that the 'costs only' rule did not catch an order that a party's legal practitioner pay costs. In that case, the rule was found in s 49 of the Judicature Act 1873 (UK) ('Judicature Act'). The order was made against a solicitor on the basis that he had made an application to the Court without his client's authority. The larger expression in s 49 was actually 'as to costs only, which by law are left to the discretion of the Court'. There was no provision comparable to O 62 r 9(1) of the FC Rules. The Court of Appeal held that it was not within the discretion of the primary Judge to 'punish' the solicitor unless he had been guilty of 'some misconduct or negligence', and that an appeal should lie as of right against such a finding. 12 The 'final or interlocutory' issue did not arise. In fact there was no requirement for the obtaining of leave to appeal from an interlocutory order (r 57 in a Schedule to the Judicature Act provided that no appeal from an interlocutory order should be brought after the expiration of 21 days except by special leave of the Court of Appeal, and that no other appeal should be brought after the expiration of one year). 13 By the time of Thompson v Fraser [1986] 1 WLR 17, there was a 'costs only' rule in s 18(1)(f) of the Supreme Court Act 1981 (UK) (the larger expression was 'relating only to costs which are by law left to the court or tribunal'). The Court of Appeal held, without referring to Bradford , that an order that a solicitor pay costs lay outside the 'costs only' rule, and that the solicitor had a right of appeal. 14 There are two interesting aspects of the case. The first is that, by now, there was a rule providing expressly for the making of an order for costs against solicitors, and the order had been made against the solicitor under that rule. The rule was RSC Ord 62 r 8(1) which was very similar to that found in O 62 r 9(1) of the FC Rules set out earlier. For example, like the Australian provision, it referred to costs having being 'incurred improperly or without reasonable cause' or having been 'wasted by undue delay or by any other misconduct or default'. 15 The second aspect is that, at that time, s 18(1)(h) of the Supreme Court Act 1981 (UK) provided that without leave, an appeal did not lie to the Court of Appeal from an interlocutory order. Despite the existence of this provision, apparently it did not occur to anyone that leave might be required because the order that the solicitor pay costs was an interlocutory order. 16 In concluding that the costs order against the solicitor was not an order 'relating only to costs', the Court of Appeal described it as an order relating to the conduct of the solicitor. 17 The Barrister and the Solicitor submit that such cases are to be explained as turning upon the inherent disciplinary jurisdiction exercised by courts or general jurisdiction over their officers. I do not agree. It is true that in Bradford , the Court of Appeal cited In Re Hardwick (1883) 12 QBD 148, a disciplinary case, but nothing was made of the point in Thompson v Fraser , in which the application was treated simply as one under RSC Ord 62 r 8(1). 18 It is unnecessary and irrelevant to distinguish, in the present context, between a court that admits persons to practise as solicitors or barristers or both, and has an inherent disciplinary jurisdiction over persons so admitted as its officers, on the one hand, and a statutory court such as this Court on the other hand. In De Sousa v Minister for Immigration, Local Government and Ethnic Affairs (1993) 41 FCR 544, a case that pre-dated O 62 r 9(1) of the FC Rules in its present form, French J held that s 43 alone empowered the court to make a costs order against a solicitor. His Honour said that the Court's power to do so was to be seen as part of a wider power under the section to make a costs order against non-parties generally, and referred to Aiden Shipping Co Ltd v Interbulk Ltd [1986] 1 AC 965 (' Aiden ') and Knight v FP Special Assets Ltd [1992] HCA 28 ; (1992) 174 CLR 178 ( 'Knight' ). In those cases, orders were made against non-parties other than legal practitioners under the general provisions conferring power to order costs (in Aiden , s 51(1) of the Supreme Court Act 1981 (UK); and in Knight , s 58 of the Supreme Court Act 1867 (Qld) and O 91 r 1 of the Rules of the Supreme Court of Queensland). A rule such as O 62 r 9(1) does not reduce the power to order costs conferred otherwise. 19 In In Re Land and Property Trust Co Plc [1991] 1 WLR 601, a costs order was made, not against legal practitioners, but against a company's directors. The Court's power to make the order was said to reside in the general statutory provision placing costs within the discretion of the court. The provision was s 51(1) of the Supreme Court Act 1981 (UK). That provision contained additional words which are not in s 43 of the FCA Act, namely, 'and the court shall have full power to determine by whom and to what extent the costs are to be paid'. However, nothing turns on this. The additional words were not present in the Queensland provisions that were considered by the High Court in Knight v FP Special Assets Ltd , above. 20 The Court of Appeal, in In Re Land and Property Trust Co Plc , held that s 18(1)(f) of the Supreme Court Act 1981 (UK) did not stand in the way of the directors exercising a right of appeal. 22 The last English case to which I was referred, Wilkinson v Kenny [1993] 1 WLR 963, is distinguishable. It concerned, not the order that the defendant's solicitors pay certain costs to the plaintiffs, but that they pay four-fifths of the plaintiffs' costs of the application for that order. The Court of Appeal held that the latter order fell within the 'costs only' rule. 23 I turn now to the three Australian cases to which I was referred. The first in time is Michael v Freehill Hollingdale & Page (1990) 3 WAR 223. Dr Michael was ordered to pay the costs of Monitronix Ltd ('Monitronix') which had been represented by solicitors ('Freehills'). He applied unsuccessfully for an order that Freehills indemnify him. His application for the order against Freehills was made under O 66 r 5(1) of the Rules of the Supreme Court 1971 (WA) which was comparable to the English Ord 62 r 8(1), and therefore to O 66 r 9(1) of the FC Rules. Section 60(1)(e) of the Supreme Court Act 1935 (WA) was a 'costs only' rule similar to s 18(1)(f) of the Supreme Court Act 1981 (UK) discussed above, while s 60(1)(f) of the Western Australian Act was a 'no appeal from interlocutory orders without leave' provision, similar to s 18(1)(h) of the English Act (and to s 24(1A) of the FCA Act). 24 The statutory setting was therefore similar to that in the present case except for the absence of a 'costs only' rule in the FCA Act. 25 On the appeal, Malcolm CJ and Seaman J delivered independent judgments. Franklyn J agreed with both of them. 26 Malcolm CJ likened Dr Michael's claim against Freehills to a third party proceeding in which an unsuccessful party in the principal proceeding seeks contribution or indemnity from a third party in respect of his liability. In this way, he said, Re Hardwick was applicable. Macteldir's claim against the Solicitor and the Barrister, was based on O 62 r 9(1) of the FC Rules which also refers to 'misconduct'. 28 In relation to s 60(1)(f), his Honour referred to the test for distinguishing between final and interlocutory judgments described by Windeyer J in Hall v Nominal Defendant , above, at 443, and held that Master Ng's order of dismissal finally disposed of the matter between Dr Michael and Freehills, subject only to any appeal. 29 Seaman J also saw no obstacle in the 'costs only' rule. In dealing with the point, however, his Honour referred to Dr Michael's application as having been made to the Court 'in its inherent disciplinary jurisdiction over practitioners' (at 233). His Honour then said that Dr Michael's claim against Freehills had 'concerned indemnity' and was not an order 'as to costs only'. A rule of the kind found in the English Ord 62 r 8(1), the Western Australian O 66 r 5(1), and the Federal Court O 62 r 9(1) itself refers to 'misconduct'. The fact that O 62 r 9(1) of the FC Rules singles out legal practitioners and refers to their 'misconduct or default' suggests a disciplinary purpose, but it suffices for present purposes simply to see it as setting out particular circumstances in which the power invested in the court by s 43 of the FCA Act may be exercised. 32 Macteldir relies on Etna v Arif [1999] VSCA 99 ; [1999] 2 VR 353. In the Victorian Court of Appeal in that case, Charles and Callaway JJA agreed with Batt JA, who held that the Victorian 'costs only' rule did not apply to an appeal from an order for costs that had been made against a party's solicitors. The word 'only' did not appear in the Victorian provision, which was s 17A(1)(b) of the Supreme Court Act 1986 (Vic), but Batt JA said (at 379) that this did not render the course of authority to which I have referred inapplicable. Accordingly, the solicitors were entitled to appeal without leave. 33 His Honour also referred to the 'disciplinary jurisdiction of the court', but it is plain that he was referring to para (1) of r 63.23 of the Supreme Court Rules (Vic) Ch I, which was generally similar to O 62 r 9 of the FC Rules. His Honour did not use the word 'inherent'. 34 Again, apparently it did not occur to anyone to suggest that the solicitors needed leave to appeal by reason of s 17A(4)(b) and the costs order's being interlocutory. 35 The Solicitor and the Barrister relied on Wentworth v Rogers [1999] NSWCA 403. The New South Wales Court of Appeal had before it a summons seeking orders setting aside, relevantly, an order made by Sperling J. The relevant order was one dismissing Ms Wentworth's application for an order that Dr Rogers's counsel and solicitors personally pay, on an indemnity basis, certain costs incurred by Ms Wentworth. Leave to appeal is thus required. The summons of 11 September 1997 should therefore be treated as an application for leave to appeal. That matter was discussed during the argument and, subject to one qualification, that is the way the Court said that it would approach it. 36 I do not regard Wentworth v Rogers as deciding the present question. 37 The Solicitor and the Barrister rely on authorities to the effect that an order made resolving a dispute between the issuer of a subpoena and a stranger to the proceeding to whom the subpoena is issued is classified as interlocutory; see, for example, Brouwer v Titan Corporation Ltd (1997) 73 FCR 241; Hudson v Branir Pty Ltd (2005) 15 NTLR 35. 38 In my view, those cases are distinguishable, on the basis that the application by a party for a costs order against a legal practitioner is 'in the nature of a principal cause of action pending between them': Hall v Nominal Defendant above, at 443 per Windeyer J; Luck , above, at [4]. This is not so in the case of a subpoena dispute. 39 The party seeking a costs order against a non-party legal practitioner has a grievance against the legal practitioner. The allegation is that the legal practitioner is guilty of misconduct or default, which has caused loss or damage to the party or is about to do so, for which the party seeks a remedy that the law provides. These considerations seem to me to attract the description 'principal cause of action', in the sense used in Hall v Nominal Defendant and Luck (see [6] above). A subpoena dispute is different. There is no antecedent and underlying wrongdoing, or loss or damage, and no consequential seeking of a remedy that the law provides. Rather, the dispute is entirely procedural, concerning, as it does, the invoking of the subpoena procedure by a party against a stranger. 40 In substance, Macteldir's application for an order under O 62 r 9(1) against the Solicitor and the Barrister was in the nature of a third party claim against legal practitioners for their alleged 'misconduct or default'. That application raised the only matter in dispute between Macteldir and them. Allsop J's order dismissing Macteldir's motion determined finally the rights of the parties (Macteldir and the legal practitioners) in respect of that matter. Macteldir had a right of appeal against the dismissal under s 24(1)(a) of the FCA Act. Macteldir exercised that right of appeal by filing its notice of appeal on 23 November 2005. The notice of appeal then filed should stand. Leave to appeal was not required. 42 The order of dismissal, following a hearing on the merits and the giving of comprehensive reasons for judgment, had the practical effect of finally determining the rights of the parties (Macteldir and the legal practitioners) in respect of the one and only matter of dispute between them, namely, Macteldir's claim against the Solicitor and the Barrister under O 62 r 9 of the FC Rules. The Court is the more ready to grant leave to appeal in such circumstances. On the day on which Allsop J delivered judgment (2 November 2005) there was a short conference on the question of whether there should be an appeal, and a further conference on 14 November 2005. Throughout the period from 2 to 14 November 2005, Mr Petrovski was discussing with Macteldir the question of the costs of an appeal. During that period, he sought orally the advice of counsel as to the prospects of success of an appeal. It was some time after the seven day period expired that he was advised by counsel, Ms Preston, that leave to appeal might be required. Mr Petrovski then took steps to file both a notice of appeal and a notice of motion seeking leave to appeal on 23 November 2005, the last day of the 21-day period for bringing an appeal as of right. After further consideration it was determined that the client's position should be protected by filing a notice of motion seeking leave. 44 Allsop J's reasons for judgment are, with respect, comprehensive and detailed. The grounds of appeal are expressed in 25 paragraphs, although they can be grouped. The questions raised by the grounds of appeal are obviously important to Macteldir. Applying the 'low threshold' test suggested in Bucknell , I should grant leave 'almost as of course'. 45 Having regard to the matters mentioned above, in particular, the fact that the order of dismissal has the practical effect of disposing finally of Macteldir's claim under O 62 r 9, I would grant leave to appeal if it were required. 47 If leave to appeal had been required, an extension of time would have been necessary and, in the circumstances, I would probably have ordered that Macteldir not have its costs of the application for extension of time and that the costs of the application for leave to appeal be part of the parties' costs of the appeal. Should I depart from an order that the Solicitor and the Barrister pay Macteldir's costs on account of the fact that Macteldir did, in the alternative, seek the extension of time and leave to appeal? I think not. The Barrister filed a notice of motion in proceeding NSD 2281 of 2005 seeking an order that 'the appeal be dismissed as incompetent'. Ordinarily, Macteldir would be entitled to an order for costs on that motion. 48 On the present motion, the issue as to the status of the order appealed from (final or interlocutory) has been fully debated. 49 The appropriate course is to order the Solicitor and the Barrister to pay the costs of the present motion and to note that there will be no order for costs on the motion in proceeding NSD 2281 of 2005. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. | costs order dismissing motion for order that solicitor and barrister for a party indemnify the party against adverse costs order and not charge fees to that party whether order of dismissal was final or interlocutory for purposes of right of appeal. held : order of dismissal was final, and leave to appeal not required. appeal whether order final or interlocutory in primary proceeding, unsuccessful party applied by motion for order that its solicitor and barrister indemnify it in respect of adverse costs order and not charge fees to that party motion dismissed whether order of dismissal final or interlocutory for purposes of right of appeal. held : order of dismissal was final, and leave to appeal not required. practice and procedure practice and procedure |
The Tribunal's reasons were handed down on 13 May 2008. The Tribunal affirmed a decision of a delegate of the Minister not to grant the appellant a protection visa. The appellant is a citizen of the People's Republic of China. He arrived in Australia on 18 August 2007 and applied shortly afterward for a protection (Class XA) visa. The appellant's claims were set out in a statutory declaration made on 26 September 2007. The Tribunal referred to those claims commencing at [18] of its reasons for decision. The Tribunal noted that the appellant worked as a fisherman in a local village in Lianjiang County and that he and other villagers were notified in January 2007 that they could no longer fish close to the shore because the land had been confiscated by the army. The appellant claimed that on 8 May 2007, he and another local fisherman arranged a demonstration of approximately 100 people to demonstrate outside the local government building. The appellant said that he was arrested at the demonstration and detained for a period of about three weeks, during which he was physically and mentally persecuted. He brought his passport with him and confirmed to the Tribunal that the passport was issued on 17 March 2007 to replace an earlier one which he had lost. The Tribunal took into account in its reasons the fact that the replacement passport was issued approximately two months before the demonstration, rather than having been issued in response to what took place following the demonstration of 8 May 2007. After the oral hearing, the Tribunal wrote to the appellant apparently pursuant to s 424A of the Migration Act 1958 (Cth) providing particulars of information which the Tribunal considered would be the reason or a part of the reason for affirming the decision of the delegate. The appellant responded to the letter in the form of a statutory declaration made 30 April 2008 and received by the Tribunal on 1 May 2008, the effect of which, the Tribunal said in its reasons at [53], was that the appellant claimed to have a well-founded fear of persecution on political grounds. The Tribunal observed that the appellant claimed to be regarded as an anti-government activist because he organised the protest and he claimed to have been detained for that reason. He also claimed that he will be persecuted if he returns to China because he fled from that country and because there is a "black mark" against his name. The Tribunal observed that while he could answer questions about the matters directly referred to in his statutory declaration, his answers to questions about matters which were said to be within his direct experience, but not referred to in his statutory declaration, were vague and lacking in detail. The Tribunal went on to consider whether there might be particular circumstances which could have affected the appellant's ability to give evidence and to provide a credible account of the events leading to his departure from China. However, the Tribunal was not satisfied that there was a satisfactory explanation for this deficiency in the appellant's evidence. If the applicant had really been involved in organising a demonstration; had he really been arrested and detained, I would expect that he would be able to readily provide the details sought from him at the hearing in relation to those matters. Given his inability to do so, and his apparent evasiveness when questioned about these issues, I consider that the applicant was not telling the truth about these events. I do not accept that the applicant was involved in organising a protest as he claims. I do not accept that he was detained as a result. I do not accept that the [sic] continued to be harassed, and of adverse interest to the authorities prior to his departure from China in August 2007. It considered his evidence about the departure arrangements from China to be unsatisfactory. It found, at [62], that the appellant travelled to Australia using a passport issued in March 2007. It observed, at [62], that passports are quite costly and that a person in the financial position of the appellant would not obtain a passport if he did not intend to travel overseas. The Tribunal accepted that a friend had helped the appellant to obtain a visa to Australia and provided false information to the Department of Immigration and Citizenship with or without the appellant's knowledge, but the Tribunal found that any difficulty that the appellant may have faced in obtaining a visa to travel to Australia had nothing to do with the Chinese authorities. The Tribunal was not satisfied with the appellant's explanation of these arrangements, and said that it would expect him to be able to provide a coherent and sensible account of his actions and motivations. The Tribunal considered the appellant's evidence on this point to be evasive and took into account his "unhelpful demeanour" when he was questioned about that issue: [65]. Accordingly, the Tribunal did not accept that the appellant was involved in protest activity as he claimed or that he had been arrested and detained. The Tribunal did not accept that the appellant had a "black mark" against his name or any profile that would result in a real chance of his persecution on return to China. The first ground may be described as a reasonable apprehension of bias on the part of the Tribunal. The particulars of the ground of bias were the Tribunal's reasoning in relation to the cost of obtaining a passport and the consequences which flowed from that in the Tribunal's reasoning. The second ground of the application characterised the same reasoning as revealing bias and an incorrect finding. The learned Federal Magistrate, at [16] of his reasons, said that he was not persuaded that it was not open to the Tribunal to form the conclusion that it did on this issue. He was not persuaded that the Tribunal's refusal to accept the appellant's explanation was not open to it or that it showed unreasonableness or irrationality within the principles stated in the well known authorities. The third ground of review challenged the Tribunal's reasons in not accepting the appellant's explanation for those parts of his evidence which were found to be vague and lacking in detail. The learned Federal Magistrate was of the view that these criticisms did not reveal any jurisdictional error by the Tribunal. The first is that the Federal Magistrate erred in law. The second is that the Federal Magistrate was wrong in finding that the Refugee Review Tribunal acted properly in making its findings. The substance of these complaints is set out in three particulars. The first refers to a reasonable apprehension of bias. The second is that the Federal Magistrate was wrong not to find that the Tribunal failed to properly consider the appellant's application. The third particular is that there was "no evidence" that the Tribunal considered the explanations given by the appellant in response to the s 424A letter. The appellant appeared before me in person this morning. He was assisted by a Mandarin interpreter. He said that the main point he wanted to make was that the Tribunal's decision was biased against him because it was based upon a prior assumption which the Tribunal was not entitled to make. As to the claim of bias, I am satisfied that there is no foundation for this claim. It is true that the learned Federal Magistrate did not refer to the principles in relation to reasonable apprehension of bias stated in authorities, such as Re Refugee Review Tribunal; Ex Parte H [2001] HCA 28 ; (2001) 179 ALR 425 at [27] --- [32], nor did the learned Federal Magistrate refer to the principles in relation to actual bias stated in authorities such as Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17 ; (2001) 205 CLR 507. However, it is plain that the Federal Magistrate was of the view that the claim of bias was made upon the footing that the Tribunal made a wrong finding of fact in relation to the appellant's explanation about the renewal of his passport. I see no error in the Federal Magistrate's conclusion that the findings of fact were open to the Tribunal on that issue. His view that this finding revealed no irrationality or unreasonableness was sufficient to dispose of the claim of bias, whether treated as a claim of reasonable apprehension of bias or actual bias. It follows in my view that the ground of appeal based on bias must be rejected. I should add that there was nothing in the reasons of the Tribunal to suggest that it approached the matter with a closed mind. Also, it seems to me that the learned Federal Magistrate did turn his mind to the issue of bias in what he said at [14] --- [16] of his reasons of judgment. As I have said, I see no error in the conclusion that he reached. Moreover, I do not consider that there is any substance in the claim made by the appellant that the Tribunal made an assumption which was not open to it. The Tribunal may, in a general sense, be said to have made an assumption about the effect of the appellant's admitted possession of a passport issued in March 2007, some two months before the demonstration. However, in my view, this is covered by what the Federal Magistrate said in his reasons, namely that this was a finding of fact which was open to the Tribunal and that it revealed no irrationality or unreasonableness. It cannot be said that the Tribunal failed to take into account an integer of the appellant's claims in accordance with the principles stated in authorities such as the reasons of Allsop J in Htun v Minister for Immigration and Multicultural Affairs [2001] FCA 1802 ; (2001) 194 ALR 244. Nor do I consider that there was any substance in the claim that the Tribunal failed to consider the appellant's claims made in his statutory declaration in response to the Tribunal's s 424A letter. The Tribunal's reasons set out at [53] the substance of the statutory declaration and there are a number of references in the Tribunal's reasons to the fact that it took into account the content of the statutory declaration of April 2008. It is true that the Tribunal did not refer in its reasons to every one of the 12 paragraphs of the statutory declaration of 30 April 2008. However, in my view it is sufficiently clear that the Tribunal's reasons disclose a consideration of each of the grounds in the appellant's application. As a Full Court said in WAEE v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 184 ; (2003) 75 ALD 630 at [46] , it is not necessary for a tribunal to refer to every piece of evidence and every contention made by an applicant in the Tribunal's written reasons (French, Sackville and Hely JJ). Their Honours went on at [46] to observe that there was a distinction between the tribunal failing to advert to evidence in its written reasons, and a failure by the tribunal to address a contention which, if accepted, might establish that the applicant had a well-founded fear of persecution for a Convention reason. As I have already said, it seems to me that the reasons of the Federal Magistrate revealed a consideration of the grounds in the application for review and I am also of the view that the Tribunal's reasons for decision indicate that it considered all of the matters that formed the basis of the appellant's claim to have a well-founded fear of persecution. Accordingly, I am satisfied that the appellant has failed to identify any error in the decision or reasoning of the Federal Magistrate or any jurisdictional error on the part of the Tribunal. The appeal should be 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 Jacobson J. | no reasonable apprehension of bias or actual bias in decision of refugee review tribunal no failure to take into account appellant's claims migration |
He arrived in Australia on 4 November 1997 with his wife and daughter as the holders of subclass 676 visitor visas. On 29 January 1998 the appellant and his wife and daughter applied to the respondent for protection visas. Only the appellant made specific claims to be a refugee. On 13 January 1999 a delegate of the respondent determined that the appellant and his wife and daughter were not persons to whom Australia had protection obligations and refused the grant of a protection visa. 3 On 3 February 1999 the appellant applied to the Tribunal for review of the delegate's decision pursuant to the provisions of the Migration Act 1958 (Cth) (' Migration Act '). The Tribunal affirmed the delegate's decision by decision dated 12 September 2000, handed down on 29 September 2000 (the first Tribunal decision). On 24 October 2000 the appellant sought judicial review of the first Tribunal decision in the Federal Court of Australia. On 11 April 2001, O'Loughlin J allowed the application and the matter was remitted to the Tribunal to be decided by a differently constituted Tribunal (the first Federal Court decision). 4 By decision dated 21 January 2002, a differently constituted Tribunal again affirmed the delegate's decision (the second Tribunal decision). The second Tribunal decision was handed down on 15 February 2002 and it is noted it is the second decision of the Tribunal that is the subject of this appeal. On 11 March 2002 the appellant sought judicial review of the second Tribunal decision in the Federal Court. On 28 November 2002, O'Loughlin J dismissed the application (the second Federal Court decision). That application was remitted to the Federal Court and on 22 August 2003, Selway J dismissed the application in the absence of any steps having been taken in accordance with orders which had been earlier made by that court on 30 June 2003 (the third Federal Court decision). 6 On 19 May 2004, the appellant made an application for judicial review of the second Tribunal decision to the Federal Magistrates Court pursuant to s 39B of the Judiciary Act 1903 (Cth) (' Judiciary Act ') and s 475A of the Migration Act . 7 On 30 May 2005, McInnis FM dismissed the application and ordered costs against the appellant. The appellant appeals against that decision to this Court. He also claimed to fear persecution due to the Tamil ethnicity of his wife and as a member of the social group comprised of the entourage of the ruling elite, who are distinguished by the privileges they receive by their ethnic background and their religion. The appellant referred to various specific incidents, some of which the Tribunal rejected as implausible or fabricated, and others which the Tribunal found were not politically motivated. The Tribunal concluded that the appellant was not at risk of future persecution for reasons of political opinion. 10 The Tribunal further rejected the appellant's claims that he had been persecuted by reason of his wife's claimed Tamil ethnicity or that there was a real chance of persecution for that reason. It further rejected the social group propounded and accordingly found that he had not been persecuted because he was a member of such a group. It found he was not at risk of future persecution for reasons thereof. I believe that this decision was unreasonable and the tribunal failed to consider relevant considerations. This was a breach of natural justice. The Tribunal failed to consider my case in accordance with law. Therefore there was an error in [the second Tribunal decision]. Those errors identified in the written submissions clearly refer to a number of issues which in my view could properly be characterised as seeking to re-agitate facts previously raised and considered by the [Tribunal] and/or to introduce additional factual material which could and should have been raised by the applicant at the previous hearing leading to the second [Tribunal] decision. I am satisfied in applying the relevant principles of law as indicated earlier that not only does res judicata apply but in the event that it does not apply issue estoppel and Anshun estoppel applies to the facts and circumstances of this application. The Federal Magistrate erred in not finding that the Refugee Review Tribunal (RRT) committed jurisdictional error. The Federal Magistrate erred in not remitting the matter back to the RRT for further consideration. No further grounds have been filed, however the appellant filed on 4 October 2006 a submission in support of his position, which is Annexure A to these reasons. In addition, this day the appellant filed a written submission dated 6 October 2006, which is annexure B to these reasons. 17 The question of whether there was political motivation behind the incidents referred to by the appellant was considered and rejected by the Tribunal. In my opinion McInnis FM was correct in stating that the appellant is seeking to re-agitate facts considered by the Tribunal. Further, the Tribunal considered each of the relevant considerations as a matter of law that were put before it by the appellant: Abebe v Commonwealth of Australia [1999] HCA 14 ; (1999) 197 CLR 510. In the circumstances, having considered the submission of 4 October 2006 of the appellant, which is annexure A, there is nothing in those submissions which indicate any error by the Tribunal. In my view, the second Tribunal decision does not evince any jurisdictional error. In reliance upon this allegation reference was made to a letter that was mentioned in the first Tribunal decision in relation to the health of the appellant's wife. In view of the above statement, provided only at hearing, and therefore unable to be confirmed with another doctor in this timeframe, the applicant was asked very few questions. She gave evidence that she had witnessed the attack in 1994, but could not recognise the people. She also said anonymous phone calls had occurred. She thought that this was because of her husband's involvement as chef for the President. Before me there was some dispute about that but the record seems clear. In any event, the passage that is relied upon does not, in itself, suggest any bias on the part of the Tribunal particularly, whether it be the first Tribunal or the second Tribunal. But, relevantly, of course, it should only relate to the first Tribunal decision. In any event, there is no basis upon which I could find bias on the part of the second Tribunal. 21 The application the subject of the second Federal Court decision was made under s 39 of the Judiciary Act . In that application the appellant asserted that there was a denial of procedural fairness. The next application made on 24 December 2002 for constitutional relief pursuant to s 75(5) of the Constitution was dismissed by Selway J in the third Federal Court decision. The appellant there relied upon a number of grounds including, again, a denial of procedural fairness. 22 The present application made on 19 May 2004 was made under s 39B of the Judiciary Act . In my view there is no relevant distinction to be drawn between an application under s 75(5) of the Constitution and an application under s 39B of the Judiciary Act : Applicant A321 of 2002 v The Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 306 at [13] - [14] (' A321 case '). In each case prerogative or constitutional relief was sought, inter alia, to quash the decision. The cause of action is said to merge in the judgment, in the sense that it no longer has an existence independent of the judgment. For the purposes of res judicata doctrine the term cause of action is to be understood by reference to the substance of the action as distinct from its form: Trawl Industries of Australia Pty Ltd (in liq) v Effem Foods Pty Ltd (1992) 36 FCR 406, 418 per Gummow J (affirmed (1993) 43 FCR 510); BC v Minister of Immigration and Multicultural Affairs [2001] FCA 1669 at [34] per Sackville J. For the reasons found by McInnis FM, these current proceedings should be dismissed as the cause of action has been determined in the second Federal Court decision. 24 The doctrine of res judicata therefore, in my view, clearly applies. It does not matter that the re-litigation is intended to be or is based upon arguments that were not previously presented. However, I do not think it is appropriate to determine the present application by reference to those difficulties. The fact of the matter is that the present application seeks to re-litigate the same claim for relief that was sought in the earlier proceeding. It matters not that the re-litigation is intended to be based upon an argument that was not previously advanced. The principle of res judicata applies to this case. 27 Further, I also agree with McInnis FM that the appeal must fail because of the operation of an Anshun estoppel. 28 The relevant legal principles both in relation to res judicata and estoppel were considered by the Full Court of this Court in Wong v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 242 ; (2004) 146 FCR 10. The doctrines of res judicata and issue estoppel are founded on the broad rules of public policy expressed in the maxims nemo debet bis vexari pro una et eadem causa (a person ought not to be vexed twice for one and the same cause) and interest reipublicae ut sit finis litium (it is in the interests of the State that there be an end to litigation). It would be an abuse of process to allow parties to litigate repeatedly matters that have been finally determined by the Court. Also, quite apart from any psychological detriment that might flow from an individual having to undertake litigation of the same issue a second time, the State has an interest in ensuring that, once an issue has been determined according to law and all rights of appeal have been exhausted, that should be an end of the matter. The resources of the community ought not to be expended in the litigation, more than once, of the same issue. A plea in bar may be raised in respect of an issue, not only if the Court in the earlier proceeding was actually required by the parties to form an opinion and pronounce a judgment, but also in relation to every issue that properly belonged to the subject of the earlier litigation and which the parties, exercising reasonable diligence, might have brought forward at the time of the earlier litigation: Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45 ; (1981) 147 CLR 589 at 598 and 602. Anshun estoppel arises where the issue now raised for the first time, properly belonged to the subject of the earlier proceeding but, by negligence, omission or accident, was not raised in earlier proceeding. In essence, where the issue was so relevant to the subject matter of the earlier action that it would be unreasonable not to have raised it at that time, it is an abuse of process to endeavour to raise that issue for the first time in a subsequent proceeding between the parties: Anshun . Nevertheless, where an issue has not actually been litigated and decided before, there must be exceptions to that general rule (cf the operation of res judicata and issue estoppel where the action/issue has been determined on a final basis). As foreshadowed in Anshun , there will be instances where, even though there is every reason why the matter should have been raised earlier but was not, there are special circumstances that prevail to permit a party to raise the issue in a subsequent proceeding. The Court therefore has a discretion, if it determines that special circumstances exist, to allow an issue to be raised, even where it is found that the point was unreasonably omitted from the earlier proceeding: see Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543 at 558. However, the circumstances in which that would be permitted must, because of the principles referred to above, be exceptional, constituting "special circumstances": see BC v Minister for Immigration & Multicultural Affairs [2002] FCAFC 221. What will be sufficient to constitute special circumstances is by no means fixed and may involve consideration of a wide range of factors, all of which bear upon the general discretion of the Court where justice requires the non-application of the general principle: see BC v Minister for Immigration & Multicultural Affairs (2001) 67 ALD 60 (Sackville J) at [50] referring to Port of Melbourne v Anshun (No 2) [1981] VR 81; see also Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 at 296, 298-299, citing Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581. Anshun estoppel has been applied to proceedings in the nature of judicial review of administrative action, insofar as Anshun estoppel is aimed at avoiding abuse of process: Taylor v Ansett Transport Industries Ltd (1987) 18 FCR 342 at 355-6 and 365; Stuart v Sanderson [2000] FCA 870 ; (2000) 100 FCR 150, at 156-157, per Madgwick J. However, where the beneficiary of such a principle is a Minister of State, who has no personal interest in the outcome of a proceeding, such a principle may be of only secondary significance. Thus, it has long been established that, regardless of the propriety of the purpose of the person responsible for their institution and maintenance, proceedings will constitute an abuse of process if they can be clearly seen to be foredoomed to fail. Again, proceedings within the jurisdiction of a court will be unjustifiably oppressive and vexatious of an objecting defendant, and will constitute an abuse of process, if that court is, in all the circumstances of the particular case, a clearly inappropriate forum to entertain them. Yet again, proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings. His friend, S Wignarajah, made submissions on his behalf. And as a consequence I did not receive a fair trial, and thus was deprived natural justice. One of the pillars of my claim that I was persecuted for political reasons and had a substantial and well founded fear for life and limb of my family and me was the threats, emotional stress, physical violence and the attempt to murder me by JVP supporters. It was the failure of the learned Judge in that he erred to rule that the RRT was bound to take cognisance of the political culture of the JVP and this failure resulted in jurisdiction error. If the RRT had taken into consideration the culture of the JVP, they then would not have arrived at the erroneous conclusions about the incident that occurred in 1990 at the Sinhalese Sports Club when I was the chef and threatened that I must delay the function of the President. Please find below the requisite information that will prove the murderous, vicious and bestial nature of the JVP, a left radical party that believes that Sri Lanka belongs only to the Sinhala Buddhist majority and treats other minority communities such as burghers and Catholics as vermin to be eliminated without compunction. I quote; What Robert Oberst wrote in " Current History " vol.91, 1992 in the article " War without winners in Sri Lanka " as a reaction to the reign of terror of the JVP. " The Government countered the JVP with its own reign of terror. In 1988 death squads believed to be made up of off duty police and army personnel and assisted by some UNP supporters removed young people form [sic] their homes at night. The next day the bodies of these youths would be discovered burnt or mutilated. By July 1989 death squad killings had reached several hundreds a week. The violence terrorised villages by targeting the innocent neighbours and friends of suspected JVP supporters. So heartless are they, no regard for the sanctity of human life that in the 1980s in their reign of terror they compelled many government hospitals totally closed. Doctors and medical staff fled for their lives. And hundreds of patients on life support systems were chased home. The vast majority succumbed even before they reached home. Failure to consider such relevant information led the RRT to erroneously conclude that the incident in 1990 did not occur, and then the RRT moved on to erroneously conclude that my statement of abuse and threat to life did not take place. The learned judge erred in that he did not rule that the RRT did commit jurisdictional error in its failure to take into account this most relevant information, although it was bound to have taken such information into account. One can judge the damage done to me for the RRT concluded that this incident was not plausible because I failed to report this threat immediately to have them arrested by the Security Forces. This is as logical as faulting a chef in the mafia capital in Sicily for not immediately reporting a mafia gangster to the boss, for requiring the chef to delay a function for the politician. The learned Judge erred in that he did conclude that there was no jurisdictional error when the RRT failed to take into consideration relevant information in regard to the incident of the planned ambush when my wife and I were thrown from our motorbike and grievously assaulted. I was bashed, my hand broken, and stabbed in the neck and leg. The RRT erroneously concluded that it was a random criminal attack. It was not a random criminal attack. It was pre planed [sic] and meditated. Exactly at a certain point an empty three-wheeler was pushed into our path late at night at a lonely spot. It was not criminal. We wore jewellery, wristwatches and had cash. None were touched. Where was the criminal intent? Where was the criminal follow up? After we were unconscious I was left to bleed to death. The Judge erred in not concluding that the RRT made an erroneous finding. This error was most damaging as this incident was indisputable evidence of persecution and possible death for our political convictions. When our house was vandalised by a gang in 1997 the Judge erred in his failure to rule that the gang who absolutely thrashed our house, did so for only criminal reasons. The Judge erred in that he did not find that the RRT came to an erroneous conclusion. On the facts it was obvious that it was politically motivated. If the motive was criminal. They would not waste valuable time endangering their safety. In regard to my position being chef at the SSC the learned judge erred in that he concluded that the RRT did not commit jurisdictional error that my position was not a plausible reason for being targeted for political persecution. The SSC was the haunt for UNP politicians, so much so that government security was provided. Presidents and Prime Ministers have their private functions there so often. I was a prominent person moving in the echelons of government power. On these facts the RRT arrived at an erroneous concluded [sic] that I was not targeted for political reasons. In this the Judge erred that the RRT was not bound to take this information into consideration and thus committed jurisdictional error. The learned Judge erred in that he did not conclude the failure to the RRT to take into account the report of the Victoria Foundation of survivors of Torture in Cooperation was jurisdictional error. The report is expressly clear " The applicant was suffering from survivor symptoms of post traumatic disorder and depression. His depression manifest as extreme grief, tearfulness, and feelings of helplessness. He is constantly anxious due to his fear of returning to Sri Lanka. It is my opinion that these symptoms are the direct result of his experiences of persecution in Sri Lanka. The RRT arrived at an unreasonable conclusion and the Judge erred in not concluding such conclusion did constitute jurisdictional error. The learned Judge has ruled that I was seeking to re agitate facts previously raised and considered by the RRT. (Page 6). I submit respectfully that I was not re agitating facts but only pleading that on the incidents accepted to have occurred by the RRT, the RRT failed to take them into consideration when bound to do so and thus committed jurisdictional error. The learned Judge ruled (page 8) " That once a [sic] issue has been determined according to law and all rights of appeal have been exhausted that should be an end of the matter. " I believe I was not granted natural justice because the RRT decision was not a decision determined by law, but was erroneous because of numerous jurisdictional errors. c) The Judge erred in that it failed to conclude that the RRT reached erroneous conclusions unsupported by evidence that was crucial to the final determination. d) The Judge erred in that he did not conclude that the RRT misunderstood the criteria for the grant of a protection visa. The RRT erred because the notion of persecution in appropriate cases involves the single act of oppression. The criteria demanded that there be some significant detriment or disadvantage. I did suffer significant detriment and disadvantage. i.e. Lost a great career, deprived of a lucrative employment in the Maldives, and bashed, stabbed and left to bleed to death. I apologise for the inconvenience caused in not submitting this information on that date. I do believe that we did not receive a fair trial because of the bias of the RRT. My wife's GP gave the RRT a letter that mentioned she should not be I quote "questioned under pressure situations as it could make her anxiety level high, resulting in diabetes worse or make her depressed". This was not a statement open to conflicting opinion between doctors. It was not a statement of medical complexity. It was a clear concise and unambiguous statement. Why then did the RRT confirm "in view of the above statement provided only at the hearing and therefore unable to be confirmed with another doctor, in this time frame the applicant was asked very few questions. " (Page 10). Why the need to test the veracity of a simple, precise medical statement? We believe the RRT concluded we were dishonest, attempting to cheat and deceive the RRT. We believe that an inaccurate entrenched mind-set of our character and integrity prevented an impartial decision. We believe that the learned Judge erred in that he should have concluded that we therefore did not receive an impartial decision. | protection visa judicial review of a refugee review tribunal decision application of res judicata, issue estoppel and anshun estoppel in respect of issues litigated in prior proceedings migration |
As it transpires, I granted leave to the applicants to file the Notice of Motion in Court, returnable instanter, and was in the course of considering the motion and the evidence in support of it when, at 10:21 am, Mr Shao ('the Respondent') arrived in Court. 2 I gave certain directions at that time and indicated that I would be prepared to sit at 5:00 pm today with a view to deciding a prayer for relief contained in the notice of motion as paragraph 9, requiring the respondent to file an affidavit disclosing certain material in relation to other persons and in relation to manufacture and importation and other matters associated with goods said to be goods which bear the applicant's trade mark ' Billabong ' in infringement of the applicant's rights. When the matter came before the Court at 5 pm, the proposed order requiring an affidavit to be filed and served by the respondent was modified and short minutes of order were handed up, which set out the modified form of order sought. 3 The order sought was set out in paragraph 5 of the short minutes of order under the heading ' Norwich Pharmacal Relief ', which I understand to be a reference to the decision of the House of Lords in Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133 ('Norwich Pharmacal'). The formulation of the order was the subject of some discussion between the Bench and counsel for the applicants, who indicated that they would seek an amended form of relief which was likely to be more readily understood by the respondent as a litigant in person. In those reasons for judgment I have set out a number of the background facts which have been supplemented by some of the additional affidavits which have been read on the current application. 6 The affidavits relied upon by the applicants are those of Kenneth James Taylor, sworn 7 September 2006, Kenneth James Taylor, sworn 20 September 2006 (paragraphs 1, 2, 3, 9 and 15 being read), affidavit of Themis Papas, sworn 19 September 2006 (paragraphs 1 to 3 inclusive, 5 to 8 inclusive, 11, 12 (the first sentence), 14 and 18 being read), affidavit of Nathan James Shepherd, sworn 20 September 2006 (paragraphs 1 to 5 being read), affidavit of Themis Papas, sworn 11 October 2006 (paragraphs 1 to 13 being read), affidavit of Lesley Ellen Skipp, sworn 11 October 2006 (paragraphs 1 to 5 inclusive and 7 to 13 inclusive being read). 7 The exhibits before me included exhibit KJT-1 to the affidavit of Kenneth James Taylor sworn 20 September 2006, exhibit TP-1 to the affidavit of Themis Papas sworn 19 September 2006 and exhibit LES-1 to the affidavit of Lesley Ellen Skipp sworn 11 October 2006, in respect of which I made an order forbidding publication in accordance with s 50 of the Federal Court of Australia Act 1976 (Cth), subject to certain terms and conditions. 8 The respondent indicated that he did not wish to call any evidence on the current application. 9 Norwich Pharmacal was a case against the Commissioners of Customs and Excise who were, in effect, innocent bystanders who were able to provide information about people involved in the importation of goods into the United Kingdom which involved patent infringements. Relief was granted against the Commissioners compelling them to, in effect, disclose the identity of the people who were the owners of the goods the subject of the importation. The position which prevailed in England at the time would appear not to have equated to that which prevails in Australia where disclosure of an owner, in circumstances such as presently prevail, may be effected in accordance with the provisions of the Trade Marks Act 1995 (Cth) ('the Act') in respect of infringing goods or potentially infringing goods. It has been clear at least since the time of Lord Hardwicke that information cannot be obtained by discovery from a person who will in due course be compellable to give that information either by oral testimony as a witness or on a subpoena duces tecum. Whether the reasons justifying that rule are good or bad it is much too late to enquire: the rule is settled. But the foundation of the rule is the assumption that eventually the testimony will be available either in an action already in progress [and I interpolate, which would be such as the present case] or in an action which will be brought later. It appears to me to have no application to a case like the present case. Here, if the information in the possession of the respondents cannot be made available by discovery now, no action can ever be begun because the appellants do not know who are the wrongdoers who have infringed their patent. So the appellants can never get the information. Its purpose is not to prevent but to postpone the recovery of the information sought. It may sometimes have been misapplied in the past but I see no reason why we should continue to do so. There is absolutely no authority for that. A person injured in a road accident might know that a bystander had taken the number of the car which ran him down and have no other means of tracing the driver. Or a person might know that a particular person is in possession of a libellous letter which he has good reason to believe defames him but the author of which he cannot discover. I am satisfied that it would not be proper in either case to order discovery in order that the person who has suffered damage might be able to find and sue the wrongdoer. Neither authority, principle nor public policy would justify that. It is not available against a person who has no other connection with the wrong than that he was a spectator or has some document relating to it in his possession. But the respondents are in an intermediate position. Their conduct was entirely innocent; it was in the execution of their statutory duty. In a parallel situation in relation to Mareva relief, the New South Wales Court of Appeal in Ross v Internet Wines Pty Ltd [2004] NSWCA 195 ; (2004) 60 NSWLR 436, held that it was inappropriate for a court to require a person to create a document, the contents of which may tend to incriminate the person, whether there be an arrangement for the document to be placed in a sealed envelope and made available to the relevant Judge's associate with a claim for privilege or not. 13 It seems to me that in the circumstances of this case, it would be entirely inappropriate to order the respondent to provide an affidavit such as the one sought in the proposed prayer for relief to which I have referred. In the circumstances, I decline to order, what is called, the Norwich Pharmacal relief sought in the draft short minutes. There has been discussion earlier as to what other appropriate orders should be made and these are conveniently dealt with by reference to the short minutes of order which I initial and date this day. | whether the privilege against self-incrimination justifies refusal of norwich pharmacal relief trade marks |
There is an allegation in the statement of claim that the infringing use of the product is the only reasonable use of it, or, that the Respondent had reasonable cause to believe that it would be put to that use by its purchasers. (b) claim 8 - a one-way vision panel assembly as defined in, inter alia , claim 1, wherein said rear surface is coated with a layer of adhesive to enable said assembly to be affixed thereby to a display medium. I am satisfied that the application and the statement of claim have been served upon the Respondent. The application made today is for judgment on default. It is brought pursuant to O 35A r 3(2)(c). On 4 March 2008, Greenwood J ordered that the Respondent file and serve its defence on or before 25 March 2008. Those orders were made with the agreement of the Respondent's then solicitors. A default has occurred in respect of the filing of that defence. It is that default which provides the basis upon which the Applicants seek relief on the notice of motion. 5 I am satisfied that the notice of motion has been served on the Respondent by service on the Respondent's then solicitors. Those solicitors have since withdrawn from the record and there has been no appearance today either by or on behalf of the Respondent. Directions as to the manner in which the account of profits will be undertaken, including orders as to discovery by the respondent and allocation of hearing dates. 3. That the respondent shall pay the applicants' costs of this motion, of these proceedings to date and of the further costs of and incidental to the account of profits. 4. Such further or other orders as the Court deems appropriate. 6 The evidence before me also establishes that the claim made in the substantive proceeding has not been satisfied by the respondent. It was until recently well settled that there was no presumption upon default of the respondent of the correctness of the applicant's claims: see Commissioner of Taxation v Finn [1960] HCA 69 ; (1960) 103 CLR 165. 17. It was not open to the court to make an order for default judgment except on the bringing of a motion supported by evidence as to the merits of the application: see Australian Securities Commission v McLeod (1994) 54 FCR 309 per Drummond J; see also for example Grey v Mango Prepaid Calling Cards Pty Limited [2004] FCA 1664 per Nicholson J, and Zomba Production Music v Roadhouse Productions (2001) 190 ALR 288 per Stone J. 18. However, recent authorities indicate that the introduction of Order 35A provides the foundation for a finding that in the absence of a defence where there is a pleading by way of a statement of claim then the facts in the statement of claim are admitted. Another more recent example of the type of case described by Jacobson J in terms of the ability to grant judgment under O 35A r 3(2)(c) is The Trustees of the Property of Amanda Marie Glass (A Bankrupt) v Heifer Creek Investments Pty Ltd as Trustee for the Nicholas Investment Trust [2007] FCA 1133. 9 Having regard to the terms of O 35A r 3(2)(c) and the authorities which I have mentioned, I am satisfied that it is not necessary to secure the giving of relief on the notice of motion that the allegations made in the statement of claim be supported by evidence. 10 Rather, the questions for determination are as stated in paras 1 and 2 of O 35A r 3(2)(c). The first of those requires consideration of whether the Applicant appears entitled to the relief sought on the statement of claim. The claim made by the Applicants against the Respondent for patent infringement has as its foundation the premise that s 117 of the Patents Act 1990 (Cth) ("the Act ") is engaged. The proposition following from that is alleged to be, and it is, indeed, the case that pursuant to ss 120(1) and (2) of the Act , that they have standing to bring proceedings for infringement of the patent. The claims are of patent alleged in the way that I have described earlier, being claims 1 and 8. 12 It is pleaded in para 6 of the statement of claim that since, at least, in or about June 2007 the Respondent has supplied within Australia, and is continuing to supply a product, which takes all but one integer of claims 1 and 8 of the patent. 13 The pleading in the statement of claim (para 7) is that the product is capable only of one reasonable use within the meaning of s 117(2)(a) of the Act , being the affixing or printing of at least one image onto one side of the product, which image is, or images are, not visible from the opposite side to that which the image was or images were affixed or printed, with the affixation of the printed product to a display medium. It is further pleaded that the use would infringe claims 1 and 8 of the patent, because the use of the product takes all of the integers of both claims 1 and 8. 14 It is pleaded that such use is an exploitation of the patent within the meaning of schedule 1 of the Act , and that, accordingly, the purchaser will infringe the patent by their use of the product, through the application of at least one image which is visible from the first side of the assembly, but not visible from the opposite side; this being alleged to be the only reasonable use within the meaning of s 117(2)(a) of the Act . It is further pleaded that the Act , by s 117(1) , imposes liability on the respondent for infringement of the patent, by reason of its supply of the product. There is an alternative pleading. That pleading also makes reference to integers of claim 1 and 8. It is alleged that the product is not a staple commercial product within the meaning of s 117(2)(b) of the Act . 15 Paragraph 11 of the statement of claim alleges that the Respondent had reason to believe that the persons to whom it supplied the product would use it affixing or printing at least one image onto one side of the product, which image or images would not be visible from the opposite side to that on which the image was affixed or printed, and that the printed product would then be affixed to a display medium. That is alleged to be an exploitation of the patent within the meaning of schedule 1 to the Act . It is further alleged that the Respondent has, by reason of its supply of the product (which is not a staple commercial product) and its state of mind (being that it had reason to believe that the purchasers of the product would use it in a way which would infringe the patent) itself infringed the patent, pursuant to ss 117(1) and 117 (2)(b) of the Act . 16 The effect of the default in the filing of a defence is that these claims are not contested by the Respondent. It seems to me, in these circumstances, that the Applicants are entitled to the relief sought in the application on the basis of the matters pleaded in the statement of claim. I turn, then, to consider whether or not the court is empowered to grant the relief which is sought today. That relief is in a narrower form than that specified in the application, in the sense that there is no relief sought in respect of a restraint from importing, particularly, the product. 21 Trite though it may be, I note that s 154 of the Act confers jurisdiction upon this court with respect to matters arising under the Act . The Act does not contain a section which expressly empowers the court to order the delivery up of infringing products. This particular feature of the Act , in contradistinction to s 116 of the Copyright Act 1968 (Cth), was noted by Einfeld J in Roussel Uclaf v Pan Laboratories Proprietary Limited [1994] FCA 1176 ; (1994) 29 IPR 556. 22 His Honour further noted, however, that this court has general power to make an order for delivery up of that kind in accordance with established principles of equitable relief pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth). That section provides that the court has power in relation to matters in which it has jurisdiction to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds as the court thinks appropriate. I note, further, s 5(2) of the Federal Court of Australia Act 1976 , which provides for this Court to be a superior court of record and a court of law and equity. 23 I am quite satisfied, having regard to ss 5 and 23 of the Federal Court of Australia Act 1976 , that I have power to make order 2 of the orders sought. Power to make order 3 is derived, in my opinion, from a combination of s 122(1) of the Act and ss 5 and 23 of the Federal Court of Australia Act 1976 . Orders 4 and 5, as described earlier, are ancillary, and power to make them is to be found, in my opinion, in s 23 of the Federal Court of Australia Act 1976 . 24 Some further comment should be made in respect of the form in which the restraint proposed is cast. Where there is a consent or default order, there having been no full court hearing with consequent guidance as to what constitutes an infringement, the orders should be narrowly framed. 25 The position in Australia in respect of an Applicant in an infringement application being entitled by election to an account of profits in lieu of damages is no different. In respect of the last sentence in the passage quoted, the learned authors cite Walker v Wilson Doors (Sales and Contracts) Limited (1964) RPC 246. Regard to that case discloses that it reports an exchange between Lloyd-Jacob J and counsel in relation to the form of a restraint order. His Lordship was concerned in the making of an order that the restraint not be cast overly widely. The restraint that had been proposed, albeit by consent, was one whereby the defendants would be restrained, whether by their directors, officers, servants or agents, or any of them or otherwise howsoever from infringing the plaintiff's letters patent numbered. In fact, I know because bitter experience has taught us, that it might well result in a dispute between the parties that has to be fought in contempt proceedings and might easily arise where parties have really got a genuine difference as to what is and what is not within the scope of the patent. 27 I am conscious that this is a default proceeding. It seems to me that the form of order which is proposed in this instance does not suffer from the vice of generality of the kind which occasioned concern to Lloyd-Jacob J. 28 It may prove to be the case that upon the filing of the affidavit of the kind described in para 4 of the proposed orders that more detailed direction is needed in respect of the taking of accounts. It seems to me, therefore, that it is appropriate to adjourn the substantive application to a date to be fixed, as well as adjourn the notice of motion to a date to be fixed, and to grant to the parties liberty to apply, both particularly in respect of or in relation to the taking of an account and otherwise generally in relation to the further conduct of the proceeding. 29 At the request of counsel for the Applicants, I shall in the formal orders add the words "in Australia" after "setting" in paragraph 1 and "predicts" in paragraph 2. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. | application for judgment on default through failure to file defence whether applicant entitled to relief sought on statement of claim whether court is satisfied it has power to grant relief sought power of court to order delivery up and account of profits practice and procedure |
Peplin is listed on the official list of the Australian Securities Exchange, ASX Limited, and specialises in the development of pharmaceutical products, particularly relating to medical dermatology. It has decided to have a restructure which, in essence, amounts to relocating the corporate structure to the United States and, in particular, to the State of Delaware. The schemes themselves are relatively straightforward. They amount to shareholders and optionholders exchanging interests in the present company for the company which has been incorporated in Delaware. That is a rather crude summary of the situation but is sufficient to understand what is at stake. 2 Prior to the hearing, counsel for the plaintiff provided me with comprehensive written submissions, which incorporate a schedule which summarises the disclosure requirements of an information memorandum for a share scheme and shows what the obligations are and where the information memorandum picks them up. There are in fact two schemes: one is a share scheme and the other is an option scheme. I have been taken through the evidence in some detail over some hours this morning. That, in conjunction with the written submissions, satisfies me that all of the relevant statutory preconditions to convening of the meetings have been satisfied. Rather than reproduce the substance of those submissions, I will do what has been done in some other similar cases. I will mark the outline of submissions for identification number 1 and I will direct that they remain with the papers and should be available for inspection by any interested party. 3 I have been taken carefully through the scheme documents themselves and, subject to one matter, I have no difficulty with them. In the course of the hearing I raised with counsel the issue of the warranty said to be given by the party whose shares or options are affected. As counsel has said, clauses along those lines have been approved or have been included in schemes approved in recent times by judges of this Court, the Supreme Court of New South Wales and the Supreme Court of Queensland, albeit misgivings or doubts having been expressed about the effect of such a clause (eg Mincom Ltd v EAM Software Finance Pty Ltd (No 3) [2007] QSC 207 at [20] ---[29]). I also have doubts but I do not believe that it is likely that the inclusion of such a clause would lead to any difficulty about confirmation of these schemes. Against the possibility of somebody coming along and arguing the matter, I cannot, of course, make a final judgment about that. Even if a draconian view were taken about that clause, it is hardly fundamental to these transactions in particular, because they are not at arm's length with parties that might be in contention, but, rather, they represent an internal restructure. 4 I have been taken carefully through the information memorandum and to the material which backs that memorandum including the expert report and the underlying advices which are directed to two topics of significance. The first is that of tax and the second is that of corporate governance, bearing in mind the different regimes in Australia, on the one hand, and Delaware, on the other. As will be appreciated, the question in the expert report is rather different from usual. The financial structure, except perhaps for costs incurred in the course of the transaction, effectively remains the same before and after. The assessment of whether to vote for the change of location will be governed by matters other than the immediate economic consequences to the company. It will involve a broader assessment by investors as to whether they wish to become part of the restructured operation and, if so, how they should do so, noting that there is, if the scheme is approved, an alternative between holding CHESS depository instruments (CDIs) listed on the Australian Securities Exchange, on the one hand, and the American securities listed, hopefully, on the NASDAQ Stock Market on the other. 5 For those reasons I make orders in accordance with the short minutes of order which I have initialled. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | application by a company to convene meetings of shareholders and optionholders to consider schemes of arrangement effecting change of location of the business to united states corporations |
The First Respondent have leave to join in the Notice to Produce filed and served by the Second and Third Respondents dated 26 May 2008. The Respondents have leave to uplift, inspect and copy the Funding Deed between International Litigation Partners Pty Ltd, Andrew Hugh Jenner Wily, and Factory 5 Pty Ltd (in liquidation), produced in response to the Respondents' Notice to Produce dated 26 May 2008, such document to be redacted to remove the amounts set out in paragraph 2.1 thereof. Paragraph 5 of this order is stayed until 21 days from today's date, or if an application under subsection 35A(5) of the Federal Court of Australia Act 1976 is made within that time, until the determination of that application. 3 The subpoenas of 3 April 2008 sought production of various documents by Stage 5 Pty Ltd (Stage 5), which is not a party to the proceeding. On 7 May 2008 Stage 5 produced, amongst others, a number of documents it claimed to be privileged. 5 The material relied on by the applicant in support of the motion consisted of three affidavits sworn by Mr Glover and two by Mr Wily. Mr Glover then briefly lists the documents over which privilege is claimed (in an abbreviated form to that described at [3]). 6 In his second affidavit (27 May 2008) Mr Glover lists more fully the privileged documents (see [3]). Stage 5 and The Promotions Factory Pty Ltd entered into a joint venture for the purpose of acting as the official concessionaire in respect of souvenirs, memorabilia and apparel for the 2006 Melbourne Commonwealth Games. Factory 5 was the joint venture vehicle which was formed to be the official concessionaire. I was provided contemporaneously with copies of the documents over which privilege is claimed both as a director of one of the joint venture entities (being Stage 5) with a direct interest in the success of Factory 5, and also, and primarily, in my role as a director of Factory 5 itself. I produced the documents pursuant to the subpoena as I was a director of Factory 5. He intended thereby to convey that he received copies of the documents "contemporaneously with their creation", that is to say, he received each of them on or about the dates they were created. By way of further clarification of his earlier affidavits, Mr Glover says he received the documents "simultaneously in both of my capacities; that is, as a director of the applicant and a director of Stage 5". 8 Mr Wily swore two affidavits. In the first (14 May 2008) he says that on 1 November 2005 he and Mr Hurst were appointed liquidators of the applicant. The balance of the affidavit essentially repeats what Mr Glover said about the documents for which Stage 5 claimed privilege. 9 Mr Wily's second affidavit (21 October 2008) was objected to by the respondents on the ground that he had failed to comply with notices that he attend for cross-examination. Ultimately, nothing turned on the objection because everything in the affidavit was covered by other evidence, in particular the fact that "in or around March 2006" Mr Wily executed the litigation funding agreement the subject of the 26 May 2008 notice to produce in his capacity as liquidator of the applicant. 10 The first respondent relied on the affidavit of its solicitor, Matthew McCarthy, who produced records of the Australian Securities and Investment Commission in respect of the applicant. 11 Division 1 of Part 3.10 of the Evidence Act 1995 (Cth), dealing with client legal privilege, consists of ss 117 to 126 . Section 118 deals with privilege in relation to legal advice. Section 119 deals with privilege in relation to litigation. Sections 121 and 122 concern the loss of privilege. Section 122(2) and (4) deal with loss through disclosure in certain circumstances. 12 There is no definition of the expression "common interest". Odgers gives examples of situations where the common interest would exist --- disclosure by insured to insurer, partner to partner, co-tenant to co-tenant and liquidator to a company's creditors: Uniform Evidence Law (7 th ed, Lawbook Co., 2006) at [1.3.11200]. ... It is to be borne in mind that the concept of common interest privilege is invoked so as to counter a suggestion that privilege has been waived by the deliberate release or publication of privileged material, by the party entitled to claim privilege, to a third party. ... [A] joint or common interest is not to be taken as a rigidly defined concept. It spans a variety of potential relationships, including partnership. 14 In order for interests to be common, they need not be identical: Thiess Contractors Pty Ltd v Terokell Pty Ltd [1993] 2 Qd R 341 (an insured/insurer case). ... Examples of interest sufficient for common interest privilege can be seen in the cases, but the concept is not rigidly defined and it is a question of fact in each case. 16 It is not necessary to decide whether documents 5.2 and 5.3 are protected by common interest privilege. It is now common ground that privilege has been waived in relation to them. Subject to the issues canvassed at [17] to [23], in my view common interest privilege attached to the other documents listed at [3] at the time they came into Mr Glover's possession. I accept the applicant's submission that joint venturers are analogous to partners for the purpose of the existence of a common interest. A fiduciary relationship exists between partners. It will often exist between joint venturers. See United Dominions Corporation Ltd v Brian Pty Ltd [1985] HCA 49 ; (1985) 157 CLR 1 at 10-13 and 15-16. As indicated in the cases discussed earlier, "common interest" is not "a rigidly defined concept", and whether it exists in a particular case is a question of fact. Here the evidence, albeit skimpy as the applicant conceded, is that Stage 5 and The Promotions Factory Pty Ltd (Promotions) entered into a joint venture, using the applicant as the joint venture vehicle, to act as the official concessionaire in respect of souvenirs, memorabilia and apparel for the 2006 Commonwealth Games. Mr Glover was provided with copies of the documents in question at about the time each was created in his capacity as a director of Stage 5 and the applicant. 17 The respondents submit that Mr Glover's claim to "maintain" the privilege is said to derive from Stage 5's shareholding in the applicant, which is then said to give it an interest in the outcome of the proceeding. They contend that it is a question of fact whether, in a particular case, a shareholder has such an interest, and that in a case such as the present, where the applicant is clearly insolvent, no such interest exists because Stage 5's shareholding is valueless. They rely on Re Bauhaus Pyrmont Pty Ltd (in liquidation) [2006] NSWSC 543 ( Bauhaus ). There, one Widdup was a director of the company in liquidation and the indirect owner of all the company's shares. Justice Austin held that Mr Widdup did not have a common interest in privileged documents given to him because there was no prospect of a distribution to contributors in the winding up. 18 The respondents rely on the matters set out at [10] to show that Stage 5 stands in the same position as Mr Widdup in Bauhaus . The applicant sought to distinguish Bauhaus on the ground that it concerned a liquidator of a company giving privileged documents to a shareholder who, at the time of receipt, had no prospect of a return from the winding up. 19 Section 122(5)(b) of the Evidence Act (set out at [11]) excludes the waiver provisions of sub-ss (2) and (4) in relation to a disclosure to a person who, at the time of the disclosure , shared a common interest with the client. Accordingly, I accept the applicant's submission that common interest is to be tested at the time Mr Glover came into possession of the documents. 20 The party claiming privilege has the onus of establishing the basis of the claim. (Emphasis added. That includes common interest privilege. See s 122(5)(b) and Bauhaus at [24]. On onus in relation to client legal privilege in general, see Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332 at 337. The claimant must establish the facts giving rise to the privilege: National Crime Authority v S (1991) 100 ALR 151 at 158-159. 22 Putting aside documents 5.2 and 5.3, the communications cover the period from 20 May to some time after 1 November 2005. Given the parlous condition of the applicant as at October 2005 (assets of $100 and a deficiency of $87,290), that Messrs Hurst and Wily had been asked by the applicant's directors before 20 October 2005 to assist in having the company placed into liquidation, and that in respect of the six months beginning 1 November 2005 the liquidators stated that they did not expect that a dividend would be paid to any class of creditor, I find that when document 5.7 came into Mr Glover's possession some time after 1 November 2005, there was no prospect of Stage 5 deriving any return in respect of its shareholding. I infer from the aforesaid considerations that the position would have been much the same on 14 October 2005. That inference is I think more readily to be drawn in view of the fact that Mr Wily did not make himself available for cross-examination, and offered no explanation for his absence. See [9]. I accept the assurances of Mr Woodward, who appeared for the first respondent, that he had intended to cross-examine Mr Wily on several topics, which he particularised, one of which was when his firm was first approached by the applicant's directors. Given the available inference, thus strengthened, and the onus the applicant bore to establish the facts supporting the existence of the privilege at the time of the disclosure of the documents to Mr Glover, I am not satisfied that in October 2005 there was any prospect of Stage 5 deriving a return in respect of its shareholding. On the material available I am not prepared to infer that in August 2005 there was no such prospect. 23 Thus, while I accept the applicant's submission that the common interest is to be tested at the time each document came into the possession of Mr Glover, I am not satisfied that documents 5.4 and 5.7 satisfy the test. As to the former it is not necessary that I rule on whether, because Mr Strapp was no longer a director of the applicant when he received the document and gave it to Mr Glover, a common interest would otherwise have existed. 24 On par 3 of the notice of motion I will declare that documents 5.1, 5.5 and 5.6 are the subject of common interest privilege between Stage 5 and the applicant, and that the other documents are not. 25 Paragraphs 1 and 2 of the notice of motion can be dealt with together. A notice to produce may be set aside on the ground of lack of apparent relevance. The test of apparent relevance is whether the documents are reasonably likely to add, in the end, in some way or another, to the relevant evidence. Relevance in an evidentiary/admissibility sense is not the test. See Trade Practices Commission v Arnotts Ltd (No 2) (1989) 88 ALR 90 at 101-103; Seven Network Ltd v News Ltd (No 11) [2006] FCA 174 at [6] ; Telstra Corp Ltd v Minister for Communications, Information Technology and the Arts [2007] FCA 1398 at [44] - [48] . 26 In my view the litigation funding agreement is reasonably likely to add to the evidence bearing on whether at the relevant times there was a common interest shared by the applicant and Stage 5. Documents 5.1, 5.4, 5.6 and 5.7 are alleged to have been created for use in existing or contemplated litigation. As at 31 October 2005 the applicant's sole asset was $100 cash. Thus, any litigation contemplated by the applicant would necessarily have been funded by a third party. The funding agreement produced in response to the 26 May 2008 notice to produce and said to have been executed in or about March 2006, was entered into as a result of the resolution of 24 March 2006 that the liquidators be authorised to enter into a "further funding arrangement" to proceed with public examinations and any subsequent legal action. See [10(e)]. These matters show that the terms of the funding agreement are germane to the nature of the interest between the applicant and Stage 5 at all times when litigation and, necessarily, litigation funding were contemplated by the applicant, including the dates on which the Stage 5 documents were created and handed to Mr Glover. 27 The Registrar's order for production of the funding agreement permitted the applicant to redact the document to remove the amounts set out in par 2.1 thereof, that is the sections dealing with the amount of funding available. The only unfairness suggested by the applicant was if there were an order that the document be provided without that redaction. See generally Re Kingsheath Club of the Clubs Ltd (in liquidation) [2003] FCA 1034 at [33] - [34] and Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 455 at [69] - [73] . 28 For the above reasons the notice of motion will be dismissed so far as concerns pars 1 and 2. 29 A matter not covered by the notice of motion was also argued. The other respondents served a notice in much the same form. 30 The material before me shows that the funding agreement produced pursuant to the earlier notice to produce is not the only one that has been entered into by the applicant. I will order that the applicant produce any document that satisfies the description in the October notices. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. | privilege client legal privilege common interest privilege time at which common interest assessed whether joint venturers have common interest evidence |
2 The present proceedings have been brought by the Australian Securities and Investments Commission ("ASIC") by an originating process dated 20 March 2008. Today before me ASIC seeks, on an ex parte basis, interim injunctive relief against each of the defendants. Reliance is placed upon the affidavits of Mr Bryan Anthony Watson, sworn 19 March 2008, Mr Timothy Boase, sworn 4 April 2008 and a further affidavit of Mr Watson, sworn on 8 April 2008. I have before me, a minute of proposed orders, date 9 April 2008 and it is in respect of those orders that interim relief is sought. 3 ASIC contends that there are a number of managed investment schemes, as that is defined within s 9 of the Corporations Act 2001 (Cth) ("the Act "). 2. In respect of the first, second, third and fourth schemes, which are identified, ASIC contends that each was required to be registered as it was a managed investment scheme which had morel than 20 members. In respect of those managed investment schemes alleged by ASIC and which I set out numbered 5 to 10 above, ASIC contends that they were required to be registered as they were managed investment schemes promoted by a person or persons who or which were in the business of promoting managed investment schemes. 5 Without such registration pursuant to subsection 601ED(1) of the Act , a person must not operate the managed investment scheme; that is by virtue of subsection 601ED(5). As a fact, none of the managed investments schemes, which I have referred to, is registered as required by the Act . The interim relief sought by ASIC, in terms of the minute of proposed orders is sought pursuant to subsection 1324(4) of the Act to preserve the position where relevant, pending the determination of its substantive application for permanent orders pursuant to subsection 1324(1), together with subsection 601EE(2) of the Act . 6 The definition of managed investment scheme in s 9 of the Act has three features. In considering these, and whether there is a scheme, it is important to note that a scheme may start off not having each of the three features required by the definition, but may be varied over time, so that the scheme does, at some point in time, have the three required features. I am satisfied, on the evidence before, me that the matters which are set out between paragraph 23 and 41 inclusive of the outline of submissions, filed by ASIC, have to the requisite degree, for an application such as this, been established to my satisfaction. I have taken illustratively the position in relation to the Lot 515, Sabrina Road, Baldivis scheme and applied the relevant evidence and the law to the other schemes mutatis mutandis. Each of the other schemes is considered in detail in those submissions. 8 On 8 February this year, written undertakings were given in relation to the schemes by each of the defendants with the exception of the sixth and eighth defendants. A copy of the undertakings may be found in the affidavit of Mr Bryan Anthony Watson sworn on 19 March 2008 at pages 931 and 932 (annexure BAW132). The undertakings are given variously by Morag Heather McLean Fraser on her own behalf and in respect of certain of the defendants and by Kenneth Andrew Newbigging Fraser, who I understand to be her husband, in respect of himself and some other defendants. 9 The terms of the undertaking are not as extensive as the orders which are sought in the minute of proposed orders filed by ASIC but in essence reflect the same relief which is sought before me today. . . 2. to refrain from to publishing, distributing, disseminating or otherwise circulating any "EOI" or any other document in furtherance of the scheme save for information to investors about the terms of this undertaking and the foreshadowed application by ASIC to wind up the schemes. I understand from counsel that "EOI" is an abbreviation for "Expressions of Interest"; 3. until further agreement with ASIC, that each scheme manager would refrain, whether by themselves or their officers, servants, employees, agents or otherwise howsoever from receiving, soliciting, disposing, or causing to be paid or transferred any funds in connection with or further to the schemes. 4. . . . 5. not to encumber or otherwise deal directly or indirectly with any real or personal property of or funds held by a schemes manager for or in connection with the schemes. 6. . . . 10 Counsel for ASIC has directed my attention to a number of instances, where I am satisfied again to the requisite degree, given the nature of the present application, that there is a serious concern that a number of those undertakings may have been breached. There is a concern as to whether the investors have been kept informed and perhaps even misinformed. I refer, for example, to the position in relation to communications by the first defendant concerning the installation of sewerage at Lot 515 Sabrina Road, Baldivis and the position which is reflected in a letter from the Water Corporation in reply to Mr Boase, who had written concerning that matter, having received a letter from the first defendant which had given him cause for suspicion. The letter, which appears at page 941 of Mr Watson's affidavit and which is dated 19 February 2008, on its face, may well be a breach of undertakings numbers 2 and 5. 11 Then, in the West Australian Newspaper for 15 March 2008, there appeared an advertisement by Ron Farris Real Estate Pty Ltd in relation to the sale of 35-38 residential lots of the land at 13 Sabrina Road, Baldivis. I was advised that this was the street address for the Land at Lot 515 Sabrina Road, Baldivis. Furthermore, a printed brochure seeking expressions of interest in relation to that land was provided by Ron Farris Real Estate to Mr Boase on 18 March this year. Individually, or in combination, those, it would appear, may well be breaches of undertaking number 5. 12 There were other examples of possible breaches in the undertakings to which I was taken by counsel for ASIC. It is unnecessary, presently, to go to each of these for the purposes of the application before me. Nonetheless, generically, the court does have a very real concern, not only that some of the written undertakings given by those defendants who gave them may well have been breached but also that Mr Ken Fraser, it would appear, and putting it no higher at this stage, has made statements which are at odds with the content of other documents, including, for example, whether or not the first defendant is involved in one of the schemes or not. So, I am well satisfied that, by reference to the criteria contained in s 9 of the Act as to what constitutes a managed investment scheme, in each case a serious issue has been demonstrated by the applicant, that they are unregistered managed investment schemes. 13 I have no hesitation in concluding that, on the balance of convenience, the orders ought to be made to preserve the position in relation to each of the schemes. The scheme of the Act concerning managed investment schemes includes, necessarily and obviously, provision for the regulation of those schemes and to thereby confer appropriate protection for investors in the schemes. The Court simply does not know what damage, if any, or what loss, if any, investors may or may not have been occasioned by their investment in these unregistered schemes. When I say that, I say that provisionally, of course, on the basis of this being an ex parte interlocutory application. 14 I will, subject to some minor amendments, make orders in terms of ASIC's minute of proposed orders for 10 April 2008 forming part of which is annexure A which sets out the several schemes to which the orders in the minute refer. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | unregistered managed investment scheme ex parte interim injunction sought alleged breach of undertakings given to australian securities and investments commission serious issues to be tried balance of convenience favours grant if interim relief. corporations |
The respondents are showing the appellant as a citizen of Indonesia whereas the appellant hails from different country. The respondents also erred in to question of law as to the persecution and well founded fear of life. This has led to the grave miscarriage of justice. The applicant be allowed to remain in Australia til the decision of the review before this Honourable Court'. 4 The Appellant is a married Punjabi man born on 7 July 1977 in Sialkot, Pakistan. He is therefore a national of the State of Pakistan. 5 The Appellant arrived in Australia on 10 September 2005. On 29 September 2005 the Appellant lodged an Application for a Protection (Class XA) Visa with the First Respondent. On 18 October 2005, a Delegate of the First Respondent refused the Appellant's application. On 16 November 2005, the Appellant sought review of that decision before the Tribunal. The Appellant contends that he holds a well-founded fear of persecution for the political opinions he holds and articulates concerning the need for a restoration of democracy in the State of Pakistan and that he is unwilling to return to Pakistan owing to such fear. Accordingly, the Appellant contends that Australia has protection obligations under the Refugee's Convention as amended by the Refugee's Protocol ( 1951 Convention Relating to the Status of Refugees and 1967 Protocol Relating to the Status of Refugees ) for the purposes of s 65(1) of the Migration Act 1958 (Cth) ('the Act'). 6 The Appellant's contentions in support of the application for a protection visa are these. The Appellant has had the benefit of seven years of education; speaks, reads and writes the Urdu and English languages; was a self-employed salesman from 1995 to 2005; has a wife, son and daughter resident in Pakistan; and elected to leave Pakistan lawfully without any difficulty in obtaining travel documentation. (b) The Appellant was a member of the Pakistan Muslim League Nawaz Group ('the M L N G'). In documentation lodged in support of the application for a protection visa, the Appellant said that the M L N G was able to secure the maximum seats from the district of Sialkot in both the upper house and the lower house in elections prior to the civil governance of Pakistan by the military. The Appellant contends that he 'suffered' due to developing tension between the M L N G and the Pakistan People's Party. (c) After the assumption of power by the military, leaders of the M L N G in Sialkot formed a movement for the restoration of democracy. The Appellant was a 'front line worker' for the M L N G; participated in processions; and distributed flyers and other literature critical of corruption on the part of military generals. (d) The Appellant contends that the army 'blackmailed' some of the leaders of the M L N G to join the governing regime. The Appellant says he knows some of these persons as the Appellant was the most senior party worker in the M L N G in Sialkot. As a result, the Appellant was persecuted by the leaders of the military governance group and by the military secret service. (e) The Appellant says that he was taken to a police station and assaulted by the police at the instigation of military authorities. The Appellant was told by the authorities that he should not demonstrate against the military governance group and if he did not comply with these demands, false charges would be brought against him as a result of which he would be declared a terrorist and then executed. (f) The Appellant contends that he is an activist struggling for the development of a democratic movement in Pakistan; that he was able to obtain a visa through an agent in order to leave Pakistan; and that if he returns to Pakistan he will ultimately be executed because of the opinions he holds and his prior pro-democracy activity. 8 An application for review of that rejection was received by the Tribunal on 16 November 2005. The Appellant provided the Tribunal with a residential address as the address for all relevant correspondence. On 23 November 2005, the Tribunal wrote to the Appellant at his mailing address advising him that the Tribunal had considered all the material before it relating to his application but was unable to make a favourable decision on that information alone. The Tribunal invited the Appellant to give oral evidence and present arguments in support of his application for a review of the decision of the Minister's Delegate at a hearing at 11.30am on Monday, 19 December 2005. The Tribunal advised the Appellant that in the event that the Appellant elected not to attend a hearing, the Tribunal might make a decision on the application for review without further notice to the Appellant. 9 The Appellant did not attend before the Tribunal on the day and at the time and place nominated for the hearing. The Tribunal elected to make a decision on the review without taking any further action to enable the Appellant to appear before the Tribunal. On 20 December 2005, the Tribunal received a 'Response to Hearing Invitation' form from the Appellant by which the Appellant advised that he did not want to attend a hearing. The form is dated 12 December 2005. Those parts of the form dealing with consequential questions should the Appellant have nominated a desire to attend a hearing and call witnesses, were crossed out and marked 'N/A'. The form is signed by the Appellant. In reaching its decision, the Tribunal observed that a mere claim of a fear of persecution for a particular reason does not establish either the genuineness of the asserted fear or that such a fear is well-founded. The Tribunal observed that the Appellant must satisfy the Tribunal that he holds, objectively, a well-founded fear of persecution as that term is understood for the purposes of the Act for the reasons articulated by the Appellant, namely, the political opinions identified in the claims, should the Appellant return to his country of nationality. In addition, the Tribunal noted that the Appellant must be unable or unwilling because of his well-founded fear, to avail himself of the protection of his country of nationality or be unwilling to return to his country of nationality by reason of the well-founded fear. There are insufficient particulars provided by the applicant to enable the Tribunal to be satisfied that these events occurred. Because he did not attend a hearing, the Tribunal has been unable to test the applicant's credibility in this regard. Therefore, the Tribunal is unable to be satisfied the applicant was in danger of being involved in false cases, declared a terrorist, and killed at the hands of the authorities. The first two and a half pages of the Decision Record recite matters such as the background, the legislation and a number of determinations of this Court and the High Court of Australia dealing with the definitional elements of a 'refugee'. 13 The particular matter of contention raised by the Appellant in the grounds of appeal is this. 14 In that part of the Decision Record of the Tribunal which recites aspects of the 'claims and evidence' reflecting the contentions of the Appellant, the Tribunal correctly notes that the Appellant is a national of Pakistan born in Sialkot. That statement is consistent with the initial 'Background' statement which commences the Decision Record. Although the grounds of appeal do not accurately formulate the contention, the Appellant's proposition must necessarily be that Federal Magistrate Barnes erred by failing to find that errors of fact contained in the Decision Record as to the nationality of the Appellant and as to the relationship between the Appellant's contended well-founded fear of persecution and the country where that persecution might occur should he return, are jurisdictional errors with the result that the decision of the Tribunal is a nullity. The second proposition is that Federal Magistrate Barnes erred by failing to recognise that the Tribunal, as a question of law, had not properly embarked upon a consideration of the Appellant's claim of a well-founded 'fear of life', namely, a fear of persecution should he return to his country of nationality. The second ground seems to me to be inherently associated with the first ground. 18 If the second ground is intended simply to be a contention that the Tribunal failed to have regard to the elements about which it must be satisfied in reaching a decision as to whether Australia has protection obligations under the Refugee's Convention as amended by the Refugee's Protocol, in respect of the Appellant, I am not satisfied that the Appellant has established that contention. 19 I propose to deal with the second part of the Appellant's ground of appeal as a subset of the first. The finding that it [the Tribunal] made was that it was not able to be satisfied that the events complained of by the applicant had occurred given the limited particulars and the unsubstantiated assertions. On that basis, the Tribunal was unable to be satisfied that the applicant was at risk of being involved in false cases, declared a terrorist or killed as he had claimed, or that he had a well-founded fear of persecution for a Convention reason. It is not apparent from the claims set out in the protection visa application (which is the only place in which the applicant made such claims) that the Tribunal failed to properly consider the applicant's claims in the manner contended for by him. Insofar as he seeks merits review, merits review is not available in this court. There is one issue that might be said to be raised by this ground that needs to be addressed. That is the fact that at the commencement of its findings and reasons the Tribunal found that the applicant was a national of "Indonesia" and later in its reasons for decision it found that it was not satisfied on the evidence before it that the applicant faced a real chance of persecution should he return to the "PRC" now or in the foreseeable future. There is absolutely nothing in the material in the protection visa application, the decision of the delegate or the application for review to suggest that the applicant made any claim to be associated in any way with either Indonesia or the PRC, which I take to be a reference to the People's Republic of China. The issue is whether they amount to a jurisdictional error. In these circumstances, while the Tribunal has clearly made a factual error in referring to Indonesia and the PRC in its reasons for decision, I consider that such factual error is not such as to amount to a jurisdictional error, that the Tribunal has understood the applicant's claims and assessed those claims despite the unfortunate reference to the wrong country on two occasions . The written submissions for the respondent cited authority to suggest that in circumstances where the Tribunal accurately recorded the applicant's claims and referred to his correct (Pakistani) nationality on numerous occasions, such a typing error or computer error was clearly irrelevant. (See SZFHM v Minister for Immigration & Multicultural Affairs [2006] FMCA 321). While such error does not establish jurisdictional error, it is clearly a matter of concern, particularly where it has occurred on more than one occasion in the same decision. However, reading the Tribunal decision fairly and as a whole and with an eye not too finely attuned to error (see Minister for Immigration & Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259) it is not apparent that the Tribunal failed to understand or consider the applicant's claims or otherwise erred in a manner constituting jurisdictional error. Accordingly, having regard to the totality of the Reasons, the First Respondent says that it can be seen that the Tribunal member directed his mind to all the relevant matters and that the Tribunal engaged in a bona fide analysis of the factual matters in an attempt to exercise the statutory power. 22 The First Respondent says that to the extent that there was an error, it was an error within jurisdiction. 23 The Appellant contends in the short grounds of appeal that the reference to the Appellant as a citizen of Indonesia rather than Pakistan together with the rejection of the Appellant's claim of a well-founded fear of persecution has led to a 'grave miscarriage of justice'. To the extent that the Tribunal was influenced by any impression or belief that this Appellant was an Indonesian national or any well-founded fear of persecution bore any relation to anything that authorities in the People's Republic of China might do, such considerations may constitute errors which reflect a failure to afford fairness to the Appellant in the exercise of the review jurisdiction and thus jurisdictional errors. If so, the decision of the Tribunal cannot stand as such a decision is a nullity. 24 The question is whether errors of the kind described considered in the context of the analysis of the facts and circumstances of the Appellant's claims, on the face of the Decision Record, are jurisdictional errors. 25 The Appellant contends that such errors are jurisdictional errors and sought before Federal Magistrate Barnes the issue of the constitutional writs of certiorari and mandamus to quash the decision of the Tribunal and compel the Tribunal to re-hear and determine the application for review of the Delegate's decision, according to law. The First Respondent contends that because the errors are not jurisdictional errors, the decision of the Tribunal is final and conclusive and not susceptible of challenge before the Court by reason of s 474(1) of the Act and Division 2 of Part 8 of the Act. 27 A decision of the Minister's Delegate to refuse to grant an applicant a protection visa is a decision susceptible of review before the Tribunal (s 411(1)(c)) by the non-citizen who is the subject of the primary decision (s 412(2)). Section 414(1) of the Act provides that subject to subsection (2) [which has no application in the present circumstances], if a valid application is made under s 412 for review of a reviewable decision, 'the Tribunal must review the decision'. In exercising that jurisdiction, the Tribunal may exercise all the powers and discretions conferred by the Act on the person who made the decision (s 415(1)). The Tribunal may affirm or vary the decision, remit the matter for reconsideration in accordance with such directions or recommendations of the Tribunal as are permitted by the regulations or set the decision aside and substitute a new decision (s 415(2)). If the Tribunal varies the decision or sets the decision aside and substitutes a new decision, the decision as varied or substituted is taken to be a decision of the Minister (s 415(3)). 28 The Tribunal in carrying out its functions is to pursue the objective of providing a mechanism of review that is 'fair, just, economical, informal and quick' (s 420(1)) and in reviewing a decision the Tribunal is not bound by technicalities, legal forms or rules of evidence and must act according to 'substantial justice and the merits of the case' (s 420(2)). 29 Division 4 of Part 7 is by s 422B(1) , 'taken to be an exhaustive statement of the requirements of the natural justice hearing rule in relation to the matters it deals with'. The Division deals with the entitlement of an applicant for review to give the Registrar of the Tribunal certain documents (s 423) ; the power of the Tribunal to seek additional information and have regard to that information if obtained and extend invitations to a person to give additional information by methods prescribed by the Act (s 424) ; the obligation to provide certain information to the applicant (s 424A) and the specification of the way additional information might be given (s 424B) ; the entitlement of the Tribunal to make a decision in the absence of additional information (s 424C) ; the circumstances in which the Tribunal has an obligation to invite an applicant to appear before the Tribunal to give evidence (s 425) and the requirements of notice (s 425A) ; the entitlement of an applicant to request oral evidence before the Tribunal from a nominated person (s 426) ; the entitlement of the Tribunal to make a decision should the applicant fail to appear at a hearing (s 426A) ; and the powers of the Tribunal for the purpose of a review of a decision (s 427) , and other provisions. 30 Section 430(1) of the Act provides that where the Tribunal makes a decision on a review, the Tribunal must prepare a written statement that sets out the decision of the Tribunal; the reasons for the decision; the findings on any material questions of fact; and references to the evidence or any other material on which the findings of fact are based. 31 Division 1 of Pt 8 of the Act deals with those decisions under the Act which the Act treats as final. A privative clause decision is final and conclusive, must not be challenged, appealed against, reviewed, quashed or called in question in court and is not subject to prohibition, mandamus, injunction, declaration or certiorari in any court on any account (s 474(1)). Section 474 of the Act contains a broadly based description of the elements making up a 'decision' for the purposes of the definition of 'privative clause decision'. A 'privative clause decision' means a decision of an administrative character made, under the Act, or under a regulation or other instrument made under the Act subject to certain exceptions (s 474(2)). Those definitions apply to decisions made by the Tribunal in the conduct of a review pursuant to Pt 7 of the Act of a decision of the Delegate of the Minister. Division 2 of Pt 8 deals with the jurisdiction and procedure of courts and the matters addressed in that division are not to be taken as limiting the scope or operation of a privative clause decision. Section 476(1) confers upon the Federal Magistrates Court the same original jurisdiction in relation to migration decisions as the High Court exercises under paragraph 75(v) of the Constitution although the Federal Magistrates Court has no jurisdiction by force of s 476(2) in relation to a 'primary decision' which is defined to include a privative clause decision susceptible of review by the Tribunal pursuant to Pt 7 of the Act, among other things. 33 Central to the exercise of the jurisdiction is an analytical process that focuses upon a fair, just, economical, informal and quick assessment of the facts and contentions of the applicant so as to ensure that the applicant for a protection visa is afforded substantial justice in the context of the merits of his or her case. Errors which misdescribe an applicant as an Indonesian and reach conclusionary observations that the Tribunal cannot be satisfied that the applicant holds a well-founded fear of persecution should he return to a country which is identified as other than the country of nationality, suggest that the deliberative process going to the merits of the Appellant's case was infused with notions which are erroneous and thus irrelevant to the Appellant's case and suggest that the Tribunal member may have had in mind facts, circumstances and considerations referable to other cases. An inference is open either having regard to the workload before the Tribunal or perhaps because of the proximity of determination of other cases involving nationals from Indonesia and the People's Republic of China that the required immediacy of focus and deliberation of the specific claims of the Appellant and the justice and merits of the case were influenced by erroneous considerations. As a result, the Tribunal failed to afford the Appellant the fairness required by s 420(1) and failed to act according to the substantial justice and merits of the Appellant's case as required by s 420(2). 34 A question then arises as to whether these failures are jurisdictional failures in which event the decision of the Tribunal is not a decision made 'under the Act' and not within the scope of the protection of the privative clause provisions of the Act ( Plaintiff S157/2002 v Commonwealth [2003] HCA 2 ; (2003) 211 CLR 476). If such an administrative tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it'. The idea that there are degrees of error, or that obviousness should make a difference between one kind of fraud and another, is not always easy to grasp. But it plays a significant part in other forms of judicial review. For example, the principles according to which a court of appeal may interfere with a primary judge's findings of fact, or exercise of discretion, are expressed in terms such as "palpably misused [an] advantage", "glaringly improbable", "inconsistent with facts incontrovertibly established", and "plainly unjust". Such an idea is influential in ordinary appellate judicial review, and it is hardly surprising to see it engaged in the related area of judicial review of administrative action'. That assessment takes into account whether the Tribunal has acted bona fide in an attempt to properly pursue the power conferred; whether the decision relates to the subject matter of the Act; and whether the decision is reasonably capable of reference to the power. Sir Owen Dixon observed at p 616 in Hickman that any decision of the particular Local Reference Board which 'upon its face appears to be within power and is in fact a bona fide attempt to act in the course of its authority, shall not be regarded as invalid' . 38 The respondent contends that the Tribunal so acted and did not misdirect itself as to the exercise of the power, as the analysis of the facts reveals a consideration of all the circumstances and claims made by the Appellant. However, importantly, an assumption that the Tribunal acted in the way described by Sir Owen Dixon does not qualify the power of the Tribunal and render within power that which is not. Rather, those considerations might qualify, properly construed in the context of the Act overall, the protection and reach of the privative clause ( Plaintiff S157/2002 v Commonwealth (supra) per Gaudron, McHugh, Gummow, Kirby and Hayne JJ [99]). 39 A proper construction of the imperative objective of the Act of a 'fair review' and the statutory direction to the Tribunal to exercise the review jurisdiction according to the 'substantial justice of the case' ([27] of these Reasons), suggests that a jurisdictional limitation upon the relevant decision-making power includes both a failure to act fairly and the taking into account erroneous matters, in the course of the analytical process of considering those facts, circumstances and conditions appropriate to the Appellant's claim. Since such failures go to the valid exercise of the power, the proper construction of 'Division 1 --- Privative clause' (s 474) of the Act having regard to the legislative instrument overall is that the section does not protect the identified failures of the Tribunal from review. 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 to 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 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. The conclusion is that, be the error one of omission or commission, some essential or indispensable requirement for jurisdiction has not been met. An imperative duty has not been discharged or some inviolable limitation has been breached and therefore the action or decision is null and void: Plaintiff S157 at [76] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ. The error may be easy to detect (manifest error) or more difficult but, either way, an action or decision is either one which falls within the decision-maker's lawful authority or it is not. If it falls within the decision-maker's lawful authority then the error is made "within jurisdiction". If it does not fall within the decision-maker's lawful authority then the error is a "jurisdictional error" and as such it cannot be a valid action or decision. In Re Refugee Tribunal; Ex parte Aala [2000] HCA 57 ; (2000) 204 CLR 82 at 100 (38) Gaudron and Gummow JJ noted that Gaudron J had left open in Abebe v The Commonwealth [1999] HCA 14 ; (1999) 197 CLR 510 at 553 [112] the question of whether procedural fairness is to be seen as a common law duty or an implication from the relevant statute. Their Honours concluded in Ex parte Aala that having regard to Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 at 615 per Brennan J, Haoucher v Minister for Immigration and Ethnic Affairs [1990] HCA 22 ; (1990) 169 CLR 648 at 652, per Deane J, Annette's v McCann [1990] HCA 57 ; (1990) 170 CLR 596 at 604 --- 605 per Brennan J, and Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21 ; (1999) 197 CLR 611 at 650 [126] per Gummow J, that the exercise of a discretionary power statutorily conferred is constrained by an obligation to exercise the power reasonably (which includes an obligation to provide procedural fairness) as a function of the proper construction of the legislation itself. 43 Once it is established that the Tribunal has asked itself the wrong question by, for example, asking whether it can be satisfied that the Appellant faces a real chance of persecution should he return to the Peoples Republic of China, or, has identified the wrong issue, or taken into account, in one part of its deliberations, a notion that the Appellant is an Indonesian rather than a Pakistani national, the Tribunal is seen to have failed to provide the Appellant with procedural fairness and thus jurisdictional error arises ( Re Refugee Review Tribunal and Another; Ex parte Aala [2000] HCA 57 ; (2000) 204 CLR 82 at 109 [59] per Gaudron and Gummow JJ). The repository of the power is constrained by an obligation to act reasonably by providing procedural fairness. A decision made in light of a failure to act reasonably is not a decision made under the Act for the purposes of s 474. 44 The obligation to undertake an un-distracted, focussed and deliberative assessment of only those facts and circumstances referrable to the case of the Appellant is an essential element of the discharge of the review function. 45 Accordingly, the decision of the Tribunal is a nullity ( Minister for Immigration & Multicultural Affairs v Yusuf (supra)). Notwithstanding that the Tribunal has in its decision record reflected an analysis of the claims made by the Appellant, the erroneous references to Indonesian nationality and the notion of a well-founded fear of persecution should the Appellant return to the Peoples Republic of China can only lead to the conclusion that the errors have affected the exercise of the power. The references to these matters are neither merely typographical errors nor errors of fact at the margin of the Tribunal's review. Since the errors go to the nationality of the Appellant and the source of nation state conduct or nation state tolerance of conduct by others giving rise to a claim of a well-founded fear of persecution, the errors affect the exercise of the power. The errors must be taken to have affected the exercise of the power as the Tribunal has recited the errors as material matters for the purposes of s 430(1) of the Act. The notion of an 'affect' upon the exercise of a power seems to me to comprehend a well placed apprehension on the part of the court in the exercise of supervisory review that the identified errors going to jurisdiction influenced the mind of the decision-maker in purporting to exercise the power. The two errors are central matters in the review of the decision of the Minister's Delegate. The appeal is to be allowed and the decision of his Honour must be set aside. The Appellant's application for the issue of the Constitutional writs of certiorari and mandamus quashing the decision and directing the Refugee Review Tribunal to conduct a review of the decision of the Minister's Delegate, according to law is granted and the respondent is ordered to pay the Appellant's costs before the Federal Magistrates Court. 47 The respondent is ordered to pay the Appellant's costs of the appeal. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of whether errors of fact evident on the face of the decision record of the refugee review tribunal constitute jurisdictional errors consideration of whether erroneous references in the tribunal's decision to the nationality of the appellant as an indonesian and notions of a well-founded fear of persecution should the appellant return to the people's republic of china, in circumstances where the appellant is a national of pakistan, constitute errors going to jurisdiction consideration of additional grounds. migration |
It was not his money, but he claims to be entitled to have it returned to him. The money was seized as part of a police search. Since the proceedings were commenced in this Court on 18 May 2006, an order has been made in another Court effectively preventing any dealings with the money presently in the control of the respondent, who is the Commissioner of the Australian Federal Police. 2 Relevant facts are not in issue. At all times, the applicant has not asserted ownership of the $130,000, only possessory title. His account of how it came into his possession was that he had been asked by his brother-in-law, Richard Ng (Aik Hoon Ng), to deliver the money to him. He gave evidence before the District Court of New South Wales that he believed the money was to be used for a legitimate purpose by Richard, in running a money exchange business. He said that on returning from China on 18 February 2004 he was picked up by his wife at the airport. Richard rang the applicant and told him that his partner in Sydney, Peter Chen (Zen Chi Chen), wanted to give Richard some money but that he (Richard) was busy and asked the applicant to pick it up. Richard said he would come to Sydney in two or three days' time. Peter called the applicant and asked to meet him at Hurstville where the money was handed over in a car. The applicant was apprehended by the police on his way home after receiving the money. It was then that the money was seized. 3 On 18 February 2004, the applicant was charged with two offences in relation to the money, an offence under section 400.9 of the Criminal Code (Cth) (possession of property reasonably suspected of being proceeds of crime) and an offence under s 527C of the Crimes Act 1900 (NSW) (persons unlawfully in possession of property). In March 2002 the applicant was acquitted of the first charge and the second charge was dismissed. On 28 March 2006 the applicant's solicitors requested the Australian Federal Police return the money, a request they noted in a letter of 31 March 2006 and repeated on 5 April 2006. The $130,000 has not been returned. 4 The applicant has filed an application, a statement of claim, and three amended applications. Initially the applicant's claim was based only on a claim in detinue, but later he contended the respondent had a statutory duty to return the money. The respondent resisted the claim on the basis that since the applicant demanded the return of the money, he has had to consider the basis of the applicant's claim and competing claims of potential owners of the money. The respondent also said that because there was a dispute about the ownership of the money between, inter alia, the Deputy Commissioner of Taxation and the applicant, s 3T and s 3ZV of the Crimes Act 1914 (Cth) authorised the retention of the money. This aspect of the defence is based on a notice from the Commissioner of Taxation the respondent received on or about 7 June 2006, issued pursuant to s 260-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth) in relation to the money. 5 Initially the respondent contended the application did not engage the jurisdiction of this Court given that it was only a claim in detinue. The matter proceeded, and the applicant reformulated his case. This contention has been abandoned. 6 On 27 October 2006 the respondent filed an amended defence where he added, in answer to the whole of the statement of claim, that on or about 21 July 2006, Howie J of the Supreme Court of New South Wales in proceedings no. That upon the order under the Proceeds of Crime Act 2002 (Cth)) made by Howie J in the Supreme Court of New South Wales on 21 July 2006 ceasing to be in force, the respondent return to the applicant the $130, 000.00 taken from him on 18 February 2004 and interest on that amount pursuant to s 51A of the Federal Court of Australia Act 1976 . 2. A declaration that, as between the applicant and the respondent, the applicant, prior to the making of the order under the Proceeds of Crime Act 2002 (Cth) by Howie J on 21 July 2006, was entitled to possession of the $130, 000.00 taken from him on 18 February 2004. A declaration that, as between the applicant and the respondent, the applicant is entitled to possession of the $130,000.00 taken from him on 18 February 2004. The respondent did not claim to be the true owner. It also appeared to be accepted by the respondent that a claim in detinue should succeed unless there was a statutory power authorising the respondent to retain the money for the time being, or a duty or obligation deriving from statute to retain the money. Reference was made by the parties to both the Crimes Act 1914 (Cth) and the Proceeds of Crime Act 2002 (Cth) as potentially the source of the power to seize the money initially. In several respects, the relevant provisions are not materially different. I apprehend I can proceed, uncontroversially, on the basis that the source of power was the Crimes Act 1914 (Cth). That Act , it was said by counsel for the respondent, authorised the retention of the money for a period after the initial demand for its return was made by the applicant. The respondent did not contend that he is presently authorised by the Crimes Act 1914 (Cth) to retain the money. However, what is now said by the respondent is that the order of Howie J prevents him returning the money. This is not disputed by the applicant but the orders finally sought, are intended to accommodate this. 9 The applicant's case has a number of elements. First, that a right or entitlement to possession can exist without actual possession or title of the property. Correctly, this is not disputed by the respondent. Secondly, that the effect of an order restraining the disposal of that money does not destroy a current right to possession but has the limited effect of precluding the exercise of such a right. Thirdly, that it would be a proper exercise of this Court's jurisdiction to make a declaration in respect of the money as between the applicant and the respondent apart from the rights of the owner of the money or the rights of other parties in respect of the money. 10 Turning to the first element, that there can exist an "entitlement to possession" or "right to possession" by a person who no longer has possession and asserts no other right in relation to the thing. In An Essay on Possession in the Common Law (Oxford: Clarendon Press, 1888), Sir Frederick Pollock discussed the "right to possess or to have legal possession" as something that could exist apart from both physical and legal possession. A. may have the right to possess a thing as against B. and every one else, while B. has at the same time a right to possess it as against every one except A. So joint tenants have both single possession and a single joint right to possess, but tenants in common have a single possession with several rights to possess. When a person having right to possess a thing acquires the physical control of it, he necessarily acquires legal possession also. 11 In the passage above a reference is made to a "suspended right to possession". Here the owner has the general right to possession, which however is suspended during the month. The customer has the right to possession during the month. The friend has the possession as a sub-bailee of the customer. The servant has the physical possession and nothing else. 12 Section 3ZV came into force on 30 November 1994. Broadly speaking, the police would have retained the right if the money had been the subject of a dispute as to ownership or it was needed as evidence or was forfeited to the Commonwealth or there was an order or law in place requiring its retention, destruction or disposal. However it would appear to be not relevantly different from the common law. The power to enter on private property and seize goods is a substantial interference with ordinary liberties and should not be extended beyond limits which the law prescribes: see Levine v O'Keefe [1930] VLR 70 at 72 ; Challenge Plastics Pty Ltd v Collector of Customs (Vic) (1993) 42 FCR 397 at 402-409. During the recent trial of Mr AU, he gave evidence under oath before Justice Solomon that the AUD$130,000.00 in question was not his. He gave evidence of two (2) individuals to whom he believed the money belongs. At the conclusion of these enquiries, if it is determined that Mr AU has a legal claim to the money (or is at the very least, legally entitled to possess it), then the money will be returned to Mr AU, or his legal representative, at the earliest opportunity. Nor is there evidence that any of the other circumstances operated allowing the retention of the money, save that mentioned in the letter, which points to the arguable suggestion that the money was the subject of a dispute as to ownership. There is no authority that I can find on the meaning of a "dispute as to the ownership" as it appears in s 3ZV of the Crimes Act 1914 (Cth). The Full Court in Flack treated the conditions in s 3ZV regarding reasons for seizure and use in evidence as being satisfied where the National Crime Authority conceded that those goods were not required for the purposes of further investigation and prosecution. But when Howie J made the order of 21 July 2006 the provision in s 3ZV ("Subject to any contrary order of a court") was enlivened. 15 Counsel for the respondent submitted that the applicant presently does not have a right to immediate possession as against the respondent. This submission probably proceeded on the basis that this was a legal assumption underpinning the applicant's proposed order 3 and probably proposed order 1. The decision of the of the House of Lords in Kahler v Midland Bank Ld [1950] AC 24 establishes the proposition that a claim for possession will fail if there is a "defect" in an asserted right to immediate possession. In that case the "defect" was founded in contract. The order of Howie J is almost certainly of the same character. That is, it creates a "defect" in an asserted right to immediate possession. The respondent, who would be comprehended by the words "any person" in the order, cannot deal with the property. That would include relinquishing possession to the applicant. The respondent has an obligation to retain possession of the money. In the face of that obligation, it is difficult to ascribe to the applicant a present right of immediate possession which is not defective. 16 The issue of whether the applicant has a right to possession arises in the context of the applicant maintaining an action in detinue. That cause of action involves a right to immediate possession of goods (sometimes also spoken of as an immediate right to possession), and a refusal to return the goods. However, the applicant, in maintaining an action in detinue must show that when the demand was made and for so long as the wrongful detention continued, the applicant had a right to immediate possession: see Gollan v Nugent [1988] HCA 59 ; (1988) 166 CLR 18 at 25 per Brennan J. Detinue has been described as a continuing cause of action, which accrues at the date of the wrongful refusal to deliver up the goods and continues until delivery up of the goods or judgment in action for detinue: see General and Finance Facilities Ltd v Cooks Cars (Romford) Ltd [1963] 1 WLR 644 at 648 per Diplock LJ. 17 His Lordship described (at 650) the action in detinue as one which "partakes of the nature of an action in rem in which the plaintiff seeks specific restitution of his chattel. At common law it resulted in a judgment for delivery up of the chattel or payment of its value as assessed, and for payment of damages for its detention". These authorities would indicate that in an action in detinue, no relief would issue if, at the time of judgment, the person asserting possessory title had a "defective" right to immediate possession which could arise from the alleged tortfeasor having a "superior title", for example, deriving from statute: see Russell v Wilson [1923] HCA 60 ; (1923) 33 CLR 538 at 547-8 per Isaacs and Rich JJ. 18 Proposed Orders 2 and 3 are declarations about the right to possession of the money as between the applicant and respondent firstly at a time before judgment is given and secondly, seemingly putting to one side whatever might be the legal effect of Howie J's order. Declarations of right are discretionary orders. The discretionary grounds for refusing a declaration are essentially that the subject matter of proceedings is hypothetical and that a grant of relief would be of no utility to the parties. The requirement that the subject matter not be hypothetical encompasses the requirement that there exist a dispute or controversy, and that legal rights, liabilities or relationships be concerned. The terms of the orders the applicant seeks, raise the issue of whether there is an immediate right to be established by the Court and whether granting the declaration sought would conclude any dispute before the Court. 19 In my opinion, there is no utility in making proposed order 2, even if the facts supported the making of the order. It is not a declaration addressing immediate rights but rights which may have existed in the past. It is not apparent to me what purpose is served by making the declaration. In addition, the proposed order is unconfined as to time. That is, it speaks of "prior to..... 21 July 2006". On any view of the facts, the respondent was lawfully in the possession of the money at, and for a period after, its seizure. The lawfulness of the seizure has not been disputed by the applicant. It is true that the applicant has submitted that at the time he made his demand, the retention of the money by the respondent was not authorised by the statute. This contention has some relevance to the question of costs which is discussed shortly. However, that is not a basis for making a declaration now by way of final judgment, in the terms proposed. 20 For similar reasons, there is no utility in making proposed order 3. In these proceedings, the applicant is asserting a right to immediate possession. If established, it would found a consequential order requiring the respondent to return the money. But no such order could be made in view of the order of Howie J. It is true that s 21(1) of the Federal Court of Australia Act 1976 (Cth) authorises the making of binding declarations of right whether or not any consequential relief is or could be claimed. However, proposed order 3 does not truly declare the rights of the parties because the respondent has a present right, indeed duty, to retain possession of the money. In substance, the proposed order is, at best for the applicant, meaningless and probably mistates the position. During the currency of the order of Howie J, the applicant has no right of possession as against the respondent or, indeed, anyone else. 21 Proposed order 1 addresses a circumstance which has not yet arisen. That is, when the order made by Howie J ceases to be in force. There are a range of possibilities including combinations of outcomes arising under the Proceeds of Crime Act 2002 (Cth). Though the respondent conceded that absent the Supreme Court order, the applicant was entitled to have the money returned to him, the situation in the future, when the order ceases to be in force, can only be hypothetical and can not be said to constitute a matter ripe for determination: Re McBain; Ex parte Australian Catholic Bishops Conference [2002] HCA 16 ; (2002) 209 CLR 372. 22 As the applicant has not made out a case for any of the orders finally sought, the application should be dismissed. 23 The submissions of the parties on the question of costs invited analysis of whether the applicant would or might have succeeded in obtaining relief before the order was made by Howie J. In cases which are settled either by consent orders or discontinuance, it is ordinarily inappropriate to determine who would have succeeded in order to deal with the question of costs. There is no reason to depart from that approach in this case where an intervening event (Howie J making the order) relevantly altered the legal foundation of the case originally advanced by the applicant. Similarly, I see no reason to depart from the approach adopted in cases which have settled, by considering whether the parties acted reasonably in both bringing the proceedings and defending them. It was an approach adopted by Heerey J in Servier Laboratories (Australia) Pty Ltd v GenRx Pty Ltd [2006] FCA 1763 in which an act of the Therapeutic Goods Administration, after the proceedings had been commenced, effectively destroyed the basis of the applicant's. 24 In the present matter, I am satisfied that both the applicant and the respondent acted reasonably in bringing and maintaining the proceedings and defending them. The claim, when made at the commencement of the proceedings, that the respondent was obliged to return the money, was one of substance (putting to one side whether the claim as originally formulated engaged the Court's jurisdiction). The defence of the respondent, as it changed over time, was mostly of substance. The only reservation I have concerns a period when the the return of the money had been demanded, and the reasons advanced for not returning it might not have withstood close scrutiny. Had the issues fallen for judgment at that time, the defence that there was a statutory right to retain the money because there was an issue about ownership, may not have proved particularly resilient. However, I think it is inappropriate to focus on that period and, in my opinion, the question of costs should be approached more holistically given that the applicant has persevered with the application notwithstanding the orders made by Howie J. In my opinion, each party shall bear their own costs. Accordingly, 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 Moore. | money seized from applicant pursuant to crimes act 1914 (cth) applicant not the owner of the money subsequent order of a court restraining the disposal of the money applicant seeking order for return of money and declarations about his possessory rights administrative law |
Lynx's case is that from 1993 for a period of some four years it engaged in research and development for the design of a new or improved railway wagon body suitable for carrying freight and bulk material. It described this project as the 'Lynx 3CR12 Wagon Project'. Each of the first, second and third respondents carry on business manufacturing railway wagons. In April 1996 Lynx entered into an agreement with the first respondent to disclose confidential information to it in respect of the Lynx 3CR12 Wagon so that it could cooperate with the first respondent in a joint response to an invitation to tender for the design, manufacture, supply and testing of ore cars. The invitation was from BHP Iron Ore Ltd (BHP). Under that agreement the first respondent received from Lynx a number of design drawings and technical information. Confidentiality terms were reached. For present purposes they do not require description. Lynx was unsuccessful in its tender to BHP. It subsequently withdrew from a tender to Hamersley Iron Ore Ltd (Hamersley) and was also unsuccessful in a later tender to Hamersley. At a later time the first, second and third respondents manufactured and supplied each of BHP and Hamersley with rail wagons described as the 'Bradken 9100 Wagon' and the 'Rio Tinto Pilbara Iron Ore Car'. Proceedings were commenced by Lynx. It contended that in breach of the various confidentiality agreements, the first respondent had used and disclosed to others, Lynx's confidential information for the purpose of manufacturing and procuring the manufacture of those rail wagons. It also claimed breaches of copyright. All respondents deny any breach and contend that each of the wagons was designed by a 'company in the Worley Group trading as Williams Worley Rail'. The respondents say they have not supplied or caused to be provided any of the confidential information to that company or any other entity. There had been a deal of correspondence in relation to the terms on which discovery should be given particularly in relation to the question of confidentiality of disclosure. For present purposes it is sufficient to say that there were two categories of documents referred to in terms I will discuss below in respect of the debate about confidentiality orders. Lynx seeks to have revoked, discovery orders relating to the second category. Following those consent orders being made, Lynx made clear to its solicitors that it had not given instructions or permission for inspection of the second category of documents. Lynx then sought to vary the consent orders made on 18 March 2008 so as to preclude general inspection of the documents in the second category. Lynx relies on two affidavits. The first is an affidavit of Vladimir Mazur sworn on 2 April 2008. Mr Mazur is a director of Lynx and deposes to the fact that 'on reflection' the order made by consent on 18 March 2008 did not sufficiently deal with and accommodate a distinction to be drawn between the confidential documents alleged by Lynx to have been disclosed to WorleyParsons in breach of Lynx's rights and several files of further confidential documents which, other than the few documents forming part of the first category (the breach documents) were never disclosed or alleged by Lynx to have been disclosed to WorleyParsons. Mr Mazur says that in relation to the second category of documents, disclosure to the WorleyParsons' witnesses would be extremely prejudicial to Lynx and would create a real risk of rendering futile the enormous time, effort and money expended by Lynx in research and development of its design. Counsel for Lynx contends that none of the documents in the second category are directly relevant to the action against WorleyParsons. Nor are they relevant to the action against the first, second and third respondents he says. Mr Mazur and counsel for Lynx submit that 'the only reason why these documents were discovered at all was to enable expert witnesses to give consideration to these documents to illustrate the extent of the skill, labour and effort expended by the applicant in reaching its design, and to illustrate the timeline showing each stage of the applicant's research and development'. Mr Mazur stresses that Lynx and WorleyParsons are competitors. In addition to the affidavit from Mr Mazur, the instructing solicitor for Lynx has sworn and filed an affidavit making it clear that notwithstanding Mr Mazur's reasons for objecting to disclosure of the second category of documents, Mr Mazur had not expressed those instructions to the instructing solicitors. The solicitor concerned had returned from approximately four weeks leave on the morning of the directions hearing and had assumed that instructions had been given by Lynx to reach a consent in terms of the minute prepared by WorleyParsons rather than in terms originally prepared and filed by Lynx. She makes clear that her subsequent perusal of the relevant files has shown that her assumption that Lynx had instructed the solicitors and thus counsel to consent in terms of the WorleyParsons' minute was incorrect. Due to the short timeframe within which WorleyParsons' minute was received (which had been the afternoon before the morning of the directions hearing) the WorleyParsons' minute had not in fact been forwarded to Lynx and thus, while the solicitor had understood that instructions to consent to that minute had been given, in fact they had not. It submits that any consent order is subject to the power of the Court to justly regulate the process of litigation: Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 WLR 185 at 191. Order 10 r 1(3) provides that 'the Court may revoke or vary any order made under (1), (1A) or (2)'. There is no dispute that the order concerned falls within those sub-rules. In Greenpark Pty Ltd v Odin Inns Pty Ltd [1989] WAR 322 it was held by the Full Court of the Supreme Court of Western Australia that an order made by consent is within the unlimited power of the court to revoke and vary orders in the interest of justice. A Master of the Supreme Court of Western Australia had varied a consent order and that order gave rise to an appeal. I do not see why it should not be so. Counsel for the plaintiff argued that by reason of the provisions of O 27, r 5(2) the wide discretionary powers apparently given by r 10 should be read down so as not to include changing an order in the manner in which Master Seaman changed it. Furthermore, it is said, that as it was a consent order there was no jurisdiction to vary it. But in any event, there is a long line of authority which supports the view that an interlocutory consent order may be varied for mistake and, indeed, if there has been a change in circumstances: Halsbury's Laws of England (4 th ed, 1979) Vol 26 par 563; Mullins v Howell [1879] 11 Ch 763 ; Brister v Brister [1970] 1 WLR 664 ; [1970] 1 All ER 913 ; Purcell v F C Trigell Ltd [1971] 1 QB 358. I do not believe there is any justification for reading r 10 down. I has been before the court in Flynn v Karina Constructions Pty Ltd (unreported, Supreme Court of Western Australia, Smith J, 11 May 1977). In that case his Honour dismissed an appeal from an order made by the master whereby he ordered that default judgment entered by a plaintiff be set aside conditional upon interrogatories previously sought by the plaintiff being answered within fourteen days. His Honour's decision was based squarely on the provisions of O 27, r 10, which he felt gave ample power to the master to make the order. A similar provision has also been considered by the Court of Appeal in John Walker & Sons Ltd v Henry Ost & Co Ltd [1970] 1 WLR 917 ; [1970] 2 All ER 106. His Honour reached the same conclusion. That decision was followed in The Director of Public Prosecutions for Western Australia v Mansfield and Ors [2005] WASC 237. Although an appeal was allowed from that decision ( Mansfield v Director of Public Prosecutions [2007] WASCA 39) the following passage was not affected by the terms of the appeal. In that case the parties had agreed to an order that the appellant pay $20,000 as security for costs into court within 45 days and in default the appellant's appeal arising under the Patents Act 1952 (Cth) be dismissed. The appellant failed to comply with the order and subsequently applied for variation of the order so as to enable compliance. At first instance the primary judge held that there was no power in the court to make the desired variation. The Full Court ( RD Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1988) 18 FCR 389) allowed an appeal even though the order had, in that particular instance (due to the nature of the negotiations between the parties), given effect to a contract. But Woodward and Foster JJ held that the court had an overriding power to control its own proceedings so as to vary interlocutory orders even when made as a result of a binding contract. It applied Siebe Gorman [1982] 1 WLR 185. Jenkinson J disagreed. Woodward and Foster JJ also held that the court, in any event, had the power in the circumstances of that case to override the terms of the contract by altering the time limit stipulated in it even after the time stipulated in the order made as a result of the contract had elapsed and the appeal to which it related had been dismissed. For WorleyParsons it was submitted that the liberty to apply order from 18 March 2008 directions did not give jurisdiction to actually vary or revoke the substantive orders ( Nicholson v Nicholson (1974) 4 ALR 212 per Jenkyn J at 363). Nevertheless, treating the application to vary the second part of the orders of 18 March 2008 as an independent motion, the governing principles it was suggested are dealt with in the cases examining O 35 r 7(2)(c) of the Federal Court Rules . It was submitted that the discretion to vary or set aside an order pursuant to O 35 r 7(2) of the Federal Court Rules will only be exercised in exceptional circumstances: Australian Competition & Consumer Commission v Black on White Pty Ltd [2004] FCA 363 ; (2004) 138 FCR 314 per Spender J at [14]-[16]; Kullilli People No. 2 and Kullilli People No 3 v Queensland [2007] FCA 512 per Tamberlin J at [17]; Dudzinski v Centrelink [2003] FCA 308 per Spender J at [11]; Paras v Public Service Body Head of Department of Infrastructure (No 2) (2006) 152 IR 352 per Young J at [4]; Wati v Minister for Immigration & Multicultural Affairs (1997) 78 FCR 543 per curiam at 549-552. For the most part the category of exceptional case to which reference has been made above by WorleyParsons arise in circumstances prevailing after a final hearing has been concluded. In this case, the error is at an interlocutory level pertaining simply to production or inspection of documents and is capable of cure without prejudice to WorleyParsons other than in relation to costs. A mere change of heart, it was submitted, is not sufficient to invoke the discretion to vary an order. See Nicholson 4 ALR 212 per Jenkyn J at 65-66. Nor will the discretion to vary orders be invoked for the purpose of allowing a party to present its arguments a second time to its better advantage. See Paras 152 IR 352 per Young J at [5]. It was submitted that in the present case, there is nothing in the affidavit of Mr Mazur sworn on 2 April 2008 which demonstrates that exceptional circumstances exist to justify varying the existing order. On the contrary, par 6 of his affidavit makes clear that Lynx is simply attempting to re-agitate the issue of confidentiality because it has had a change of heart. The affidavit of Mr Mazur taken alone, as is pointed out for WorleyParsons, may not justify exercise of the discretion to revoke that part of the order which had been made by consent. Indeed, taken alone it might be construed as constituting no more than a change of heart. The driving factor warranting consideration of exercise of discretion to revoke the order, is the affidavit filed by the solicitors for Lynx from which it is clear that Lynx did not authorise its solicitors to instruct counsel as they did, to consent to inspection of the second category of documents by WorleyParsons. I have indicated to counsel that I proposed approaching this matter on a two stage basis --- first to consider whether as a matter of principle it was appropriate to revoke that part of the order which Lynx seeks to revoke. If I acceded to that course, I would then turn to consider the merits of the appropriate approach to that category of documents taking into account any additional evidence and submissions from the parties. In all the circumstances of this particular case, in my view, the discretion should be exercised to revoke that part of the order which Lynx seeks revoked. That does not mean that I would not entertain, on consideration of further evidence and submissions, from WorleyParsons, an application that it should have suitable limited ability to take instructions on the documents from expert advisors. I am mindful in that regard that it is contended for Lynx that the documents are very sensitive and in the hands of the competitor could do it much damage. The interests of justice require that the order to which there was inadvertent consent in the mistaken belief that the client had instructed that there be consent should be revoked. The appropriate order is that the particular order be vacated and that Lynx should pay the costs of WorleyParsons in any event. WorleyParsons wish to press for orders in terms which enable it to take instructions from experts in relation to the documents. The reason that is necessary is because Lynx has contended that it may be implied from the short period of time within which the rail cars were capable of being designed by WorleyParsons, that there had been a significant springboard benefit from usage of the designs of Lynx. WorleyParsons says it would be impossible for it to defend this assertion unless it had the opportunity to take instructions from experts in relation to those drawings. There must be some force in that submission. Lynx says that the second category documents were not documents in respect of which any discovery would ever be necessary in the sense that they were documents which would simply assist Lynx in proving its case. I can see no basis why such documents would not be discovered. That does not mean that certain confidentiality protections should not be imposed. I am willing to hear further argument on the issue but it should be possible for counsel to agree a minute which enables the documents already discovered to be shown to some suitable independent expert or experts so that WorleyParsons can obtain advice. This is not a procedure that is particularly unusual. Other consent orders were prepared on the day of hearing this motion but in light of the time that has elapsed since the hearing (during which further written submissions were made), I will not make those orders. They should also be the subject of the consent minute. In the meantime, I will make the following orders: Paragraph 2(b) of the Orders made on 18 March 2008 be varied to read, 'in respect of Items 30 and 46-65 (inclusive) of Schedule 1 (the second category of documents), until further order, access to such documents to be limited to solicitors and counsel for the fourth respondent'. There be liberty to apply on two days written notice in relation to these orders. The applicant pay the fourth respondent's costs of the hearing in any event. The parties file within 14 days a minute of agreed orders pertaining to suitable confidentiality protection of Lynx in relation to the second category of documents; failing which the issue of confidentiality be re-listed for argument and further directions. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | application for an order revoking an earlier order to which consent had been given in error order revoked in absence of prejudice apart from cost practice and procedure |
It will be convenient to refer to it by that name. 2 The first respondent Mens Suit Warehouse Direct Pty Ltd (MSWD) has since 2002 operated menswear stores in or near the Melbourne CBD, and in particular at 500 Collins Street (North side between William and King Streets), in Queen Street on the corner of Little Collins Street in the old RACV building and at 177 Toorak Road, South Yarra. These stores trade under the name "Walter Withers". MSWD has other stores, including one at 431A Victoria Street, Abbotsford and one at the corner of Lonsdale and Queen Streets in the CBD, where it trades under the name "Mens Suit Warehouse Direct". 3 Peter Jackson complains of a number of alleged representations made by MSWD which are said to be misleading and deceptive in contravention of s 52 of the Trade Practices Act 1974 (Cth). Sections 53(a) , (c), (d), (e) and (eb) of the Trade Practices Act and a number of provisions of the Fair Trading Act 1999 (Vic) are mentioned in the further amended statement of claim (FASC) but were not the subject of consideration at the hearing. Peter Jackson claims to have suffered loss and damage and seeks damages and declaratory and injunctive relief. Stand out from the crowd with the latest European fabrics and styles. You'll look a million dollars at an affordable price when dressed by Walter Withers. For a limited time, receive a second suit free with your first suit purchase. Walter Withers Suits for Men. 177 Toorak Road, South Yarra and 500 Collins Street, City. Open 7 days. 5 Similar statements are alleged to have been made on signage at the Walter Withers CBD stores and on labels on suits sold at those stores. It is not necessary to consider such statements separately. The statements are said to have conveyed the following representations. The statements are said to be misleading and deceptive because, according to FASC par 5(c), they convey the representation that suits sold at the Walter Withers stores "are each of a quality and style being made of European fabric and in a European style to warrant a retail of price (sic) $799 or $899". 7 According to FASC par 6(d), this representation is false and misleading because "the price of $799 or $899 for which the suits are sold does not represent a price bearing out the true retail value of suits sold by (MSWD)". These are said to arise from signage at the store. The store has a substantial frontage to Victoria Street, a busy arterial road. The following allegations of representations are to be implied from the allegations of falsity in par 8 of the FASC. This is misleading and untrue because they are being sold on a retail basis (FASC par 8(a)). This is false and misleading and untrue because "the large majority of the suits are not Australian made in any respect but are fully imported from China" (FASC par 8(c)). What is in contest is whether they would convey the representations alleged and, if so, whether those representations are untrue so as to mislead a hypothetical ordinary and reasonable member of the class of potential purchasers: Campomar Sociedad Limitada v Nike International Limited [2000] HCA 12 ; (2000) 202 CLR 45 at [102] - [103] . Such a person in the present case would be a potential purchaser of men's suits from a retail store in or near the Melbourne CBD. Since a purchase price of $400 to $900 is a significant amount, and is for an item which would normally be expected to last for a number of years, and which will affect the image the wearer presents to the world, the hypothetical ordinary and reasonable purchaser (perhaps assisted by the hypothetical ordinary and reasonable spouse) is to be regarded as taking a fair amount of care in arriving at a purchase decision. This case is not concerned with impulse buying of items for a few dollars. An example is Fraser v NRMA Holdings Limited (1995) 55 FCR 452. In that case proponents of the demutualisation of NRMA represented that policyholders would receive "free" shares, whereas the acquisition of those shares would involve the relinquishment of significant rights. 19 In the present case there is no extra charge or loss or obligation to be borne by the purchaser. If the purchaser pays $799 or $899 for a suit he will in fact get another suit without charge. The evidence does not suggest otherwise. 20 The representation does not convey anything as to whether the suits "warrant" a retail price of $799 or $899 or that such prices "bear out the true retail value". Offering goods for sale at a given price, without more, usually does not imply any statement as to "true" value. The seller is merely saying "If you pay me $X, I will sell you this article". The position is no different when the seller is offering to sell two articles for a given price. 21 So far I have considered Peter Jackson's case as pleaded in the FASC. During the course of the hearing, however, there was a significant shift. It was said that MSWD at its Walter Withers stores never, or almost never, sells suits for the full marked price of $799 or $899. The case was said to be analogous to cases such as Trade Practices Commission v Cue Design Pty Ltd (1996) ATPR 41-475 where tags on garments had a higher price struck out so as to lead purchasers to believe that the garment had previously been offered for sale at the higher price. So, it is said, the alleged misleading and deceptive conduct here is to present an inflated "normal" price to induce the buyer to believe he is getting a second suit "free" if he pays such a price. This version of Peter Jackson's case alleges misrepresentation as to price, not value. 22 However, the evidence establishes that MSWD does, at its Walter Withers stores, sell single suits for $799 or $899. 23 There was evidence from the third respondent Mr Daniel Mortellaro, a director of MSWD, corroborated by the second respondent Mr Angelo Salerno, the second respondent and also a director, which was to the following effect. In 2004 MSWD adopted a system, which was used at Walter Withers stores, including the Collins Street store from the time it opened in July 2005. Every suit when first delivered to the store has its label tagged with a gold sticker. Every gold sticker label suit sells for the full price, either $799 or $899. Every 10 to 12 weeks all of the stock in Walter Withers stores is assessed by Mr Mortellaro or Mr Salerno. Depending on suit volumes, sales and other considerations, gold sticker label suits might be reclassified as black label, in which case the labels are tagged with a black sticker. Some suits of a particular colour, for example "birds eye grey", never become black sticker label suits. The second suit free offer only applies to black sticker label suits. 24 A general change of all prices of suits only occurs during clearance sales when all suits and accessories (shirts, ties, etc) are sold for half price. Since opening the Walter Withers CBD stores there have been two clearance sales, both in 2008, for approximately six weeks from mid February to the end of March and for approximately four weeks in July. 25 Mr Mortellaro produced as exhibits to his affidavit photocopies of sales dockets from the Walter Withers Collins Street store for periods in February 2007 and March-April 2008. I asked counsel at the conclusion of the hearing to agree on an analysis of the figures. The analyses supplied differed slightly, but not materially. The figures supplied by Peter Jackson are as follows. Where the MSWD figure differs it is bracketed. MSWD did not supply figures for half price suits. He spoke to a sales person who introduced herself as Paula. He asked her about the "buy one get one free" offer. She said it applied to approximately 95 per cent of the suits in the store. It did not apply to suits with a gold sticker because they were recently received and were the "latest range". She said he could choose two suits and would only be required to pay for the higher priced suit and would receive the second suit free. She said the prices of the suits marked were either $799 or $899. 27 Mr Filippone asked Paula to show him gold label suits. She showed him suits which were priced at $899. He said he liked them and asked her if she could do a better price for him. She replied that if he purchased one of the gold label suits that day she could include it in the one free suit offer. However Mr Filippone did not buy a suit on that occasion. 28 Mr Rodney Jones is the Inventory Manager of Peter Jackson. He visited the Walter Withers Collins Street store on 1 and 2 April 2008. He saw a particular suit marked at $799. He told a salesman at the shop that he only wanted to buy one suit. The salesman said he could get two suits for the price of one. He was shown other suits. The majority of suits in his size had swing tickets marked with a black spot. He chose a second suit marked "Paris Lyon". He paid $799 and received two suits. The suits were produced in evidence (exhibits J and K). In the case of each suit there is both a gold and a black sticker on the price tag. 29 On 28 October 2008 Mr Jones went to the Walter Withers Queen Street store. The signage in the window said "Buy one suit get one free --- black label suits only". He browsed through suits for about ten minutes. All the swing tickets he looked at had both gold and black stickers on them. He did not find any swing tickets which had only gold stickers. 30 On the same day Mr Jones visited the Walter Withers Collins Street store. The signage on the front said "Buy 1 suit get 1 free --- black label suits only". He browsed through about 20 or 30 suits at random. The swing tickets had both gold and black stickers. 31 A salesman asked if he needed help. He asked about the buy one get one free promotion and what suits it applied to. The salesman said that any suit with a gold and black sticker on the label was part of the promotion and any suit with just a gold sticker was not. Mr Jones remarked that it appeared to him that all the suits had gold and black stickers. The salesman then took a suit from the rack. The suit had only a gold sticker on the swing ticket. Mr Jones thanked the salesman, browsed a bit longer and then left the store. 32 Mr Nicholas Jackson is a sales area manger for Cambridge Clothing. I do not know whether that firm has any connection with Peter Jackson. He is a son of Mr Paul Jackson, the Managing Director of Peter Jackson. On 27 October 2006 he visited the Walter Withers Collins Street store. He noticed signage on the front window with words "Buy one Suit, get one Free". He tried on a suit and asked its price. The salesman said "$799". When Mr Jackson remarked that the price was expensive, the salesman said that if he purchased the suit at $799 he would receive another one free. Salesman: Yes, if you come back any other time when the promotion is not on then you will pay $799. 33 Mr Nicholas Jackson found another suit and purchased the two for $799. The suits were in evidence (exhibits D and E). Neither had a gold or black sticker on its swing tag. 34 Mr David Jackson is the Merchandise Manager for Peter Jackson. He is also a son of Mr Paul Jackson. On 9 November 2006 he visited the MSWD Abbotsford store. He saw there a rack of suits in his size all marked $399. He purchased one for that price (exhibit B). It bore the label Nicolas Jordan. It did not have a gold or black sticker. He noticed eight other suits in the same rack. These were labelled Walter Withers. They had a swing tag with a price of $799. The salesman said: "They're all selling for $399". 35 On 8 August 2008 Mr David Jackson visited the Walter Withers Collins Street store. A saleswoman showed him an ash grey birds eye suit and told him the price was $899 but that he was entitled to another suit of equal value in the store at no extra charge. She did not say anything about gold or black stickers. A salesman who intervened in the conversation told him that if he was unsuccessful in finding a second suit there and then, they would issue a credit which would entitle him to obtain in the future any suit at no extra charge. Mr Jackson said he didn't want another suit. The salesman offered him a $300 reduction on a single suit purchase with complimentary alterations. Mr Jackson did not reply. 36 Mr Jackson pointed out to the salesman that last week "All suits half price" had been painted on the window. The salesman said: "It's effectively the same promotion". 37 On 29 August 2008 Mr Jackson visited the Walter Withers Queen Street store. There was signage on the window "Buy one suit get one free --- black label suits only". He asked a saleswoman if there was any promotion if he bought only one suit. She replied that they did not split sales, but he could bring a friend to the store in which case they would pay half price each or she could issue a credit. 38 On 23 October 2008 Mr Jackson visited the Walter Withers Queen Street store. The signage on the front window displayed the words "Buy 1 suit get 1 free". He asked a saleswoman what suits the promotion applied to and she told him that it applied to all suits with a black sticker. He selected two suits in his size marked Linea Uomo. Both suits had both black and gold stickers on the swing label. In answer to Mr Jackson's query as to which sticker was relevant, the saleswoman said it was the black sticker as it was on top of the gold one. Mr Jackson purchased the two suits for $899 (exhibits L and M). 39 I am not satisfied that MSWD, at its Walter Withers stores, conducted Second Suit Free promotions based on a fictitious "normal" price of $799 or $899. Mr Mortellaro and Mr Salerno gave detailed evidence of the gold and black sticker system. It appears to be a commercially rational system which might be adopted in this kind of business. Their evidence was not seriously challenged, it is not inherently improbable, and I accept it. Most of the Peter Jackson witnesses gave evidence at least of the presence of gold and black stickers on labels of suits at the Walter Withers stores in Collins Street and Queen Street, and that Walter Withers employees by and large were aware of the sticker system even if they did not always follow it strictly. There is no suggestion as to what was the purpose of having gold and black stickers if not to implement the system described by Mr Mortellaro and Mr Salerno. 40 The evidence of the sales dockets corroborates the evidence of Mr Mortellaro and Mr Salerno. They do not support the allegation that the sale of single suits is something which never, or almost never, happens. Mr Goldblatt for Peter Jackson complained that the dockets only covered limited periods. However, if there was any concern as to the adequacy of discovery by MSWD, remedies were available. I cannot see any rational reason for concluding, or suspecting, that the periods covered by exhibits DJM-1 and DJM-2 were selected so as to give a misleading impression as to the ordinary course of business. No Jones v Dunkel (1959) 101 CLR 298 inference should be drawn. Like most business systems dependent on human implementation, the gold and black sticker system may not always have been adhered to strictly, but that is not to say that the system did not exist. 41 The Second Suit Free representation did not convey the meaning alleged in the FASC that the suits had a particular "real" worth, and so was not misleading in this way. In the form as put during trial and referred to in [21] above, the representation was true and was not misleading since a not insignificant number of suits were in fact offered for sale and sold at the full price. The ordinary message conveyed by retailer's advertisements of articles with desirable attributes is that such articles can be purchased from the advertiser, not that all products sold have these attributes. 43 Mr Mortellaro's evidence was that approximately 30 per cent of all suits sold in the Walter Withers stores were manufactured from European fabrics. These fabrics were mostly from Italy and were selected by Mr Salerno or himself. The suits were then manufactured in China. 44 Mr Howard Thompson was called by Peter Jackson. He is the Managing Director of Expedition Apparel Pty Ltd, an importer of clothing which sells to MSWD. He did not swear an affidavit and gave evidence pursuant to subpoena. He was asked in examination in chief to give an indication as to what percentage of suits supplied to Mens Suit Warehouse Direct and Walter Withers would be made from European fabrics, Spanish or Italian. His answer was "Between 25 to 30 max". 45 I find that a far from trivial proportion of suits sold by MSWD have in fact been made from European fabrics. Contravention of s 52 by the making of the European Fabrics representation is not made out. (There was some reference in the FASC par 5(c), in the context of the Second Suit Free representation, to MSWD suits being said to be "in a European style". The style aspect was not, however, the subject of any attention at the hearing. 48 Later, in par 14, he deposed that the statement in par 11(d) "was, and is, true". These suits were unavailable at any other retail outlet. MSWD never stated in any promotion that all of the suits sold in Walter Withers stores were made exclusively for it. However, he said in examination-in-chief that he had gone though all the firm's advertising campaigns and television advertisements and "at no time at any time has there been the reference to exclusivity or 100 per cent exclusivity". At best this was a passing comment from an unidentified employee, made long after the commencement of proceedings on 4 December 2006. It was not part of any organised promotion, but in answer to a supposed customer. Mr Mortellaro's unshaken evidence and the lack of any other evidence from Peter Jackson leads me to a conclusion that I am not satisfied that MSWD engaged in any promotional statements which made any claim for exclusivity. 50 In any event, on the basis of the evidence of Mr Mortellaro, and Mr Howard Thomson of Expedition Apparel, any such statement would have been true. Mr Thompson said his firm did supply suits to Walter Withers which were of European fabric which would be exclusive to MSWD's "area of trade", such as the CBD or Richmond, although not for Australia. As an example he was asked to comment on, he said that Peter Jackson's store in Southland would not be able to get such a fabric or suit. Giving the expression "exclusive" a realistic commercial meaning, it would be true to say that some of MSWD's suits would be exclusive to it. As already noted ([24] above), there was an exception of two periods in February-March 2008 for six weeks and at the end of the 2008 financial year for four weeks, at which times a 50 per cent off all suits and accessories promotion was held instead. 52 Mr Messer for MSWD suggested that because the offer was not promoted in advertisements the entire time, it was truly for a "limited time". However, the relevant allegation is not that MSWD advertised the offer during a limited time, but that it advertised an offer which was to run only for a limited time. It is a misrepresentation as to the nature of the offer, rather than the advertising of that offer. 53 While there may be room for debate as to what is a "limited" time, a period of several years clearly fails to qualify. The presentation of an offer for "a limited time" could convey to a potential purchaser that there is some fixed date in the future, and probably the near future, after which the beneficial offer will no longer be available. The practical effect could well be to concentrate the mind of the potential purchaser, who perhaps has no more than a vague awareness that he might need a new suit --- perhaps for a wedding in two months time --- or is thinking that he might wait a while until his finances are in better shape. Such an acceleration of a purchase decision could confer a benefit on the offeror. In truth, the offer was to be open indefinitely, subject only to suspension during temporary periods when equally attractive offers would be available. 54 Contravention of s 52 by the making of the Limited Time representation is established. to by retail). in small quantities (opposed to wholesale). 56 The Abbotsford MSWD store is self-evidently a retail outlet. It offers suits for sale to the general public. Suits are offered for sale not in bulk, but as single items for ultimate consumption (in the economic sense) by the purchaser. The word "wholesale" was not used by MSWD. 58 As to (a), a reasonable consumer would not understand from a statement that merely suggests he should not pay $699 or $799 that in fact the articles are "worth" that amount: see [20] above. Rather, the advertisement tends to suggest that at other places a customer might be asked to pay those prices for the same suit that they can purchase for $399 at MSWD. This is in fact true, as the same suits are sold at Walter Withers for $799 and $899 (see [39]-[40] above). The evidence revealed that MSWD's retail strategy is to sell the same suits, with different labels, at higher prices at its Walter Wither stores which have a more upmarket ambience than its Mens Suit Warehouse Direct stores. 59 As to (b), the statements do not convey the meaning that the suits in question had previously been sold at the Abbotsford store or other MSWD outlets for $699 or $799. Rather, the statement tends to suggest that elsewhere (ie in other stores, not necessarily within the MSWD chain) it would be possible to buy an equivalent suit for those higher prices, whereas at MSWD one can purchase them for $399. 60 These representations have not been shown to be untrue. This evidence was not shaken in cross-examination. The FASC, par 8(c), did not go beyond an allegation that the "large majority" of suits are not Australian made. Even if there were evidence to support this allegation, which there was not, the representation would not be untrue; see [42] above. 62 The falsity of this representation was not established. It is sufficient that this conduct was a cause of the loss or damage; it does not have to be the sole, or even the dominant cause: Henville v Walker [2001] HCA 52 ; (2001) 206 CLR 459 ; I & L Securities Pty Limited v HTW Valuers (Brisbane) Pty Limited [2002] HCA 41 ; (2002) 210 CLR 109. The proportionate liability provisions of Pt VIA of the Act, and in particular s 87CD , have no application because MSWD was not a "concurrent wrongdoer" within the meaning of s 87CB(3) ; no third party is suggested to have contributed to any relevant loss or damage suffered by Peter Jackson. It is said that as a result of MSWD's s 52-contravening conduct the William Street store was closed on 6 November 2006. Quantification of damage was the subject of reports by Peter Jackson's expert accounting witness, Mr David Ferrier of BDO Kendalls. 66 The decision to close the William Street store must have been taken much earlier. On 20 February 2006 Mr Paul Jackson wrote to the landlord of the premises advising that Peter Jackson did not wish to exercise its option for a new term of the lease, from 1 September 2006 to 31 August 2011. It will be necessary to return to this letter. 67 Mr Ferrier worked on profit and loss statements for the William Street store prepared by another accountant for the financial years 2004, 2005 and 2006 and the period 1 July to 10 November 2006. These statements, relating as they did to an individual store, were not part of Peter Jackson's ordinary business records but were prepared for the purposes of this litigation. 68 In his first report Mr Ferrier took average net profit of the store in the 2004 and 2005 financial years prior to the commencement of trading of the Walter Withers Collins Street store as $210,088 with an average monthly sales growth of 2.1 per cent. Because Peter Jackson declined to exercise an option to renew its existing lease for a further five years, he estimated the "total loss as a result of store closure" by extrapolating those figures over five years and arrived at $1,090,000. 69 Shortly prior to the trial Mr Ferrier was informed that the gross sales figures which he had worked on were incorrect. He produced two supplementary reports which, while adopting the same methodology, arrived at a reduced figure of $256,000. 70 During the course of Mr Goldblatt's opening I asked him to provide further particulars of loss and damage giving dollar figures as to how the damages claim was calculated or arrived at. In assessing damages the Court can be assisted by expert evidence given on behalf of the Applicant by Mr David Ferrier and by the evidence of damage given to the Court by Paul Jackson. Save as aforesaid the Applicant is unable to provide any further particulars of the loss and damage which it has suffered consequent upon the Respondents' wrongful conduct in the making of the (CBD) representations and the Abbotsford store representations. He made a number of criticisms of Mr Ferrier's reports. Some of these criticisms involved comparisons between Peter Jackson's William Street store and its other CBD stores which were at 131 Elizabeth Street, 418-420 Bourke Street and 161 Collins Street. The more important of Mr Fitzgerald's criticisms were as follows. 72 During the period January 2005 to February 2006 there were other factors which may have affected the performance of the William Street store. In January 2005 Peter Jackson closed its Elizabeth Street store for renovations and sales at its Collins Street store were recorded for the first time. In July 2005 Peter Jackson re-opened its Elizabeth Street store. About this time the Walter Withers Collins Street store opened with a supporting television campaign. Also about July 2005 scaffolding was erected on the eastern footpath of William Street footpath in the immediate vicinity of the Peter Jackson store. This was in place for some six to eight months. 73 The sales value and volumes at William Street were the lowest of all the Peter Jackson CBD stores. 74 Prior to the opening of the Walter Withers Collins Street store, sales at the Peter Jackson William Street store had been in constant decline since 2002. There was a temporary improvement, also before the Walter Withers Collins Street opening, which seems to be attributable to the temporary closure of the Peter Jackson Elizabeth Street store. He noted that it was now accepted that sales for the financial years 2004 and 2005 had been overstated by $498,319 and $546,005 respectively. Applying Peter Jackson's stated gross margins, the impact of the overstatement on gross profits for the two the year period was an average of $216,059. This exceeded the average net profit previously claimed. On this basis, in Mr Fitzgerald's opinion, the William Street store was trading at best at a break-even level and probably was making a loss. 76 Peter Jackson's solicitors provided Mr Fitzgerald with corrections to the expenses of the William Street store. Supporting details were not provided. The net effect was to reduce expenses and thereby increase net profits by a two year average of $50,489. The revised average profit was $44,520. 77 Peter Jackson also supplied figures for financial 2006 and the first four months in financial 2007 (July to October, prior to the store's closure in November 2006). These showed a decline in net profit in 2006 of $22,214 from the previous year, some 50 per cent. However, in the remaining four months the net profit was $41,563, which is approximately the same as the profit in each of the twelve month periods in financial 2004 and 2005. The gross margins for financial 2006 (48.4 per cent) and the first four months of financial 2007 (50.1 per cent) increased significantly over 2004 (40.8 per cent) and 2005 (41.9 per cent), which is not consistent with what one would expect from a closing down sale campaign. 78 Mr Fitzgerald's conclusion was that even if the corrected expenses were valid, which he did not accept, the maximum loss suffered in financial 2006 was $22,214. As mentioned, there were several other factors which could have contributed to that result. Further, there is the unexplained increase in margins and net profits in the four months in calendar 2006 immediately before closure of the store. Perhaps that is the reason why Peter Jackson does not appear to have made a claim for loss of profits for the period prior to closure. 79 I accept Mr Fitzgerald's criticism of Peter Jackson's accounting evidence. In particular the primary figures advanced do not inspire confidence, especially given the huge discrepancy between the original and revised gross sales figures. It was said that somehow interstate sales had found their way into these figures. But there is still no basis provided for the revised expenses. This case is not like those Trade Practices Act claims which are analogous to defamation or passing off. The case on damages has to be that the one type of representation established as contravening s 52 , the Limited Time representation, was a cause of persons who would, or might, have bought a suit from Peter Jackson's William Street store instead buying a suit from the Walter Withers Collins Street store. It may be unreasonable to expect a precise dollar figure on such a loss, but at least there has to be some rational basis for an estimate. It would not be correct to fix a sum which represented simply a mark of disapproval of MSWD's conduct. This case is concerned with damages, not penalties. 81 I am not satisfied that Peter Jackson has established any loss or damage suffered as a result of MSWD's contravening conduct. 82 There were serious problems with the William Street store well before the Walter Withers Collins Street store opened. The William Street store was not in a good location. That section of William Street is not a retail thoroughfare. Apart from a small menswear store on the Western side of William Street on the corner of Little Collins Street, the block between Collins and Bourke Streets is taken up with banks, other commercial buildings and a large club building. The scaffolding which was in place for a substantial part of 2006 was very obtrusive, as is shown in photographs produced by Mr Mortellaro. 83 As to the non-exercise of the option in February 2006, Mr Paul Jackson, as Managing Director of Peter Jackson, wrote on 20 February of that year to Mr Adrian Hardingham, the Leasing Executive of the landlord, Henkell Brothers. Accordingly we plan to vacate the premises at the end of the lease term, or if the landlord desires, to remain on a monthly holding basis, until such time as a suitable incoming tenant is found. ... I take this opportunity to thank you for your assistance and courtesy throughout our past dealings, and will keep you advised of any developments. 84 By this stage the Walter Withers Collins Street store had already been operating for some eight months and had been using the promotions complained of in this proceeding. In evidence Mr Jackson's explanation of the letter was that the landlord was "very supportive" and probably the best landlord the company had had. We decided to exit the store because the store was no longer profitable, and we really weren't desirous of negotiating with him a lower rent and for a new term. 85 Mr Jackson said in evidence the reason given, that their product was "over distributed", was untrue. He said that with the fall in turnover of the store it was no longer profitable, and that the "store's turnover fell after the actions of (MSWD)". The conclusion to be drawn from Mr Fitzgerald's figures ([74] above) is that Peter Jackson's product was in fact over distributed and that the reason Mr Jackson gave in the letter to Mr Hardingham was the true reason. If Mr Jackson wished to explain that Peter Jackson's decision to leave the William Street premises was irrevocable, why did he give an explanation which he now says was untrue and fail to give what he now says is the true explanation? 86 If Mr Jackson really believed at the time that the loss of turnover was the result of MSWD's actions, it is hard to see why he did not confide in Mr Hardingham, with whom he was obviously on excellent terms, and state that as a reason, even if only an additional one. 87 It may well be that the Walter Withers Collins Street store drew business away from the Peter Jackson William Street store. They were direct competitors in the same market. The stores were only one to two minutes' walk apart, separated by one set of traffic lights. The effect of the Walter Withers store on the Peter Jackson store could be a result of both uncontroversial factors --- such as a more modern, attractive layout and convenient location --- and contentious factors which I have nevertheless found to be not unlawful --- such as the Second Suit Free promotion. On the other hand, there is the striking increase in gross and net profit in July to October 2006 ([77]-[78] above) which, perhaps counter-intuitively, tends to show that the fortunes of Peter Jackson William Street were unconnected to anything done at or in relation to Walter Withers Collins Street. 88 In any event, I am unable to see that the Limited Time representation can be realistically isolated as having any causal effect on the trading of the Peter Jackson William Street store. I say this having regard to the location problems which were well established prior to the establishment of the Walter Withers store and the other possible factors mentioned. 89 Another factor arguing against any finding of causality flowing from the Limited Time representation is that, over a reasonably short period of time, it would be self-correcting. The longer the representation was in existence, with no termination of the Second Suit Free offer, the more potential customers would see the Limited Time statement as lacking potency. This is particularly so in an environment where many passers by would be regulars, people who work in the vicinity or habitually pass along those parts of Collins, Little Collins or Queen Streets. 90 The claim for damages will be dismissed. Obviously enough, there could not be an injunction simply restraining MSWD from making the Limited Time representation. In itself this is a familiar and quite lawful marketing technique. Any injunction could only be in terms of restraint from making such a representation unless the offer was truly for a limited time, or a "reasonable" limited time. But is such a time to be defined as a week, or several weeks, or a month, or several months? It is not for the Court to define a marketing program for MSWD, with sanctions, including imprisonment, if it is departed from. 93 Because of the ongoing involvement of the Court, the serious consequences for the parties, and the occasional room, as there would be in the present case, for confusion and disagreement as to the terms and effect of an injunction, it is relief which should not be granted. 94 I am also influenced by my impression that Mr Mortellaro and Mr Salerno are intelligent businessmen who have built up a substantial and successful business. I feel reasonably confident that they will understand from this judgment what is permissible and what is not. I certify that the preceding ninety-five (95) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | claim of misleading and deceptive conduct in advertising in retail market for men's suits various false representations alleged, including representations that purchasers would receive a second suit free, such offer to be open for "a limited time" claim that applicant's store forced to closed due to misleading and deceptive conduct of respondents only "limited time" representation found to be contravening no damage established difficulty in framing injunction trade practices damages injunction |
The Tribunal had affirmed a decision of a delegate of the first respondent refusing to grant the applicant a protection visa. Dismissal of a proceeding at a show cause hearing is an interlocutory order: r 44.12(2) Federal Magistrates Court Rules 2001 . Accordingly, the applicant requires leave to appeal. On 8 September 2003 a delegate of the first respondent refused to grant the applicant a protection visa under the Migration Act 1958 (Cth) ("the Act "). I have set out below some of the most significant claims. On 13 March 1996 he had commenced a Social Service organisation called Caliph Madrasa ("the organisation") with his friends. He became its treasurer. The applicant, a Muslim, claimed that this organisation was disliked by the Hindu majority in the area. Initially, oppressed Muslims who approached the organisation were helped. The applicant outlined that the organisation assisted in the search for a girl who had gone missing. It transpired that the missing girl was killed by the assistant of a famous politician. This politician pressured the police not to arrest his assistant and consequently the organisation, along with other groups, conducted rallies against the assistant. The applicant claimed that when the assistant was eventually arrested tried and sentenced to life imprisonment his problems began. He claimed however that after this success Hindus and Christians also starting coming to the organisation for assistance. 4 The applicant claimed that in April 1997 the politician asked him to dissolve the organisation and resign as its treasurer and offered him money to move to another place with his family. The applicant claimed that when he did not do so, the followers of the politician beat him. The applicant claimed that although he and other members of the organisation complained about the politician's actions to the Inspector of Police, they were warned that they were prejudicing the leader's reputation and that a "case" would be filed against them. 5 The applicant claimed that in June 1997, the politician organised a meeting including Hindus and Christians, but that representatives of the applicant's organisation were excluded. At the meeting, subordinates of the politician spoke against Islam and Muslims and it was suggested that the Muslim community should migrate to Pakistan. The applicant claimed that Hindus and Christians conducted rallies against the organisation on 8 September 1997, and threw stones at its office. The applicant claimed that he and his colleagues were beaten and taken to the police station, where they were warned by police, made to sign blank papers and released. 6 The applicant claimed that in February 1998 the infamous Coimbatore blast occurred and that Tamil Nadu Muslims were rounded up and tortured and that the police rounded up all the members of the organisation. The applicant claimed that he became a target due to the politician's vengeance, and that he was tortured in a police station, that he was falsely charged and sentenced to 3 months of "rigorous imprisonment. " The applicant further claimed that he was kept under observation by police and sometimes questioned at the police station. 7 The applicant claimed that in 2002 the politician's assistant was killed in gaol and the assistant's wife blamed the applicant for his death. The applicant claimed that together with his parents and wife he was attacked in his home by a mob, that he was hospitalised for a month and his family for a week. The applicant claimed that his business was ruined and he relocated in December 2002 to Chennai. The applicant claimed that he was warned amongst others by Hindu Front extremists to leave to area to which he had relocated and that he was detained for a month for "hampering a Hindu festival. " Upon his release the applicant claimed that on 17 April 2003 Hindu extremists tried to kill him. The applicant stated he could not live in India because the extremists who had networks throughout India would kill him. The applicant gave evidence at a Tribunal hearing in December 2003. The Tribunal affirmed the decision of the delegate in its decision handed down on 18 February 2004. Following a review by the Federal Magistrates Court the matter was remitted back to the Tribunal by consent on 27 March 2006. 9 The applicant attended a further hearing on 26 July 2006 before a differently constituted Tribunal and gave oral evidence. The Tribunal questioned him on various aspects of his claims and formed the opinion that he was an unreliable witness. The Tribunal had significant doubts as to the credibility of the applicant, particularly considering the different accounts of key experiences that he gave to the Tribunal at the December 2003 and July 2006 hearings. 10 The Tribunal accepted that the applicant was part of a very small Muslim group in Tiruchy which sought to do social welfare work, noting that this organisation had no political aims and was not a supporter of any political organisation. The Tribunal gave the applicant the benefit of the doubt accepting that the organisation protested a cover-up of the murder of the girl together with other organisations, because the murderer had strong political connections. The Tribunal further accepted that as a result of this protest, the murderer was brought to justice, convicted and imprisoned. However, as a result of the claims being vaguely and inconsistently made at both hearings, the Tribunal rejected the assertion that the applicant was the leader of this campaign and this caused the Tribunal to form the opinion that the evidence of the applicant was unreliable in this matter, as in other matters. 11 The Tribunal found that the applicant had been highly unreliable in making claims about what happened to him following the murder of the girl, although the Tribunal accepted that he had consistently claimed that his problems began after this murder. The Tribunal found that the applicant was unable to consistently state when either the authorities or others had harmed him, what the nature of the harm was, where it occurred and when the last harmful incident alleged occurred. The Tribunal found that the most serious claim, concerning the three month detention, was not mentioned by the applicant at his July 2006 hearing and the Tribunal could not accept that the applicant would have forgotten this alleged imprisonment, if it had indeed occurred. 12 Further, the Tribunal took issue with the credibility of the applicant in relation to the alleged source of his problems. Although the applicant had claimed that his difficulties were caused by the politician, he could not give many details about the politician. The Tribunal did not find it to be credible that the applicant would know so little about the politician if he had in fact caused the applicant serious harm. 13 On the basis of the highly inconsistent and unconvincing claims at both Tribunal hearings, the Tribunal rejected the claims of the applicant to have suffered serious harm in the past from the Indian authorities or non-State agencies or individuals. The Tribunal rejected the claims that the applicant had been beaten or otherwise harmed by the supporters of the politician at any time, or by other groups or individuals (such as Hindus or Christians). 14 The Tribunal was not convinced the applicant had suffered Convention related persecution in the past and went on to consider whether there was a real chance that the applicant would be persecuted if he returned to India in the foreseeable future. 15 The Tribunal considered the independent country information noting that although there had been serious conflict in the past between Muslims and the rest of the community in Tamil Nadu, there are no reports of recent violence against Muslims in that State. The Tribunal questioned the independent country information provided by the applicant. The Tribunal was not satisfied that there was a real chance that the applicant would be persecuted for reasons of his religion in Tamil Nadu, his home state, if he returns to India in the foreseeable future. 16 The Tribunal also considered the applicant's claims that he had been victimised by the authorities and by individuals at the instigation of a politician but was not satisfied by reason of the applicant's lack of credibility that he had suffered serious harm as a result. 17 The Tribunal was not satisfied that there would be a real chance that the Applicant would be persecuted for reasons of his political opinion if he were to return to India. 18 Accordingly the Tribunal was not satisfied that the applicant was a person to whom Australia has protection obligations under the Refugees Convention, as amended by the Refugees Protocol and found that the applicant did not satisfy the criterion set out in s 36(2) of the Act to be granted a protection visa. A breach of the rules of natural Justice occurred in connection with the making of the decision. RRT made an error when they failed to comply with the s.424A of the Migration Act 1958 . 2. The Tribunal failed to internalize the circumstantial ground of the review application and in weighing both the subjective and objective claims of the review application and in reviewing the huge supporting facts and documents, and such has breached s.424 , s. 430 , s. 439 and s. 440 of the Act . 3. The Tribunal in its decision of 9 August 2006 failed in its written statement that a breach of the rules of natural justice, therefore rises (sic) the ground under s.476 of the Migration Act . In considering the first ground, his Honour found that when the Tribunal made its adverse findings concerning the credibility of the applicant's evidence, the Tribunal had relied on inconsistencies between oral evidence provided at the first and second hearings in December 2003 and July 2006 respectively involving separately constituted Tribunals. This information was not required to be put to the applicant in writing as the information provided at the first hearing fell within the exception in s 424A(3)(b): SZGNY v Minister for Immigration and Multicultural Affairs [2006] FMCA 1142 ; SZFBJ v Minister for Immigration and Multicultural Affairs [2006] FMCA 1472. His Honour noted that although Div 4 of Part 7 of the Act constitutes an exhaustive statement of the requirements of natural justice, the Tribunal did in any event raise issues about the inconsistencies with the applicant and allowed him an opportunity to respond. However, the Tribunal was not persuaded by the applicant's explanations concerning the inconsistencies. 21 The factual findings of the Tribunal concerning the applicant's credibility were correctly found to have been open to the Tribunal on the material before it and that such factual findings were matters of fact for the Tribunal and were not to be disturbed by the Courts. 22 Similarly, ground 2 of the applicant's notice of motion was rejected as the Tribunal complied with s 430(1). The Federal Magistrate having considered each statutory provision in turn, in the context of the factual findings and the procedures followed in the Tribunal, held that there was no breach of ss 424 , 430 , 439 or 440 of the Act . 23 The Federal Magistrate characterised the third ground as difficult to comprehend, but found that to the extent that it alleged a breach of natural justice, there was no breach. 24 The Federal Magistrate held that the applicant had not made out any jurisdictional error, under any ground of appeal nor, having carefully considered the Tribunal decision and the supporting material before him was he able, outside the pleaded grounds, to discern any such error. The Single Judge of the Federal Magistrates Court in his Honors judgment delivered on the 21 December 2006 failed to find error of law, jurisdictional error procedural fairness and relief under section 39B of the judiciary Act. 1903. Recent Federal Court of Australia judgement: AGDB v Minister for Immigration and Multicultural Affairs. I will provide more ground after received the judgement. 27 At the hearing of the appeal before me the applicant who was assisted by an interpreter elected not to make oral submissions. The first respondent relied upon its filed written submissions. 29 The "Notice of Appeal" raises a number of "grounds", none of which articulates a comprehensible challenge going to jurisdictional error. No particular findings are challenged. Three authorities are, in effect, said to expose the grounds. No further grounds have been added despite this being foreshadowed. Furthermore, no written submissions have been filed by the applicant. 30 The Court ought not be required, and, in my opinion, has no relevant duty to trawl through authorities cited by a party as in themselves constituting, in effect, both the grounds and particulars of its proposed appeal. Nonetheless I have carefully considered the authorities set out in the purported Notice of Appeal because the applicant is unrepresented and does not speak English. 31 The first proposed ground of appeal is to the effect that the Federal Magistrate erred by failing to find a breach of natural justice. I have carefully considered his Honour's reasons and conclusions and, with respect, I agree with them. No arguable jurisdictional error is established. 32 The applicant's second proposed ground points to the decision of Muin v Refugee Review Tribunal [2002] HCA 30 ; (2002) 190 ALR 601. I have considered this case which concerns amongst other things the issue of jurisdictional error arising from a denial of procedural fairness and natural justice where there was an alleged failure to provide an applicant seeking a review of a decision to refuse the grant of a protection visa with an opportunity to respond to adverse material. Its disposition so far as factually based turned on the particular facts of the case. The Federal Magistrate, correctly, in my opinion, upon a consideration of all the material, concluded that there was no denial of procedural fairness. Muin provides no assistance to alter that finding and accordingly no arguable ground of appeal arises. 33 The applicant's third proposed ground points to another case: Plaintiff S157/2002 v Commonwealth [2003] HCA 2 ; (2003) 211 CLR 476. Once again I have considered this case. It concerns matters of the statutory construction and constitutionality of certain provisions of the Act . It provides no assistance to the applicant that is apparent on the papers before me. No arguable ground of appeal arises. 34 The fourth proposed ground refers to AGDB v Minister for Immigration and Multicultural Affairs . I take this to be a mistaken reference to the decision of the Full Court of this Court in SGDB v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 59 , which was an appeal from a decision of the Federal Magistrates Court. In that case the applicant succeeded on the one ground that the Tribunal had fallen into jurisdictional error by failing to consider, in respect to the issue of whether the applicant had a well-founded fear of persecution, the risks which he, an Afghan citizen, together with his wife and family, might face should he return to Afghanistan, when travelling from Kabul through other ethnic tribal areas in order to reach their home. [23]-[27] It provides no assistance to the applicant in this case. No arguable ground of appeal arises. 35 Scarlett FM was correct to dismiss the application before him. 36 Accordingly, the applicant has failed to satisfy me that the decision below is attended by sufficient doubt to warrant a grant of leave. For these reasons, the application for leave to appeal ought to be dismissed with costs which I have fixed at $1,200. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | application for leave to appeal against interlocutory order of federal magistrate dismissing application for review application for a protection visa whether decision attended by sufficient doubt to warrant grant of leave no point of principle. migration |
It also moves for orders to restrain ONGC from taking further steps to demand or obtain payment or renewing or claiming to renew such demand in respect to certain performance guarantees granted by the three respondent banks to ONGC. 2 The application is supported by affidavits sworn by Jae-Ho Choe of 5 June 2007; Kulasegaram Sirithiran of 25 May 2007 and Malcolm Rutter of 5 June 2007. It is from these affidavits that the factual matters to which I will refer have been sourced. 3 In the substantive application, in addition to permanent injunctive relief, Clough seeks declarations concerning a construction contract entered into between it and ONGC. The contract is an engineering, procurement, installation and commissioning contract for the development of certain oil and gas fields in the Krishna Godavari basin off the coast of the state of Andhra Pradesh in India. The declaratory relief sought is that upon the proper construction the contract entered into between Clough and ONGC on 30 November 1994 as recorded in an instrument dated 6 January 2005, and in the events which happened, ONGC by demanding and threatening to make a demand on the performance guarantees granted by the second, third and fourth respondents has engaged in, or proposes to engage in, unconscionable conduct in contravention of s 51AA of the Trade Practices Act 1976 (Cth) ("the Act"). 4 It also seeks, on the same footing, an interim interlocutory injunction to restrain ONGC broadly in the terms to which I have referred above in respect to the performance guarantees granted by each of the respondent banks dated 14 January, 19 January and 13 January 2005 respectively. Those performance guarantees were provided pursuant to the terms of the contract between Clough and ONGC. 5 Clough also claims, relevantly, damages pursuant to s 82 of the Act and/or other orders pursuant to s 87 of the Act arising from ONGC's alleged contravention of s 51AA of the Act. 6 On 5 June 2007 I made interim interlocutory injunctive orders restraining each of the three respondent banks from making payment to ONGC under their respective performance guarantees. 7 In granting those orders I concluded that there were serious questions to be tried whether ONGC was entitled under the contract to call on the Banks to make payment under the performance guarantees. The reasons here should be read in conjunction with the reasons I gave ex tempore for making those orders. I am indebted to counsel for the applicant for the considerable assistance provided to the Court in their very detailed written submissions, in respect of what is a relatively complex matter. I have drawn heavily upon these in compiling these reasons. 9 By facsimile of 30 November 2004 from ONGC to Clough, received by Clough in Perth, ONGC notified Clough that it had been successful in being awarded the contract for execution of certain works. The facsimile stated that ' This Notification of Award shall constitute binding Contract between CLOUGH and ONGC, and shall be subject to all terms and conditions of the Bidding Documents and other documents mentioned in Para 1.0 above. ' On receipt of the facsimile, ONGC and Clough had entered into a binding agreement. The parties had agreed to be bound immediately even though there would be a more formal agreement subsequently executed. 10 By para 8.0 of the facsimile, Clough was required to sign a formal contract with ONGC. On 6 January 2005, a formal agreement was made between ONGC and Clough under which it was recited that ONGC had awarded to Clough the contract at a negotiated lump sum of US$215,351,156.33 by its facsimile of 30 November 2004 on the terms and conditions as agreed to by the parties as of the date of the facsimile and as outlined in the formal agreement. 11 The formal agreement made on 6 January 2005 incorporated annexure A (General Conditions of Contract), annexure B (bidding documents, including the facsimile of 30 November 2004), annexure C (Contract price schedule and Rental Rate Schedule), annexure D (Construction schedule/ Project Key Dates), annexure E (Project Instructions) and annexure F (Milestone payment formula giving break-up of the negotiated lump sum prices). 12 The overall project to which the contract relates involves three main elements, namely the construction of (i) an onshore gas processing plant, (ii) a shallow water field and (iii) a deep water field. This work was not part of Clough's scope of work under the contract. ONGC was to carry out the drilling and well-completion work itself. This work had to be carried out before Clough could complete its offshore scope of work. ONGC has not effected well-completion. That has delayed the project's completion. This is because the offshore work, namely the shallow water work and the deep water work, was contractually agreed to be done together with one mobilisation and de-mobilisation of the required spread, in the same campaign. The deep water work cannot be completed because it is directly dependent on well-completion. Moreover, the onshore work cannot be completed and the onshore plant commissioned, until there is a flow of hydrocarbons from the deep water wells. 95% of the hydrocarbons for the plant was to come from the deep water wells. 15 The contract contained certain provisions for liquidated damages, as a genuine pre-estimate of damage rather than a penalty, to apply if completion was delayed beyond 15 April 2006. 16 As a result of delay caused by ONGC, on Clough's request for an agreement for extension, the original contract completion date of 15 April 2006 was extended until 13 April 2007. Because of ONGC's further delays (in effecting well-completion), the work cannot be completed by 13 April 2007. Clough sought further agreement for extension, and ONGC has recently said that it ' provisionally ' extended the completion date to 30 April 2008. There has been no agreement between the parties concerning the potential application of liquidated damages to any delays occurring after 13 April 2007 or 30 April 2008. 17 Clough has made various claims on ONGC, including for delay costs, in the total sum of about US$125m. ONGC has rejected these claims. 18 The parties agreed in or about July 2006 to refer the dispute to an outside expert committee (OEC) for non-binding adjudication. That process has itself been delayed. 19 Under the contract, progress payments are to be made by ONGC if the payment procedure in the contract is followed. Despite the procedure having been followed, some US$7 million of invoiced and undisputed amounts have not been paid by ONGC to Clough, in breach of the obligation to do so under cl 3.2.4. 20 On 11 December 2006, ONGC asked Clough to submit a proposal by which Clough would install the shallow water wellhead platform on its own, separately from the other off-shore work. The contract does not provide for this work to be carried out on its own. Under the original agreed contractual program, which is annexure D of the formal agreement, Clough was to commission all platforms (deep and shallow water) in the same campaign. The work to commission the shallow water wellhead platform alone will involve mobilising much of the same marine spread as would be required to complete both the shallow water and deep water installations as originally contemplated by Clough's program. 21 On 25 January 2006, Clough submitted a price to commission the shallow water field only. On 8 February 2006, ONGC rejected Clough's proposal but did not direct Clough to carry out that work. ONGC instead asserted that Clough was required to decide the best option to complete the shallow water work. Although the issue had been raised by Clough, including at the meeting on 11 December 2006, ONGC refused to recognise that the contract provided for the shallow water work and the deep water work to be done together. ONGC, therefore, did not agree to pay Clough the extra amounts needed to effect the shallow water work alone. Nor did ONGC recognise that the requirement to do the shallow water work separately was not contemplated by the contract. 22 By letters of 29 January 2007 and 8 February 2007, ONGC threatened to call on the performance guarantees. ONGC has also threatened to require payment of liquidated damages. Clough contends that ONGC cannot lawfully serve a notice of demand under the performance guarantees or obtain liquidated damages. Because attempted commercial negotiations in the months of February, March, April and May 2007 between the parties has not broken the impasse between them, Clough feared that the performance guarantees might be called, without notice to Clough. It was for this reason that the application for injunctive relief was brought ex parte. As it transpired ONGC in fact purported to call on the performance guarantees shortly before this matter came before the Court. 23 There remain allegations by ONGC, that Clough is in breach of contract, and allegations by Clough, that ONGC is in breach of contract. Each party denies the other's allegations and for its part, Clough also contends that no damage arises even if there were breaches. Under FCR O 8, r 3(2), the Court may give leave to serve ONGC in India in accordance with the laws of India, if the Court has jurisdiction in the proceeding; the proceeding is of a kind mentioned in rule 2; and Clough has a prima facie case for the relief claimed. See also, Burgundy Royale Investments v Westpac Banking Corporation (1987) 18 FCR 212, 219; Eurogold Ltd v Oxus Holdings (Malta) Ltd [2007] FCA 811 [15]-[19]. 27 Further, Clough's other causes of action (namely for breach of contract) are sufficiently closely related to the cause of action based on unconscionable conduct that they form part of the same controversy and are, therefore, within the Court's accrued jurisdiction: Traxon [52]; Eurogold [20]. 28 I am satisfied, for the reasons which follow, that the proceeding is of a kind mentioned in several of the items contained within O 8, r 2. Clough seeks injunctive relief to enjoin ONGC from serving demand under the performance guarantees. This relief is claimed in futuro even though demand has already been made in respect of each of these. 30 Even though the performance guarantees are given in favour of ONGC by the banks, and even though Clough is a third party to the banks' promise to pay, O 8, r 2, item 3 is in my opinion wide enough to cover Clough's claim to enjoin conduct in relation to the performance guarantees: Tana v Baxter [1986] HCA 69 ; (1986) 160 CLR 572, 580, in relation to the similarly worded s 11(1)(b) of the old Service and Execution of Process Act 1901 (Cth). 31 Secondly, the proceeding arises in relation to the contract between Clough and ONGC, which contract was made in Australia and Clough seeks an order affecting that contract. Even though the formal agreement was made on 6 January 2005 in India, the contract was made earlier on 30 November 2004 in Australia when ONGC sent its facsimile to Clough in Perth, where it was received instantaneously. The facsimile expressly provided in para 8.0 that it constituted a binding contract between Clough and ONGC. Generally, instantaneous communications take effect at the place they are received: Entores Ltd v Miles Far East Corporation [1955] 2 QB 327, Sydbank Soenderjylland A/S v Bannerton Holdings Pty (1996) 68 FCR 539, 548-549. 32 Again, though the banks are not a party to the contract between Clough and ONGC, O 8, r 2, item 3 is wide enough to cover Clough's claim to enjoin the banks from paying under to the performance guarantees because that is an order affecting the contract: Tana at 580. I deal with the matter of unconscionable conduct below. Clough will have to pay the banks in Australia and Clough will suffer financial damage and reputational damage in Australia if the performance guarantees are wrongly called. Injunctive relief that is ancillary to the causes of action based on breach of contract and unconscionability are within the court's jurisdiction and may be granted to restrain conduct in Australia: Dunlop Rubber Co Ltd v Dunlop [1921] 1 AC 367, 371. Under s 80(1) of the Act, the Court may grant an injunction to enjoin a person that has engaged or is proposing to engage in conduct that contravenes or would contravene s 51AA. Under s 80(2) of the Act, the Court may grant an interim injunction if it considers that it is desirable to do so. In Western Australia v Vetter Trittler (1991) 30 FCR 102 at 110, French J expressed the opinion that a prima facie case 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. See also Merpro Montassa Ltd v Conoco Specialty Products Inc (1991) 28 FCR 387. 37 In my view, Clough has a prima facie case for the relief variously claimed in that, for reasons I set out below, ONGC would arguably be in breach of the contract and acting contrary to the express terms of the performance guarantees and acting unconscionably, in contravention of s 51AA of the Act, if it were to take further steps in making demands or obtaining payment under the performance guarantees: Merpro Montassa Ltd v Conoco Specialty Products Inc (1991) 28 FCR 387, 390; Western Australia v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102, 110; Sydbank Soenderjylland A/S v Bannerton Holdings Pty (1996) 68 FCR 539, 549; Eurogold Ltd v Oxus Holdings (Malta) Ltd [2006] FCA 1270. It is not necessary for an applicant seeking leave to show a prima facie cause of action in respect of each of the causes of action pleaded: Bray v F Hoffmann-La Roche Ltd [2003] FCAFC 153 ; (2003) 130 FCR 317; Traxon Industries Pty Ltd v Emerson Electric Co (2006) 230 ALR 297, 311 [65]. Nevertheless, Clough does so here. 38 Where I refer, in these reasons, to a claim, whether a construction point, or otherwise, being arguable, (or some derivative expression) I use it conveniently for present purposes to mean that it raises a serious issue to be tried but also that it represents a prima facie claim for the relief claimed. (b) The factors that favour an Australian court exercising jurisdiction include: Clough is an Australian company; the parties could not have intended that the foreign jurisdiction/arbitration clause would apply to a TPA claim: Hi-Fert Pty Ltd v Kukiang Maritime Carrier Inc (1998) 90 FCR 1; it is the contractor to the project; importantly, the performance guarantees will be called in Australia and, in this proceeding, Clough seeks to enjoin the calling of the performance guarantees; and, if they are called, loss will be suffered by Clough in Australia. (b) In respect of its claim under the Act, Clough would be deprived of its right to seek to obtain declaratory and injunctive relief in respect of ONGC's conduct said to contravene the Act if it were left to sue in India. As I have mentioned, were the matter to be dealt with in India, Clough would be deprived of a legitimate personal or juridical advantage, namely its ability to invoke relief under the Act. It is relevant, in this context to have regard to the object of the Act which, by s 2, is to enhance the welfare of Australians through the promotion of competition and fair trading and provision of consumer protection. The remedy conferred by the Act, in respect to s 51AA cannot be lost, whatever the parties agree in their contract. See, by analogy Clark Equipment Australia Ltd v Covcat Pty Ltd (1987) 71 ALR 367, 371. The Act is 'a public policy statute'. Its operation cannot be ousted by private agreement. 'Parliament passed the [TPA] to stamp out unfair or improper conduct in trade or in commerce; it would be contrary to public policy for special conditions such as those with which this contract was concerned to deny or prohibit a statutory remedy for offending conduct under the [TPA]': Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546, 561. See also IOOF Australia Trustees (NSW) Ltd v Tantipech (1998) 156 ALR 470, 478-480. Any attempt to contract out of the remedies conferred by the Act may be void: Hi-Fert Pty Ltd v Kukiang Maritime Carrier Inc (1998) 90 FCR 1, 24. 42 In Akai Pty Ltd v People Insurance Co Ltd [1996] HCA 39 ; (1996) 188 CLR 418, 445, the High Court confirmed that an application to stay proceedings on the basis that the proceedings were brought in breach of a foreign jurisdiction clause 'may be refused where the foreign jurisdiction clause offends the public policy of the forum whether evinced by statute or declared by judicial decision'. The policy of the Act militates against this Court refusing to accept jurisdiction. The Court is required to give decisive weight to the effective operation of the Act: Akai , 447. 43 If an Australian protective provision would be avoided by forcing an applicant to sue in the courts of nominated jurisdiction, that is an important factor which should overcome the pre-disposition of the court to refuse to accept jurisdiction: Commonwealth Bank of Australia v White [1999] VSC 262 ; [1999] 2 VR 681, 704-705, [87]-[91]; Quinlan v Safe International Forsakrings AB [2005] FCA 1362 , [49]; Hume Computers Pty Ltd v Exact International BV [2006] FCA 1440 , [21]-[26]; see also [2006] FCA 1439 , [35]. 44 The starting point is that the proper construction of the contract, the performance guarantees, and other contractual questions should be determined by applying the proper law of the contract: Permanent Trustee Co (Canberra) Ltd v Permanent Trustee Co of New South Wales Ltd (1969) 14 FLR 246, 254; L Collins, Dicey and Morris on The Conflict of Law (13 th ed, 2000), [32-188]. The contract is governed by Indian law: cl 1.3.1. As a general rule, there is a presumption that the law of a foreign country is the same as that of the forum, unless proven otherwise: Neilson v Overseas Projects Corp of Victoria Ltd [2005] HCA 54 ; (2005) 223 CLR 331, [116], [125], [249], [267]. 45 Clause 3.3 of the contract deals with the Performance Guarantee. Arguably on its proper construction, its terms are as follows. 46 Clough shall furnish an unconditional Performance Guarantee for the performance of the contract, in the form of Appendix III of Annexure A, for a sum equivalent to 10% of the contract price: cl 3.3.1. 47 The Performance Guarantee is to be valid initially for the period to the original completion date of 30 April 2006, plus the 12 month Guarantee/Warranty period, plus 60 days: cl 3.3.1. 48 If the works are delayed beyond the original completion date, whether the delay is attributable to ONCG, or to Clough, or for any other reasons (including force majeure), Clough shall extend the term of the Performance Guarantee so that it is valid for 12 months plus 60 days, from the actual date of completion of the works: cl 3.3.2. 49 If the reason for delayed completion of the works is attributable to ONGC, then ONGC shall bear the cost of procuring the extension of the term of the Performance Guarantee: cl 3.3.2. If ONGC exercises its rights to call on the Performance Guarantee to recover liquidated damages, Clough shall cause the Performance Guarantee to be increased by the amount drawn down by the call, or cause a fresh Performance Guarantee to be given for that amount: cl 3.3.5. I accept that, for present purposes, this construction is arguable. 53 A liquidated damages clause, included solely for the benefit of the principal (Company), is to be construed contra proferentum in the event of ambiguity: Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 1 BLR 114 at 121 ; Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82 ; (1986) 161 CLR 500 at 510. 54 Where the parties have agreed liquidated damages for delay as a genuine pre-estimate of damage, rather than a penalty, the presumed intention of the parties is that absent express provisions to the contrary, the clause has no operation where the principal is a cause of the delay: Peak v McKinney at 121, 125-6, 127-8. 55 A contrary intention may be shown where the parties have, in the terms of the contract itself, provided for a contractual mechanism for the determination of extensions of time where the principal is in default: Turner Corporation Ltd v Co-Ordinated Industries Pty Ltd (1995) 12 BCL 33. 56 There is no provision in the contract by which the parties have expressly agreed to confer the power on a person (such as the Company's Representative) to determine extensions of time (cf certification of Practical Completion and Discharge Certificate). 57 Unless the parties have clearly expressed, in the wording of their contract, that a party or its agent is to be the sole and exclusive judge of what additional time should be allowed, such a construction should not be inferred, as it would put one party completely at the mercy of the other: Roberts v Bury Improvement Commissioners (1870) LR 5 CP 310 at 326-327, cited in Turner v Co-ordinated at 218. 58 The difficulty in inferring such a construction of the contract in this case is underscored when it is to be recalled that once the liquidated damages provisions properly apply, and the Performance Guarantee is called, the contractor is required to reinstate it in accordance with cl 3.3.5. It could not have been intended that a mere assertion of an entitlement to liquidated damages would operate to allow the Company to recover the Performance Guarantee of up to US $21 million, and require the contractor to then re-instate that guaranteed amount, as continued security for the performance of the other contractual obligations of the contractor. 59 Moreover, the parties in this matter have not expressly, or by necessary implication (e.g. by agreeing a new Construction Schedule with a new completion date) varied the contract to establish a new completion date in respect of which the liquidated damages clause may operate. 60 Accordingly, in this case, where the Company has, by its breach, caused substantial delay to the off-shore works, the liquidated damages clause has no application. 61 In my opinion, these submissions, upon the proper construction of the contract, are arguable. 65 If the entitlement to call on the performance guarantee is conditioned by the terms of the contract, it cannot be called unless the condition is met, and an injunction restraining an incorrect call may be obtained: eg Barclays Mowlem Construction Ltd v Simon Engineering (Australia) Pty Ltd (1991) 23 NSWLR 451, 456-457; Rejan Constructions Pty Ltd v Manningham Medical Centre Pty Ltd [2002] VSC 579 , [4]; Anaconda Operations Pty Ltd v Fluor Daniel Pty Ltd [1999] VSCA 214 , [8]; Bachmann Pty Ltd v BHP Power New Zealand Ltd [1998] VSCA 40 ; [1999] 1 VR 420, [28]-[30]; Baulderstone Hornibrook Pty Ltd v Qantas Airways Ltd [2000] FCA 672 , [10]. 66 As between the principal and the contractor, it is always relevant to determine whether the principal's right to call on the performance guarantee or bond has actually arisen, and if it has not arisen, the principal may be restrained from incorrectly calling on the performance guarantee: Potton Holmes Ltd v Coleman Contractors Ltd (1984) 28 BLR 19, 28-29; Fletcher Construction Australia Ltd v Varnsdorf Pty Ltd [1998] 3 VR 812, 826. Suggestions that performance guarantees or bonds should be treated as 'good as cash' should not, therefore be regarded as conveying some proposition of general legal application. The question remains, fundamentally, what was the intention of the parties, on the proper construction of the relevant contract. 69 In this case as the conditions in cl 3.3 have not been satisfied, ONGC may not make a call under the performance guarantees, but having purported to do so, should be enjoined from taking any further steps to demand or obtain payment thereunder. 70 Further, because Clough's performance of the offshore work under the contract was and is conditional on ONGC's performance of drilling and well-completion, ONGC's failure to do that work without delay disqualifies ONGC from relying on any failure by Clough to complete the offshore work: Foran v Wight [1989] HCA 51 ; (1989) 168 CLR 385, 417, 425-426, 427 (Brennan J), 455 (Gaudron J); see also 442 (Dawson J); Newcombe v Newcombe (1934) 34 SR (NSW) 446, 450-451; Mackay v Dick (1881) 6 App Cas 251, 270. That again means that ONGC cannot purport to rely on Clough's apparent delay, ignoring its own obligations under the contract, and thereby allege breach and seek to call on the performance guarantees. 71 These matters are complex and of course the Court, in this ex parte application, obviously has not had the assistance of a proper contradictor. Nonetheless, in my opinion, these matters are arguable although it has to be remembered that ONGC has already made calls under the performance guarantees. It is also arguable that an injunction lies to restrain ONGC from taking further steps to demand or obtain payment, under the performance guarantees. There remains the declaratory relief sought by Clough. This raises the question of the asserted unconscionable conduct. It makes the following submissions. 73 Section 51AA provides that a corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the Australian State or Territories. 74 ONGC is a ' corporation ' for the purposes of s 51AA: s 4(1) of the Act. It is a body corporate that is incorporated outside Australia within the meaning of Commonwealth Constitution s 51(xx). It was incorporated in India under the Indian Companies Act 1956. 75 By threatening to call the performance guarantees in correspondence received in Australia or by calling on the performance guarantees by serving notice on the banks in Australia, it has engaged in and will engage in conduct in trade or commerce. By s 4(1) of the Act, ' trade or commerce ' means trade or commerce within Australia or between Australia and places outside Australia. In Houghton v Arms [2006] HCA 59 ; (2006) 231 ALR 534, [33], the High Court accepted that ' in trade or commerce ' refers only to conduct having the character of being an aspect or element of trading or commercial activities or transactions. ONGC's conduct here qualifies as being part of its trading or commercial activities. 76 The real issue is whether ONGC's conduct is unconscionable within the meaning of the unwritten law. There is authority that clearly supports the proposition that an inappropriate threat to call, or a call, on performance guarantees can be unconscionable conduct within s 51AA of the Act: see ACCC v Samton Holdings Pty Ltd [2002] FCA 62 ; (2002) 117 FCR 301, [46]-[50]. 77 In ACCC v CG Berbatis Holdings Pty Ltd [2003] HCA 18 ; (2003) 214 CLR 51, which was a case argued as case of advantage taking of a special disability (see [5], [45]-[46], [77], [160]-[161]), the High Court did not need to consider the point about whether s 51AA is confined to a only the case of advantage taking of a special disability or attracted a more general form of unconscionability. The point was expressly left undecided ([45]-[46], [77], [160]). In Tanwar v Enterprises Pty Ltd v Cauchi [2003] HCA 57 ; (2003) 217 CLR 315, [23]-26], although the High Court suggested that an element or hardship or unfairness alone might not be sufficient to enable the interference with contractual rights and that the phrase ' unconscionable conduct ' was misleading, the High Court did not deal with the issue of the outer boundaries of s 51AA or the equitable doctrine of unconscionability. 78 Further, equity has traditionally exercised its jurisdiction to curtail an exercise of a right to terminate if that right is sought to be used arbitrarily, or capriciously or unreasonably or in bad faith. Equity operates to prevent this conduct on the basis that it is unconscionable conduct: Pierce Bell Sales Pty Ltd v Frazer [1973] HCA 13 ; (1973) 130 CLR 575, 587; see also 587-588, 590-591; NC Seddon & MP Ellinghaus, Cheshire & Fifoot's Law of Contract (8 th Aust. ed) (2002), [20.9]. This doctrine, although distinct from, is very similar to, the implied contractual duty of good faith: Walker v ANZ Banking Group Ltd (No 2) (2001) 39 ACSR 557, [93]-[96], esp. [96]. 79 Because the issue as to the width of s 51AA has been left open and because equity has traditionally protected against unconscionable conduct, if there is an attempt to exercise a right unreasonably or in bad faith, it cannot be said that s 51AA does not extend to cover this sort of unconscionability. 83 Further, the balance of convenience favours the grant of an injunction because the evidence shows how Clough will be irreparably affected (both financially and through an adverse impact on its reputation) if ONGC presses its demands and secures payment under the performance guarantees. Damages would not be an adequate remedy for Clough, on the evidence. 84 Because the performance guarantees will remain intact or must be renewed (cl 3.3.6), ONGC will not suffer irreparable loss by the grant of an injunction. 85 In his affidavit sworn on 5 June 2007, Jae-Ho Choe has deposed that there is no convention treaty or other agreements in force between Australia and India on the service of documents in civil proceedings and further that the service of the Application and Affidavits, as proposed by means of a process server or legal practitioner in India, upon ONGC, is permitted by the law of India. This satisfies the relevant provisions of FCR O 8 r 3(3). 86 Accordingly leave should be granted to serve the Amended Application outside of the jurisdiction and interim interlocutory injunctive relief should be afforded for a very short period. I propose to make orders in terms of the Applicant's Minute dated 6 June 2007. I certify that the preceding eighty-six (86) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour . | interim interlocutory injunction whether serious issues to be tried whether applicant contractor may enjoin respondent principal from taking further steps to demand or obtain payment under performance guarantees issued by respondent banks whether applicant contractor guilty of unconscionable conduct in contravention of trade practices act 1974 (cth) s 51aa. leave to serve proceeding in india federal court rules o 8 whether proceeding of kind(s) mentioned in o 8 r 2 whether prima facie case of contravention of s 51aa if the trade practices act 1974 (cth) by calling on performance guarantees by respondent banks when no contractual entitlement to do so. injunction practice and procedure |
He applies for leave to appeal from an interlocutory judgment of Federal Magistrate Driver published on 22 June 2006 in which his Honour dismissed an application for judicial review of a decision of the Refugee Review Tribunal. The Tribunal had affirmed a decision of the delegate of the Minister for Immigration and Multicultural Affairs to refuse the applicant a protection visa. 2 On 2 June 2006 Federal Magistrate Driver dismissed the applicant's application on account of his non-attendance. At a further hearing on 22 June 2006, the learned Federal Magistrate refused to reinstate the application. His Honour found the applicant was not a witness of truth, as the explanation the applicant provided for his non-attendance was implausible. His Honour found the applicant did not attend court for the previous hearing and even if he had, he took a conscious decision not to enter the courtroom when his name was called. The Federal Magistrate said that if the applicant had advanced a sufficient explanation for his non-attendance a serious question to be tried would have been demonstrated. 3 The applicant, who is self-represented, submitted that the Federal Magistrate erred in not accepting that he did not attend court on 22 June 2006. By the draft notice of appeal annexed to his application for leave to appeal, the applicant raised a number of grounds. The applicant asserted that the Federal Magistrate failed to consider the fact the applicant did appear at court but did not realise he was being addressed as SZIEN. The applicant contended that the Federal Magistrate failed to find the Tribunal misunderstood his claims and that the Tribunal made erroneous findings. The applicant also indicated that an issue arising under s 424A(1) of the Migration Act 1958 (Cth) was raised and that the Tribunal applied the wrong test for credibility and denied him procedural fairness. 4 The Tribunal's decision was based on its finding that the applicant had fabricated his claims. It did not accept he was involved in a certain anti-government organisation. It made this finding, in part, on the applicant's inability to describe, in any cogent way, how that body was organised. The Tribunal found that the evidence the applicant gave regarding his participation in demonstrations lacked credibility. It also found it implausible that the authorities would have permitted seven to eight demonstrations to take place before taking action to arrest the demonstrators, as independent evidence suggested the authorities moved quickly to suppress demonstrations. The Tribunal also considered it relevant that the applicant, although claiming to be a political dissident whose colleagues were sentenced to prison terms, did not "bring the plight of these colleagues to the attention of human rights organisations". The Tribunal was not satisfied that the applicant had a well-founded fear of persecution arising from his claim of being involved in an anti-government organisation. 5 The Tribunal did accept that the appellant left China using a passport which was not his own, and although it was satisfied, on country information, that a penalty may be imposed on the applicant for his illegal departure, it was not satisfied that this constituted persecution for a Convention reason. 6 As the judgment below is interlocutory, leave to appeal is required. Leave will not be granted unless the judgment below is attended with sufficient doubt to warrant its reconsideration on appeal and unless substantial injustice would result if leave were refused, supposing the judgment to be wrong. 7 I do not consider that the judgment of Driver FM is attended with sufficient doubt to warrant its reconsideration on appeal. The judgment below was based on his Honour's view of the applicant's credibility. The applicant has not demonstrated why this Court should take a different view of his credibility than that taken by his Honour, especially where the transcript of the proceeding on 2 June 2006 supports his Honour's finding that the applicant was called outside the Court both by his actual name and his designated name for the purposes of the proceeding before the Court below. 8 Additionally, no substantial injustice arises from the refusal of leave to appeal because the applicant's proposed grounds of appeal cavil with factual findings made by the Tribunal. The only issue of substance raised in those proposed grounds, which does not seek to dispute the Tribunal's findings of fact, is a ground based on s 424A of the Act. That ground alleges that the Tribunal relied on country information without inviting the applicant to comment on it. Section 424A does not apply to country information that is not specifically about the applicant and which is just about a class of persons of which the applicant is a member; see s 424A(3)(a). 9 The application for leave to appeal is refused with costs. | application for protection visa refused application for review by refugee review tribunal refused appeal to federal magistrate's court dismissed leave to appeal required judgment below not attended with sufficient doubt no substantial injustice leave refused migration |
Orders reflecting the result were made on 27 April 2005 ( Kamha v Australian Prudential Regulation Authority [2005] FCA 688). On 30 November 2005 the Full Court allowed an appeal, ordered that the orders made on 27 April 2005 should be set aside and remitted the matter to me for reconsideration ( Kamha v Australian Prudential Regulation Authority [2005] FCAFC 248 ; (2005) 147 FCR 516). That reconsideration has been delayed by reason of an appeal to the High Court in related proceedings ( X v Australian Prudential Regulation Authority (2007) 226 CLR 630). This is that reconsideration. The case concerns a challenge under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) to a decision by the Australian Prudential Regulation Authority (APRA) to disqualify the applicant pursuant to s 25A of the Insurance Act 1973 (Cth). I will assume a familiarity with the history and circumstances of the case, the statutory background and the prior judgments in framing these reasons. 2 On 9 June 2006 counsel for the applicant submitted that the reconsideration is limited to consideration of the applicant's grounds of attack upon the decisions in question that were not dealt with in my prior judgment on their merits. Put another way, it is submitted that the Full Court decision precludes any discretionary refusal of relief or summary dismissal as the case presently stands. 3 I rejected that submission and indicated that, in my opinion, the remittal includes exercise of the discretion whether or not to grant relief under s 16 of the ADJR Act. The Full Court dealt with the discretion issue in Kamha [2005] FCAFC 248 ; 147 FCR 516 at [76] ---[90]. The existence and possible application of the s 16 discretion was affirmed. The Full Court did not purport to exercise that discretion for itself. The Full Court decision does not preclude the application of the Federal Court Rules , including those relating to summary dismissal. The order of remittal is not limited in any way and cannot be read down. The result of the Full Court appeal is that only ground 1(b) in respect of the satisfaction decision and ground 2(b) in respect of the discretionary decision in the further amended application have been disposed of. All of the remaining grounds are open, subject to the limitations arising out of what the Full Court had to say under the heading "Reasons for deciding to disqualify". The reconsideration must be conducted in the light of the circumstances that exist at the present time. I propose to reconsider the issue of discretion before moving to complete the hearing of the remaining issues on the merits. Certain events occurring after the previous decision now need to be taken into account. 4 The Administrative Appeals Tribunal (the AAT) has now held that it is appropriate to make orders ensuring that an applicant's identity is not disclosed in the course of proceedings before it and that APRA can be restrained from publishing a notice relating to, or in any other way revealing, its decision ( Re VBJ and Australian Prudential Regulation Authority [2005] AATA 642 ; (2005) 87 ALD 747, (2005) 60 ATR 1013). That supplements the topic referred to in Kamha [2005] FCA 480 ; 146 FCR 24 at [44] . Whether it is appropriate to now make such orders in this case, with its history, would be a matter for the AAT. 5 The applicant has now been charged with two offences, firstly, that he did not act honestly in exercise of powers and discharge of duties as an officer of FAI General Insurance Co Limited and, secondly, that being an officer was privy to the fraudulent altering of a database of that company. Those charges obviously involve an overlap with the subject matter of the present proceedings. The charges have been preferred in open Court and there has been newspaper publicity about them. This adds to the point discussed in Kamha [2005] FCA 480 ; 146 FCR 24 at [43] . 6 The Full Court appeal in this case was argued in public and the judgment of the Full Court is public. It has been available on the Court's website since shortly after it was delivered. It has been reported. The remitted proceeding has been argued in public. This judgment will be public. The fact that APRA has decided to disqualify the applicant is well and truly in the public domain by reason of his choice in bringing this proceeding. 7 It is clear enough that, if the inevitable disqualification had taken place, the applicant could have exercised the internal review and made an application to the AAT for an immediate stay and thereafter maintained confidentiality through that process and any consequent appeal to the AAT. Counsel for the applicant naturally sought to rely upon what was said by the Full Court as to "status" (see Kamha [2005] FCAFC 248 ; 147 FCR 516 at [85] ). "Status" is an unusual way of describing an administrative disqualification that is stayed and is subject to full confidential internal and external review on the merits. Even in the case of bankruptcy by court order, a successful appeal means that it is as if sequestration had never occurred ( de Robillard v Carver (2007) 159 FCR 38 per Buchanan J at [141]---[150], agreed with by Moore and Conti JJ at [1]). Reliance is also placed upon the statement "that may be a matter of prejudice..." ( Kamha [2005] FCAFC 248 ; 147 FCR 516 at [85] ). No fact or circumstance indicating potential prejudice is identified. I cannot discern any. Nonetheless, I will take into account the possibility of some unidentified prejudice by reason of the statutory process being followed to decision by the AAT. 8 The judicial discretion under s 16 as to whether or not to grant relief is at large, even where a case for relief is made out ( Lamb v Moss (1983) 49 ALR 533, (1983) 76 FLR 296, (1983) 5 ALD 446; Seymour v Attorney-General (Cth) (1984) 4 FCR 498; Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 per Mason CJ at 338---339, agreed with by Brennan J at 365 and Deane J at 369). There are no mandatory criteria. A factor is only irrelevant to exercise of discretion if it is contrary to the purposes of the section read in its context in the ADJR Act. 9 Full internal and external merits review of a disqualification is available pursuant to s 63 of the Insurance Act . The existence of a suitable alternative remedy is a well established basis for the refusal for administrative law relief, whether under the ADJR Act or at common law. Section 10 of the ADJR Act, particularly s 10(2)(b)(ii) reflects that principle. ( Tooth & Co Ltd v Parramatta City Council [1955] HCA 21 ; (1955) 97 CLR 492 at 497---498 per Dixon CJ; Re Refugee Tribunal; Ex parte Aala [2000] HCA 57 ; (2000) 204 CLR 82 at [5] per Gleeson CJ, [40]---[79] per Gaudron and Gummow JJ, [145]---[150] per Kirby J and [172] per Hayne J; Swan Portland Cement Ltd v Comptroller-General of Customs (1989) 25 FCR 523. ) For obvious reasons, full merits review is generally a more suitable remedy than an administrative law challenge except, for example, where there is a clearly identified question of jurisdiction or power or other legal objection that can be decided without significant fact finding and is appropriate for decision by a court ( Du Pont (Aust) Ltd v Comptroller-General of Customs (1993) 30 ALD 829, [1993] FCA 187 ; NAUV v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 79 ALD 149, [2003] FCA 1319 at [49] citing New South Wales Bar Association v Stevens (2003) 52 ATR 602, [2003] NSWCA 95 at [13] per Spigelman CJ; Boral Gas (NSW) Pty Ltd v Magill (1993) 32 NSWLR 501 particularly per Kirby P at 508---509; Stack v Commissioner of Patents (1999) 161 ALR 531 at [12]---[13]). The points argued and decided in this and the related case already (including the point involved in the High Court proceeding) illustrate such questions. As consideration of [79]---[83] of the Full Court judgment ( Kamha [2005] FCAFC 248 ; 147 FCR 516) makes clear, it is only the barest of technicalities which prevented s 10(2)(b)(ii) from being directly applicable. That does not limit the relevance of similar considerations in exercise of the discretion under s 16. 10 The remaining grounds in this case require findings of fact and law. The evidence for the respondent, together with final submissions, will take some days and cannot be heard this year. A judgment will then take some time to deliver. The full merits review that has been and is available in the AAT provides the applicant with a remedy capable of taking account of all legitimate concerns about the decisions, including matters of process and substance, that are involved in the remaining grounds before the Court. 11 Furthermore, there is more at stake than the interests of the applicant. There is a public interest in disqualification of unsuitable persons in this field and in the timely consideration of that issue by the statutory regulator. Indeed, there is a public interest in the timely administration of the Insurance Act 1973 (Cth). Collateral administrative law challenges have the capacity to seriously interfere with the process. This case is a good example. The findings of the Royal Commission that sparked the issue were made in April 2003 based upon evidence given in public many months before that and related (so far as is relevant) to events up to September 1998. Furthermore, the applicant could pursue the remaining grounds in this case and then, if he loses and is formally disqualified (putting aside the possibility of appeals), exercise the internal and external rights of review. If no interlocutory injunction had been granted and undertakings given by APRA, the merit reviews which would have been open to the applicant would have been completed well before now. The tendency to mount collateral administrative law challenges to decisions where full merits review is available rather than deal with the substance of a case on review is becoming a more common phenomenon (eg Syngenta Crop Protection Pty Ltd v Commissioner of Taxation (2005) 61 ATR 186, [2005] FCA 1646). 12 There is also a public interest in proper use of the resources of the Court. There is no good reason that those significant public resources should be devoted to hearing the balance of this case, to the disadvantage of other litigants, where the issues are far better determined by the AAT --- the body chosen by Parliament to review the substantive decisions in question. Among other things, the AAT can be taken to have specialist expertise that this Court does not and is not bound, as is a Ch 3 Federal court, by rules of evidence, practice and procedure. 13 All in all, the balance lies firmly in favour of declining relief, whatever the merits of the remaining grounds, and this proceeding should be brought to a halt, leaving the applicant to his statutory rights of review. The unresolved grounds can be regarded as summarily dismissed for reasons outlined in Du Pont (Aust) Ltd 30 ALD 829, [1993] FCA 187 ; Saitta Pty Ltd v Commonwealth [2000] FCA 1546 ; (2000) 106 FCR 554; and McGowan v Migration Agents Registration Authority [2003] FCA 482 ; (2003) 129 FCR 118. There is no need to make formal orders to that effect on the motion or otherwise as no other basis for relief remains. The appropriate order is that the proceeding be dismissed. These reasons explain the bases for that order. 14 The question of costs is not without its complications. The issues in the case that were argued and finally dealt with were all ultimately decided in favour of the respondents, either because of my orders or the orders of the Full Court. The respondents are entitled to the costs of those issues. The remaining issues are in a different category. They have not been determined on the merits. The motion for dismissal that has succeeded was not filed until 14 March 2005. The applicant elected to push on regardless and lost. Assessment and apportionment of costs attributable to particular grounds of the application for particular periods of time would be very difficult. In my opinion, the proper order for costs is that the applicant should pay the general costs of the proceeding and of the respondents' motion for dismissal but that each party should bear its own costs up to 14 March 2005. The applicant's motion to amend to rely upon s 6N of the Royal Commissions Act 1902 (Cth) should be formally dismissed and the applicant should pay the costs of and incidental to that motion . | judicial review of a decision by the australian prudential regulation authority reconsideration following appeal to be conducted in light of current circumstances nature of judicial discretion under s 16 of the administrative decisions (judicial review) act 1977 (cth) consideration of prejudice to applicant consideration of public interest consideration of full merits review as a suitable alternative remedy decision of the australian prudential regulation authority to disqualify a person from being or acting in various capacities pursuant to s 25a of the insurance act 1973 (cth) appropriate methods of challenge to decision administrative law insurance |
He is also the liquidator of the company which was wound up by an order of this Court made on 5 October 2007. 2 On 25 March 2008 the plaintiff filed an application which was subsequently amended on 21 May 2008 seeking directions pursuant to s 447D of the Corporations Act 2001 (Cth) (the Act) in his capacity as deed administrator and pursuant to s 479(3) of the Act in his capacity as liquidator. Paragraphs 1 to 5 of the orders made in this matter on 22 April 2008 be revoked. The plaintiff file any amended application and any further affidavits upon which he intends to rely on or before 20 May 2008. 3. 4. Any creditor that intends to be heard on the application file and serve an appearance and any affidavits on or before 3 June 2008. 5. The plaintiff, and any creditor that intends to be heard on the application, file and serve an outline of submissions five business days before the hearing of the application. 6. The application be listed for hearing on 24 June 2008 at 9.30am. No creditor has filed an appearance or sought to be heard on this application. 5 The purpose of providing administrators and liquidators with the right to apply for directions from the Court is to protect those officers from incurring personal liability in relation to acts done on behalf of the company. Provided that an administrator or a liquidator makes a full and fair disclosure to the Court of any material facts which are relevant to the application, those officers are entitled to obtain directions from the Court as to the manner in which they should act in carrying out their functions. The purpose is not to enable an administrator or liquidator to apply to the Court to make binding orders in the nature of judgments which would impact upon creditors or other parties not parties to the proceeding but to give the administrator or liquidator advice: Re G B Nathan and Co Pty Ltd (In Liq) (1991) 24 NSWLR 674. However, there may be instances where a court will go further without simply giving directions and make declarations which impact on parties' substantive rights, but usually the parties affected will be parties to the proceeding or at least indicate consent to such a procedure. 6 The company was registered on 28 August 2001. On 1 November 2005 the Deputy Commissioner of Taxation filed an application in this Court seeking an order that the company be wound up in insolvency. On 29 November 2005 at a meeting of the company the plaintiff was appointed administrator of the company by the director pursuant to s 436A of the Act. At that meeting the director of the company, Mr Kerry Rogers, expressed the opinion that the company was insolvent. On 6 December 2005 the plaintiff in his capacity as administrator of the company convened a meeting of the company's creditors pursuant to s 436E of the Act. On 20 December 2005 Emmett J dismissed the Deputy Commissioner of Taxation's application on the ground that a DOCA was likely to be executed. On 23 December 2005 the plaintiff convened a further meeting of creditors pursuant to s 439A at which the creditors resolved that the company execute a DOCA. That deed was executed on 31 December 2005. 7 The DOCA provides that a moratorium applies for all liabilities of the company to creditors until the company is released from the DOCA or the DOCA is terminated: clause 3. 8 Clause 4.3 of the DOCA provides that the director, Mr Kerry Rogers, pay to the administrator the sum of $57,150 for the purchase of the plant, equipment and vehicles of the company. The DOCA provided for that sum to be held by the administrator, together with other monies as provided for in clause 5 of the Deed; which together would comprise the "fund". ST001/04 ("Cable Rectification Works") together with all other company property shall be available for distribution amongst creditors in accordance with clause 6 hereof and which shall together comprise and shall be referred to herein as the fund. There are other provisions for termination if the company is in default (clause 12) or the administrator is of the opinion that it is no longer practicable or desirable to implement the DOCA (clause 12A), but they are not relevant on this application. 13 Clause 18 of the DOCA provides for termination where the arrangement has achieved its purpose. 14 On 26 March 2006 the plaintiff paid an initial dividend to all but two creditors of the company of 48 cents in the dollar. The creditors who did not receive a dividend were CGU Workers Compensation (NSW) Limited (CGU) and Austsign Extreme Pty Ltd (in liquidation) (Austsign), neither of whom at that stage had made claims in accordance with the DOCA. CGU and Austsign submitted their claims on 29 June 2007 and 15 August 2007 respectively. 15 In May 2007 the company ceased trading. 16 On 29 June 2007 the Deputy Commissioner of Taxation again applied to this Court for an order that the company be wound up in insolvency. 17 On 31 July 2007 the plaintiff convened a meeting of the deed creditors pursuant to s 445F of the Act. The administrator advised the deed creditors that the meeting was convened for the purpose of terminating the DOCA in accordance with clauses 12 and 12A of the DOCA and s 445F of the Act. He advised the meeting that the Deputy Commissioner of Taxation had petitioned to wind up the company on the basis "that it has unpaid post deed debt". On a motion proposed by the Deputy Commissioner of Taxation, the meeting was adjourned to 20 September 2007. 18 On 18 September 2007 the plaintiff admitted CGU's and Austsign's claims in the sum of $126,082.61 and $2,000 respectively. 19 On 20 September 2007 the director, Mr Rogers, moved a resolution that the meeting be adjourned to 27 September 2007 in order that he might pay out the Deputy Commissioner of Taxation. The meeting was adjourned. 20 On 27 September 2007 the meeting of the deed creditors resumed at which the only creditors present were the director and representatives of the Australian Taxation Office. The plaintiff invited the creditors to pass a resolution under s 445C(b) of the Act terminating the DOCA and winding up the company but neither creditor was prepared to propose a motion to that effect. 21 On 5 October 2007 Registrar Hedge, in the New South Wales District Registry, made an order that the company be wound up and the plaintiff be appointed as liquidator of the company. 22 At the time the winding up order was made, the DOCA was still extant; equalising dividends had not been paid to the two creditors CGU and Austsign; and the plaintiff's fees had not been paid. Deed assets consisting of $82,295.91 in cash at the bank and $130,515.15 of collectable items were still undistributed. 23 Section 445C of the Act provides for the circumstances in which a deed of company arrangement may be terminated. Termination of a deed of company arrangement is also a purely statutory matter, in the sense that there can be no termination except as is produced by the Corporations Act and the consequences of termination are those produced by the Act. Section 445C must be taken to deal comprehensively with the circumstances in which a deed of company arrangement may be terminated. 27 Clause 7 of the DOCA provides that the company is to be released from the deed and from its debts, and all claims by creditors relating to the company's debts and all liabilities, upon payment to the creditors of their entitlements as provided for in clause 6 of the DOCA. Although an initial dividend of 48 cents in the dollar was paid on 26 March 2006, two deed creditors have not yet been paid their dividend and are entitled to an equalising dividend of 48 cents in the dollar in relation to their debts. Clause 7 therefore does not operate to release the company and bring the DOCA to an end. Neither clause 12 nor clause 12A applies so as to terminate the DOCA, at least without a resolution of creditors. Because there is a fund remaining the plaintiff cannot certify in accordance with clause 18 and the DOCA cannot be terminated by that event. The DOCA does not provide that it should be terminated upon the company being wound up. No deed creditor sought to have the DOCA terminated at the meeting of 27 September 2007 despite the plaintiff's invitation: s 445C(b). In those circumstances, the DOCA continues to bind the company because none of the circumstances in s 445C have been met at least until an order is made by the Court pursuant to s 445D: s 445C(a). 28 This appears to be a novel case in that at the time the company went into liquidation the company was in administration and subject to a deed of company arrangement. That administration did not cease by reason of anything done by the creditors at or before the winding up order, nor did administration cease by force of the winding up order. In those circumstances, both administrations were in existence as a result of the winding up order and the plaintiff was charged with carrying out both administrations. 29 The effect of the DOCA continuing to bind the company is that two creditors, CGU and Austsign, are apparently entitled to an equalising dividend to that paid to the remaining creditors on 26 March 2006. There are sufficient funds to make that payment. 30 I am told that if that equalising dividend were paid and all other costs and expenses arising out of the administration of the deed were met, there would still be sufficient funds to pay a second dividend to the creditors under the DOCA in the order of 5.55 cents in the dollar. Of course, that would mean that, effectively, the creditors existing as at the date the company entered into the DOCA would be preferred to those creditors who have become creditors of the company subsequent to the administrator's appointment on 29 November 2005. 31 The issue which has arisen, therefore, is whether in the absence of the termination of the DOCA the fund should be administered in accordance with the DOCA or whether it should be applied and distributed in the course of the winding up. 32 The effect of the plaintiff's appointment as liquidator means that no-one can perform or exercise or purport to perform or exercise a function or power as an officer of the company: s 471A. An administrator of a deed of company arrangement is an officer of the company: s 9. The plaintiff cannot therefore exercise his functions or powers as an administrator unless as liquidator he gives himself written approval as administrator or has the approval of the Court: s 471A(1A). 33 A deed of company arrangement binds all creditors of the company, so far as it concerns creditors' claims arising in this case before the appointment of the administrator: s 444D(1). The deed also binds the company, its officers and members and the deed's administrators: s 444G. The liquidator of a company is an officer: s 9. 34 It follows that in a case such as this where a company is in administration and subject to a deed of company arrangement, and the administration continues after the company is also wound up in insolvency and a liquidator appointed, the administrator ceases to be able to perform any function or power under the deed of company arrangement; but the creditors at the time the administrator was appointed and the liquidator are bound by that deed of company arrangement. 35 Where a company is being wound up in insolvency, the liquidator must take into the liquidator's custody or control all the property to which the company is or appears to be entitled: s 474(1). The company's property must be applied in discharging the company's liabilities: s 478(1)(a). Whilst the liquidator takes custody and control of the company's assets, the legal title to the property remains in the company. The liquidator merely adopts the position of the directors: Octavo Investments Pty Ltd v Knight [1979] HCA 61 ; (1979) 144 CLR 360 at 371; Mineral & Chemical Traders Pty Ltd v T Tymczyszyn Pty Ltd (in liq) (1994) 15 ACSR 398. The effect of the appointment of a liquidator is rather that control of all of the company's property passes to the liquidator. There is no change in the ownership of a company property upon a winding up (leaving aside preferences). Title to property does not pass but remains vested in the company: Re Allan Fitzgerald Pty Ltd (in liq) (1992) 9 ACSR 627. The liquidator does not become the beneficial owner of the assets of the company. The liquidator is simply an officer of the company charged with the duty of dealing with the company's assets in accordance with the statutory scheme: United Tool & Lye-Makers Pty Ltd (in liq) v J V Marine Motors Pty Ltd [1992] 1 VR 266; Re Allan Fitzgerald Pty Ltd (in liq), supra. The liquidator of a company takes the position of the directors and, in the absence of a court order under s 233(2) of the Companies Act acquires no title to the company property . When a company is placed in liquidation and a liquidator appointed, the ownership of the assets of the company remains with the company. The control of those assets, however, passes to the liquidator in accordance with the statutory scheme and the liquidator must deal with those assets for the benefit of the creditors. 37 The question for determination is whether the liquidator must apply the fund in accordance with the DOCA, or in accordance with the statutory provisions relating to a liquidation and without reference to the DOCA. The plaintiff cannot perform his functions as administrator because he has been appointed as a liquidator: s 471A. If the liquidator must apply the fund in accordance with the statutory provisions relating to a liquidation, the Court may need to make an order terminating the DOCA so that the liquidator may discharge his duties: s 445C(a). 38 There is an antecedent question, namely, whether by reason of the execution of the DOCA, the plaintiff holds the deed fund on a trust either for the company or for the deed creditors. 39 There is a conflict in the authorities as to the effect of a deed of company arrangement on the assets of the company. In Dean-Willcocks v ACG Engineering Pty Ltd (in liq) [2003] NSWSC 353 ; (2003) 45 ACSR 290 , the plaintiff liquidator had previously been the voluntary administrator of the company. After his appointment as administrator, the company entered into a deed of company arrangement which provided for the plaintiff to be the deed administrator. The deed provided for the creation of an administration fund on account of the creditors and provided that the administrator was to hold the administration fund in accordance with the terms of the deed of company arrangement. The deed recorded that the company and its directors had agreed that any monies paid to the administrator towards the fund were not refundable to the company or a third party. The deed of company arrangement required a distribution among the participating creditors. 40 The question for determination for Austin J was whether the administration fund was an asset of the company so as to be available for distribution in the liquidation of the company, or an asset held by the deed administrator for the benefit of the deed creditors and not for the benefit of the company. 41 Justice Austin examined the provisions of the deed of company arrangement and concluded that the plain and natural meaning of the words in the deed created a trust of the amount of the administration fund for the benefit of the participating creditors. The trust arose by reason of the provisions of the deed which created an obligation on the administrator to hold the administration fund in accordance with the terms of the deed. He said that s 444G had the effect of binding the company and the deed's administrators, as well as officers and members, which meant that the administrator was bound to hold the administration fund in accordance with the terms of the deed of company arrangement, which was also binding on all relevant parties. He said the provisions of the deed gave rise to an express trust of the administration fund for the benefit of the participating creditors as beneficiaries. 42 That decision was followed by Campbell J in Shepard v Sports Mondial of Australia Pty Ltd (in liq) [2005] NSWSC 432 ; (2005) 53 ACSR 746 who said at 748 that "the manner of application of the available funds depends upon the terms of the deed of company arrangement. In that case, a clause of the deed provided that the deed fund was to be held on trust for the benefit of the administrators, deed administrators and for those creditors who became participating creditors. In other words, there was specific reference to the deed fund being held on trust. His Honour held, however, that no trust of the kind suggested by Austin J was created by the deed. Instead, the administrator was like a liquidator who was bound by statute to deal with the Club's assets in a particular way in accordance with the deed of company arrangement. In his reasons, Barrett J relied upon a decision of Davies J in Federal Commissioner of Taxation v All Suburbs Car Repairs Pty Ltd (1994) 14 ACSR 753. In that case, Davies J concluded that when an administrator was acting in accordance with the powers conferred by the deed and carrying out the duties arising under the deed, the administrator was acting in his capacity as agent for the company. The segregation of part of the company's property (whether or not including property to be contributed by someone else) so that it becomes a fund to be applied by the deed administrator as the company's agent in accordance with the deed of company arrangement does not, of itself, give rise to a trust. And where, as in the present case, the segregation is made in a context referring to a "trust" administered by the deed administrator, there is again no trust unless it can clearly be seen that the company has divested itself of the legal and beneficial interests in its property. The fact that the fund is to be applied by reference to creditors' claims is not sufficient to give them such beneficial interests in the property concerned; nor is it sufficient to justify a conclusion that the deed administrators became the legal owners of the property so as to be capable of holding it on trust. 44 His Honour then considered the effect of the deed if he were wrong about his conclusion that no trust was created and in circumstances where the deed of company arrangement was terminated. In those circumstances, he held that the trust property (if there be trust property) would be held upon a resulting trust for the company: Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567. 45 That decision was followed by Gyles J in Purchas v Estore Pty Ltd (in liq) [2006] FCA 1222 ; (2006) 154 FCR 246. The decisions of Austin J in Dean-Willcocks v ACG Engineering Pty Ltd (in liq) [2003] NSWSC 353 ; (2003) 45 ACSR 290 and Campbell J in Sports Mondial favour the conclusion that the fund is held on trust for the deed creditors. After those decisions, Finkelstein J, in Commonwealth v Rocklea Spinning Mills Pty Ltd [2005] FCA 902 ; (2005) 145 FCR 220 , drew attention to the possibility of an inconsistency between them and the earlier decision of Davies J in Commissioner of Taxation (Cth) v All Suburbs Car Repairs Pty Ltd (1994) 29 ATR 329. Davies J held that payments to the administrator were payments to him in his capacity as the agent of the company and consequently the sums received were the property of that company. Barrett J needed to consider the differences in the reasoning in those authorities in Lombe v Wagga Leagues Club Ltd [2006] NSWSC 3 ; (2006) 56 ACSR 387 at [53] - [77] . In circumstances which I cannot distinguish in substance from the present facts, Barrett J in a careful and reasoned decision applied the reasoning of Davies J. It is appropriate to follow the decision of Barrett J unless I am satisfied that it is clearly wrong. Consistency of decision in relation to the Act is desirable. As I am not satisfied that the decision of Barrett J is clearly wrong, I propose to follow it and give directions accordingly. 46 In my opinion, the decision of Barrett J is to be preferred to the decisions of Austin J and Campbell J for the reasons given by Barrett J. 47 The Act provides a statutory scheme for the administration of a company under a deed of company arrangement. There is no reason, in principle, to treat an administrator any differently from a liquidator. The administrator, like a liquidator, is an officer of the company. He or she is obliged to act in accordance with the functions and powers given him or her under the deed of company arrangement which he or she is appointed to administer. 48 There is no reason to impress upon the administrator a trust so that the company is divested of its assets upon the execution of the deed of company arrangement. It is enough that the administrator is obliged to deal with the assets of the company in accordance with the directions given by the company by its execution of the deed of company arrangement. The Parliament could, if it wished, create the administrator as a trustee of the company's assets on execution of the deed of company arrangement: Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation [1993] HCA 1 ; (1993) 178 CLR 145 at 167. Indeed, the legislation could render the administrator as trustee without the legislation using the expression "trust": Commissioner of Taxation of the Commonwealth of Australia v Linter Textiles Australia Ltd (in liq) [2005] HCA 20 ; 220 CLR 592 at 607. But that is not the case here. There is nothing in the statute which suggests that an administrator is to become the trustee of any fund created by the company pursuant to a deed of company arrangement. There is nothing to suggest that the administrator should occupy any different position to a liquidator. The purpose of an administration is to get in the available assets and distribute them to the creditors; in the case of an administrator in accordance with the deed of company arrangement and in the case of a liquidator in accordance with the statutory scheme. 49 The administrator must discharge the administrator's statutory obligation and any obligations which are imposed upon the administrator which the administrator accepts by reason of accepting his or her appointment by the deed of company arrangement. I think the reasons of Barrett J which rely in part on the reasons of Davies J are to be preferred to the other decisions of the Supreme Court of New South Wales. 50 If I am wrong about that and a deed of company arrangement could create a trust in favour of the creditors at the date of the appointment of the administrator, this DOCA is not an arrangement of that type. 51 Clause 5 of the DOCA simply makes the fund available for distribution amongst creditors in accordance with clause 6 of the DOCA. In my opinion, clause 6 instructs the administrator as to the order in which the administrator shall distribute and apply the fund. Neither clause 5 nor 6, nor clauses 5 and 6 considered together, creates a trust whereby the monies are held by the administrator for the benefit of the deed creditors. For those reasons, this case can be distinguished from the facts in Dean-Willcocks v ACG Engineering Pty Ltd (in liq) [2003] NSWSC 353 ; 45 ACSR 290 and in Shepard v Sports Mondial of Australia Pty Ltd [2005] NSWSC 432 ; 53 ACSR 746. It follows therefore that the fund created by the DOCA is still the property of the company. 52 In those circumstances, the plaintiff, as liquidator, must receive as part of the liquidation the fund, and distribute those monies held in the fund in accordance with his obligations as liquidator. 53 The plaintiff has sought an order that the deed be terminated. It is not clear in which capacity the plaintiff makes that application but I think because of the provisions of s 471A that he has made this application as liquidator. Section 445D of the Act empowers the Court to terminate a deed in the circumstances specified in the section. A deed would be terminated if, in the exercise of the Court's discretion, it is in the interests of the creditors as a whole and in the public interest: Emanuele v Australian Securities Commission (1995) 63 FCR 54. 54 In the present circumstances, on the appointment of the plaintiff as liquidator, the DOCA has no further work to do and cannot assist the two creditors who have not received their dividend in accordance with the DOCA. For that reason, it would be appropriate to order its termination: s 445D(1)(g). In those circumstances, I am prepared to make an order terminating the deed. 55 If the deed is terminated, the plaintiff's remuneration as deed administrator would become a deferred expense for the purpose of s 556 of the Act and payable accordingly. A direction that the plaintiff would be justified in making an application for the termination of the deed of company arrangement executed by Strongest Link Pty Ltd (in Liq) (Subject to a Deed of Company Administration) on 31 December 2005. 2. An order pursuant to s 445D(1) of the Corporations Act 2001 (Cth) (the Act) that the deed of company arrangement executed by Strongest Link Pty Ltd (in Liq) (Subject to a Deed of Company Administration) on 31 December 2005 be terminated. 3. An order that pursuant to s 447A of the Act that the order made in paragraph 2 hereof is not to be taken as the passing of a special resolution in accordance with s 446B(1) of the Act and reg 5.3A.07 of the Corporations Regulations 2001 (Cth). 4. A direction that the plaintiff would be justified upon the termination of the deed of company arrangement executed by Strongest Link Pty Ltd (in Liq) (Subject to a Deed of Company Administration) on 31 December 2005, in applying and distributing the fund described in clause 5 of that deed as the property of Strongest Link Pty Ltd (in Liq) (Subject to a Deed of Company Administration) in due course of winding up. 5. A direction that the plaintiff would be justified upon the termination of the deed of company arrangement executed by Strongest Link Pty Ltd (in Liq) (Subject to a Deed of Company Administration) on 31 December 2005, in treating his remuneration payable pursuant to clause 8 of the deed "as deferred expenses" within the meaning of s 556 of the Act in the winding up. 6. The costs of this application be paid out of the assets of Strongest Link Pty Ltd (in Liq) (Subject to a Deed of Company Administration) as an expense of the winding up. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | where plaintiff appointed administrator of the company on 29 november 2005 where deed of company arrangement (doca) executed on 31 december 2005 where plaintiff also appointed liquidator of company on 5 october 2007 when company wound up where two deed creditors remain unpaid where no deed creditor sought to have the doca terminated at creditor's meeting where administration fund established under the doca but not distributed prior to liquidation still contains monies where doca does not provide it should be terminated upon the company being wound up whether in the absence of termination of the doca the fund should be administered in accordance with the doca or whether it should be applied and distributed in the course of the winding up in accordance with statutory provisions relating to a liquidation whether by reason of execution of the doca, the plaintiff holds the fund on trust either for the company or for the deed creditors no such trust created by the doca plaintiff as liquidator must distribute monies held in the fund in accordance with his obligations as liquidator order that the doca be terminated. corporations |
The order was made upon the provision of certain undertakings to the Court by the applicant, Sutton Developments Pty Limited. The substance of the order was that his Honour granted leave on an interim basis to the applicant to file a generally endorsed writ in the Supreme Court of Victoria in the name, and on behalf, of Nine West Australia Pty Limited ("Nine West Australia") against Nine West Group Inc and others. The generally endorsed writ was subsequently issued. 2 I have before me the next step in the process of obtaining a final order granting leave under ss 236 and 237 of the Act . When the matter was before me on 15 February 2006, the parties had not reached final agreement as to the undertakings and/or conditions that should attend any grant of leave. On that day, I heard submissions as to whether ss 236 and 237 were otherwise satisfied. The submissions were made on the basis that the parties expected, or at least hoped, that they would be able to agree upon undertakings and/or conditions attending the grant of leave. 3 I reserved my decision as to whether the statutory conditions that must be satisfied for leave to be granted had been demonstrated and adjourned the application to 22 February 2006. I did so to allow the parties time to reach agreement on appropriate undertakings and/or conditions. The parties have now reached agreement upon an appropriate set of undertakings and minutes of proposed consent orders which have been submitted to me. 4 There are two relevant undertakings. The first is, in effect, that the applicant will execute and deliver to the respondent's solicitors a deed poll which is attached to the minutes. The deed poll contains certain indemnities given by the applicant in favour of Nine West Australia. It is otherwise unnecessary to set out or to refer in any detail to the terms of the deed poll. 5 The second undertaking is an undertaking by counsel on behalf of the applicant to procure that all solicitors, barristers, expert witnesses and lay witnesses retained by Nine West Australia in connection with the newly issued proceedings in the Supreme Court render charges to the applicant only, and not to Nine West Australia. Further, such persons are not to seek payment from Nine West Australia in relation to the proceedings in the Supreme Court, and their duties to Nine West Australia are in no way affected by entering into a retainer with the applicant. 6 Upon these two undertakings being given to the Court, the parties submit that the Court should, by consent, make, inter alia , an order granting leave to the applicant, pursuant to s 237(2) of the Act , to proceed with the newly issued proceedings in the Supreme Court in the name, and on behalf, of Nine West Australia. 7 I am satisfied that the conditions for a grant of leave set out in s 237 have been met. It is probable that Nine West Australia would not itself bring the proceedings as it is a deadlocked joint venture company. I am satisfied that the applicant is acting in good faith, and that it is in the best interest of Nine West Australia that leave be granted. I am also satisfied that the procedural requirement in s 237(2)(e) has been met, namely that at least 14 days before making the application, the applicant gave written notice to Nine West Australia of its intention to apply for leave, and of the reasons for applying. Finally, I am satisfied that there is a serious question to be tried. 8 In the course of the hearing, I raised with counsel the question whether it was appropriate for this Court to accept undertakings of the kind I have described where the leave relates to the conduct of proceedings in the Supreme Court. My concern was that the ongoing supervision of the undertakings by this Court may be less than convenient in circumstances where the underlying proceedings are being conducted in another Court. 9 Counsel for both parties submitted that it was appropriate for the Court to accept the undertakings notwithstanding this potential difficulty. They submitted, which I do not doubt, that this Court has power to make the necessary order. They also submitted that Merkel J had already granted interim leave, and I was effectively concluding an application that his Honour had embarked upon by making interim orders on 20 December 2005. They submitted that it is not unusual for a Court to retain, after final orders and undertakings have been made, the responsibility for dealing with any application arising from an alleged breach of the undertakings. 10 It was also submitted that if any question of breach of the undertakings did arise in future, this Court would always retain, at that point of time, a discretion under s 1337H of the Act to transfer the application regarding the alleged breach of the undertakings to the Supreme Court if it considered that it would be in the interests of justice to do so. However, that step might not be taken readily because it would be an undertaking to this Court which would be under consideration. 11 On balance, I am satisfied, in view of the parties' consent and the submissions made to me, that it is in the interests of justice that I accept the two undertakings that have been proffered and that I make the consent orders. 12 Accordingly, I will make orders in the form of the minute of consent orders that have been provided to me. I will initial those orders, and place a copy on the file. The orders deal with all outstanding matters, including costs. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young. | leave to commence proceedings in the name of another company whether conditions satisfied corporations |
It has evidently, by its former Board, reached a settlement with the applicant, the University of Western Australia (the University), although the validity of that settlement and the validity of the appointment of the members of the Board of CRI who were involved in its negotiation is in question. The principal issue between the University and CRI in these proceedings has been the entitlement of the University to the ownership, via a constructive trust or otherwise, of shares in the second respondent, Sirtex Medical Ltd (Sirtex). The shares, which evidently derive their value from the disputed technology, are the only substantial asset held CRI. The asset is substantial. One estimate of its value earlier in these proceedings was $11 million. 2 It is in the public interest that, if there be a resolution between the University and CRI, that asset not be dissipated in the litigation and that it be made available for the public purposes for which CRI was formed. Since the settlement however, a new Board has evidently been appointed by resolution of a meeting of CRI. It comprises the first respondent, Dr Gray, a member of the firm of legal practitioners representing him (Mr Sanders) and his sister, Ms Daebritz. This has given rise to concerns about the extent to which the affairs of CRI may be conducted in the pursuit of interests other than those related to its objects. 3 Mr Bennett, on behalf of Dr Gray, maintains that there is no intention to pursue interests other than those of CRI. His client however has a concern about the validity of the settlement agreement relied upon by the University which has filed a motion seeking its enforcement. These concerns were discussed at the return of that motion on 3 October 2006 and at that time I raised the possibility that, because of the obvious governance difficulties affecting CRI, it might be necessary to consider the appointment of a receiver. 4 There has been debate today about how the matter should proceed. 6 I have given anxious consideration to these proposals and the course which I propose to take represents something of a half-way house. In essence, I propose, under s 57 of the Federal Court of Australia Act 1976 (Cth) (the Act), to appoint a receiver as a receiver of the shares in Sirtex which are held by CRI. As receiver of those shares he will have the power to exercise all of CRI's rights as shareholder. He will be entitled to investigate the enforceability of the agreement said to have been made with the University. A meeting of CRI is to be convened by the receiver, who shall have all the powers of the Board and a member of CRI for that purpose in order to enable the meeting to consider and determine whether the agreement which has been made should be ratified or whether some alternative course should be taken in relation to the resolution of litigation. I will authorise him to obtain independent legal advice in order to enable him to properly discharge his functions in that regard. 7 The receiver shall be entitled to reasonable remuneration and costs, and to an indemnity out of the assets of CRI in respect of those costs. The freezing orders I made on 2 June and 7 July 2006 will be varied to the extent necessary to give effect to these orders and there will be liberty to apply to the Court for further directions by the receiver and by any other party. This order is made under s 57 of the Act. | appointment of receiver under federal court of australia act pending proceedings re ownership of intellectual property developed by former university academic shares in publicly listed corporate owner of intellectual property held by cancer research institute non-profit incorporated association settlement of proceedings between university and association disputed shares to be applied to cancer research and education purposes challenge to validity of board of association and of settlement agreement new board elected potential conflict of interest defendant and solicitor on new board of association receiver appointed to shares receiver empowered to call general meeting corporations |
These were alcohol abuse, depressive disorder and irritable bowel syndrome. These diseases or their aggravation were ascribed to the occurrence of a single event in 1971 when Mr Milenz was on war service in Vietnam as a crew member of HMAS Yarra. That event involved the ship being called to "action stations" and "locked down" for a short period, though hostile action did not ensue. Mr Milenz was locked below decks during this event. He believed he was at risk of death or serious injury. The event is said to have evoked feelings of substantial distress. 2 The various questions of law said to arise in the appeal relate in essence to the proper construction and operation of s 120(1), s 120(3), s120(4) and s 120A(3) of the Veterans' Entitlements Act 1986 ("Cth") ("the VE Act"). The Act imposes a liability on the Commonwealth to pay a pension to, amongst others, a veteran incapacitated by a war-caused disease: s 13(1). It prescribes the circumstances in which an injury or disease is to be taken to be war-caused or to be aggravated by war service: s 9. And in ss 120 and 120A it stipulates the standard and manner of proof where a claim is made for a pension in respect of incapacity from a war-caused or aggravated disease or injury. I outline those provisions below. 3 Part XIA of the VE Act established the Repatriation Medical Authority and gave it the primary function of determining "Statements of Principles". 5 Where a claim for a pension for incapacity from disease relates to operational service rendered, the Commission is obliged to determine that the disease was a war-caused disease, unless it is satisfied beyond reasonable doubt that there is no sufficient ground for making that determination: s 120(1). 9 The interaction of s 120 and s 120A has been considered in many cases, but most notably in Repatriation Commission v Deledio (1998) 83 FCR 82 which provided an exposition of the proper application of the provisions which, as in the present matter, is now regularly applied by the Commission and the Tribunal. The four steps the Court identified (at 97-98) are often referred to as "the Deledio steps". The Tribunal must consider all the material which is before it and determine whether that material points to a hypothesis connecting the injury, disease or death with the circumstances of the particular service rendered by the person. No question of fact finding arises at this stage. If no such hypothesis arises, the application must fail. 2. If an SoP is in force, the Tribunal must then form the opinion whether the hypothesis raised is a reasonable one. It will do so if the hypothesis fits, that is to say, is consistent with the 'template' to be found in the SoP. The hypothesis raised before it must thus contain one or more of the factors which the Authority has determined to be the minimum which must exist, and be related to the person's service (as required by ss 196B(2)(d) and (e)). If the hypothesis does contain these factors, it could never be said to be contrary to proved or known scientific facts, nor otherwise fanciful. If the hypothesis fails to fit within the template, it will be deemed not to be 'reasonable' and the claim will fail. 4. The Tribunal must then proceed to consider under s 120(1) whether it is satisfied beyond reasonable doubt that the death was not war-caused, or in the case of a claim for incapacity, that the incapacity did not arise from a war-caused injury. If not so satisfied, the claim must succeed. If the Tribunal is so satisfied, the claim must fail. It is only at this stage of the process that the Tribunal will be required to find facts from the material before it. In so doing, no question of onus of proof or the application of any presumption will be involved. 11 Before turning to each of the diseases in issue there is one further matter of a general character to which I need refer. It relates to SoPs. The function of an SoP for s 120(3) purposes is to prescribe a medical-scientific standard with which a hypothesis must be consistent: Deledio , at 96. Accentuating the "medical-scientific" character of the standards set in the three presently relevant SoPs, the factor or factors which must as a minimum exist before it can be said that a reasonable hypothesis has been raised connecting the relevant disease with a person's service, are all related in some way (usually by time) to the " clinical onset" or the " clinical worsening" of the disease. Diagnostic criteria, or else prescribed symptoms, are in turn specified for each of the diseases. 12 I emphasise the above for this reason. The essence of the Commission's challenge to the Tribunal's reasons in relation both to alcohol abuse and the depressive condition is that the clinical judgment and diagnostic standards prescribed in the two relevant SoPs were simply not made or applied respectively in raising the s 120(3) reasonable hypothesis. Because the Tribunal found that the clinical onset of each disease pre-dated war service, the relevant factor the SoP in each instance required to exist was tied to "the clinical worsening" of the respective diseases. As will be seen, the proper construction of this formula is central to this appeal. 13 For ease in exposition I will deal separately with the appeal as it relates to each of the three diseases. A. Though the Tribunal considered there to be no dispute between the doctors that Mr Milenz suffered from "alcohol abuse and alcohol dependence" --- "that diagnosis is beyond doubt": Reasons [46] --- it is, in my view, clear from the structure of the Reasons that alcohol abuse only was considered for the purpose of raising a reasonable hypothesis: see e.g. Reasons [58], [77], [78] and [81]. Each of the two diagnoses is, in any event, made exclusive of the other in the SoP: see diagnostic criteria B for "alcohol abuse" below. Additionally, signs of tolerance or withdrawal are absent. B. The symptoms have never met the criteria for alcohol dependence. Subject to clause 6, at least one of the factors set out in clause 5 must be related to any relevant service rendered by the person. Paragraphs 5(c) to 5(3) apply only to material contribution to, or aggravation of, alcohol dependence or alcohol abuse where the person's alcohol dependence or alcohol abuse was suffered or contracted before or during (but not arising out of) the person's relevant service:" emphasis added. In consequence, the Tribunal's focus in par 5 of the SoP above was upon factor (d). For Deledio step three purposes, the Tribunal was satisfied that a reasonable hypothesis had been raised that (a) Mr Milenz had experienced a "severe psychosocial stressor" in the "action stations" event; (b) he suffered from alcohol abuse; (c) there was material pointing to alcohol abuse existing prior to operational service being worsened by service; and (d) the hypothesis was consistent with the template in the SoP. 17 For the purposes of Deledio step four, the Tribunal was satisfied that (i) the psychosocial stressor was an identifiable event that evoked feelings of distress in Mr Milenz: Reasons [75]; and (ii) there had been a clinical worsening of the alcohol abuse: Reasons [77]. On occasions the quantity was immodest. But after operational service, the quantity, type and frequency of alcohol consumed was far greater. It follows that there has been a clinical worsening of alcohol abuse. The worsening, in my view is referable to him having experienced a severe stressor, as defined and within two years of the worsening. There was an event which objectively did occur and from which Mr Milenz suffered a subjective reaction. His increased alcohol consumption was an element of that reaction:" emphasis added. Mr Milenz did not call any medical witnesses. Dr Percival reaffirmed in cross-examination that the history was recounted as given. The history had Mr Milenz, by the end of his first year's service in the navy and prior to his departure for Vietnam, drinking every day when on shore, getting so drunk that he had no idea of his total consumption of alcohol, and experiencing frank alcoholic blackouts as a consequence. On one occasion, when HMAS Yarra was leaving harbour, the vessel was closed up at action stations, and actually fired its guns at a target whose nature was unknown at the time to Mr Milenz, and in fact has remained so, but there is no question of there having been any return fire. The former diagnosed Mr Milenz as having Axis 1 alcohol abuse. Dr Ratnayake did not consider that that condition was the result of a factor listed in the SoP. Further, it was considered that Mr Milenz's diagnosis could not be related to his eight day period of operational service. The report indicated that the earliest date for alcohol abuse would be shortly after he joined the Navy, around 1966 or 1967. 24 In her second report, Dr Ratnayake noted the history in Dr Percival's report and stated that it was difficult to establish when Mr Milenz first met the criteria for alcohol abuse. She could only state with certainty that, "at present, he fulfils the criteria for alcohol abuse". That abuse began soon after he joined the Navy and this was confirmed by the histories given both to Dr Percival and to himself. Dr Strauss did not believe that the circumstances of Mr Milenz's navy service satisfied any causal factor in relation to alcohol dependence or alcohol abuse. 26 The cross-examination of Dr Strauss on this condition did not add to, or alter the above. 29 The answer to each of these turns on the proper construction of the words "clinical worsening" in par 5(d) of the SoP and of the diagnostic judgment those words require to be made. The words are not defined in the SoP. It is the Commission's contention that the requirement that the worsening of alcohol abuse be "clinical" takes one back to the SoP and to the diagnostic criteria stipulated in the definition of alcohol abuse. Thus, it is said, for there to be a clinical worsening of alcohol abuse, i.e. of a "maladaptive pattern of alcohol use leading to clinically significant impairment or distress", there has to be a worsening within the 12 month period of one or more of the four manifestations of the disease stipulated in the diagnostic criteria of the SoP. 30 Mr Milenz contends to the contrary. Once the diagnosis of alcohol abuse has been made, the diagnostic criteria have no further application when considering the worsening of an accepted disease. Those criteria are only relevant if the existence of the disease is in issue. Once its existence has been established, as here, the inquiry is simply as to whether there had been a worsening of it by virtue of war-service, i.e. was it more grave, more grievous or more serious in its effect on Mr Milenz. I would note in passing that the Tribunal appears to have proceeded on this view of par 5(d). 31 I preface what I have to say on this question with the observation that the Tribunal did not advert at all to the SoP's definition of the disease and its stipulated manifestations in forming the view that the material before it pointed to an hypothesis that fitted the par 5(d) template of the SoP. 32 It is well accepted that the Tribunal cannot use other evidence (expert or otherwise) to contradict or provide an alternative to the requirements of an SoP. I have emphasised "as defined" for the reason that the clinical worsening must be of the disease having the features, symptoms and manifestations prescribed in the relevant SoP's definition: cf Lees v Repatriation Commission [2002] FCAFC 398 ; (2002) 125 FCR 331 at [16] . 34 As I have already indicated, the definition of "alcohol abuse" provides its own diagnostic criteria. I need not repeat them here. These contrive the inquiry to be undertaken by a doctor in determining for the purposes of the SoP whether the disease is, or was, present at a particular time: cf Repatriation Commission v Cornelius [2002] FCA 750 at [26] ; or whether that disease, being present, had worsened. In other words, to use the language of the definition, the worsening is in the "clinically significant impairment or distress" which resulted from the maladaptive pattern of alcohol abuse and which, importantly for present purposes, was "manifested" in one or more of the prescribed ways within a 12-month period. 35 What is clear, in my view, is that the Tribunal misconstrued what was comprehended by the clinical worsening requirement of par 5(d) of the SoP. That requirement imposed a medical-scientific standard, not a lay standard. Though the Tribunal found a clinical worsening of Mr Milenz's alcohol abuse, it did not address whether there was a worsening in the disease as defined and manifest. It simply inferred a worsening because, "after operational service, the quantity, type and frequency of alcohol consumed was far greater". These are not features or manifest symptoms of the disease defined in par 2(b) of the SoP. 36 The consequence of the Tribunal so treating par 5(d) is that the actual hypothesis it considered was pointed to on the material before it was not one upheld by the SoP. For this reason the decision as it relates to alcohol abuse must be set aside. 37 There is a sequential question raised by the Commission in light of my conclusion. It is contended that it would be futile to remit the matter to the Tribunal for reconsideration as there was no material before the Tribunal capable of supporting the hypothesis upheld by the SoP. There is no material before me, it is said, suggesting that the clinical worsening of Milenz's alcohol abuse was addressed by the psychiatric experts, or that Mr Milenz's par 2(b) symptoms (if any) in the period 1971 to 1973 --- the two years prescribed by par 5(d) --- were addressed in any way. 38 The course pressed on me is not one I am prepared to take. I do not speculate on the likely fate of Mr Milenz's claim on a rehearing particularly given the standard of proof provisions of the VE Act. He is entitled to have his case put again to the Tribunal. It is possible that it might come to a result favourable to him: cf Santa Sabina College v Minister for Education (1985) 58 ALR 527 at 540. B. 40 Only one of the three psychiatrists, Dr Strauss, diagnosed Mr Milenz as having a depressive disorder. Such views as the other two had on whether Mr Milenz suffered from a depressive/anxiety condition of some variety had no relevance either to the condition found by the Tribunal or to the SoP applying to it. That SoP (No 58 of 1998) concerned "Depressive Disorder". A(ii) above). For its part the Tribunal was satisfied that the appropriate diagnosis was "depressive disorder" but did not indicate which of the three possibilities in the SoP was the particular depressive disorder found. 45 Later in its reasons it indicated it was satisfied as a fact that there had been a clinical worsening of depressive disorder. It would also appear from the evidence heard in these proceedings that Mr Milenz did suffer from a depressed state prior to enlistment and certainly before commencement of operational service but was obviously not detected on pre-enlistment or other medical examinations. On the evidence of Dr Strauss, Mr Milenz suffered a 'constitutionally based psychiatric disorder' which appears to have manifested by a sense of failure, behaviour problems, difficulty concentrating and immaturity (refer paragraphs 33 and 34 earlier). Mr Milenz's mood, behaviour, increased alcohol consumption and symptoms subsequent to the episode onboard Yarra clearly point to a worsening of his depressed state. The Tribunal, it is said, has not considered whether there has been a clinical worsening of the symptoms and features of any one of the three possible definitions. 47 In my view, for reasons similar to those I earlier gave in relation to the Tribunal's application of the alcohol abuse SoP, the appeal as it relates to depressive disorder must be allowed. Whether there has been a clinical worsening of a particular depressive disorder --- and the Tribunal had to, but did not, identify which of the three possibilities it was considering - was a diagnostic question that addressed the features and symptoms of that disorder as defined in the SoP and required a clinical judgment be made. That question was not asked or answered. 48 Again the Commission has raised the issue of futility in remitting the matter to the Tribunal and again I am not prepared to take the course pressed on me. As with the alcohol abuse claim, the issues raised for determination by the Tribunal were not properly addressed. Whether ultimately successful or not, Mr Milenz should be permitted to have his claims determined according to law. I need not consider whether this conclusion could withstand critical examination. 51 There is disagreement between the parties about (a) whether the Commission conceded that Mr Milenz had the syndrome, and (b) whether there was material capable of supporting the finding that he did. I need not express any views on either of these matters other than to say that (i) the "concession" actually made was ambiguous and could be interpreted as either conceding or not conceding that Mr Milenz had the syndrome; and (ii) the evidence dealing with the irritable bowel syndrome was sparse indeed. 52 Because the above conclusion on this matter hangs off the Tribunal's earlier conclusion on depressive disorder, it too must fall with my decision that that conclusion cannot stand. In consequence of this it is unnecessary to consider whether material relating to the concession noted above, which the Commission sought to tender after the hearing, should be admitted. I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. | appeal from decision of administrative appeals tribunal tribunal found that veteran suffered from three war-caused diseases whether tribunal erred in construction of ss 120(1), (3), (4), 120a(3) of veterans' entitlements act 1986 (cth) inquiry to be made under deledio steps whether tribunal failed to address the requirements of the statements of principles with respect to two of the diseases construction of phrase "clinical worsening" whether material capable of supporting finding of clinical worsening of two of the diseases conclusion in relation to third disease dependent on conclusion in relation to second disease. administrative law |
After a series of interlocutory applications and related judgments, the pleadings have come to reflect their present form. In essence, the allegation made is a breach of s 142 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the Conservation Act) constituted by an alleged contravention of a condition imposed by the responsible Commonwealth Minister in respect of the construction and operation of the dam. The fish way will commence when the dam becomes operational. The effect of the variation, if made, would, on any view, have serious ramifications for the ability of the Conservation Council to secure the injunctive relief claimed, and perhaps also to secure even the declaratory relief claimed in respect of any past contravention of the Act as alleged. There is, as yet, no decision by the Minister as to whether he will vary the condition. The evidence is, though, that a Departmental submission has been made to the Minister and that a decision from him is expected within about a fortnight. There is reason to think that the submission to the Minister reflects an exchange of views between Burnett Water and the Department as to the terms on which the existing condition might be varied. It would be quite wrong, a subversion of the separation of powers under our Constitution , for me, in any way, to speculate as to how the Minister might come to make his decision. Nonetheless, the fact having emerged that he is seized with a submission which seeks, seemingly, a variation, it was obviously necessary for Burnett Water to raise that. Initially, the Conservation Council was disposed to oppose the granting of an adjournment, based on awaiting what the Minister might decide. That particular disposition has, though, now changed. The adjournment itself is not now opposed. There is a controversy, though, as to whether costs ought to be awarded in favour of the Conservation Council on an indemnity basis. The change in stance of the Conservation Council relieves me from the necessity of considering the question of what impact any change in the conditions might have on the proceedings, at least for the moment. As to the question of costs, this litigation is litigation that was instituted pursuant to a particular standing conferred on a group such as the Conservation Council to seek in the public interest particular injunctive relief in circumstances where, for one reason or another, the Minister is either unable or unwilling to seek the enforcement of the statute himself. That evidences a recognition on the part of Parliament that there is a particular public interest served by the enforcement, or attempted enforcement, of the Conservation Act by groups such as the Conservation Council, and without any need on the part of such a group to secure what would be required at common law to enforce a public right namely, the fiat or permission of the Attorney-General. There is, it might be thought, something of an asymmetry between the role consigned by Parliament to groups such as the Conservation Council and the ability, nonetheless, on the part of the Minister without, it seems, at least to date, any reference to the Conservation Council, to change the substratum of the litigation, in other words, to vary the condition. That, to me, has ramifications for a party to a proceeding which actively seeks to persuade the Minister to change the substratum by varying a condition, and does so without giving notice of that intention to the body charged by, or at least permitted by, the statute to enforce the right grounded in the existing condition. In effect, what has occurred, it seems to me, is that particular inertias that I infer existed in the Department have been overcome by the looming prospect of a trial. That has come at a cost in terms of the body permitted by Parliament to enforce the right concerned. Those costs have been incurred without being put on notice by Burnett Water that it was seeking to exercise its legitimate right to persuade the Minister to change the condition. So far as costs are concerned, I have a discretion to exercise. It seems to me that a discretion ought to be exercised in favour of the awarding of costs thrown away by the adjournment to the Conservation Council. However, to do that just on the usual basis, which would be party and party costs, would not be fully to compensate the Conservation Council for the expenses thrown away by an adjournment. Were the Minister a party I would not hesitate to order that the Minister pay the costs of each of the parties or perhaps, at least, the Conservation Council, on the basis that an indulgence was being sought on the part of the Minister to make up his mind rather earlier than one might think could otherwise have been done. The Minister, though, for his own reasons, chose not to become an active party. Burnett Water is not to be regarded as a surrogate for the Minister. It is an emanation of the State of Queensland. It has exercised a legitimate right to persuade a Commonwealth Minister, in effect, to change his mind or at least vary his mind. There is, something of a flavour of an indulgence that is sought, nonetheless, in the sense that the occasion for the adjournment is to allow time for a Minister on the supplication of one party to change his mind. When one has regard to what I have referred to as the asymmetry of role whereby the Conservation Council has no control over conditions but has an ability to litigate nonetheless, it does seem to me that, as a matter of courtesy, it would have been better if Burnett Water had been rather more fulsome in its disclosure of its intentions. That may have led to a much earlier and, perhaps, consensual application for the adjournment of this proceeding than at the present. The categories in respect of which indemnity costs may be ordered are not closed. This seems to me to be a particular and peculiar species of public interest litigation against a background where the ground rules may legitimately be changed. Whilst that is a risk that the Conservation Council assumed in commencing the proceeding, the extent of that risk has not been lessened by the particular stance Burnett Water has chosen to adopt in terms of communication. For these reasons it seems to me that the awarding of party and party costs is not appropriate, but rather costs ought to be awarded on an indemnity basis; that is, costs thrown away by the adjournment which is now the subject of agreement. A question does arise as well as to whether or not the entirety of the hearing ought to be adjourned or at least some of the time set aside used for a view. Arrangements are in place already for the conduct of a view. It is a consideration in that regard that the trial dates that could be offered next are in the latter part of November. Had they been any longer, the submission made on behalf of Burnett Water that, with the best of will, recollection can fade and evidence is best received when a view is fresh would have resonated greatly with me. However, as the time which will elapse is quite short, and so as to maximise the time that I shall fix for the resumption of the trial, it seems to me on balance that it is better to take the slight risk of an absence of freshness and the rather greater benefit of at least using some of the time that has been set aside for the purpose of the trial already. I propose therefore to hear the parties as to arrangements in respect of the view and such of the Conservation Council's opening as is necessary in a general way to put in context the view, but otherwise to order that the trial be adjourned to 9 November 2009 at 10.15am, and to enlarge to that date the return of such subpoenas as have been issued in respect of the attendance of witnesses. In the event that the Minister decides to vary the conditions within the time presently apprehended, I should expect that the parties will make such application as they may be advised as results from the Minister's decision insofar as it may affect the conduct of the trial. I also expect that application to be made as soon as possible after the Minister's decision. I grant liberty to apply for that purpose. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. | indemnity costs application by respondent to adjourn trial where substantive issue is an alleged contravention of a condition of a ministerial approval under the environment protection and biodiversity conservation act 1999 (cth) adjournment application occasioned by respondent's petitioning the relevant minister to vary that condition respondent failed to put applicant on notice as to the making of this petition costs incurred by applicant in ignorance of this development adjournment not opposed by applicant held circumstances warranted order for indemnity costs in respects of costs thrown away by the adjournment costs |
The substance of the notice of motion was that the respondents sought the leave of the Court to tender additional evidence notwithstanding that the hearing had concluded and judgment reserved. An order that the First and Second Respondents be granted leave to tender as evidence in the trial of these proceedings the Affidavit of Steven Patrick Cranitch sworn on 9 April 2008. 2. An order that the costs of this Motion to be costs in the cause. 2 The respondents' notice of motion is opposed by Bing! Software Pty Ltd ACN 078 281 197 (the applicant). On 13 March 2008 at the conclusion of the hearing I reserved judgment. 4 The applicant is the registered proprietor of Trade Mark 836622 with a priority date of 24 May 2000. 6 On 11 March 2008 during the primary proceedings, the first respondent gave an undertaking to the Court through their Counsel. " 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!". The 12 March affidavit details the steps taken by the respondents to that date, as well as steps proposed to be taken by the respondents, to comply with the undertaking. The applicant did not object to the 12 March affidavit being filed, and did not seek to cross-examine Mr Cranitch in relation to evidence in the affidavit. The same correspondence, with the addition of a copy of the affidavit, was sent to the applicant. On 16 April 2008, the applicant addressed a letter and email to my associate outlining its objections to the filing of any further evidence. 9 On 18 April 2008 the respondents sought to file with my associate the affidavit of Steven Patrick Cranitch sworn on 9 April 2008 (the 9 April affidavit). The matter was referred to Deputy District Registrar Belcher. 10 The respondents filed a notice of motion on 16 May 2008 seeking leave to file the 9 April affidavit. The notice of motion was set down for hearing at 10.15 am on 27 May 2008. Indeed this jurisdiction is well recognised: Murray v Figge (1974) 4 ALR 612 , Gulf Pacific Pty Ltd v Londish [1992] FCA 502 , Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471, Smith v New South Wales Bar Association (1992) 176 CLR 256 , McCarthy v McIntyre [2000] FCA 1250 , Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 , Hawthorn Glen Pty Ltd v Aconex Pty Ltd (No 1) [2007] FCA 2010. These four classes are (1) fresh evidence (Hughes v Hill [1937] SASR 285 at 287; Smith v New South Wales Bar Assn [No 2] (1992) 108 ALR 55 at 61---2); (2) inadvertent error (Brown v Petranker (1991) 22 NSWLR 717 at 728 (application to recall a witness); Murray v Figge (1974) 4 ALR 612 at 614 (application to tender answers to interrogatories); Henning v Lynch [1974] 2 NSWLR 254 at 259 (application to re-open); (3) mistaken apprehension of the facts (Urban Transport Authority of NSW v NWEISER (1992) 28 NSWLR 471 ("UTA") at 478; and (4) mistaken apprehension of the law (UTA at 478). In every case the overriding principle to be applied is whether the interests of justice are better served by allowing or rejecting the application for leave to re-open: see UTA at 478; also The Silver Fox Co Pty Ltd as Trustee for the Baker Family Trust v Lenard's Pty Ltd (No 2) [2004] FCA 1310 ("Silver Fox") at [22] and [25]. The current application concerns a further affidavit wherein Mr Cranitch deposes to evidence of steps taken to complete the task of removing reference to "bing" in software of the first respondent, which was also the subject of the 12 March affidavit. But what your Honour needs to be satisfied of is the fact of compliance with the undertaking and that's the reason we've put that in. It was unfinished business. The affidavit that went in, the 12 March affidavit, made it plain it was unfinished business. We're simply putting in evidence which has occurred since the end of trial or trying to put that evidence in which finishes off that aspect of the case, makes it plain we are fully complied with the undertaking and that's the relevance of it... It's about compliance with the undertaking. • The evidence sought to be adduced is directly relevant to compliance with the undertaking provided to the Court on the second day of trial and the scope of injunctive relief which is appropriate to be granted should the applicant succeed. • The interests of justice are better served by allowing the application. In determining the issue of what relief (if any) is appropriate, the Court should have the relevant facts before it. • There would be no difference in principle if, for example, after the trial had ended the same undertaking had been provided in an open letter by the respondents to the applicant. • In reality, the new evidence relates to steps taken by the respondents in an attempt to avoid allegations of trade mark infringement, in particular as relates to software and distribution of software. These have always been relevant issues in these proceedings. • It was always open to the respondents to take the steps outlined in the 9 April affidavit, however they chose not to and chose to run the case on the basis that their existing conduct did not infringe because they were not using the trade mark in relation to goods and services covered by the registration. • If the evidence in the 9 April affidavit is relevant it is relevant to an undertaking given during the trial. The obvious reason the undertaking was given was that the respondents realised during the trial that their case might not be strong in relation to the first respondent's denial that it used the trade mark in relation to software and distribution of software. • If the Court were to find for the applicant in the primary proceedings, the applicant would be entitled to an injunction notwithstanding the provision of an inadequate undertaking. Whether the conduct of the first respondent in using "bing" in relation to, for example, software and the distribution of software has ceased will need to be the subject of further investigation through discovery, cross-examination and possibly further evidence. • The applicant would be prejudiced by the admission of further evidence occasioned by the delay in the conclusion of the matter and the further costs associated with the reopening of the trial. • No explanation is offered by the respondents for why the undertaking which is the subject of the so-called further evidence was not made at an earlier date. 19 The applicant has submitted that it would be prejudiced by the admission of further evidence occasioned by the delay in the conclusion of the matter and the further costs associated with the reopening of the trial. The applicant has also submitted that if the 9 April affidavit were admitted it would require at the very least that further discovery be undertaken by the first respondent, cross-examination of Mr Cranitch, leave to amend its pleadings and leave to lead further evidence. I agree with the respondents that the applicant's approach is curious in light of the lack of objection to Mr Cranitch's earlier affidavit of 12 March 2008, which was similar to the 9 April affidavit in that it was also in support of the undertaking and also set out steps taken by the first respondent in compliance with that undertaking. I consider that the applicant has not substantiated its need for the additional steps it has claimed would be necessary, nor how any prejudice it would suffer from the admission of this evidence could not be compensated by a costs order. 20 There is no dispute that the evidence in the 9 April affidavit is relevant in these proceedings. However it is difficult to form any view other than that the primary reason for the 9 April affidavit is that the respondents are anxious to have on the record the continuing fact of their compliance with the undertaking as, in a sense, additional "insurance" in the event that the Court found against them and was minded to order an injunction as sought by the applicant. 21 As I have noted in my judgment in the primary proceedings ( Bing! Software Pty Ltd v Bing Technologies Pty Limited (No 1) [2008] FCA 1760) an undertaking given by a party to proceedings in Court is enforceable by order of the Court pursuant to O 35 r 11 Federal Court Rules . However the occurrence of the events the subject of the 9 April affidavit flow from a deliberate tactical decision of the first respondent during the trial to give an undertaking, the purpose of which --- as the respondents admit --- was to bring themselves within the principles articulated in MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236. In summary, it is as a result of decisions taken by the respondents, during the proceedings as to the manner in which their case was to be conducted, that the respondents now seek to put additional evidence before the Court. • I consider that allowing the respondents to supplement their case after the conclusion of the applicant's case at trial would offend the principle of finality of litigation. It is not in the interests of justice that a litigant should be entitled to adduce additional evidence after the conclusion of proceedings simply to bolster its own position, which I consider is the intention of the respondents here. • As the respondents concede, the evidence in the 9 April affidavit simply provides additional evidence that there has been compliance with the undertaking given by the first respondent in Court. I do not consider this evidence so material that the interests of justice require its admission. Further, while the evidence in the 9 April affidavit is of relevance to the primary proceedings, I consider that it would be of particular relevance in the event that the applicant subsequently claimed that the first respondent had failed to comply with that undertaking. I make this observation because I consider that the evidence goes primarily to compliance with the undertaking. • I do not consider that the additional evidence in the 9 April affidavit is evidence which, if believed, would most probably affect the result of the primary proceedings. The undertaking given by the first respondent in Court on 11 March 2008, and supported by an affidavit of Mr Cranitch, is enforceable on its own terms. • While, as I have already indicated, I consider the applicant has demonstrated little potential prejudice should I exercise my discretion to permit the respondents to adduce this additional evidence, that is not in itself a reason to exercise my discretion in the respondents' favour in light of the other factors I have taken into account. 23 Accordingly the notice of motion should be dismissed. I shall hear submissions as to costs. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | application for leave to reopen case to adduce further evidence following conclusion of trial and judgment reserved circumstances invoking court's discretion whether interests of justice require reopening practice and procedure |
2 Storm also claims by way of final relief an injunction restraining the Bank from making any further such statements in contravention of the Corporations Act and an injunction pursuant to ss 1324 and 1325 of the Corporations Act directing the Bank to publish to those persons to whom it made the statements, a notice correcting the contended false, misleading and deceptive content of the statements. By paras 4 and 5 of the application, Storm also seeks damages based on other causes of action. The applicant also seeks an interlocutory injunction restraining the Bank from informing recipients or any other person the Bank knows or has reason to believe is a client of the applicant, from withdrawing such person's instructions of business from the applicant and retaining another financial adviser. 5 It can be seen that the content of the mandatory injunction is directed to achieving by an interlocutory order what is sought by para 3 of the claim for final relief. In order to make such an order, the Court would require a high degree of satisfaction that the applicant would be entitled to that relief at trial by way of final relief. In terms of an interlocutory mandatory order where a higher risk of injustice might arise, it is not enough for the Court to be satisfied that the applicant has demonstrated a sufficient likelihood of success in terms of Australian Broadcasting Corporation v O'Neill [2006] HCA 46 ; (2006) 227 CLR 57 at [65] to [72] per Gummow and Hayne JJ. A higher state of assurance is necessary ( Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 92 ALR 499 per Gummow J). 6 The application for all interlocutory orders was brought on and heard urgently yesterday afternoon. Judgment is to be given today. 7 The applicant has filed a range of affidavit material. The essential facts emerging from that material are these. 8 Storm is a financial adviser, has offices in 14 locations throughout Australia and approximately 14,500 clients. The essence of its business is the provision of financial advice to individual clients tailored to their individual circumstances. As part of that service, Storm has advised clients to consider taking up loans from Australian banks and other financial institutions to acquire securities. Typical securities are investments in unit trusts regulated by the Australian Securities and Investments Commission under applicable Financial Services legislation. Those loans, relevantly here, were margin loan facilities offered by particular financial institutions including the Bank through its business division described as Colonial Geared Investments ("CGI"). Storm recommended to approximately 3,000 of its clients investment in 10 Indexed Trusts or Indexed Funds through the use of margin loans. 9 A margin loan is understood in the financial services industry as a loan with a pre-determined limit set by the lender of the proportion the loan balance, owing to a bank, might bear to the value of the securities purchased using the loan. That relationship is described as the relationship the loan bears to the value of the assets or the loan to value ratio or LVR. Storm has been dealing with CGI for over 10 years and in early 2007 Storm began discussions with the Bank to enter into an arrangement whereby the Bank would offer margin loan facilities to Storm's clients of up to 80% of the value of selected funds to be acquired, that is, loans with an 80% LVR. Those discussions resulted in a letter dated 18 May 2007 by which the Bank and Storm agreed to the terms for such investments for clients of Storm. By that letter, the Bank offered particular terms for margin lending facilities for clients of Storm at which an LVR ratio of 80% was established to enable Storm clients to invest in 10 identified Indexed Trusts and Indexed Funds subject to what was described as "expectations" set out in the letter. 10 Those expectations dealt with such matters as the nature of the investments for which loans might be used by clients; the weighting of investments in particular sectors of the economy (resources, technology); an obligation upon Storm to convey to its clients a particular differential LVR ratio that the Bank might apply to a particular fund which might require a "re-balancing" of the clients' facilities with the Bank; and a commitment by the Bank to maintain the 80% LVR and a "10% buffer for existing business retained or newly written in respect of specific clients". Naturally an extraordinary meeting can be called at any time by either party. Details of these meetings will be settled by both parties. We would further require that Storm Financial provide to CGI before these meetings, acceptable reporting that confirms observance of these particular expectations. We will include a periodic update on trends in market volatility compared with our methodology. Despite our allocation of a global LVR of 80% to your clients on the basis of our expectations being met, as set out above, nothing in this letter modifies or varies the obligation of any client borrower under clause 3.2 of the margin loan to pay us the amount owing under the margin loan if that client borrower is either in default or we send that client borrower a five day notice requiring payment of the amount owing. In the unlikely event of a margin call, CGI and Storm Financial will work in partnership to clear the margin call. Note however that CGI reserves its rights under its margin lending terms and conditions. The form contains a checklist for the adviser no doubt on the footing that the adviser's client is introduced to the Bank by the adviser and assists the client in completing the application form. The form sets out all the obvious details such as the borrower, the legal standing of the borrower, details of third party mortgagors and other such matters. Section 3 is to be completed by the client adviser and requires details of the adviser's name, that person's relationship with the Australian Financial Services' licensee and other formal things. By completing this section, I acknowledge and confirm that: I have been appointed by the Borrower(s) as their Client Adviser; and I have identified the Borrower(s). You cannot just "wait out" any down turns in the market. You will have limited time to deal with any margin call, by either repaying to us enough of your facility or giving us more securities on our list. If you fail to act within the time period specified in the terms and conditions, then some of your securities may be sold so as to reduce the amount owing to an amount that does not exceed the base security value. We may at any time remove an investment from our list of securities. If you are holding this security on your margin loan then your base LSR, current LSR and margin call LSR will be affected. Section 2 deals with interest. Section 3 deals with repayments and prepayments and Section 4 deals with margin calls. Clause 4 deals with a number of defined terms such as "current loan to security ratio", "margin call loan to security ratio" and "base loan to security ratio". Essentially the clause operates on this footing. The Bank establishes a ratio, as its base, which is the total amount lent as a percentage of the market value of the securities. The Bank then establishes another ratio, the margin call ratio, which is an uplift by 10% of the base ratio. This margin call loan to security ratio is used as a benchmark for comparison with any prevailing ratio from time to time struck between whatever the current balance of a customer's loan is as a proportion of the then market value of the securities. You can do this by: giving us a security interest acceptable to us over additional securities acceptable to us, or by repaying part of your loan, or selling some or all of the secured property and applying the sale proceeds to your loan. 14 Under clause 4, the Bank is entitled to give a borrower a notice of a margin call in circumstances where the current ratio is equal to or exceeds the margin call ratio and on receipt of such a notice the borrower must act to restore the position. By clause 4.3, the borrower agrees that the Bank may provide notice of margin call to the borrower or to the borrower's client adviser either in writing, orally or by updating the Bank's website. 15 Clause 4.4 provides that the borrower is responsible for monitoring the borrower's portfolio and determining when the borrower's loan might be subject to a margin call. The borrower is required to be in a position to receive any communications from the Bank and to act within the time limits specified in clause 4 and to ensure that a margin call does not occur. By clause 4.5, if the borrower fails to meet a margin call, the Bank may but is not obliged to, sell any or all of the security supporting the borrower's loan and reduce the amount owing; sell more security than the minimum required to satisfy the margin call; sell the securities without first contacting the borrower, any "margin call contact, or agent you may have nominated"; and sell the securities in the order the Bank chooses. 16 Clause 5 deals with "administering your loan" and provides that the Bank will send the borrower an account statement every quarter, among other things. 17 Storm contends that the completion of the application document subject to the terms and conditions brought into existence an orthodox banker/customer relationship which called upon the borrower to discharge certain obligations and created rights and entitlements in the Bank to take a number of steps and, relevantly here, issue margin call notices under the terms and conditions and exercise any or all of the rights conferred by clause 4. Storm says that there is nothing in the arrangements reflected in the letter of 18 May 2007 between the Bank and Storm which casts an obligation upon Storm to manage the margin loan borrowing by any particular customer who applied for and took up a loan with the Bank. Moreover, there is nothing in the application document or the terms and conditions which recognise as between the banker and its customer, an obligation on the part of Storm to manage the margin loan on behalf of the Bank. Storm says that, objectively viewed, such an obligation if it was to subsist would be manifest and extant in the documents. 18 Storm says that it did not provide monitoring or management for its clients of margin loans, in the ordinary course. From time to time where a client failed to maintain a borrowing within the margin ratio, Storm became involved in discussions with the Bank and the client about that circumstance. Those examples of such engagement by Storm are said to be simply transactional examples of Storm playing a role of assisting the client in its dealing with the Bank and they do not reflect the orthodoxy of the systemic arrangement. Storm says that a reason for Storm having no role to play in the management of margin loan accounts was that it did not obtain any commission, described as a "trail commission" by reason of the client taking up a margin loan with the Bank which in turn led to the Bank being in a position to offer more favourable interest rates to clients of Storm since that additional cost was not involved. 19 Mr Emmanuel Cassimatis is a director of Storm. Mr Cassimatis, together with his wife, built up the business of Storm over 14 years. He says at para 22 of his affidavit filed 19 December 2008 that there was no agreement between Storm and the Bank that Storm as the client's adviser "would manage or monitor the performance of the units in the fund acquired with the proceeds of the margin loan for the purpose of monitoring whether a margin call was imminent or likely or indeed whether a margin call situation had occurred --- that is, that the value of the security had dropped so that the amount of the debt under the margin loan was equal to or greater than 90% of the security". 20 Mr Cassimatis says (para 26) that the clients were responsible for identifying circumstances which would constitute a margin call. However, if a margin call did arise, the Bank would give notice to the client borrower. If the client borrower did not respond to the margin call, the Bank would take action to sell the underlying securities. The only role (para 27) which Storm had in the management or monitoring of margin loan facilities for customers of the Bank "was that CGI was entitled to give notice of a margin call to the customer by giving such notice to Storm". 21 Mr Cassimatis says these further things. In October 2008, the Bank supplied particular data to Storm by email in which it said that based upon a report run by the Bank that morning there were 640 margin calls for Storm and that the Bank had "been advised by Group Risk that all margin calls above 95% need to be resolved this week". Storm cooperated with the Bank to assist it in contacting clients and in making arrangements with them to attend to those margin calls. Mr Cassimatis says that Storm did so consistent with what Mr Cassimatis believed to be Storm's required cooperation under the agreement of 18 May 2007. Conditions deteriorated through until late November 2008 by which time it was clear that many of Storm's clients who had taken up margin loans with the Bank were in a situation where the amount of their loan exceeded the value of the securities and thus those borrowers were in a condition described as "negative equity". Mr Cassimatis says at para 32 that he understood that the Bank had sold the underlying securities of most but not all of those clients. 22 Mr Cassimatis says that the circumstances were serious; with regular monitoring, it would have been possible for the Bank to determine when a facility was approaching margin call or in a circumstance where a margin call ought to be made; his expectation was that if a facility was approaching a margin call situation the lender would immediately contact the client directly and give a written notice of margin call and if no response was obtained the Bank might promptly sell the underlying securities to prevent deterioration in market value and thus the transition into "negative equity". 23 By the end of November 2008, Mr Cassimatis says that clients of Storm who had taken up margin loans with the Bank faced a negative equity position of approximately $37 million. 24 These events led to a meeting on 1 December 2008 at the Sydney premises of the Bank. Mr and Mrs Cassimatis met with Messrs Grimshaw, Tait and Clothier of the Bank. Mr and Mrs Cassimatis complained that for a period of some weeks data supplied by the Bank had been inaccurate and unreliable. That data related to daily data sheets sent by the Bank to Storm which set out details of each client, the balance of the loan, the credit limit, the security value, the market value of the securities, the current loan to security ratio and the margin call to security ratio. The data was thus comprehensive and sent daily to Storm. Some of the statistics in the margin ratio column are incorrect. The daily variation in values is said due to rapidly changing market circumstances is said to be the explanation for those errors. 25 Mr Cassimatis says that in discussion with bank representatives concerning the dilemma of these negative equity positions, Mr Grimshaw said to Mr Tait that margin loans are designed not to get into a negative equity position and how did this happen. Mr Cassimatis suggests that this seemed to be an inquiry made by a bank officer of another bank officer. Mr Cassimatis says that no one from the Bank suggested that Storm had failed to manage the loans or that Storm had breached any obligation to manage margin calls or otherwise fail in managing the loan facilities. 26 Another meeting occurred on 4 December 2008 at the Bank's office. Mr Cassimatis attended with a view to seeking a solution to the problem which had arisen for clients basing margin calls and particularly those whose facilities had "gone into negative equity". Mr McCullough and Ms Richards, executives of Storm, attended the meeting. It lasted for three hours. 27 The Bank contends that at this meeting, Storm by its representatives gave instructions to the Bank to sell securities for clients who had failed to bring margin loans back into the relevant ratio. Mr Cassimatis says that he did not give any instructions to the Bank in respect of clients as a whole or in respect of any particular client to sell their securities. Mr Cassimatis says that he had no authority to do so and that had he formed a view that a particular client should sell securities the subject of a margin loan he would routinely give that advice either in writing or confirmed by writing and would not effect such a transaction without the "direct instructions of the particular client". He says that he did not give instructions during the course of the meeting or at all to take any such action or express any view that the Bank ought to sell or redeem securities in respect of "any or all margin loan accounts of Storm clients in general or any particular Storm clients or class of clients". 28 Mr Cassimatis thought that he might be able to assist in resolving the Bank's concern about the 640 or so accounts. Mr Cassimatis put a proposal to the Bank that Storm borrow from the Bank a sufficient sum to recover "the lost funds represented by this negative equity; that it [Storm] would then, by some means provide financial assistance to the relevant clients in the same amount so that they could recover the negative equity positions (without selling their own assets or otherwise devoting their own funds at the time) and, in the period of the ensuing year or two, work to recover such shortfall". Mr Cassimatis says that he intended that the Bank would regard this as a generous offer by Storm because Storm would take on the primary liability itself in a direct relationship with the Bank. 29 That proposal was put to the Bank on the evening of 4 December 2008 by Storm. However, no one wins from an attitude that is one-sided. We ALL benefited from the client relationships, we ALL owe a duty of care to these clients, we ALL should participate in the recovery process and then we ALL will benefit again from those relationships when this crisis passes, as it inevitably will. 31 The letter advised that the Bank had commenced calling customers "to ensure that they are aware of the position of their individual margin loans and to discuss the options to satisfy their obligations". 32 On 8 and 9 December 2008, the Bank despatched letters to each of their customers who had taken up a margin loan which was either in negative equity or subject to a margin call. These are the letters about which complaint is made. 33 The second and third paragraphs of that letter set out market circumstances and the default position of the borrower. The letter sets out the balance payable by the particular borrower. Colonial Geared Investments has been providing daily updates on your position to Storm Financial. Colonial Geared Investments wants you to be aware of your position in regard to the deteriorated position of your investments, and we will endeavour to assist you in clearing the outstanding amount. We have begun that process by calling you directly today. The letter of 9 December 2008 also written by Mr Clothier commences with the same opening paragraph as the earlier letter which again contains reference to the margin loan facility "which has been managed by the Storm Financial Group". Storm Financial are your financial adviser and they manage your margin loan according to the statement of advice they provided to you when you established your relationship with them. 36 Storm complains that the letter is misleading because no such instruction was given on 4 December 2008 and the initial statement of advice given by Storm to its clients as part of its adviser/client relationship does not contain an obligation upon Storm to manage margin loan accounts taken up by client borrowers with the Bank. 37 The letter then says that the Bank as the margin loan provider acts on instructions provided to it by Storm and advised the recipient that the Bank had commenced the redemption of all managed funds and the sale of all equities within the borrower's margin loan, on Friday, 5 December 2008. The letter tells the recipient that the Bank is currently awaiting receipt of these proceeds which will be deposited as cash into the borrower's margin loan. We are keen to ensure that you remain advised of your current position with regard to your margin loan. If you have any questions with regard to your account please contact [CGI]. 38 Storm complains that the letters are false and misleading because it has never been the sole manager of the borrower's margin loans; the statement that the Bank has been providing daily updates is misleading; and the letters contained two inferences which are misleading. The first is an inference that the Bank wanted clients to be aware of their position which suggests that Storm did not have such a desire and secondly, that the Bank's desire to assist the borrower in clearing the outstanding amount suggests that Storm did not have any such interest. Storm says the letter of 9 December 2008 is misleading because Storm was not required to and did not manage the Bank's margin loan facility with its customer. Secondly, no instruction was given on behalf of any client to the Bank to redeem margin loan accounts geared greater than 90%. Thirdly, the notion that the Bank acts on instructions provided to it by Storm is not correct or at least to the extent that it suggests that it was responsive to instructions in the management of the account, it is misleading. Fourthly, the statement that Storm assumed an obligation to manage a margin loan account with the Bank by reason of the statement of advice initially given to clients of Storm by Storm is simply wrong. Finally, the statement in the letter of 9 December 2008 concerning the instructions of 4 December 2008 and the redemption from 5 December 2008 resulting from those instructions, is simply incorrect. 39 In order to support the proposition that Storm had not assumed any management responsibility for margin loan accounts, Storm relied upon further evidence from Mr Paul Johnston by an affidavit sworn and filed 19 December 2008 and an affidavit from Mr David McCullough sworn and filed 18 December 2008. Mr Johnston says that he established "Colonial Margin Lending", a division of the Commonwealth Bank of Australia, in 1996. Margin lending facilities were offered to clients through financial advisers. Mr Johnston had responsibility for overseeing all operations, managed considerable staff and is completely familiar with margin loan facilities and especially the operations and business of the margin loan facilities offered by the respondent. Mr Johnston first met Mr and Mrs Cassimatis in the early 1990s. Mr Johnston says that margin loans were conducted on the basis that if the value of a client's loan to value ratio fell below a particular percentage the Bank had a right to make a margin call and sell the client's portfolio. If action was required on an account, for example, if a client wishes to redeem funds, Colonial did not act upon instructions from Storm but upon written authorisation direction from a customer. He understood that Storm was not authorised to give instructions to the Bank on marginal lending facilities its clients held with the Bank about written instruction. He says that this was the general practice in the industry. He says that it was his experience that once Storm referred a client to Colonial, Storm had little or nothing to do with the management or maintenance of the facility thereafter. In practice, the Bank regarded the facility as the customers' facility and the customer managed it. Colonial sent quarterly statements to its customers and gave customers access to its website so that a customer could determine the position of his or her loan at any time. The Bank was able to discount its rates to customers because Storm was not paid commissions for loans taken up. He says that he resigned from the Bank in June 2003 but for many years prior to that it was the Bank's practice to monitor the position of its margin loan customers and in the event that a margin call was looming, the Bank contacted either Storm or the client direct. He says the Bank's practice was to act on instructions only from those clients and not instructions from Storm without confirming that an individual client with a margin loan facility had provided those instructions. He says that the Bank did not regard Storm as a manager of a margin loan. He says that at no time during his tenure was Storm regarded by him or to the best of his knowledge by anyone else as the sole manager of Colonial's margin loans or the investments securing those loans. 40 Similarly, Mr McCullough who has been an employee of Storm for 10 years and who was for 25 years prior to that an employee in senior positions in retail banking at the Bank, says that whenever a loan exceeded the "buffer" relating to a margin ratio for a margin loan, the Bank would write to the client borrower and the Bank would require the client to do what was necessary to bring the loan back into the relevant ratio. Mr McCullough also speaks to the meeting of 4 December 2008. He says that the Bank made it clear that it wanted a solution to the margin lending where limits were exceeded. The Bank wanted to review each client's circumstances client by client. Mr McCullough says that one of the Bank representatives said that it was not the Bank's responsibility to make margin calls. Mr McCullough says that at no time during the meeting on 4 December 2008 did Mr Cassimatis or anyone on behalf of Storm say that all margin loan accounts geared at greater than 90% should be redeemed by the Bank. 41 The Bank does not accept that having regard to all of the affidavit material and responses by Mr Clothier and material filed by the Bank that Storm has demonstrated a sufficient likelihood of success to justify the preservation of the status quo. The applicant filed an affidavit by Ms Teneale Henderson which attaches a transcript of the meeting of 4 December 2008. Objections were made to the transcript but the affidavit was admitted for interlocutory purposes. 42 There are other statements in the transcript such as at p 20 where Mr Cassimatis says "None of these should be in negative equity, should have, could have, would have but didn't. For various reasons or for whatever reasons they should have been sold out at 90% or earlier". The Bank says that the references in the transcript; the references in the loan application document by which the Bank is authorised to take instructions from the client's adviser (Storm), the transmission of daily data sheets which contain schedules of all relevant information and the proposal put by Storm in its letter of 4 December 2008, strongly suggest that the financial adviser had assumed the management role of the margin loan. The Bank says the representations which are complained of concerning management by Storm of margin loan accounts are true . Secondly, the Bank says that statements made at the meeting on 4 December 2008 conveyed the clear impression that Storm had instructed the Bank to redeem margin loan accounts in breach of the margin ratio. 43 For present purposes, I am satisfied by the weight of the applicant's material that had the financial adviser assumed a management responsibility for the margin loan transaction in each case and more particularly a "sole" responsibility for the management of the margin loan account through the period, the documents as between the Bank and Storm and in particular the letter of 18 May 2007 would have said so in clear and transparent terms. Secondly, the documents as between the financial adviser and the client would have reflected that position. Mr Cassimatis says it was not so as a matter of practice. Mr Johnston says it was not so in his experience although his experience concluded in 2003. Mr McCullough also gives evidence consistent with Mr Cassimatis. I am satisfied that solely for interlocutory purposes, Storm has demonstrated a sufficient likelihood of success in terms of Australian Broadcasting Corporation v O'Neill demonstrating that the statement as to sole management of the margin loan accounts and instructions allegedly given in the meeting on 4 December 2008 are capable of being misleading or deceptive or likely to mislead or deceive. Of course, the ultimate position must be tested at trial where the evidence will be closely examined and findings reached on all aspects of the controversy. 44 Storm also relies upon a further letter written by the Bank on 17 December 2008 in which it says that Storm is "completely responsible for your financial position". In that letter, the Bank changed its position slightly from one of asserting sole management of the clients margin loan throughout the period to one where "Storm Financial is primarily responsible for your margin loan and we are disappointed if they have not kept you informed of your account position or any instance of margin call". Storm also complains that the letter goes on to offer defaulting borrowers the opportunity to meet with another financial planner for a one hour consultation to discuss the borrower's financial position. Storm says that it only complains about that as a statement which reinforces the notion that Storm as manager of the margin loan has failed to discharge its responsibilities. 45 The Bank has not offered any undertaking not to make any of the statements complained of. 46 Storm says that it has experienced many responses from clients in response to the Bank's letter of 8 and 9 December 2008. It says that its clients have been led to believe that Storm has failed to manage each of the margin loan accounts which in turn has led to a redemption in circumstances where losses greater than those which would otherwise have been incurred have now been incurred. 47 The Bank says that it has despatched all of the letters to the portfolio of margin loan borrowers in issue. There is now nothing to enjoin. Moreover, the question of the circumstances of the portfolio of borrowers/investors has become extremely controversial with very significant media publicity in relation to the circumstances of the investors with claims and counter-claims by the Bank and Storm as to responsibility for the management of the margin loans and consequent redemption. The Bank says that the Court's intervention by way of a mandatory interlocutory order for correction prior to the determination of the final merits would lend the Court's authority to one version as against another. Further, in circumstances where borrowers are calling and engaging with the Bank and with Storm about aspects of the matter the Bank needs to be free to say what needs to be said, in its view, about the circumstances and context within which these events have emerged. 48 Storm contends that the misleading statements have caused it damage and loss of clients and that position has been reinforced by the references in the Bank's material to encouragement of clients to seek independent advice from other financial advisers. 49 It is fair to say looking at the material that the correspondence from the Bank is concerned to make it plain to its borrowers that the responsibility for the management of the margin loan accounts and thus the bank and customer relationship was entirely a matter for Storm and thus borrowers ought not to look to the Bank at all as to whether the margin loan accounts might have been managed and margin lending ratios managed more prudentially. The Bank's position on the application for interlocutory relief is that this has nothing to do with the Bank. It is entirely a matter for Storm. That seems unlikely as the letter of 18 May 2007 talked about working in partnership to clear margin calls and the Bank's letter of 17 December 2008 seems to acknowledge that the position is that Storm had primary responsibility for the loan. It seems unlikely as a matter of prudential bank management that the Commonwealth Bank of Australia would have displaced all responsibility for its loan portfolio with these borrowers and investors entirely to a third party, Storm. However, it should be noted that the protocol surrounding or at least reasons for the Bank sending daily data sheets to Storm containing all the relevant ratios and information is not explained by Storm in its material in support of the application. The much more likely inference is that both Storm and the Bank assumed a degree of responsibility for managing in a tripartite way the relationship between the Bank, the borrower/customer/investor and Storm as adviser overall. The boundaries of that relationship are the core matter in issue in these proceedings. 50 I am not satisfied that a mandatory interlocutory order ought to be made directing the Bank to correct the two matters that are the subject of primary criticism. Those are that Storm was responsible for and further had sole responsibility for managing the margin loan accounts and secondly, that Storm instructed the Bank on 4 December 2008 to redeem the relevant loans. I say that notwithstanding having considered Mr Clothier's affidavit of 23 December 2008 and the affidavits of Mr Arnaout, Mr Chard and Mr Phelps including other material relied upon by the Bank which ultimately puts in issue facts going to the central matters in controversy. For present purposes, I simply note that there is a contest between the parties on the facts and assess the question of whether relief should go having regard to the burden the applicant must discharge. Making a mandatory interlocutory order effectively is the grant of final relief. It seems to me inappropriate in the context of the current controversy to order corrective advertising on an interim basis. Further, in the context of disputes which might arise between the Bank and its borrowers about whether the Bank has properly invoked mechanisms for the redemption of the loans, the sale of securities and whether the Bank acted properly or improperly in terms of any authority it may have needed or may have obtained on behalf of borrowers in the meeting on 4 December 2008, an order restraining the Bank from making any representation in any relevant place or forum that the Bank acted with authority on 4 December 2008 (if that be necessary) would be likely to work injustice. Such an order would not be of any real utility in preserving the status quo. The letters to the borrowers have been despatched and although the Bank has written a further letter on 17 December 2008 it seems to me that an injunction restraining the Bank from representing that Storm had sole responsibility for managing the margin loan accounts, in the context of the controversy overall, is of little utility in terms of the status quo. 51 Further, I am not satisfied that the balance of convenience is served by granting the relief sought. 52 As to the question of an order that the Bank provide the respondent with a list of each borrower that received the letters, the Bank says that the applicant knows who the clients are in any event. What it may not know, however, is which clients got which letter. The Bank is an organisation with considerable resources and it ought to be able to tell the applicant by 6 January 2009 by the provision of a list electronically or otherwise of all recipients who received a letter in terms of or substantially in terms of the letter dated 8 December 2008 and similarly a letter in terms of or substantially in terms of the letter dated 9 December 2008. I do not propose to make an order in those terms. However, I propose to list the matter for directions on 9 January 2009 for review. 53 I suggested to the parties in the course of the hearing that one approach to the matter might be to separate the issues in the proceeding by hearing the issues in relation to contravention and whether injunctions ought to be made by way of final relief, in a trial commencing on or about 8 January 2009. For entirely understandable reasons the parties have had difficulty in accommodating that time frame. All issues in relation to the future conduct of the matter can be addressed on 9 January 2009. 54 I also suggested to the parties that there may be some utility in framing an order that a letter or notice be published to all those who received the letters of 8 and 9 December 2008 written on the letterhead of the Bank or perhaps a joint letterhead signed by both the applicant and the respondent but issued by order of the Court advising each recipient that contentions had been made in the letters as to particular matters and that objection had been taken to the accuracy of those matters with the result that a proceeding was presently before the Court to test and determine those matters. In that sense, the authority of the Court might be lent to a communication to all recipients making it clear that a particular controversy involving those matters was now before the Court. That seemed to be of some utility because it elevated claims and cross-claims by correspondence from the parties directly or through media statements to one of a formal proceeding to be resolved by and before a Court. However, neither the respondent nor particularly the applicant thought there was any utility in such a communication and thus I have not pursued it. 55 Accordingly the interlocutory application ought to be dismissed. For present purposes, the costs of the interlocutory application are reserved. I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application for an interlocutory mandatory order for corrective advertising, an injunction restraining particular conduct and related orders corporations law |
The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs to refuse to grant a protection visa to the appellant. 2 The appellant is a citizen of India. He claimed to have a well-founded fear of persecution because of his work for social welfare organisations and his being the only Hindu member of the political party Dravida Munnetra Kazhagam ("DMK") in his district. The appellant's claims centred on an individual who was "angry" with the appellant and had subsequently caused various tragedies which beset the appellant's family between 1978 and 1998. The appellant claimed that he had made complaints to the police, but that the police did not do anything. Further claims involved the appellant being chased out of his house and being attacked by his brother. The appellant claimed to have lived in impoverished circumstances in different parts of India. 3 On 21 February 2005, the Tribunal sent a hearing invitation letter to the appellant at the address of the appellant's migration agent. The appellant had nominated his agent as an authorised recipient of correspondence relating to his appeal to the Tribunal. As the hearing invitation letter requested a response by 9 March 2005 and no response had been received by 6 April 2005, an officer of the Tribunal telephoned the appellant's migration agent on the land line telephone number provided on the application form, but was unable to obtain a response. The officer did not contact the migration agent on the mobile phone number also provided on the form. On the date of the hearing, neither the appellant nor his migration agent appeared. After the hearing, the Tribunal made telephone contact with the appellant's migration agent. The agent said that he was not sure of the date and time of the Tribunal hearing. The migration agent was invited to provide a written statement, but no such statement was received. 4 The Tribunal proceeded under s 426A of the Migration Act 1958 (Cth) ("Act") to make a decision in the absence of the appellant. The Tribunal was not satisfied that the appellant attracted protection obligations in Australia and noted that there was insufficient detail provided to support the claim. On the evidence, the Tribunal could not be satisfied of the appellant's claims and did not accept that the appellant had a well-founded fear of persecution. 5 The appellant sought judicial review of the Tribunal's decision in the Federal Magistrates' Court. He claimed that the Tribunal had failed to exercise its jurisdiction by breaching s 425 of the Act and that he was not provided with 14 days notice pursuant to s 425A of the Act . The appellant claimed that he had directed that all correspondence was to be sent to his residential address and not to his migration agent. The appellant also raised claims that the Tribunal had breached s 424A of the Act because the contents of the Tribunal's telephone conversation with the migration agent were not put to him for comment. The appellant further claimed that the migration agent had not contacted him about the hearing. 6 The Federal Magistrate found that there was no arguable jurisdictional error affecting the Tribunal's decision. His Honour found that the Tribunal had complied with its obligations under ss 425 and 425A of the Act and that it was sufficient for the Tribunal to send an invitation to the authorised recipient pursuant to ss 441A(4) and 441G (1) of the Act and Reg 4.35D of the Migration Regulations 1994 (Cth) ("the Regulations "). The Federal Magistrate was not satisfied that the Tribunal had not followed those procedures and considered that it was probable that it did. He noted that the appellant was seeking to take advantage of his failure to comply with the instructions contained in Section D of the form on which he applied to the Tribunal for review of the delegate's decision. Section D asked the applicant: "Where do you want us to send correspondence about your application? " Various options appeared in the form. An applicant was instructed to "tick one box only. " Despite this the appellant had ticked the boxes adjacent to "my residential address in Australia" and a box which authorised correspondence in connection with the review to be received by "my adviser". The Federal Magistrate held that the requirements of the Act relating to the giving of notice of a hearing had been satisfied by the advice given to the adviser notwithstanding the Tribunal's failure also to advise the appellant directly. His Honour relied on his decision in Song v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FMCA 685. The Federal Magistrate was prepared to accept that the appellant did not have actual notice, but considered that, if preconditions for the exercise of its power exist and the Tribunal has properly exercised its discretion to proceed, then it has no obligation to make further enquiries or efforts to notify an applicant that it proposed to do so. 7 The Federal Magistrate found that the Tribunal had taken into account the contents of the telephone conversation with the appellant's migration agent before deciding to proceed pursuant to s 426A(1) of the Act , but that there was no breach of s 424A(1) of the Act because the Tribunal did not take the information into account in order to affirm the delegate's decision. However, his Honour considered that, even if this conclusion were incorrect, the information from the appellant's migration agent would be treated as information given by the appellant and would attract the exception provided for in s 424A(3)(b) of the Act . 8 The notice of appeal to this Court contains various grounds, many of which are no more than merits claims. The single Judge of the Federal Magistrate's Court ... failed to find error of law, jurisdictional error, procedural fairness and relief under s39B of the Judiciary Act 1903 . The grounds and relief is very much similar with a recent High Court Judgment --- Nuin v Refugee Review Tribunal; Lie v Refugee Review Tribunal [2002] HCA 30 (8 August 2002). Recent High Court Judgments; plaintiff S157/2002 Commonwealth of Australia [2003] HCA 1. Recent Federal Court of Australia Judgment: AGDB v Minister for Immigration and Multicultural Affairs. I will provide more ground after receiving the Judgment. The FM erred in failing to find that the Tribunal erred in law under s476, s426 and Migration Act 1958 . My point is that despite having attended the hearing, it became imperative that, before the Tribunal made up its mind to dismiss the application, such in information was required to be sent to me in written to make comments, in order to fully compliance of s424A as decided by the majority Judge of the High Court in SAAP. 9 The appellant appeared in person on the hearing of the appeal. He had the assistance of an interpreter. He told the Court that a Tamil friend had prepared the notice of appeal for him. It had not been translated for him before he signed it. He could not assist the Court to understand the grounds or elaborate on them. He asked that the matter be remitted to the Tribunal and asserted that he could not return to India because of fears for his life. 10 The appellant's application to the Tribunal was made on a form which was completed on his behalf by his migration agent. It was, however, signed by the appellant. Although the appellant has sworn that he does not "speak, read and write English", he declared, when signing the form, that he had "read and understood the information supplied to [him] in this application form. " I assume, therefore, that the agent, or someone acting on the agent's behalf, translated the contents of the application form to the appellant. As noted earlier in these reasons the appellant had requested that correspondence about his application should be sent to his residential address which had been provided in section B of the form. However he also authorised his adviser (who had been identified in Section C of the form) "to receive correspondence in connection with the review". Adjacent to the authorisation to send correspondence to the adviser was a statement that: "A copy of all correspondence will be sent to the residential address set out in SECTION B. " This would have conveyed to the appellant that copies of all correspondence, sent by the Tribunal to his adviser, would also to be sent to him. This is what occurred when the Tribunal, in November 2004, acknowledged receipt of the application. It did not, however, occur when the letter of invitation to attend a hearing was sent in February 2005. That letter was sent only to the agent. No copy was sent to the appellant. The agent was so advised. Please note that [the applicant] has not been sent a copy of this letter. It is important that you tell the review applicant about the contents of this letter. Even if the appellant had not ticked the box asking that the Tribunal correspond with him at his residential address, he would have been entitled to expect that he would receive copies of letters relating to his application which were sent to his agent. There was, however, no evidence before the learned Federal Magistrate that the appellant had failed to attend the hearing because he was expecting to receive personal notification of the date, time and place of the hearing. 11 The question on this appeal is whether the learned Magistrate erred in failing to hold that the failure of the Tribunal to advise the appellant personally of the details of the hearing constituted a jurisdictional error which vitiated the Tribunal's decision. I have given this matter anxious consideration because of the confusing statements and contradictions to which I have referred. I have, however, come to the view that no jurisdictional error occurred by reason of the failure of the Tribunal to send a copy of the hearing invitation to the appellant. The Tribunal was under an obligation to invite the applicant to appear before it: see s 425(1) of the Act . The invitation had to include notice of the date, time and place of the hearing: see s 425A(1). The Act provided for notice to be given by one or more prescribed methods: see s425A(2)(a). One such method was for an officer of the Tribunal to send the notice by prepaid post addressed to an "authorised recipient" nominated by the applicant: see s 441A(1) , (4); s 441G(1) . If an authorised recipient is nominated by an applicant the Tribunal is required to send the notice to that authorised recipient "instead of the applicant": see s 441G(1). If the notice is given to the authorised recipient "the Tribunal is taken to have given the document to the applicant": see s 441G(2). The Tribunal can, if it wishes, give the applicant a copy of the notice: see s 441G(2). If a notice is given to an authorised recipient and the applicant does not appear before the Tribunal at the appointed time and place the Tribunal "may make a decision on the review without taking any further action to allow or enable the applicant to appear before it": see s 426A(1). Sections 425 , 425A and 426A of the Act all fall within Division 4 of Part 7 of the Act . Division 4, according to s 422B(1) , constitutes an exhaustive statement of the requirements of the natural justice hearing rule in relation to the matters with which it deals. 12 In this case, the Tribunal met its statutory obligations when it sent the notice of hearing to the migration agent, nominated by the applicant as the authorised recipient of correspondence relating to his application to the Tribunal. The Tribunal could but was not obliged to, have sent a copy of the invitation to the appellant. There was no evidence before the learned Magistrate which suggested that the notice had not been received by the migration agent. The exchanges between the Tribunal officer and the migration agent shortly after the hearing date suggest rather that the agent received the notice but failed to advise the appellant about the hearing. An opportunity was offered to the agent to provide submissions to the Tribunal before a decision was made but no such submissions were forthcoming. In these circumstances, in my view, the Tribunal did not fail to meet the notice obligations imposed on it and there was, in any event, no denial of procedural fairness. None of the grounds of appeal has been made out. 13 The appeal should be dismissed with costs. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. | application for protection visa appeal from federal magistrates court where application of review dismissed whether the federal magistrate erred in not holding that the failure of the tribunal to advise the appellant personally of the details of the hearing constituted a jurisdictional error tribunal advised 'authorised recipient' of hearing details no legal error as tribunal met statutory obligations migration |
These are my reasons for the making of that order. 2 Previously on 21 December 2007, pursuant to s 436B(2) of the Corporations Act 2001 (Cth) (the Act), I granted the first plaintiffs, Christopher John Palmer and Bryan Patrick Collis (the Liquidators), the liquidators of Terraplanet, leave to appoint themselves as its administrators. Pursuant to s 447A of the Act, I dispensed with the holding of the first meeting of creditors required to be held pursuant to s 436E of the Act. On 28 December 2007, I published reasons for the making of those orders: see Palmer and Collis and Terraplanet Limited (in liquidation), in the matter of Terraplanet Limited (in liquidation) [2007] FCA 2092. Those reasons form part of my reasons for the making of the order terminating the winding up, and I will take those earlier reasons as read. 3 As appears from the earlier reasons, Terraplanet carried on business as a publisher of magazines, graphic design and pre-press service provider, internet web site designer and developer and related businesses. It was formerly admitted to the Official List of the Australian Stock Exchange (ASX) but its securities were suspended from trading on the ASX in November 2002. Also, as appears from the earlier reasons, for a time the Liquidators were voluntary administrators of Terraplanet. On 7 January 2003, at a meeting of creditors held under s 439A of the Act, the creditors resolved under s 439C(c) of the Act that Terraplanet be wound up. The voluntary administration then came to an end and the Liquidators (in their then capacity as administrators) became the liquidators of Terraplanet. 4 After events recounted in the earlier reasons, the position was reached that if the winding up were to be finalised, there would be no distribution to ordinary unsecured creditors, whose claims totalled approximately $1,533,000. 5 Terraplanet received a recapitalisation proposal from Dalgety Capital Pty Ltd (Dalgety), under which Dalgety would inject $1,800,000 cash into Terraplanet in return for shares representing approximately 92.17% of Terraplanet's issued share capital. The proposal was conditional on the Liquidators again being appointed as administrators of Terraplanet, and the creditors of Terraplanet resolving under s 439C(a) of the Act that Terraplanet execute a deed of company arrangement (DOCA) proposed by Dalgety. While that statement was a correct reflection of the affidavit evidence before the Court, it has now come to light that there was an error in the affidavit of Bryan Patrick Collis, and that it was in fact predicted that the ordinary unsecured creditors would receive a distribution of approximately 15 cents in the dollar. I will, for the time being (see [20] below), refer to them as "Liquidators/Administrators". 8 The Liquidators/Administrators convened a meeting of Terraplanet's creditors (Creditors' Meeting) which was held on 24 January 2008. Accompanying the notice of meeting was a report (Report) by the Liquidators/Administrators to creditors under s 439A(4) of the Act. The Report showed that there was cash at bank of $239,804.67. The Report also showed that if the winding up were to be finalised, the monies remaining after costs would be applied in part payment of the balance of the preferential DEWR GEERS claim, and there would be no payment to other priority creditors and known ordinary creditors whose claims totalled approximately $36,346 and $934,617 respectively. 9 The Report explained the recapitalisation proposal and the proposed DOCA. Annexed to the report were copies of the proposed DOCA, the "Proposal to Recapitalise" Terraplanet and a "Creditors Trust Deed". I will say more of these documents below. 10 The Report noted that Dalgety had already paid a non-refundable deposit of $10,000 of the $450,000 cash advance that was to be paid into a creditors' Trust Fund, which, together with the cash at bank of $239,804.67, less costs, would be available to Terraplanet's creditors, subject to shareholder approval of the recapitalisation proposal. 11 At the Creditors' Meeting, the participating creditors unanimously resolved that Terraplanet execute a DOCA and a Creditors' Trust Deed on terms not materially different to those contained in the drafts attached to the Report. 12 On 7 February 2008, the Liquidators/Administrators, Terraplanet and Dalgety executed a DOCA in terms not materially different from those of the draft. 13 The DOCA was expressed to be conditional upon certain conditions being satisfied or waived prior to or at completion. One of these was execution of a trust deed in the form (or substantially in the form) of an attachment to the DOCA, under which the Liquidators/ Administrators, as trustees, would hold the Trust Fund, comprising, inter alia, the "Settlement Sum" of $10, the deposit previously mentioned of $10,000, the remainder of the Cash Advance of $450,000, namely, $440,000, and Terraplanet's assets other than the "Terra Business Assets" upon the terms of the proposed trust deed. Generally speaking, the Terra Business Assets were all intellectual property associated with certain mastheads. Again, generally speaking, Terraplanet's assets other than the Terra Business Assets were Cash at Bank of $239,804 and a refund of ASX listing fees of up to $17,000. 14 At completion of the implementation of the DOCA, Terraplanet was to transfer to the trustees all of Terraplanet's assets other than its Terra Business Assets, of which it was to remain the owner. By reason of the recapitalisation and the associated issue of shares in Terraplanet to Dalgety, this intellectual property would enure to the benefit of Dalgety. Terraplanet's other assets would enure, through the trust, to the benefit of its creditors. 15 "Completion" was defined in the DOCA as the occasion of the making of the payments and transferring of the property referred to in the preceding paragraph. 16 The DOCA was expressed to bind all persons having a "Claim" (widely defined) against or in respect of Terraplanet. It provided that on completion, Terraplanet would be released from all Claims, that all Claims against it would be extinguished, and that all persons having a Claim were permitted to lodge a proof of debt pursuant to the proposed trust deed. 17 Also annexed to the DOCA was a form of the "Proposal to Recapitalise" of Dalgety which was dated 22 October 2007. No more need be said of it, since it has been overtaken by the orders made on 21 December 2007 and the events referred to in the earlier reasons and in these reasons. 18 The Liquidators/Administrators convened a meeting of the shareholders of Terraplanet, which was held on 3 April 2008. The participating shareholders unanimously passed a series of ordinary and special resolutions, the effect of which was to enable the recapitalisation proposal to be effectuated. The resolutions included resolutions adopting a new constitution and changing Terraplanet's name to "TPL Corporation Limited". Other resolutions provided for consolidation of the shares --- every eight shares into one share --- and the issue of new shares and options as part of the recapitalisation by Dalgety. 19 The "Terraplanet Creditors Trust" was established on 11 April 2008. In the result, the present position is that the Liquidators (they ceased to be Administrators on 11 April 2008 and I will henceforth refer to them simply as the Liquidators) in their capacity as trustees of the Terraplanet Creditors Trust, hold approximately $609,000 upon the terms of that Trust. 21 On the making of an order under s 482 of the Act terminating the winding up, that amount will be distributed to Terraplanet's creditors. After priority creditors have been paid in full, it is estimated that there will be a return of approximately 17 cents in the dollar on admitted claims. The Guide recommends that administrators evaluate the proposal before submitting it to creditors, disclose all material information about the proposal to creditors, and express an opinion as to whether the proposal is one that adequately protects the interests of creditors. 23 I am satisfied that the DOCA and the Trust satisfy the object of Pt 5.3 of the Act of providing for the business, property and affairs of an insolvent company to be administered in a way that maximises the chances of the company, or as much as possible of its business, continuing in existence, or results in a better return for its creditors and members than would result from an immediate winding up: see s 435A of the Act. 24 Rupert Co v Chameleon Mining (2006) 24 ACLC 635 presented factual circumstances somewhat similar to those of the present case. Austin J stated in that case (at [15]) that in the exercise of its discretion whether to terminate the winding up, the Court considers the interests of creditors (including future creditors), the liquidator, contributories and the public. 25 In the present case, the application is made by the Liquidators; the existing creditors have voted in favour of the DOCA and the Terraplanet Creditors' Trust; and the contributories (that is, the shareholders) have voted in favour of the various resolutions to implement the recapitalisation proposal. 26 Terraplanet is released from all existing debts under an arrangement that sees existing creditors better off than they would be if the winding up were to proceed to finalisation. 27 This leaves future creditors to be considered. In substance, Terraplanet is to commence its commercial life again. No doubt Dalgety is of the view that its capitalisation of Terraplanet is adequate to enable it to succeed commercially. 28 In the light of the absence of any existing debts and of the recapitalisation of the company, I infer that Terraplanet is solvent. There is no reason to doubt, on the present evidence, that the company will be able to pay debts it will incur as and when they fall due after it recommences business. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. | application by liquidators for order terminating winding up liquidators had previously appointed themselves administrators pursuant to leave of court deed of company arrangement (doca) entered into doca implemented and term of doca expired creditors' trust recapitalisation of company by third party resolution passed by shareholders in support of third party's recapitalisation proposal payment of amount into a trust for benefit of participating creditors, and release of company from its obligation to pay creditors interests of existing and future creditors, contributories and the public relevant considerations solvency of company recommencing its commercial life held : order made terminating winding up corporations |
This is the patent in suit. The earliest priority date claimed for the patent is 10 July 2000. The invention is concerned with aspects of a medical injector system for injecting fluid from a syringe into a patient. An aspect of the invention disclosed in the patent relates to the syringes, including associated hubs and seals, used in the injector system. The second applicant, Imaxeon Pty Ltd, claims to be the exclusive licensee of the patent in suit. The applicants seek an interlocutory injunction in order to prevent the respondent, Alpine Medical Pty Ltd, from selling or offering for sale syringes, including hubs and seals sold with them, allegedly having features falling within claims of the patent. In an amended statement of claim filed 30 July 2009, the applicants allege that each of these products contain an essential integer of claims 1, 9, 51 and 52 of the patent in suit and that, by selling these products or offering them for sale, the respondent has infringed claims 1, 9, 51 and 52 of the patent. At the hearing of the application for interlocutory relief, the applicants applied to amend their statement of claim, in order to add the further or alternative allegation that the respondent's products contain an essential integer of claims 4 and 12 of the patent, and that, by selling these products or offering them for sale, the respondent has infringed claims 4 and 12 of the patent. The respondent opposed the amendment, but, for the reasons stated below, I would grant the applicants the leave they sought. This application is determined on this basis. In support of their claim for relief, the applicants rely on two affidavits of Alwyn William Reynolds sworn on 30 July and 18 August 2009, two affidavits of Victor Chang Ting Tse sworn on 30 July and 18 August 2009, an affidavit of Timothy James Hands sworn on 18 August 2009, and an affidavit of Wayne McMaster also sworn on 18 August 2009. The respondent filed its defence on 19 August 2009, which: (1) denied the alleged infringements in respect of syringes with product numbers 100102 and 100104 (i.e, the Stellant substitute syringes) upon the basis that they do not contain the integers of the claims as alleged; (2) accepted that syringes with product number 500102 (i.e, the Klikfit substitute syringe) have the alleged features; and (3) asserted that claims 1, 9, 51 and 52 of the patent are invalid "as those claims do not define a patentable invention for the reason that the invention, as claimed in claims 1, 9, 51 and 52 of the patent, is obvious having regard to common general knowledge at the earliest priority date for each of those claims". The respondent indicated in argument that, in so far as necessary, its challenge to invalidity on the ground of obviousness should be understood to extend to the invention as claimed in claims 4 and 12. In opposition to the relief sought, the respondent relied on an affidavit of Susan Terry Evans sworn on 14 August 2009 and an affidavit of Frank Papamichalakis (known also as Frank Pappas) also sworn on 14 August 2009. Mr Reynolds described Medrad as "a worldwide, market-leading manufacturer and distributor of high technology medical devices". Mr Reynolds stated that "Medrad has a worldwide reputation for performance that helps physicians diagnose patients more accurately and, ultimately, deliver quality patient care". Mr Reynolds noted that Medrad is also the registered owner of two Australian trade marks in Australia, both of which are exclusively used in Australia by Imaxeon. These trade marks are "KLIKFIT" and "VISIMAX". Turning to Imaxeon, Mr Reynolds said that "Imaxeon designs, manufactures, imports, exports, distributes and supplies contrast injection systems for computer tomography (" CT ") and cardiovascular (" CV ") applications, as well as all associated consumables". Imaxeon has been Medrad's sole distributor in Australia since 2000. According to Mr Reynolds, the main focus of its business is CT contrast injection systems and the sale of consumables for injection systems. Imaxeon's customers are typically hospitals and radiology clinics. This proceeding involves the sale by the respondent of syringes (including their hub and seal components) for use as part of CT contrast injector systems supplied by the applicants for use in CT imaging. Injector systems are used for injecting contrast dyes intravenously into patients. Mr Reynolds deposed that CT imaging frequently involves injecting intravenous contrast dye materials into patients, in order to enhance the images obtained from a CT scan by highlighting structures such as blood vessels and soft organs that would otherwise be difficult to delineate from their surroundings. Once the injector unit has been programmed, it automatically controls the piston of the contrast injector, which pushes the hub and seal within the syringe barrel to deliver the contrast dye materials for the patient. Mr Reynolds deposed that the software algorithms installed on the computer processor within the injector unit regulate the rate of injection of the contrast material into the patient. The algorithms are designed to take into account the technical features of the relevant contrast injector syringe that are specific to that injector system. Mr Reynolds stated that "the syringe is an integrated component of the entire system, the characteristics of which are important to the accurate and safe operation of the system". He also stated that "[i]t is for this reason that a contrast injector system uses only the syringes that are specifically designed for that particular injector system". According to Mr Reynolds, the two main contrast injection systems supplied by Imaxeon were the Imaxeon™ VISIMAX® CT contrast injector system and the Medrad™ STELLANT™ CT contrast injector system. Imaxeon and Medrad only sell single use disposable syringes for their own systems. Imaxeon presently prices its STELLANT™ syringes on average at $9 per syringe and its KLIKFIT syringes, at $6 each. The VISIMAX® injector system is designed to use syringes sold by Imaxeon under the "KLIKFIT" trade mark. The STELLANT™ injector system is designed to use syringes sold by Imaxeon and Medrad under the STELLANT™ mark. Both types of syringe include a transparent cylinder with a hub and seal combination that fits inside the base of the cylinder. The syringe, including the hub and seal combination, fits onto a piston of the injector system. Mr Reynolds stated that, typically, the injector system is supplied to the hospital or clinic and consumables, including syringes and tubings, are purchased as needed on the basis of an agreed unit price. He added that the hospitals and clinics also engage the suppliers to service and maintain the injector systems. Imaxeon considered the revenue obtained in the on-going sale of consumables, including syringes, in setting the price and terms of supply of the injector system. Mr Reynolds said that, as the syringes are disposable, the costs of the syringes over the life of the injector system will significantly exceed the initial cost of the injector system. Mr Reynolds observed that, since Imaxeon supplies consumables (such as syringes) to its customers on an on-going basis, Imaxeon is in regular contact with its customers, "keeping it in the customer's mind for its future injector system needs". Mr Reynolds stated that Imaxeon has developed a strong reputation in the disposable contrast dye syringe market, which is based on the quality of its products and after-sale service. Imaxeon holds around 80% of the market for injector systems and related consumables, including the syringes, in the CT segment of the Australian disposable contrast dye syringe market. The respondent is not amongst its main competitors in this market. Imaxeon's competitors are typically other manufacturers of competing injector systems that require specific single use syringes manufactured specifically for their own systems. Mr Reynolds stated that, on or about 18 May 2009, Timothy Hands advised him that he had become aware that the respondent was promoting syringes for use with the STELLANT™ injector system. Mr Reynolds later looked at the respondent's website, noting, amongst other things, that one of the products on the website was entitled "Visimax CT 150ml". The website included a statement about the compatibility of the respondent's syringes with Imaxeon's syringes, stating that "[t]hese are like for like replacement for popular syringe types". Mr Reynolds produced a computer print-out from the respondent's website apparently obtained on 27 May 2009 that evidenced these matters. In its defence filed 19 August 2009, the respondent admitted that, since 30 March 2009, it had offered for sale and sold in Australia syringes with product numbers 100104 and 100102, which were manufactured by Shenzhen Ant Medical Devices Co Ltd for use with a medical injector system, and registered on the Australian Register of Therapeutic Goods, administered under the Therapeutic Goods Act 1989 (Cth), under ARTG 158824. These syringes are amongst the allegedly infringing syringes. Mr Reynolds believed that the respondent's syringes were being sold at a price of about $7 --- approximately 20% below the price of comparable syringes sold by Imaxeon in Australia. Mr Reynolds also noted that some of Imaxeon's promotional material indicated that its syringes were patented. The affidavit of Mr Hands, a territory manager for Northern New South Wales, supported the proposition that the syringes manufactured by Shenzhen Ant are to be sold at about $2.00 cheaper than the equivalent ones supplied by Imaxeon. Mr Reynolds deposed that, if the respondent were able to continue to sell the allegedly infringing syringes, then Imaxeon would be forced to lower its supply price in order to be competitive in the market. Mr Reynolds considered that any such price reduction would be permanent, and gave his reasons for this opinion. He added that "[a] price decrease would ... result [in] a significant overall loss of revenue both immediately and into the future ...". He gave further reasons for this view in his affidavit of 18 August 2009. Mr Reynolds observed that, since the sale of syringes allowed Imaxeon to have regular contact with its customers, Imaxeon was able to address any problems that customers might have with its injector systems. He added that "[r]egular contact with customers also allows Imaxeon to understand the changing needs of its customers and develop improvements and new features for its products to address these needs". Further, Mr Reynolds said that, if the respondent supplied syringes to its customers and Imaxeon lost the opportunity for regular contact, then it also lost the opportunity "to convince the customer to accept a replacement injector system from [it] and continuously develop and maintain its injector systems and associated products". Finally, Mr Reynolds said that he believed that "it is uncertain whether the Alpine Syringes will work correctly, or to the same standard as syringes supplied by Imaxeon, within the injector systems supplied by Imaxeon". Mr Tse, a patent attorney, stated that, based on his observations of the pertinent features of the allegedly infringing products, it was his opinion that the Stellant substitute syringe "embodies each and every feature of claims 1, 9, 51 and 52 of the patent [in suit]". Mr McMaster's affidavit was to the effect that searches had failed to disclose that the respondent had assets sufficient to meet a compensation claim and had failed satisfactorily to answer the applicants' inquiries in this regard. Mr Pappas, also a patent attorney, gave his opinion that the syringes manufactured by Shenzhen Ant under product numbers 100102 and 100104 are identical and that neither 100102 nor 100104 possesses all the features of claims 1, 9, 51 and 52 of the patent. In his opinion, "[t]he hub of Shenzhen 100102 has an 'annular engaging portion', but that engaging portion does not have or comprise a groove". Mr Pappas continued that "feature 108 identified by Mr Tse in photo 7-8 is a 'ridge' (or 'projecting lip') and not a groove". This reasoning prompted the applicants to seek the leave mentioned above, to amend their application and statement of claim a second time, so as to include references to claims 4 and 12 of the patent in suit, since both of these claims referred to a ridge instead of a groove. I return to this application for leave below. Mr Pappas also stated that it was his opinion that "the inner surface of the Shenzhen 100102" could not be described as "complementary in shape" to that of the plunger as the claims required. The basis of this opinion is discussed below. If Mr Pappas' opinion were accepted, there would be no infringement of claims 1, 9, 51 or 52 by the Stellant substitute syringes (products numbered 100102 and 100104). Mr Pappas also deposed to a number of documented and anecdotal illustrations of the use of an "annular engaging portion" and reinforcement by the use of complementary shapes outside the medical device or injector fields. Both of these features were said to pre-date the earliest priority date of the patent in suit. Ms Evans, a director and secretary of the respondent, stated that the respondent had received three shipments of syringes (bearing product numbers 100102, 100104 and 500102) from Shenzhen Ant on 11 March, 7 and 20 April 2009. Ms Evans deposed that a syringe under product number 500102 is compatible with Medrad's Visimax injector system and a syringe under product numbers 100102 and 100104 is compatible with the Stellant injector system. Ms Evans also accepted that the respondent made the first sale of the imported syringes on 30 March 2009. Ms Evans noted that she recalled representatives of Shenzhen Ant saying that there were no patents that would cause any issue for the respondent in selling syringes in Australia. As noted below, Ms Evans disagreed with the proposition that Imaxeon would be forced to lower the prices of its syringes if the respondent sold its products in competition with it. Under the heading "background of the invention", the patent noted that "[m]edical injectors and syringes for injecting contrast media into a patient for imaging biological structures are known in the art". The patent illustrated and amplified this proposition. Amongst other things, the patent noted the need "for a simpler front-loading medical injector". Where the engaging portion is a groove, the groove may define a semi-circular cross-section or the groove may extend at least partially along the circumference of the inner surface of the hub. Preferably the inner surface of the hub comprises an interior hollow that contacts the plunger. Such an arrangement allows for a form fit which has the advantage of providing a reinforcing effect to the hub. ... Preferably the plunger has a tapered front end, which is inherently "self centering" as it engages the hub. The claims upon which the applicants rely read as follows: A hub for a syringe for use with a medical injector system, comprising an outer surface adapted to slidingly engage with a barrel of the syringe, and an inner surface having an annular engaging portion comprising a groove adapted to be releasably engaged by a plunger to permit the hub to be selectively withdrawn along the barrel by the plunger wherein the inner surface of the hub is complementary in shape to an outer surface of the plunger. A syringe for use with a medical injector system comprising a hub and seal combination, the seal comprising an outer surface adapted to slidingly engage with a barrel of the syringe and an inner surface adapted to engage the hub, and the hub comprising an outer surface adapted to engage the seal and an inner surface having a substantially annular engaging portion comprising a groove adapted to be releasably engaged by a plunger to permit the hub and seal combination to be selectively withdrawn along the barrel by the plunger wherein the inner surface of the hub is complementary in shape to an outer surface of the plunger. Counsel for the applicants argued that, if Stellant substitute syringes (products numbered 100102 and 100104) were found to feature a ridge, instead of a groove, then the respondent would be found to infringe claims 4 and 12 and properly be enjoined from selling the barrel of the syringe alone. Whether this would have any practical significance is uncertain. (As already noted, the respondent conceded that its Klikfit substitute syringes had the essential integers of the applicants' KLIKFIT syringes. ) The applicants argued that the respondent's challenge to patent validity needed "to be tempered by the proposition that registration of a patent constitutes prima facie evidence of validity". Thus, said the applicants, unless the case of invalidity was sufficiently strong, the Court should move to consider the adequacy of damages, the balance of convenience, and other discretionary factors. Such an approach does not provide a basis for qualifying the serious question on infringement. The applicants cited loss of sales; loss of regular contact with customers; temporary and permanent reduction in the price of their Australian products; and potential loss of reputation. The applicants noted that they had an established trade, and that that there was no evidence that the respondent would be forced out of business or otherwise unable to conduct its business normally until the trial if an interlocutory injunction were granted. The applicants noted that the respondent had not provided any financial or asset information, notwithstanding requests to do so. The respondent had entered the market, so the applicants said, with "its eyes wide open" and there was insufficient evidence to suggest that it would suffer reputational harm in the event of an interlocutory injunction. The respondent argued that there was no serious question to be tried because the Stellant substitute syringes (products numbered 100102 and 100104) did not have two essential integers. This argument is explained below. It followed, so the respondent said, that none of claims 1, 9, 51 and 52 were infringed. Moreover, according to the respondent, each of the claims merely defined syringes or parts of syringes by reference to broad features that were well known and in use in syringes in Australia before the earliest possible priority date. The only ways in which the defined syringes or parts could differ from the prior art are, so the respondent said, with respect to mere specific, constructional features which, in themselves, were, at that time no more than obvious mechanical equivalents or design variants for locking components or for providing means of reinforcement, commonly known in Australia by designers and engineers alike. Thus, said the respondent, there was nothing in the claims, either alone or in combination, which provides an inventive step to support a patentable invention in the terms used in the claims. The respondent argued that it had not been shown that the balance of convenience favoured an interlocutory injunction. Further, the respondent argued that its was a growing business and the grant of interlocutory injunctive relief may well signal to the market that it is an unreliable supplier. In order to demonstrate that there is a serious question to be tried, the applicants must make out a prima facie case in the sense that, if the evidence remains the same, then there is a probability that at trial they will be found entitled to relief. As Gummow and Hayne JJ explained in Australian Broadcasting Corporation v O'Neill [2006] HCA 46 ; (2006) 227 CLR 57 at 81-82 [65] - [70] , "it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial". Their Honours added at 84 [71], "the governing consideration [is] that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought". The respondent's submission --- that, in a patent infringement case such as this, where the validity of the patent is challenged, the practice of the court is to refuse an interlocutory injunction --- depended on Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1 ; (1968) 118 CLR 618 at 623-624. In Beecham , Kitto, Taylor, Menzies and Owen JJ referred (at 623) to "the special considerations which generally arise in a patent action where there is a substantial issue to be tried as to the validity of the patent". This much appears from the authorities to which counsel for the applicants referred me, including AB Hassle v Pharmacia (Australia) Pty Ltd (1995) 33 IPR 63 , Genrx Pty Ltd v Sanofi-Aventis [2007] FCA 1485 ; (2007) 73 IPR 502 , and Interpharma Pty Ltd v Commissioner of Patents [2008] FCA 1498 ; (2008) 79 IPR 261. The reason for the change in practice is that the legislative requirements for grant of a patent are more exacting than they once were and include provision for opposition proceedings before the grant. In AB Hassle (33 IPR at 69-70) Ashley J specifically rejected a submission similar to that made by the respondent in this case and held that, where the defendant challenged the validity of the patent, it was for the defendant to establish a triable question in respect of validity. If a strong case for invalidity was provisionally made out, then, as his Honour said, this factor would be relevant to the exercise of discretion. In Genrx (73 IPR at 503-504 [2]-[6]), Gyles J again considered the ongoing significance of Beecham for the grant of interlocutory injunctions in cases of alleged patent infringement. As his Honour observed, after American-Cyanamid Co v Ethicon Ltd [1975] UKHL 1 ; [1975] AC 396 , there was a good deal of discussion about the importance of apparent differences between American-Cyanamid and Beecham . In the course of that judgment his Honour pointed out that the authorities referred to by the High Court in Beecham Group for not attributing great significance to the grant of a patent were old cases from England based upon a different system for grant than that which had developed in Australia by that time. The system of examination of patents prior to grant in Australia was more stringent than had been the case in England the century before. The practical effect of this decision was to give greater weight to the grant of a patent thereafter than might have been deduced from Beecham Group . His Honour noted, correctly in my view, that the reaffirmation of Beecham by the High Court in O'Neill concerned the elucidation of what is required for a prima facie case (or serious question to be tried). In Interpharma , Jessup J stated (79 IPR at 267 [17]) that "[i]n a patent case, the fact of registration constitutes prima facie evidence of validity", noting that it is for the respondent to show that want of validity is a triable question. His Honour continued that, in his view, if the respondent went no further than showing a triable case on validity, "then, assuming always that the applicant has shown a triable issue on infringement, absent questions of validity, the conclusion would remain that the latter had a triable question". This approach is consistent with that of Sundberg J in Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2009] FCA 595 , where his Honour granted an interlocutory injunction in an alleged case of patent infringement, notwithstanding that he was satisfied that there was a prima facie case that the invention would have been obvious to a person skilled in the relevant art in light of the common general knowledge as it existed in Australia before the priority date. See also Wake Forest University Health Sciences v Smith & Nephew Pty Ltd [2009] FCA 630 at [36] and [55], where Ryan J held that there was a serious question to be tried on the issue of novelty, but granted an interlocutory injunction on the basis that the applicants had established a serious question to be tried on infringement. As previously noted, the respondent has admitted that the Klikfit substitute syringes have the essential integers of these claims, as the applicants alleged. If the respondent fails on its invalidity defence, then the applicants' case on infringement is made out in respect of the Klikfit substitutes. The respondent submits, however, that the Stellant substitute syringes do not contain the integers of the claims as alleged. First, according to the respondent, these syringes have no groove adapted to be releasably engaged by a plunger. On this issue, the applicants relied on the evidence of patent attorney Tse, who expressed the opinion that the Stellant substitute syringes had an inner surface having an annular engaging portion comprising a groove adapted to be releasably engaged by a plunger to permit the hub to be selectively withdrawn along the barrel by the plunger. The groove (112) is adapted in shape to define a ridge (108) that is releasably engagable by a plunger of the injector system to enable the plunger to selectively withdraw the hub (100) along the barrel (104). Photos 5, 6, 7 and 8 are reproduced in Appendix A. Mr Tse added "[t]he plunger has engaging protrusions (116) for engaging a part of the groove (112) of a syringe" and that without this feature the Stellant substitutes would not be compatible with a STELLANT™ medical injector system. In argument, the applicants submitted that (108) was a ridge and that, when one drops down the side of that ridge, from (108) to the flat portion (112), one is dropping into a groove in the sense of a depression or recess. The pins on the plunger drop into the groove so understood. Alternatively, the applicants submitted that, having regard to Mr Pappas' affidavit, the engaging portion comprised a ridge, within claim 4 and claim 12. Referring to a definition of the word "comprising" in the specification, the respondent argued that the Stellant substitute syringes have an engaging portion comprising a ridge, rather than a groove. The respondent relied on patent attorney Pappas for the contrary opinion to Mr Tse. It is this ridge that is engaged by the plunger by means of pins projecting from the outer surface of the plunger. When the pins on the plunger (which are retractable within the body of the plunger) pass through the smallest diameter of the hub (being the diameter of the ridge), they extend or can be actuated to extend and, in their extended state, sit against the ridge. When the plunger is withdrawn the pins sitting against the ridge apply a force to the ridge to move the hub in the direction of the force of the withdrawing plunger. Whilst the ridge is annular, it is not a cut or indentation, furrow, track or channel in a surface or any other shape that is a groove. Nor is feature (108) a component of a groove. Whilst 112 is cylindrical, there is no cut or indentation, track or channel in that surface that in anyway resembles a groove. Nor is feature (112) a component of [a] groove. For this reason, I deal with the submissions on this issue comparatively briefly. In its ordinary natural meaning, the word "groove" may signify a generally narrow channel, hollow, furrow, or rut: see Oxford English Dictionary and Macquarie Dictionary . The specification for the patent in suit uses the words "groove or recess" apparently as indicative of the same feature. As presently advised, it is reasonably arguable that the engaging portion is a groove. I accept the applicants' submission that, if the engaging portion is the hollow or recess created by and under the ridge, then the engaging portion may well be said to comprise a groove within the meaning of claims 1, 9, 51 and 52. If, however, the engaging portion is, as the respondent said, better described as a ridge, then the engaging portion will apparently comprise a ridge within the meaning of claims 4 and 12. The respondent argued that, even if the engaging portion were a ridge, it would not follow that the Stellant substitute syringes infringed the patent in suit by falling within claim 4. The respondent contended that to so conclude involved a misconstruction of claim 4. The respondent submitted that claim 4 required a hub according to claim 1, such that the engaging portion is a ridge and that did not obviate the necessity for a groove. On the respondent's construction, "an inner surface having an annular engaging portion comprising a groove" was to be read as "an inner surface having an annular ridge comprising a groove". At this stage, I would be inclined to reject the respondent's construction. As the applicants submitted, I would construe claim 4 so as relevantly to read, "an inner surface having an annular engaging portion comprising a ridge". Hence, I am inclined to the view that little may in practice turn on whether the engaging portion is said to be a groove or a ridge. Secondly, the respondent submitted that the inner surface of the hub of the Stellant substitute syringes is not complementary in shape to an outer surface of the plunger. The respondent relied on an asserted lack of conformity with this integer. The respondent noted that the plunger was cylindrical with a thruster conical tip whilst the inner hub of the Stellant substitute syringe was complex in shape (because of its interior ribs) and flaring outwards. The respondent argued that the applicants' case disregarded the conical tip at the end of the syringe and the complexity brought about by the ribs and the flaring. In this respect too, the applicants relied on the opinion of Mr Tse. In his first affidavit, Mr Tse gave the opinion that "[t]he inner surface (which includes the area shown by item 110) of the hub (100) is complementary in shape to an outer surface (118) of the plunger of a STELLANT™ medical injector system, which has a substantially round cross-section". Mr Tse added that the Stellant substitute syringes and each of the applicants' Stellant syringes "have this feature and work in the same way". That is, the hub was designed to fit over the plunger by adopting a shape conformable to the plunger. In his affidavit, Mr Pappas expressed the contrary view. An advantage of this feature is a form fit which provides a reinforcing effect to a thin walled hub. The presence of a thin walled hub is said to contribute to economies of manufacture: see lines 15-18 on the same page. This arrangement is also described between page 35 line 29 to page 36 line 4 of the Patent (pages 65 to 66) of the Tse affidavit). It can be seen that that part of the plunger which engages the hub of the syringe comprises a shaft that is of substantially uniform cylindrical shape (I leave aside the engaging pins indicated by the numeral 116), with a frusto-conical tip or dome on which there is a projecting pin. When the plunger of a STELLANT medical injector system is engaged with the hub of the Shenzhen 100102, in no way can the inner surface of the hub be "complementary in shape" to that of the plunger or any part of the plunger. The plunger must pass through that portion of the hub so that the pins on the plunger can engage with the ridge. The inner cylindrical surface of the hub of the Shenzhen 100102, being the feature identified by numeral 112 as indicated in photos 7-8 of exhibit VCT-1 on page 18 of the Tse affidavit, has a diameter grater than the diameter where the plunger passes through the annular engaging ridge. This arrangement is in fact the opposite to that shown in Fig 6 of the Patent ... in the sense that, in Fig 6, the diameter of the inner surface of the hub is substantially constant until it narrows in the region of the frusto-conical tip. On the other hand, in the Shenzhen 100102, the diameter of the inner surface of the hub in fact widens in the region beyond the engaging portion provided by the ridge. If in fact the plunger was complementary in shape to the inner surface of the Shenzhen 100102, that part of the plunger that was complementary in shape to that region of the hub beyond the ridge (towards the tip of the seal) would not be able to pass through the diameter of the annular engaging ridge. It would be impossible for it to do so. Similarly, in the region of the Shenzhen 100102 before the annular engaging ridge, the diameter of the inner surface of the hub is in fact wider than the diameter of the annular engaging ridge. This means that the whole inner surface of the hub must be "complementary in shape" to an outer surface of the plunger, except for where the groove/annular engaging portion is. The applicants noted that the notion of "form fit" was not part of claim 1 but was part of claim 5. There is some substance to this objection. The whole of the specification, including the preferred embodiments, may assist in the construction of the claims. The preferred embodiment of the invention is, in this instance, a statement of the preferable method of construction of the article (or, in other instances, best method of performing the invention), but it is the claim that actually defines the invention the subject of the patent. As presently advised, the respondent's argument on form fit apparently seeks to limit the monopoly as fixed by the words of claim 1 by adding a gloss drawn from the statement of a preferred embodiment in the specification. There would appear to be no good reason to do this, especially having regard to claim 5. The word "complementary" is not apparently a technical term. The word "complement" can signify "[s]omething which, when added, completes or makes up a whole; each of two parts which mutually complete each other, or supply each other's deficiencies": see Oxford English Dictionary . If understood as broadly as this, it may well be that "complementary in shape" includes a feature wherein the inner shape of one component follows the general shape of an outer surface of another component that is in close proximity, such as the Stellant substitute hub and plunger. As presently advised, I do not consider that "complementary in shape" requires that the inner surface of the hub must entirely conform to the whole outer surface of the plunger. Having said this, however, I would not discount Mr Pappas' observations entirely. It may be that more is required to make the inner surface of the hub complementary in shape to an outer surface of the plunger than merely having a common round cross-section that enables the hub of the Stellant substitute syringe to fit over the plunger as it presently does. Whilst the construction of a claim is essentially a matter for the court, expert evidence is admissible on the meaning of technical terms and generally to put the court in the same position as a skilled addressee. Doubtless the parties will present evidence of the latter kind at the trial, which may assist on this aspect of the case. As things presently, however, there is a serious question as to whether the respondent's Stellant substitute syringes infringe the applicants' Stellant syringes because the requirement for complementary surfaces in claims 1, 9, 51 and 52 is a feature of the Stellant substitute syringe. That is, this requirement may very well be found to involve no more than a round cross-section that enables the hub of the syringe to encircle the body of the plunger as it does in the Stellant substitute. I have reached this conclusion that there is indeed a serious question to be tried as to whether there has been an infringement of the kind alleged by the applicants and not admitted by the respondent, especially having regard to the photos in Appendix A and to exhibits A1 and R1. The respondent accepts that, but for the issue of validity, the Klikfit substitute syringe would infringe the patent in suit. Mr Pappas stated that he had seen "many publications and patent documents in the medical connector field and fluid connection fields ... which predate the earliest possible priority date for the Patent ... and which utilise movable engaging members, releasably or permanently engaging with annular grooves and recesses in other members both 'complementary' and 'non-complementary' in shape" and sought to illustrate his point by reference to numerous patents. He augmented this evidence by reference to arrangements in other fields, especially engineering. Mr Pappas also gave evidence directed to showing that reinforcement by the use of complementary shapes, especially in relation to the design and manufacture of plastic items, was well-known. The respondent argued that Mr Pappas' evidence showed that to use an annular engaging portion as a means of locking or connecting two complementary members was to specify a well-known and obvious design technique. The respondent also observed that Mr Pappas referred to the fact that using complementary shapes as reinforcement was a well-known technique. The respondent relied on the fact that Mr Pappas was an engineer, and, so it said, therefore a person skilled in the art. In this context too, the respondent relied on the evidence of Ms Evans as a practising radiographer. As Mr Tse noted, the documents to which Mr Pappas referred did not relate to medical injector systems, and did not appear to describe "any mechanism that enables two different parts to releasably engage with each other so that one part can selectively withdraw the other part from a container (such as a syringe)". In argument, the applicants submitted that there was no evidence that any of the inventions disclosed in the documents to which Mr Pappas referred was part of the common general knowledge of a person skilled in the art at the relevant date. Thus, so the applicants submitted, there was no evidentiary basis for s 7(2) of the Patents Act 1990 (Cth). The respondent disclaimed any reliance on s 7(3) of that Act. As things presently stand, I do not consider that the respondent has made out a prima facie case that the invention would have been obvious to a person skilled in the relevant art in light of the common general knowledge as it existed in Australia before the priority date. This is because there is insufficient evidence that the invention disclosed in the patent in suit would have been obvious to a person skilled in the art in the light of common general knowledge as it existed in the patent area before the priority date. Mr Pappas' evidence amounted to no more than general assertions about common arrangements in different fields of endeavour with different problems to confront. It is by no means clear that he should be regarded as a person skilled in the art simply because he has engineering qualifications. The respondent has not produced any document identifying a similar use of technology in the prior art to that found in the patent in suit. Ms Evans' evidence was not that of a person skilled in the art and was of a generalised kind. For these reasons, her evidence was of very limited utility. First, the respondent has not been engaged in selling the impugned syringes for very long and the quantities involved are comparatively slight. Against this, the applicants have been in the business of selling syringes and medical injector systems for many years. They have a considerable business interest at stake. It may be as Ms Evans deposed, that, if the respondent were enjoined as the applicants seek, then this would adversely reflect on the respondent's reputation for reliability as a supplier. It seems probable, however, that the respondent's representatives will be able to offer suitable explanations to its relatively new customers. The respondent has not said that it would suffer any other kind of harm to its business. Secondly, damages would not be an adequate remedy for the harm that the applicants are likely to suffer. There is no evidence that the respondent has assets available to satisfy an award of damages in the applicants' favour. The respondent, which was incorporated about two years ago, has paid-up capital of $2 and searches have revealed no significant assets. The respondent has stated that it is prepared to deposit into a separate bank account the gross profits it has received, and receives, from the sales of products numbered 100102, 100104 and 500102, pending the final determination of the proceeding, but this does not provide the needed assurance that the respondent could meet a significant award of damages. As previously noted, the respondent is a relatively new entrant into the market and is apparently still in the process of building its business. There is no dispute about the applicants' capacity to pay damages pursuant to the usual undertaking to do so. Further, Mr Reynolds' evidence is that, if the respondent is permitted to sell the syringes in issue, there will be what Gyles J called "interference with ... trade patterns": see Genrx at 506 [15] and Interpharma at 280 [71]. That is: If the respondent is permitted to continue supplying its syringes at a price that is approximately 20% less than Imaxeon's price, then Imaxeon would probably be compelled to lower the price for its equivalent syringes or lose its customer base. There is a real risk that if it held to its higher price, this would damage its reputation and have ramifications when a customer came to purchase or upgrade their injector system. If Imaxeon is compelled to lower the price for its syringes, the price reduction would probably be permanent (even if Imaxeon succeeded at trial) and result in a significant overall loss of revenue which would be very difficult to quantify. Any price increase would compromise Imaxeon's reputation and goodwill and the chances of securing new customers in a market where prices are either stable or declining. By regularly supplying their customers with replacement syringes, Imaxeon retains regular contact with the applicants' customers. This confers various advantages, including that Imaxeon is foremost in the customer's mind when the time arrives to replace an injector system. Imaxeon would likely suffer a loss of reputation if there were defects in the respondent's syringes because the defects would affect the operation of the injector system. (I note that, in argument, the applicants did not invite the court to give this consideration a great deal of weight since there was no evidence of defects in the respondent's syringes. ) The respondent noted that the applicants had presented little detailed evidence on pricing and the effects of competition. The respondent noted that Mr Reynolds' affidavit established that, in any event, the major suppliers of injector systems compete against one another on the cost of the injector systems and consumables and that the prices for the applicants' syringes broadly reflect the pricing for other CT contrast injector systems. It followed, so the respondent said, that price competition was a feature of the market and that the applicants were already competing with the respondent, which was supplying syringes to competing systems. The respondent noted that the applicants had not yet lowered their prices as a result of the respondent's entry into the market. Further, the respondent challenged Mr Reynolds' evidence that any price reduction would be permanent and, in this regard, referred to Ms Evans' evidence that this had not been her experience in the business of Jacobs Medical Australia Pty Ltd. The respondent observed that, in elaborating on the harm likely to befall their business, the applicants had engaged in a degree of speculation. I accept that evidence about the nature of the competition in the medical injector systems and associated consumables market and the effect of new entrants might well be complex. Obtaining complete evidence of this kind would be expensive and probably unjustified for this application. It is undisputed that the applicants occupy a large proportion of the present market, and derive a large proportion of their revenue from the sales of consumables for the contrast injector systems, particularly KLIKFIT syringes and STELLANT™ syringes for the VISIMAX® CT and the STELLANT™ CT contrast injector systems respectively. Although the respondent disputed the propositions advanced by Mr Reynolds, ultimately, the respondent fails to take its case beyond the level of mere disagreement. The evidence of Ms Evans was very limited in that it concerned her experience in a different and not necessarily comparable business. None of the respondent's evidence seriously undermined the assessment made by Mr Reynolds as Imaxeon's managing director and a person with apparently considerable experience in the relevant market. As things presently stand, the respondent has not demonstrated that Mr Reynolds' assessment of the effect of the respondent's sales of the impugned syringes is significantly wrong in any material respect. The effect on Imaxeon strongly argues in favour of preservation of the status quo until the issues in dispute can be determined at trial, the date for which is already fixed. The effect on the respondent provides no strongly countervailing consideration. Further, it is apparent that at least some of the harm that would be done to Imaxeon if an interlocutory injunction were not granted would not readily be met, if met at all, by an award of damages. The applicants submitted that the respondent got itself into this situation with its eyes wide open. As noted above, Ms Evans' evidence was that representatives of Shenzhen Ant had said that there were no patents that would cause any issue for the respondent in selling syringes in Australia. The applicants argued that the respondent ought to have checked the position for itself. That is, the respondent has offered for sale or sold the syringes in the knowledge that they were the subject of a patent, or in circumstances where the respondent should have known of the patent. A consideration of this kind has been weighed in the balance of convenience from time to time: see Beecham 118 CLR at 626; Tidy Tea Ltd v Unilever Australia Ltd (1995) 32 IPR 405 at 415; Pharmacia Italia SpA v Interpharma Pty Ltd (2005) 67 IPR 397 at 408 [52]; Interpharma 79 IPR at 282 [77]; and Sigma Pharmaceuticals [2009] FCA 595 at [61] - [62] . There would indeed appear to be some force in the applicants' criticism of the respondent's conduct in this regard. The evidence on this point is slight, however, and I would not therefore be inclined to give this factor much weight in determining the outcome of the applicants' interlocutory injunction application. In view of the way the respondent sought to answer the applicants, it would be contrived and artificial not to consider the present application for an interlocutory injunction on the basis of the applicants' further proposed amendments. The respondent submitted that, had it known that the applicants would rely on claims 4 and 12, it would have presented evidence: (1) on the infringement question to the effect that the ridge on the hub of the Stellant substitute syringe does not contain a groove; and (2) on the validity question, that the use of a ridge as an engaging portion was common general knowledge. For the reasons already given, I doubt that evidence on either of these matters would affect the conclusion that I have reached. First, as I have said, I am disinclined at this stage at least to accept the construction of claim 4 that the respondent urges. Secondly, had Mr Pappas and Ms Evans given further evidence as to the use of a ridge as an engaging portion, their evidence would still have suffered from the deficiencies to which I have already referred. I would fix the trial of the matter for 10.15 am on 22 February 2010, with an estimate of 4 days. I certify that the preceding eighty-nine (89) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | syringes for use with medical injector systems alleged infringement of patent application for interlocutory injunction alleged invalidity of patent on ground of obviousness construction of claims whether serious question to be tried balance of convenience interlocutory relief granted application for leave to further amend statement of claim and application leave granted patents practice and procedure |
That Motion was filed in proceedings in which the principal claim for relief is a declaration that a notice issued under s 16(1) of the Extradition Act 1988 (Cth) on 11 November 2007 is " invalid ". 2 Detailed written submissions have been filed by both the Applicant in support of its Motion and by the First Respondent in respect to the making of any order for further discovery. 3 The principal submission advanced by the First Respondent is that there has already been made available to the Applicant a copy of all of that material which was before the Minister when making his decision in November 2007. Reliance is also placed by the First Respondent upon the fact that on 14 April 2008 the Minister purported to revoke the November 2007 notice. 4 The Applicant contends that there is no power to revoke the s 16 notice: Dutton v Republic of South Africa [1999] FCA 498 , 162 ALR 625 ; Tervonen v Minister for Justice and Customs (No 2) [2007] FCA 1684 at [108] , [2007] FCA 1684 ; 98 ALD 589 (Varied: Minister for Home Affairs v Tervonen [2008] FCAFC 24). 5 The Minister's position is that any form of declaratory relief such as that sought in the Amended Application is futile. During the course of submissions this morning it became apparent that the Minister is prepared to unequivocally give an assurance that no reliance is to be placed upon the November 2007 notice. Indeed, the Minister contends that such an assurance has previously been proffered. Whether that is so or not, the assurance that no reliance will be placed upon the November 2007 notice is noted. 6 In those circumstances the Applicant correctly accepts there is no utility in further pursuing his claim for declaratory relief and further accepts that any application for discovery also becomes unnecessary. 7 The issues remaining outstanding are the making of an order dismissing the proceedings and the question as to who should bear the costs of the proceedings. It is anticipated at this stage that the appropriate order to be made, insofar as the principal relief is concerned, is an order noting the assurance given by Counsel for the Minister and an order formally dismissing the proceedings. That order will be made at the same time as the order as to costs. The parties are content for the question of costs to be resolved upon the basis of written submissions to be filed. The parties are prepared for the question of costs to be resolved on the basis of such written submissions as may be filed. The Applicant to file and serve a Statement of Facts annexing correspondence relevant to the question of costs together with an Outline of Submissions as to costs on or before 15 May 2008. 2. The First Respondent to file and serve a Statement of Facts annexing such correspondence as it sees fit and relevant to the question of costs together with an Outline of Submissions as to costs on or before 29 May 2008. 3. The Applicant to file and serve any such Further Statement of Facts in Reply together with Submissions in Reply on or before 4 June 2008. 4. Liberty to apply on two days' notice. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | declaration sought that s 16 notice given by minister under the extradition act 1988 (cth) " invalid " assurance given to court by minister that s 16 notice not relied upon submission of minister that relief sought futile concession by applicant that proceedings consequently unnecessary practice and procedure |
On the grounds alleged in the Relevant Paragraphs of the Amended Statement of Claim, whether the Respondent is under a duty or obligation to deliver to the First Applicant the originals or alternatively, any copies of documents provided by the Respondent to the Australian Prudential Regulation Authority (APRA) during the period 19 September 2006 to 10 December 2006 (the APRA documents) and hence entitled to the relief claimed in paragraph 1 of the Amended Application. 2. Alternatively, on the grounds alleged in the Relevant Paragraphs of the Amended Statement of Claim, whether the Respondent is under a duty or obligation to deliver to the Court all of the APRA documents for the purpose of allowing the First Applicant to inspect, take notes and make copies of same, and hence entitled to the relief claimed in paragraph 2 of the Amended Application. His Honour noted that the relevant paragraphs were paragraphs 1---3, 36---46 and 70---78 of the Amended Statement of Claim . 3 When making those orders, his Honour expressed some hesitation as to the desirability of doing so but was persuaded to make the orders by reason of the urgency in which the matter should be determined. That urgency arose out of a forthcoming supervisory visit to be conducted by APRA on 10 December 2007. 4 The source of the obligation imposed upon the Respondent to keep the First Applicant ("the Trustee") so informed was said to be a fiduciary duty owed by Mr Rickus. So much is apparent from the terms of the Amended Statement of Claim and from the transcript of the proceedings before Gyles J on 4 October 2007. Written submissions as filed on behalf of both the Respondent and APRA deny the existence of any such duty. Reliance was placed in those submissions inter alia upon the decision in Breen v Williams (1996) 186 CLR 71. Particular reliance was placed upon the joint judgment of Gaudron and McHugh JJ at 113. Reference may also be made to like observations made subsequently in Pilmer v Duke Group Ltd [2001] HCA 31 , 207 CLR 165 at 197---8 by McHugh, Gummow, Hayne and Callinan JJ. 5 At the commencement of proceedings today, Senior Counsel for the Trustee sought leave to further amend both the Amended Statement of Claim and the Amended Application . The gist of those amendments was to abandon reliance upon a fiduciary duty as the source of the duty and to now place reliance upon the status of the Respondent as an agent. The application to amend, it is understood, was not opposed, but it was contended by both APRA and the Respondent that the consequence of granting such leave was that it would no longer be appropriate to resolve either of the questions as posed by Gyles J, or possibly even some form of revised questions. 6 It is considered that leave should be granted to amend the Amended Statement of Claim and the Amended Application but that the consequence of doing so is that the orders made by Gyles J on 9 October 2007 should be vacated. 7 The Trustee contends that its factual case in respect to those parts of the Amended Statement of Claim is now closed and that it would not wish to adduce further evidence if the questions, as posed by Gyles J, could have been resolved today. If the price it had to pay in having those questions resolved today was that it would not cross-examine Mr Rickus, the Trustee was prepared to pay that price. Notwithstanding the submissions on behalf of the Trustee, it is considered that an inevitable consequence of granting leave to further amend is that the orders made by Gyles J should be vacated. Important questions arise as to the duty imposed upon persons such as Mr Rickus to disclose to his principal the substance of the materials he provided to the Authority pursuant to a notice served under s 255(1) of the Superannuation Industry Supervision Act 1993 (Cth). It is undesirable that such questions should be resolved by reference to a confined construct of facts. The Respondent, it is understood, is uncertain as to whether or not he would wish to supplement the evidence sought to be relied upon by the Trustee. Separate from any reservation expressed by the Respondent, the Court is also concerned to ensure that all facts relevant to a determination of the ambit of the agency said to descend upon Mr Rickus are fully explored. The very fact that the Trustee, but for its desire to have the issues determined quickly, may also potentially wish to cross-examine the Respondent, only provides further reason for reservation. 8 Another area of factual uncertainty potentially surrounding the application is whether or not the documents produced by Mr Rickus pursuant to the notice were his personal property or the property of the Trustee. The submissions as made orally today by the Trustee were also at odds in some respects with its written Outline of Submissions as previously filed. It is not appropriate to formulate questions, or to answer questions ordered to be separately determined pursuant to O 29 of the Federal Court Rules , where such uncertainty prevails. It is unnecessary to cite further authority for the proposition that the procedure contemplated by O 29 should be adopted with caution and is a procedure fraught with difficulties, other than the decision of the Full Court in Save the Ridge Inc v Commonwealth [2005] FCAFC 203 , 147 FCR 97. 9 It should further be noted that at the commencement of the proceedings today, APRA sought leave to intervene pursuant to s 320 of the Superannuation Industry Supervision Act 1993 (Cth). No reliance was placed by APRA upon O 6, r 17 of the Federal Court Rules . Neither the Trustee nor the Respondent sought to contend that the Authority could not intervene because the proceedings presently before the Court did not relate to a matter arising under the 1993 Act within the meaning of s 320(1). Leave is granted to the Applicant to further amend their Amended Statement of Claim and the Amended Application . 2. The orders made by Gyles J on 9 October 2007 be vacated. 3. The Applicant pay the costs of the First Respondent of and incidental to today's hearing and the application to further amend the Amended Statement of Claim and the Application . 4. The Australian Prudential Regulation Authority be joined as the Second Respondent to the proceedings. 5. The question of costs insofar as the Second Respondent is concerned is reserved. 6. The Second Respondent file and serve any submissions in support of an application that the Applicant pay its costs no later than 22 November 2007 at 5pm. 7. The Applicant file and serve any submissions in support of an application that the Second Respondent not be entitled to its costs, or an order that those costs be paid forthwith, on or before 23 November 2007 at 4pm. 8. The question as to whether the Applicant should pay the First Respondent its costs on an indemnity basis, and the question as to whether an order should be made under Federal Court Rules O 62, be reserved and heard on 26 November 2007 at 9:30am. 9. The First Respondent file and serve any submissions in support of an application for costs on an indemnity basis, together with an order that those costs be paid forthwith, and an indication as to the quantum of those costs, no later than 22 November 2007 at 5pm. 10. The Applicant file and serve any submissions in opposition to either of those two orders no later that 23 November 2007 at 4pm. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | australian prudential regulation authority leave to intervene practice and procedure |
The Tribunal affirmed a decision of a delegate of the Minister not to grant the appellant a protection visa. The appellant has claimed to have a well-founded fear of persecution in China by reason of her political opinion. She claimed that she protested against the illegal reclamation of land in her home town by the local authorities in her province. She claimed to have joined a local group which printed and distributed leaflets critical of the government, and that her husband was arrested by the Public Security Bureau ("PSB"). She also claimed that the PSB was looking for her and that her home had been searched by the PSB. The appellant claimed that she was on a black list and would be arrested if she returned to China. The appellant also claimed that she secretly photocopied political leaflets after being approached by an old school friend and, as I have said, that the police searched her home and confiscated her personal property. In addition, she claimed that her parents and relatives were investigated and that she is regarded as a key member who played an active role in the anti-government movement organised by her friend. While she lived in the area of the Project she did not demonstrate and she was not politically active and the reasons she gave were that she was working and had no time. Yet at a time when she was also working full-time and now had a very young child and she was not living in the area of the Project, she claimed that she decided to help to print propaganda materials and join the group. The Tribunal does not believe her evidence and finds that it is not credible. This ground of review was that the Tribunal failed to comply with section 424A of the Migration Act 1958 (Cth) ("the Act"), because it failed to supply particulars of information about similar protection visa claims that were made by other individuals using the same migration agent. The learned Federal Magistrate held that section 424A was not engaged, because the Tribunal did not refer to or rely upon the information relating to the similarity of the other applications. The Federal Magistrate observed at [6] that the Tribunal did not adopt the approach taken by the delegate and considered the appellant's claims on their merit, dissecting them and dealing with them in some detail. His Honour also observed at [7] that the Tribunal wrote to the appellant on 13 June 2008, pursuant to section 424A of the Act, but there was no mention in that letter of the information that had been referred to by the delegate. As his Honour observed, the issue before him was whether this information should have been referred to in the section 424A letter. His Honour, at [11], said that, while the contrary is arguable, in his view the Tribunal did not breach section 424A. In fact there was no mention of the issue in any document generated by the Tribunal at any stage of the review process. In that case, Heerey J observed that the decision of the High Court in SZBYR & Anor v Minister for Immigration and Citizenship & Anor (2007) 235 ALR 609 impliedly overruled a substantial body of authority in the Federal Court in which it was held that an assessment of whether the Tribunal has complied with section 424A(1) requires close attention to the reasons of the Tribunal. Driver FM considered that MZXBQ was distinguishable from the present case because in MZXBQ , the relevant information was raised by the Tribunal at the section 425 hearing. Counsel for the Minister submitted that the approach taken by the Federal Magistrate is consistent with that of a Full Court in SZKLG v Minister for Immigration and Citizenship & Anor [2007] FCAFC 198 ; (2007) 164 FCR 578 at [33] . Counsel also submitted that this view is reinforced by the language of section 424A(1)(b) of the Act. That subsection requires the Tribunal to ensure, as far as is reasonably practicable, that an applicant understands why the information is relevant to the review. It follows that if the Tribunal does not perceive the information to be relevant, there can be no obligation under section 424A(1) of the Act. Counsel also submitted that evidence as to what the Tribunal considered to be the reason, or part of the reason, for making its decision may be found in the statement of reasons. The submission continued by stating that when relevant information is not relied upon in the Tribunal's statement of reasons, an applicant for judicial review will need some other evidence to establish the jurisdictional fact stated in the provision. In my view, these submissions are correct and are supported by the authorities. It is true that the High Court in SZBYR impliedly overruled a substantial body of authority in the Federal Court which held that an assessment of whether the Tribunal has complied with section 424A(1) requires close attention to the reasons of the Tribunal. Indeed, in SZBYR at [22], the High Court rejected the need for "unbundling" of the Tribunal's reasons, an approach which had been adopted in authorities of this court such as Paul v Minister for Immigration and Multicultural Affairs [2001] FCA 1196 ; (2001) 113 FCR 396 at [99] , and SZEEU & Ors v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214 at [208] . But I do not think it follows from what the High Court said in SZBYR that in making an assessment of whether section 424A(1) was engaged, a court can never have regard to the reasons of the Tribunal. It seems to me that this proposition would be contrary to what the High Court said in Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs & Anor [2005] HCA 72 ; (2005) 225 CLR 88 at [12] . In my opinion, the effect of what their Honours said in SZBYR at [22] was that the Tribunal's reasons are not the starting point for determining whether it considered the information to be a reason for affirming the decision under review. What their Honours said at [22] in SZBYR was that the need for "unbundling" is "correspondingly reduced. " The question of whether the Tribunal considered the information to be a reason for affirming the decision must be a question of fact. Accordingly, and significantly, in light of the submission made by the first respondent, the assessment is not dependent upon the use that the Tribunal subsequently made of the information, although, in my view, that may be a relevant consideration in drawing inferences as to the proper characterisation of the information. In the present case, not only was there no mention of the information at the Tribunal hearing, it was not mentioned in the Tribunal's reasons or in any document generated by the Tribunal during the review process. The only inference therefore available was that the Tribunal did not consider the information to be relevant. It follows, in my opinion, that Driver FM was correct in the conclusion that he reached. The decision of Heerey J in MZXBQ is distinguishable, because it appears, from [6] and [12] of his Honour's reasons, that the information in question was referred to in the course of the Tribunal hearing, even though there was no reference to it in the section 424A letter or the Tribunal's reasons. Jagot J followed MZXBQ in SZJZB v Minister for Immigration and Citizenship (2008) 105 ALD 226 , so too did Siopis J in SZMFZ , but both of those cases are distinguishable from the present matter upon the basis that the information in question was considered in those cases to be relevant by the Tribunal, either explicitly or by inference from the review process. I do not consider that the conclusion I have reached is contrary to the decision of the High Court in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs & Anor [2006] HCA 63 ; (2006) 228 CLR 152. In that case, the court held that the applicant was entitled to assume the issues considered dispositive by the delegate to be issues which arose in relation to the decision under review. The High Court also held that if the Tribunal were inclined to reach its decision by reference to an issue other than those considered to be dispositive by the delegate, a failure to notify the applicant would be a denial of procedural fairness and a contravention of section 425(1). In my opinion, that decision is of no assistance to the appellant in this case, because here the position is the opposite to that which occurred in SZBEL , because the Tribunal considered the issues to be narrower than those which were considered to be dispositive by the delegate. The appellant appeared in person this morning. She was assisted by a Mandarin interpreter. She did not address me on the question of law to which I have referred, but I have given it careful consideration in coming to the views that I have reached. The appellant did not speak to them, but I have considered them. The first ground is an unparticularised claim that the Federal Magistrate "erred in law". That seems to be covered by what I have said above. The remaining five grounds were not raised before the Federal Magistrate, and the Minister objected to leave being granted to rely upon them for the first time on the appeal. In SZKMS v Minister for Immigration and Citizenship [2008] FCA 499 at [18] --- [31], Lander J reviewed the authorities on the question of the grant of leave in these circumstances. His Honour was of the view that this court should not be made, de facto, the court of original jurisdiction when sitting on appeal. However, his Honour referred to the decision of the Full Court in VUAX v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 158 , in which it was said that, in cases such as this, leave is more readily granted where the point has merit and there is no prejudice. It seems to me that, without the need to address in any detail the principles referred to by Lander J, it is sufficient to dispose of the further grounds upon the basis that they do not have sufficient merit. Ground 2 states that the Refugee Review Tribunal was affected by a reasonable apprehension of bias. This has not been demonstrated. Ground 3 expresses disagreement with the Tribunal's conclusion at [111] of its reasons. This is an impermissible claim for merits review. Ground 4 expresses disagreement with the Tribunal's finding at [112] of its reasons, that it was not satisfied as to the identity of the appellant. Once again this is a claim for merits review. Ground 5 claims that the Tribunal's finding is unreasonable and irrational, in particular, because there was no evidence that the Tribunal had considered the appellant's evidence as a whole. It is plain from reading the Tribunal's reasons that it considered the appellant's claims at length. Ground 6 claims that the appellant was not provided with a tape-recording of her interview with the delegate, although the section 424A letter does refer to the interview tape. However, there is authority in the decision of Flick J in SZKOB v Minister for Immigration and Citizenship [2007] FCA 1949 at [12] --- [14] that the Tribunal was not obliged to provide the tape recording. It follows, in my view, that the appeal must be dismissed with costs. | court may have regard to reasons of tribunal in assessing whether section 424a(1) of migration act 1958 (cth) engaged question of fact delegate considered evidence of similar protection visa claims made by other individuals from same region as appellant section 424a not engaged as tribunal did not rely on same information as delegate migration |
The company was registered in Western Australia on 25 February 2000 and deregistered by ASIC on 17 July 2005. Pursuant to s 601AD of the Act the company "cease(d) to exist" on deregistration and all of its property vested in ASIC. 2 The two directors appointed on the date of registration of the company were the owners of the two shares that had been issued by the company. They remained the directors of the company until its deregistration. At all times the residential address of the directors, who the Court was told are husband and wife, was in Canberra in the Australian Capital Territory. 3 From the date of registration the registered principal place of business of the company was in Canberra. It has been deposed by one of the former directors of the company, Mr Bertuol, that the company carried on business in the ACT and had an Australian Business Number. The nature of the business conducted by the company appears to have involved the sales of goods and the provision of professional consultancy services. 4 From the 17 March 2000 the registered office of the company was at the office of a firm of accountants carrying on business in Western Australia. That firm had been instructed by the company to prepare accounts and to file returns on behalf of the company with ASIC. 5 Annual returns were filed with ASIC for the years 2000, 2001 and 2002. At the end of 2002 Mr Bertuol instructed a firm of accountants carrying on business in Canberra to take over preparation of the accounts and to conduct secretarial duties for the company formerly performed by the accountants instructed in Western Australia. No change of registered office was filed with ASIC thereafter. The requirement of Chapter 2N of the Act that an annual return be filed was repealed on 1 July 2003 and replaced with more general obligations and the payment of an annual "review fee". (See: Corporations Legislation Amendment Act 2003 (Cth) s 3 Schedule 1). It does not appear that after 1 July 2003 the company, as a "small proprietary company" (s 45A(2)), was obliged to file any further documents such as financial or directors' reports prepared under s 293 or 294 of the Act , or responses to a return of particulars or requisitions delivered to the company by ASIC under s 348A or 348B of the Act . 6 The material placed before the Court shows that a taxation return for the company for the year ending 30 June 2004 was prepared by the accountants instructed in Canberra. The company also presented to the Court accounts for the years ended 30 June 2004 and 30 June 2005 which showed that after provision for income tax the company derived a net profit in each year of $10,566.65 and $27,992.15 respectively. Indicative accounts prepared to the date of deregistration, 17 July 2005, showed that at that date the net worth of the company would have been $53,748.72 of which $47,884.63 was represented by undistributed profits. 7 Mr Bertuol has deposed that the company "continued to operate as an ongoing concern" and that it was not until February 2006 that the directors became aware that the company had been deregistered. Business Activity Statements have been filed with the Australian Taxation Office each quarter. Application for reinstatement of registration was made by the company in order that the foregoing acts could be validated and to allow the company to continue to carry on business as a provider of consultancy services. 8 It seems that deregistration of the company was effected by ASIC pursuant to s 601AB(1A) of the Act . Under that section ASIC may decide to deregister a company if a "review fee" in respect of a "review date" has not been paid in full twelve months after the "due date". 9 Section 345A(1) of the Act provides that the "review date" for the company is the anniversary of its registration. Under the Corporations (Review Fees) Act 2003 (Cth) and Corporations (Review Fees) Regulations 2003 a company must pay the "review fee" prescribed in the regulations. Pursuant to s 1351(3) of the Act the "due date" for payment of a "review fee" is two months after the "review date". 10 The payment of a "review fee" is tied by the Act to the resolution the directors must make annually as to the solvency of a company. (See: ss 347A - 347C , s 348C). 11 Before ASIC could deregister the company it was required by s 601AB(3) of the Act to give notice of the proposed deregistration. Such notice had to be given to, inter alia, the company and to its directors and had to be published in the Government Gazette . ASIC was empowered by the Act to effect deregistration two months after the date of publication of the notice in the Gazette . 12 Mr Bertuol has deposed that notice of the proposed deregistration did not reach the directors. Mr Bertuol deposed that the directors changed their residential address in Canberra in about January 2003. The post office box in Canberra, however, to which Mr Bertuol had directed the accountants in Western Australia to forward mail, remained in operation at all material times. 13 It is to be noted that the surname of the deponent director as recorded in the ASIC register is a first name and not his surname. Whether that circumstance caused an ASIC notice to go astray is unknown. 14 Under s 601AH(2) of the Act the Court may make an order that ASIC reinstate the registration of a deregistered company if satisfied that it is just to do so. Section 601AH(5) provides that if a company is reinstated it is taken to have continued in existence as if it had not been deregistered. Any director of the company in office immediately before deregistration becomes a director again from the time reinstatement is ordered and any property of the company vested in ASIC revests in the company. 15 Section 601AH(2)(a)(i) provides that "a person aggrieved" may apply for an order that the registration of a company be reinstated. It is necessary to have regard to earlier provisions of company law to understand the context in which that provision of s 601AH(2)(a)(i) is to be construed. 16 At one time the Companies Act 1948 (UK), the Australian Uniform Companies Act 1961-1962 and Companies Act 1955 (NZ) all contained similar provisions that permitted a company that had been struck off the register of companies that felt aggrieved by that fact to apply to the Court, within a specified period of years, for an order that the company be restored to the register. The Court was empowered to make that order if satisfied that at the time of striking off the company was carrying on business, or was in operation, or that it was otherwise just that the company be restored to the register. 17 Although expressed in different terms the effect of dissolution of a company under the foregoing provisions was equivalent to the application of s 601AD of the Act, namely, that the company ceased to exist at the time of deregistration or striking off. 18 The respective legislative provisions acknowledged however, that a deregistered company had capacity to make application for the restoration of registration, notwithstanding the cessation of existence of the company. (See: Re L Carroll Ltd [1975] 1 NZLR 79 per O'Regan J at 80). 19 The provisions of s 601AH(5) suggest that the Act has continued to recognise that a deregistered company has sufficient existence for the purpose of making an application under s 601AH(2) as a "person aggrieved" notwithstanding that under s 601AD(1) the company "cease(d) to exist" upon deregistration. (See: GA & RJ Elliot Pty Ltd (formerly a company) Ex parte Mitcham (1978) 3 ACLR 523 per Young CJ at 526; CTG Pty Ltd v Yamamori (Hong Kong) Pty Ltd (1992) 10 ACSR 534, 536). The terms of s 601AH(5) are consistent with a statutory form of a "nunc pro tunc" order. That is to say the Act contemplates that an order under s 601AH(2) will have a retrospective effect that makes good the deregistered company's standing to make the application. There are no authorities directly on point. It may be accepted that the deregistered company has no standing to commence other proceedings. (See: Sweeney & Vandeleur Pty Ltd v BNY Australia Ltd (1993) 11 ACSR 356). 20 In the absence of any material that suggests that the legislature identified and sought to remedy a mischief that had arisen out of a company being permitted to apply for reinstatement of its registration there seems to be no reason to apply a restrictive interpretation to the term "person aggrieved" as used in s 601AH(2)(a)(i). Apart from the historical context referred to above the term is an expression of wide import that is not to be given a restrictive interpretation. (See: GIS Electrical Pty Ltd v Melsom [2002] WASCA 302 ; (2002) 172 FLR 218 per Steytler J at 230-231). If the proper construction of the Act is as I have posited the company would have capacity to make an application as a "person aggrieved". 21 Putting to one side for the moment the question whether the Act contemplates that a deregistered company has capacity to make an application under s 601AH(2), there would seem to be adequate grounds in this case to conclude that by the company being subjected to deregistration when it was successfully carrying on business it became a person "aggrieved" for the purpose of s 601AH(2). Indeed s 601AB(1) does not empower ASIC to deregister a company unless it has no reason to believe that the company is carrying on business. Although the subsequently enacted 601AB(1A), empowers ASIC to deregister a company that has defaulted in paying "review fees" without qualifying that power by requiring ASIC not have reason to believe that the company is carrying on business, that provision does not detract from the foregoing argument. 22 To avoid doubt as to whether the company has the capacity to make application under s 601AH(2)(a)(i) Mr Bertuol now seeks to be substituted for the company as plaintiff in this matter. 23 It may be accepted that the fact that a person is a shareholder, or a director, of a deregistered company does not in itself establish that person to be a "person aggrieved" for the purpose of s 601AH(2) of the Act. However, a shareholder who is a creditor of the company who could have expected payment of the debt in whole or in part, or who had an expectation of a distribution from surplus assets or a dividend from retained profits would be a person prejudicially affected by deregistration of the company and, therefore, a "person aggrieved". (See: Casali v Crisp [2001] NSWSC 860 ; (2001) 165 FLR 79 per Young CJ in Equity at 82-83). 24 The company has assets that exceed its liabilities, the net worth of the company being represented in substantial measure by undistributed profits. A shareholder in the company, therefore, has an expectation of the distribution of a dividend from the retained profits and is a person aggrieved by deregistration of the company, an event that has removed that expectation and has vested the property of the company in ASIC for ASIC to dispose of, and deal with, as it sees fit pursuant to s 601AE(2)(a) of the Act. 25 I am satisfied that it is appropriate that Mr Bertuol be substituted for the company as plaintiff in the matter. 26 As to what is "just" in the circumstances of this case the relevant points seem to be as follows. 27 First, the company was not deregistered as a consequence of insolvency and although some delay has occurred since deregistration the company has moved reasonably promptly to obtain reinstatement. If reinstatement of registration were ordered the company would have ample funds from which it could meet outstanding fees due to ASIC, a step the directors have undertaken to carry out if returned to office by an order for reinstatement. There appears to be no question that the company would be able to resume the conduct of a profitable business if reinstated. 28 Second, it does not appear on the material before the Court that a third party could be adversely affected by an order for reinstatement. Obviously it would be more convenient for the company, and for the parties with whom it deals, for reinstatement to be effected and the assets recovered rather than another corporation be formed, or acquired, to take over the business previously carried on by the company. 29 As required by rule 2.8 of the Federal Court (Corporations) Rules 2000 a copy of the originating process and supporting affidavit was served on ASIC a reasonable time before the hearing of the application and copies of all further materials filed in Court have also been served on ASIC. 30 In response to that material ASIC has advised the solicitors for the company that it had no objection to the order for reinstatement of registration sought. ASIC did not attend on the hearing of the application. 31 In all the circumstances it appears to be just to order that ASIC reinstate registration of the company and that a further order be made under s 601AH(3) of the Act that anything done between deregistration of the company and reinstatement be validated. 32 Orders will be made accordingly. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee. | application for reinstatement of registration of a company whether a deregistered company has capacity to make an application under s 601ah(2) meaning of "a person aggrieved". corporations |
The Application as filed states that the Bankruptcy Notice was served on the Applicant, Mr Robert Harding, on 17 August 2007. There may be some uncertainty as to whether or not it was served on 17 July 2007 as opposed to 17 August 2007 but, whenever it was served, the Applicant wants it set aside. The form of Bankruptcy Notice as served attaches the " judgments or orders relied upon by the creditor ", being a judgment entered against the present Applicant by the Respondent in the District Court of New South Wales on 9 November 2006 for the principal sum of $373,772.47. A hand-written alteration to the Bankruptcy Notice records that " within 21 days after 17 August 2007 " Mr Harding was required to either pay the Deputy Commissioner the amount of the debt or make an arrangement to her satisfaction for settlement of the debt. The Application as filed in this Court was filed within 21 days, namely on 5 September 2007. Section 41(7) of the Bankruptcy Act 1966 (Cth) provides, in such circumstances, that the time for compliance with the Bankruptcy Notice is " deemed to have been extended ". An application for leave to appeal that decision has also been dismissed: Harding v Deputy Commissioner of Taxation [2008] FCA 1516. The present Application is thus to be heard by a Judge of this Court, sitting alone. The present Application was initially set down for hearing on 22 October 2008. That date, however, became inconvenient to Counsel for the Applicant and --- with the concurrence of Counsel for the Respondent --- that date was vacated and the matter was then set down for final hearing on 29 October 2008. Submissions on behalf of the Respondent were concluded on 30 October 2008. In support of the Application a number of Affidavits were read and there was limited cross-examination. The claim was for monies said to be owing to the Commonwealth pursuant to s 8AAZH of the Taxation Administration Act 1953 (Cth). A defence was filed on 28 July 2006. The Applicant had become indebted to the present Respondent because he falsely believed that he had a GST exemption. His small business involving the sale of batteries involved the necessity to exact GST and to account for that tax. The belief that he had a GST exemption was engendered by false representations made to him by a Mr Malcolm McClure --- namely, that Mr McClure was an agent of the Australian Taxation Office and had the authority to sell " GST exemption packages ". Mr Harding had come across Mr McClure when he attended a series of seminars conducted by Mr McClure in the Ryde-Eastwood Leagues Club. Mr Harding was " impressed by the professionalism of the seminars the location and the formality adopted ". Needless to say, Mr McClure had no such authority. Searches undertaken within the Australian Taxation Office disclosed no one of that name ever having been employed by that Office. Other searches undertaken disclosed that Mr McClure had close associations with a body called " U.P.M.A.R.T. ", which described itself as "[a] n association for human rights and much, much more " . That was clearly a body having no connection with the Australian Taxation Office. Notwithstanding the genuineness of his belief that he was exempt, Mr Harding nevertheless incurred the liability. It was not paid. An " administrative penalty " of $143,775 was also imposed. The proceedings in the District Court were commenced. On 9 November 2006, Kearns DCJ of that Court delivered judgment. No transcript of those reasons was available, nor were any reasons published. A " note " of the reasons delivered, however, was available and was accepted by the parties as accurately setting forth His Honour's reasons and decision. The " note " records that the Court dealt with a motion seeking to strike out the defence and seeking summary judgment. The Court there also considered two further motions whereby Mr Harding had apparently also sought a jury trial in the District Court and an order that the claim of the Deputy Commissioner be dismissed for failure to reply to the defence. The learned trial judge ordered that the defence was to be struck out and entered a " verdict and judgment for the plaintiff in the sum of $373,772.47 ". It is considered that the present Application filed in this Court should be dismissed. Section 41(1) provides that a bankruptcy notice may be issued where there is a " final judgment " of the kind described in s 40(1)(g) and, if the bankruptcy notice is to be set aside, s 41(7) requires the Court to be " satisfied that the debtor has ... a counter-claim, set-off or cross demand " of the kind set forth in s 40(1)(g). Numerous decisions of this Court have addressed the requirement that a Court must be " satisfied " that a debtor has a counter-claim, set-off or cross demand. Section 52 (j) makes it necessary that a debtor served with a bankruptcy notice, if he does not comply with its requirements, should satisfy the Court of Bankruptcy that he has a counter-claim, set-off or cross demand which equals or exceeds the amount of the judgment debt. The debtor clearly must satisfy the Court that there exists in him a counter-claim, set-off or cross demand. "Cross demand" is the word relied upon here. The appellant cannot satisfy the Court that a cross demand exists by showing no more than that she propounds one and states how she suggests that she can make it out. In Re Duncan; Ex parte Modlin [(1917) 17 SR (NSW) 152 ; 34 WN 49] Street J. said that the debtor need not satisfy the Court that there are reasonable grounds for believing that he will establish his cross action, but only that he has a bona fide claim which he is fairly entitled to litigate. This perhaps is expressed too favourably to the debtor. In Re A Debtor [(1958) 1 Ch 81] Roxburgh J. said : "But not every demand will suffice. A demand made in bad faith would not be good enough. The debtor must satisfy the Court that he has a genuine demand... But in my opinion a demand must be more than bona fide : the Court must be satisfied that it has a reasonable probability of success" [(1958) 1 Ch 81]. Perhaps the standard may be expressed by saying that the debtor must show that he has a prima facie case, even if then and there he does not adduce the admissible evidence which would make out a prima facie case before a court trying the issues that are involved in his counter-claim, set-off or cross demand. In Brink [ Re Brink; Ex parte Commercial Banking Co of Sydney Ltd [1980] FCA 78 ; (1980) 44 FLR 135, 30 ALR 433] Lockhart J treated (at ALR 438---9; FLR 141) the reference to a " prima facie case " ... as a reference to "a fair chance of success". Accordingly, evidence tendered on an application to set aside is to be tested for admissibility, not as if the proceeding were one in which the debtor's claim was being finally determined, but by reference to the question whether the Court should be satisfied that the debtor has a claim deserving to be finally determined. It is not considered that any state of satisfaction could possibly be reached that Mr Harding has any counter-claim, set-off or cross demand which it is " just " to be resolved before allowing the bankruptcy proceedings to continue: Dekkan v Evans [2008] FCA 1004 at [54] per Jacobson J; Dekkan v Macquarie Leasing Pty Ltd (No 2 ) [2008] FCA 1431 per Buchanan J; Re Cox (1934) 7 ABC 98. The conclusion that has been reached is that the judgment of the District Court is a " final judgment " and that no state of satisfaction can be reached within the meaning of s 41(7) of the 1966 Act that the Applicant has a " counter-claim, set-off or cross demand " which has any prospects of success, let alone " a fair chance of success " or one which he is " fairly entitled to litigate ". Nor is it considered that any such " counter-claim, set-off or cross demand " could not have been " set up in the action or proceeding " in which the Deputy Commissioner obtained judgment. Finally, there is not considered to be any separate discretion to set aside the Bankruptcy Notice in circumstances where, relevantly, the requirements of s 40(1)(g) have not been met. A FINAL JUDGMENT? Mr Harding maintained that he " tried to talk to the Government's Solicitor prior to going into the room " to tell " her about the Malcolm McClure problem ". Whatever was told to the solicitor was not further expanded upon. The solicitor's response was that " she basically said that it had no relevance ". In re-examination, Mr Harding agreed with the proposition that he " tried to talk to the government solicitor and tell her about the McClure problem and she said it had no relevance ". The submission on behalf of Mr Harding was that this conversation brought him within SZFDE v Minister for Immigration and Citizenship [2007] HCA 35 , 232 CLR 189. In SZFDE the applicants had there not attended a hearing before the Refugee Review Tribunal. They had failed to respond to an invitation to do so on the advice of a person they had retained, a Mr Hussain. That person had wrongly represented himself to be a solicitor and a migration agent. The fraud of the agent, it was concluded, had the effect that the decision of the Tribunal was no decision at all. Although the Tribunal was unaware of the fraud of the agent, the result of his fraud was that the applicants had been denied such natural justice as was afforded by the Migration Act 1958 (Cth). What came to be known as the principle of " Wednesbury unreasonableness" was developed in the case law by analogy to the principles controlling the exercise of powers of discretions vested in trustees and others [ Minister for Immigration v Eshetu [1999] HCA 21 ; (1999) 197 CLR 611]. First, given the equitable nature of their origins described above, principles of public law concerning impropriety in the exercise of statutory powers have not had the focus upon what might be called the "red blooded" species of fraud which engages the common law. It is extremely rare for public authorities to be found guilty of intentional dishonesty: normally they are found to have erred, if at all, by ignorance or misunderstanding. Yet the courts constantly accuse them of bad faith merely because they have acted unreasonably or on improper grounds. Again and again it is laid down that powers must be exercised reasonably and in good faith. But in this context "in good faith" means merely "for legitimate reasons". Contrary to the natural sense of the words, they impute no moral obliquity. But the appellants do direct attention to the effect upon the processes of the Tribunal of the dishonest acts and omissions of a third party, Mr Hussain. In this regard, the appellants pray in aid another generally expressed precept drawn from private law and from the significance of dishonesty in the litigation of private rights. This is expressed in the oft-repeated proposition that whilst on one hand fraud may be infinite, on the other hand "fraud unravels everything". The submission was that Mr Harding was " lied to or at least misled by the Respondent's legal representative about the utility of his cross claim before Kearns DCJ ". The submission is to be rejected. Whether or not Mr Harding should have applied to the District Court to have the judgment set aside, as was contended by the Deputy Commissioner, may be left to one side. Also left to one side is whether the approach pursued in SZFDE may be extended so as to potentially vitiate proceedings before a court as opposed to an administrative tribunal. The submission is to be rejected upon the more fundamental basis that the conduct of the solicitor is in no way comparable to that of Mr Hussain. It is not considered that Mr Harding was " lied to or at least misled ". The extent of the detail provided by Mr Harding to the solicitor is unknown. But even if the solicitor had been told such detail as to Mr McClure's conduct as was explained in the present proceeding, the solicitor's statement that that conduct " had no relevance " was accurate if the solicitor was directing attention to the issues then before the District Court. Mr Harding certainly had not been " lied to ". On the basis of the statement of claim as filed in the District Court and upon the basis of the defence as filed, the conduct of Mr McClure was irrelevant to the issues then before that Court. Nor is it considered that Mr Harding was " misled ". It was no part of the duty of the solicitor then appearing for the Deputy Commissioner to give advice to the then defendant, Mr Harding, as to either the prospect of a claim being made against the Commonwealth or even advice confined to the prudence of Mr Harding getting independent legal advice. The Australian Government Solicitor is established pursuant to s 55J of the Judiciary Act 1903 (Cth). That Act further provides for the issue by the Attorney-General of Legal Services Directions : s 55ZF. Directions have in fact been issued requiring the Commonwealth and its legal representatives to act as a " model litigant ". No particular provision of the Directions was relied upon by the Applicant. But it is not considered that the standards of a " model litigant " extend to imposing any general duty to give advice to an opponent as to the prospect of resisting a claim being advanced by the Commonwealth, or even a duty to suggest that independent advice be obtained. Whether or not the duty of a " model litigant " may in some particular circumstances embrace such a duty need not be resolved. Considerable caution should be exercised before imposing any such duty upon solicitors within the Australian Government Solicitor. Confined to the circumstances of the present proceeding, there was scant evidence as to what the solicitor had in fact been told by Mr Harding. Even assuming that Mr Harding had told the solicitor the entirety of his dealings with Mr McClure and his subsequent conversations with officers of the Australian Taxation Office, it is not considered, even on that assumption, that there was any requirement upon the solicitor to proffer advice. No source of any requirement to proffer advice or give assistance to Mr Harding was identified other than the requirement to act as a " model litigant ". No authority was cited which supported the imposition of any such requirement upon a " model litigant ". It is not considered that Mr Harding was deprived of any opportunity to have his case resolved by the District Court. The conduct of the solicitor can in no way be equated with the conduct of Mr Hussain in SZFDE . COUNTER-CLAIM OR CROSS DEMAND: MISREPRESENTATION? The " counter-claim " or " cross demand " relied upon by Mr Harding was said to be either: a claim for " misrepresentation ", namely a misrepresentation that Mr Harding had the benefit of a GST exemption issued by the Australian Taxation Office; or an action in the nature of judicial review to have the assessments or amended assessments upon which the District Court proceeded to enter judgment set aside and declared void. Counsel for Mr Harding properly accepted that no case in misrepresentation which was actionable as against the Australian Taxation Officer, or the Deputy Commissioner, could be sustained if the evidence was confined to the statements apparently made by Mr McClure. Statements made by him as to the authority or the agency he was professing could not be attributed to the present Respondent merely by reason of those statements alone. It was for this reason that Counsel accepted that he needed the evidence of a conversation with an officer of the Australian Taxation Office only able to be identified as " Laura ". It was her evidence, so it was contended, that effectively meant that the misrepresentations made by Mr McClure could be attributed to the Respondent. Having attended the seminars conducted by Mr McClure, Mr Harding also telephoned the Tax Office and asked to speak to a " GST information officer ". He was put through to an officer named " Laura ". Mr Harding apparently explained to the officer the purpose of his call, namely to " check that what I had been told was accurate and could be relied on ". We do have agents out there. What are you after? Are you proposing to apply for that? It is a GST exemption which is a private binding agreement with the business. Mr Williams had purchased a car battery from Mr Harding and was present when the conversation took place. We were talking about it and he said about the GST and he mentioned Mr McClure, I'm pretty sure he did, but they said they give the exemptions out and there was no money, no limits or anything involved you know, so I thought that was quite interesting because I think that's what the Tax Office was talking about in public at one stage because I'd seen a program regarding that. Having received what he thought was corroboration from " Laura ", Mr Harding then paid Mr McClure $2,000 and received in the mail a " GST exemption " card. Meaning no disrespect to Mr Harding, he was a person with limited ability to read. It was his genuine belief that he had got what he paid for --- a GST exemption. He included on at least one of the tax invoices issued in September 2002 a disclosure of his " ABN " and the " GST Exemption " number as disclosed on the card. There was also some evidence that Mr Harding had disclosed to another officer of the Australian Taxation Office, a Mr David Scott, his belief that he had a GST exemption. I have an exemption. In cross-examination, Mr Scott denied that he had been told by Mr Harding about either the existence of Mr McClure or the claimed GST exemption. Upon the assumption that " a taxpayer claimed an exemption from collecting GST ", Mr Scott accepted that " if the client had made that statement ... --- and provided the names --- who it was from the ATO, I would have checked with that officer, and I would have asked for a copy of the exemption ". Such divergence as there is, as between the evidence of Mr Harding and Mr Scott, is to be resolved in favour of Mr Harding. It is accepted that he did disclose to Mr Scott the identity of Mr McClure and the fact that he claimed he had a GST exemption. To Mr Harding, it was a matter of importance. Moreover, it was not put to Mr Harding in cross-examination that such a conversation did not occur, and another officer present with Mr Scott when the telephone conversation took place was not called. No case was sought to be advanced that the conversation with " Laura " amounted to a misrepresentation. The case that was sought to be advanced was that the conversation with " Laura ", and possibly the conversation with Mr Scott, together with the earlier misrepresentations of Mr McClure, were sufficient. The submission that the present Respondent, or possibly the Australian Taxation Office more generally, is to be held accountable for the representations made by Mr McClure is to be rejected. Counsel for Mr Harding was quite correct in disavowing any suggestion that Mr McClure's own statements were sufficient to establish any counter-claim or cross demand. And the conversation with " Laura ", it is considered, took the matter no further. Nothing that was said by " Laura " could be construed as any endorsement that Mr McClure was an agent of the Australian Taxation Office, or as any endorsement that the " GST exemption " being canvassed by Mr McClure was an exemption authorised by that Office. No details were provided to " Laura " upon which any such endorsement could be founded. The purported GST exemption number, for example, was not mentioned; nor were any further details either provided to or requested by " Laura " in order to verify that which Mr Harding believed. It was no more than a statement that the Australian Taxation Office did have GST exemptions for small business. There is not considered to be any nexus as between the conduct of Mr McClure and the present Respondent. The conversation with Mr Scott, likewise, took the matter no further. Whatever was said by Mr McClure could not be attributed to the present Respondent or the Australian Taxation Office more generally. COUNTER-CLAIM OR CROSS DEMAND: JUDICIAL REVIEW? The statement of claim as filed in the District Court stated that a " Running Balance Account " was established pursuant to s 8AAZC of the Taxation Administration Act in respect of primary tax debts due by Mr Harding. Primary tax debts were allocated to the " Running Balance Account " pursuant to s 8AAZD. The statement of claim further stated that Mr Harding became liable to pay a general interest charge pursuant to s 8AAZF and that Mr Harding ultimately became liable to pay monies pursuant to s 8AAZH in respect to the sum of $332,943.86. The statement of claim also alleged that there had been a failure to lodge income tax returns and that by reason of s 286-75 of the 1953 Act, Mr Harding had become liable to pay a further penalty. Before the District Court there were tendered a number of assessments served by the Deputy Commissioner upon Mr Harding. Each of those assessments was expressed to have been made under s 22(1) of the Taxation Administration Act . The application in the nature of judicial review was not formulated with any degree of precision. First, it is far from certain that an application seeking judicial review of decisions to issue assessments or amended assessments, upon which a judgment for a monetary sum has been entered, is a " counter-claim, set-off or cross demand " within the meaning of s 40(1)(g). In support of the contrary conclusion, it was understood that Counsel on behalf of Mr Harding contended that the term " cross demand " was not a technical term but rather a term which should not be given any confined meaning: In re Judd; Ex parte Pike (1924) 24 SR (NSW) 537. But, whatever the meaning to be given to the term, it has to date been held that an action " must be something sounding in money ": Re Brink; Ex parte Commercial Banking Co of Sydney Ltd (1980) 44 FLR 135 at 138 per Lockhart J. See also: Re Jocumsen (1929) 1 ABC 82 at 85 per Henchman J. An application seeking declaratory relief as to an entitlement to a charge on the proceeds of property has thus been said not to be a " counter-claim, set-off or cross demand ": In re A Bankruptcy Notice [1934] 1 Ch 431. See also: Massih v Esber [2008] FCA 1452 at [22] ---[24]. A more modern instance of that which may fall within the statutory phrase is provided by Re Zakrzewski; Zakrzewski v Rodgers [2000] FCA 1187 , 178 ALR 694. An application had there been made for relief under s 106 of the Industrial Relations Act 1996 (NSW), that being a provision which allowed the Industrial Relations Commission of New South Wales to declare void or to vary a contract. In the first place it is accordingly clear that the counter-claim ... must be something sounding in money. However, the debtor seeks, among other things, an order that the creditor pay to the debtor any money that may be found owing under the arrangement as varied by the Commission and his claim is that the amount Network sued for in the Local Court plus interest at something like commercial rates should be found to be owing. If successful, this would amount to a direct order for money and the Commission clearly has the power to make such an award. The other remedies sought are, in a practical sense, subsidiary to that claim. Therefore, this objection to the application must fail. If the application for judicial review was to be successful, the application would certainly deny to the Deputy Commissioner an ability to obtain judgment. But the judicial review application would not be an application sounding in money. It is more in the nature of a defence to the claim being made by the Deputy Commissioner and a possible reason why that claim should not prevail. Second, an even more fundamental difficulty confronting Mr Harding in the present proceeding is whether his proposed application has any prospects of success. Even if an application in the nature of judicial review could constitute a " counter-claim, set-off or cross demand ", it is not considered that such an application is anything other than a " shadowy claim ". It is certainly not an application which would make it " just " that that application should proceed in advance of the continuation of the bankruptcy proceedings. Third, it was contended by the Deputy Commissioner that it was s 105-100 of Schedule 1 to the Taxation Administration Act which made the present assessments " conclusive ". And no submission was advanced that there had been any error committed which amounted to a jurisdictional error: cf Commissioner of Taxation v Futuris Corp Ltd [2008] HCA 32 , 247 ALR 605. See also: Kocic v Commissioner of Taxation [2008] FCA 1576. Even if it is assumed that an application in the nature of judicial review such as that presently contemplated may be a " counter-claim " or " cross demand ", and further assuming that such an action could be instituted notwithstanding the statutory regime, the proposed ground of review upon which the judicial review application was to be advanced provided little basis upon which any state of " satisfaction " could be reached that jurisdictional error could be established. The ground of review as formulated by Counsel for Mr Harding was that Mr Scott's decision to issue the amended assessments was vitiated by reason of a failure to consider relevant considerations, namely: the conversation with " Laura "; and the acknowledgment on the part of Mr Scott that, had he known of the claimed GST exemption, he would have made further inquiries. COULD NOT HAVE BEEN SET UP IN THE ACTION OR PROCEEDING? The requirement imposed by s 40(1)(g) that the " counter-claim, set-off or cross demand " be one which " could not have [been] set up in the action or proceeding in which the judgment or order was obtained " is a requirement which refers to the ability to set up the claim, set-off or demand as a matter of law. A mere failure to take advantage of an opportunity to do so does not fall within s 40(1)(g): Re Vicini; Ex parte E A Sealey & Co (1982) 64 FLR 323. 135, at p. 139, when he said: "The words 'that he could not have set up in the action or proceeding in which the judgment or order was obtained' mean 'which he could not by law set up in the action': see Re Jocumsen (1929) 1 A.B.C. 82 , at p. 85; Re A Debtor [1914] 3 K.B. 726 , at p. 730 per Avory J.; Re Stockvis (1934) 7 A.B.C 53 , at p. 57, especially per Lukin J. where his Honour said: 'I take as a counterclaim, set off or cross demand which could not be set up as one which, from point of time, or from its nature, or from absence of empowering provisions, or from positive inhibition so to do, could not be set up in the particular case in which judgment was obtained .... Mere failure to take advantage of the opportunity can hardly be said to be inability. Thus at the time of judgment he could not have as a matter of law set up the counterclaim. It was nothing to the point that he might have earlier taken an assignment. "I think it means a counter-claim which as things then stood the debtor could not set up in the action. See also: Smart v Esanda Finance Corp Ltd [2000] FCA 235 at [17] per Lee, Goldberg and Kenny JJ; Tzovaras v Nufeno Pty Ltd [2003] FCA 1152 at [34] ---[35] per Jacobson J; and Massih v Esber [2008] FCA 1452 at [28] ---[29]. In respect to the suggested claim founded in misrepresentation, again Counsel for Mr Harding properly accepted that any such counter-claim or cross demand could have been filed in the District Court. Notwithstanding that concession, the submission as to why that claim " could not have [been] set up " in the District Court again seized on the conversation with the solicitor outside the District Court hearing room. Again, the submission was that Mr Harding had been effectively precluded from raising his cross-claim because he had been misled by the solicitor. The submission is to be rejected. There has been no misleading conduct such as to have prevented Mr Harding from pursuing his claims in misrepresentation had he wished to do so or been advised to do so. Moreover, the requirement that a person have a cross-claim which " could not have [been] set up " directs attention to whether or not the cross-claim could have been pursued in the action or proceeding in the District Court as a matter of law; it does not invite an inquiry as to why an available cross-claim was not pursued. Nor is it considered correct to characterise the " action or proceeding " in the District Court as the application for summary judgment. The " action or proceeding " was the entirety of the matter before that Court and cannot be confined to the one motion whereby summary judgment was sought and obtained. Finally, it was understood that both the Applicant and the Deputy Commissioner were in agreement that the judicial review application could not have been " set up " in the District Court. AN INDEPENDENT DISCRETION? This final submission is also to be rejected. Reliance was sought to be placed on the observation of Latham CJ in Vogwell v Vogwell (1939) 11 ABC 83 at 85 that a Court should consider " whether it is just that the claim should be determined before the bankruptcy proceedings are allowed to continue ". Reliance cannot be placed upon those observations of the Chief Justice in isolation. In the first place it is accordingly clear that the counter-claim, set-off or cross demand must be something sounding in money. It is also obvious that the section does not apply or refer to an already established right. If there were an already established set-off, for example, the judgment debt would have been reduced pro tanto and if there had been a counter-claim or cross demand which had already been applied as against the amount of the judgment the position would have been entirely different. What the section contemplates is a claim to the enforcement of a right sounding in money. It must be a real claim ; it is insufficient that the debtor believes that he has a claim, and the authorities show that the matter to which the court looks is this, --- whether it is just that the claim should be determined before the bankruptcy proceedings are allowed to continue ; in other words, whether it is a claim which it is proper and reasonable to litigate. It should, perhaps, be further noted that at one stage a Schedule of Questions of Fact and/or of Mixed Law and Fact was filed on behalf of the Applicant. That Schedule was filed in support of the application as previously made for the present proceeding to be heard with a jury. Such facts as did require resolution in the present proceeding were within a limited compass and could readily be resolved by a judge sitting alone. During the course of final submissions, the Deputy Commissioner foreshadowed that, if the Application was to be dismissed, costs would be sought on an indemnity basis. Although it is considered that the Applicant should pay the costs of the Respondent, it is not considered that there should be any further order that those costs are to be paid on an indemnity basis. Such revisions as have been made from time to time in the submissions being advanced for resolution have been the product of a previously unrepresented litigant being subsequently represented. Such revisions to the submissions to be resolved as have occurred since Counsel has been retained are no more than the refinement of ideas, which is to be expected. The Applicant is to pay the costs of the Respondent. I certify that the preceding seventy-seven (77) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | lack of satisfaction as to counter-claim misrepresentation by third party counter-claim, set-off or cross demand need for an action sounding in money judicial review conclusiveness of assessments bankruptcy notice not set aside bankruptcy |
The application was the subject of orders made by Lander J on 26 March 2008, one of which was an order that the winding-up order be stayed until 4pm today. The application for termination has been listed for hearing this morning. However, a preliminary matter has been raised as to whether an adjournment ought to be granted for a period of four weeks. 2 The question to be determined on the application for termination goes to the solvency of the company at the date of the hearing of the termination application. 3 The history of the matter involves a statutory demand made by the Deputy Commissioner of Taxation (which I will refer to as the 'ATO') in relation to taxation liabilities due to the Commonwealth by the first defendant company. Taxation returns under the PAYE regime had not been lodged in 1999 and 2000, and after the introduction of the BAS protocols, taxation returns were not lodged throughout a number of years. The end result of the ultimate lodgement of returns and assessment of the unpaid tax was that an amount of $631,955.71, among, perhaps, some other moneys, became payable to the Commissioner. 4 The company has fully paid that amount of money. 5 Earlier undertakings given to the Court required further returns for particular years to be lodged by 16 April 2008 as a condition of the stay order. Those returns, I understand, were lodged on 9 April 2008. Those returns resulted in an amount of tax due to the Commonwealth of $87,635.37, and apparently the balance payable to the Commonwealth, as at this morning, is $84,169.06. The application for the adjournment is made on the footing that the director, Mr Wilkie, has taken steps to firstly deal with the earlier outstanding taxation liabilities and has made arrangements for the payment of a substantial amount of money and secondly, has taken steps to make an application to the Bank of Queensland for finance so that the balance moneys due to the ATO might be paid in a reasonably timely way. 6 The application to the Bank of Queensland resulted in a letter, dated 23 April 2008 to Mr and Mrs Wilkie, which is exhibited to the affidavit of Mr Robert Alexander Wilkie, sworn 23 April 2008. In that letter the bank responds to a recent inquiry regarding an increase in a line of credit from the bank to Mr and Mrs Wilkie and notes that the normal credit criteria of the bank can not be satisfied because there is a reference in a credit reference search to two matters. First, a Magistrates Court summons in favour of the Deputy Commissioner of Taxation claiming an amount of $143,309.00 which was said to be still then outstanding and secondly, the question of the external administration of Arizcorp Pty Ltd. It seems to me that really it is not a conditional approval. It is a statement of intention to reconsider an application should it be satisfied about those two matters. As to those matters, it is common ground that the amount of $143,309.00 has been paid and fully discharged and Mr Bell, on behalf of the ATO, has said that the ATO would be prepared to issue a letter to Mr Wilkie which confirms simply that fact. The question of the external administration of Arizcorp is, in fact, the very matter that is to be determined in the application for termination. 8 The company appears not to have any other external creditors other than creditors in the ordinary course of business. There is one question in relation to an extension of the terms of a loan to the company and Mr Bell makes the point that that extension seems, on its face, to be inconsistent with an element of an order of Dowsett J, made on 19 March 2008, in the sense that the order then made was conditioned upon the first defendant undertaking through its counsel not to dispose of any assets or incur any liabilities other than in the usual course of business. The extension of the terms and conditions of that loan are said on one view to constitute incurring a liability other than in the usual course of business. It seems to me that that element is fraught with some controversy. It may or may not be inconsistent with the undertaking. 9 A further matter that is agitated on the application for the adjournment is that there is said to be no real prejudice flowing to either the liquidator of the company, represented by Mr Humzy-Hancock this morning - the liquidator does not oppose the stay, but has an interest in, of course, securing his fees and expenses, or the Deputy Commissioner. The Deputy Commissioner of Taxation opposes the application for the adjournment on a number of grounds, but, fundamentally, on the basis that Mr Wilkie, as director, has presided over the company since 1998 and has had the governance of the company during the period during which the company has failed to lodge taxation returns and has failed until relatively recently to discharge tax debts due to the Commonwealth. 10 Secondly, Mr Bell says that the company was insolvent at the moment in time when the order was made on 29 February 2008. It remains insolvent today. The question of the solvency of this company is the central, material matter to the application for the termination and that question will be determined on all the evidence and, in particular, in the light of an expert's report which has been filed in support of the termination application. There is said to be no prejudice to any party in adjourning the matter, because debts are only being incurred in the ordinary course of business. The Commissioner has been substantially paid. 11 There are steps being taken to try and secure loans to discharge the residual interest of the Commissioner and, on the company's side of the equation, the fundamental asset of the company is a 'rent-roll' which, if the application is proceeded with and lost, then the rent roll will be sold and individuals will be displaced from employment. That, by itself, is not significant on the merits of the primary application, because it will simply follow the event of the resolution of the primary application. 12 For the purposes of the adjournment application, though, it seems to me that the position ought to be preserved in the meantime and what I propose to do, therefore, is grant an adjournment of the application for termination of the winding-up order until 11.00am on 21 May 2008. I will order that the first and second defendants pay the costs of the Deputy Commissioner of Taxation of the adjournment. I will further order that the applicants on the present application, being the first and second defendants in the proceeding, pay further security to the liquidator of $5,000.00. The parties will have liberty to apply by re-listing the matter on two days notice. There are two further matters. First, the first defendant by its counsel undertakes that it will not on or before 4.00pm on 21 May 2008 dispose of any assets or incur any liabilities other than in the usual course of business. Secondly, the winding-up order made on 29 February 2008 will be stayed until 4.00pm on 21 May 2008. The application for termination of the winding-up will be adjourned until 11.00am on 21 May 2008. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application for adjournment of an application for the termination of an order for the winding-up of the first defendant insolvency |
At the hearing I ordered that the decision of the Administrative Appeals Tribunal ("the Tribunal") in this matter be set aside and the matter be remitted to the Tribunal for rehearing, and reserved my decision as to costs. Although this order followed a concession by Counsel for Ms Sergeant that the matter should be remitted to the Tribunal, I informed Counsel that I would provide short reasons for the decision to assist the Tribunal at the rehearing. This judgment contains those reasons, in addition to my decision as to costs in this matter. The Tribunal had set aside the decision of the Veterans Review Board of 25 November 2005, which had affirmed the decision of the Repatriation Commission dated 27 September 2004. In making its decision, the Tribunal found that the death of a Veteran, Mr Charles Harvey Michael Sergeant, on 28 April 2004 aged 78 years, was war-caused within the meaning of s 9 Veterans' Entitlements Act 1986 (Cth) ("the Act "). The respondent, Mrs Sergeant, is the widow of the Veteran. The decision of the Tribunal whereby the Tribunal set aside the decision of the Veterans' Review Board made on 22 November 2005 and decided "that the death of the late Mr Charles Sergeant is war-caused within the meaning of s 9 of the Veterans' Entitlements Act 1986 " be set aside. 2. The matter be remitted to the Tribunal to have the question whether the death of the late Mr Charles Sergeant is war-caused heard and decided again. 3. The respondent pay the applicant's costs of the appeal. The Tribunal must consider all the material which is before it and determine whether that material points to a hypothesis connecting the injury, disease or death with the circumstances of the particular service rendered by the person. No question of fact finding arises at this stage. If no such hypothesis arises, the application must fail. 2. If the material does raise such a hypothesis, the Tribunal must then ascertain whether there is in force a Statement of Principles determined by the Authority under s 196B(2) or (11). If no such Statement of Principles is in force, the hypothesis will be taken not to be reasonable and, in consequence, the application must fail. 3. If a Statement of Principles is in force, the Tribunal must then form the opinion whether the hypothesis raised is a reasonable one. It will do so if the hypothesis fits, that is to say, is consistent with the "template" to be found in the Statement of Principles. The hypothesis raised before it must thus contain one or more of the factors which the Authority has determined to be the minimum which must exist, and be related to the person's service (as required by ss 196B(2)(d) and (e)). If the hypothesis does contain these factors, it could neither be said to be contrary to proved or known scientific facts, nor otherwise fanciful. If the hypothesis fails to fit within the template, it will be deemed not to be "reasonable" and the claim will fail. 4. The Tribunal must then proceed to consider under s 120(1) whether it is satisfied beyond reasonable doubt that the death was not war-caused, or in the case of a claim for incapacity, that the incapacity did not arise from a war-caused injury. If not so satisfied, the claim must succeed. If the Tribunal is so satisfied, the claim must fail. It is only at this stage of the process that the Tribunal will be required to find facts from the material before it. In so doing, no question of onus of proof or the application of any presumption will be involved. Further, a relevant hypothesis must consist of a link or links which connect, at one end, the type of death suffered by the Veteran, which is the basis of the claim under the Act , with, at the other end, the circumstances of the particular service rendered by the Veteran: McKenna 86 FCR at 151. Each of these links must be upheld by a Statement of Principles and, if need be, more than one Statement of Principles: McKenna 86 FCR at 151. Ischaemic heart disease, cerebral haemorrhage, transient ischaemic attack. This was conceded by the respondent. As made clear in McKenna [1999] FCA 323 ; 86 FCR 144, all "links" in the hypothesis must be supported by Statements of Principles. Accordingly, having regard to the links contained in the hypothesis advanced before the Tribunal in addition to the three Statements of Principle already mentioned, it was also necessary for the Tribunal to have regard to the Statements of Principles concerning anxiety disorder (Instrument No 1 of 2000) and panic disorder (Instrument No 9 of 1999). However, no reference was made by the Tribunal to the Statements of Principles concerning anxiety disorder and panic disorder. Accordingly, it follows from that submission that, contrary to the finding of the Tribunal, the second Deledio step was not satisfied. 12 Ms Skennar for the respondent conceded that the Tribunal did not specifically identify the hypothesis upon which it relied. Ms Skennar submitted that the hypothesis identified by Ms Bowskill was one hypothesis that could be inferred from the Tribunal's reasons, although there were other hypotheses which could also be inferred. In particular, an alternative submission which was made in writing by Ms Skennar was that the hypothesis in this case was reasonable because the Tribunal at [19] specifically identified the ingestion of salt from the time of the Veteran's operational service as a factor in the Statement of Principles for Hypertension upon which reliance could be placed in reviewing the decision of the Veterans Review Board. Ms Skennar submitted that, while there was no specific expression of the ingestion of salt being the basis for hypertension, nonetheless the Tribunal found on the material available that hypertension was satisfied and therefore it was open to the Tribunal to find that the hypothesis was reasonable. However as submitted by Ms Bowskill, it is clear from the transcript of the hearing before the Tribunal that the possibility that the Veteran's hypertension was caused by the ingestion of salt, which could be related back to his war service, was specifically not pressed by Counsel for the respondent before the Tribunal. I note that Counsel before the Tribunal was not Ms Skennar. However, I accept the submission by Ms Bowskill that the issue concerning the ingestion of salt was unambiguously abandoned by Counsel at the hearing (transcript before the Tribunal, 4 October 2006, p 55 l 24). 13 Critically, Ms Skennar conceded that, if I were to accept that the no hypothesis had been identified by the Tribunal which connected the hypertension with the Veteran's operational service, the appropriate order was that the matter should be remitted to the Tribunal for a rehearing. 14 In my view it is appropriate that the decision of the Tribunal be set aside and the matter be remitted to the Tribunal for a rehearing, not only for the reason conceded by Ms Skennar, but also on the basis that, to the extent that any hypothesis is identifiable in circumstances where the Tribunal has not specifically identified an hypothesis, the Tribunal has not properly identified and addressed Statements of Principles that uphold the whole of that hypothesis. If, for example, the hypertension of the Veteran was caused by anxiety or a panic disorder, that link in the hypothesis needs to be supported by the relevant Statements of Principles. The link between the war service and the hypertension is not substantiated nor supported by identified Statements of Principles in these proceedings as required by McKenna [1999] FCA 323 ; 86 FCR 144. In any event, I also note that any possible hypothesis referable to ingestion of salt by the Veteran could not, in circumstances where the point was unequivocally abandoned, have properly formed the basis for decision by the Tribunal. However at the hearing, Ms Skennar for the respondent submitted that the Court should exercise its discretion pursuant to s 6 Federal Proceedings (Costs) Act 1981 (Cth) to grant a costs certificate. The matter before me is a Federal appeal, and it has succeeded on a question of law. The issue however is whether the Court should exercise its discretion to grant the certificate. I make this finding for the following reasons. 20 First, as pointed out by Branson J in Cornelius [2002] FCA 930 , a submission that a costs certificate should be granted only because a Veteran is a party to the proceeding, is not sustainable. Section 6 of the Act , in my view, requires that each application for a certificate, including each application made on behalf of a war veteran, be considered individually and on its merit. Parliament has given recognition to this special contribution in the Veterans' Entitlements Act 1986 (Cth) by, amongst other things, providing for a relatively low standard of proof to be applied in the determination of whether a veteran's death, injury or disease is war-caused. The Executive Government has given recognition to the special contribution in the formulation of the Commonwealth guidelines for the administration of legal aid. It seems to me that the status of a respondent as a war veteran is a factor which may be taken into account in the exercise of the discretion to grant a certificate under s 6 of the Act . However, I am not persuaded that it is a factor which either compels, or necessarily suggests strongly in favour of, the grant of a certificate. As indicated above, each application must be considered on its merits. 22 Third, no new issue of law arose in this litigation, and indeed I have found that the reasons for setting aside the decision of the Tribunal were that not only was there a failure to articulate a hypothesis as required by the first Deledio step, but also that relevant Statements of Principles had not been identified to support each link in that hypothesis as required by the second Deledio step. 23 Finally, although I understand Ms Skennar's submission concerning the stage in the proceedings before me at which the Repatriation Commission had drawn her attention to concessions made by the respondent's Counsel below, in my view this is answered by Ms Bowskill's submission that the material with respect to the ingestion of salt, in particular the transcript of the hearing before the Tribunal, was material to which the respondent's legal representatives - in particular the solicitors - would already have had access. 24 As no circumstances exist which warrant the Court exercising its discretion pursuant to s 6 Federal Proceedings (Costs) Act 1981 (Cth), the appropriate order is that the respondent pay the applicant's costs of the appeal. The decision of the Tribunal whereby the Tribunal set aside the decision of the Veterans' Review Board made on 22 November 2005 and decided "that the death of the late Mr Charles Sergeant is war-caused within the meaning of s 9 of the Veterans' Entitlements Act 1986 " be set aside. 2. The matter be remitted to the Tribunal to have the question whether the death of the late Mr Charles Sergeant is war-caused heard and decided again. 3. The respondent pay the applicant's costs of the appeal. | appeal from the administrative appeals tribunal application of the four-step test articulated by the full court of the federal court in repatriation commission v deledio (1998) 83 fcr 82 tribunal did not identify the relevant hypothesis even if hypothesis could be identified all the links in the hypothesis were not supported by statements of principles conceded by the respondent's counsel guidance for the tribunal in rehearing the matter whether the court should exercise its discretion pursuant to section 6 federal proceedings (costs) act 1981 (cth) to grant a costs certificate relevance of respondent's husband being a war veteran whether new issue of law arose whether costs limited by respondent's concessions timing of concessions veterans entitlements costs |
The Tribunal had affirmed a decision of a delegate of the first respondent ("the delegate") dated 4 August 2005 to refuse to grant protection visas to the appellants. 2 The appellants are a mother and her two children who entered Australia on 2 June 2005. They are citizens of Sri Lanka. They entered on one month visitors' visas. The first appellant claimed to have been an active supporter of the United National Party ("the UNP") in Sri Lanka and, as a result, had been subjected to harassment and threats by political opponents throughout the 2004 election period. The first appellant also claimed that one of her children was the victim of an attempted kidnapping and that she believed that the authorities did not act because of her political allegiances. She alleged that a JVP politician had interfered with the police investigation. The first appellant's husband now works in the United States of America and the appellant claims that she fears raising her children alone in Sri Lanka. 3 A delegate of the Minister refused the appellant's application for a protection visa and she appealed to the Tribunal. Prior to the hearing she forwarded written submissions to the Tribunal. Attached to those submissions were what were said to be copies of two extracts from police information books. They were written in Sinhalese and had been translated into English. One referred to a report of the alleged abduction of the appellant's son. The other referred to an assault allegedly suffered by the appellant's husband. The first extract was tendered to support the claim that the appellant's son had been kidnapped. 4 The Tribunal accepted certain of the appellant's claims. However it rejected her claim that an attempt had been made to kidnap her son. One reason for rejecting the claim was that country information suggested that political violence occurred in Sri Lanka at times when elections were being conducted. The alleged attempted kidnapping had occurred in February 2005 at which time no elections were taking place. The Tribunal also expressed doubts about the authenticity of the extracts from police reports but held that, even if they were genuine, they "would only attest to a report being made to a police station and could not represent evidence of the events described therein having occurred. She has made vague connections between the visit by members of the JVP who were clearly on a recruiting/fund raising campaign and the threats over the phone which she claims to have received. She also indicated that she had received requests for money from many other parties. The Tribunal accepts that she may have been approached by funds for a number of political parties given the obviously comfortable financial position in which the family is in, it accepts that she may have been threatened for not complying; the nature of these threats over the telephone has not been detailed to the Tribunal. Even in her own alleged report to the police on the attempted kidnap of her son she states that people are attempting to extort money from her. There is no mention of a political motive or that the would be perpetrators were political opponents. The attempt to kidnap her son is said to have occurred almost a year after the said election and the loss of this election by the UNP cited as the reason that the applicant was importuned; both the timing and the reason do not appear likely given that political violence tends to occur around election time; the elections which followed the general elections of 2 April 2004 were the presidential elections of 17 November 2005. The only indication of presumed political involvement is the original claims by the [appellant] that a certain JVP politician had "interfered with the police investigation". This claims (sic) was not reiterated at the hearing and does not sit well with the [appellant's] insistence that the police did nothing following any of her complaints. If there was a police investigation, this indicates that the authorities did take her claims seriously. The [appellant] has provided no further comment on this presumed political interference. The Tribunal does not accept that this politician interfered with the police investigation. She claimed that the Tribunal had erred when considering the authenticity of the police reports used to substantiate the claim that her child was the victim of an attempted kidnapping. In particular, the first appellant claimed that the Tribunal had not complied with s 424A of the Migration Act 1958 (Cth) ("the Act ") by failing to provide her with written notice that a reason for its adverse decision would be her claim that the kidnapping investigation was neglected as a result of her political affiliations. It was also claimed that the Tribunal had failed to exercise its jurisdiction by not making adequate enquiries as to the validity of the police reports, and did not have sufficient evidence to support a conclusion that they were not genuine. 7 The Federal Magistrate rejected the submission that the Tribunal had erred by failing to meet its obligations under s 424A(1) of the Act . He held that the appellant's failure to reiterate a claim made at the time of her original application for a protection visa was not "information" for the purposes of s 424A. The claim is not the information, according to the first respondent's submissions, but rather it is the information relied upon in rejecting a claim that is relevant. I accept that submission and, in my view, accordingly this ground should fail. In reaching that decision, the Court is not assisted by other authorities referred to by counsel during the course of submissions. The Tribunal in this case is simply noting a failure to reiterate a claim, and that in my view cannot constitute information of a kind which would attract the application of s 424A of the Migration Act . As indicated, this ground should therefore fail. While the Federal Magistrate commented that the Tribunal had dealt with this issue in a "somewhat unsatisfactory manner", his Honour found that the Tribunal "proceeded to make findings where little or no weight was placed upon the police report and other factors were taken into account. " The Federal Magistrate dismissed the application on 30 January 2007. • Did the Tribunal fall into jurisdictional error by making findings which were not open on the evidence or by failing to exercise its powers of enquiry in relation to the extracts from Sri Lankan police records? This was because the Tribunal had found as a fact that "there was no attempt to kidnap the [appellant's] son. " If there was no kidnapping there was no report to the police and no police investigation to be interfered with. • A failure to reiterate a claim cannot constitute "information" within the meaning of s 424A. • If the original claim was "information" which formed part of the reason for the Tribunal's decision that information was given by the appellant to the Tribunal for the purposes of its review and, therefore, it was information comprehended by the exemption provided for in s 424A(3)(b). However, the Tribunal is only bound to provide particulars of information "that the Tribunal considers would be the reason, or part of the reason, for affirming the decision that is under review. " Information will not be "a part of the reason" for affirming a decision unless it is established that the information "contributed in some way, which renders it an operative causal link, to the decision itself": see SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214 at 256 [182] ; NBKS v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 174 ; (2006) 156 FCR 205 at 224 [79] . 14 The Tribunal's reference to the failure by the appellant to reiterate the political interference claim was made in the paragraph of its reasons which is set out above at [5]. The context is important. The paragraph deals with the question of whether any alleged persecution suffered by the appellant occurred by reason of her political opinion or imputed political opinion. In dealing with this issue the Tribunal puts the appellant's case, in relation to the existence of a Convention related reason for alleged persecution, at its highest and then discounts it. Phrases such as "[e]ven in her own alleged report to the police on the attempted kidnap of her son ...", "[t]he attempt to kidnap her son is said to have occurred ...", "[i]f there was a police investigation ..." are suggestive of considerable scepticism. The critical and operative finding was, however, that "there was no attempt to kidnap the [appellant's] son. " Once the Tribunal had reached this point in its reasoning nothing which it might have said as to the reason for the kidnapping or the reason for any alleged interference with a police investigation into it could, in my opinion, form an operative reason for rejecting the appellant's claim. 15 Moreover, there is force in the Minister's contention that the claim about political interference had formed part of the claims made in support of the appellant's visa applications and that these claims had been republished to the Tribunal when review of the delegate's decision was sought. Section 424A(3)(b) provides that the requirements of s 424A(1) do not apply to information which an applicant "gave" for the purpose of the application. Most, if not all, cases in which s 424A(3)(b) has been invoked have been cases in which an applicant makes a significant claim before the Tribunal which was not made in support of the original protection visa application. This case differs because a claim which was made in the original application was not repeated during the oral hearing before the Tribunal. Section 424A(3)(b) could only operate in this case if the claims made in support of the original visa application were made (given) to the Tribunal by the appellant: SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214 at 222, 252, 256. 16 A written submission was made to the Tribunal on behalf of the appellant. Although no express reference was made, in that submission, to the alleged political interference with the police investigation, the Tribunal's attention was directed to the appellant's statement in support of her protection visa application. Part of the submission read: "She has also been politically involved as can be seen from the statement she made in support of her protection visa application. " As already noted, one aspect of the appellant's political involvement was her work for the UNP which it was said led to the interference by a political opponent. She thereby expressly relied on the information and invited the Tribunal to have regard to it: see M55 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 131 at [25] . The Tribunal was, therefore seized of the political interference claim. Was it also seized of the "information" that the claim had not been reiterated during the hearing which it conducted? This is particularly so when, as the Tribunal seems to have done here, it treats the omission as though it provides implicit support for a positive assertion that is detrimental to an applicant's case. It makes no difference whether the omission is to be found in a prior statement of an applicant or as in this case in a statement provided by a third party. Although his Honour was dealing with a case in which the relevant omission was made in the original application, there is no reason, in principle, why the failure to mention a particular matter when advancing a case before the Tribunal should not also constitute "information" for the purposes of s 424A. 17 It follows that I agree with the Federal Magistrate's alternative basis for rejecting this ground. The Tribunal was not obliged to give particulars of the information relating to the alleged political interference with the police inquiry which was contained in the appellant's original application and the information relating to her failure to mention the matter during her appearance before the Tribunal. In both cases the "information" was given by her to the Tribunal. Section 424A(3)(b) therefore applied. 18 The second ground relied on by the appellants relates to the Tribunal's treatment of the extracts from the police reports. It is fair to say that the Tribunal had serious reservations about whether the extract tendered by the appellant supported the claim that her son had been kidnapped. This was not filled in on the last line of text but appeared as a wet stamp under the signature. The Tribunal remains of the view that the space for the date in the top part of the document is there to indicate the date on which the report to the police was made, the time, page number and paragraph number of the police book in which it is found. A place for the date of issue of the extract is provided on the bottom left hand corner of this form. It has not been filled in in the document in question. The applicant, in her response to the s 424A letter on this point, stated that the date "2005.02.17", the alleged date of the incident, forms part of the declaration to the police Constable who actually copied the extract. Although the Tribunal can see that this date is there in the Singhalese version, it is notable by its absence in both translations of both documents. At the hearing the Tribunal asked that this clause be read by the [appellant] and it was confirmed that this was an indication of when this report had been made, that is 17 February 2005. There is a further issue with the declaration by the Constable. On the top of the document the page and paragraph number of the said report in the said book are cited as 321 and 145 respectively. In the declaration, 350/145 appear. The adviser has submitted to the Tribunal possible reasons for this less than accurate transcription from the police record book to the present document. These are that the process of transcription itself, the purpose for which thought the document was being obtained and the different standards applying in Australia and Sri Lanka in the matter of legal documents. At the hearing the Tribunal sought to establish who had obtained this report from the police; the applicant stated that it was her husband. When further questions were asked when her husband had returned to Sri Lanka she replied that this had occurred on 5 November 2005, a copy of the relevant page from her husband's passport showed that he had entered Sri Lanka on 9 November 2005. The Tribunal asked how he could have obtained this report on 5 November if he was not in Sri Lanka. The answer to this question came in the adviser's response to the s 424A letter where in it is stated that "whilst the primary applicant's husband collected the reports, and sent these back to the primary applicant, her uncle had made a request for the kidnapping extract before her husband returned to Sri Lanka. This accounts for the earlier date on the kidnapping extract. The Tribunal does not accept that the errors in it are due to mere administrative incompetence or perceived uses to which the document would be put, not (sic) does not accept that standards in different countries is a relevant issue when it is purported that this is a case made by a person of a portion of what was contained in another book and counter signed for accuracy not only by the person making the copy but also the officer in charge of the police station. In addition, the Tribunal is not satisfied that the report was requested by an "uncle" and picked up by the [appellant's] husband on his arrival in Sri Lanka; this in itself negates the view that the date on the top of the document is the date of its issue to the person requesting it. The existence of this document, even if it were accepted as genuine, would only attest to a report being made to a police station and could not represent evidence of the event described therein having occurred. The appellants further contended that the Tribunal was not entitled to form a view about the extract "simply on the basis of certain English words appearing; expert evidence was needed. Such a strong adverse finding required a sound basis. The appellant's credit had not otherwise been destroyed. It would have been a simple matter for the Tribunal to inquire, utilising its powers under s 427(1)(d) of the Migration Act and/or its own resources, in order to obtain a firm basis for a conclusion on the authenticity of the police reports. It was not necessary that the confidentiality of the appellant be compromised. The relevant information was on a proforma document, readily discernable (sic) from a police station in Columbo. It plainly did consider that they could not be relied on to support the particular claims being made by the appellant. In the passage extracted above at [18] the Tribunal explains its reasons for concluding that "the space for the date in the top part of the document is there to indicate the date on which the report to the police was made". One reason was that there was provision elsewhere on the form for the date of extract to be written in. There was also an issue about the accuracy of transcription from the police record book to the extract. It is clear that the Tribunal carefully examined the extract before concluding that it could place little reliance on it. The Tribunal explained its reasoning process. Its conclusion was a finding of fact which was open to it. Expert evidence was not required: there was no allegation that the document had been forged. The Tribunal's misgivings were exposed to the appellant and she was, through her adviser, given the opportunity to respond to the Tribunal's concerns. She did so. The Tribunal was under no obligation to make further inquiries in order to obtain further information to ascertain (if this were possible) whether or not there was evidence available through police sources or otherwise in Sri Lanka to support the appellant's claim relating to the kidnapping of her son, the reporting of the incident to the police and the conduct of the police investigation. 21 The appeal should be dismissed with costs. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY . | appeal from federal magistrate affirming decision of refugee review tribunal claim made in original application not repeated before tribunal whether tribunal complied with its obligations under s 424a of the migration act when it failed to provide the appellants with written particulars of information claimed in original application authenticity of police reports claiming appellant's child a victim of an attempted kidnapping whether tribunal's failure to exercise its powers of enquiry in relation to the police reports constitutes jurisdictional error no appellable error made out migration |
The applicant is a national of Mongolia who speaks little or no English. She appeared in person assisted by an interpreter. No explanation for the delay is given, other than an assertion by the applicant that she believed that the time limit had not expired. That explanation does not constitute special reasons for the grant of an extension of time. Nevertheless, it is appropriate to consider the merits of the appeal in determining whether leave should be granted ( NBBD v Minister for Immigration and Multicultural Affairs [2006] FCA 1029 at [12] ). In summary, the applicant lodged an application for a protection visa. That application was refused by a delegate of the Minister and the applicant sought review of the Minister's decision before the Refugee Review Tribunal. The application form to the Tribunal included an authority for a migration agent (Mr Mollah) to act for the applicant in relation to her application. The form indicated that correspondence was to be sent to the applicant's residential address and that her agent was authorised to receive correspondence in connection with the review by the Tribunal. The form explained that, if such a person was nominated, all correspondence would be sent to that person, identified by the form as the "authorised recipient". 4 Letters addressed to the applicant were sent to Mr Mollah regarding the Tribunal proceeding. One such letter informed the applicant that the Tribunal had considered the material before it but was unable to make a decision in her favour and invited her to attend a hearing. Smith FM summarised the steps taken by the Tribunal to notify the applicant of the hearing date through Mr Mollah (at [10] to [14]). 5 Prior to its attempts to contact the authorised recipient, the Tribunal was aware that the signature on the application form to the Tribunal did not match the signature on the Department's file. There is no evidence that the Tribunal was on notice that the signature on the application, while not that of the applicant, had been placed there without her authorisation. 6 When the Tribunal received no reply to its correspondence, it made numerous attempts to contact the authorised recipient. It encountered an answering machine and left messages. There was no response. The Tribunal called the applicant on her mobile phone and left contact details. There was no response. The steps taken by the Tribunal demonstrate that the Tribunal was aware that the migration agent was not responding to its attempts to notify the applicant of the pending hearing. 7 The Tribunal noted in its reasons that the applicant did not appear and the Tribunal made a decision pursuant to s 426A of the Migration Act 1958 (Cth) ('the Act') without taking any further action. As noted by Smith FM, the application for a protection visa ' was completed with only cursory information in support of a claim for protection ' (at [4]). The application to the Tribunal contained no additional information. The Tribunal concluded that the applicant's claims were very general and lacking in useful detail and was not satisfied that she was a person to whom Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol. 8 The applicant made unsworn claims of misconduct by her migration agent before the Federal Magistrate, specifically that she had been informed of the proposed Tribunal hearing by Mr Mollah but advised by him that she did not need to be present. As his Honour noted, Mr Mollah's registration has since been cancelled (at [26]). However, even accepting the assertions of misconduct to be true, his Honour was correct in finding that they do not give rise to any jurisdictional error on the part of the Tribunal (at [27]). 9 Federal Magistrate Smith held that notice to an authorised recipient had been given in compliance with s 441G(1) of the Act and, by reason of s 441G(2) , the Tribunal was taken to have given notice to the applicant. For that reason, his Honour held that the Tribunal had power to proceed under s 426A(1) of the Act and no jurisdictional error was established (at [23]) and [27]). The applicant relies in the affidavit on the fact that the migration agent ' was not doing his job ' and that she had been unable to contact him. She asserts that the Tribunal should have written to her because her address was also provided as an address for correspondence. She says that this was required for a ' fair decision to be made according to law ' and that the Federal Magistrate failed to properly consider and apply s 494D of the Act. 11 Consistent with her affidavit, the grounds in the draft notice of appeal assert a failure on behalf of the Federal Magistrate to apply s 494D of the Act and to consider the circumstances which led to the applicant not receiving the hearing invitation. That section is not applicable to the applicant's complaint. As his Honour noted, the relevant section in respect of service by the Tribunal on an applicant by his or her authorised recipient is s 441G (at [20]). 12 The remaining matters raised in the application to the Federal Magistrates Court were noted by Smith FM to give only a list of general heads of jurisdictional error without any sufficient particulars or substance (at [17]). None of those matters are raised in the draft notice of appeal. 14 Her attention was drawn to a file entry by the Tribunal recording that the signature on the application to the Tribunal does not match that on the Department file, the latter being, presumably, the signature on the application for a protection visa. A cursory examination of the two signatures confirms that notation. 15 This raised the question of the validity of the application to the Tribunal and the authority given to the migration agent to complete the form for the purposes of s 441G of the Act. Section 441G(1) provides that the Tribunal must give the authorised recipient, instead of the applicant, any document that it would otherwise have given to the applicant if ' the applicant gives the Tribunal written notice of the name and address of another person (the authorised recipient ) authorised by the applicant to do things on behalf of the applicant that consist of, or include, receiving documents in connection with the review '. 16 The applicant was offered the option of giving evidence orally or, with an adjournment, preparing evidence in writing as to the signature and the instructions, if any, given to the migration agent with respect to the application. The applicant chose to give evidence orally. 17 The applicant confirmed her signature on the application for a protection visa. She also confirmed she received the letter from the Department, sent to her residential address, notifying her of the Minister's decision. She said that she realised that she needed to apply for a review of that decision. Every time that she went to her migration agent he told her not to worry and that he would take care everything, including the review proceeding before the Tribunal. 18 The applicant's evidence about the application to the Tribunal was not clear. She said that she thought that she would be called to attend the Tribunal hearing but did not know if the agent had lodged the application for her. When asked how she expected to come before the Tribunal to explain her case, she responded that, by giving the documentation to her agent, she would receive a reply and attend the hearing. She said that she gave her materials to Mr Mollah and that he acted on her behalf and submitted all matters on her behalf. 19 The applicant's evidence was ' I just gave all my materials, all my documents to [the agent] and he acted on my behalf ' and ' I asked him to convey my, to submit my application saying all the matters on my behalf '. The applicant said that she had not seen her application form before and that it was not her signature on it. She did not receive any letters from the Tribunal. When referred to the Tribunal file note to the effect that the Tribunal had left a message on her phone, she denied having received it. However, no such assertion was made by the applicant. There is no evidence that the applicant did not intend her instructions to extend to the signing of the application on her behalf or to authorise the agent to receive correspondence on her behalf. 21 To the contrary, in the ordinary course, the instruction to the agent to submit "all the matters on my behalf" would include the completion of the application form and lodgement of the application with the Tribunal. Similar instructions have been found to give rise to an authority to sign a protection visa application ( SZGJO v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 393 at [7] ). On the basis of the evidence before me, and in circumstances where the applicant gave that general authority and expected it to result in an appearance before the Tribunal, I am satisfied that the agent's authority extended to an authorisation to sign the application form on her behalf. 22 I am also satisfied, in the circumstances, that the agent's authority extended to an authority for Mr Mollah to receive correspondence in relation to the review by the Tribunal. That is, the applicant authorised the agent to give the Tribunal written notice of his own name and address as the person authorised by the applicant to receive documents. Such notice was given by Mr Mollah when he completed and sent the application form. He became an "authorised recipient" within the meaning of s 441G(1)(b) of the Act. 23 An application to the Tribunal for review must be in the approved form (s 412(1)(a) of the Act). Accepting the applicant's evidence that the signature on the application form was not hers, a question arises as to the status of the application to the Tribunal. It may be that an application must be signed personally by an applicant to be in approved form. If the application was defective for this reason, the applicant had not applied to the Tribunal for review of the delegate's decision. The Tribunal then had no jurisdiction to hear the application. It would follow that an appeal to this Court alleging a failure by the Tribunal to give notice of the hearing and failure by the Federal Magistrate to make that finding does not arise and the application for an extension of time to appeal should be refused ( SZGJO v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 393 at [4] to [5]). 24 If an application form need not be signed by an applicant personally, the application for review by the Tribunal was validly made. However, as I have noted, notice was given to the Tribunal that Mr Mollah was the "authorised recipient" for the purposes of s 441G of the Act. Where the Tribunal gives a document to the authorised recipient, the Tribunal is taken to have given the document to the applicant (s 441G(2) of the Act). Indeed, the Tribunal is required to give documents to the authorised recipient (s 441G(1)). Accordingly, in corresponding with the agent alone, the Tribunal did not deny the applicant procedural fairness. If the application was valid the Tribunal was entitled to proceed pursuant to s 426A of the Act and no jurisdictional error has been established. 25 The parties did not make submissions on whether an application to the Tribunal must be signed personally by an applicant in order to be in approved form. In any event, the proposed appeal must fail. It cannot be established that there has been any jurisdictional error on the part of the Tribunal. 26 The application for an extension of time in which to file and serve a notice of appeal should be dismissed with costs. 27 In the circumstances, the applicant may wish to seek the exercise by the Minister of her power under s 48B of the Act, thereby permitting the applicant to make a second application for a protection visa. | application for review not signed by applicant applicant authorised migration agent to submit all matters on her behalf agent's authority extended to signing application form and receiving correspondence from the tribunal no application to the tribunal if application defective no jurisdictional error if application effective migration |
He emigrated to Australia when he was 16 years old. Some four years later he was dead. He died on 25 May 2006. 2 Mr Lapidario was killed as a result of an accident that occurred on that day at a warehouse controlled by the Respondent at Wetherill Park, New South Wales. From 16 August 2004 until his death, he had been employed by a labour hire agency, Landmark Industrial Recruitment Pty Ltd (" Landmark ") and worked in the Respondent's warehouse as a picker and packer. 3 At about 2.45 pm on 25 May 2006 a forklift was being driven at the warehouse by a certified forklift driver, Mr Tran. Mr Lapidario engaged in some " horseplay ". He climbed onto the forklift and placed his hand on the driver's head and neck and his other hand under the driver's leg. The reverse pedal was accidentally engaged and the forklift reversed. Mr Lapidario was crushed between the forklift and a pole. He could not be resuscitated and died at the scene. 4 His was not the first accident or death at the warehouse. In November 2002 an employee had been injured in a forklift collision. The Respondent was convicted under s 8(2) of the Occupational Health and Safety Act 2000 (NSW). In July 2003 an employee was killed. The Respondent was there convicted under s 8(1) of the New South Wales Act. 5 A report into the death of Mr Lapidario was undertaken by an Investigator appointed under s 40(2)(a) of the Occupational Health and Safety Act 1991 (Cth). 6 These tragic facts are the occasion of the present Application. Comcare also seeks an order for the payment of a pecuniary penalty. 8 Schedule 2 of the 1991 Act makes it mandatory for this Court to make a declaration where it considers that s 16 has been breached, but confers a discretion as to the imposition of a pecuniary penalty. 9 In proceedings seeking a declaration and a pecuniary penalty, the Court is to apply the rules of evidence and procedure for civil matters: sch 2, cl 8. 10 There is agreement between the parties that it is appropriate for the making of the declaration as sought and further agreement as to the imposition of a penalty in the sum of $165,000. Section 16(4) is also of relevance. Commonwealth contractor (2) A Commonwealth contractor is a natural person (other than a Commonwealth employee or a Commonwealth authority employee) who performs work on Commonwealth premises in connection with a contract between: (a) the Commonwealth; and (b) that person or another person (whether a natural person or not); which is in connection with an undertaking being carried on by the Commonwealth. (2) The pecuniary penalty must not exceed the amount stated in the table to be the maximum penalty in relation to the provision concerned. The maximum penalty prescribed for a contravention of s 16(1) is 2,200 penalty units. A " penalty unit " is defined by s 4AA of the Crimes Act 1914 (Cth) as being $110. 12 Various responsibilities have been entrusted to Comcare by the 1991 Act including functions in respect to the provision of advice to employers (s 38A); the appointment of investigators to undertake investigations as to compliance with the Act (ss 40 and 41); the entry upon premises and requiring the provision of assistance with respect to the conduct of an investigation (ss 42 and 43); and the issuing of notices requiring " improvement " (s 47). Section 77(1) is the provision which ( inter alia ) authorises Comcare to institute proceedings for a breach of the Act. 13 For the purposes of resolving the Application , the parties helpfully prepared a Statement of Agreed Facts. Comcare also relied upon parts of an Affidavit of its employee who undertook the investigation into the death of Mr Lapidario, Ms Jackie Somerville. The Respondent relied upon parts of an Affidavit of a manager of the Respondent, Mr Michael Halloran. Reliance upon the balance of the evidence as filed became unnecessary given the agreement reached on the first day of the hearing as to the quantum of the penalty. 14 The facts as agreed disclose that Mr Lapidario was provided with what can only be described as minimal instructions directed at ensuring his safety. 15 On 12 August 2004 he completed an " OHS Induction Questionnaire ". On 16 August he received what is described as " induction training " and prior to commencement of work at the warehouse he received further " induction training ". That training consisted of a verbal instruction " to keep out of the way of moving machinery " and verbal instructions as to safety rules, emergency evacuation procedure, lifting, administrative matters and site amenities. He also watched an " OH&S Instruction Video " and received a certificate acknowledging that he had read an induction manual and completed a questionnaire. He also attended a series of " Take 5 " talks, being talks taking about five minutes. Those " Take 5 " talks covered a variety of matter varying from heat stress, drugs and alcohol and workplace emergencies. 16 Such training and instructions as he should have been given were not given by either Landmark or by the present Respondent. 17 The supervisors and team leaders of the present Respondent at the time had not received any specific training as to the performance of their duties. They had not been given adequate or clear instructions as to the need to ensure that there was no " horseplay " or " skylarking " in the vicinity of forklifts. They were expected to " learn on the job ". There was no program in place to formally evaluate or monitor the performance of supervisors or team leaders. 18 Since Mr Lapidario's death, changes have taken place. A system has been put in place to monitor the performance of supervisors and team leaders. Traffic barriers have been put in place to separate moving forklifts from pedestrians. The site where Mr Lapidario was killed was previously an area shared by machinery and pedestrians. It is now only an area for the operation of forklifts. 19 Whereas none of the " Take 5 " sessions related to " horseplay ", there are now in place more regular and comprehensive training sessions directed to employees and contractors, including pickers and packers, regarding " horseplay " and appropriate behaviour in and around forklifts. A DECLARATION? 21 The power conferred by s 21 is a discretionary power which is not to be limited by the laying down of rules as to the manner of its exercise: Ainsworth v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564. It is a discretionary power which "[i]t is neither possible nor desirable to fetter ... by laying down rules as to the manner of its exercise. " However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have "a real interest" and relief will not be granted if the question "is purely hypothetical", if relief is "claimed in relation to circumstances that [have] not occurred and might never happen" or if "the Court's declaration will produce no foreseeable consequences for the parties". Indeed, cl 5 to sch 2 of the 1991 Act expressly provides that either Comcare or an investigator may apply for a declaration of contravention. 23 The manner in which the Court is to inform itself as to whether or not there has been a breach of the 1991 Act is not surprisingly left unspecified. Whether or not there has been a breach may involve, in some cases, a contested and lengthy hearing. Alternatively, and as in the present proceeding, the parties may provide to the Court a statement of agreed facts and limited further evidence . 25 No different approach, it is considered, is warranted in the present proceeding. 26 The Statement of Agreed Facts, including the admission of those facts as pleaded in the Further Amended Statement of Claim , provides a basis upon which the Court can be satisfied that there has indeed been a breach of s 16(1) of the 1991 Act and those matters specified in cl 2(3) of sch 2 to that Act. Moreover, such of the Affidavit of Ms Somerville as was relied upon provided evidence in support of the Statement . 27 The parties are in agreement that there was a failure to " take all reasonably practicable steps to protect the health and safety " of Mr Tran, he being an " employee " of the Respondent; there was also agreement that there had been a failure to " take all reasonably practicable steps to protect the health and safety " of Mr Lapidario, he being a " contractor ". The finding in respect to Mr Lapidario arises by reason of the extended reach of s 16(1) effected by s 16(4) of the 1991 Act. 28 Declaratory relief should be granted. The form of the declaration was also the subject of agreement. But there the guidance provided by the legislature both begins and ends. The criteria by reference to which the discretion is to be exercised are left unspecified. 30 Schedule 2 to the Occupational Health and Safety Act provides another example of the recourse by the Commonwealth legislature to civil penalties as a means of regulation. Criminal penalties are also being retained for offences which are more appropriately dealt with in the criminal justice system, such as contempt of the Commission or failing to attend before the Commission as a witness... Although the present proceeding involved the death of Mr Lapidario, it should be noted that cl 18(1)(c) to sch 2 of the Act confines criminal prosecutions to those cases where death or serious bodily injury was the result of either negligence or recklessness. There was no suggestion that the death of Mr Lapidario was the result of either negligence or recklessness. Consideration can thus presently be confined to the discretion relevant to civil proceedings. 31 Having set the maximum penalty that may be imposed, the discretion as to that which is otherwise considered to be the appropriate penalty is one which must necessarily be informed by reference to the balance of the statutory scheme, including most relevantly the objects sought to be achieved. The statutory scheme also relevantly includes Part 2 as it applies to s 16 and the duty of an employer to " take all reasonably practicable steps to protect the health and safety at work of the employer's employees ". Such a duty must be regarded as fundamental. 32 In the statutory context of the present legislation, Madgwick J has focussed attention upon those considerations relevant to the imposition of a penalty in Comcare v Commonwealth [2007] FCA 662 , 163 FCR 207. A member of the Australian Defence Force had there died in November 1994 as a result of heat stress sustained during an army training exercise. However the occurrence of death or serious injury may manifest the degree of the seriousness of the relevant detriment to safety; (v) a systemic failure by an employer to appropriately address a known or foreseeable risk is likely to be viewed more seriously than a risk to which an employee was exposed because of a combination of inadvertence on the part of an employee and a momentary lapse of supervision; (vi) general deterrence and specific deterrence are particularly relevant factors in light of the objects and terms of the Act; (vii) employers are required to take all practicable precautions to ensure safety in the workplace. This implies constant vigilance. Employers must adopt an approach to safety which is proactive and not merely reactive. In view of the scope of those obligations, in most cases it will be necessary to have regard to the need to encourage a sufficient level of diligence by the employer in the future. This is particularly so where the employer conducts a large enterprise which involves inherent risks to safety; (viii) regard should be had to the levels of maximum penalty set by the legislature as indicative of the seriousness of the breach under consideration; (xi) the neglect of simple, well-known precautions to deal with an evident and great risk of injury, take a matter towards the worst case category; (x) the objective seriousness of the offence, without more may call for the imposition of a very substantial penalty to vindicate the social and industrial policies of the legislation and its regime of penalties. These considerations, it was concluded, " provide [d] useful, analogical, general guidance as to the approach to be taken in consideration of penalties under the Commonwealth Act ". His Honour noted that the maximum penalty was 2,200 penalty units, a penalty of less than $250,000. The maximum penalty would be appropriate where there had been a " conscious decision to flout the law ". A penalty of 1,800 penalty units ($198,000) was ordered. His Honour found that there had been " systemic failures of the most serious kind ": at [125]. 33 In Comcare v National Gallery of Australia [2007] FCA 1548 , 98 ALD 67 a penalty of $20,000 had been agreed between the parties and ordered by the Court. Whilst not downplaying the serious risks involved, the injuries sustained by the workers were relatively mild. As the cases indicate, it is not so much a question of me deciding what figure I would independently propose and then seeing whether it accords with the figure proposed. A commonsense approach is to take the agreed figure and give consideration to whether it is within the range of appropriate figures. In my opinion it is. I make the orders set out in the draft order which I have initialled and placed with the papers. 34 Although the particular legislative regime which is being enforced must always remain the source whereby considerations relevant to the imposition of a penalty are to be discerned, there nevertheless remain some more general considerations that inform the discretion being exercised. 35 Many other Commonwealth Acts provide for a regulator to approach this Court seeking an order for the imposition of a pecuniary penalty as a means of securing compliance with legislative provisions. A degree of learning has emerged from those authorities dealing with those other legislative provisions as to the matters to be taken into account when assessing a penalty. 36 In the statutory context of the Trade Practices Act 1974 (Cth), French J (as he then was) has attempted to summarise some of these considerations: Trade Practices Commission v CSR Ltd (1991) ATPR 41-076. These include the following: 1. The nature and extent of the contravening conduct. 2. The amount of loss or damage caused. 3. The circumstances in which the conduct took place. 4. The size of the contravening company. 5. The degree of power it has, as evidenced by its market share and ease of entry into the market. 6. The deliberateness of the contravention and the period over which it extended. 7. Whether the contravention arose out of the conduct of senior management or at a lower level. 8. 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. 9. 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. These considerations have since been applied to other legislative contexts: eg, Minister for the Environment and Heritage v Greentree (No 3) [2004] FCA 1317 at [51] , [2004] FCA 1317 ; 136 LGERA 89 ; Australian Prudential Regulation Authority v Derstepanian [2005] FCA 1121 at [30] ; Secretary, Department of Health & Ageing v Pagasa Australia Pty Ltd [2008] FCA 1545 at [24] . 37 These considerations may also be applied to the task of assessing the penalty to be imposed under the current legislation. To some extent the considerations set forth by Madgwick J overlap with those set forth by French J; to some extent they do not. 38 Care must be taken to ensure that any listing of potentially relevant considerations do not themselves become an impermissible substitute for considering the terms of the legislation in issue or an unnecessary constraint upon a discretion conferred in otherwise unconfined terms. But the attempts that have been made by both Madgwick and French JJ (in particular) provide a useful touchstone of those matters that may be taken into account when assessing the penalty to be imposed. Those considerations set forth by Madgwick J are obviously more directed to the specific statutory context of ensuring the health and safety of workers than the more generally expressed considerations set forth by French J. But both, it is considered, are relevant to the present assessment of penalty. 39 A final matter of principle should also be noted. It is inappropriate to fix a penalty simply by reference to the quantum of a penalty imposed in another case. It was thus understood to be common ground between the parties to the present proceeding that it was not appropriate to regard (in particular) the penalty of $198,000 in Comcare v Commonwealth as itself fixing a " benchmark " against which other penalties are to be determined in cases involving death. There should not be such an inequality as would suggest that the treatment meted out has not been even-handed: cf the criminal law case Lowe v The Queen [1984] HCA 46 ; (1984) 154 CLR 606. However, other things are rarely equal where contraventions of the Trade Practices Act are concerned. In the present case, differing circumstances, size, market power and responsibility for the contraventions, as well as other factors, complicate any attempt to compare the penalties imposed on the appellant with those imposed on the other corporations. Another form of comparison is not appropriate. The facts of the instant case should not be compared with a particular reported case in order to derive therefrom the amount of the penalty to be fixed. Cases are authorities for matters of principle; but the penalty found to be appropriate, as a matter of fact, in the circumstances of one case cannot dictate the appropriate penalty in the different circumstances of another case. A comparison of the facts in Comcare v Commonwealth and the facts in the present proceeding only serves to underline the point there being made by Burchett and Kiefell JJ (and by Spender J) -- namely that the facts and circumstances of individual cases are infinitely diverse. The quantum of any penalty to be imposed must necessarily be fixed by reference to the peculiar facts arising in each case as and when they arise. QUANTIFICATION OF PENALTY: AGREEMENT? 42 The extent to which this Court may inform itself as to the appropriate quantification of any penalty to be imposed by reference to any agreement between the parties has been the subject of consideration in the context of other legislation: eg, Secretary, Department of Health & Ageing v Pagasa Australia Pty Ltd [2008] FCA 1545 at [33] ---[42]. Reference was there made to the decision of the Full Court of this Court in Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 and to the earlier decision in NW Frozen Foods . (ii) Determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another. (iii) There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed. (iv) The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular, the views of the regulator on matters within its expertise (such as the ACCC's views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more "subjective" matters. (v) In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so. (vi) Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court's view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range. In Comcare v National Gallery of Australia [2007] FCA 1548 at [4] , [2007] FCA 1548 ; 98 ALD 67 at 68 Gyles J referred to Mobil Oil and accepted that " that decision does provide appropriate guidance ". 43 Of particular concern is the need to ensure that this Court is " not merely giving effect to the wishes of the parties ": cf Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 18 at [18] , [1999] FCA 18 ; 161 ALR 79 at 86 per French J. The Court is not to be regarded as a " rubber stamp ": Australian Competition and Consumer Commission v Australian Abalone Pty Ltd [2007] FCA 1834 at [121] , ATPR 42-199 per Weinberg J. 44 No different approach was advanced in the present proceeding. In so proceeding, it is accepted that the Respondent has expressed a " willingness to facilitate the course of justice ": Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 at [74] , [2008] FCAFC 70 ; 168 FCR 383 at 404 per Stone and Buchanan JJ. It would be inappropriate to increase the penalty now to be imposed by reason of those two earlier contraventions of the New South Wales Act -- to do so " would be to impose a fresh penalty for past offences ": Veen v The Queen (No 2) [1988] HCA 14 ; (1988) 164 CLR 465 at 477 per Mason CJ, Brennan, Dawson and Toohey JJ. But those events do assume some limited relevance. There was no explanation as to why those steps which have more recently been implemented in order to address the safety of employees working in the vicinity of forklifts were not implemented at a far earlier date. The dangers inherent in working in the vicinity of forklifts had very clearly emerged long ago. 47 It is considered that it is " appropriate " to give effect to the agreement between the parties as to penalty. Whether or not the Court would have reached the same figure is not to the point; the sum of $165,000, as agreed between the parties, is within the " permissible range ". (b) In or about March 2006 its contractor Mr John Lapidario approached a moving forklift operated by its employee Mr Van Trot Tran and disconnected the power on that forklift. (c) On another occasion in or about March 2006 Mr Lapidario, without any qualifications or training to do so, operated a moving forklift in warehouse 1 in the vicinity of Mr Tran. (d) On another occasion in or about March 2006 Mr Lapidario approached an operating forklift operated at the time by Mr Tran and applied the handbrake. (e) At approximately 2.45 pm on 25 May 2006 Mr Tran was operating a forklift from the driver's seat in the vicinity of the work benches and immediately to the south of the southern-most rack of shelving at the Site. In an attempt to engage in horseplay with Mr Tran, Mr Lapidario climbed onto the forklift putting his right hand on Mr Tran's head and neck, and his left hand under Mr Tran's leg. The forklift travelled in reverse and Mr Lapidario was accidentally crushed between a pole and the forklift. Mr Lapidario died at the scene of the accident. 2. (b) failed to ensure that there was an adequate traffic management system in place to prevent or reduce the risk of Mr Lapidario coming into contact with a moving forklift. 3. Pursuant to clause 4 of Schedule 2 of the said Act, Post Logistics pay the Commonwealth a penalty of $165,000. 2. The Respondent is to pay Comcare's costs as agreed, or in the absence of agreement, as taxed. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | civil penalty failure to take reasonable steps to protect health and safety death of worker statement of agreed facts declaration as to contravention imposition of pecuniary penalty principles to be applied occupational health and safety |
2 I earlier refused the application, and now provide reasons for that decision. The second respondent Ms Kennedy is an employee of Boatman Nominees Pty Ltd. That company held an air operator's certificate authorizing it to conduct charter operations. 4 Mr Boatman held a commercial pilot licence endorsed with a condition requiring him, for medical reasons, to have a qualified co-pilot. He also held a private pilot and a student pilot licence, neither of which had that condition endorsed on it. Ms Kennedy also held a commercial pilot licence, private licence, student pilot licence and radio telephone licence. The various licences are species of 'authorisations' under the Act. 5 On 29 April 2004, Mr Boatman was the pilot of a Cessna 172K aircraft, flying with a holder of a student pilot licence and two other passengers, one of whom was a fare-paying passenger who chose to fly in that plane. Ms Kennedy was the pilot of a Cessna 172RG aircraft, carrying two fare paying passengers and one other passenger. 6 Each aircraft took off along a public road, Browne Street, in Innamincka, South Australia, a very small and isolated settlement. The matter came to CASA's attention and CASA staff made preliminary enquiries. 7 On 13 May 2004 and pursuant to s 30DC(1) of the Act, CASA suspended the civil aviation authorisations held by the respondents. 8 As will be seen in more detail below, the legislation envisages a scheme which enables CASA to act in the perceived interests of safety, but allows quick and interim review by this Court. A case like this would often involve a decision by CASA to suspend an authorisation in circumstances where time has not permitted a proper investigation to occur, an application by CASA to the Federal Court within five days for adjudication of that suspension, and an early hearing of that application by the Court, taking into account the possibility that CASA may need more time for a full investigation. 9 However, this matter has followed a much more protracted course. Prior to the substantive issue being heard, the matter was twice before a Full Federal Court, first in relation to the validity of s 30DE of the Act, the validity of the section being upheld: Civil Aviation Safety Authority v Boatman [2004] FCAFC 165 (' CASA No 1 '); and secondly, in relation to confusion over consent orders that are not relevant to the present proceedings: Civil Aviation Safety Authority v Boatman [2004] FCAFC 336 ; (2004) 139 FCR 444 (' CASA No 2 '). Division 3A was inserted by the Civil Aviation Amendment Act 2003 (the 2003 Act). Subdivision B, which consists of ss 30DB to 30DD, is headed "Suspension for contravening the serious and imminent risk prohibition". (2) If the Federal Court is satisfied that there are reasonable grounds to believe that the holder has engaged in, is engaging in, or is likely to engage in, conduct that contravenes section 30DB, the Court must make an order that prohibits the holder from doing anything that is authorised by the authorisation but that, without the authorisation, would be unlawful. (3) In deciding under subsection (2), the Federal Court must have regard to section 3A and subsection 9A(1). (4) Subject to section 30DF, an order continues in force for the period determined by the Federal Court when making the order, being the period (not more than 40 days) that the Court considers reasonable to allow CASA to complete an investigation into the circumstances that gave rise to CASA's decision to suspend the authorisation. They include the function of conducting the safety regulation of civil air operations in Australian territory in accordance with the Act and the regulations. The first is that it purports to confer on the Court a power that is not judicial power. The second is that the provision does not assign jurisdiction to the Court in a "matter" for the purposes of s 39B(1A)(c) of the Judiciary Act or s 76 of the Constitution . CASA was the sole actor. These measures will help to ensure that justice is not only done but seen to be done by providing a range of options for CASA to vary, suspend or cancel aviation authorisations such as licences and air operators certificates. The automatic stay will enhance fairness by reducing the time an authorisation holder is grounded while awaiting a review of CASA's decision by the Administrative Appeals Tribunal. The bill introduces the concept of a Federal Court exclusion order, where there is a serious and imminent risk to air safety. Under the new enforcement regime, CASA will retain the power to immediately suspend an authorisation where there is a serious and imminent risk to safety, but it will be required to apply to the Federal Court within five days of its decision for the court to adjudicate the suspension. These new reforms address the perception in aviation circles that CASA is somehow judge, jury and executioner . In serious and imminent risk cases, CASA is empowered to impose a suspension that concludes at the end of the fifth business day after the holder is notified of the suspension: s 30DC. CASA is not required to give the holder notice before imposing the suspension. This short term suspension was not inappropriately described by the Solicitor-General as an interim disqualification, similar to that imposed by courts on applications for interim injunctions. If there is to be any extension of the interim suspension, it can only be done by the Court. Any such extension is analogous to the grant of an interlocutory injunction prior to the expiration of an interim injunction. This is known as the Civil Aviation Advisory Publication or CAAP 92-1(1). So far as relevant, it appears in the Appendix to these reasons. 16 It may be noted that, if the Court is satisfied that the grounds referred to in s 30DE(2) exist, then it must make a prohibition order under s 30DE(2): there is no discretion to decline to make such an order once the test is satisfied. Importantly, the provision does not require that the Court be satisfied that the respondents engaged in, or are likely to engage in, conduct that contravenes s 30DB; only that there be reasonable grounds to believe that the respondents engaged, or are likely to engage, in such conduct. 17 Determination of that issue involves three steps. First, consideration must be given to the meaning of 'reasonable grounds to believe'. Secondly, it is necessary to understand what is meant by 'serious and imminent risk to air safety'. Finally, those tests must be applied to the conduct of the respondents. It requires only that the Court be persuaded that, upon the evidence before it, there are grounds upon which a belief may be based that the respondent had engaged in such conduct (or is likely to engage in it). The presence of grounds to believe the contrary is not inconsistent with the presence of grounds that satisfy the test: R v Magdulski (1989) 40 A Crim R 154. Belief is an inclination of the mind towards assenting to, rather than rejecting, a proposition and the grounds which can reasonably induce that inclination of the mind may, depending on the circumstances, leave something to surmise or conjecture. The applicant further contended that the establishment of those grounds, though objective, contemplates a reasonable person in the position of CASA, as is apparent from the reference in s 30DE(3) to ss 3A and 9A(1). 22 As to what is involved in 'reasonable grounds for a belief', the passage cited from Rockett is obiter as to belief because that case concerned suspicion. In any case, the respondents said that the High Court really decided in Rockett that 'reasonable grounds for believing' '[r]equires the existence of facts sufficient to induce' an actual belief (at 112-3), so that, to discharge its legal onus, while the applicant does not need to prove on the balance of probabilities that the take-offs at Innamincka constituted a serious and imminent risk to air safety, it must nevertheless prove facts sufficient to induce a belief in that proposition. 23 The respondents nevertheless submitted that the facts necessary to induce the state of mind (reasonable grounds) must be established on the balance of probabilities. However, as soon as evidence is adduced that shows that on the balance of probabilities there was not a serious and imminent risk to air safety, then the evidentiary burden shifts back to the applicant. The respondents also submitted that the well-known principles in Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336 (' Briginshaw ') at 361-3 are applicable. Thus a reasonably sanguine view must be taken of the way in which reasonable people might differ in their approach to matters. So, even if the Court took the view that a serious and imminent risk to air safety were not affirmatively proven on the balance of probabilities, in my opinion the Court nevertheless should be cautious, if there be some evidence of relevant matters for concern, before concluding that there is no reasonable ground for belief. 25 I do not accept that the establishment of the reasonable grounds for the necessary belief necessarily contemplates a reasonable person in the position of CASA . The point of the requisite approach to the Court is clearly to enable the Court to decide on all the materials before it, whether, objectively, there are reasonable grounds for the requisite belief. The Court is to adjudicate that matter, not CASA. It is not a mere question of considering whether CASA's view was such that no reasonable person could hold it. The Court is to form its own view of what are reasonable grounds for belief. So, the question is: regardless of whether or not there was in fact a serious and imminent risk to air safety, are reasonable grounds shown to the Court's satisfaction to induce an actual belief that there was such a risk? 27 If the judge is moved by all the evidence to conclude that there was in fact such a risk, it will follow that there were reasonable grounds for that belief. If not, the judge must consider whether, nevertheless, there are, in the judge's opinion, reasonable grounds for so believing. 29 However, the phrase being composite in nature and having a particular context, the parties differed in their emphases, so that the overall meaning of 'serious and imminent risk to air safety' remains to be determined. The words are intended as a compound expression identifying qualitatively the nature of the risk --- serious and imminent. The elements which make up that compound expression cannot be separated and considered in isolation from one another. 31 The applicant correctly points out that the fact that a risk does not materialize into an incident does not deny the existence of the risk, nor its seriousness. The applicant says that it is the risk of exposure to the potential for harm that must be serious and imminent, not its materialisation. So it is the exposure that has to be serious and imminent, not the materialisation of the risk. This can be measured on a continuous scale, from 'conceivable' through 'possible' and 'likely' to 'certain'. (ii) The extent of exposure. Exposure refers to how often there is an exposure to the source of the risk, ranging from 'infrequent' through 'occasional' and 'frequent' to 'continuous'. (iii) The potential consequences. This refers to the magnitude of the potential consequences of the risk, which might range from 'insignificant' with little or no impact, through 'minor' requiring first aid treatment or minor loss or damage of property, through 'serious' involving serious injury, permanent disability, major property damage; 'disastrous' including fatalities and significant injuries and loss of assets; to 'catastrophic' involving numerous fatalities, significant loss of assets and major disruption to activities or capabilities. It is a question of degree: see Fleming v Hutchinson (1991) 66 ALJR 211 at 211 per Mason CJ, Brennan and Dawson JJ, albeit in a different context, where it was said by McGarvie J that 'elements of fact, degree and judgement are involved'. 34 Further, the applicant drew an analogy with Kennelly v Incitec Ltd [1998] FCA 1470 (' Kennelly '). In that case, Mr Kennelly was an experienced 'versatile operator' of an elevator used to transport fertilizer to the top of a tower approximately five storeys high. He was dismissed for conduct said to be such as to cause 'imminent and serious risk' to the 'safety, of a person' within the meaning of reg 30CA of the Workplace Relations Regulations 1989 (Cth). The central feature of the impugned conduct of Mr Kennelly was the removal of a 'danger tag' on the head roller of the elevator without ensuring by inspection that it was safe to commence the operation of the elevator. The failure to inspect the machine was a serious breach of Mr Kennelly's obligations in the operation of the systems dealing with safety in the workplace. Such visual inspection as he performed was wholly insufficient to discharge his responsibilities in the circumstances, and the fact that fortunately no person was injured or killed as a result of the operation of the elevator on that morning cannot affect the conclusion that the start up in the circumstances involved a serious risk of injury . It is clear on the evidence that Mr Kennelly exposed employees and maintenance workers to the chance of injury or loss in removing the danger tag and operating the elevator without performing the physical inspection of the head roller on the morning of 8 September 1997, and satisfying himself that it was safe to remove the danger tag and operate the elevator. There was the possibility that such persons might be working on, or in the vicinity of, the head roller, when Mr Kennelly removed the danger tag and commenced the operation of the head roller. Where that high probability is missing (as in the present case, on the respondents' submission), no matter how catastrophic the potential consequences, a risk cannot be characterized as a serious and imminent risk to air safety. 37 The respondents submitted that the meaning of the phrase 'serious and imminent risk to air safety' should be determined by reference to its context in Division 3A of the Act. Given the scope of reg 269 of the CAR (see para [11] above), Division 3A should be confined to the hopefully exceptional circumstance of serious and imminent risk to air safety. 38 The respondents submit that the notion of 'serious risk' has two limbs to it. 40 The respondents submitted that the case of the applicant focused on the magnitude of the potential consequences, and not on the probabilities of such consequences being realised. In the present case, the respondents cast no doubt upon the potential seriousness of the consequences, but said that there was only an 'outside' (to use a word discussed in argument) or remote chance that such consequences would materialize. Therefore there was not a 'serious risk'. 41 The respondents say that if there were a strong chance of some quite minor harm, that is not what the section is concerned with. Neither, if there were a miniscule chance of major harm, is such the concern of the section. All flying involves a degree of risk. A really significant chance of significant harm occurring is what the section contemplates. 43 It was not in dispute that all flying involves risks to life and limb and that no flying avoids all outside chances. This is a significant aspect of the context. The section cannot be concerned simply with the seriousness of the consequences if the risk of an accident should become an actuality. 44 The phrase 'a serious and imminent risk to air safety' is a difficult one to comprehend fully in relation to all possible circumstances in which it might fall for consideration. It is, to a degree, a composite phrase: it is not appropriate to see 'serious' as only referring to the risk of harm occurring. In the context, 'serious' means something like 'really significant'. However, if a licence holder had done something indicative of very poor regard for safety but the potential consequences were only very slight then it might be unfair to call that a serious and imminent risk to air safety. 45 I agree with the applicant that the level of a risk is a product of a number of factors which include the probability or likelihood of its occurring, the degree of exposure and the potential consequences. Nevertheless, in most cases attention will focus on the degree of likelihood that a risk to air safety would eventuate. At least that is, to my mind, true of the present case. There is no flying which avoids risks that are outside chances. 47 The underlying concern of the legislation seems to be: in the interests of air safety, is the conduct of the authorisation holder such as to warrant immediate, temporary withdrawal of the rights of the authorised person, even though that might, in some (but, of course, not all) cases, mean the destruction or significant impairment of the holder's livelihood? At least the statutory test has, in my opinion, to be viewed with that notion as part of the context. 48 However, the injunction in s 30DE(3) that the Court must have regard to s 3A and subs 9A(1) also modifies the Court's role: the question is less one of possible hardship to the authorisation holder, than of considering the seriousness of the risk, as justifying interim suspension. The justification and the question of seriousness are to be approached with the two criteria of placing particular emphasis on preventing situations threatening safety, and viewing safety as the most important consideration, primarily in mind. That said, the question, at least in a case such as the present, still comes down to the likelihood of the risk materialising. 49 The prospect that a risk will materialise does not, other things being equal, alter according to the classification of a flight as private or commercial, nor depending on the reasons or necessity for undertaking the manoeuvres which give rise to the risk. 50 It is also useful to note that the degree of likelihood of the risks eventuating is a different question from others not uncommonly asked in situations of risk. In themselves, breaches of lawful regulatory requirements, or of civil duties of care to third parties, are by no means decisive and may deflect attention from the proper inquiry. As counsel for the respondents submitted, such breaches, as well as matters such as ceasing to be a fit and proper person to hold the relevant authorisation/licence, conduct falling short of 'best practice', and some elevation of the level of risk, can exist without there being reason to believe that there has been a serious and imminent risk to air safety. It is, conversely, unnecessary that a serious and imminent risk should be attended by breach of express regulatory requirements, though such would be an unusual case. Further, the existence of regulatory requirements may provide evidence of the existence of a risk or its elevation if they are breached. 51 Reliance was placed by CASA on Stone J's observations in the Full Court decision of CASA No 1 . In assessing the conduct the Court is not in the position of having to formulate its own standards but may be guided by the detailed standards regulating air safety set out in the relevant regulations, Civil Aviation Publications and Civil Aviation Orders as well as other evidence before the Court. It determines this question with reference to the standards laid down by the Act and the regulations. CASA's right to interfere with the authorisation holder doing that which is permitted by the authorisation is conditioned by the Court's determination under s 30DE(2). No doubt mandatory standards laid down by delegated legislation may be evidence of the existence of risks. But the judgment as to grounds for belief in a 'serious and imminent risk' remains squarely with the Court on all the material before it. I do not understand her Honour to have been saying more than this in the context of her concern to demonstrate the correctness of her conclusion that the legislation does not require the Court to perform a non-judicial function. It would, in my view, be wrong necessarily to equate what might be termed a 'serious breach' of a regulation with the existence of a serious and imminent safety risk. 53 There is something of a panoply of powers, quite apart from those given to CASA by Div 3A of the Act, designed to deal with risks in relation to aircraft and air safety. It is clear enough, I think, that Div 3A was intended only for cases where a responsible attitude to air safety demands immediate action protective of the public (including, in some cases, the holder of the relevant authorisation). 54 Since it is air safety Div 3A of the Act is concerned with, this implies that inevitable risks and risks commonly accepted by competent pilots in Australian flying conditions are not within the purview of the statutory notion of a 'serious and imminent risk'; if that were not so, much accepted light civil aviation might be required to cease. 55 So far as the present case goes, the test is, in my opinion, given appropriate meaning by asking: was there a really significant prospect that such risks of serious considerable harm as actually existed, in relation to the conduct complained of, would materialise? It seems to me that there were such risks and that choices and actions of the pilots contributed to such risks. If there were, on all the evidence, reasonable grounds for believing that there was actually a significant chance that those risks would eventuate, then CASA would have made out its case. 56 In Kennelly a danger tag was attached to grain-elevating machinery having the capacity, if it malfunctioned, to threaten safety. The purpose of the tag was to indicate that a danger existed if the machinery were started before a competent person had indicated that it was safe to do so. A supervising employee removed the tag without ensuring by inspection that it was safe to put the equipment into operation. Thus, in the face of a clear indication that a dangerous situation might exist, a person responsible for making an inspection to see whether that dangerous situation did exist, failed to do so. His Honour's finding that this was conduct that caused 'imminent, and serious, risk' to safety commands respect. 57 That case is different from the present. In Kennelly there was no doubt that a dangerous situation existed. The worker did not take a readily available step to confirm or dispel the warning offered by the danger tag. Here, the question is whether there are reasonable grounds to believe that such elevation of the risks in taking-off as occurred was in the actual circumstances prevailing, 'serious' and whether, the steps taken to recognise and avert any such risks were sufficient to render the risks, in their context, less than 'serious'. As will appear, in my view, reasonable grounds do not exist to believe that the elevation of the risks given the steps taken by the experienced pilots in the interests of their own and their passengers' safety constituted a serious risk to air safety. Notwithstanding the seriousness (in the sense of significance) of the consequences, this circumstance would not necessarily be conduct that constitutes, contributes to or results in a serious and imminent risk to air safety, in respect of the landing aircraft. The relevant conduct is proceeding with the landing with an aircraft adjacent to the runway (a common occurrence). There is plainly a possibility that the parked aircraft will infringe the runway. But despite that remote possibility occurring, landing an aircraft in that circumstances does not constitute, contribute to or result in encountering a serious and imminent risk to air safety. It entails encountering a remote possibility, which against the odds, materialised. Despite the reliability of aircraft engines, they can and do fail. To undertake such a flight with a normally functioning well maintained engine, is acceptable and lawful conduct not caught by section 30DB, because to undertake such a flight is to encounter merely a remote risk to air safety, not a serious and imminent risk to air safety. This is so whether or not the engine actually fails over the water and the aircraft is forced to ditch with serious consequences. The proceedings are between parties in an adversarial context. Many procedural rules long worked out for inter-parties litigation are thereby attracted. For example, the Court is not free to inform itself in any manner it thinks fit but is, with quite narrow exceptions, confined to the material addressed by the parties. 61 Another instance is that, absent applications for adjournments and questions of costs (and other potential hardship for non-corporate parties), the Court is bound to see the proceedings conducted on the issues presented by the parties to each other in the pre-trial processes adopted for the purpose of defining the issues. Thus, there was some, apparently credible, initial material before CASA officers to suggest that Mr Boatman's student was actually controlling the plane in which they were. Later, Mr Boatman and the student denied this. The matter was then presented to the respondents in the preparatory phases of the litigation in a way that did not press the more alarming scenario. An attempt was made on CASA's behalf to revive that version at the hearing but, on familiar grounds of the kind indicated as appropriate for adversarial litigation, I upheld the respondent's objection to that course. 62 As to the ease with which the Court should be satisfied of matters adverse to them, the respondents submitted that, given the seriousness of the consequences for their reputation and livelihood of adverse findings, the evidentiary principles in Briginshaw at 361-3 are applicable. I disagree. The proceedings are primarily protective of the public, notwithstanding that fairness to impugned authorisation holders is an important part of the process. Further, any adverse finding that the Court might make is provisional only: it would merely assert that there are reasonable grounds for believing that some conduct had been in contravention of the statutory requirement. It would be inconsistent with the statutory commands to the Court to consider 'reasonable grounds to believe' and to give safety the primary emphasis to require that the Court only act on proofs which are not 'inexact', testimony which is not 'indefinite' and inferences which are not 'indirect' (see Briginshaw at 362). He had over 12 000 hours of flying experience, mostly in light single-engine aircraft such as Cessnas, accumulated over a period of 40-odd years. He had been to Innamincka and other like remote places before. He had many years, and thousands of hours of experience in instructing trainee pilots and licensed pilots in advanced safe handling techniques. For 14 years he had conducted an advanced safe handling course, training pilots in relation to using airstrips with difficult approaches, upslopes, downslopes and undulations, including landings and take-offs on curved strips, and using strips narrower than the road at Innamincka. He had, among other things, at the request of a Papua New Guinea commercial airline operator, trained some 50 pilots for operations in the notoriously difficult airstrips and conditions there. 64 Mr Boatman had also trained Ms Kennedy in such specialised techniques including take-offs and landings into strips much more difficult, in Mr Boatman's opinion, than would be the road at Innamincka. Ms Kennedy had some four years' flying experience, including 'reasonable experience flying in the outback and in respect of operations from unmade surfaces and marginal areas'. The trip was intended to be a three-day charter flight from Tuesday 27 to Thursday 29 April 2004 inclusive. The intention was to have the paying passengers fly in the plane piloted by Ms Kennedy and to have some other private passengers in the aircraft piloted by Mr Boatman. One of those was a student pilot, Mr Barber, whom Mr Boatman had been training. So far as Mr Barber was concerned, the trip was in part aimed at extending his skills in outback map-reading. 66 The two aircraft arrived without incident in Innamincka, as planned, in the afternoon of 27 April 2004. The party stayed overnight at the hotel there, anticipating a departure the following morning. However, the next morning it rained sufficiently to prevent the use of the small purpose-built airstrip on the settlement's outskirts. 67 The respondents examined that airstrip and computer weather forecasts available. They decided that the strip (and another nearby, privately-owned, made strip) would be unserviceable for that day, 28 April 2004, on account of the weather. Further heavy rain fell throughout that day and into the evening. Later that day, Mr Boatman and Ms Kennedy then considered using the gravel roadway known as Browne Street, as a place from which to take-off. 68 Browne Street runs approximately east-west. Its eastern end terminates at, or near, the town airstrip. Its western end terminates to the west of the hotel complex which appears to be the most significant built structure in the settlement. Browne Street was a formed, unsealed road with a significant degree of camber. It was flanked at various distances from its centreline and made surface, by posts, including steel posts. The roadway was formed with gravel and was not wide. The formed surface was between 10 and 15 metres wide, probably closer, mostly, to 10 metres. There were rough verges --- pitted, likely soft, furrowed with small ditches, and with some rocks on the surface. A light plane would likely have been in trouble if it hit one of those steel posts, or if any of its wheels had run off the made roadway. Travelling westwards along Browne Street it, it has a long curve to the right, over which it changes its course by about 47 degrees. It also contains a slope which leads down to the west from a blind crest. The slope has a 6 degree gradient. A downward slope shortens the distance required for take-off. 69 The wingspan of each plane was about 11 metres. The under-wing height was about 1.8 metres. 70 Surprisingly but convincingly, all the evidence was that it is very rare for a pilot to be blown significantly off-course during the ground run of a take-off. (The weather conditions at the times of the take-offs the next day were of no real concern. They measured its width with the odometer of a borrowed vehicle. They actively considered possible obstacles, intersecting roads, and appropriate points to commence taxi-ing, 'ground runs' (at speed for take-off), and take-off. They considered how to cope with an engine failure while taking-off. 72 They considered that, subject to wind direction, with the temporary removal of some obstacles, the road could safely be used for take-off in a westerly direction but, as there was no head-wind (westerly) component to the wind prevailing on 28 April 2004, it would not be appropriate to take-off on that day. 73 The following morning was fine with a south-westerly breeze which would provide a good headwind component for a westwards take-off. (A headwind assists an aircraft to become airborne. ) The two pilots inspected the town airstrip and considered it was still unusable. Mr Boatman's view, which Ms Kennedy accepted, was that it would remain unserviceable for some considerable time. 74 The pilots again inspected the Browne Street roadway. They again considered it safe to take-off from the road. 75 Mr Boatman seemed to have been under the impression that he would need permission to do so from the resident officer of the South Australian government department which administers 'national parks' --- Innamincka being in the vicinity of one. Mr Agnew was such an officer. Mr Boatman approached Mr Agnew and acquainted him with his intention to use the road for the take-offs of two aircraft. Mr Agnew indicated he had no power to permit or forbid the proposed use of the road. He conveyed to Mr Boatman the fact that he too was a qualified commercial pilot. Mr Boatman gave Mr Agnew the impression that he was intending the road take-off as a 'mercy flight' necessary for the well-being of an elderly female passenger. There is no suggestion that Mr Agnew expressed surprise at the proposed use of the road, far less counselled against it. Mr Agnew referred Mr Boatman to another Innamincka resident, Mr Osborne, to obtain permission so that Mr Boatman could take down the fence at the airstrip to enable the two planes, which were parked at the airstrip, to be moved out onto the road. Mr Osborne is a retired man who helps to look after the Innamincka airstrip as a community service. He is known locally as the 'controller' of that aerodrome. He had no flying qualifications. Mr Agnew later watched the take-offs from just outside Mr Osborne's house. 76 Mr Boatman then spoke to Mr Osborne at the latter's home on the south side of Browne Street, west of the airstrip and not far east of the crest in the road. Neither man formed a favourable impression of the other. Each has a forceful and self-confident manner. Mr Osborne indicated that he wished to seek advice, by telephone, from a qualified 'consultant' who apparently had some responsibility for the airstrip. Mr Boatman again suggested that he had an emergency situation with an elderly female passenger and he raised the concept of a mercy flight. Mr Osborne suggested that the lady concerned could be evacuated by a resource company's helicopter which was coming to take a rig worker to the nearby Moomba gas and oil field. Mr Boatman left without comment and returned a short time later. Mr Osborne then told him that it was illegal to take the fence down unless it was an emergency. Mr Osborne had the impression that Mr Boatman told him he had 'declared' a mercy flight. Mr Osborne did not ultimately either expressly give or refuse permission to take down and replace the fence. 77 Mr Boatman decided to take the fence down and put in hand the requisite arrangements for this. 78 It is clear that Mr Osborne thereafter considered Mr Boatman to have been rude and overbearing, and to have engaged in a subterfuge about the welfare of the elderly passenger. Mr Osborne's recollection of what transpired between the two men was more reliable than that of Mr Boatman, but it was not perfect. Mr Osborne was offended and irritated. Mr Boatman regarded him as officious. Mr Osborne's subsequent perceptions of the actual take-offs were, in my opinion, coloured by what had become his marked disapproval of Mr Boatman. 79 It is clear that there was no emergency impelling the respondents to take-off when they did. The need to leave Innamincka at that time did not rise higher than the convenience of their passengers and themselves and, perhaps, commercial considerations. CASA submitted that Mr Boatman's spurious introduction of the 'mercy flight' issue indicated an arrogant attitude on his part, and it was said that '[s]uch an attitude relevantly informs the seriousness of the risk that Mr Boatman was prepared to accept'. In my view, unless an attitude produces conduct of the proscribed type it is simply irrelevant to the present question. It is conceivable that a pilot's attitude to relevant matters might touch on his/her fitness to hold a licence. But that is a different enquiry entirely. Mr Boatman's 'attitude' may have conditioned his decision to use the road as an airstrip. The question is whether thereby a serious and imminent risk to air safety was occasioned. 80 More fundamentally, the reason --- even an altruistic and life-saving one --- for a flight does not affect whether it is attended by a serious and imminent risk to air safety. If a brave pilot takes serious and imminent risks for his/her own life and substitutes such risks in place even of a certainty of death for passengers, say from a bushfire, there will still have been proscribed conduct under the Act, although CASA might well, of course, opt to take no action in such a case. The converse is also true. Even though there was nothing approaching a necessity for the respondents to take-off when they did, the question still remains: given that there was some degree of elevation of the risks, how considerable was the overall risk? In other words, how likely was it, as a matter of reasonable grounds for belief, that any of the elevated risks might have materialised? 81 Mr Boatman had arranged on the previous evening, and again arranged on the morning in question, for people staying at the hotel to keep vehicles and people off the roadway. Mr Osborne's assessment was that, in any case, Innamincka was at that time isolated, the rain having made the roads into the village impassable. Ms Kennedy took-off first. As her aircraft approached Mr Osborne's house from the east, he decided to cross the road. He thought the aircraft was merely taxi-ing, but Ms Kennedy then had the aircraft under full power. Mr Osborne said he 'had to run to get out of the way' but I think that is an exaggeration of the matter. He may well have had a fright, but, provided he kept moving, there was no chance in reality of a collision between him and the aircraft. Ms Kennedy was surprised and shocked to see him, but judged that there was no real chance of a collision with him, since she was sufficiently far away that, by the time her plane would reach the point of Mr Osborne's crossing, he would be well out of the way. Mr Agnew who was nearby did not see fit to volunteer to CASA any concern about Mr Osborne's position. 83 Mr Osborne said that he was told by a 'National Parks representative' that the aircraft would taxi down the road for warm-up before starting their take-off runs: he was not expecting the plane he heard to make its take-off run at that point. 84 The incident shows that there was some risk, despite the efforts made by Mr Boatman to have people kept off the road at crucial times, that the arrangements made would not prove adequate. People do sometimes misunderstand things. However, the intended take-offs were a singular event in a tiny and isolated settlement. The people there, outback dwellers and travellers, were likely to have at least ordinary levels of commonsense, self-protective skills and faculties. The chance that the arrangements would fail, though real, remained an outside chance. It is not reasonable, in my view, to regard it as amounting to a serious and imminent risk to air safety. The likelihood that the arrangements would fail cannot be regarded as increased because, so far as Mr Osborne was concerned, they did fail. Before Mr Osborne crossed the road, the only reasonable assessment would have been that he would be one of the least likely people to do that, given his general sense of civic responsibility. Ms Kennedy had embarked on her take-off run before Mr Osborne moved onto the road. The position would be different if he had been on the road, say with his back to her, and she had decided nevertheless to accelerate, knowing that he was there. 85 Mr Boatman had told Ms Kennedy that he had informed Mr Osborne of their intention to use the road for the take-offs and that they had organised people to block access to the roadway. It is likely that the lack of harmony between Mr Boatman and Mr Osborne had also been communicated to her. She thought Mr Osborne had gratuitously and deliberately sought to be on the roadway as she approached. 86 There was, in my view, nothing more than an outside chance that, in fact, anyone would move onto the roadway or, once on it, would stay there, in a position of any danger from either aircraft. The take-offs were unusual and it is likely that everyone in Innamincka well knew that they were about to occur. Ms Kennedy and Mr Boatman would, in my opinion, have believed that any such chance was a remote one, even though in fact it eventuated. In my view, that belief was the only reasonable one. 87 Ms Kennedy's take-off proceeded without further incident. She became airborne some distance into the curved section of the road. CASA raised concerns about a curving take-off run. There is no evidence that there was any significant centrifugal force on the aircraft as she rounded the curve, and no evidence that such force was sufficient, or even close to sufficient, to cause the plane's wheels to slip sideways during the run towards the point of lift-off. The uncontradicted expert evidence of Mr MacGillivray (who, I foreshadow, was in general an impressive witness) was that such a slip would considerably precede the manifestation of any lack of structural capacity of the aircraft to withstand such centrifugal force. In other words, the concern from the viewpoint of possible serious risk, was unfounded. 88 The respondents' evidence comfortably established that take-offs around a curve are not uncommonly made in bush flying. Mr Boatman had, as indicated, trained Ms Kennedy and many other pilots in appropriate techniques for this. While it is true that Ms Kennedy had not executed such a manoeuvre with a planeload of passengers before, in the circumstances there was, in my opinion, no appreciable risk of mishap from the fact that Ms Kennedy traversed the curve in this road on that day. 89 The chance of a mishap was not significantly enlarged by the fact that there were passengers in the plane. There was little chance of any competent pilot, let alone one of Ms Kennedy's training and experience, which included frequent use of much narrower, informal bush strips, in paddocks for instance, being blown sideways so as to create any real risk of a collision with the posts. 90 Originally, the other CASA criticism of her take-off was that Ms Kennedy had taken-off along the road although there was a blind crest at a point in the curved section of the road. On examination of the objective evidence (photographs and video footage), it appears that Ms Kennedy was off the road before that crest. In any case, the only real risk would have been of a vehicle or person approaching from the opposite direction. On that day, at that location, having regard to the roads being impassable in the wet conditions and the steps taken by the respondents to keep people and vehicles off the roadways, there was scant chance that any such vehicle or person would approach. 91 Mr Agnew, the only trained pilot known to have observed the take-offs, saw nothing amiss about the 'profile' (that is, the apparent path described by the aircraft as viewed at right angles to it) of Ms Kennedy's take-off. As indicated, the statement and other material he produced at CASA's request does not suggest any concern about a possible collision with Mr Osborne. He observed matters from the front of the Osborne residence close to where Mr Osborne must have crossed the road. 92 Even taken together, in my view, the features of Ms Kennedy's take-off which attracted CASA's attention could not, in the light of all the evidence before me, reasonably be regarded as giving rise to any significant risk to air safety. His plan had been to take-off where Ms Kennedy had but, when he heard about the apparent obstructor, he decided to taxi past Mr Osborne's house, to the top of the downslope before applying full power for his ground run. He became airborne about 100 metres past the house. 94 It is to be noted that Mr Boatman changed his take-off plan in the intended interests of safety --- he did not want to be at-speed near where the pedestrian had crossed the road. He evidently judged that any risks inherent in so doing --- arising from a shorter distance to the trees, the narrow distance between the posts at one point, being on or low to the ground in an area where some relative aggregation of roadside onlookers might have been expected --- were less significant than being near a pedestrian who, he had been told, had actually exhibited irresponsibility. There is no reasonable basis for believing that his judgment in changing the plan was so awry that, of itself, the change contributed to a serious and imminent risk. The risks consequent upon the new plan are elsewhere evaluated. 95 Mr Agnew observed that the second aircraft approached more slowly and deemed it not to be at full power as it reached the crest. That accords with Mr Boatman's account. Mr Agnew then lost sight of the aircraft for a short time. He moved out onto the road and saw the aircraft again just before it reached the intersection with Mitchell Street. From where I was standing, I feared that the angle of climb and the speed of the aircraft at the time may lead to a stall. I made a comment to people standing nearby about my concerns. Once airborne the aircraft climbed steeply at relatively slow speed to clear the trees and then banked and levelled off'. Mr Boatman says he adopted the steepest of a number of orthodox and safe angles of climb. He denies that his speed was low. 97 In the light of CASA's case, I interpolate that it is significant that Mr Agnew did not mention any concern over proximity of the wingtips of Mr Boatman's plane to any of the posts at or near the Mitchell Street intersection. (a) Did Mr Boatman lose control of the plane? The respondents and their experts do not appear to have perceived that CASA might even have had any concern on this score until Mr South spelled it out. That does not betoken any disregard for matters that might affect safety, but a perception based on experience that, whatever other risk may have been involved, involuntary movement off-course was not one. There is no suggestion that such puffs of wind, including a cross-wind component, as might in reality have occurred during the ground run at the time of the take-offs, were in that category. It would therefore have been an easy matter for a pilot of Mr Boatman's experience to avoid involuntarily moving sideways off-course. That consideration is relevant to an issue that was the subject of some dispute. Mr Boatman gave evidence that he deliberately 'cut the corner' around the bend and moved from the centre of the roadway some moderate distance to his right, without any loss of control. It is true that he did not give that account in his pre-trial affidavits. Nevertheless, it is very unlikely that he would have lost control of the plane at that point, and in my view, it is not a reasonable surmise that he did so. I accept his evidence on that matter. 99 Mr Boatman's account is that he applied full power as the aircraft came onto the downslope of the road and the plane became airborne well before Mitchell Street. There was at that point a slight crosswind gust. The nose was lowered to gain speed and the aircraft settled briefly to touch down lightly in the middle of the road, then commenced to climb away. I held the nose down to gain takeoff safety speed of 70 kts before climbing away. The 13 steel [posts] posed no problem as they were well away from the centreline of this strip. The road signs at the intersection posed no problem as we were well above those and flying under perfect control in perfect weather conditions at this stage. I always teach all of my students to lower the aircraft nose after takeoff and accelerate to take off safety speed before entering the climb. This is far safer as the aircraft has plenty of inertia to handle a severe windshear or downdraft. I regularly find pilots whilst conducting my advanced safe handling course dragging the aircraft off ground at 50 kts and straight into a climb. 101 I accept that Mr Boatman's account is the more accurate if, on a proper understanding, Mr Agnew's and his version differ: the wind was from the southwest; the lateral component of a puff would therefore have tended to push the plane to the pilot's (and Mr Agnew's) right. Mr Osborne saw the plane move to its right and then 'back to the middle of the road'. Mr Agnew, it seems, saw the movement of the plane to the left as part of its response to Mr Boatman's deliberate corrective yaw of the plane. Such a corrective yaw is itself apparently an orthodox manoeuvre. It flew over them in fact. However, there was likely additional clearance: the made surface of the road was likely higher than the shoulder. Although the road sloped up to the centre by some imprecisely measured degree from ground level at the respective base of each post, that camber may have reduced such clearance, but equally, depending on the actual heights of the points of the roadway in contact with the wheels, may not have done so. It seems from measurements made by Mr Pilchiewicz, a CASA aerodrome inspector, that for most of its relevant length the road was cambered with slopes measuring 7.5 to 10 percent. 103 Doing my best with the evidence, I think that the aircraft probably cleared the post in question by about 1.5 metres (5 feet). Given the light winds prevailing, there is no evidence to suggest that there was a real risk either that Mr Boatman could not clear it as he intended to do, or of a wind gust sufficient to tilt the plane by the considerable degree necessary to force the wing tip into contact with the post. It seems clear from the objective material that Mr Boatman flew over one of the posts at the narrow point emphasised by counsel for CASA, not through the gap between them. He told Mr Barber, as they were flying low along the road that: 'our helpers [presumably with traffic control] want to get some photos'. I do not accept Mr Boatman's denial. 105 Counsel for CASA made the point that, had the angle of the wing of Mr Boatman's aircraft 'deflected (with a rolling moment about the longitudinal axis) the wing would not have cleared' a low post it passed over. Mr Boatman was a pilot of very great and highly relevant experience, old and experienced enough not to believe in his own immortality even if, as CASA would have it, he had a degree of arrogance, was not above embroidering the truth to get his own way, and was in a hurry to get moving. He had a plane load of passengers, one of whom had paid a commercial fare. If the plane were at any serious risk of striking objects such as steel posts with a diameter of, say, 60 mm firmly embedded in the ground, it was obvious that serious injury would likely befall himself and his passengers. Objectively, he had special motivation to be taking great care in the interests of safety as he perceived it. It is shown beyond doubt that Mr Boatman inspected the area, gauged its measurements and decided which, if any, posts presented a serious risk. In the result, he had one post removed. It is clear that, after close inspection, he must have judged that the chance that there would be an uncontrolled and uncontrollable dip of the wing forced upon him sufficient to strike one of the remaining posts at the narrowest point along the road, was remote. It seems to me too that that chance was, as I have explained, remote. There is, in my view, no reasonable ground for thinking that, in this respect, Mr Boatman's judgment was at fault. He had the requisite experience, knowledge of the actually prevailing circumstances as to weather, wing height, the capacities and limitations of the aircraft and his own capacities and limitations, and the utmost motivation to make that judgment correctly. 106 It must be accepted that there was some elevation of the risk of an accident in the course he chose. But I am unpersuaded that there is reasonable ground, despite resort to surmise, to believe that there was any really significant risk of an accident actually occurring. 107 There was a degree of unorthodoxy in Mr Boatman's holding the plane down but, for reasons explained by Mr MacGillivray and Mr Boatman, any added degree of risk was not actually significant. The plane's momentum contained energy that was convertible by the pilot into a number of evasive manoeuvres that might have been taken if any emergency presented itself. In short, the horizontal speed of the aircraft could be converted into gaining height. 108 The reasons for the manoeuvre do not inform the level of risk it entailed. He had been treated rudely by Mr Boatman; he regarded Mr Boatman as having been duplicitous and reckless in the matter of a 'mercy flight'. In my opinion, he formed a consequent view that Mr Boatman was a rule-breaker and a menace. He was predisposed to see and to find dangers in what occurred in relation to the take-offs. He was no expert and no expert observer. His good faith is, however, beyond doubt. Mr Boatman dealt with Mr Osborne in such a way as not to induce respect or confidence. 110 While it is not a matter of great weight, no occupant of either aircraft has expressed any concern for his or her safety. Ms Sheldon, a passenger in Ms Kennedy's aircraft, aged 69, saw Mr Osborne 'on the right hand side of the aircraft walking (not, I interpolate, running) away from us' very soon after Ms Kennedy marked his presence by swearing. Despite saying that she felt that 'the actions of this man were extremely dangerous', Ms Sheldon said she 'did not feel at risk at all' in relation to the take-off or flight. She apparently had no prior connection with Mr Boatman or Ms Kennedy. 111 Mr Giblin, a passenger, in the aircraft piloted by Mr Boatman who was a friend of his, was apparently undisturbed by the take-off. He merely noticed that the climb was 'a little steeper' --- presumably meaning a little steeper than normal. He did not think that anything was wrong. 112 Mr Atkinson, another witness present at Innamincka, confirmed that his vehicular access into the 'town' had been blocked on account of the then impending take-offs. He was on the south side of Browne Street. The left hand wing narrowly missed a sign post on the southern side of Browne Street on the intersection. There are a number of sign posts around this intersection. I saw it become airborne and then seemed to settle down before I lost sight of it behind the dongas. The next thing, I saw the aircraft as it climbed steeply above the Cooper Creek area beyond the T intersection at West Terrace. It banked to the north and continued the turn to head in an easterly direction. Mr Atkinson did not give evidence and Mr Boatman was not cross-examined about it. It may be that Mr Atkinson saw the aircraft as it concluded rounding the curve, still in the centre of the road but facing in a generally south-western direction. It may also be that Mr Atkinson's recollection confuses the order of events and that he saw the aircraft in its yawed position, apparently, but not actually, flying towards him. Mr Atkinson was not tested and CASA placed no real reliance on his statement before me. So far as I can tell from all the material, there is no reasonable ground for belief that Mr Atkinson's fears were at all well-founded. 114 Ms Nicholls, an Innamincka resident, who was some distance to the north from Browne Street, saw the second aircraft 'veer from the crown of the road. I further saw the wheel closest to myself travel off the shoulder of the road for a short distance'. With the exception of the suggestion that the wheel travelled past the shoulder of the road to its right --- which would have involved a very considerable deviation --- her statement largely supports Mr Boatman's account of matters. She did not give evidence before me but I think it very unlikely that the wheel did travel 'off the shoulder' of the road, if by 'shoulder' Ms Nicholls meant what is usually meant by that term. The aircraft then moved back towards the middle. Again, the statement was untested in evidence before me. Mr South holds a number of pilot licences and has impressive experience, including approximately 4 000 hours flying time in various aircraft, and qualifications in safety auditing and investigation. ensure that the width and the dimensions of the approach and take-off areas at both ends shall not be less, and the approach and take-off climb gradients at both ends shall not be steeper, than depicted in the current issue of CAAP 92-1. (Mr Boatman had removed a tall road sign he considered hazardous. His plane's wingspan was 10.97 metres. 120 Mr South was in the unenviable position of trying to assess the take-offs against the then new criteria of a 'serious and imminent risk to air safety', without the benefit of any full judicial exegesis of that term. It seems fair to say, from the whole of Mr South's evidence, that, in his view, whereas both respondents took risks elevated beyond 'normal' and recommended levels, he was unable confidently to assert a view that the conduct of either of them constituted a serious and imminent risk to air safety. Mr South was an honest and fair witness but, to the extent that there was conflict between them, the evidence of Mr MacGillivray was, in my opinion, decisively more cogent. He had more relevant experience and, in some important respects, knowledge. 121 Some matters which were of relevant concern to CASA in the light of Mr South's evidence seem to have rather evaporated, it is fair to say, in the light of Mr MacGillivray's unanswered evidence. 'Stop-start distances' are an instance: it appears that there are many licensed aerodromes where there is enough distance available to take-off but not enough to stop again should there be some emergency. The key question, it appears, is whether, one way or another, including by take-off and landing elsewhere, the danger might be averted. Mr Boatman, who knew the Innamincka area, made the point without contradiction that there was ample room to land to the north and south of the roadway and the adjacent miniscule 'township' areas. He had had over 10 000 hours of flying experience including considerable experience in outback operations and operations out of bush airstrips. 123 In his view, CAAP 92-1(1) being merely advisory, CAR reg 92(1)(d) left the determination of what is an acceptable aeroplane landing area to the judgment of the pilot in command, after due consideration of all prevailing circumstances. taxi-ing and then, with the plane in motion, powering up for the 'ground run'), both pilots had enough take-off distance. 125 Furthermore, light single-engine aircraft, the (air) stall speed, well exceeded by both pilots, justified the view that planning to rely on an 'off airport' emergency landing, if necessary, was an acceptable risk. There was no need for the planes to be able to come to a stop in the runway distance available. 126 At Innamincka there was clear ground to the west of the trees at the very end of Browne Street that could enable a forced landing straight ahead. Such a situation is common at Australian airports. 127 Experience shows that ordinary, responsible people can be relied on, if briefed, to keep a runway area clear of crowds. 128 As to the flight manuals, there was at the time, for reasons of transition in legislative requirements, no legislatively required Flight Manual for the plane flown by Mr Boatman. Likewise, the legislatively required Flight Manual for Ms Kennedy's plane had to do with design elements rather than such matters as landing areas. 129 Mr MacGillivray considered that, given their aircraft, the weights they were carrying and the conditions of the day, each respondent 'demonstrated a level of skill and judgement as would be expected of commercial pilots exercising the privilege of their licences'. He considered that their conduct had not contributed or resulted in a serious and imminent risk to air safety. 130 As a CASA delegate authorised to redesign certain aspects of aeroplanes, he had no concern about the side load on the aircraft in relation to rounding the curve in Browne Street. Taking-off around a curve is commonly done. 131 Mr Boatman's take-off, using the 'best angle of climb', a recognised concept, allowed a safe margin above stall speed. 132 In his view any pilot experienced in operating from bush strips could safely take-off from the Innamincka road in question. 135 His evidence was also helpful to the respondents, and largely confirmatory of that of Mr MacGillivray. However, I thought he was less objective than Mr MacGillivray and somewhat over inclined to adopt suggestions helpful to the respondents. In my view it is sounder to rely on Mr MacGillivray's evidence. The misunderstanding was that CASA was more concerned with the trees at the Western end of Browne Street and with the proximity of buildings to the sides of it, and with the curve in the street, than with other things. The respondents showed that, not infrequently, Australian airstrips have landscape and other features that might present comparable degrees of difficulty if an emergency landing should be necessary. Take-offs from curved strips are, it seems, not uncommon in bush flying of light aircraft. 137 But CASA was concerned also with other matters --- the steel posts; the narrowness of the road between them (especially at one point); the prospect that people might move onto the road; the blind crest, and so on. CASA was also concerned with the accumulation of the risks inherent in such allegedly hazardous circumstances or the risks that might be comparable with other, well-accepted airstrips. Such other matters and such accumulation did, as I have indicated, elevate the overall levels of risks in the take-offs. However, in the actual circumstances and given the training and experience of the two pilots concerned and the precautions they took and arranged, there are not reasonable grounds for considering that the resultant level of risk to air safety was 'serious and imminent'. The operator must ensure that the operations manual contains such information, procedures and instructions with respect to the flight operations of all types of aircraft operated by the operator as are necessary to ensure the safe conduct of the flight operations (other than information, procedures or instructions that are set out in other documents required to be carried in the aircraft in pursuance of these Regulations). ensure that the width and dimensions of the approach and takeoff areas at both ends shall not be less, and the approach and takeoff climb gradients at both ends shall not be steeper, than depicted in the current issue of CAAP 92-1. Mr MacGillivray did not understand that to be the case. 142 Stawell Aviation's Operations Manual seems to be concerned with the width and dimensions of the 'approach and take-off area[s]'. I understand these to be the areas before and beyond the ends of the runway strip. The requirement is that in the rhomboidal area shown in Figure 2A, the parallel sides of which are 900 metres apart and which have lengths respectively of 30 metres and 150 metres, there shall be no objects above the ground with which an aircraft, taking off on a gradient rising 5 metres in 100 metres, could collide. It is likely that the area at the western end of roadway did not comply with this standard. However that must be seen in light of aviation practice in Australia. There was undisputed evidence that a number of formally established, and often used, aerodromes do not have the clear areas and ground surfaces envisaged by CAAP 92. 143 An earlier version of the Manual was written by Mr MacGillivray for Stawell Aviation. Whether, in the context of such aviation practice, it was even subjectively intended to be read as, absent that context, its objective terms might suggest, is a matter of some doubt. 144 In any event, at worst, non-compliance with the Manual might indicate a regulatory breach of some relevance to the question at issue in this case, but which needs assessment in the light of all of the material. In my view, taken alone or in concert with other matters, it provides no reasonable ground for belief that there was a 'serious and imminent' risk to air safety. Much, however, remains in the eye of the beholder. The response by Mr Osborne caught on the videotape was, objectively, exaggerated. He also executed some low level passes and flew 'in ground effect' (that is, very low) for some distance. I did not find the events at Ballarat helpful as background to the events at Innamincka. They did not show that Mr Boatman had knowingly taken a serious risk on another occasion. While flying with a student pilot during a low flying exercise, in a rural area, the aircraft hit overhead power lines and crashed. Both Mr Boatman and the other pilot were seriously injured. Power lines present problems of visibility for pilots of light aircraft. Mr Boatman knew the area and mistakenly believed that there were no power lines where he was flying. He has not accepted any responsibility for that incident, but instead holds a self-perception not only of the unassailability of his own flying skills and abilities but also as to the rectitude of his own beliefs (in never having a lapse). Though not conduct which is specified in the suspension notice, it is illustrative of Mr Boatman's attitude and approach to matters of safety. It is an attitude and approach that is inimical to air safety, influencing, as it undoubtedly did, Mr Boatman's belief that his take off at Innamincka was completely without risk. Moreover, there is no satisfactory basis for attributing to Mr Boatman any belief that his take-off at Innamincka was 'completely without risk'. Mr Boatman put effort and thought into an assessment of what the risks were and how they might be managed. He had the view that his take-off was without readily manageable risk given his capacities. No basis has been shown, despite possible regulatory breaches and some elevation of the risks, and the unorthodoxy of taking-off along a roadway, for viewing that assessment as wrong. Such flights are not however, under the instructions governing them, to be undertaken when, among other things, 'the crew and other occupants of the aircraft involved will be exposed to undue hazard'. This seems to underline that, in the Australian flying context, the seriousness of a risk ought not be regarded as affected by the reason the risk is undertaken or encountered. Whether Mr Boatman committed any regulatory breach by asserting the possibility of a mercy flight when none existed is not a matter before me. 154 The respondents seek such costs. They also submit that all costs should be ordered to be paid on a solicitor-client basis. 155 It is by no means clear to me that there is any substantial amount of costs unaccounted for by the costs orders made by the Full Court. If there is, I see no adequate reason why the usual rule should not also apply to such costs. That view is reinforced by the consideration that a short and minor issue, the first respondent's medical condition, was to no ultimate point raised by the applicant. 156 On the other hand, no adequate basis is shown for awarding costs on other than the usual party and party basis. CASA's case was fairly arguable, notwithstanding the choice (probably a considered one) by its expert Mr South not to express his own view on the ultimate issue for the Court. There was material from which a respectable argument could be and was put by CASA, notwithstanding that I have rejected it. 157 Further, CASA and Mr South put forward their positions in good faith in intended pursuit of the public interest. In a protective context, the Court should not be too quick to discourage public authorities from acting, even though the outcome might be uncertain. The period in which any notice of appeal may be filed is extended until 19 May 2006, being 21 days from the date of publication for the reasons for judgment herein. 2. The applicant is to pay the respondents' costs including any costs incurred before 24 December 2004 which are not the subject of previous final orders of the Court, to be agreed or assessed. There is no legal requirement to observe the details set out in this publication. The Civil Aviation Regulations set out the legal requirements that must be complied with in relation to the subject matter of this publication. There may be a number of ways of ensuring that the requirements of the Civil Aviation Regulations are met. This publication sets out methods that may be used and which experience has shown should, in the majority of cases, ensure compliance with the Regulations. These matters are the responsibility of the pilot in command and, in some circumstances, are shared with the aircraft operator. These guidelines set out factors that may be used to determine the suitability of a place for the landing and taking-off of aeroplanes. For other than agricultural operations, a minimum width of 15 metres is recommended although aeroplanes with a MTOW below 2000kg can be operated safely on runways as narrow as 10 metres provided there is no or only light cross-wind. For agricultural operations, a 10 metre wide runway is the recommended minimum. 5.2 Runway Length . For other than agricultural operations by day, a runway length equal to or greater than that specified in the aeroplane's flight manual or approved performance charts or certificate of airworthiness, for the prevailing conditions is required (increasing the length by an additional 15% is recommended when unfactored data is used). For agricultural day operations, the minimum runway length is the greater of 75% of the take-off distance specified in the aeroplane's flight manual or approved performance chart for the prevailing conditions with the balance as clearway or the landing distance so specified. 5.3 Longitudinal Slope . The longitudinal slope between the runway ends should not exceed 2%, except that 2.86% is acceptable on part of the runway so long as the change of slope is gradual. For agricultural operations, the slope should not exceed 12.5% for day and 2% for night operations: where the overall slope exceeds 2% the runway should only be used for one-way operations -- downhill for take-off and uphill for landing. 5.4 Transverse Slope . The transverse slope between the extreme edges of the runway strip should not exceed 2.5% or 12.5% upward slope over the fly-over area. For agricultural day operations, the transverse slope should not be more than 3% over the runway and 5% over the runway strip. 5.5 Other Physical Characteristics . Both ends of a runway, not intended solely for agricultural operations, should have approach and take-off areas clear of objects above a 5% slope for day and a 3.3% slope for night operations. 8.2 A pilot should not use a landing area without taking all reasonable steps to ensure the physical characteristics and dimensions are satisfactory. For aerial work and charter operations the operator should provide evidence to the pilot on the suitability of a landing area prior to its use. For example, soft surfaces or the presence of long grass (over 150mm) will increase take-off distances while moisture, loose gravel or any material that reduces braking effectiveness will increase landing distance. | regulation of air navigation licences pilots cancellation or suspension of licence whether conduct constituted, contributed to, or resulted in, a serious and imminent risk to air safety. aviation |
The respondent claimed compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the Act). That claim was rejected at Departmental level but the Administrative Appeals Tribunal constituted by the Honourable R J Groom (Deputy President) set aside that decision and remitted the matter to the respondent with a direction that it was liable to pay compensation in accordance with the provisions of the Act and that the amount of that compensation should be assessed: Clark v Military Rehabilitation and Compensation Commission [2005] AATA 436. The respondent appeals to this court under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). The only basis on which the Tribunal dealt with the matter was on the extension of "course of employment" provided for in s 6(b)(ii), namely that the respondent was travelling between his place of work and place of residence. "Place of work" is defined in s 4(1) as "any place at which the employee is required to attend for the purpose of carrying out the duties of his or her employment". The purpose of this function was to welcome new members of the diving team to which the respondent belonged and to farewell some members who were being deployed to Townsville and then on to the United States for military exercises. 4 The Tribunal made a careful review of the evidence and set out its findings of fact. If I may say so, the clear way in which the issues, evidence and findings are presented could serve as a model for Tribunal determinations; see AAT Act s 43(2B). The findings of the Tribunal can be summarised as follows. 5 The function was organised by the diving team social convenor, ABCD Shields, who was in charge of the team fund or "kitty". His Warrant Officer and Executive Officer Lieutenant McPhail approved. Those attending paid $10 each. The function was to commence at noon. 6 The prescribed normal working hours for the diving team were between 7.50 am and 3.50 pm each working day. There is evidence that the team did not always work until 4.00 pm, including on some Fridays, depending on the work available at the time. A barbeque and beer keg were set up and sausages cooked. Soft drinks were also available. Personnel began socialising and drinking, discussing questions of issues of interest including work matters and in particular the deployment to Townsville and the United States. There were no formal speeches or proceedings. Lieutenant McPhail attended the function for some two hours. He left about 3.00 pm. Members of the team commenced leaving from some time after 2.00 pm although "quite a number" were still at the function at 3.00 pm when Lieutenant McPhail left. Petty Officer Davies left at this time, although he returned about 4.15 pm. In due course there were only eight or so remaining at the function and they continued there until around about 5.30 pm when a number of those remaining helped clean up the site. There is no evidence to indicate that an announcement was made that the function had concluded. The number who attended was in excess of thirty and could have been as many as forty. 9 The Tribunal found at [28] that there was the "clear understanding of most members of the diving team that it was necessary for them to attend the function". Leave was not good prior to the function at Camp Markham. Quite a number were still at the function after four. In due course there were only eight or so remaining and they continued there until about 5.30 pm when a number of those remaining helped clean up the site. 12 The respondent arrived at the function soon after 12.00 and remained until about 6.00 pm. He was drinking beer and soft drink during that time and probably some food. The Tribunal fund that he had consumed "a considerable amount of beer" and was under the influence of alcohol and therefore unable to ride his motorcycle safely when he commenced his journey home. 13 Shortly after 6.00 pm the respondent left Camp Markham on his motor cycle to ride directly to his residence. He turned left into Dampier Road and headed south towards the main gate of the base. The motor cycle veered onto the wrong side of the road and collided with a light pole. The respondent's helmet flew off and he was thrown about twenty metres in the air. He sustained serious injuries including significant impairment of brain function. There was a general understanding within the diving team that members were required to attend, attendance was required and the purpose was plainly work related. 15 The Tribunal found at [58] that the function commenced as a work function and "it remained a work function until the clean-up at about 5.30 pm". Although the numbers of naval personnel in attendance were fewer its essential character remained. It was still an officially approved function at a place of work attended by work colleagues. It is reasonable to infer that work issues were still being discussed towards the end of the function, although those then present were affected by alcohol. After discussing some authorities referred to by counsel the Tribunal referred to the definition of "place of work" in s 4(1) of the Act and found that "in the special circumstances of this application", Camp Markham satisfied that definition. Having found that the true nature of the work related function at Camp Markham did not change until it concluded after the clean-up it followed that it was the applicant's place of work until he departed on his motorcycle. 16 The Tribunal noted that although the respondent was under the influence of alcohol and was thus guilty of "serious and wilful misconduct" because he had suffered "serious and permanent employment" he remains entitled to receive compensation: ss 14(3), 4(13). 18 Both sides finally accepted that the interruption exclusion (s 6(2)(b)) was not relevant. If at the time the respondent set off on his motor cycle he was not required to be in attendance at Camp Markham then his travel was not within the terms of s 6(1)(b)(ii). On the other hand, if he was so required to be in attendance then the travel started at that point in time, unarguably he was travelling towards his place of residence, and no interruption of any kind occurred before the accident. 19 Counsel for the applicant attacked the Tribunal's findings that the essential character of the function remained and that it continued to be an officially-approved function at a place of work attended by the respondent and his work colleagues. However, this was a matter of fact and degree: Maunder v Commonwealth (1983) 51 ALR 44 at 49, Gregory v Comcare Australia (1997) 72 FCR 196 at 202. 20 I did not understand counsel for the applicant to dispute the finding that at its inception the function was work-related and that the respondent was required or expected to attend it as part of his duties: cf Roncevich v Repatriation Commission [2005] HCA 40 ; (2005) 218 ALR 733 at [23] . Rather, counsel submitted that, at some time before the respondent left, the function ceased to have the character of an officially-approved work function. 21 Understandably, counsel for the applicant did not submit that the Tribunal was obliged to find that the work-related character of the function ceased on the dot of 3.50 or 4.00 pm. That being so, the applicant's case has to be that the only finding open to the Tribunal was that at some unspecified time after 4.00 pm but (well) before 5.30 or 6.00 pm, and without any announcement or other identifiable event, the character of the function changed. This argument must be rejected. 22 Counsel for the applicant relied on Hatzimanolis v ANI Corporation Limited [1992] HCA 21 ; (1992) 173 CLR 473. But, as the Tribunal correctly observed, that case was concerned with quite a different situation, where the worker's injury was sustained in an "interlude or interval occurring within an overall period or episode of work" as distinct from "after the day's work has ceased" (see at 483 and the discussion by Cooper J in Gregory at 200-202). The question in the present case is whether the day's work had ceased before the respondent mounted his motor cycle or, more correctly, whether it was open to the Tribunal to find it had not. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | appeal from administrative appeals tribunal respondent naval rating injured while travelling to residence from naval base after attending function whether function work-related whether function had ceased to be work-related at time respondent departed whether at that time base was "place of work" whether findings open to tribunal "place of work" commonwealth compensation words and phrases |
2 The applicant, Mr Asaad, has been in immigration detention since August 2005. His application for a protection visa was refused, and the Minister subsequently declined to exercise his power under s 417 of the Act. On 9 May 2008, Mr Asaad was notified that he would be removed from Australia on the following Monday, 12 May 2008. He was also informed of the details of the flights by which he would travel to his country of origin, Syria. A declaration that s 198(6) of the Act does not authorize the removal of a person from Australia in circumstances where the removal would pose a serious threat to the safety of the applicant and of others. Alternatively, a declaration that s 198(6) of the Act does not authorize the removal of a person from Australia in circumstances where he or she is not medically fit to travel. 3. The respondent is restrained from removing the applicant from Australia until further order. I made this order based on evidence that Mr Asaad had a history of epilepsy and psychiatric problems, and that there was cause for concern that the journey to Syria would jeopardise his health. There was some conflicting evidence on this issue, particularly in respect of the efficacy of protective measures to be taken before and during the flight. Although neither side had any real opportunity to test the evidence, I decided it was appropriate, having regard to the balance of convenience and the fact that Mr Asaad had raised an arguable case, to make the restraining order. 5 The primary proposition advanced on the substantive application on behalf of Mr Asaad is that, due to his health problems, it is not "reasonably practicable" within the meaning of s 198(6) of the Act for him to be removed from Australia. ' (Emphasis added. Mr Asaad contends that this submission raises an important question of law, namely, the meaning which should be given to the expression "reasonably practicable". He says that he is entitled to know his position under the Act . Therefore, it is said, a real controversy exists between the parties, the question is not merely hypothetical, and the Court has jurisdiction to make declaratory and restraining orders in his favour. 7 The Minister contends that the Court does not have jurisdiction in relation to the matter which Mr Asaad seeks to raise. The Minister submits in the alternative that Mr Asaad cannot succeed because his claim discloses no reasonable cause of action. 8 In relation to the declaratory orders sought, the Minister submits that they are cast in abstract terms and, if made, would not finally determine any controversy between the parties. This, it is said, shows that there is no "matter" in the application on which the Court can exercise federal jurisdiction. The Minister says that the declarations are simply generalised statements of principle, which might possibly form part of the Court's chain of reasoning in relation to a variety of matters, but which cannot be orders made in the exercise of judicial power because they do not address and resolve the position of Mr Asaad. In other words, the orders as framed do not seek declarations as to the rights of the parties in this dispute. There is considerable force in this submission. The dispute, as the Minister points out, arises from the attempt to enjoin the Minister from removing Mr Asaad from Australia. Accordingly, in my view, while the reasoning involved in deciding whether to restrain the Minister from deporting Mr Asaad may relate to a controversy between the parties, the declaratory orders, in the form now sought by Mr Asaad, are not declarations of right and therefore cannot be made by the Court. 9 In relation to injunctive relief, the issue is whether the action to remove Mr Asaad falls within the scope of s 198(6) of the Act . The Minister contends that the relevant action comes within the definition of a "migration decision" in s 476A of the Act , and that this Court therefore does not have jurisdiction. Under s 476A(1) of the Act , this Court only has original jurisdiction in relation to a "migration decision" in four specified circumstances, none of which arise in this case. However, while that provision limits the jurisdiction of this Court, it does not prevent the Federal Magistrates Court from hearing the present proceeding. Under s 476 , the Federal Magistrates Court is given the same original jurisdiction in relation to migration decisions as the High Court has under s 75(v) of the Constitution . Accordingly, the Minister says that the decision as to whether it is "reasonably practicable" to remove Mr Asaad is a decision which is made under s 198(6) of the Act , which comes within the broad definition of "decision" in s 474(3) , and which this Court does not have jurisdiction to review. 10 The Minister further submits that, even if the action is not authorised pursuant to s 198(6) (or any other provision) of the Act , it falls within the description of a "purported privative clause decision" as defined by s 5E of the Act , and is by definition (see s 5 of the Act ) a "migration decision". Section 5E defines a "purported privative clause decision" as meaning a decision "purportedly made, proposed to be made, or required to be made" under the Act , which would be privative clause decision except for the fact that there was a failure to exercise jurisdiction or an excess of jurisdiction in the making of the decision. 11 Therefore, the Minister says, on either of these two lines of argument, the action or determination which Mr Asaad challenges is a "migration decision" within the meaning of the Act , which this Court does not have jurisdiction to review. 12 Counsel for Mr Asaad submits that this Court has jurisdiction to hear and determine the application for injunctive relief and to make the declarations sought. He contends there is a real controversy between the parties as to the meaning of the expression "as soon as reasonably practicable" in s 198(6) of the Act , and that this controversy, in raising a question as to the correct interpretation of a Commonwealth enactment, involves a "matter" necessary to ground federal jurisdiction. 13 Counsel for Mr Asaad also submits that there is nothing in s 476A to exclude the jurisdiction of this Court in relation to matters which may affect decisions under the Act which are yet to be made. It is submitted that the Minister's reliance on s 5E of the Act is misplaced because any challenge made to the correctness of an opinion prior to taking action (in this case, the removal of Mr Asaad from Australia) is merely part of the decision-maker's reasoning process, and thus cannot itself be a "decision" within the meaning of s 5E. Accordingly, counsel contends, a decision as to whether it is reasonably practicable to remove Mr Asaad would not be "a migration decision" for the purposes of s 476A and the jurisdiction of this Court is not excluded. 14 Counsel for Mr Asaad submits that the issue for determination is whether, in proposing to form an opinion about whether it was "reasonably practicable" to remove a person, the officer making the decision acts outside his or her jurisdiction if he or she misinterprets the meaning of the expression. 15 In response to this, counsel for the Minister relied on the decision of Besanko J in Beyazkilinc v Manager, Baxter Immigration Reception and Processing Centre [2006] FCA 1368 ; (2006) 155 FCR 465. In that case, Besanko J decided that the question of "reasonable practicability" under s 198(6) , which question may include an assessment of the relevant non-citizen's physical and/or mental health, is not a jurisdictional fact which conditions the existence of the duty in that provision of the Act . The difficulty for the applicant in that case was that the jurisdictional error was not pleaded in the Statement of Claim because the case proceeded on the assumption that it was sufficient to allege that it was not reasonably practicable, as a matter of fact, to remove the applicant from Australia. His Honour did not consider that was a sufficient ground. On this point, Mr Asaad submits that the present case gives rise to issues different to those canvassed by Besanko J, and that Beyazkilinc [2006] FCA 1368 ; 155 FCR 465 is therefore not determinative in this application. 16 As I have decided to transfer the proceeding to the Federal Magistrates Court (see below at [19]-[22]), it is not necessary for me to make a final determination in this case as to whether this Court has jurisdiction to hear and determine Mr Asaad's application. I shall, however, make some brief comments on the submissions advanced before me. 17 As noted above at [10], s 5E of the Act provides that a purported privative clause decision is a decision purportedly made, proposed to be made, or required to be made under the Act , which would be a privative clause decision except for the fact that there was a failure to exercise jurisdiction or an excess of jurisdiction when the decision was made. The word "decision", as it is defined in s 474(3) , includes a determination as to whether it is reasonably practicable to remove a person pursuant to s 198(6). Moreover, in light of s 5E of the Act , if the decision under s 198(6) is affected by error (whether by not determining a jurisdictional fact or by some other means), it still "purports" to be a decision and thus is properly described as a "purported privative clause decision". In other words, a decision of administrative character for the purposes of s 474(2) of the Act will have been made, or at least purportedly made. In this case, the decision of an administrative character is the decision that it is reasonably practicable to remove Mr Asaad from Australia. The fact that this decision is impugned as erroneous does not enliven jurisdiction in this Court which is otherwise excluded by s 476A. 18 On the basis of this reasoning, it seems reasonably clear to me that this Court does not have jurisdiction to hear and determine the application. However, even if it were to be eventually found that this Court did have jurisdiction to hear the matter, I am of the view that the convenient and expedient course is to transfer the matter to the Federal Magistrates Court, which undoubtedly has jurisdiction. This is preferable because it shall avoid the risk, which may arise if I proceed to determine the issues raised, of involving the parties in future disputes as to the jurisdiction of this Court. It is appropriate not to address the jurisdictional question, at least insofar as the present application before this Court is concerned, as this is a matter for the Federal Magistrate. It is also not necessary to consider whether the reasonable practicability of a non-citizen's removal is a jurisdictional fact in s 198(6) of the Act . 19 This Court has power under s 32AB of the Federal Court of Australia Act 1976 (Cth) and O 82 r 7 of the Federal Court Rules to transfer a proceeding from this Court to the Federal Magistrates Court on the application of a party or on its own initiative. In deciding whether to transfer a proceeding to the Federal Magistrates Court, this Court is directed by O 82 r 7 to several factors, which it may take into account. These include: whether the proceeding is likely to involve questions of general importance such that it would be desirable for there to be a decision of this Court; whether, if transferred, the proceeding is likely to be determined at less cost and more convenience to the parties; whether, if transferred, the proceeding is likely to be heard and determined earlier; and whether the parties desire the transfer. 20 In this case, I am satisfied that the above considerations, on balance, favour transferring the proceeding to the Federal Magistrates Court, thereby avoiding unnecessary delay and expense resulting from disputes concerning jurisdiction. 21 I note that during argument as to whether the Court ought to transfer the matter to the Federal Magistrates Court, a question arose as to whether this Court has power to remit a "proceeding" to the Federal Magistrates Court where this Court does not have jurisdiction due to the absence of a federal "matter". In my view, the expression "proceeding" in s 32AB of the Federal Court of Australia Act 1976 (Cth) is distinct from the expression "matter" (as used in s 39B(1) of the Judiciary Act 1903 (Cth)) and is sufficiently wide to encompass the present dispute between the parties. I therefore consider that the Court has power to, and should, transfer the proceeding notwithstanding any doubt which may exist as to its jurisdiction to hear and determine the application. 22 Accordingly, I order that this proceeding be transferred to the Federal Magistrates Court. The costs to date shall be costs in the cause. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | applicant in immigration detention removed "as soon as reasonably practicable" jurisdiction whether "migration decision" whether "purported privative clause decision" injunctive and declaratory relief whether declaratory relief hypothetical. transfer of proceeding to federal magistrates court discretion factors to consider whether court can transfer "proceeding" which discloses no "matter". migration practice and procedure |
The applicant also seeks pecuniary penalties for the contraventions of s 38 of the Act. The applicant previously sought declarations and penalties in respect of alleged contraventions of ss 44(1) and 49 (1) of the Act by the respondents but discontinued these claims prior to the hearing. The applicant is an Australian Building and Construction Commission inspector appointed pursuant to s 57 of the Act and is eligible to bring this proceeding pursuant to s 49(6) of the Act. The second respondent is a member of the first respondent ("the Union") and the senior vice-president of its construction division. The Union is responsible for the second respondent's conduct by reason of the second respondent's position within the Union; see s 69(1)(b) and (d) of the Act. The Union has also admitted to contravening s 38 of the Act. The breaches arise out of conduct during construction performed by Bovis Lend Lease Pty Ltd ("Bovis") at 133 Southbank Boulevard, Melbourne ("the Site") in late 2006. LCR Lindores Group Pty Ltd ("LCR Lindores") was engaged by Bovis to undertake crane work at the Site. LCR Lindores in turn engaged Sergi Pty Ltd ("Sergi") to assist in the erection or installation of a crane tower at the Site. Four employees of Sergi attended the meeting, which lasted 10 minutes. Following the stop work meeting, the applicant alleges that the second respondent made threats that a picket of the Site would occur the next morning. The respondents deny this claim. In any event, no picket eventuated at the Site and the applicant did not rely on this allegation. As a result of the stop work meeting, a ban was placed on crane installation work by the Sergi employees at the Site ("the ban"). The Sergi employees continued to perform other work at the site during the ban. The ban ended the same day at 4.40pm when the Sergi employees commenced the installation of the crane. In all, the ban was in place for a little over an hour. The parties agree that in imposing the ban, the respondents were motivated by occupational health and safety concerns over the erection of cranes at the Site. The parties also agree that another reason for the imposition of the ban was the respondents' desire to pressure LCR Lindores into making a collective agreement with the Union. Conduct is unlawful industrial action if it is industrially motivated, constitutionally connected action and is not excluded action. Section 38 is a Grade A civil penalty provision. The maximum penalty for a corporation is 1000 penalty units ($110,000). Individuals face a maximum penalty of 200 penalty units ($22,000); see s 49(1)---(2)(a) of the Act and Crimes Act 1914 (Cth) s 4AA. These figures represent 9.09 per cent and 22.73 per cent of the applicable maxima respectively. The penalties are not inappropriate merely because I would have imposed different figures. Rather, the penalties agreed by the parties must be within the permissible range of penalties for such a contravention; see Mobil Oil at [51] and [54]. The Court must still consider the factors relevant to the contraventions by the respondents to determine the permissible range of penalties for the contraventions. The factors relevant to a penalty for a contravention of the Act have been thoroughly discussed by this Court; see, eg, Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426 per Tracey J at [40] and citations therein. As Tracey J observed in Stuart-Mahoney at [40], the relevant considerations include: The respondents' conduct consisted of a brief stop work meeting and a short-lived ban on crane work. Crane work at the Site was only affected for 90 minutes and during this time the Sergi employees continued to perform other work at the Site. The ban and stop work meeting did not significantly disrupt work at the Site and any loss or damage caused was minimal. Given the brief period of time in which the ban and stop work meeting occurred, and the interrelationship between the two events, it is appropriate to regard the stop work meeting and subsequent ban as a single course of conduct giving rise to a single contravention; see s 36(3) of the Act. The ban and meeting occurred in response to occupational health and safety concerns regarding crane work at the Site. Nevertheless, the respondents concede that the ban was motivated by the desire to pressure LCR Lindores into entering into a collective agreement with the Union. The contraventions of the Act were deliberate, being designed to pressure entry into a collective agreement and to address the health and safety concerns. The second respondent's involvement is evidence of the involvement of the Union's senior management in the breaches. The respondents also provided no evidence which indicated that they have engaged in corrective action since the events of 2006. Counsel for the respondent submitted that the respondents' admissions and cooperation is relevant evidence of contrition. I accept this submission. The respondents have admitted to the contravention of s 38 of the Act. By making these admissions during an early stage of the proceeding they have obviated the need for a lengthy trial, saving the parties and the Court considerable time and resources. These admissions and cooperation relevantly demonstrate a degree of contrition which it is appropriate to consider in the assessment of an appropriate penalty. There are three instances of similar previous conduct by the Union involving breaches of s 38 ; see Stuart-Mahoney, Temple v Powell [2008] FCA 714 ; (2008) 169 FCR 169 and Duffy v Construction, Forestry, Mining and Energy Union (No 2) [2009] FCA 299. Although the relevant conduct in Temple , concerned breaches by the Western Australian Branch of the Union of s 38 of the Act, nevertheless the conduct is previous relevant conduct; see Williams v Construction, Forestry, Mining and Energy Union (No. 2) [2009] FCA 548 per Jessup J at [22]---[25], see also Temple per Dowsett J at [63]. The second respondent has not engaged in any similar previous conduct. In contrast to the circumstances in Stuart-Mahoney, Temple and Duffy (No 2) , the respondents' conduct on 6 October 2006 was of limited duration and impact and penalties at the lower end of the scale are appropriate. An agreed penalty must adequately give effect to general and specific deterrence; Mobil Oil at [69]. Despite the limited duration and impact of the ban and stop work meeting, the imposition of penalties is appropriate in order to provide general and specific deterrence. Although the respondents may have held legitimate health and safety concerns, other avenues were available to the respondents to address these concerns in a lawful manner; see Duffy (No 2) at [18]. In light of these factors, I am satisfied that the agreed penalties proposed by the parties are sufficient to provide both general and specific deterrence. In view of considerations discussed, I consider that the appropriate range of penalty is in the lower to medium range for the contravention of the Union and that the penalty agreed by the parties is appropriate in all the circumstances. I do have some concerns about imposing a monetary penalty on the second respondent for performing his job in accordance with the approach to industrial relations taken by his employer, the first respondent, in circumstances where that respondent has had a monetary penalty imposed on it. The penalty on the second respondent is within the permissible range, albeit at the upper end of that range. That is especially so where no prior contravention is alleged against the second respondent. Absent the parties' agreement I would not have imposed a penalty in that amount on the second respondent but as the agreed penalty is within the permissible range, albeit barely, I will order accordingly. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. | penalty hearing admitted contraventions of s 38 of the building and construction industry improvement act 2005 (cth) agreed penalty relevant considerations in assessing appropriateness of agreed penalty industrial law |
However, the question in issue in this hearing is only one of several that arise in the dispute between the plaintiffs, Beconwood Securities Pty Ltd and Beconwood Ltd (collectively Beconwood), their broker, the second defendant, Opes Prime Stockbroking Ltd (Receivers and Managers appointed) (Administrators appointed) (OPS) and one of its bankers, the first defendant, Australia and New Zealand Banking Group Ltd (ANZ). The question involves the construction of an agreement, entitled "Securities Lending and Borrowing Agreement" (SLA), that was entered into between Beconwood and OPS. Under that agreement Beconwood transferred shares to Green Frog Nominees Pty Ltd, a company related to OPS, in return for funds. The funds advanced to Beconwood were obtained from ANZ. In due course the shares held by Green Frog were transferred to the fifth defendant, ANZ Nominees Ltd, and held for ANZ. Beconwood contends that it has a security interest in the shares still held by ANZ Nominees. It founds this contention on a number of bases, only two of which are presently relevant. First Beconwood says that, on its true construction, the legal effect of the SLA is to create a mortgage of its shares in favour of OPS with the consequence that the shares can be redeemed on repayment of the money received from OPS. The second basis is that Beconwood has an equitable charge over the shares. If it is successful on either count Beconwood says that its interest as mortgagor or chargee (as the case may be) has priority over ANZ's legal title. (For purposes of determining priority ANZ is to be treated as holding the legal estate: Macmillan Inc v Bishopsgate Investment Trust Plc (No 3) [1995] 1 WLR 978, 1001. ) Whether Beconwood's claimed equitable estate has priority over ANZ's legal estate will, if necessary, be decided on another day. The description that follows is derived from a variety of sources, including: C Benjamin, Interests in Securities: A Proprietary Law Analysis of the International Securities Markets (2000); K Tyson-Quah (ed), Cross-Border Securities: Repo, Lending and Collateralisation (1997); F J Fabozzi (ed), Securities Lending & Repurchase Agreements (1997); F J Fabozzi & S V Mann (eds), Securities Finance: Securities Lending and Repurchase Agreements (2005); P Ali, The Law of Secured Finance: An International Survey of Security Interests over Personal Property (2002); M C Faulkner, "An Introduction to Securities Lending" (Spitalfields Advisors report, 3rd ed, 2006); M J Fleming & K D Garbade, "The Specials Market for US Treasury Securities and the Federal Reserve's Securities Lending Program" (Federal Reserve Bank of New York draft working paper, 28 August 2003); Technical Committee of The International Organization of Securities Commissions, "Securities Lending Transactions: Market Development and Implications" (International Organization of Securities Commissions and Bank for International Settlements report, July 1999); G M D'Avolio, "Essays in Financial Economics" (PhD thesis, Harvard University, September 4 2003); affidavit of Natalie Floate, Chairman of the Australian Securities Lending Association (ASLA). Securities lending refers to the practice by which securities are transferred from one party (the lender) to another party (the borrower), with the borrower contractually obliged to redeliver to the lender at a later time securities which are equivalent in number and type. Securities lending is an important element of modern financial markets, playing a substantial role in promoting market liquidity and providing stability to securities settlement systems. Although the practice can be traced back to the 19th century, an active market for securities lending did not emerge until the 1960s. The market developed principally to accommodate two growing needs: first, to avoid settlement failure (stock market transactions had to be settled within a short period) and, secondly, to accommodate short selling (the practice of selling shares that the seller does not currently own in the hope of buying them in at a lower price and in the meantime acquiring shares to complete the sale). Securities lending was also spurred by more sophisticated forms of trading strategies, often involving derivatives, which require borrowed stock. For example, traders in equity options, indexed futures, equity return swaps and convertible bonds began selling short to either hedge their positions or exploit arbitrage opportunities. The modern securities lending market can, broadly speaking, be divided into two markets, one that is defined by the motive of the borrower (the "securities driven" market) and the other by the motive of the lender (the "cash driven" market). In the first category, which is the more common type of transaction, a borrower seeks access to specific securities, usually to cover exposure to a short position. In the second category, a lender of securities seeks access to cash, often for purposes of equity financing at interest rates which are better than the uncollateralised borrowing rate. Securities lending is typically structured in one of three ways: securities loan transactions, repurchase agreements and sell-buyback arrangements. While the legal forms of the transactions differ, the commercial purposes are the same. In a securities loan transaction in the securities driven market the lender transfers specific securities to the borrower who must return "equivalent securities" to the lender either on demand, on the occurrence of a defined event or at the end of an agreed term. The borrower: (1) obtains an outright transfer of title to the securities, which may then be sold or on-lent; (2) pays a fee for the use of the securities, calculated by reference to the value of the lent securities; and (3) provides collateral to the lender in the form of cash, other securities or other assets (eg government bonds, certificates of deposit, bank letters of credit), title to which passes to the lender. The value of the collateral exceeds the value of the borrowed securities, the difference in percentage terms being referred to as the "margin". At the conclusion of the transaction there is an exchange of "equivalent securities" for "equivalent collateral". In the event of default provision is made for placing a money value on each party's obligations, setting one off against the other, and, if there is a net balance, for payment of the balance. A securities loan in the cash driven market follows the same structure but with important differences. First, the collateral is always provided in the form of cash. Secondly, the amount of cash collateral is less than the value of the lent securities. And thirdly, the lender pays a fee, much like interest, calculated by using a discounted interest rate. By reason of these differences commentators and securities lending participants colloquially refer to the securities rather than the cash as the collateral. In a repurchase agreement (called a "repo"), the seller agrees to transfer securities to the buyer in exchange for a transfer of cash and the buyer of the securities agrees to sell back the same or equivalent securities at a different price on a future date. There are two kinds of repos: a general collateral repo and a special collateral repo. A general collateral repo, in which the seller is after cash and the buyer seeks securities of sufficient value as collateral, is a transaction in the cash driven market. The seller compensates the buyer for the use of the cash during the term of the repo by the differential (which essentially reflects a rate of interest) as well as by the securities being priced at below market. A special collateral repo, in which the buyer is after specific securities, is a transaction in the securities driven market. The buyer pays compensation by the securities being priced at above market. In a sell-buy back transaction, the sale and buy trades are entered into at the same time but the buy back settlement date is fixed at some future point. The risks include: liquidity risk (counterparty not settling an obligation on time, often due to the inability to obtain securities for redelivery), market risk (adverse movements in the market price of assets), legal risk (unexpected application of a law or the inability to enforce a contract), operational risk (deficiencies in information systems or internal controls), settlement risk (completion or settlement of transactions failing), credit risk (counterparty not settling an obligation in full, either when due or at any time thereafter, often as a consequence of insolvency), principal risk (the primary form of credit risk that arises where either the securities or collateral are not delivered) and replacement cost risk (the secondary form of credit risk that arises where the non-defaulting party incurs costs in realising the value of assets). In this case credit risk is all important. Boiled down to its essence, a party's exposure to loss in the event of default is equal to the margin. That is to say, if the non-defaulting party is on the short side of the margin (ie the value of the assets delivered to him is less than the value of the assets provided) he will suffer a loss and, in the case of insolvency, be required to prove for the difference in the insolvency of the defaulting party. It is worthwhile pointing out that in other jurisdictions there is a regulatory and statutory framework that provides a measure of protection to investors that is lacking in Australia. In the United States, for example, the credit risk faced by parties is mitigated by a variety of provisions. First, the Securities and Exchange Commission (SEC) "strictly regulates the solvency and practices of registered broker-dealers pursuant to the Securities Exchange Act [SEA] of 1934": J Schroeder, "Repo Madness: The Characterization of Repurchase Agreements under the Bankruptcy Code and the UCC" (1996) 46 Syracuse Law Review 999 , 1041. Second, the conduct of brokers and, more specifically, the claims of investors in the event of a broker's insolvency, are governed by the Securities Investor Protection Act 1970 (US) (SIPA): see generally R Hakes, "UCC Article 8: Will the Indirect Holding of Securities Survive the Light of Day? " (2003) 35 Loyola of Los Angeles Law Review 661, 734-741; Schroeder at 1037-47; D Morse, "When a Securities Brokerage Firm Goes Broke: A Primer on the Securities Investment Protection Act of 1970" (2006) 25(2) American Bankruptcy Institute Journal 34. SIPA established a quasi-governmental organisation known as the Securities Investor Protection Corporation (SIPC). The SIPC has power to liquidate insolvent broker-dealers under SIPA (rather than under the Bankruptcy Code) and effectively insures certain investor claims for up to $500,000 per account: Schroeder at 1040. Although the SIPC has taken the position that creditors of insolvent brokers under securities lending agreements are not covered by its bail-out scheme, some courts have held otherwise: Schroeder at 1043-1046. The case law on this point is somewhat sparse, however, in part because of the success of the regulatory oversight scheme: Schroeder at 1041 (noting that out of 20,344 broker failures between 1970 and 1992, only 228 required the SIPC to step in to cover investor claims and that "[a]s a result, there is remarkably little reported case law" interpreting the relevant provisions). Although a SIPA liquidation is generally similar to a liquidation under the Bankruptcy Code, one interesting difference is that, unlike in a liquidation under the Bankruptcy Code, under SIPA the SIPC has the power to stay the set-off provisions of a securities lending agreement that would otherwise liquidate to a single sum the obligation of a broker in insolvency to redeliver equivalent securities. Instead, SIPA gives the SIPC the option, where feasible, to direct the trustee in liquidation to redeliver the equivalent securities, whether by purchasing them on the market or otherwise: Morse at 71. The net effect of the regulatory framework is that although a US securities lender may still be unsecured as to any difference in value between the cash obtained from the broker and the value of the securities provided, the risk is much less. Due to strict regulatory oversight of the broker, the lender can have some confidence that the broker will not suddenly fail (or, alternatively, that the SEC and SIPC will have notice before failure occurs and be able to address the situation before matters reach the stage they have in this case): Schroeder at 1041 ("The stringent reporting and auditing requirements of [the SEA] have been a successful early warning system which has allowed the SEC and SIPC to step in quickly and sell troubled broker-dealers' customer business to solvent broker-dealers before it is too late"). The lender might also not unreasonably expect that he will be at least partially bailed out by the government even if the broker does fail. In other words, part of the answer to the credit risk problem may be that it is in fact not as much of a problem in other jurisdictions. Of importance to this case is the Overseas Securities Lending Agreement (OSLA) which was superseded by the Global Masters Securities Lending Agency (GMSLA), both prepared by the International Stock Lenders Association, based in London. OSLA was (and GMSLA is) intended to govern all securities loan transactions, that is, the transaction structure is used interchangeably for a borrower who is after specific securities and a lender who is seeking cash. In 1996 ASLA commissioned Messrs Mallesons Stephen Jacques to adapt OSLA for the Australian market. The resultant agreement, released in April 1997, is known as the Australian Masters Securities Lending Agreement and is often referred to as "AMSLA". The term "securities lending" under these agreements is factually incorrect. The transaction that is referred to as "lending" is in terms an outright disposal of the securities lent, linked to a subsequent acquisition of equivalent securities. In other words the agreements provide that title to the securities on loan, as well as to any collateral that is received by the lender, passes from one party to the other. On the other hand, the economic benefits of ownership are "manufactured" back to the lender by the terms of the securities loan agreements. In October 2006, Beconwood's director, Mr Choiselat, instructed Ms Chan, the office manager, to investigate "margin lending facilities on small market cap stocks. " Ms Chan then met with an OPS employee in late October to discuss the possibility of Beconwood establishing a facility with OPS in order to leverage its holdings in Destra Corp Ltd, Q Ltd, and Jumbuck Entertainment Ltd, each a publicly listed company. No agreement was reached but Ms Chan revisited the issue of a lending facility with OPS at another meeting on 17 July 2007. In addition to the meetings, the parties also exchanged email correspondence regarding the proposed facility. I emphasise that for present purposes it is neither necessary nor proper to consider (and I expressly have not considered) precisely what representations were or were not made in the meetings and correspondence between Beconwood and OPS, or what Beconwood may or may not have understood regarding the meaning of the terms of the proposed securities facility. At present, it necessary only to note that Beconwood entered into the SLA, the construction of whose written terms is now at issue, shortly after the 17 July meeting, with Beconwood Securities entering the SLA on 31 July 2007 and Beconwood Ltd entering on 16 August 2007. Pursuant to the SLA, Beconwood Securities transferred to Green Frog at the direction of OPS 1,116,355 shares in Q on 31 July 2007 and 1,559,447 shares in Jumbuck on 13 November 2007. Beconwood Ltd transferred to Green Frog at the direction of OPS 10,962,104 shares in Destra on 16 August 2007, a total of 114,463,651 shares in Q on four dates between 16 August 2007 and 8 January 2008, and 2,000,000 shares in Jumbuck on 4 December 2007. The total market value of the shares transferred by Beconwood was said by counsel for Beconwood to be approximately $7 million, presumably calculated just prior to the appointment of receivers to, and administrators over, OPS. An examination of the share price tables on the ASX website bears this out. In return for the shares Beconwood received from OPS cash in the amount of $1,353,830.02. On or shortly after the day of each transfer to Green Frog, the shares were transferred to ANZ Nominees. Mr Cahill, the head of the financial institution products division of ANZ, stated that ANZ Nominees acquired the shares as "custodian and nominee" for ANZ. The transfers were effected pursuant to a modified AMSLA between OPS and ANZ dated 26 July 2006. It is the shares still held by ANZ Nominees that are the subject of Beconwood's claim. The following provisions are important. In the description of the parties Beconwood is identified as the "Client". Clause 1.1 provides that "[t]he lender will lend Securities to the Borrower, and the Borrower will borrow Securities from the Lender, in accordance with the terms of this Agreement. " The definitions of "Lender" and "Borrower" in cl 22 indicate that Beconwood and OPS may be either a "Borrower" or a "Lender". In all cases, cl 1.1 requires that OPS has received from the Client a "Borrowing Request". The definition of the "Borrowing Request" in cl 22 states that the request (which may be oral or in writing) must, among other things, describe the Securities to be lent, and the amount of any collateral. Clause 1.1 also provides that if OPS is the Borrower, Beconwood must pay a Fee which "initially will be interest on the Cash Collateral". Cash Collateral is defined in cl 22 as "Collateral that takes the form of a payment of currency". Clause 3.1 provides: "The Parties must execute and deliver all necessary documents and give all necessary instructions to procure that all right, title and interest in [any Securities, Equivalent Securities, Collateral or Equivalent Collateral] will pass absolutely from one Party to the other, free from all liens, charges, equities and encumbrances, on delivery or redelivery of the same in accordance with this Agreement. " Clauses 3.2 and 3.3: These clauses may be summarised as giving the Lender the right to dividends, and other benefits which it would be entitled to were a securities lending transaction not to have taken place. As applied to the facts of this case, the clauses attempt to "manufacture" for Beconwood a contractual equivalent to the beneficial interest it would have retained had it not transferred shares to Green Frog. Clause 3.4 provides: "Notwithstanding the use of expressions such as "borrow", "lend", "Collateral", "Margin", "redeliver", etc., which are used to reflect terminology used in the market for transactions of the kind provided for in this Agreement, all right title and interest in and to Securities "borrowed" or "lent" and "Collateral" which one Party transfers to the other in accordance with this Agreement will pass absolutely from one Party to the other free and clear of any liens, claims, charges or encumbrances or any other interest of the Transferring Party or of any third party (other than a lien routinely imposed on all securities in a relevant clearance system) without the transferor retaining any interest or right to the transferred property, the Party obtaining such title being obliged only to redeliver Equivalent Securities or Equivalent Collateral, as the case may be. Each Transfer under this Agreement must be made so as to constitute or result in a valid and legally effective transfer of the Transferring Party's legal and beneficial title to the recipient. " Clause 3.4 is buttressed by the warranty of the Lender (ie Beconwood) in cl 9(c) that it is "absolutely entitled to pass full legal and beneficial ownership of all Securities" to the Borrower (ie OPS) free from "all liens, charges, equities and encumbrances. " Clause 4.1 also picks up the obligation to pay a fee. It provides that if in respect of a loan of securities the Collateral is cash, the Collateral Taker must pay "a fee ... in respect of the amount of that Collateral, calculated at the rate initially as agreed" and "the Client must pay a fee to Opes Prime for each loan of Securities" in an amount agreed. Clause 5 deals with Collateral and top-up Collateral. The heading to cl 5.1 reads: "Borrower's Obligation to Provide Collateral". According to its terms, however, the clause only imposes the obligations to provide Collateral and top-up Collateral on "[t]he Client as Borrower or Lender". Clause 5.2(a)(i) states that the "aggregate value of the Collateral delivered to or deposited with Opes Prime ... [must] be at least the aggregate of the Required Collateral Value". Clause 5.2(a)(ii) states that the "[i]f the aggregate value of the Posted Collateral ... exceeds the aggregate of the Required Collateral Value ... Opes Prime must (on demand) repay such Cash Collateral or redeliver to the Client Equivalent Collateral". These subclauses operate so that if the value of the securities transferred by the Client relative to the amount of cash transferred by OPS drops below a certain predetermined ratio (variously called the Required Collateral Value, Loan-to-Value ratio or LVR), the Client will be required to transfer additional securities. If the converse occurs and the value of the securities increases OPS must redeliver equivalent securities to eliminate the excess. Clauses 6.1 and 6.2: These clauses require the Borrower "to redeliver Equivalent Securities in accordance with this Agreement and the terms of the relevant Borrowing Request" and specifically at the call of the Lender. Equivalent Securities are defined in cl 22 to be "securities of an identical type, nominal value, description and amount to particular Securities borrowed and such term will include the certificate and other documents of or evidencing title and transfer". The definition goes on to provide that in redelivering Equivalent Securities, one must also factor in the value, in cash or kind, of corporate events affecting the value of the Securities, such as splits, dividends, takeovers, redemptions and so forth. Clause 6.3 permits the Lender to terminate the loan of Securities upon written notice if the Borrower fails to redeliver Equivalent Securities as requested, in which case the netting provisions of clause 7 are triggered. Clause 7: This clause provides for netting (ie acceleration and reduction to a single sum certain) as well as set-off of the parties' obligations against each other in an Event of Default and also in a case where the Borrower has failed to redeliver Equivalent Securities under cl 6.3. Clause 11.1 defines Events of Default to include (in cl 11.1(d)) an "Act of Insolvency" by either party. Clause 22 in turn relevantly defines an Act of Insolvency to include appointment (or attempt, consent, or acquiescence to appointment) "of any trustee, administrator, receiver or liquidator or analogous officer," or the presentation of a petition or other attempt to wind up or liquidate. Most Events of Default require a notice to be given to trigger netting. In the event of "the appointment of a liquidator or analogous officer" netting is automatic: cl 11.1(d). Clause 16 provides: "Each Party agrees that, in relation to legal proceedings, it will not seek specific performance of the other Party's obligation to deliver or redeliver Securities, Equivalent Securities, Collateral or Equivalent Collateral, but without prejudice for any other rights it may have. " The assumption that lies behind cls 1.1 and 4.1, as well as other provisions, is that Beconwood will lend securities to OPS and, in return, will receive cash collateral. It is also assumed that Beconwood may be required to top up the value of the lent shares (by lending more shares) to maintain the margin. There is, however, no provision in the SLA that imposes an obligation on OPS to provide collateral. Nor is there a provision that requires Beconwood to provide additional shares. Perhaps the draftsman assumed that cl 5 would satisfy both functions. But when read literally it does neither. This is a serious gap. Interestingly, this defect does not appear in cl 6 of AMSLA from which cl 5 has been adapted. Be that as it may, the SLA does contemplate that the parties will (indeed they must) reach independent agreement on a number of matters including the type of securities Beconwood is to lend to OPS, the value of the cash collateral that will be delivered to Beconwood and the margin that is to apply. That is precisely what happened. Although not all the evidence is before the court, it is sufficiently clear that, in correspondence and conversations between Beconwood and OPS, they agreed on the identity of the shares to be lent, on the amount of cash collateral and on the margin. To the extent that it is necessary to give cl 5 any operation, it will be to require Beconwood to deliver top-up securities. This can be achieved by treating the expressions Cash Collateral and Collateral as references to the lent shares. Even if this is not how cl 5 operates the problem with the clause will not affect the outcome of this application. One reason is the severance provision in cl 15, which provides that the balance of the SLA should remain effective even if one clause is void or unenforceable. Another reason is that the question in issue does not involve any matters that might even arguably turn on cl 5, such as a dispute as to the provision of collateral or the maintenance of the loan to value ratio. Rather, the question here involves only the ownership of the lent securities. It follows, so the argument goes, that Beconwood has an equity of redemption in respect of those shares. Its alternative argument is that by reason of the SLA Beconwood has a charge over the shares which is enforceable in equity. The corollary of each argument is that under the arrangement OPS did not become the absolute owner of the shares. In the way this case was argued, we are only concerned with a mortgage and a charge. A mortgage is "a security created by contract for the payment of a debt already due or to become due, or of a present or future advance, effected by means of an actual or executory conveyance of real or personal property, charging the mortgaged property with the payment of the money secured": Coote on Mortgages (9th ed, 1927) vol 1 at 6. A mortgage may be legal or equitable. A legal mortgage involves an assignment or transfer of property to the mortgagee: Santley v Wilde [1899] 2 Ch 474. There will be a mortgage in equity if there is an agreement to grant a legal mortgage. The right of the mortgagee in equity is to have his security perfected, usually by the execution of a legal mortgage: Matthews v Gooday (1861) 31 LJ Ch 282. By way of example, the delivery of share certificates with blank transfers will create an equitable mortgage of the shares: Harrold v Plenty [1901] 2 Ch D 314 , 316. The mortgage will become a legal mortgage when the transfers are registered: Rose v Inland Revenue Commissioner [1952] 1 Ch D 499 , 510-511. A charge differs from a mortgage because it does not depend upon a transfer of the ownership of the charged property. It is of the essence of a charge that a particular asset or class of assets is appropriated to the satisfaction of a debt or other obligation of the chargor, or a third party, so that the chargee is entitled to look to the asset and its proceeds for the discharge of the liability: Re Cosslett [1998] Ch D at 508. A charge can arise by operation of law or by agreement. A charge may be fixed, that is, attached to particular assets which are identified or ascertainable. Or a charge may relate to a changing class of present and future assets and not attach to any particular asset unless it is converted to a fixed charge. In the case of a fixed charge, the chargor cannot dispose of the assets without the chargee's consent, but the chargor can in the case of a floating charge. The task is to discover the true substance of the transaction. On this aspect I will proceed, so far as this trial is concerned, on the basis that the SLA is a true record of the arrangement between Beconwood and OPS and that it is no sham or artifice to disguise their true intention. It must be remembered, however, that Beconwood contends that if it has not made out its case on the SLA alone, it will still be able to do so when account is taken of representations allegedly made by OPS and which form part of the arrangement, or inform that arrangement. At this point I am only concerned with the effect of the SLA without regard to any wider aspects of the arrangement. In particular, I need not consider whether Beconwood could lead extrinsic evidence regarding the effect of the SLA absent some ambiguity in its terms or in support of an attack that the SLA is a sham. On this basis the character of the SLA must be determined from its language, particularly of its operative parts. If those provisions are clear, they must be given effect, unless there are provisions which alter that effect. It is only by a study of the whole of the language that the substance can be ascertained. The duty of a Court is to examine every part of the agreement, every stipulation which it contains, and to consider their mutual bearing upon each other; but it is entirely beyond the function of a Court to discard the plain meaning of any term in the agreement unless there can be found within its four corners other language and other stipulations which necessarily deprive such term of its primary significance. What this means is that the character of a transaction is to be determined by reference to its legal nature, not to its economic effect. The leading authority on this point is the advice of Lord Devlin in Chow Yoong Hong v Choong Fah Rubber Manufactory [1962] AC 209. He said (at 216-217): "There are many ways of raising cash besides borrowing. ... If in form it is not a loan, it is not to the point to say that its object was to raise money for one of them or that the parties could have produced the same result more conveniently by borrowing and lending money. " I propose also to apply the rule that a commercial contract should be construed having regard to its purpose, which requires an understanding of the genesis of the transaction, its background, its context, and the market in which the parties are operating: Codelfa Construction Pty Ltd v State Railway Authority (NSW) [1982] HCA 24 ; (1982) 149 CLR 337 , 350 applying Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989 , 995-996. See also Pacific Carriers Ltd v BNP Paribas [2004] HCA 35 ; (2004) 218 CLR 451. The controversy here is in identifying what is the appropriate context and what is the relevant market. The SLA is derived from AMSLA which in turn is derived from OSLA. Both OSLA's successor GMSLA and AMSLA are in widespread use in markets (both cash driven and securities driven) in which the participants give or take an outright transfer of securities in exchange for a promise that the borrower will deliver equivalent securities or that the redelivery obligation will be set off against the duty to return collateral in the event of default. The principal objects of securities driven share lending (to enable the borrower to satisfy a short sale or to complete the settlement of a sale within the time) can only be achieved by transferring title to the borrowed securities to the borrower. This is the very essence of the transaction; without the ability to pass title there is no utility in the borrowing. This may not be true in the cash driven market, but it is still important to pass title to the securities. Without title the borrower cannot, as OPS did here, dispose of the shares for commercial purposes. Moreover, the provision for netting following default would not operate effectively unless title to the securities lent and to the collateral given has passed to the opposite party. One of the essential features of a mortgage is that the mortgagor is entitled to get back the subject matter of the mortgage on returning to the mortgagee the money that he has received. The right is either contractual or exists in equity, and is referred to (sometimes loosely) as an equity of redemption. At law, if a mortgagor defaulted in payment of the secured debt the right of the mortgagee to the mortgaged property became absolute. In equity, however, the mortgagee could still redeem the mortgaged property, or recover the surplus if the mortgagee had sold the mortgaged property. The rule applied as much to real as to personal property: Sewell v Burdick (1884) 10 AC 74 , 95; Johnson v Diprose [1893] 1 QB 512. The problem that confronts Beconwood in its argument for a mortgage is that there can be no right to redeem in the case of an outright transfer of property, such as occurs in an absolute sale. In Re George Inglefield Ltd [1933] 1 Ch D 1 , 27-28 Romer LJ analysed the difference between a transfer by way of sale on the one hand and a mortgage or charge on the other. In a transaction of sale the vendor is not entitled to get back the subject-matter of the sale by returning to the purchaser the money that has passed between them. In the case of a mortgage or charge, the mortgagor is entitled, until he has been foreclosed, to get back the subject-matter of the mortgage or charge by returning to the mortgagee the money that has passed between them. In determining questions of this nature, it must be borne in mind that a mortgage cannot be a mortgage on one side only; it must be mutual; that is, if it be a mortgage with one party, it must be a mortgage with both. But the rule only requires that it shall not be competent to one party alone to consider it a mortgage. In other respects the rights of the parties may be different, for it happens not unfrequently, that one party may not be able to foreclose at a time when the other party may redeem. ... The rule is that prime facie an absolute conveyance, containing nothing to show the relation of debtor and creditor, does not cease to be an absolute conveyance and become a mortgage merely because the vendor stipulates that he shall have a right to repurchase. In every case the question is what, upon a fair construction, is the meaning of the instruments, and the absolute conveyance will be turned into a mortgage if the real intention was that the estate should be held as a security for the money. ... The deed may be absolute in form but still a mortgage, and the absence of a proviso for redemption will not prevent its being a mortgage. The question that arose in the latter case was whether a transaction by which the defendant became the proprietor of land previously owned by the plaintiff was entered into for the purpose of securing the payment of a debt lent by the defendant to the plaintiff --- that is, whether the land was held as security with the plaintiff having an equity of redemption. The alternative was that the plaintiff had sold the land to the defendant upon terms that he should have an option to purchase it upon certain conditions: Gurfinkel 116 CLR at 115-116. The court found that the transaction was, in fact and in law, what it purported to be according to the terms of the agreement between the parties. After referring to Alderson v White , Windeyer J went on to point out (at 114) that the court is reluctant to hold that "a bargain is not as the parties expressed it. A court will ... ordinarily take at their word persons who execute a [particular agreement unless] it can be shewn by parol evidence that both parties to a document adopted the form they did as a disguise. " In light of the foregoing, the argument that the SLA can be characterised as a mortgage is simply unsustainable. It breaks down at many points. First of all, by the express terms of the SLA, unencumbered title in both lent securities and collateral passes on delivery. Secondly, when the transaction comes to an end there is no obligation to hand back in specie the securities initially lent. Nor is there an obligation to return the collateral actually provided. The obligation falling on the borrower is to deliver the same number and type of securities. The same is true as regards the collateral. Third, there are the netting and set off provisions that come into effect on default. This is the means by which the parties mitigate credit risk, converting redelivery obligations into payment obligations. The provisions are particularly important because they confirm that the parties did not intend there to be any equitable property rights retained over lent securities or collateral following their delivery, for if such rights existed, they could not simply be converted by contract to monetary obligations. Equity does not allow the redemption to be "clogged": Kreglinger v New Patagonia Meat and Cold Storage Co Ltd [1913] UKHL 1 ; [1914] AC 25 , 61; E I Sykes and S Walker, The Law of Securities (5th ed, 1993) at 70. I also want to put to rest Beconwood's argument that the SLA should be characterised differently from any other share lending agreements because the SLA was made in a different market (ie the retail market as opposed to the institutional market) and between different participants. First of all, I disagree with one fundamental premise of this argument, namely that the transactions which are given effect by the SLA and other securities lending agreements take place in different markets. The view I take is that as each agreement may be used for financing purposes they are made in the same market, namely the market for providing funding to intending share purchasers. In any event, even if they be different markets, that would not, in my view, be good reason for giving a different meaning to the same agreement. This is because I do not accept that a share lending agreement (indeed any agreement) can have a meaning that is dependent upon (and changes with) the subjective motivations for which it is entered into. What Beconwood's argument comes down to is this. Being an unsophisticated investor, it did not know what it was getting into when it signed the SLA and its lack of sophistication is a sufficient reason to give the SLA a construction it would not bear if entered into by skilled market players such as investments banks, hedge funds or arbitrageurs. I do not accept this argument either. Beconwood borrows for, and invests millions of dollars in, share trading. It does not qualify as an unsophisticated investor. It certainly is not a candidate for the special protection courts give to the weak and vulnerable. Beconwood's attempt to characterise the SLA as a mortgage might be attractive if one were permitted to have regard to the economic substance of the arrangement. In the cash driven market, securities lending is a means of obtaining finance and for that reason has features similar to a mortgage. In each case a person (the lender of securities and the mortgagor) receives cash. In each case the person who receives the cash pays a fee for its use. In one case (securities lending) the lent securities are a proxy for collateral. In the other (a mortgage) they constitute the security. Further, in many share funding arrangements it is common to find provisions for topping up the value of the shares lent or put up as security (as the case requires) if there is a fall in their price. Despite these similarities, however, the arrangements are not of the same legal character. They are different means of achieving a similar result. Put another way, while the economic substance of the transactions (mortgage and securities lending) may be similar, the legal mechanism by which they are effected is fundamentally different. Beconwood seeks to overcome these difficulties (and in so doing should concede the weakness of its mortgage case) by arguing that there is a charge in its favour over the Equivalent Securities. The way the argument proceeds is as follows. Upon delivery to it of the lent shares, title passes to OPS. At that point the shares, because they are identical in number and type to the lent shares (Securities), immediately fall within the definition (and thus assume the character) of Equivalent Securities which, in due course, must be delivered to Beconwood. The crux of the argument is that under the SLA OPS has an implied obligation to hold or retain an interest in any shares that meet the definition of Equivalent Securities as soon as it receives or obtains such securities. In those circumstances, Beconwood contends that it has a charge, or some kind of equitable interest, over the shares until it obtains legal title on the transfer back. There are several problems with this argument. The first and most obvious is that the putative implied obligation upon which the whole argument is founded does not satisfy the requirements for an implied term. The principles on which a term may be implied are well established. For a term to be implied in fact, the term must be "so obvious that it goes without saying": Codelfa 149 CLR at 346-347, 354-356, 404-405 citing Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 , 227. Moreover, the supposed implied term must be reasonable and equitable: BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 226, 283. Looking at the SLA, I can see no necessity for the implication of the term. Nor are the criteria set out in BP Refinery satisfied. The term is sought not so much to make the SLA work, but to help convert it into a mortgage or charge. That is not a proper foundation for the implication of a term. The second problem is equally fundamental. Having regard to the definition of "Equivalent Securities", the fact that OPS immediately holds, or may at some future point come to hold, shares that are the same as those it has borrowed does not convert those shares into "Equivalent Securities". It is true that, according to the definition, "Equivalent Securities" are securities "of an identical type, nominal value, description and amount" to the lent securities. But it is equally true that the definition does not require the lent securities (or even any particular batch of securities identical in number and type to the lent securities that happen to be received by OPS prior to its obligation to deliver Equivalent Securities falling due) to be Equivalent Securities. Rather, the SLA contemplates that OPS will deal with the lent securities as it sees fit and that, in order to meet its obligation to return "Equivalent Securities" in accordance with cl 6.1, it may have to get them in. This it can do from its own holdings or in the open market. Put another way, OPS has the freedom to decide how and from whom it will obtain securities that answer the description of "Equivalent Securities". Crucially, there is no provision in the SLA restricting OPS from disposing of the lent shares or requiring OPS to keep on hand at any time specific securities for delivery to Beconwood as Equivalent Securities. In these circumstances, Beconwood cannot obtain a legal or equitable interest in any shares, even if they meet the description of Equivalent Securities, before shares that satisfy the description are appropriated to the agreement: Re Goldcorp Exchange Ltd [1994] UKPC 3 ; [1995] 1 AC 74. This is no more than an application of the rule that until property which is previously unidentified is appropriated to an agreement, neither a legal nor an equitable interest in that property can be created by that agreement: Hoare v Dresser [1859] EngR 430 ; (1859) 7 HLC 290 [11 ER 116] ; Citizens' Bank of Louisiana v First National Bank of New Orleans (1873) LR 6 HL 352. It merits mention, however, that under the SLA even appropriation may not be sufficient. This is because cl 3.1 provides that title in Equivalent Securities will pass on redelivery. Until that point OPS may be free to deal with its shares in whatever way it sees fit. The issue here is whether either the appointment by a debenture holder of a receiver to take control of OPS' assets or the appointment of an administrator under Pt 5.3A of the Corporations Act 2001 (Cth) to take control of the company's affairs amounts to the appointment of an officer "analogous" to a liquidator: see cl 11.1(d). Beconwood conceded that whatever interest it had in the shares would be lost if the appointment of receivers or administrators falls within the clause. In my view the role and function of, on the one hand, a party-appointed receiver or an administrator and, on the other hand, a liquidator, are not analogous. The role of a liquidator is to get in the assets of the company that is being wound up, dispose of those assets and out of the proceeds discharge the debts due to creditors (pro rata if there is a deficiency) and pay the balance (if there be a balance) to the contributories. When this task is complete the company is finished. This is in marked contrast to the role of a party-appointed receiver or an administrator. A party-appointed receiver takes control of the company's assets (and sometimes manages its business), but for the single purpose of discharging the debt due to his appointer, the secured creditor. The receiver holds any surplus he has secured for the benefit of the company. On his retirement the company continues in existence. An administrator does little more than take over the running of the company, and then only for a relatively short period. This enables the creditors to decide the company's fate. In reaching the conclusion that a party-appointed receiver or an administrator is not "analogous" to a liquidator, I have derived no assistance from the definition of "Act of Insolvency" which provides (in cl 22(e)) that one such act is "the appointment of a receiver, administrator, liquidator or trustee or analogous officer of such Party over all or any material part of such Party's property. " The question in cl 22(e) whether an officer is "analogous" to a class of receivers, administrators, etc is not the same as whether as in cl 11.1(d) an officer is "analogous" to a liquidator only. If one is to look for some common thread that binds the larger class, it may be found in the control each of them has over the assets or operations of the Party's property. But the wording of cl 11.1(d), where the class is narrower, requires a different construction. In my view, therefore, there has been no automatic trigger of the netting provision, and Beconwood's concession does not bear on its claimed entitlement. The US position on securities lending has been settled for more than 80 years. If there is one constant theme across the cases, it is that agreements made using industry-standard documentation should be honoured according to the practices and expectations of the securities industry; to do otherwise would be to risk impairing the efficient functioning of national and international capital markets: Granite Partners 17 FSupp2d at 302-303; Re County of Orange 31 FSupp2d at 778; Bevill 67 BR at 597-598. To refuse to give effect to securities lending agreements in this context would be to revisit upon the market all of the difficulties involved with rehypothecation and the illiquidity of encumbered securities, in respect of which see R Elias, "Legal Aspects of Swaps and Collateral" (2001) 3(6) Journal of International Financial Markets 232, 239-240. With respect to the legal rationale, as distinct from the foregoing policy rationale, given for reaching this result, the US courts have, in large measure, relied on the same principles of construction that I have applied. First and foremost is the rule that effect must be given to the plain language of the contract construed as a whole and the objective intentions of the parties as can be gathered therefrom: see eg Modern Securities Transfers (3rd ed, 2007) s 6a:17 nn 14-15 and surrounding text. For example, in Provost 269 US at 455, one of the reasons that the Supreme Court rejected the equitable interest theory was that the agreement contained no provision restricting the broker from disposing of the shares or requiring the broker to "at all times have on hand specific securities for delivery to the customer on payment of the amount of the broker's advances for the customer's account". Similarly, in Bevill 67 BR at 597, the court concluded that the "unequivocal language of purchase and sale ... is strong prima facie evidence that the parties intended the transactions to be treated accordingly". See also Granite Partners 17 FSupp2d at 302 (stating that the unequivocal intention of the parties as evinced in the language of the agreement must be honoured). It is true that US courts will (as Australian courts also will) look to extrinsic evidence in construing securities lending agreements if the plain language is ambiguous. For example in Bevill 67 BR at 590 the court stated that consideration of extrinsic evidence was appropriate because the agreements there also had "terms customarily found in secured loan transactions". However, the court went on to say (at 598) that "[t]he mere presence of secured loan characteristics in [securities lending] agreements is not enough to negate the parties' voluntary decision to structure the transactions as purchases and sales" (quoted with approval in Granite Partners 17 FSupp2d at 302). Second, the US cases also adhere to the view that a commercial contract should be construed with a view to the background, context, and market in which the parties are operating: Bevill 67 BR at 597, quoted with approval in Granite Partners 17 FSupp2d at 301; see also Modern Securities Transfers s 6a:17 n 17 and surrounding text. Third, the US authorities appear to adopt the same view of Lord Devlin in Chow Yoong Hong [1962] AC 209 that the economic substance of a transaction does not and should not affect the legal characterisation of the contract between the parties to the transaction. The seller's interest in the market value of the securities is no greater in a secured loan transaction where he retains beneficial ownership of the securities than in a purchase and sale transaction where he is contractually bound to reacquire ownership of them. Clearly, any attempt to determine whether a repo or reverse repo transaction is more like a secured loan than a purchase and sale by weighing economic factors on a finely tuned balance scale would be an essentially formalistic and ultimately unproductive exercise. While it is accepted in the US that, as between the parties to the transactions, securities lending agreements are to be honoured as purchase-and-sales rather than loans, the courts have also stated that such agreements may be characterised differently in other contexts: see Nebraska Department of Revenue v Loewenstein [1994] USSC 56 ; (1994) 513 US 123 (treating a repo as a collateralised loan under a certain provision of the tax code); Resolution Trust Corp v Aetna Casualty & Surety Corp of Illinois (7 th Cir [1994] USCA7 614 ; 1994) 25 F3d 570 (treating a repo as a collateralised loan for purposes of a loan-loss exclusion in an insurance agreement). Without descending too far into the details of these cases, the important point for present purposes is to clarify that they do not represent a contrary line of authority; rather, they simply stand for the proposition that although the court should, on general freedom of contract grounds, honour the structure of a transaction adopted by the parties as between those parties , that says nothing about how those agreements should be viewed with respect to the operation of legislative acts or third party obligations external to the securities lending contract and unrelated to the question of ownership. A sale-repurchase characterization presumably would make the [securities borrowers] the "owners" of the federal securities during the term of the repo. But the dispositive question is whether the [securities borrowers] earned interest on "obligations of the United States Government," not whether the [securities borrowers] "owned" such obligations. As [the securities lender] himself concedes, "[t]he concept of 'ownership' is simply not an issue under 31 U.S.C. § 3124. We need not examine the accuracy of these assertions, for we are not called upon in this case to interpret any of those bodies of law. Our decision today is an interpretation only of 31 U.S.C. § 3124(a)---not the Securities Exchange Act of 1934, the Bankruptcy Code, or any other body of law. There the question was whether a loss incurred by a party to a repo transaction gone bad was excluded from coverage under a policy insuring against theft or loss of securities because of an exclusion for "loss resulting directly or indirectly from complete or partial non-payment of, or default upon, any loan or transaction in the nature of a loan or extension of credit": at 576. The language of the Loan-Loss Exclusion, which broadly excludes from coverage losses resulting from default upon any transaction "in the nature of a loan," clearly indicates that whether a particular transaction falls within the exclusion is determined by its economic substance, not by the labels attached to it by the insured and third parties dehors the insuring agreement. " (For purposes of this question, the expressions "Borrower", "Equivalent Securities", "Lender" and "Securities" have the meaning given to them in cl 22 of the SLA. I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | securities lending agreement contract to lend shares ownership of shares whether securities lending agreement constitutes secured loan or purchase-and-sale whether reference may be had to economic effect of transaction in determining legal character whether contract is to be construed with reference to its purpose, background, context, and market whether same contract may be construed differently if entered into in different market or by different participants implied term whether it is reasonable and equitable to imply a term requiring shares acquired to be held and retained whether administrator or receiver is analogous to liquidator claim for equitable interest in shares transferred on documents purporting to give full title to broker whether equity of redemption can exist after outright transfer of title whether equitable charge over undefined shares may exist absent appropriation charge credit risk margin mortgage repo securities lending contract corporations equity words and phrases |
Objection is taken on behalf of the respondent on a number of grounds. As the decision is an interlocutory ruling in the course of the hearing I will not deliver extensive reasons. I will assume a knowledge of the case. 2 On 17 July 2007 an exhibit to the first affidavit of the deponent was rejected. It purported to set out the contents of interviews between the deponent, then a workplace inspector, and certain employees of the respondent. Leave was granted to adduce oral evidence on the topic. It was then decided that an affidavit would be prepared which would deal with the matters in relation to which leave had been granted. This is the affidavit in question. 3 The affidavit deals with interviews occurring during a visit to the factory premises of the respondent on 5 February 2007, during which Inspector Goodall conducted an interview with a person now known to be Mr Huuson Nguyen; a visit to Brownbuilt's factory on 7 February 2007 where there was an interview of each of Mr George Koorey, the Finance and Administration Manager of the respondent, and Ms Yvonne Arnold, the Human Resources Administrator of the respondent; and a visit to the factory on 12 February 2007 where there was an interview of Mr Amit Misra, the Operations Manager of the respondent. 4 I have ruled earlier that s 87(1)(b) of the Evidence Act 1995 (Cth) has the effect that an employee is able to make an ex post facto admission binding the employer provided that it relates to a matter within the scope of the person's employment. 5 The first basis of objection was that the evidence was improperly obtained. A voir dire was held in relation to that question. 6 The starting point is Pt 6 of the Workplace Relations Act 1996 (Cth) (the Act) dealing with workplace inspectors, as the deponent was an inspector at all times material to this issue. It is submitted for the respondent that it is apparent that Inspector Goodall entered the premises that she did in order to interview the individuals pursuant to s 169(2)(b)(iii) of the Act. It follows, so it is said, that the only conclusion available is that the purpose was not to investigate whether there was, or had been, a contravention but to obtain evidence in relation to the contravention that had already been the subject of a decision to prosecute. It was submitted that such a purpose was beyond the scope of s 169(1). Put another way, the power was spent once the decision to proceed had been taken. The evidence was, therefore, obtained illegally. 8 The first answer by counsel for the applicant is that there is no evidence that the deponent was exercising the compulsory statutory powers in conducting the interviews in question. It is submitted that she was simply asking questions of persons willing to answer without compulsion. There is no express reference to the use or existence of the statutory powers in relation to the relevant interviews. It is, at least, doubtful whether the statutory preconditions for the operation of s 169(2)(a) existed in relation to the Brownbuilt premises. On the other hand, Inspector Goodall was no doubt presenting as an authorised inspector and it may not be necessary to wave a badge to assert the statutory powers to gain entry and conduct the interviews. 9 It is not necessary to resolve that issue as, in my opinion, the objection cannot succeed in the face of the decision of the Full Court in Laing v Carroll [2005] FCAFC 202 ; (2005) 146 FCR 511 which concerned the operation of the predecessors to s 169 of the Act, namely, s 83BH and s 86 of the Act as it stood in 2003. The sections cannot be distinguished in substance and the reasoning in Laing [2005] FCAFC 202 ; 146 FCR 511 is directly applicable to the present circumstances. Lander J gave the leading judgment on this point (at [246]---[286]). Kenny J agreed (at [82]) but added some observations of her own on this point ([90]---[93]). On this reasoning, the powers in question are not spent, even by the institution of civil penalty proceedings. It seems that Spender J would agree ([76]). There is no need for me to repeat the analysis of the authorities to be found in those judgments. I would only add a reference to the judgment of Merkel J in Health Insurance Commission v Freeman (1998) 88 FCR 544 at 558---560 (agreed with by Von Doussa J and Carr J). The argument is weaker in this case than in Laing [2005] FCAFC 202 ; 146 FCR 511 as the proceeding had not been commenced at the time of the interviews. It can be concluded that a decision in principle to commence the proceeding had been taken by 2 December 2006. That is not incompatible with the necessity for completion of the investigation prior to actual commencement of the proceeding. I should add that there is no basis here for an argument that the interviews constituted a contempt of court. The evidence was not illegally obtained. 10 Separate objection is taken to para 4 of the affidavit, referring to a conversation with a Mr Huuson Nguyen. I agree with the submission for the respondent that this evidence is not admissible, even with the assistance of s 87 of the Evidence Act . There is no evidence that the scope of his employment is such as to make the statements admissible. Paragraphs 3 and 5 fall with para 4. 11 Objection is taken to paras 18---23 of the affidavit on the basis that they go beyond the leave which was granted to lead further evidence. A conscious decision was made by the deponent to omit the content of these paragraphs from the statement which had previously been tendered and rejected as the interviewee had requested that the comments be kept strictly confidential and not on the record. I can see no good reason for granting leave to permit that decision to be reversed. It is clear enough that the statements would not have been made for the record. Even if admissible pursuant to s 87 of the Evidence Act , there would be arguments for excluding the evidence pursuant to either s 135 or s 138 of that Act. Leave is refused and the paragraphs will be rejected. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | whether evidence improperly obtained investigative powers of workplace inspector are not spent by a decision to commence court proceedings investigative powers of workplace inspector are not spent by a decision to commence court proceedings evidence workplace relations |
For convenience, the applicant shall be referred to as 'Dragan'. 2 Dragan, a citizen of both Australia and Serbia is in custody at the Parklea Correctional Centre pending a hearing in the Local Court before the fourth respondent. Such hearing is to commence on 6 December 2006 pursuant to s 19 of the Extradition Act 1998 (Cth) ('the Act') and will determine whether Dragan should be surrendered to the Republic of Croatia. 3 Dragan has instituted proceedings in this Court seeking an order in the nature of habeas corpus against the Minister, the second respondent and the fourth respondent and an order that the Minister, the third and fourth respondent be restrained from taking any step which facilitates Dragan's surrender to the Republic of Croatia. 4 The Minister now moves the Court for an order pursuant to Order 35 Rule 1 of the Federal Court Rules that the hearing of Dragan's claims in this Court be adjourned until the magistrate has determined Dragan's eligibility for surrender. That motion is the subject of this decision. Thereafter Warrant KIO-86/05 ('the warrant') was issued in Croatia for his temporary arrest in respect of alleged offences committed by Dragan against the Basic Criminal Code of the Republic of Croatia ('the Code'). The warrant refers to one count of alleged war crimes against the civil population under Article 120 of the Code and to two counts of alleged war crimes against prisoners of war under Article 122. 6 On 19 January 2006 Dragan was taken into custody in Sydney pursuant to a provisional arrest warrant issued under s 12(1) of the Act. This section authorises a magistrate to arrest a person if the magistrate is satisfied, on the basis of affidavit evidence, ' that the person is an extraditable person in relation to the extradition country ' (see s 12(1)(b)). 7 The Act prescribes the procedure to be followed when an ' extradition request ' is made by an ' extradition country ' in respect of an ' extradition offence' . 'Extradition offence' is defined in s 5 of the Act, and includes, inter alia, an offence against the law of the country for which the maximum penalty is death or imprisonment for a period of not less than 12 months. ' Extradition request' is defined as 'a request in writing by an extradition country for the surrender of a person to the country ', and ' extradition country ' is identified as any country that is declared by the regulations to be an extradition country. 8 Section 16(1) enables the Attorney General to issue a notice to a magistrate once an extradition request is made , informing a magistrate that a request has been made for extradition. The Extradition (Croatia) Regulations 2004 ('the Regulations') were made pursuant to the Act and provide inter alia that the Republic of Croatia is an extradition country for the purposes of the Act. 10 On 18 March 2006 following receipt of an extradition request from Croatia, the Minister issued a notice pursuant to s 16(1) of the Act ('the s 16(1) notice'). It includes causing death, severe bodily harm or serious damage to people's health, torture or inhumane treatment of civilians resulting from orders to attack a civilian population in violation of the rules of international law in times of war, armed conflict or occupation. The punishment prescribed for such offence is imprisonment for not less than five years or imprisonment for twenty years. 12 Article 122 of the Code is entitled ' War Crimes Against Prisoners of War '. Such Article provides that a person who in violation of the rules of international law, orders inter alia, the killing, torturing or inhumane treatment of prisoners of war, is liable to punishment by imprisonment. The prescribed punishment is the same as that contained in Article 120 of the Code. 13 Pursuant to s 19 of the Act the magistrate, in determining whether extradition should occur, must find that there are offences in Australia equivalent to those with which Dragan is charged. This concept is known as 'dual criminality'. The Minister claims that the equivalent offences in New South Wales to those referred to in the warrant are contained in the Crimes Act 1900 (NSW), namely assault occasioning bodily harm and common assault (ss 59(1) and 61 ); murder as accessory before the fact and/or soliciting or encouraging a person to commit murder (ss 19A and 26 ); and murder, malicious wounding, malicious destruction of property, firing a firearm with reckless disregard for safety, and stealing property in a dwelling house (ss 19A , 35 , 195 , 93GA and 148 ). Each offence carries a prescribed penalty including imprisonment for a period of not less than 12 months. 14 Following his apprehension, Dragan instituted proceedings for a writ of habeas corpus in the High Court of Australia claiming that both s 15 of the Act and the Regulations were invalid. On 15 June 2006 those proceedings were dismissed: see Vasiljkovic v The Commonwealth of Australia & Ors [2006] HCA 40 . 15 On 7 July 2006 Dragan instituted the present proceedings by filing an application stated to be pursuant to s 39B of the Judiciary Act 1903 (Cth). Do the Extradition (Croatia) Regulations 2004 apply to make the Republic of Croatia an extradition country under the Extradition Act for the purpose of extradition for war crimes against prisoners of war and the civilian population as alleged against the Applicant by the Republic of Croatia in the extradition request received by Australia from the Republic of Croatia? Do the Extradition (Croatia) Regulations 2004 make the Republic of Croatia an extradition country for the purpose of extradition for war crimes against prisoners of war and the civilian population in the territory of the former Socialist Federated Republic of Yugoslavia as alleged against the Applicant by the Republic of Croatia in the extradition request received by Australia from the Republic of Croatia? Does s.11(1)(b) of the Extradition Act allow the Extradition (Croatia) Regulation 2004 to specify the Republic of Croatia as an extradition country for war crimes in the former Socialist Federated Republic of Yugoslavia that are the subject of United Nations Security Council Resolution 827 made under Chapter VII of the on 25 May 1993? Dragan further submits that the alleged crimes are the subject of the Statute for the International Criminal Tribunal for the former Yugoslavia (adopted 25 May 1993 by Security Council Resolution 827 ). He disputes that the offences under the Crimes Act 1900 (NSW) relied upon by the Minister constitute equivalent offences to those referred to in the s 16(1) notice. Instead he claims that the equivalent offences are contained in Chapter 8 Division 268 Subdivisions D, E, F, G, and H of the Schedule to the Criminal Code Act 1995 which refer specifically to war crimes, and particularly to grave breaches of the Geneva Conventions. Dragan refers to the distinction between war crimes and crimes under municipal law as considered by the High Court in Polyukhovich v Commonwealth of Australia and Another [1991] HCA 32 ; (1991) 172 CLR 501 especially Brennan J (as he then was) at 557-579. 17 For these reasons Dragan submits that there are no offences under New South Wales law equivalent to the war crimes with which he is charged, with the consequence that there could be no finding of dual criminality. It would follow that he is not eligible for surrender. Even if the magistrate declined to hear the Issues, s 21 of the Act permits a review of the decision of the magistrate to this Court or to the Supreme Court. If necessary the Issues could be heard together with those proceedings. Accordingly, the Minister submits that Dragan will not be disadvantaged if the proceedings before this Court are adjourned until the magistrate has delivered judgment. 19 The Minister also submits that in accordance with established authority, the Court, in the exercise of its discretion, should not permit the fragmentation of the criminal process by determining the Issues pending the magistrate's hearing. The Minister relies upon several authorities including Harris v Attorney-General of the Commonwealth and Another (1994) 52 FCR 386; Peniche v Hannan [1999] FCA 915 ; Yates v Wilson and Others (1989) 168 CLR 338; Forsyth v United Kingdom [2003] FCA 1084 , and submits that they demonstrate a strong presumption against interference with the statutory extradition process. 20 As a separate consideration the Minister says that the Court should not permit a second application to be made for habeas corpus when Dragan has already brought proceedings in the High Court of Australia for habeas corpus and the relief now sought from this Court could have been raised before that Court. The Minister relies upon Metwally v University of Wollongong [1985] HCA 28 ; (1985) 60 ALR 68 in support of the submission that Dragan's application should be refused on this discretionary ground. 21 Dragan opposes the adjournment and submits that a determination of the Issues prior to the magistrate's hearing would decide whether the Geneva Conventions operate to the exclusion of the Regulations. Such determination would resolve the question of Dragan's eligibility for surrender. 22 Dragan also proposes, under s 19(1)(b) to challenge the jurisdiction of the magistrate on the basis that the s 16(1) notice and supporting documents do not satisfy the requirements of that subsection because of the absence of dual criminality. Dragan submits that upon a hearing under s 19 of the Act, the magistrate is confined to a consideration of the specific grounds referred to in s 19 and that any right of appeal or review to this Court under s 21 is limited to a consideration of those issues only. As authority for these propositions Dragan relies upon Director of Public Prosecutions of the Commonwealth and Another v Kainhofer [1995] HCA 35 ; (1995) 185 CLR 528; Federal Republic of Germany v Parker (1998) 84 FCR 323; Pasini v United Mexican States and Others [2002] HCA 3 ; (2002) 209 CLR 246. Dragan therefore submits that the most expeditious method of challenging the magistrate's jurisdiction under s 19 of the Act is by way of application under s 39B(1) of the Judiciary Act 1903 (Cth). 23 In response to the Minister's submission that the Issues could have been brought in the High Court proceedings, Dragan submits that the Minister could have raised such questions, and submits that the principle in Metwally has no application. Dragan relies upon Regina v Governor of Brixton Prison; Ex parte Osmon (No. 3) [1992] 1 WLR 36 at 43 as authority for the principle that the raising of a new legal argument late in proceedings for habeas corpus does not amount to an abuse of process. Accordingly, this Court has jurisdiction to entertain the claim for relief under s 39B(1A)(c) of the Judiciary Act (1903) (Cth). The essential question is whether such jurisdiction should, in the Court's discretion, be exercised. 25 Part II of the Act establishes the procedure to be followed when an application for extradition has been made. It commences with the issue of a provisional arrest warrant (s 12(1)), the remand before a magistrate before execution of the warrant (s 15); the issue of the notice by the Attorney-General pursuant to s 16(1); the determination of eligibility for surrender as provided by s 19(1). A party wishing to challenge the magistrate's decision is entitled to seek judicial review as provided by s 21 of the Act. Then consideration must be given to the compliance of the supporting documents with the requirements of sub-s (2)(a) and (b). The character of "the conduct of the person constituting the offence... or equivalent conduct" must be ascertained under sub-s (2)(c) (19). And, finally, the magistrate must decide whether the person has shown any substantial grounds for believing that there is an extradition objection in relation to the offence: sub-s (2)(d). The term "extradition objection" is defined by s 7 (2)). Pursuant s 19(2)(c), the magistrate must be satisfied that the crimes alleged against Dragan would constitute crimes if committed in New South Wales. In considering this fundamental issue, there would appear to be no bar to Dragan submitting to the magistrate that there is no 'dual criminality' because the crimes with which he is charged constitute war crimes within the Geneva Conventions in respect of which there are no equivalent offences in New South Wales. The decision will determine the question of dual criminality and therefore the applicability of the Regulations. In arriving at this decision, the magistrate will have the benefit of all of the material facts relating to the charges against Dragan. If Dragan is dissatisfied with the decision, he is entitled to seek judicial review under s 21 on such an application the Court will determine whether the magistrate's administrative decision was correct: see Pasini v United Mexican States and Others (per Gleeson CJ, Gaudron, McHugh and Gummow JJ at [15-18]. In such a case, the Court would be entitled to quash the magistrate's order and direct the magistrate to order the release of the person (107). The Minister disagrees with several facts upon which the Issues rely. Accordingly there is no ' discrete point of law on uncontested facts ' (see Harris) , the resolution of which would determine all issues between the parties. Accordingly Dragan's amended application before this Court does not raise 'a discrete question of law on incontestable facts' as submitted by Dragan. 31 Dragan submitted that it would be more convenient for the Issues to be determined separately to the magistrate's hearing. Contrary to Dragan's submission, the Court is satisfied that a hearing of the issues prior to the magistrates decision, would offend the anti-fragmentation principle. 33 For the above reasons, this Court is satisfied that its discretion should be exercised against determining the Issues, and the Court will adjourn Dragan's application to this Court. In reaching this decision the Court makes no finding upon the merits of Dragan's submissions. 34 Since the Court has already determined to grant the adjournment sought, it is not necessary to deal with the submission of the Minister based on Metwally . | hearing pending before magistrate to determine whether person is eligible for surrender application for habeas corpus application to adjourn hearing for habeas corpus whether issues raised on habeas corpus application should be raised before magistrate matters relevant to exercise of discretion p rinciple against fragmentation adjournment granted. extradition |
The appellant husband and his wife came to Australia on temporary business visas in 2003, and established a car wash business in the North Rocks Westfield shopping complex. That business closed in late 2005, and the appellants say they then purchased "a bigger car wash business ... employing 2 full-time Australian citizens" which was conducted at a Caltex service station at Lane Cove in Sydney. On 23 January 2007, an agent lodged a residency visa application for the husband as primary applicant, and his wife and two children as secondary applicants. Officers of the Department of Immigration and Citizenship (the Department) visited the business on 29 March 2007. They observed "4 young men working on two cars when we arrived". The first appellant told the officers that he had no "paperwork" at the business, and said that the employees were paid in cash. He later told the Department that the casual workers were "working holiday visa holders". However, their wages did not appear in the business's company accounts for 2006, and had not been declared to the Australian Taxation Office for any of the four quarters in 2006. In a letter to the first appellant dated 19 February 2008, an officer of the Tribunal said, in respect of the employment of a number of casuals during the calendar year ending 31 December 2006, "it appears that the salaries of the casual employees had not been declared and that PAYG withholding tax obligations on their behalf had not been met". The letter was in relation to the criteria necessary for the grant of the relevant visas. And due to the lack of interest from the Australian general public in working in this type of labour work, I had no choice but to rely on overseas people such as working holiday makers for the required job. They work for a short period due to their travel plan and work limitation condition. This has been the main reason why they were omitted from employment declaration and PAYG withholding tax. I have now rectified this situation and will continue to do the right things. I regret about the default of conducting the business in the way that had gone through. The delegate found that the salaries had not been declared to the ATO and that PAYG withholding tax obligations on their behalf had not been met and that the first named visa applicant "had evaded tax obligations through participation in the 'cash' or 'black' economy and this behaviour "would be likely to be offensive or to give rise to controversy in the Australian economy". The Tribunal does not disagree with him regarding the nature of the employment scenario he outlined to it. But the crucial point is that he has admitted to breaking the law over a period of time by bypassing payroll tax, superannuation and workers' compensation payments through cash payments to his casual employees. The employees for their part have evaded paying income tax. He, therefore, has 'a history of involvement in business activities' meaning an elaborated, prolonged and consistent period of conduct in activities which are likely to be offensive to a large section of the Australian population and which are unlawful. Furthermore, although the first named visa applicant has claimed to have rectified these payments, he did not desist from this conduct until discovered by the Department on a site visit in regards to his Business visa application. The Tribunal finds, therefore, that the first named visa applicant does not meet the criterion in clause 892.214. The grounds of that Amended Application were: The decision of the second respondent was based on a statutory provision that is invalid. An order that a writ of certiorari be issued quashing the decision. A declaration be made that the decision of the second respondent was made in excess of jurisdiction and is null and void. An order that the first respondent pay the applicant's costs. Federal Magistrate Smith said: I note that the applicants did not submit that the Tribunal misconceived the criterion's reference to 'history' or 'involvement' or 'business activities' when addressing the applicant's conduct. They accepted that it was within the ambit of the criterion for the Tribunal to address the failure of the applicants' company to comply with PAYG and other legal requirements in relation to its employees over a period of 12 months prior to the visa application and continuing until these deficiencies were discovered by the delegate. In my opinion, this was properly conceded. The phrase "not generally acceptable in Australia" --- even read with the words limiting it to "involvement in business activities" --- is vague and so incapable of ready determination that it could mean almost anything. While one could readily point to conduct which would come within the provision --- for example the border trading activities discussed in Minister for Immigration v Lay Lat (2006) 151 FCR 214 --- the sheer breadth of possible circumstances in which the provision might be applied could leave a visa applicant subject to arbitrary exercise of a discretion of a decision maker as to whether or not the clause has been met. Concerning the contention that cl 869.214 was invalid because it was uncertain, Smith FM said: The applicants' submissions referred to a statement by Starke J in Brunswick Corp v Stewart [1941] HCA 7 ; (1941) 65 CLR 88 at 97, cited by Weinberg J in Vanstone v Clark at [143]. This suggests that delegated legislation could be held invalid because it is " uncertain, that is, does not contain adequate information as to the duties of those who are to obey it ... or is unreasonable, that is, in this connection, so oppressive or capricious that no reasonable mind can justify it". As a consequence, it was conceivable that decision-makers might apply their own idiosyncratic standards, and might penalise behaviour which was trivial or not deserving of the withholding of a visa. However, I do not accept these arguments. Unlike such standards, the standards governing unacceptable business activities would usually be identifiable by reference to Australia's laws and prevailing business ethics and practices. There would usually be little controversy about these. In doubtful situations, decision-makers would have access to expert or experienced sources of advice and information about relevant business standards. Smith FM concluded: I therefore do not accept that the criterion adopts a meaningless test, nor one incapable of application by the Minister and his delegates in a reasonable, consistent, and rational manner. His Honour said: ... It is clear that the Tribunal took into account all the circumstances of the applicants' failure to comply with the relevant legislation, including the period of time over which the business had operated with 'black' labour, and the failure to rectify this situation until it was discovered on the site visit by Department officers. The Tribunal also took into account its assessment of how the conduct would be regarded generally in the Australian community. In its terms, this conclusion did more than reach a conclusion that the activities were unlawful. It shows that the Tribunal did consider whether the activities were "generally acceptable in Australia" from a broader perspective than legality alone. Smith FM later said: ... I am not persuaded that [the Tribunal's] references to the unlawfulness of the conduct reveal that it confined its consideration of that element alone. Because the Federal Magistrate rejected the contention that cl 892.214 was invalid, and also rejected the contention that the Tribunal reasoning showed that it had proceeded upon a misconstruction of cl 892.214, his Honour dismissed the application with costs. The Notice of Appeal to the Federal Court from the judgment of Smith FM was filed on 16 December 2008, and contained two grounds: The learned Federal Magistrate erred in finding that Clause 892.214 in Schedule 2 of the Migration Regulations 1994 was not an invalid exercise of the legislative power delegated pursuant to s 31(2) of the Migration Act 1958 . The learned Federal Magistrate erred in finding that the second respondent did not misconstrue clause 892.214 in Schedule 2 of the Migration Regulations 1994 . The decision of the second respondent dated 18 June 2008 be set aside. The first respondent pay the appellants' costs. The arguments addressed to this Court, however, are not precisely the same as the arguments which were put to the Federal Magistrates Court. Mr N Poynder, counsel for the appellants, addressed the second ground of appeal at the outset of his submissions, contending that the Tribunal did not address the test in criterion 849.214. He submitted the Tribunal failed to ask whether the appellants had a history of involvement in business activities that are of a nature that is not generally acceptable in Australia, but rather simply considered whether the business activities of the male appellant were unlawful, and having so concluded, found that was sufficient to find that he did not meet that criterion. The policy intention of this criterion is to guard against the entry of people who may otherwise satisfy Business Skills visa criteria, but whose business is in an industry, or whose business practices are of a nature that would generally be unacceptable to the Australian community, were the business to operate in Australia. If the business activities and practices of the applicant and their spouse are lawful throughout Australia then this requirement is taken to have been met. If officers have doubts as to whether a business would be acceptable in Australia, they should contact the relevant policy area in national office. If the Tribunal in fact equated unlawfulness of the husband appellant's business activities with non-satisfaction of cl 892.214, as the appellants contend it did, it would have misapplied cl 892.214. It may well be that some conduct which is unlawful is not of a nature that is not generally acceptable in Australia. Being engaged in SP bookmaking, either as a bookmaker or as a better, even though unlawful, might not be an activity that is "not generally acceptable in Australia". Similarly, jaywalking is an activity that is unlawful, but might not be regarded as "not generally acceptable in Australia". Advertising by way of business signage which does not comply with the by-laws might be unlawful, but that activity might not be activity that is "not generally acceptable in Australia". The short answer to the second ground of appeal, however, is that the Tribunal did not, as the appellants contended before the Federal Magistrate and repeated before this Court, hold that cl 892.214 was not complied with for the reason simply that the business activities involving tax evasion were unlawful. It is true that the Tribunal in its reasons set out in [9] above say the crucial point is that he has admitted "to breaking the law", and he therefore has "a history of involvement in business activities" which are likely to be offensive to a large section of the Australian population and which are unlawful. The Tribunal finds, therefore , that the first named visa applicant does not meet the criterion in clause 892.214. The reasons of the Tribunal contain the conclusion that the male appellant "had a history of involvement in business activities, meaning an elaborate, prolonged and consistent period of conduct in activities which are likely to be offensive to a large section of the Australian population and which are unlawful". That conclusion indicates that the Tribunal characterised the activities as, first, being "likely to be offensive to a large section of the Australian population", and secondly, as being "unlawful". It shows that the Tribunal did consider whether the activities were "generally acceptable in Australia" from a broader perspective than legality alone. In my judgment, the Federal Magistrate was correct to conclude that the Tribunal did not misapply cl 892.214. The second ground in the Notice of Appeal therefore fails. The submissions for the appellants in relation to the first ground of appeal, asserting the invalidity of cl 892.214, focus on the phrase "not generally acceptable in Australia". The submission on the invalidity point by the appellants is that the words, and, in particular the words, "not generally acceptable in Australia" are incapable of any meaningful determination, with the result that cl 892.214 is not a valid exercise of the legislative power delegated under s 31(3) of the Act. There are two aspects of the contention that the clause is invalid because its content is unascertainable. The first concerns the words "in Australia". The appellants point out that the criterion is not expressed as "not generally acceptable by Australians" or "not generally acceptable to a majority of Australians". The contention is that the identity of who is to judge the unacceptability is unascertainable. Counsel rhetorically asked, "does that include only Australian citizens; might it include temporary residents; might it include visitors to Australia; could it be limited to the elected representatives of Australia that is parliament? " The contention for the appellants on this part of its submission as to unascertainability is that the words "in Australia" are incapable of determination. Mr Lloyd of counsel, appearing for the Minister, provided the Court with the Macquarie Dictionary definition of "generally". 1 . with respect to the larger part, or for the most part: a claim generally recognised. 2. usually; commonly; ordinarily: he generally comes at noon. In my judgment, the word "generally" bears the first meaning set out in the Macquarie Dictionary: "with respect to the larger part, or for the most part". The word "accepted" is described in the Macquarie Dictionary as "customary, established, approved". In the context of the criteria set out in cl 892.21, the expression "not generally acceptable in Australia" requires consideration of whether an applicant, or his or her spouse, has a history of involvement in business activities that are of a nature that the larger part, or most, of people in Australia would not or do not approve of. I therefore reject the contention that the words of the clause are "incapable of meaningful determination". Dixon J did acknowledge in King Gee that a regulation could be invalid if it provided a standard according to a fact that was not ascertainable. The High Court held in King Gee that the regulation, properly construed, was incapable of determining a price for outwear clothing which was what the empowering Act required the regulation to do. As a consequence, it was held that the regulation was invalid. Conduct which may attract a direction under cl 7(1)(b) is conduct which "causes annoyance ... to participants in a World Youth Day event". That is to say it is conduct which actually results in its observers being ruffled, troubled, vexed, disturbed, displeased or slightly irritated. These are responses which depend very much on the individuals concerned. Some may find protests of the kind which are proposed by the applicants mildly amusing. Others may be practising Catholics or Christians who agree with some of the protestors' points and are not troubled by them. ... There is no objective criterion to assist the judgment of "an authorised person" in deciding whether to issue a direction under cl 7. There may be circumstances in which it would be difficult if not impossible for a person to whom a direction is given to know whether his or her conduct was such as to authorise the giving of the direction. It is little consolation to the person affected by a direction that he or she could argue the point later in a prosecution in a court of law as the State suggested. On the other hand, the Full Court upheld the validity of cl 7(1)(b) of the regulations authorising a direction to cease engaging in conduct that causes inconvenience to participants in a World Youth Day event, because it was posited on an ascertainable fact. It requires a judgment by the authorised person of objective inconvenience. Such inconvenience may arise, for example, where protestors by their locations or actions hinder or obstruct the movement of participants or are so loud in their protest as to impair communications between groups of participants and officials. The term "inconvenience" may be criticised as conferring wide powers of uncertain ambit upon authorised persons but it is, in our opinion, a term which can reasonably be construed as limited to matters susceptible of objective judgment. That character is, in my judgment, one which is capable of determination, as a matter of assessment or judgment. Counsel for the appellants referred also to the judgment of Refshauge J in R v Goreng-Goreng [2008] ACTSC 74 ; (2008) 220 FLR 21. That case was concerned with the validity of a regulation, reg 2.1(3) of the Public Service Regulations 1999 (Cth). Refshauge J referred to Merrell v Roberts (1909) 26 WN (NSW) 73 , which held that a regulation which prohibited driving "at such rate of speed ... or in a manner as to ... frighten or injure any ... animal" was held not to be uncertain. Counsel for the appellants referred also to the judgment of the Full Court of the Federal Court in Vanstone v Clark [2005] FCAFC 189 ; (2005) 147 FCR 299. That case concerned quite different statutory provisions, and the attack on the validity of those provisions was quite different from the attack mounted in the present case. It provides no relevant assistance to the disposition of the present appeal. The Federal Magistrate, in the context of whether the business activities of the husband appellant were "generally acceptable in Australia", held that that test had a meaning and was capable of application in a reasonable and proportionate way. His Honour held that the criterion was not invalid, and the male appellant in the circumstances of this case was in breach of that criterion. In my opinion, the disqualifying criterion in cl 892.214, that neither an applicant nor his or her spouse has a history of involvement in business activities that are of a nature that is not generally acceptable in Australia, requires a consideration of whether there is a history of involvement in business activities that are of a nature that the larger part, or most, of people in Australia would not or do not approve of. The activities of the appellant in the present case were identified by the Tribunal as bypassing payroll tax, superannuation, and workers' compensation payments through cash payments to his casual employees, with the consequence that the employees, for their part, have evaded paying income tax. The Tribunal concluded those activities are activities "which are likely to be offensive to a large section of the Australian population and which are unlawful". Those findings support the conclusion that "those business activities are not generally acceptable in Australia". The Federal Magistrate concluded that "the first named visa applicant does not meet the criterion in cl 892.214". No error taints this conclusion. Counsel for the respondent submitted that if the Court were of the view that the criterion was invalid, there would be a question of severability in respect of the various criteria in cl 849.21. Since, in my view, that criterion is not invalid, the question of severability does not arise. For the above reasons, the appeal should be dismissed. The appellants should pay the costs of the first respondent, to be taxed if not agreed. I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. | applications made for business skills (residence) (class df) visas applications refused on the grounds that the appellants had a history of involvement in business activities that are of a nature that is not generally acceptable in australia whether cl 892.214 in schedule 2 of the migration regulations 1994 (cth) which proscribes such involvement is invalid because it is overly wide, vague and uncertain held that cl 892.214 is capable of meaningful determination and a valid exercise of the delegated power in s 31(2) of the migration act 1958 (cth) whether the migration review tribunal misconstrued a test of "not generally accepted in australia" with a test of "unlawful in australia" held that the tribunal characterised the activities as, first, being "likely to be offensive to a large section of the australian population", and secondly, as being "unlawful" tribunal did not misapply cl 892.214 appeal dismissed ss 31(2) , 476 migration regulations 1994 (cth) cl 892.214 in schedule 2 cited evans v new south wales [2008] fcafc 130 ; (2008) 168 fcr 576 relied on ireland v wilson (1936) all er 358 discussed king gee clothing company pty ltd v commonwealth [1945] hca 23 ; (1945) 71 clr 184 referred to merrell v roberts (1909) 26 wn (nsw) 73 discussed r v goreng-goreng [2008] actsc 74 ; (2008) 220 flr 21 referred to migration migration act 1958 (cth) city of brunswick v stuart [1941] hca 7 ; (1941) 65 clr 88 |
Six of the categories are sought upon the basis that they are necessary for their expert witness, Professor Rubinfeld, to complete his report. The other two categories comprise documents which were filed or served in proceedings in the Victorian Registry of the Court, Cadbury Pty Ltd v Amcor Ltd & Ors (VID 1377 of 2006). The background to the claim for the first six categories is to be found in two judgments of Tamberlin J, Jarra Creek Central Packaging Shed Pty Ltd v Amcor Ltd [2007] FCA 1559 ; Jarra Creek Central Packaging Shed Pty Ltd v Amcor Limited [2009] FCA 60. Tamberlin J was the docket judge for the matter before he reached the age of Constitutional retirement on 31 March 2009. Tamberlin J's second judgment was delivered on 6 February 2009 when his Honour made orders for further discovery sought by the applicants. He did so upon the basis of evidence from Professor Rubinfeld and "the unsatisfactory nature of the discovery to date". The essence of what was ordered by Tamberlin J was the discovery of sales/price, costs of production and production data for corrugated fibreboard packaging (CFP) and pulp paper products (PPP), which are physical inputs in the manufacture of CFP. His Honour's orders covered the period from 1 January 1998 to 1 May 2006. The reason why discovery was ordered was that those documents were considered to be necessary for the purpose of enabling Professor Rubinfeld to construct an economic model to arrive at an opinion as to what would have been the true price of CFP and PPP but for the existence of a cartel between the Amcor respondents and the Visy respondents. The cartel is said in the Statement of Claim to have been formed in early 2000 and continued until November 2004. The existence of the cartel is said to have been publicly exposed when the Australian Competition and Consumer Commission issued a press release on 21 December 2005, the same day on which it commenced proceedings against Visy Industries Holdings Pty Ltd in this Court. The purpose of discovery of documents covering the period before and after the existence of the cartel is to enable Professor Rubinfeld to have documents covering a "clean period" before and after the cartel so that economic evidence may be given as to the "but for" hypothesis. The period for which documents were to be discovered was determined as long ago as Tamberlin J's first judgment on the question in October 2007. His Honour accepted the need for clean period documents before and after the cartel period. He said at [14] of that judgment that he was not satisfied "at this stage" that documents outside of the eight year period were "appropriate or necessary" for the purpose of ascertaining a benchmark. The applicants now rely on evidence of certain deficiencies in the material produced, and on further evidence from Professor Rubinfeld to support the widening of the period. The essence of Professor Rubinfeld's further evidence is that the material provided to date does not have sufficient coverage or detail to enable him to conduct a reliable analysis. There was some criticism by counsel for the Amcor and Visy respondents of the nature of Professor Rubinfeld's evidence. However, I am satisfied that it does demonstrate that the discovery of data for a wider period than that ordered by Tamberlin J is "necessary in the interests of a fair trial": Trade Practices Commission v CC (New South Wales) Pty Limited (No 4) (1995) 58 FCR 426 at 436 per Lindgren J. The "clean period" data which is sought places some emphasis on the post-cartel period. This is because of the inadequacy of the pre-cartel data discovered to date. Although Professor Rubinfeld accepts that it is preferable to analyse data for the period prior to the formation of the cartel, he says that in the absence of such data, post-cartel material takes on an even greater importance. Although some post-cartel material, namely from November 2004 to May 2006 has already been produced, Professor Rubinfeld says that this is "highly unlikely" to be sufficient. I accept this evidence and the reasons given for it, including the difficulties associated with the lingering effects of cartel behaviour. I reject the suggestion of the respondents as to the lack of utility of the evidence. Nor do I consider that in litigation of this magnitude, the costs associated with the exercise are so burdensome as to warrant denial of additional discovery. The only real question is, as Tamberlin J observed nearly two years ago, to determine the suitable period before and after the cartel behaviour. In doing so, I take into account the apparent inadequacy of the material going back to 1998 and the need to set a period after the existence of the cartel was made public, to take into account the possible lingering effects on competition. The Court maintains control over its own interlocutory orders, particularly those made for the management of the proceedings. I am satisfied that I ought to make orders for discovery of the documents covering categories 1 to 6 in the Amended Notice of Motion. I do not consider it is appropriate to limit the period to 30 June 2007 as was submitted on behalf of the respondents. To do so would fail to take into account the date on which the existence of the cartel is said to have been exposed, the potential lingering effects of the cartel on the market, and the inadequacy of pre-cartel data. Categories 7 and 8 seek, as I said earlier, documents filed in the Cadbury proceeding. These documents are sought in relation to the issues of liability and damages. As to liability, the Amcor and Visy respondents do not admit either the existence of the cartel or that it was put into effect. Nevertheless, I do not consider that the documents identified in categories 7 and 8 are "necessary" within the terms of O 15 r 15 or Practice Note 14. Nor are they "directly relevant" to the proceeding: Australian Competition and Consumer Commission v Advanced Medical Institute Pty Ltd [2005] FCA 366 at [21] --- [23] per Lindgren J. The issues in this proceeding are different from those in the Cadbury proceeding. Such overlap as does exist is not sufficient to warrant the orders. To the extent that the documents are sought on the issue of damages, I do not consider they are relevant or necessary. As was submitted by the respondents, any relevant documents are already covered by existing orders so that what is really sought is nothing more than the right to "fish" for further material. One further order was sought on the motion. It was for leave to amend the existing Further Amended Statement of Claim. The only contest between the parties was as to the proposed [89C]. In my view, that paragraph pleads the allegations at such a level of generality that the respondents ought not to have to plead to it. The deficiency could be cured by particulars but the applicants should be in a position to do so either now, or following the further discovery I will order. I therefore propose to refuse leave in respect of [89C]. I direct the parties to bring in short minutes to reflect my reasons. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Bannon SC with Mr I.S. | application for further discovery application granted in respect of categories of documents relevant to alleged pre- and post-cartel period documents necessary to enable expert witness to construct economic model application denied in respect of documents filed in previous federal court proceeding to which respondents were parties practice and procedure |
The Magistrate made an order that the application before him was not competent, 'as the Court has no jurisdiction to hear it'. The Minister for Immigration and Multicultural Affairs ('the Minister') had filed a notice of objection to competency in the proceedings and had submitted that the application was not competent. 2 The appellant arrived in Australia on 23 February 2003. He is a national of the People's Republic of China. On 20 March 2003 he lodged an application for a protection (class XA) visa with the Department of Immigration and Multicultural and Indigenous Affairs. On 22 May 2003 a delegate of the Minister refused the appellant's application. On 11 June 2003 the appellant applied to the Refugee Review Tribunal for a review of that decision. In due course, I will set out the details of the course of the appellant's application for a protection visa and his application for review but, at this point, it is sufficient to note that on 6 January 2004 the Tribunal handed down its decision affirming the decision not to grant a protection visa. 3 On 4 July 2005 the appellant made an application to the Federal Magistrates Court for orders under s 39B of the Judiciary Act 1903 (Cth) in relation to the Tribunal's decision (see also s 475A of the Migration Act 1958 (Cth) ('the Act')). The Magistrate held that the decision was a privative clause decision and he made an order that the application was not competent. The appellant attacked the Magistrate's decision on the ground that he erred in concluding that the Tribunal's decision was a privative clause decision. If that proposition is correct, the time limit in s 477 is not fatal to the application although the delay in issuing it would still be relevant to the discretion to grant or withhold relief. He submitted that the advice or conduct of his agent was fraudulent and that that was sufficient to take the decision of the Tribunal outside the statutory definition of a privative clause decision in s 474(2) of the Act. Alternatively, if fraud was not established, the appellant submitted that nevertheless the advice or conduct of his agent was 'wrongful' and that that was sufficient to take the decision of the Tribunal outside the statutory definition of a privative clause decision. It is not clear to me precisely what the appellant means by the word 'wrongful'. Having heard the submissions, I think that what was being put was that the agent's advice was erroneous and that it had led to a failure to accord procedural fairness to the appellant. 7 The appellant submitted that s 422B of the Act did not stand in the way of the acceptance of either of his submissions. 8 On appeal, the appellant also pointed to what he said was other fraudulent conduct by his agent consisting of the preparation and submission to the Department of a false statement of the appellant and the provision of fraudulent advice to a third party. The extent to which those matters were put to the Magistrate is unclear. 9 Before considering whether the Magistrate erred in not accepting the appellant's submissions, it is necessary to say something more about the facts and to examine the Magistrate's reasons. Before he lodged his application for a protection visa with the Department, the appellant contacted Mr Yu Tan (Wayne) Han who was said to be a migration agent. He paid Mr Han a sum of money to assist him with his application. The appellant lodged a three-page typed statement signed by him with his application for a protection visa. The statement was in the English language and it detailed his experiences in China, his adherence to Falun Gong and his claim for refugee status. It seems that (at least in part) the statement was prepared by Mr Han on the basis of conversations he had with the appellant. I will refer to this as 'the statement'. 11 In his application for review the appellant nominated Mr Han of the Aozhong Immigration Affairs Centre (PO Box K922 Haymarket, New South Wales) as an authorised recipient of correspondence from the Tribunal. 12 On 6 November 2003 the Tribunal wrote to the appellant care of the Aozhong Immigration Affairs Centre advising him that it had considered the material before it in relation to the application but was unable to make a decision in his favour on that information alone. The appellant was invited to a hearing of the Tribunal on 1 December 2003 and he was told that if he did not attend the hearing and the Tribunal did not postpone the hearing it could make a decision on his case without further notice. 13 On 28 November 2003 the appellant completed a form indicating that he did not wish to come to a hearing and that form was sent to the Tribunal and received by it at 3.28 pm on 1 December 2003. 14 On 6 January 2004 the Tribunal handed down its decision affirming the decision not to grant the appellant a protection visa. I was unable to determine whether the applicant practises Falun Gong in Australia or whether he will do so if returned to the PRC. His claims could not be tested by the Tribunal nor his credibility established. Accordingly, the Tribunal is not satisfied that the applicant is a Falun Gong practitioner. This was followed in March 2004 with an application by the appellant for a bridging visa. 16 In his application to the Federal Magistrates Court, the appellant asserted that he was an 'innocent victim' of the agent, Mr Han, and he provided a letter with some additional details. The Tribunal and Mr Han were joined as respondents to the application before the Magistrate. 17 The appellant filed an affidavit sworn on 26 September 2005 and he gave oral evidence before the Magistrate. Mr Han filed an affidavit sworn on 3 November 2005, but ultimately he elected not to give evidence before the Magistrate. There was also an affidavit and evidence from a third party who had been advised by Mr Han in relation to his (the third party's) application for a protection visa. Some parts of the statement have been read to him. The statement is not correct and he did not give 'this' information to Mr Han. 2. Some time in 2003 or 2004 Mr Han told him that it was possible for him to attend a hearing in the Tribunal but, because he did not speak English, there was no need to attend. Mr Han said that he would appear on his behalf and the appellant agreed. 3. Mr Han never told him that the Tribunal had refused his application and until June 2005 he thought his application was 'still being processed'. He admitted that it was his signature on the letter to the Minister dated 24 January 2004, but disavowed any knowledge of an application to the Minister for her to intervene in his case. The Magistrate found that the appellant would have gone to the hearing if he had been told that his attendance was necessary or useful. The Magistrate found that the Tribunal was in no way aware that the appellant had been misled by Mr Han and he said that there was no evidence that 'the Tribunal was aware of any suspicious circumstances about the migration agent'. The Magistrate said that the appellant had followed the advice of his migration agent and could not now complain that the Tribunal fell into error as a result. He referred to the decision of the Full Court of this Court in S58 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 283. The Magistrate said that there was no evidence of fraud in the case and he said that in the absence of 'some exceptional circumstance' like fraud, there is no jurisdictional error where there is no defect in the Tribunal's decision-making process. The Magistrate said that the decision of the House of Lords in Al-Mehdawi v Secretary of State for the Home Department [1990] 1 AC 876 (' Al-Mehdawi ') was persuasive and should be followed. 20 The Magistrate referred to s 422B(1) of the Act. He noted the decision of Gray J in Moradian v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1590 ; (2004) 142 FCR 170, but he said that he was not confident that the approach taken by Gray J 'is the preferred view any more' and referred to the decision in Minister for Immigration and Multicultural and Indigenous Affairs v Katisat [2005] FCA 1908. 21 Other than his general finding that there was no evidence of fraud in the case, the Magistrate made no express finding concerning the preparation of the statement. As to the evidence of the third party, the Magistrate appears to have accepted that the third party was advised by Mr Han not to attend the Tribunal (although apparently that advice was given for a different reason to that given to the appellant) and that as a result he did not go. He, like the appellant, would have gone if he had been told that his attendance was necessary or useful. The Magistrate said that that evidence was not sufficient to establish that it was Mr Han's practice to advise all of his clients in this way. On appeal, the appellant also referred to two other matters which he submitted constituted fraud on the part of Mr Han. It is convenient to deal with those two matters first. 23 As I have said, the appellant's case was that at least some parts of the statement were not correct. He deposed to the fact that some parts of the statement had been read to him, the statement was not correct and he did not give 'this' information to Mr Han. He admitted that it was his signature on the statement and that on one or two occasions after his first meeting with Mr Han he had been asked to come to Mr Han's office and sign some papers and that it was possible that he was asked to sign his name. The appellant said he could not read the document because he could not read English. In evidence in chief the appellant was taken to one part of the statement and he said that the events there described did not happen to him, nor did he know the persons referred to in that part of the statement. Later in cross-examination of the appellant it became clear that Mr Han spoke Mandarin very well and that the appellant had told Mr Han what his claims were. 24 The Magistrate did not make a specific finding about whether the statement accorded with the appellant's instructions. As I have said, the Magistrate said that there was no evidence of fraud in the case. I think the Magistrate must be taken to have found that Mr Han did not knowingly concoct the statement. On the evidence, it is unclear whether part of the statement was erroneous and, if so, whether this resulted from Mr Han's negligence, but it matters not in my view because even if these matters are made out they cannot give rise to a jurisdictional error on the part of the Tribunal. 25 As far as the allegation that Mr Han was fraudulent in his dealings with the third party is concerned, it is not entirely clear how the appellant puts his argument. If he is submitting that Mr Han was fraudulent in the advice he gave to the third party and that that in some way means that the Tribunal's decision in relation to the appellant was infected with jurisdictional error, then clearly that argument cannot succeed. If, on the other hand, he is submitting that Mr Han gave fraudulent advice to the third party and that that establishes he was fraudulent with all his clients including the appellant, then that argument must be rejected because there is no reason to disturb the Magistrate's finding that Mr Han's advice to the third party was not sufficient to establish that it was Mr Han's practice to advise all his clients in that way. 26 I return then to the main submission on the appeal which relates to the agent's advice and the appellant's non-attendance at a hearing of the Tribunal. The appellant's two submissions, which are put in the alternative, are that the fraudulent conduct of the agent and the appellant's non-attendance meant that the Tribunal's decision was infected with jurisdictional error or, assuming fraud was not present, there was a breach of the rules of procedural fairness which also gave rise to a jurisdictional error. 27 I start with the submission which takes as its basis the allegation that the agent's conduct was fraudulent. In examining the authorities it seems to me that it is not always clear what is encompassed by the word 'fraud' in this context. It would include the making a false statement knowing it was false or engaging in conduct which deceives another, knowing that it would, or was likely to, have that effect. It could include other circumstances and some of the authorities suggest that circumstances may be sufficiently analogous to fraud to lead to the granting of relief. I refer by way of example to Lord Bridges' explanation in Al-Mehdawi (at 895-896) of the basis of the Court of Appeal's decision in R v Leyland Justices; Ex parte Hawthorn [1979] QB 283. 28 In this case there would be fraud if Mr Han gave advice to the appellant which he knew to be incorrect, or if he said he would do something and at the time did not intend to do it. There is no fraud if the advice was merely negligent or erroneous and if at the time Mr Han intended to do what he said he would do. On the evidence in this case there was no obvious reason why Mr Han would act fraudulently in the way in which I have explained it. The Magistrate found that there was no evidence of fraud and I see no reason to interfere with that conclusion. Although Mr Han did not give evidence, there was insufficient evidence upon which to draw an inference of fraud. The appellant's submission based on fraud falls at the first hurdle. 29 Even if I am wrong and the Magistrate erred in not making a finding of fraud, such a finding would not lead to the setting aside of the Tribunal's decision. The effect of fraud by a migration agent on a decision of the Tribunal was considered by the Full Court of this Court in the recent decision of Minister for Immigration and Multicultural Affairs v SZFDE [2006] FCAFC 142 (' SZFDE '). Applicants for a protection visa engaged a man who said he was a solicitor with a lot of experience in migration matters. Unbeknown to the applicants he had been struck off as a solicitor and deregistered as a migration agent. He told the applicants that they should not accept an invitation to appear before the Tribunal at an oral hearing because their application would be refused. He told them that he was going to write to the Minister on their behalf and he was concerned that if they appeared before the Tribunal they might say something inconsistent with what he said in the letter. He told them not to worry, that he was doing what was best for them. The Magistrate found that the agent had acted dishonestly and fraudulently. In other word s, his advice was not only bad, but also fraudulent. A majority of the Court (Allsop and Graham JJ) said that the fraud in that case did not provide a basis for setting aside the decision of the Tribunal. The Tribunal was not aware of the fraud and had complied with the Act in terms of extending an invitation to the applicants (ss 425 , 425A ). 30 Allsop J said that the decision of the Tribunal was not induced or affected by fraud (at [136]). Allsop J made the point that in the circumstances of the case before him the fraud was linked to the complaint that there had been a failure of procedural fairness. The complaint of a lack of procedural fairness could not succeed in light of ss 422B , 425 and 426A of the Act. Allsop J also said that it was not a case where it could be said that the statutory process was corrupted by fraud (at [139]). Graham J also dismissed the challenge based on fraud saying that even if there was fraud it was of no relevance (at [191] and [237]). 31 French J dissented. 33 The appellant's alternative submission was that the agent's conduct led to a breach of the rules of procedural fairness and that that gave rise to a jurisdictional error. This submission raises two questions. First, absent the particular statutory context, is there what might perhaps be called a general rule that there is a breach of the rules of procedural fairness if a party fails to attend a hearing due to the erroneous advice of his agent? Secondly, if there is such a rule, does the particular statutory context negate the rule or the granting of relief. I realise that dividing the issue into two questions is somewhat artificial, but I think it does assist in the overall analysis. 34 There are many cases in which the courts have considered whether, in the absence of fault on the part of the decision-maker, there can be a breach of the rules of procedural fairness. A number are discussed in the reasons for judgment of French J in SZFD E (see also Aronson, Dyer and Groves, Judicial Review of Administration Action (3 rd ed, 2004) pages 460-463). They can perhaps be placed in various categories depending on one or more of: the powers the Court was exercising; the status of the person at fault (ie, party's agent, other party to the proceeding or a third party); the nature of the conduct of the party at fault (ie, fraudulent or negligent); and the effect of the procedural departure. It seems fairly clear on the authorities that there can be a breach of the rules of procedural fairness in the absence of fault on the part of the decision-maker: Hot Holdings Pty Ltd v Creasy [2002] HCA 51 ; (2002) 210 CLR 438 per Gleeson CJ at 448 [22]. Equally, it seems clear on the authorities that there is no breach of the rules of procedural fairness if the fault leading to the procedural departure was that of the agent of the applicant for relief. That was the view of the House of Lords in Al-Mehdawi (supra) and of French J (at [101]-[103]) and Allsop J (at [138]) in SZFDE . The appellant's alternative submission fails on this ground. 35 The submission would fail in any event because even if there was such a general rule it could not operate in the context of the provisions of the Act. Section 422B provides that Division 4 of Part 7 is taken to be an exhaustive statement of the requirements of the natural justice hearing rule in relation to the matters it deals with. Section 425 requires that the Tribunal must invite an applicant to appear before it to give evidence and present arguments relating to the issues arising in relation to the decision under review. That invitation was given in this case. Section 426A provides that where an applicant fails to appear in response to an invitation, the Tribunal may make a decision on the review without taking any further action to allow or enable the applicant to appear before it. That is how the Tribunal decided to proceed in this case and it was entitled to do so. The conclusion that the statutory provisions allow no room for a claim that there was a breach of the rules of procedural fairness based on the erroneous advice of an applicant's agent was a conclusion reached by a majority of the Court in SZFDE (per Allsop J at [138] per Graham J at [237]-[239]). 36 The decision of the Tribunal did not involve jurisdictional error and the Magistrate's decision that the application was not competent was correct. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | judicial review procedural fairness where appellant failed to attend hearing before refugee review tribunal where visa refused by tribunal where appellant advised by migration agent not to attend hearing where appellant alleges fraud against agent effect of ss 422b, 425, 426 of migration act 1958 (cth) on availability of judicial review. judicial review jurisdictional error where alleged fraud on appellant by third party induced non-attendance at hearing where decision maker unaware of alleged fraud whether statutory process corrupted by fraud whether jurisdictional error arises procedural fairness whether breach of procedural fairness can arise without fault on the part of decision maker whether breach of procedural fairness can arise where fault is that of party's own agent. migration administrative law |
The notice of motion has been filed by the first and second respondents to the proceedings and is supported by the third respondent. 2 The proceedings were commenced by an 'application for an order of review' ('the application') under Order 54 of the Federal Court Rules . The application seeks to invoke the grounds of review set out in ss 5 , 6 and 7 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('the ADJR Act'). Indeed it seeks, indiscriminately and without any attempt at specificity, to invoke almost each and every possible ground of review provided in those provisions. 3 The decision with respect to which review is sought is contained in a letter dated 8 January 2007 written to the applicant, Mr Rahman, concerning a complaint which he made to the third respondent, the Privacy Commissioner, on 21 December 2006. The letter to Mr Rahman was signed by Ms Anna Dobkin, an Assistant Compliance Officer in the Compliance Section of the Office of the Privacy Commissioner. 4 Mr Rahman's complaint was that the Commonwealth Bank of Australia Limited ('CBA') (of which the first and second respondents are officers) had by the conduct of the first and second respondents disclosed his personal information to Centrelink. In her letter of 8 January 2007 Mr Dobkin informed Mr Rahman that it appeared his complaint did not constitute a breach of 'the privacy principles' and that she was therefore declining to investigate it. 5 In a letter dated 1 February 2007, sent to Mr Rahman before the application was filed (on 5 February 2007) Ms Dobkin reversed her earlier decision. She advised Mr Rahman, who had protested by letter faxed on 15 January 2007 against her earlier response, that she would make 'preliminary enquiries' into his allegations. 6 The term 'preliminary enquiries' comes from s 42 of the Privacy Act 1988 (Cth) ('the Privacy Act '). On 12 August 2006, the Bank was served with a section 196 notice from Centrelink ("statutory notice"). The statutory notice required the production of statements for loan account number 253350500 ("account statements") held by Mr Rahman, from 1 August 2005 to date. A copy of that notice appears at pages 1 to 3 of exhibit LRA-1. Sections 192 and 196 of the Act empower the Secretary or a delegate to require any person to give information relevant to Centrelink customers receiving their correct entitlement. However, your answers may be supplied to Mr Mohammad Rahman if requested under the Freedom of Information Act . If you do not want your answers released to Mr Mohammad Rahman please attach a statement explaining your reasons. These will be taken into account if a request is made under the Freedom of Information Act . Mr Rahman was informed by letter the same day that this had occurred. It is apparent that this information was conveyed to Ms Dobkin. 12 Subsequent to her preliminary inquiries Ms Dobkin wrote again to Mr Rahman on 28 February 2007. As you are aware from my letter to you dated 8 January 2007, I have treated your letter as a complaint under section 36 of the Privacy Act 1988 (Cth) (the Act). Specifically, NPP 2.1 limits the circumstances in which personal information may be used or disclosed. Relevantly, NPP 2.1 (g) permits an organisation to disclose personal information where that disclosure is "required or authorised by or under law. With this in mind, I advised that your complaint did not appear to constitute an interference with privacy under the Act, and that I was declining to investigate your complaint on this basis. Therefore, it appears that in this instance NPP 2.1 (g) permits CBA to disclose the specified personal information to Centrelink. It is for this reason that I am declining to investigate your complaint against CBA under section 41(1)(a) of the Act. My file in this matter is now closed. Appeals under the AD(JR) Act must be made within 28 days of the date of the final decision and may incur an application charge. Please contact the Federal Court registry in your State or Territory for more information or visit www.fedcourt.gov.au/contacts/contacts.html. For more information contact the Commonwealth Ombudsman's Office on 1300 362 072 or visit www.comb.gov.au. 14 However, on every occasion that the matter has been before the Court Mr Rahman has insisted that his application is brought only against the letter from Ms Dobkin dated 8 January 2007. With this in mind initially, the conclusion seems to be inevitable that the proceedings against the Privacy Commissioner have no prospect of success. 15 In my view the decision conveyed to Mr Rahman on 8 January 2007 was revoked by letter dated 1 February 2007, before the proceedings were commenced. As a result the application filed by him is moot. As he has insisted that the proceedings should go forward without amendment it is inevitable that I should conclude that they have no reasonable prospect of succeeding against the third respondent. 16 They have no reasonable prospect of succeeding either against the first or second respondents. There are a number of reasons for this conclusion. In the first place, there is no basis to think that either of them made a decision to which the ADJR Act applied. Moreover, s 8 of the Privacy Act renders their conduct, if it were otherwise actionable, conduct of CBA. The obligations owed by CBA as an 'organisation' identified in s 6C of the Privacy Act to comply with the 'National Privacy Principles' (see s 16A of the Privacy Act ) do not appear to me to extend to the first and second respondents independently of CBA. In my view their joinder individually to the proceedings is quite misconceived. However the matter is viewed, there is no reasonable prospect that the application could succeed against them and they are entitled to summary judgment also. 17 Even had Mr Rahman amended the proceedings to focus attention upon Ms Dobkin's letter of 28 February 2007 the application would nevertheless have no reasonable prospects of succeeding against any of the respondents. 18 So far as the first and second respondents are concerned that is for the reasons which I have already expressed. So far as the third respondent is concerned it is for the reason that Ms Dobkin appears to have correctly identified the legal position. 19 The 'National Privacy Principles' are set out in Schedule 3 to the Privacy Act . The time must be at least 14 days after the notice is given. If, as I accept, it was within the power granted by s 192 to require CBA to provide to Centrelink the information specified in the s 192 notice served on 12 August 2006, any challenge to Ms Dobkin's decision, that the matter should not be further investigated because there had been no interference with Mr Rahman's privacy, is untenable. Even if he were to amend the application there would be no reasonable prospect that the application could succeed against the third respondent. 25 In my view Mr Rahman's contentions and his application, wherever they are, or might be, directed are misconceived and without any foundation. It is inevitable that the application be dismissed for that reason and I will so order. 26 Each of the respondents sought their costs. There is no reason why some order for costs should not be made in their favour. 27 Counsel for the first and second respondents, however, made an application for their costs on an indemnity basis. There is no reason to think that either of them will have to bear the costs of their representation personally. They were each represented in the proceedings by Mr O'Sullivan, General Counsel for CBA who briefed counsel on their behalf. However the fact that CBA, and not Ms Ashpole and Mr Barker, will meet their costs is no reason to deny an application for indemnity costs if it is otherwise justified. 28 The jurisdiction of the Court to order costs is conferred by s 43 of the FC Act. The discretion is a general one. The Court takes special care when asked to make an order for indemnity costs against an unrepresented litigant but there is no bar to such an order (see Bhagat v Global Custodians Ltd [2002] FCA 223 at [55] --- [60] and Wu v Avin Operations Pty Ltd (No 2) [2006] FCA 792 at [41] --- [46]). 29 Reference is frequently made, when indemnity costs are sought, to the judgment of Sheppard J in Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 and to the principles distilled by his Honour at 232 --- 234. These principles remain a reliable guide. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the Court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs. Finn J said at [6], inter alia, 'the application was a hopeless one and ought never have been brought in the form it was'. I think that observation applies equally to the case with which I am dealing in this judgment. I can see no basis for the application whether in an unamended or an amended form. Mr Rahman's insistence on pursuing it in an unamended form rendered it, if this was possible, even more hopeless than otherwise. I think that the first and second respondents are entitled to be protected so far as possible, if they seek it, against the unnecessary expenditure of costs which Mr Rahman's application has caused. 32 As indemnity costs have been sought by the first and second respondents and as that application falls within well accepted principles in my view it would be an appropriate exercise of discretion to award them. 33 Accordingly I will award indemnity costs to the first and second respondents and party/party costs to the third respondent. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan J. | national privacy principles provision of information to centrelink preliminary inquiry by privacy commissioner no reasonable prospects of success indemnity costs awarded summary judgment costs |
The applicant ("Roche") is the sponsor of orlistat within the meaning of the Act . It is intended for persons with a body mass index ("BMI") greater than or equal to 30 (ie those who are obese) or persons with a BMI greater than or equal to 27 (ie those who are significantly overweight but not obese) in the presence of other risk factors such as diabetes and hypertension. Material before the Court suggests that orlistat may thus be an appropriate treatment option for approximately 2.7 million obese adults and approximately 1.6 million overweight adults in Australia. 3 Since 1 May 2004 orlistat has been included in Schedule 3 of the Poisons Standard (see [12] below). Consequently, since that date it has been able to be supplied to a consumer by a healthcare professional such as a pharmacist without a prescription. In February 2006 the respondent, the National Drug and Poisons Schedule Committee ("the Committee") decided additionally to include orlistat in Appendix H of the Poisons Standard. The inclusion of a medicine in Appendix H has the consequence that the medicine can be advertised directly to consumers. 4 The decision to include orlistat in Appendix H was confirmed by the Committee in June 2006 and took effect from 1 September 2006. On or about 12 October 2006, following its receipt of complaints concerning the advertising of Xenical, the Committee decided to reconsider orlistat's inclusion in Appendix H. On 22 February 2007, the Committee decided to remove orlistat from Appendix H. On 26 June 2007 the Committee confirmed that decision with effect from 1 October 2007. 5 This proceeding was instituted on 8 June 2007 pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act ") and s 39B of the Judiciary Act 1903 (Cth) ("the Judiciary Act ') to challenge the decision or conduct of the Committee of 12 October 2006 and the decision or conduct of the Committee of 22 February 2007. An amended application was filed by consent on 9 July 2007 to include a challenge to the confirmation decision made on 26 June 2007. 6 For the reasons set out below I have concluded that the amended application should be dismissed with costs. Each of these jurisdictions has enacted complementary legislation to regulate the availability of therapeutic goods and poisons (see: Poisons & Therapeutic Goods Act 1966 (NSW) and Poisons and Therapeutic Goods Regulation 2002 (NSW); Drugs, Poisons and Controlled Substances Act 1981 (Vic); Health (Drugs and Poisons) Regulation 1996 (Qld); Controlled Substances Act 1984 (SA) and Controlled Substances (Poisons) Regulations 1996 (SA); Poisons Act 1971 (Tas) and Poisons Regulations 2002 (Tas); Poisons and Dangerous Drugs Act 1983 (NT); Poisons and Drugs Act 1978 (ACT) and Poisons Act 1964 (WA). Chapter 3 is concerned with medicines and other therapeutic goods that are not medical devices. This chapter provides for the determination of standards for such goods and for their registration and listing. It additionally controls their manufacture in Australia. Chapter 5 is concerned with, among other things, the advertising of therapeutic goods. Chapter 6 is concerned with the administration of the Act. Part 3 of Chapter 6 contains provisions concerning the Committee. The Commonwealth, each State, the Northern Territory and the Australian Capital Territory are each entitled to nominate a representative on the Committee (s 52B(3)). The explanatory memorandum in respect of the Therapeutic Goods Legislation Amendment Bill 1999 indicated that the assured representation of State and Territory Governments on the Committee was intended to encourage a uniform approach to the classification of substances throughout Australia for regulatory purposes. Subject to the assured representation of State and Territory Governments on the Committee, the Committee is to be constituted, and to hold meetings and make decisions, in accordance with the regulations (s 52B(2)). 11 The functions of the Committee include the making of decisions in relation to the classification and scheduling of substances (s 52C(a)), the maintenance of the Poisons Standard (s 52C(c)), and the undertaking of public consultation with respect to matters relating to the classification and scheduling of substances that are of public interest or significance (s 52C(e)). Section 52A defines "substance" to mean any medicine or poison and "scheduling" in relation to a substance to mean determining the schedule or schedules in the Poisons Standard in which the name or a description of the substance is to be included. 12 The Poisons Standard is a document the full title of which is the Standard for the Uniform Scheduling of Drugs and Poisons . This document was initially published by the Australian Health Ministers' Advisory Council (s 52A). Section 52D(2) gives the Committee power to amend the current Poisons Standard or to prepare a new document in substitution for it. Section 52D(4) requires the Committee to cause a notice to be published in the Gazette in respect of each amendment of the current Poisons Standard. The content of the Gazette notice is regulated by reg 42ZCY of the Therapeutic Goods Regulations 1990 (Cth) ("the Regulations") (see [20] below). 16 Subdivision 4 of Division 3A sets out the procedures that the Committee must follow in holding meetings. The Committee is required to act with as little formality and as quickly as the requirements of the regulations, and a proper consideration of the issues before the Committee, allow (reg 42ZCN(b)). It is not bound by the rules of evidence and may obtain information about an issue in any way it considers appropriate (reg 42ZCN(c) and (d)). 17 Regulation 42ZCO(1) authorises the Chair of the Committee, by written notice to the committee, to "direct the committee to hold meetings at the times and places, and to deal with matters in the manner, stated in the notice" . 18 Regulation 42ZCR governs how decisions of the Committee are to be reached. 19 Subdivision 5 of Division 3A is concerned with scheduling procedures. Before a Committee meeting for the scheduling of a substance the Chair of the Committee must publish notice of the meeting in the Gazette and invite public submissions to be made by a date mentioned in the notice (reg 42ZCU). The Committee, in making a decision in relation to the classification and scheduling of a substance, must consider all public submissions made by the closing date that address a matter mentioned in s 52E of the Act (reg 42ZCV). A relevant submission prepared in relation to a substance by a Committee member and submitted before or at the meeting must be considered by the Committee at the meeting (reg 42ZCW(1)). 20 There must be public notification of an amendment to the current Poisons Standard (see [12] above) (s 52D(4)). However, the applicant's written submissions described those aspects of it that are relevant to this proceeding. The respondent accepted the accuracy of this description. I therefore do likewise. The following description is taken from the applicant's written submissions. 23 The Poisons Standard contains nine schedules although only Schedules 2-9 are used. Generally speaking medicines are included in schedules 2, 3 4 and 8; poisons are included in Schedules 5, 6 and 7; and prohibited substances (such as cannabis and heroin) are included in Schedule 9. The Poisons Standard also contains a number of appendices which supplement the schedules by setting out additional controls, qualifications and exemptions for some substances. 24 The schedule and appendix to the Poisons Standard in which a medicine or poison is included may affect the way in which matters such as the advertising, supply, storage and labelling of that medicine or poison are regulated by Commonwealth, State and Territory legislation. For instance, broadly speaking, a substance included in Schedule 4 cannot be supplied except upon the written prescription of a healthcare professional with prescribing authority, whereas a substance included in Schedule 3 can generally be supplied without a prescription but cannot be supplied, except under licence, other than by a healthcare professional. 25 Section 42DL(1)(f) of the Act makes it an offence to publish or broadcast an advertisement about therapeutic goods that refers to goods, or substances or preparations containing goods, included in Schedules 3, 4 or 8 to the Poisons Standard. However, it is a defence to such an offence if the goods, substance or preparations are mentioned in Appendix H of the Poisons Standard. For this reason, to the extent that Roche claims relief under the ADJR Act , it is necessary for the Court to be satisfied that an exercise of the power of the Committee under s 52D(2) of the Act to amend the current Poisons Standard gives rise to a decision of an administrative character. 27 As the Full Court observed in RG Capital Radio Ltd v Australian Broadcasting Authority [2001] FCA 855 ; (2001) 113 FCR 185 ("R G Capital" ) at 194 at [40], there is no simple rule for determining whether a decision is of an administrative or legislative character. In Commonwealth v Grunseit , Latham CJ expressed ... the distinction in these terms: 'The general distinction between legislation and the execution of legislation is that legislation determines the content of a law as a rule of conduct or a declaration as to power, right or duty, whereas executive authority applies the law in particular cases'. Nonetheless, the task ultimately is an evaluative one; a judgment must be made taking into account all relevant considerations, but no single consideration is likely to be decisive ( RG Capital Radio at 194 at [42]). 31 First, the inclusion of a substance in a particular schedule of the Poisons Standard, or an appendix thereto, determines the future lawfulness of conduct in relation to that substance (eg publishing or broadcasting advertisements about the substance: s 42DL of the Act; supply of the substance without required information: reg 9A(1A) of the Regulations ; importation, exportation, supply or manufacture of the substance: s 19B of the Act and reg 12(1) and Schedule 5 of the Regulations ). That is, a decision under s 52D determines the content of rules of general application. 32 Secondly, although a sponsor of therapeutic goods may initiate the process which leads to a decision under s 52D(2), any decision made under the subsection will apply to the substance in general, not merely to the substance when manufactured or supplied by that sponsor. 33 Thirdly, public consultation is an important element of the process that leads to a decision under s 52D(2) (see [19] ---[21] above). 34 Fourthly, the Poisons Standard is an important element of a national system of controls relating to the quality, safety, efficacy and timely availability of therapeutic goods. It is also intended to, and does, form part of a framework for the States and Territories to adopt a uniform approach to the control and regulation of poisons in Australia (see [8] above). Section 52B(3) of the Act, which provides that the Commonwealth, each State, the Northern Territory and the Australian Capital Territory are each entitled to nominate a representative on the Committee, is plainly intended to assist the achievement of uniform, national regulation of substances included in the Poisons Standard. The significance of the jurisdictional members of the Committee is underlined by reg 42ZCR(2) which provides that a decision of the Committee has no effect unless the majority includes a majority of the jurisdictional members present and voting. 35 As indicated above, decisions under s 52B(2) have significance not only under the Act and Regulations but also under legislation enacted by the States and Territories to regulate the availability of therapeutic goods and poisons (see [8] above). Not surprisingly in this context, the matters to which the Committee may have regard in exercising its power under s 52D(2) include broad policy considerations concerning public health. Moreover, having regard to this statutory framework it would be surprising if the legislature did not intend that the jurisdictional members of the Committee should be free, particularly on controversial issues, to advance the views of their respective governments on the matters identified in s 52E(1). This is particularly the case, in my view, since the jurisdictional members include persons nominated by agencies of another sovereign polity, namely the New Zealand Government. 36 Fifthly, there is no provision for merits review of the decision of the Committee --- other than by the Committee itself as provided for by reg 42ZCZ. 37 Finally, as mentioned above, decisions under s 52B(2) are required to be published in the Gazette and, subject to the special positions of the jurisdictional members of the Committee, are not amenable to executive variation or control. 38 In arguing that decisions of the Committee under s 52D(2) are administrative in character, Roche placed reliance on Pro Health Products Pty Limited v McEwen [2004] FCA 1790. In that case Emmett J described a scheduling decision of the Committee as "clearly an administrative one". However, it appears that the true character of a scheduling decision of the Committee was not the subject of argument in that case which, moreover, was decided under significant time constraints. I do not regard his Honour's description as reflecting a considered view on the question. 39 Roche additionally drew attention to what it described as the tightly drawn nature of the matters which s 52E(1) requires or allows the Committee to take into account when exercising its power under s 52D(2) of the Act. I give consideration below to the nature of these matters. I do not accept that they are as tightly drawn as Roche contends. In particular, I regard it as significant that s 52E(1)(i) requires the Committee to take into account "any other matter that the Committee considers necessary to protect public health" . Considerations necessary to protect public health, as the paragraph recognises, includes risks, whether imminent or long term, of death, illness or injury from the use of the substance in question but may extend beyond these considerations. Taken together, the matters identified in s 52E(1) call for the evaluation of broad policy considerations touching upon an important area of public administration. 40 I accept that the failure of the legislature to provide for disallowance by Parliament of decisions made under s 52D(2) of the Act is a factor which tends in favour of a finding that the decisions are administrative, rather than legislative, in character ( Aerolineas Argentinas v Federal Airports Corporation (1995) 63 FCR 100 at 110; Vietnam Veterans' Affairs Association v Cohen (1996) 70 FCR 419 at 428-429). Nonetheless, no single consideration is determinative of the proper characterisation of an exercise of power under s 52D(2). 41 I conclude that an exercise of power under s 52D(2) of the Act is legislative, rather than administrative in character. For this reason the application in this matter is incompetent to the extent that it seeks to invoke the jurisdiction of the Court under the ADJR Act . This conclusion is of limited significance because of the reliance placed by Roche on s 39B of the Judiciary Act . However, certain of the grounds of review upon which Roche relies assume that the Committee was exercising an administrative power. My conclusion that this assumption is erroneous means that those grounds necessarily fail. The Committee noted the available data in the clinical trials setting using orlistat for weight loss resulted in modest efficacy and reduced long-term efficacy. Members were concerned that omission of this information in advertising campaigns could potentially create a consumer demand based on unrealistic expectations of the product's effectiveness. The record of reasons of this meeting records that the Committee remained concerned that branded advertising of orlistat would convey an inappropriate public health message that pharmacotherapy is the first-line treatment for obesity or overweight conditions and could expose the public to unnecessary risks. Additionally, the Committee considered that such advertising could increase consumer expectations and make them less likely to accept advice from pharmacists. 44 After its June 2005 meeting, the Committee received a new submission from Roche seeking the inclusion of orlistat in Appendix H. That submission was considered by the Committee at its 46 th meeting held on 21-23 February 2006. The Committee noted additional information on post-marketing surveillance study, media survey and consumer/market research, as well as the experience gained by pharmacists on screening and consulting patients on the suitability of orlistat for other [conditions] . The Committee also believed that the newly amended TGAC [Therapeutic Goods Advertising Code] which has been strengthened with regards to the advertising of weight loss products shall [sic] ensure responsible and appropriate [branded] advertising of the orlistat product ... by the sponsor. After noting that those comments were supportive of the decision, it confirmed the decision to include orlistat in Appendix H on the ground of potential public health benefit. 46 The 48 th meeting of the Committee was held on 10-12 October 2006. Orlistat was again on the agenda; on this occasion for the purpose of enabling the Committee to consider "the current media attention on the direct to consumer advertising" . Both the Australian Medical Association (AMA) and the Australian Consumers Association (ACA) have criticised the advertising of Xenical during prime time TV. The AMA has stated that advertising Xenical direct to consumers gives a misleading message and that it is a medication that shouldn't be allowed to be advertised direct to consumer. The AMA have also commented that the decision to allow direct to consumer advertising needs to be reviewed, as must the decision allowing orlistat to be available without prescription. The ACA believes that the advertising campaign is in breach of the TGAC. Their argument is that the code prohibits the advertising of pharmaceuticals to people under the age of 18 and the core audience for the Australian Idol program is girls in the 13-17 year age group. The ACA also express concern that the advertisements for Xenical send the message to young women that taking a pill is a solution to weight problems rather than undertaking a balanced diet and exercise regimen. Post meeting, the Chair decided to also bring consideration of orlistat's current Schedule 3 status to the Committee for consideration at the February 2007 NDPSC meeting. The notice advised that the scheduling of orlistat would be under consideration and that the closing day for submissions was 24 January 2007. 49 The agenda paper concerning orlistat prepared for the 49 th meeting of the Committee, which was held in February 2007, was lengthy. It reviewed the scheduling history of orlistat and also the circumstances giving rise to the decision to reconsider the scheduling status of orlistat. It summarised submissions received concerning the agenda item, including those from Roche and the Australian Consumers Association ("ACA") respectively. It set out the findings of the Complaints Resolution Panel ("CRP") on the complaint made by the ACA concerning Roche's advertising of Xenical during the television program Australian Idol on 19 October 2006. It noted that a number of submissions had been received supporting the continued Schedule 3 and Appendix H listing of orlistat on the basis of public health need; others had been received supporting the Schedule 3 listing of orlistat; and yet others supporting the retention of orlistat in Appendix H. It also noted that submissions had been received opposing the inclusion of orlistat in Appendix H and that the Australian Medical Association (AMA) had provided a submission calling for orlistat to be withdrawn as a Schedule 3 substance. The Pharmacy Guild of Australia (PGA) had put forward a proposal to strengthen the Standard for the Uniform Scheduling of Drugs and Poisons (SUSDP) regulations regarding the advertising of Schedule 3 substances. THE COMMITTEE AGREES THAT DUE TO THE EMERGING CONCERNS REGARDING INAPPROPRIATE USE OF THE SUBSTANCE, TO INCLUDE ORLISTAT IN SCHEDULE 4 OF THE SUSDP AND, AS A CONSEQUENCE, REMOVE IT FROM APPENDIX H OF THE SUSDP. THE COMMITTEE AGREES THAT THE CURRENT SCHEDULING OF ORLISTAT REMAINS APPROPRIATE BUT DUE TO THE POTENTIAL FOR DIRECT TO CONSUMER ADVERTISING TO BE MISUNDERSTOOD BY CONSUMERS THAT ORLISTAT BE REMOVED FROM APPENDIX H OF THE SUSDP. THE COMMITTEE AGREES THAT THE CURRENT SCHEDULING OF ORLISTAT REMAINS APPROPRIATE BUT THAT THE CURRENT REGULATIONS IN PART 3 OF THE SUSDP REQUIRE REVISION. THE COMMITTEE AGREES THAT THE CURRENT SCHEDULING OF ORLISTAT REMAINS APPROPRIATE. It reveals that the Committee discussed the above options. 52 When a vote was taken on Option 1 that option was defeated. You'll just need to put your hands up and we'll just count. Those against? Okay. And State and Territories in favour? [counting] for. And against? So that is carried which means that the Appendix H listing for orlistat be removed. It remains in Schedule 3. Another member is recorded as questioning the appropriateness of the wording of Option 2. Orlistat is currently only indicated for use in a relatively small group of patients with serious and significant weight problems (those with a Body Mass Index (BMI) greater than 27 with other serious diseases, or those with a BMI greater than 30), not for the general population who might wish to manage more minor weight issues. The Committee noted the advice from professionals and consumers that direct-to-consumer advertising increased pressure on pharmacists to provide orlistat to consumers. This in turn had the potential to result in inappropriate patterns of use, in patients for whom orlistat was neither indicated nor appropriate. By retaining it in Schedule 3, the Committee has ensured that orlistat remains available for appropriate patients with professional advice from pharmacists. Orlistat was on the agenda for the purpose of considering public submissions on the February 2007 decision to remove orlistat from Appendix H. The agenda paper noted that 33 form letters had been received from pharmacists who supported the Appendix H listing of orlistat. These were in addition to another 607 form letters that were received as part of the post-meeting submission made by the PGA. The paper also summarised a further submission from Roche, which called for the Appendix H listing of orlistat to be reinstated, and a submission from the Australian Self Medication Industry which also supported reinstatement. Its reasons for the decision are set out in [68] below. It voted on this resolution having earlier received an agenda paper which identified four options as possible outcomes from its reconsideration of the scheduling of orlistat. The resolution adopted was the second of the four options. 61 Submissions were not advanced on whether this agenda paper constituted a written notice from the Chair of the Committee pursuant to reg 42ZCO(1) (see [17] above). It is therefore inappropriate to determine that question. However, the agenda paper plainly placed Committee members on notice of resolutions upon which they could be invited to vote at the meeting. 62 Decisions of the Committee are required to be made by a process of voting at a Committee meeting (reg 42ZCR) (see [18] above). At the Committee meeting held in February 2007, the Committee voted to adopt the second of the four optional resolutions concerning orlistat of which Committee members had been given advance notice. For this reason I accept the submission of Roche that the decision taken by the Committee concerning orlistat at its February 2007 meeting was to remove it from Appendix H because of the potential for direct-to-consumer advertising to be misunderstood by consumers. The Committee made its decision by voting on a resolution which so identified its reason for decision. 63 Nonetheless, the true meaning of the resolution is to be derived from the context in which the resolution was adopted. That context included the Committee's earlier decision to include orlistat in Appendix H and its consideration of matters identified in s 52E(1) at that time. The agenda papers before the Committee in February 2007 included, or made reference to, the materials before it at the time of the earlier decision and the minutes of the earlier meeting. Having regard to its terms and context, the meaning of the February 2007 resolution is, it seems to me, that orlistat should be removed from Appendix H because the Committee concluded that the potential for direct-to-consumer advertising to be misunderstood by consumers had been underestimated at the time of its previous decision. I did not understand Roche to suggest otherwise. 65 I note incidentally that reg 42ZCS(1) requires the Committee to keep a record of its proceedings. As the matters set out in [51]-[55] above disclose, the Secretary and the Chair of the Committee apparently considered themselves free to prepare a record of the Committee's proceedings that did not include the terms of the resolution passed by the Committee. Plainly what reg 42ZCS(1) requires is that the Committee keep an accurate record of its proceedings. This does not mean that the Committee must keep a record of every observation made at a meeting. However, as decisions of the Committee are made by a process of voting, a record of proceedings that does not include reference to a resolution moved, voted upon and adopted by the Committee does not comply with the requirements of reg 42ZCS(1). 66 It appears that some or all of the Committee also considered it appropriate to prepare a record that referred to the Committee having "decided that, on balance, there was insufficient public health benefit associated with allowing direct-to-consumer advertising of orlistat" when no resolution in those terms was voted on by the Committee. Again, as reg 42ZCR provides, decisions of the Committee are made by a voting process, a record that refers to a "decision" of the Committee when no vote on the subject matter of the alleged decision has been taken, is not a record that complies with the requirements of reg 42ZCS(1). 67 Additionally, it seems to me that the legitimacy of the Committee's apparent practice of not recording the number of votes cast for and against resolutions moved at its meetings is open to serious doubt. However, it was not contended in this case that the Act or Regulations disclose an intention that deficiencies in a record of proceeding of the Committee affect the validity of any conduct or decision of the Committee to which the record relates (see Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1998) 153 ALR 490). No ratified minutes of the meeting had come into existence at the time of hearing. 73 The first issue concerning the proper construction of s 52E that requires to be addressed is whether the section sets out exhaustively the matters to which the Committee must or may take into account in exercising its powers under s 52D(2). The Committee contended that, while it was obliged to take into account the matters identified in s 52E(1)(a)-(i) where they were relevant, and it was free to take into account the labelling, packaging and presentation of a substance, it was also entitled to take into account additional matters that can properly be seen as having a bearing on the issue for its consideration. I reject this contention. In my view, the following aspects of the language of s 52E suggests against a legislative intention to leave the exercise of the powers of the Committee under s 52D(2) unrestrained in this way. First, subs (1) identifies only a limited class of matters that the Committee "may take into account" . Had the legislature intended that the Committee was also free to take into account other matters that it considered relevant, it could easily have so provided. Secondly, the qualification contained in the opening words of subsection (2) suggests that subsection (1) identifies the totality of the matters that the Committee must or may take into account in exercising its powers under s 52D(2). Were the position otherwise, the qualification would significantly undermine the apparent purpose of subsection (2). This is because, when considering matters other than those identified in subs (1), the Committee would not be constrained by the requirement to comply with any guidelines notified to the Committee for the purpose of subs (2). 74 Nonetheless, it would be inappropriate to take a narrow view of the matters identified in s 52E(1)(a)-(i). In particular, the reference in (i) to "any other matters that the Committee considers necessary to protect public health" discloses a legislative intention that the Committee should be free to give consideration to a wide range of matters concerning public health. 75 The second issue concerning s 52E is the extent of the obligation placed on the Committee by s 52E(2). Roche did not dispute that certain guidelines received in evidence and headed Interim Guidelines for the National Drug & Poisons Schedule Committee ("the Guidelines") were notified to the Committee for the purpose of s 52E. It did not challenge the validity of the Guidelines. It therefore accepted that, in taking into account the matters referred to in s 52E(1), the Committee was obliged by s 52E(2) to comply with the Guidelines. It argued, however, that the Committee was only entitled to have regard to the Guidelines in the context of its consideration of one of the matters identified in s 52E(1). That is, that the Guidelines were relevant to a decision of the Committee only to the extent that they had something to say about one of the matters identified in s 52E(1). 76 In my view, the construction of s 52E(2) for which Roche contends is artificially narrow. It seems to me that the legislative intent behind s 52E(2) is to require the Committee, when exercising its powers under s 52D(2) in the manner prescribed by s 52E(1), to comply with the entirety of any guidelines of the kind identified in s 52E(2). 77 The third issue concerning s 52E is whether the Committee, in taking into account the matters identified in s 52E(1), may have regard to matters concerning the advertising of a particular product, including the impact of such advertising on consumer demands on pharmacists. As identified above, Roche submitted that by having regard to the advertising of orlistat, including media coverage and criticism of the advertising of Xenical during the Australian Idol television program, the Committee breached limits placed on the power granted to it by s 52D(2) of the Act. Roche drew attention to the detailed and comprehensive legislative framework that regulates the advertising of therapeutic goods. It argued that this framework showed that the legislature had gone to considerable lengths to make provision for the effective regulation of pharmaceutical products and had not vested responsibility for the advertising of pharmaceutical products in the Committee. In particular Roche argued that it is no part of the function of the Committee to second guess the efficacy of the Code or the CRP or to make assumptions about the ability of the pharmacy profession to withstand any pressure to sell a particular product that may flow from the advertising of that product. 78 The legislative framework on which Roche placed reliance includes Part 5 of the Act, Part 2 of the Regulations and the Therapeutic Goods Advertising Code 2006 (Cth) ("the Code"). That framework, Roche observed, is supplemented by the more general requirements of the Trade Practices Act 1974 (Cth) ("TP Act"), its State and Territory equivalents and the common law. 79 It is necessary to examine in a little detail the framework upon which Roche placed reliance. The object of the Code is to ensure that the marketing and advertising of therapeutic goods to consumers is conducted in a manner that promotes the quality use of therapeutic goods, is socially responsible and does not mislead or deceive the consumer (s 1(1) of the Code). Advertisements for therapeutic goods must comply with the general principles set out in s 4 of the Code. The general principles include that an advertisement must contain correct and balanced statements only (s 4(1)(b)) and must not be likely to arouse unwarranted and unrealistic expectations of product effectiveness (s 4(2)(a)) or encourage, or be likely to encourage, inappropriate or excessive use (s 4(2)(f)) or, generally speaking, be directed to minors (s 4(2)(j). Section 7(3) of the Code requires advertisements for therapeutic goods containing claims for weight management to have an appropriate balance between the claims and references to a healthy, energy-controlled diet and physical activity. A person is guilty of an offence if the person publishes or broadcasts an advertisement about therapeutic goods and the advertisement does not comply with the Code (s 42DM of the Act). 80 Additionally, for some therapeutic goods (including orlistat) advertising on television, and the other specified media, is not permitted without approval from the Secretary of the Department of Health and Ageing (Division 2 of Part 2 of the Regulations ). I note, incidentally, that it is not in dispute that the Xenical advertisement that was screened during Australian Idol had the necessary approval. 81 Responsibility for the implementation of the framework that regulates the advertising of therapeutic goods lies with a number of statutory bodies established for that purpose. One of these bodies is the Therapeutic Goods Advertising Code Council ("TGACC") established by reg 42A of the Regulations . The functions of the TGACC include considering requirements for the advertising of therapeutic goods and changes to the Code, to accept submissions for this purpose and to advise the Minister accordingly (reg 42B(1)(a)). Its membership of 15 must include two advertising industry members, two consumer members and three healthcare professional members (reg 42C). Another relevant body is the CRP established by reg 42R. The function of the CRP is to receive and consider complaints about advertisements of therapeutic goods and to take action, and to make recommendations to the Secretary, on the complaint (reg 42S). Its membership of eight includes consumer members and healthcare professional members but no provision is made for an advertising industry member (reg 42T). The chairperson of the panel is nominated by the TGACC (reg 42T(1)(a)). 82 For the following reasons I conclude that the Committee, in taking into account the matters identified in s 52E(1), may have regard to matters concerning the advertising of a particular product, including the impact of such advertising on consumer demands on pharmacists. 84 Secondly, s 52E(2) requires the Committee, in taking into account the matters referred to in s 52E(1), to comply with certain guidelines notified to the Committee. As mentioned above, Roche accepted that the Guidelines were lawfully notified to the Committee under s 52E(2). It is acknowledged it may not always be possible to present data to quantify the extent of any claim of public health benefit. In such circumstances, qualitative data maybe acceptable. By their terms the Guidelines require the Committee, in making a decision as to whether a substance included in Schedule 3 of the Poisons Schedule may be advertised to the public, to consider the likelihood of advertising of the substance leading to inappropriate patterns of medication use. 86 Thirdly, one of the powers that the Committee exercises under s 52D(2) can be, as it was in this case, the power to determine whether a substance included in Schedule 3 of the Poisons Standard may be advertised to the public (ie included in Appendix H). It seems impossible to accept that the legislature intended that the Committee, in exercising this power, could not have regard to matters concerning advertising including the actual or likely impact of a substance being advertised to consumers and the impact of such advertising on consumer demands on pharmacists. 87 Nonetheless, the conclusion that the Committee, in taking into account the matters identified in s 52E(1) , may have regard to matters concerning advertising, does not mean that s 52E is to be construed in a way which would allow the Committee to usurp the role of the TGACC and the CRP respectively. Each of these bodies has a distinct role to play in the statutory regime of the regulation of the advertising of therapeutic goods. It would be inappropriate, for example, for the Committee to seek to regulate the content of particular advertisements for therapeutic goods. Similarly s 52E is not to be construed in a way which would allow the Committee to usurp the role of regulating the pharmacy industry. 88 The fourth issue concerning s 52E is the ambit of the matter identified by s 52E(1)(d) , namely "the extent and patterns of use of a substance" . Roche argued that, on the proper construction of s 52E(1)(d) , the Committee was only authorised to consider the actual extent and patterns of use of a substance; that is, that the Committee was not entitled to speculate as to the likely extent and patterns of use of the substance should it exercise its powers under s 52D(2). Roche drew attention to the reference in s 52E(1)(c) to "the potential hazards" and in s 52E(1)(g) to "the potential for abuse" and to the absence of the word "potential", or a similar word, in s 52E(1)(d) . The references to potentialities in the description of other matters that the Committee is to take into account do not, in my view, carry the significance that Roche attributes to them. The potential hazards associated with use of a substance and the potential for abuse of the substance are factors inherent in the substance --- albeit that they may be identified in part by speculation as to the uses that may be made of the substance. Just as the Committee is entitled to take into account the likely effect of its decision on the extent and patterns of use of a substance, it is also entitled to take into account the likely effect of its decision on the potential hazards associated with the use of the substance and on the potential for abuse of the substance. 91 The functions of the Committee include the making of decisions in relation to classification and scheduling of substances, the maintenance of the Poisons Standard and the undertaking of public consultations with respect to matters relating to the classification and scheduling of substances that are of public interest or significance (s 52C(a) , (c) and (e)). Having regard to the functions of the Committee, the decision of the Committee to consider the legitimacy of apparently responsible and informed criticism of its earlier decisions concerning the classification and scheduling of orlistat was plainly appropriate. It was impossible for the Committee to consider that criticism without having regard to the advertising of Xenical, including media coverage of the advertising of Xenical during the Australian Idol program. Nothing in s 52C(a) , s 52C(e) , s 52D(2) or s 52E(1) of the Act rendered it impermissible for it to do so. 92 The relevant decision made by the Committee in February 2007 was, as I have found, that the potential for direct-to-consumer advertising to be misunderstood by consumers was sufficient to mean that, after evaluation of the relevant matters identified in s 52E(1), the appropriate decision was that orlistat be removed from Appendix H. The agenda papers for the February 2007 meeting drew attention to the advertising of Xenical, including media coverage and criticism of the advertising of Xenical during the Australian Idol program. I conclude that these were matters that the Committee took into account in making its decision. 93 Roche submitted that it is self evident that any advertising has the potential to be misunderstood by consumers and that is no doubt why, in the context of therapeutic goods, the Code exists to supplement the more generally applicable TP Act . It argued that, both on the proper construction of s 52E, and in the more general context of the scheme of the Act as a whole, concerns as to the efficacy of the prospective advertising of orlistat under its brand name Xenical are not matters which the Committee is entitled to take into account. Roche drew attention to the fact that the membership of the Committee does not include experts in advertising or the effects of advertising. It further submitted that the thrust of the legislative scheme is to sever public health considerations (the province of the Committee) from the regulation of advertising (the province of the Code and the CRP). 94 As discussed above, a decision about whether a substance should be included in Appendix H is a decision about whether the substance should be allowed to be advertised to consumers. That is the significance which attaches to inclusion in Appendix H (see s 42AA and s 42DL of the Act). For this reason I accept the submission of the Committee that, in determining whether a substance should be included in, or removed from, Appendix H, the Committee must be entitled to consider, in the context of the matters identified in s 52E(1) that are relevant to the particular case, the actual or likely consequences of the substance being advertised to consumers. Notwithstanding that s 52E(1) makes no reference to either the regulatory regime governing the advertising of therapeutic goods or the regulatory and professional disciplinary regime applying to the conduct of pharmacists, the Committee's appreciation of the nature and effectiveness of those regimes will necessarily inform its consideration of the matters identified in s 52E(1). 95 I conclude that nothing in s 52C(a), s 52C(e), s 52D(2) or s 52E(1) rendered it impermissible for the Committee to have regard to the advertising of Xenical, including media coverage and criticism of the advertising of Xenical during the Australian Idol program, in the context of the decision made by it in February 2007. 96 In June 2007 the Committee confirmed its February 2007 decision that orlistat be removed from Appendix H. I note incidentally that, as Roche observed, the draft minutes of the Committee's June 2007 meeting, which were prepared after the institution of this proceeding, appear to reflect a greater appreciation of the statutory regime within which its powers under s 52D(2) of the Act are to be exercised than earlier records of its proceedings. The draft minutes confirm that the reasons for the decision of the Committee included conclusions drawn from consideration of the advertising of Xenical. I consider it appropriate to infer that the advertising to which the Committee had regard included the advertising of Xenical on the Australian Idol program and that the Committee further had regard to criticism, including media criticism, of that advertising. For the reason given above in respect of the October 2006 and the February 2007 decisions, I conclude that nothing in s 52C(a), s 52C(e), s 52D(2) or s 52E(1) rendered it impermissible for the Committee to have regard to that material in the context of the decision made by it in June 2007. The first category was reports of anecdotal evidence that some girls as young as thirteen in the healthy weight range were asking pharmacists for Xenical. The second category was information provided by the ACA of a "shadow shop" of thirty pharmacists in the Sydney metropolitan area. 99 The shadow shop information had not been collected at the time of the October 2006 meeting of the Committee. The relevant agenda paper for the Committee's October 2006 meeting did not refer to any alleged experiences or practices of pharmacists although an email from the ACA to a departmental officer, which was included with the agenda papers, refers to an allegation that girls as young as thirteen had been asking pharmacists for the drug since the Xenical advertisement appeared on Australian Idol . Although some members of the Committee may have placed weight on the alleged experiences and practices of some pharmacists in dispensing orlistat to consumers, it seems unlikely that this matter affected the decision taken. In any event, and particularly having regard to the nature of the decisions taken by it at that time (ie to foreshadow consideration of the Appendix H listing of orlistat in order to give interested parties the opportunity to put forward submissions on the issue), I do not consider that anything in s 52C(a), s 52C(e), s 52D(2) or s 52E(1) of the Act rendered it impermissible for the Committee to have regard to the alleged experiences or practices of pharmacists in making its October 2006 decision. 102 The relevant agenda paper for the Committee's February 2007 meeting referred to both categories of information concerning the alleged experiences and practices of some pharmacists in dispensing orlistat to consumers (see [97] above). Under the heading "Pre-Meeting Submissions" a detailed report is provided of the ACA "shadow shopper" survey. 103 The agenda paper also includes a detailed analysis of the response provided by Roche to the TGA concerning the advertising of Xenical during Australian Idol . That response stressed the role of pharmacists in the supply of Xenical and described their involvement as an "inherent safeguard" against inappropriate supply of the product. Additionally the agenda paper summarises the main points made by Roche in its pre-hearing submission to the Committee. Within those points references are made to the experiences and practices of pharmacists generally and in dispensing orlistat to consumers. The agenda paper reported that Roche argued that "direct to consumer advertising gives the greatest opportunity for the most appropriate patients to be guided by pharmacists" . This could be viewed as a positive outcome if it has raised awareness in more people about health and weight management issues and available options for better and appropriate management. While the Schedule 3 classification of orlistat is intended to provide the necessary and appropriate avenues for health professional intervention, this need is not readily understood by consumers. Not all consumers view orlistat from a quality use of medicines perspective. Pharmacists report to PSA that when a consumer has seen a branded advertisement and subsequently come into a pharmacy seeking that product, in the majority of cases they have already made their own assessment about the need for and suitability of the product. Under these circumstances the intervention of the pharmacist as required for all Schedule 3 products and any clinical assessment to determine the actual suitability of the product for the individual are not always readily accepted by the consumer. In some cases, consumers have become angry as they resent the need to be assessed by the pharmacist when they have already made their own assessment and choice to self-medicate. Even with such provisions, pharmacists have encountered consumers who are very keen to self manage their condition and are convinced that orlistat is the product best suited to them. 106 The record of reasons of the February 2007 meeting refers to both categories of information concerning the dispensing of orlistat by pharmacies. It refers in some detail to the shadow shop survey and to related submissions made by the ACA. It also refers in some detail to the pre-meeting submission made by Roche. It summarised other submissions that supported the retention of orlistat in Appendix H and also submissions that opposed the appendix H listing of orlistat. 107 The record of reasons highlights observations and comments made by various Committee members. It is noted that the Committee agreed that the ACA might more appropriately have directed its concerns regarding the shadow shop and pharmacist practice to the Pharmacy Board of NSW. It is also noted that a member questioned the validity of the selection of the pharmacies chosen for the shadow shop but that the Committee agreed that the results of the exercise were concerning. 108 The terms in which the decision of the Committee is recorded are set out in [56] above. Relevantly those terms include reference to direct-to-consumer advertising having increased pressure on pharmacists to provide orlistat to consumers and the potential for this to result in inappropriate patterns of use in patients for whom orlistat is neither indicated nor appropriate. As noted above, notwithstanding the wording of the resolution adopted by the Committee, I accept that it is to be inferred from the terms in which the decision is formally recorded that in making its decision the Committee had regard to the alleged experiences and practices of some pharmacists in dispensing orlistat to consumers. 109 I reject the submission that the Committee breached limits on its statutory powers by having regard to the alleged experiences and practices of some pharmacists in dispensing orlistat to consumers. Information before the Committee touching on these issues was capable of being regarded by the Committee as relevant to not only the extent and patterns of use of the substance (s 52E(1)(d)), but also the potential for abuse of the substance (s 52E(1)(g) and the purposes for which a substance is to be used (s 52E(1)(h). Reduction in the risk of inappropriate practice by pharmacists was also open to be regarded by the Committee as another matter that it considered necessary to protect public health (s 52E(1)(i). 110 As indicated in [89] above, I also reject the submission that the Committee breached the limits placed upon its grant of power by considering potential rather than actual patterns of use of orlistat. 111 The agenda paper for the June 2007 meeting of the Committee summarised the submissions received following the decision of February 2007 to delete orlistat from Appendix H. These included submissions from pharmacists, the PGA and the Australian Self Medication Industry as well as a detailed submission from Roche calling for the Appendix H status of orlistat to be reinstated. 112 As noted above, the decision of the Committee in June 2007 was to confirm its February 2007 decision to revoke the Appendix H listing of orlistat. The draft minutes of the June 2007 identify the Committee's reasons for this decision as including the possibility that direct-to-consumer advertising may adversely affect the ability of pharmacists to provide advice about other appropriate weight management strategies and that safeguards such as education programs for pharmacists did not remove the potential for direct-to-consumer advertising to adversely affect appropriate provision of orlistat. 113 Again, I consider it appropriate to infer that in making its decision the Committee had regard to the alleged experiences and practices of some pharmacists in dispensing orlistat to consumers. However, for the reasons set out in [72]-[89] above, I do not accept that the Committee thereby breached the limits of the power granted to it by s 52D(2) and s 52E. Assuming that Roche did press these grounds of review, I reject them. As mentioned above, the functions of the Committee include making decisions in relation to the classification and scheduling of substances, maintaining the current Poisons Standard and undertaking public consultations with respect to matters relating to the classification and scheduling of substances. Nothing in the Act or the Regulations suggests that, having made a scheduling decision, the Committee becomes functus officio with respect to that substance unless and until new data about the risks and benefits of using the substance become available. As mentioned above, it is appropriate for the Committee to monitor the impact of decisions made by it under s 52D(2) and, provided that it follows the procedures mandated for scheduling decisions, to reconsider earlier decisions as it deems appropriate. Moreover, the Committee is not bound by the rules of evidence and may obtain information about an issue in any way its considers appropriate (reg 42ZCN). It also submitted that the decisions lacked a "legally defensible foundation" in their factual material and in logic ( Luu v Renevier (1989) 91 ALR 39); were capricious and irrational ( Tickner v Bropho (1993) 40 FCR 183 at 197-199) or were so at variance with the material before the Committee as to be unreasonable ( Fuduche v Minister for Immigration, Local Government and Ethnic Affairs (1993) 45 FCR 515). 116 The Committee accepted that its decisions are open to review under s 39B of the Judiciary Act on the ground of unreasonableness notwithstanding that the Court does not have jurisdiction to review those decisions under the ADJR Act . I accept that this would not ordinarily be described as a relatively small group of patients. Indeed, the record of reasons of the Committee's February 2007 meeting records the Committee's appreciation that obesity is a major public health concern in Australia and its understanding that 67% of adult males and 52 percent of adult females were overweight or obese in 1999-2000. 119 The record of reasons of the Committee are "not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed" ( Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 per Brennan CJ, Toohey, McHugh and Gummow JJ at 272). In particular, in the circumstances of this case, the different contexts in which the Committee evaluated the prevalence of obesity and other significant weight problems are important. 120 In February 2006 the Committee agreed to include orlistat in Appendix H on the grounds of potential public health benefit. It was then concerned to identify the total number of adults in Australia for whom orlistat might be indicated. By contrast, in February 2007 the Committee was concerned to review the current scheduling and Appendix H listing of orlistat in the context of criticism of its earlier decision. That criticism was based in large part upon the advertising of Xenical during the television program Australian Idol . The reference in the Committee's record of reasons of February 2007 to the "relatively small group of patients with serious and significant weight problems" is, in my view, to be understood as a reference to the relatively small proportion of the viewers of Australian Idol who were likely to have serious and significant weight problems. That is, it is to be understood as a reflection on the audience to which the Committee understood the advertisements to be directed. The Committee, it may be assumed, would have adopted a different approach had Roche directed the advertisement to an audience comprised mainly or significantly of overweight adults by, for example, placing the advertisements in a magazine directed to adults with weights problems. 121 For the above reasons, I do not accept that the reference in the Committee's record of reasons of February 2007 to a "relatively small group of patients with serious and significant weight problems" is suggestive of unreasonableness affecting the decision of the Committee. Although there were submissions before the Committee from pharmacists who supported the advertising of Xenical, there were also submissions before it from pharmacy industry bodies and others which opposed such advertising. In inviting the Court to review the above matters (some of which are contestable) for the purpose of finding that the decision of the Committee was unreasonable, Roche in reality invited the Court to engage in merits review of the decisions of the Committee. 124 I reject the contention that by reason of any of the above matters, or the cumulative impact of some or all of them, the October 2006, February 2007 and June 2007 decisions of the Committee were so unreasonable that no reasonable person could have exercised the s 52D(2) power in the way that the Committee did. Nor am I satisfied that the decisions were otherwise capricious or irrational or without a legally defensible foundation. This contention may be understood as a complaint concerning irrationality. 126 Additionally Roche contended that the making of the decisions was an improper exercise of the power conferred by s 52C(a) and (e) of the Act. Section 52C is concerned with the functions rather than the power of the Committee. This contention is appropriately understood as a challenge to the Committee's exercise of power under s 52D(2). Roche complained that the Committee took into account irrelevant considerations and failed to take into account relevant considerations. 127 For the reasons given above for rejecting the complaint of Wednesbury unreasonableness, I reject both of these contentions. It placed reliance on the extract from the transcript of the February 2007 meeting of the Committee set out in [51] above. The significance of the statements made by Committee members as recorded in that extract from the transcript of the meeting is explained by documents produced by two Committee members in response to subpoenas served on them. 129 Shortly before the February 2007 meeting of the Committee, Mr James Galloway, the jurisdictional member of the Committee who represented Tasmania, advised Mr Roscoe Taylor, the Tasmanian Director of Public Health, that the Schedule 3 and Appendix H listing of orlistat was to be reconsidered at the Committee's February 2007 meeting and asked: "Do you wish to direct me on voting on this matter? " Mr Taylor responded: "Unless you have any arguments to the contrary, I would like Tasmania to strongly support rescheduling Orlistat to S4" . 130 In early February 2007 Mr Healey, the jurisdictional member of the Committee who represented Queensland, advised the Chief Health Officer of Queensland that the scheduling status of orlistat would be reconsidered at the Committee's February 2007 meeting. He sought endorsement of a proposed Queensland position, namely that the approval for the continued advertising of orlistat be rescinded. The Chief Health Officer indicated her approval of the proposed position by an endorsement on the memorandum. 131 I accept that the above evidence demonstrates that at least two jurisdictional members of the Committee sought advice from appropriately qualified senior officers of the executive branches of their respective governments as to the way in which they should vote when the issue of whether orlistat should be included in Appendix H was reconsidered by the Committee. There is no evidence that either of the two jurisdictional members exercised his vote at either of the February or June 2007 meetings contrary to his personal views or without regard to the merits of the case. However, I accept that it is more likely than not that each of them exercised his vote at the direction of another. In reaching this conclusion I place weight on the failure of either of them to give evidence. 132 Nonetheless, I am not persuaded that their conduct resulted in the decision of the Committee being an improper exercise of the power vested in the Committee by s 52D(2) of the Act. This is because of the view which I take of the character of that power. 133 Whether an exercise of a statutory power is improper so as to render the exercise a nullity is to be determined as a question of statutory construction. For the reasons set out in [26]-[41], I have concluded that at least the jurisdictional members of the Committee who are representatives of the Commonwealth, the States, the Northern Territory and the Australian Capital Territory are entitled to exercise their votes as members of the Committee at the direction of their respective governments. 134 For this reason I also reject the submission of Roche that, because at least two jurisdictional members exercised their vote at the direction of others, procedures required to be observed in connection with the making of the decision were not observed. However, I do not accept its validity so far as jurisdictional members are concerned. In my view, neither the Act nor the Regulations discloses an intention that a decision of the Committee under s 52D(2) should be a nullity because jurisdictional members cast their votes as directed by their respective governments. It advanced no submissions in support of the grounds. 137 The extent to which the rules of natural justice apply to decisions of the Committee under s 52D(2) is controlled by the relevant provisions of the Act and Regulations ( Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 per Mason J at 577, Wilson J at 594, Brennan J at 609 and Deane J at 633). 138 As outlined above (see [19]-[20]) the Regulations require advance public notice to be given of a meeting of the Committee at which a decision is to be made concerning the scheduling of a substance. They do not require advance notice to be given of a decision to foreshadow consideration of the scheduling of a substance. The Regulations establish a regime for the receipt and consultation of public submissions both before and following a scheduling decision. A sponsor who seeks a scheduling decision concerning a substance will, it may be assumed, make a submission in support of the scheduling decision sought by it. Certainly Roche did in respect of the scheduling of orlistat. A scheduling decision does not come into effect until after the Committee has had the opportunity to consider the further submissions, if any, made in response to its decision by those who made submissions concerning the scheduling decision. A record of the Committee's reasons for the decision are to be publicly accessible. 139 In my view the statutory provisions which govern the exercise of the Committee's power under s 52D(2) of the Act do not disclose an intention that the exercise of that power is conditioned on sponsors of substances being given rights to be heard additional to the rights to make the submissions for which the Regulations provide. I certify that the preceding one hundred and forty (140) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson. | application under administrative decisions (judicial review) act 1977 (cth) whether "decision" of administrative or legislative character relevant considerations no one consideration determinative held: exercise of power under s 52d(2) of therapeutic goods act 1989 (cth) is legislative in character therapeutic goods act 1989 (cth) statutory scheme for classification and scheduling of drugs application to review decision of national drugs & poisons schedule committee alleged errors of law under ss 52c , 52d and 52e of act proper construction of s 52e whether impact of advertising of substance and pharmacists' experience a relevant consideration allegation of wednesbury unreasonableness and irrationality whether denial of natural justice whether exercise of power improper because exercised at behest of another held: application dismissed administrative law administrative law |
Many people were induced to participate in the scheme. The idea was that the home-owners could free up and live off the equity that would otherwise be tied up in their family home. To the great misfortune of those people the scheme collapsed. The companies that purchased their homes (the purchaser was either MFL or MFLP) are insolvent and have had administrators appointed. The 'guaranteed income' is not being paid. For some, their life tenancy may be at risk. 3 Six home-owners of the kind described by Finkelstein J commenced these proceedings in the Federal Court of Australia against MFL, MFPL, the directors of MFL, Diakou Faigen, four third party investors and three lenders. 4 The applicants comprise a number of categories. Category A group members are those who, at the date of filing of the Application, had entered into Contracts of Sale of their property ("Contracts of Sale"), either Deeds or Deeds of Agreement ("Deeds of Agreement") and either Residential Tenancy Agreements or Deeds of Tenancy ("Leases") with MFL and remained registered proprietors of their respective properties. The first applicant is a member of this category. Category B group members are those who, at the date of filing of the Application, had entered into Contracts of Sale, Deeds of Agreement and Leases with MFL but the title to whose respective properties the subject of the Contract of Sale was registered in the name of MFL. The second and third applicants are members of this category. Category C group members are those who, at the date of filing of the Application, had entered into Contracts of Sale, Deeds of Agreement and Leases with MFPL and whose title to their respective properties the subject of the Contract of Sale was registered in the name of MFPL. The fourth to sixth applicants are members of this category. 5 Each of the applicants retained the thirteenth respondent, Diakou Faigen, to advise them prior to entry into the MFL Scheme and to prepare the necessary contract documentation to facilitate their entry into the MFL Scheme. As a consequence of the collapse of the MFL Scheme, the applicants suffered loss and damage. The applicants alleged that their losses and damages were caused by Diakou Faigen having breached its retainer and its duty of care and the fiduciary duties owed to the applicants. 6 Subject to approval by the Court, the claim against Diakou Faigen was settled by agreement between the applicants and Diakou Faigen made on 19 April 2007. The terms of settlement are set out in a Deed of Settlement between the parties dated 19 April 2007 ("the Diakou Settlement Deed"). The balance of the applicants' claims against the other respondents remain on foot. The Diakou Settlement Deed also settled related representative proceedings in the Supreme Court of Victoria in which Diakou Faigen was the sole defendant ("the Harrison Proceeding") and separate proceedings instituted in that court against Diakou Faigen by Mr and Mrs Daly. On 6 June 2007, the Honourable Justice Gillard approved the settlement of the Harrison Proceeding pursuant to the terms of the Diakou Settlement Deed. 7 By s 33V of the Act , a representative proceeding may not be settled without the approval of the Court. The question before me is whether the settlement of these representative proceedings between the applicants and Diakou Faigen should be approved by the Court. Counsel for the applicants submitted that the settlement (as recorded in the Diakou Settlement Deed) was fair, reasonable and adequate in the interests of the group members as a whole and should, therefore, be approved. 9 On 4 May 2007, Middleton J made orders, inter alia , that on or before 11 May 2007, the applicants' solicitors post by ordinary mail to all group members in this representative proceeding an explanatory notice and, pursuant to s 33J of the Act , an attached opt-out notice. The order went on to provide that by 4.00pm on 1 June 2007, a group member could file an opt-out notice with the Court. I have evidence before me that the explanatory notice and the attached opt-out notice was sent by ordinary mail to each group member. No opt-out notice has been filed with the court. On or before 11 May 2007 the Applicants' solicitors shall post by ordinary mail to each of the group members identified in schedule 1 to these orders a notice of the Applicants' application for approval by the Court of the proposed settlement of the group proceeding against the Thirteenth Respondent pursuant to s 33V of the Federal Court of Australia Act 1976 (the Act) in the form initialled by me and placed in a sealed envelope in the Court file marked with the words 'Not to be opened except by order of a Justice of the Federal Court of Australia'. That any group member who pursuant to Section 33Y(6) of the Act wishes to object to the approval of the settlement of this representative proceeding must do so on or before 4 pm on 1 June 2007 by filing with the Court a notice of objection in the form set out in schedule 3 to the notice of proposed settlement setting out the reasons for their objection. That any notice of objection filed pursuant to order 2 hereof, be placed in a sealed envelope in the Court file and marked with the words 'Not to be inspected by any person other than the applicants, the thirteenth respondent and their legal advisors without Order of the Court', and until further order of the Court, inspection of any such notice of objection be restricted to the applicants, the thirteenth respondent and their legal advisors. 12 The applicants' solicitors complied with the first order of the Orders made on 4 May 2007. A copy of the amended form of notice of the proposed settlement was mailed to each group member identified in Sch 1 to the Orders made on 4 May 2007. That notice gave group members an opportunity to object to the Diakou Settlement if they so desired by notice to the Court. No notice of objection was filed with the Court. 13 In addition to the procedural orders, the Diakou Settlement Deed requires that Deeds of Release be executed which will take effect upon the conditions precedent to the Settlement Deed being satisfied. Those conditions precedent include approval of the settlement by the Court. 14 In support of the application for approval, Mr Warren of Russell Kennedy provided two affidavits --- one affirmed on 4 June 2007 and the second on 6 June 2007. In that affidavit, Mr Hardwick also deposed to discussions between Slater & Gordon and his group member clients, the advice that he had given, and the fact that his clients had accepted his advice and executed a release in favour of Diakou Faigen. In addition, Mr Hardwick deposed to the fact that he had obtained an executed release from the sole group member who was not represented by Slater & Gordon, Russell Kennedy or Dellios West. See also Neil v P & O Cruises Australia Pty Ltd (formerly P & O Holidays Ltd) [2002] FCA 1325 (Weinberg J) at [6] ---[7]; Jarrama Pty Ltd v Caltex Australia Petroleum Pty Ltd [2004] FCA 1114 (Crennan J) at [10]; Courtney v Medtel Pty Ltd (No 5) (2004) 212 ALR 311 (Sackville J) at [37] ---[42]) and Georgiou v Old England Hotel Pty Ltd [2006] FCA 705 at [18] (Young J). Ordinarily in such circumstances the Court will take into account the amount offered to each group member, the prospects of success in the proceeding, the likelihood of the group members obtaining judgment for an amount significantly in excess of the settlement offer, the terms of any advice received from counsel and from any independent expert in relation to the issues which arise in the proceeding, the likely duration and cost of the proceeding if continued to judgment, and the attitude of the group members to the settlement. See Girsh v Jepson 521 F 2d 153 at 157 (1975) (3rd Cir). Those factors are: (1) the complexity and duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining a class action; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement in light of the best recovery; and (9) the range of reasonableness of the settlement in light of all the attendant risks of litigation. ) This nine-factor test is equally helpful in the Australian jurisdiction and I find it a useful guide in considering the present proposed settlement. Similarly, Jessup J stated that although the notion that a settlement should be 'fair and reasonable' seemed unobjectionable as a matter of principle, if that consideration was to inform the process of approval under s 33V, it should be because of its harmony with the scheme of Pt IVA of the Act and because it tended to achieve the implicit object of the section. The analysis provided and continues to provide a useful guide in considering applications for approval under s 33V of the Act: see most recently Gillard J in Harrison v Kerrili Pty Ltd (trading as Diakou Faigen) (Unreported, Supreme Court of Victoria, 6 June 2007). It should, in appropriate cases and subject to the circumstances of any particular case, continue to be employed as a useful guide. In the course of approving the Diakou Settlement Deed in the Harrison Proceeding, Gillard J in the Supreme Court of Victoria described the settlement in general terms. I do not propose to repeat that analysis. 22 It is sufficient to state that Diakou Faigen does not admit liability. It will pay a lump sum of compensation of some millions inclusive of liability for legal costs and disbursements and the amount that is paid will be shared amongst the group members in this proceeding, the group members in the Harrison proceeding and Mr and Mrs Daly, the plaintiffs in another proceeding filed in the Supreme Court of Victoria. 23 Having read the supporting affidavits and the exhibits to those affidavits including the opinions of counsel, the Diakou Settlement Deed and the submissions of counsel, I am satisfied that the group members have been duly appraised of relevant matters in making their decision to settle the proceeding and in the case of group members who are not applicants, not to object to the settlement. It is unnecessary to set out the advices provided by counsel or the advice provided by the solicitors as to the prospects of success in the claim. On the material, it is apparent that the legal representatives for the group members have carefully considered and weighed all the risks. To the extent relevant, the factors identified by Goldberg J in FAI have been addressed by the legal representatives for the group members. 24 Settlement of the applicants and group members' claim against one respondent usually requires consideration of the interests of the other respondents to the proceeding. However, there are no cross claims made on a joint liability basis against Diakou Faigen and any other respondent. The only cross claim involving Diakou Faigen is MKM Capital Pty Ltd's amended cross claim dated 4 August 2006. That is a stand alone claim and is not affected by the releases provided by the applicants and the group members. Moreover, orders were made by Middleton J on 20 April 2007 in contemplation of the continuation of that cross claim notwithstanding the intended settlement of the applicants' claim against Diakou Faigen. 25 In all the circumstances, I am satisfied that the proposed settlement represents a fair and reasonable result for the group members and is in the best interests of the claimants. Accordingly, the proposed settlement is approved by the Court. I will not accede to that application. The terms of the judgment are sufficiently general that the contents of the settlement are not disclosed. Moreover, to the extent that any aspect of the terms of settlement have been disclosed, that occurred on 6 June 2007 when Gillard J delivered an ex tempore judgment approving the Diakou Settlement in the Harrison proceeding. | approval of settlement against one respondent where application unopposed principles relevant to court approval provision of adequate notice whether proposed settlement is fair and reasonable and in the interests of group members as a whole confidentiality of settlement terms representative proceedings |
I ordered that the first respondent, Mr Thomas, bring in short minutes on 6 August 2007 to reflect the views I expressed in my reasons of that day. He foreshadowed an application, to be made when the settled reasons for judgment were available, that I permit the proceeding to be re-opened and that I change my view as to how I should deal with the matter. 3 On 15 August 2007, I heard a notice of motion filed in court brought by the applicants. In short, I permitted the re-opening of the proceeding because I had overlooked the fact that I had expressly left costs to one side at the hearing. In my reasons published on 2 August 2007, I expressed a view about who should pay the costs, and I expressed a view as to how the question of costs could be dealt with to protect the creditors. 4 The application to re-open to revisit the question of the applicants paying the costs was clearly legitimate. I had overlooked the hiving-off of this issue in preparing my reasons. Thus, on 15 August 2007, I received evidence and heard the parties on this question. 5 The applicants also contended that I should permit a re-opening to revisit the exercise of the discretion. It was said that the question of costs had been pivotal to the foreshadowed exercise of discretion not to set aside the composition. To an extent that was correct, though the way I proposed to protect the creditors from costs did not depend upon the particular order for costs that I made against the applicants. Nevertheless, having overlooked the question of costs, I took the view that there should be no residual basis for a litigant to consider that it or he had not had its or his submissions considered fully. Subject to the comments I make later, the parties had undertaken the hearing in the second half of July with some real despatch. I sought to give them an expeditious result. In so doing, I overlooked an issue. 6 After the evidence on the motion to re-open was led, I came to the view that I should permit the matter to be re-opened, not merely in relation to the costs order against the applicants. One of the most compelling reasons for taking this course was the further elaboration of the position of the applicants. It was evident from my reasons of 2 August 2007 (distributed in settled form on 13 August 2007) that I was not prepared to set the composition aside with the existing amended offer of $685,000 from the McGurk interests. One aspect of my reluctance was the lack of clarity in how the matter would or might unfold in the future. Another aspect was my reluctance to interfere with the decision of the creditors, even in circumstances where they had not been served as well as they were entitled to expect they would be by Mr Thomas on and leading up to 11 May 2007. This was partly due to a preference (that was less than fully expressed in my reasons) for caution in setting aside the acts of creditors under these provisions of the Bankruptcy Act 1966 (Cth). It was also partly due to the difficulty of comparing the position of all creditors under the Naylors' composition with the position of creditors of the respective estates under the applicants' offer. Also, assuming I set the composition aside, the likely additional costs of further meetings, in the light only of the existing offers may well have left the creditors worse off, especially if there were further to-ing and fro-ing involving arguments about the operation of the Bankruptcy Act . This was reduced to a written undertaking to the Court in terms annexed to these reasons. Based on figures provided by Mr Thomas to the applicants' solicitors, the undertaking had the intention of bringing about a payment of 100 cents in the dollar to all creditors. 8 This undertaking so radically changed the landscape that I took the view that I should re-open the consideration of the exercise of the power. 9 Having made that decision, I gave the Naylors, through Mr Friedlander, an opportunity to put submissions as to why I should not set aside the composition in the light of the terms of the undertaking. I also gave them the opportunity of calling further evidence in the application. No further evidence was called. In particular, no evidence of the willingness of any particular financier to lend additional funds to the Naylors to match the effect of the offer contained in the undertaking which is annexed. Mr Friedlander did say that should the composition be set aside his clients wanted the opportunity to bring forward a competing proposal. 10 In his submissions, Mr Friedlander, whilst accepting it was within the power of the Court to set aside the composition, stressed the caution that the Court should exercise in acting under s 222 or s 222C. I agree with that approach. As I said in my earlier reasons, the Parliament intended that unnecessary applications to the Court be eliminated. It should not be easy for third parties (as the applicants effectively are) to interfere with the decisions of creditors affecting the lives of bankrupts when the rights and responsibilities of each are mediated through a skilled, experienced professional appointed by, and responsible to, the Court. 11 Notwithstanding these considerations, I have come to the view that I should set aside the composition. I have come to this view for a number of reasons. First, it cannot now be disputed that the offer by the applicants reflected in the undertaking is one which benefits all creditors necessarily at a level above the Naylors' composition. On calculations provided by the trustee, the sum of $773,769.54 will provide 100 cents in the dollar to all creditors. Secondly, in the circumstances I have found, the trustee failed in May 2007 in the exercise of his duties to the creditors. They were left with what is now clearly an inferior result. That was not plain after the July hearing. It is plain now. Thirdly, the Naylors say that they can improve on their earlier offer. Thus, it is clear that those who are interested in the property should now finalise their positions. The applicants have submitted themselves to an undertaking to the Court. With the creditors now substantially protected by that undertaking, by the costs orders of the kind that I will make and by any further necessary orders, I do not see why the creditors should not be given 100 cents in the dollar rather than receiving a lesser sum under the Naylors' earlier proposal. 12 In coming to this view, I have not ignored the position of the Naylors and their attachment to the land. Any cropping or work done on the land since May 2007 should be protected and can be by the timing of relinquishment of possession. The primary concern should be, however, the creditors of their former bankruptcies, whom they have not paid and who remain unpaid. 13 That said, it would not be fair on the Naylors, or appropriate in the circumstances, to make orders that require the sale to the applicants under the new offer, without giving them an opportunity to match it. The creditors should decide this question, not the Court. Other machinery and protective orders should also be made, which I set out below. 14 That leaves the question of costs. A spirited debate took place on 15 August 2007 as to what I should do about costs. The applicants submitted, with some justification, that Mr Thomas and those running the case for him were less than forthcoming in the provision of information, both documentary and evidentiary. Mr Thomas submitted that the calls for documents in the notice to produce issued by the applicants were, if not oppressive, at least over-reaching and, when the file was called for expressly, it was handed over. Mr Thomas' explanation, through his counsel, as to why the reality of his evidence and that of Mr Fagan was not frankly and fully disclosed without the need for cross-examination was less than persuasive. In fairness to Mr Thomas, he was being assailed litigiously by the applicants, aspects of which (such as the misleading or deceptive conduct claim and the claim for damages) impugned his position personally. 15 I do think, however, that both sides lost sight of the proper way to run litigation. The courts are a scarce and expensive public resource. Litigation is necessarily expensive for the parties. It involves skilled, experienced members of a profession. The professionals and their clients have a duty not to call upon court resources to resolve matters other than truly in dispute: Ashmore v Corporation of Lloyds [1992] 1 WLR 446 at 453. This duty, which the courts can enforce, reaches down to the method or conduct of cases. Issues should be examined realistically and cases should be run with a minimum (not a maximum) of discovery and interlocutory skirmishing. Parties should be frank with each other in order that the real issues are litigated without confusion or surprise: see in particular Nowlan v Marson Transport Pty Limited [2001] NSWCA 346 ; (2001) 53 NSWLR 116 at 117[1], 128 [28], and 131 [39]. 16 One aspect of this approach is the sensible and reasonable provision of documents and information, reasonably requested. This is said to limit, not expand, discovery. Sometimes a reasonable request for informal inspection or for the provision of information and a reasonable and prompt response can save much greater expense and trouble later. Here, instead of asking for access to the file, a long and repetitive notice to produce was issued which would have required a significant body of (wasted) time and expense to answer. That said, access to the file was not offered. Further, and more importantly, a frank disclosure of the likely evidence of Mr Thomas and Mr Fagan was not made. Had it been, considerable time and money would have been saved. These combative and defensive postures led to claims before me for discovery by the applicants. I dealt with these at an extended directions hearing. Some of the asserted claims for documents were unnecessary and such as to be described in former times as "mere fishing", now perhaps better described as unreasonable or inappropriate. The above comments reflect a change in approach as to the former perceived "right" to discovery and the modern approach, reflected in this Court by the Federal Court Rules and Practice Note 14, that any and all discovery must be justified and is in the control of the Court. It is fair to say that a prompt offer of the trustee's file and of a full explanation of the events leading up to and on 11 May 2007 would have forestalled a lot of the time-consuming and wasteful correspondence and disputation and may well have limited the case considerably. 17 It should not be thought that I have forgotten the difficulties of practice. It is easy to be wise after the event. Practitioners and clients must, however, approach civil litigation (even hard fought commercial litigation) with the recognition of the need for civility and reasonableness so as to avoid unnecessary time and energy being expended (at cost to the client) in dealing with incivility and unreasonableness. The professionals here were civil to each other; but their positions were sometimes unnecessarily intransigent. There is a balance to be struck between reasonable informality to cut through procedures and resistance to unnecessary demands. That balance is one for practitioners whose fees represent their skill and experience, including their skill in identifying the real issues for trial and bringing them to trial efficiently, in a cost-effective way and with a minimum of unnecessary activity and expense. 18 I think both sides approached the preparation of this litigation with an eye to raising every issue, demanding every document and restricting every incursion, without calmly and reasonably accommodating each other in an attempt to minimise the costs of the litigation. That, I think, is what led to the failure of the first respondent and those advising him to lay out clearly and frankly what his and Mr Fagan's evidence was. 19 Though the applicants have been successful in their attempt to set aside the composition, that success is a result of the effect of the latest offer that they have put forward and not a result of persuading me of any substantive error in my approach to the matter on the material put before me in July. The applicants also failed in a considerable number of issues; indeed, as I have just indicated, substantially all issues as run in the July hearing. 20 That said, if the first respondent had been forthcoming in these proceedings (arguably it was not relevant in the caveat proceedings that he initiated) about his conduct of 11 May 2007 and Mr Fagan's conduct earlier, these proceedings would, in all probability, have been less protracted. 21 Weighing up these considerations and taking into account the evidence led and submissions made on 15 August 2007, I think that the appropriate order for costs should be that the applicants pay 70% of the costs of the first respondent up to and including 15 August 2007 on a party/party basis, 70% of the Naylor's costs up to the same time on the same basis, the first respondent pay 30% of the Naylor's costs up to the same time on the same basis. The parties should pay their own costs from 15 August 2007 to today. Declares that the first respondent has validly rescinded the contract for the sale entered into in April 2007 between the first applicant and the first respondent of Certificate of Title Folio Identifiers 1/137459, 1/137460, 1/111408, 3/111408, 164/750357, 165/750357, 166/750357, 171/750357, 173/750357, 179/50357, 183/750357, 184/750357, Auto Consol 11846-232, Auto Consol 8100-243, Auto Consol 5574-195 and Auto Consol 1222-122. 2. Orders pursuant to section 74MA of the Real Property Act 1900 (NSW), the First Applicant to withdraw Caveat No. AD114421M lodged in respect of the said land. 3. (b) Declares pursuant to ss 30 and 222 (8) of the Bankruptcy Act that the property described in the First Schedule hereto is held on trust by the first respondent for those persons who were creditors of the Naylor Estates as at 11 May 2007. (ii) Providing to the said creditors within four weeks of 29 August 2007, the terms of any offer from Mr Milton Naylor and Mr Glen Naylor or any other person to purchase the said property, including the offer to purchase pursuant to the terms of the said undertaking of the applicants. The terms of the said undertaking may be communicated to the said creditors at any time within those four weeks. (iii) Providing to the said creditors within four weeks of 29 August 2007 a précis of any competing offers to the creditors and his views about the competing benefits of the respective proposals. (iv) As soon as reasonably possible after said meeting, entering into a contract to sell the said property to the purchaser decided upon at the meeting. (d) Orders that should the second and third respondents wish to put a proposal to the persons mentioned in (b) above at the meetings mentioned in (c) above, such proposal in final form and wholly in writing signed by the Naylors capable of consideration and acceptance by the meetings be delivered by hand to the first respondent by 4.00 pm Wednesday, 19 September 2007. (f) Notes the agreement between the applicants and the first respondent that the proceedings commenced in the Supreme Court of NSW in relation to the caveat being proceedings number 3182 of 2007, will be discontinued by consent with the only other orders being an order that the defendants pay both the plaintiff's costs and the cross-defendant's costs of the cross-claim on an indemnity basis. (g) Orders that the first respondent will not, without the leave of the Court, seek to recover, either as part of his costs, charges and expenses of the administration of the estates of the second and third respondents or as part of his costs, charges and expenses of the composition entered on 11 May 2007 or of the trust created hereunder any costs, charges and expenses occasioned by these proceedings and the Supreme Court proceedings up to and including 29 August 2007. (h) Orders that the costs of the steps required to be undertaken by the first respondent henceforth, including the costs of the meeting referred to at (b) above, be determined by the Court after the sale of the property, such determination being as to amount and who is to pay. 4. In the event that there is any dispute as to the terms of the contract, the parties are to seek directions from the Court, and the Court shall settle the terms of the contract. (b) Upon completion of the said sale, to distribute the net proceeds of sale to the persons who are creditors of the Naylor Estates as at 11 May 2007, as if it were a distribution pursuant to s 110 of the Bankruptcy Act . (c) Subject to 3(h) above, the first respondent only deduct from the sale proceeds the amounts set out in the schedule attached to the undertaking, being Annexure 'A', plus or minus appropriate and reasonable adjustments. (d) In the event that there is any dispute between the applicants or either of them and the first respondent as to adjustments, that dispute is to be referred to this Court for determination. (e) The first respondent take steps at the cost of the applicants for the obtaining of vacant possession of the land described in the Second Schedule, such application to be brought in the first instance before Allsop J for directions at the earliest opportunity. 5. If the first respondent does receive a proposal from the Naylors or any other party (other than the applicants) by 4.00 pm on Wednesday, 19 September 2007, but he is of the view that it is not a proposal of the kind described in 3(d) above, the first respondent is to have the proceedings listed before Allsop J at the earliest opportunity, having notified all parties. 6. Liberty to apply on 2 days' notice or such earlier notice as is considered necessary by the listing party. 7. Subject to further orders, these orders not be entered before 3.30 pm on Friday, 31 August 2007. 8. Any argument about the form of these orders be listed for hearing at 10.15 am on Friday, 31 August 2007. 23 The following comments should be made about some of these orders. (a) First, order 3(a) above sets the composition aside under s 222 of the Bankruptcy Act . There is no evidence of any intervening acts of third parties that need to be protected. I will hear the parties on whether I should substitute the order to set aside with an order to terminate under s 222C. (b) Secondly, order 3(h) above is made because it is unclear from the undertaking whether the applicants would bear these costs. Mr Newlinds (as I understood him) indicated that they would. I am not clear why they should under the terms of the undertaking. It may be that the applicants wish the position to be clear that they pay those costs since the costs may differentially affect the position of the creditors should the purchase be pursuant to the undertaking compared to some offer from the Naylors. If I have misunderstood the position, I will hear the parties. (c) Thirdly, if the Naylors are unsuccessful in winning the property, they should be reasonably protected in terms of occupation to harvest any winter crops and sell any livestock and plant and machinery. That is only reasonable. However, it will also be necessary for them, in these circumstances, to appreciate the necessity for reasonable despatch in respect of such matters and for reasonable despatch in giving vacant possession. Reasonable and enforceable arrangements for vacant possession may (subject to hearing the parties) be the price for extended possession, if the Naylors fail to win the property. (d) Fourthly, the parties should make use of any liberty to restore the matter if they think it appropriate. I do, however, expect co-operation between the parties in the manner I have identified. (e) Fifthly, the three weeks for the Naylors to put forward a proposal is more than reasonable. It is intended that the time prescribed be of the essence. I have nit been assisted by evidence from the Naylors since July. There was no suggestion by Mr Friedlander that this was a time frame that was too short. (f) Sixthly, I considered ordering only one meeting in order 3(c)(i). However, on reflection, there should be three meetings as if the bankrupts estates were meeting again. Given that the intent is to replicate as far as possible the events of 11 May 2007, and given that the holding of the property on trust for the creditors should as far as possible reflect the creditors' rights in the bankruptcies and the various estates, 3 meetings should be held. If some deadlock arises from this course the parties should have the matter relisted for resolution of any difficulty. 24 I will give the parties an opportunity to address me on the form of these orders on Friday, 31 August 2007. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. | composition setting aside costs proper approach of parties to conduct of litigation bankruptcy practice and procedure |
2 The first respondent, a plumbing company which I will call A1, owned a valuable BMW sedan. There were four keys to it when it was supplied to A1 on its original purchase. 3 A1's office manager, the second respondent, Ms Touma, took the vehicle to the appellant's premises for the appellant to service and carry out any necessary repairs on the vehicle. She handed the key that she had to agents of the appellant. The key was of an electronic type, and the engineering of the vehicle included the provision of a complex immobilisation system. Somebody stole the car from the appellant's premises. The only reasonable inference is that somebody other than an agent of the appellant had another key to the vehicle and, picking his or her moment, drove the car away when there was no mechanical device, or human agent of the appellant to stop it. The evidence suggests that a 'swarthy' male, in fact, drove the vehicle away. 4 The law accepted by both parties is that, in relation to such a bailment, the duty of the bailee is to take all reasonable care for the safety of the vehicle, and once the theft of the bailed item from the bailee's possession has been shown, as here, the onus is on the bailee to prove that it took all reasonable steps for the safety of the item. 5 The case for the appellant rested entirely upon the inability of the vehicle to be moved without a key, upon the high probability that the key which was used by the thief had come from the possession of A1, and on the proposition that it was not unreasonable for the appellant's agents to assume that A1 would keep its other keys to the vehicle safe. In these circumstances, A1 did not suggest that there was any system of boom gates, electronic gates, or any other system to prevent the vehicle being taken if some dishonest person had obtained another key. The case was that it was not foreseeable that somebody would or could dishonestly obtain one of A1's other keys, and steal the vehicle from the appellant's premises. 6 The case for A1 is that it was perfectly foreseeable that somebody would steal the car by means of obtaining one of A1's other keys, and it was within the bounds of reasonable foreseeability that the car might be stolen while in the possession of the appellant. In these circumstances, as a practical matter, it was not sufficient for the appellant to rely upon protection of the key as the sole means of protection of the vehicle: protection of the vehicle against theft by somebody using a stolen key should have been undertaken. On the face of it, there are well known and obvious mechanical means, such as electronic gates, only able to be opened by an authorised representative of the gate-owner, which might have been employed. It is submitted that the onus in such circumstances lay on the bailee to show that doing more than protecting the key was not reasonably possible. 7 I agree with the respondents' submissions in this regard. 8 Reference was made by the appellant to the failure of A1 to call the person responsible for the overall management of A1 and for the safety of A1's vehicle and its keys, and in particular, Mr Symonds to explain if, when and how another key or keys had gone missing. That failure however does not seem to me to deal with what the appellant might have reasonably foreseen. Had the case been appropriately pleaded in respect of contributory negligence, it might have been a powerful weapon for the appellant. In these circumstances there is no basis, especially not on appeal, for trying to construct some other case of contributory negligence. 10 It follows then that on the principal issue the appeal must fail. 11 The proceedings were constituted in the first instance with two applicants, the first of which was A1, the second being Ms Touma. Another point taken on the appeal was that the learned Federal Magistrate did not differentiate between the respondents as to which of them should be the beneficiary of judgment in the matter. Whether the matter was drawn to his Honour's attention, or whether it was an obvious oversight (as it appears to be) was not made clear to me, but it seems obvious that judgment should have been given for A1 only. The appeal will be upheld for the sole purpose of amending the order to ensure that the judgment as given by his Honour will be in favour of the first respondent only. 12 It is suggested that costs should be allowed to the appellant against Ms Touma, but I am unimpressed with this. There was a basis upon which she might have been a claimant, in that she was the person actually in physical possession of the vehicle when it was delivered to the appellant. There is nothing put before me to suggest that the proceedings were prolonged or complicated in any way by her unnecessary joinder as an applicant. The matter might have been sorted out below and was not, but I think no allowance for costs should be made. 13 The appeal will be allowed as indicated but the appellant is to pay the respondents' costs. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick. | bailment for reward duties and liabilities of bailee negligence onus of proof when not discharged. bailments |
The Tribunal decided that valid notification of the delegate's decision had occurred on 16 August 2007, with the result that the prescribed period within which an application could validly be made to the Tribunal was 6 September 2007. See Migration Act 1958 (Cth) (the Act) s 347(1)(b) and Migration Regulations 1994 (Cth) (the Regulations) reg 4.10(1)(a). The first respondent's application for review was not made until 28 February 2008. The Magistrate found that the initial valid notification had been invalidated by a subsequent invalid notification, and declared that the first respondent had never been notified of the delegate's decision. If an extension of time is granted, the appeal will be heard forthwith. I will call the first respondent "the respondent". The respondent and her family are citizens of Singapore. The respondent entered Australia in February 2002 on a four year Temporary Business (Class UC) Independent Executive subclass 457 visa. In February 2006 the respondent lodged an application for a further business visa in which she provided an address to which correspondence should be sent (the Bridgewater Way address). On 7 August 2007 the delegate refused to grant the visa. Later on that day the delegate sent a letter by registered post to the Bridgewater Way address (the first notification letter), which enclosed a copy of the delegate's decision. On 22 August 2007 the respondent advised the Department of Immigration and Citizenship of a change of address (the Bindowan Drive address). On 23 August 2007, in response to that advice, the Department sent a further letter to the respondent enclosing the first notification letter (the second notification letter). However, as a result of an error the second notification letter was not sent to the Bindowan Drive address but to an address that did not exist. On 24 August 2007 the first notification letter was returned to the Department unopened. On 3 September 2007 the second notification letter was returned to the Department marked "no such address". On or about 8 February 2008 the respondent became aware of the delegate's decision. On 28 February 2008 she applied to the Tribunal for review of the decision. On 6 May 2008 the Tribunal found it did not have jurisdiction to review the decision because the application had not been made within time. This was based on the Tribunal's acceptance that the respondent had been notified of the delegate's decision on 16 August 2007 by the first notification letter. The respondent applied for judicial review of the Tribunal's decision. The Federal Magistrate rejected the respondent's contention that the first notification letter was not a valid notification of the delegate's decision for technical reasons which it is not necessary to record. However, he upheld a submission by the respondent that the second notification letter amounted to a re-notification which cancelled the first notification letter. His Honour rejected the Minister's submission that the second notification letter was merely a courtesy letter, in effect advising of the decision, and that it did not invalidate the earlier notification. ... I find that the Tribunal erred in its determination that an effective notice was served because the re-notification invalidated the first notification and, because of it being sent to the wrong address, the re-notification plainly did not satisfy the legislative scheme. Those orders were made on 6 March 2009. On 24 March 2009 the Department sent the respondent's solicitor a letter (the third notification letter) enclosing a letter to the respondent dated 23 March 2009 and the Decision Record dated 7 August 2007 by which the delegate refused her visa application. The 23 March letter stated that the visa application had been refused. On 2 April 2009 the Minister filed and served a notice of appeal to this Court from the Magistrate's decision. Later on that day the Court's registry informed the Minister's solicitors that the notice of appeal had been filed out of time. On 8 April 2009 the Minister's solicitors filed and served an application for extension of time to file and serve a notice of appeal and an amended draft notice of appeal. The amendment consisted of adding the family members other than the respondent as respondents. On 14 April 2009 the respondent applied to the Tribunal to review the delegate's decision. It was filed and served six days late. Order 52 rule 15(2) empowers the Court to extend time for "special reasons". On 6 March 2009, the date of the Magistrate's decision, the Minister's solicitors advised him that the last day to file and serve a notice of appeal was 3 April 2009. According to the solicitor handling the matter, that date was calculated by reference to s 477A of the Act. Reliance on that section was misplaced, because the section applies to applications to the Court in its original jurisdiction and not its appellate jurisdiction. The Minister acted on that advice, and within the advised appeal period, on 1 April instructed his solicitors to file a notice of appeal. That was done on 2 April. As I have said, later that day the Registry informed the Minister's solicitors that the notice was out of time. The solicitors informed the Minister of that fact, and the Minister said he would consider his position and provide instructions by 6 April. On that day the Minister decided to seek an extension of time. That application was filed on 7 April together with a supporting affidavit setting out the matters recorded in this paragraph. In my view the Minister has sufficiently explained the short delay in filing the notice of appeal. In several cases an extension of time has been granted where there has been a short delay caused by reliance on incorrect advice as to time limits. Jess v Scott was such a case. Regulation 2.16(3) of the Regulations requires the Minister to notify an applicant of a decision to refuse to grant a visa by one of the methods in s 494B. It will be recalled that the Federal Magistrate concluded that the respondent had not been notified of the delegate's decision because the Department's decision to re-notify the respondent of the decision rendered the first notification "redundant" or "invalidated" it. See [6]. The Minister submits that the Magistrate identified no legal principle for his decision. Rather he focused on whether the second notification letter was a courtesy letter or a re-notification letter. The rejection of the Minister's courtesy letter submission in favour of the respondent's re-notification characterisation does not, says the Minister, provide a legal principle by reference to which the act of sending the second notification letter affects the validity of a notification that had already occurred. Section 494C is a statutory deeming provision. It does not create a rebuttable presumption that notification has occurred. It provides that in certain circumstances, a person is to be "taken to have received the document ...". In my view this provision manifests an intention that a person is taken to have received the document seven working days after the date of the document, without qualification. There is nothing to indicate that the effect of the subsection is to be read as if there was a proviso that the person was not taken to have received the document where the document had been returned undelivered to the sender within seven working days after the date of the document, or that the subsection operates in its terms only "until the contrary is proved". The sequence of statutory and regulatory provisions to which we have referred prescribes with precision the steps to be taken in notifying a visa applicant of the outcome of his or her application. The Minister says that s 494C(4) would have operated to deem the first notification letter to have been received even if the respondent's notification of change of address had been received by the Department between 7 August 2007 (when the letter was sent) and 16 August 2007 (when it was deemed to have been received). Neither the language nor the evident purpose of the statutory and regulatory scheme supports such a construction. In my view the Minister has a strong case that once the Federal Magistrate had rejected the technical attacks on the validity of the first notification letter, he should have concluded that the respondent had been notified of the delegate's decision on the ground that the defect in the second notification letter cannot affect the validity of a notification that had already been "taken" or "deemed" to have occurred prior to the second notification letter being sent. The first was that an appeal is of academic interest only, and will not determine any question now at issue between the parties. The respondent has a review proceeding on foot in the Tribunal in respect of the delegate's decision. That review will determine whether she is entitled to the visa. It was submitted that if an extension of time were granted and the appeal upheld, that would not affect the conduct of the review or the validity of the Tribunal's decision on the review. The position would be the same if the appeal were to be dismissed. The contention that the respondent's application for review will determine her right to a visa is in my view much weaker than the Minister's strong case described at [26]. On that case, the third notification letter was incapable of having any effect because the first notification letter was effective. Accordingly the Tribunal would have no jurisdiction to entertain the application. Section 347(1) requires an application for review to be made in the approved form and be given to the Tribunal within the prescribed period. The prescribed period in reg 4(10)(1)(a) is 21 days after the notification of the decision. Notification took place on 16 August 2007. The current application was not made within the prescribed period, and accordingly is not competent. The Tribunal has no jurisdiction to entertain it. The Department's letter of 24 March 2009 cannot confer on the Tribunal jurisdiction it does not have. The respondent's discretionary consideration depends on the Minister's contention, just described, being erroneous. All I need say at this stage is that in view of the strength of the Minister's case, I do not regard this discretionary consideration, which is at odds with that strong case, to be sufficiently persuasive to cause me to refuse an extension of time. As part of this first discretionary consideration, the respondent contended that the Minister made an election by not seeking a stay of the Magistrate's orders and indeed complying with them, and that he cannot resile from the consequences of that conduct. He may keep the question open, so long as he does not affirm the contract or continuance of the estate and so long as the delay does not cause prejudice to the other side. Presumably the right other than the right to seek a stay is the right to appeal. In my view these rights are not inconsistent rights. Unsuccessful litigants frequently comply with orders which they intend to challenge without thereby losing their right of appeal. For example a litigant ordered to repay money to the Commonwealth is unlikely to be advised to seek a stay, because there would be no risk of the Commonwealth being unable to repay the money in the event of a successful appeal. The notion that the consequence of not applying for a stay and complying with an adverse order is the loss of the right to appeal is quite foreign to the way in which appellate litigation is conducted. That the right to apply for a stay and the right to appeal are not inconsistent is shown by the fact that they so often travel together. For example, an unsuccessful party who is ordered to pay money to an opponent he thinks will use it to pay heavy debts so as to make it unlikely he will be able to repay it if the appeal is successful, will both appeal and seek a stay. The second discretionary consideration relied on by the respondent is that the legal issues the Minister wishes to raise on an appeal are of academic interest. Accordingly, it does not apply to the present case. The respondent's argument was that if the circumstances before the Court were to arise again under the amended legislation, a court or tribunal would find that the second notification letter was defective and would have the effect of cancelling or invalidating the first notification letter. On that approach the Minister has made an error in giving a document to the respondent in accordance with a method specified in s 494B, but the respondent nevertheless received it on 12 February 2008. She is thus taken to have received the document at that time. The time within which to apply to the Tribunal would run from that date. Because of this change in the law, the respondent says that the issues raised are no longer matters of public importance, and I should not write a judgment about them because "Parliament has moved on". The Explanatory Memorandum to the Bill which became the Amending Act explains that the notification provisions in the Act and regulations are highly prescriptive and create fertile ground for the courts to find defects in notifications. Technical errors can be relied on by those seeking to delay the resolution of their cases despite no apparent prejudice flowing from the defect. The Memorandum gives examples of defects, including the use of the wrong postcode, where the document is nevertheless received by the addressee. The Memorandum identifies two key changes to the notification regime: Provide that substantial compliance with the required contents of a notification document is sufficient unless the recipient is able to show the error or omission in the document causes them substantial prejudice. Provide the deemed time of notification provisions will operate despite non-compliance with a procedural requirement for giving a document to an individual where the individual has actually received the document unless the individual is able to show they received the document at a later date in which case they will be taken to have received the document at that date. It provides that a person is taken to have received a document at the times mentioned in s 494C even if the document, the envelope containing the document or any accompanying material, contains an error or omission that is minor or insignificant, unless the person can show that the error or omission substantially prejudices him or her. As I have said at [28], the Minister's argument to the contrary is much stronger than the respondent's argument in support of denying the extension of time. What I have said there is applicable to this discretionary consideration. The third discretionary consideration relies on what is described as "the justice of the matter". In this connection it is said that the Tribunal review application is on foot. The Tribunal is the only body in which merits review can take place, and "there is no question of the decision of that tribunal being defeasible at all, ever". As I have said at [28], the Minister's argument to the contrary is of much greater strength than this assertion. Having regard to what I regard as the Minister's strong prospects of success on an appeal, if leave is granted, and the comparative weakness of the discretionary considerations which are entwined and at odds with the Minister's case, I propose to grant an extension of time. Having heard the argument on the appeal itself, I have concluded that the matters recorded at [16]-[26] and [28] lead to the conclusion that the appeal should be allowed. It is necessary, however, to deal with the respondent's submissions on the appeal that were not deployed on the extension application. The respondent submits that the Act does not prevent the Minister notifying a decision on more than one occasion, either because there is doubt whether the duty imposed by s 66 had been discharged or because it is expedient to do so. It was said that Minister for Immigration and Multicultural Affairs v Bahwadj [2002] HCA 11 ; (2002) 209 CLR 597 shows that where a person exercising statutory power realises a purported exercise is not legally effective, the person can re-exercise the power. In that case an applicant's agent informed the Immigration Review Tribunal that the applicant was unable to attend a hearing and wanted a later hearing date. By error that information was not drawn to the attention of the member constituting the Tribunal, who made a decision adverse to the applicant. On discovering the error, the Tribunal held a further hearing and decided in the applicant's favour. The Minister's application to set aside the second decision on the ground that the Tribunal was functus officio once it had made the first decision was dismissed. Four members of the Court held that the Tribunal's first decision was made in jurisdictional error (denial of natural justice), did not constitute a review as required by the Act, and was of no legal effect. The present case is quite different. Here the Tribunal found, correctly, that it did not have jurisdiction to entertain the appeal. Once it had done that, it was functus officio. If it had purported to re-exercise its power, any "decision" would have been of no effect. The essence of Bahwadj is that the Tribunal's first decision was a nullity, and thus no obstacle to a fresh decision. The respondent relied on s 33(1) of the Acts Interpretation Act 1901 (Cth) for the contention that the requirement in s 66 of the Act that the Minister notify an applicant of the decision whether to grant or refuse a visa can be exercised from time to time. Section 33(1) was mentioned in Bahwadj . There the Minister argued that the subsection does not confer any power to make a further decision, because the Act disclosed an intention to the contrary. The High Court held that once it was seen that the first decision was a nullity, the Tribunal was required to revisit the matter because its duty remained unperformed. At [53] Gaudron and Gummow JJ said this was so "regardless of s 33(1) ". At [156] Hayne J said that s 33(1) did not require consideration because the Tribunal had performed its duty only once, by the making of the second decision. Whatever the scope of s 33(1) , it cannot in my view operate in the way in which the respondent seeks to have it apply, namely to invalidate or cancel the legal effect of an earlier performance of a duty. The subsection says nothing about displacing the legal effect of an earlier exercise of power or performance of duty. Her Honour pointed to the contrast between subss (1) and (3) in this respect. Whilst the Minister has a discretion whether or not to exercise the s 501(2) power, the power in question is simply a power to cancel a visa which, if validly exercised, results in the former holder acquiring the status of an unlawful non-citizen with the consequences prescribed by the Act. There is no occasion for the re-exercise of the power once it has been validly exercised. Later the applicant asked that the refusal be reviewed in the light of additional material. That request was refused. The applicant sought judicial review of both refusals. The ground of review of present relevance concerned the second refusal, which was attacked on the ground that the decision maker erroneously concluded that he did not have power to reconsider his decision. French J considered whether the power to grant or refuse to grant an entry permit carried with it a power to reconsider an earlier exercise of the power. His Honour concluded it did not. And in the context of the Migration Act as it presently stands with specific provisions for review of decisions and the making of regulations relating thereto, I do not consider, in the absence of clear words, that it would be proper to imply such a power. However, in Burgess v Minister for Immigration and Multicultural Affairs [2000] FCA 926 ; (2000) 101 FCR 58 at 62 Katz J expressed the view that his Honour would have come to the same conclusion had he taken that provision into account. If, contrary to my view, s 33(1) could in an appropriate statutory context operate in the manner sought by the respondent, it could not do so in the present case because the notification scheme of the Act, especially s 494C , discloses a contrary intention. The prescriptive timing regime that runs through the Act is inconsistent with the notion that, as the Minister put it, "you can reset the clock as often as you like by just sending a new letter". In support of the contention that a subsequent notification cancels the effect of an earlier one, the respondent relied on H v Minister for Immigration and Multicultural Affairs (2002) 118 FCR 153. There notification had first been sent to the appellant's agent and was later handed to the appellant in person. Notification to the agent gave the appellant more time in which to lodge his application for review. The Refugee Review Tribunal dismissed the application on the ground that it was out of time. The primary judge dismissed an appeal from that decision. The appellant's appeal was upheld by the Full Court. The Court agreed with the Tribunal's decision so far as it concerned personal notification, but said that the Tribunal had overlooked the notification to the agent. The first is that the notification to the migration agent was the only relevant notification of the decision, so that the application for review could be lodged at any time before 14 November. This approach assumes that once the Minister first notified the appellant of the decision, that exhausted the Minister's obligation under s 66. If that be correct, any further "notifications" (for example, by personally serving the appellant with a copy of the decision), would not be notifications under the statute and would have no legal consequence. In that event the applicant has been given two inconsistent timetables within which to make application for review and, in the absence of any statutory basis for giving one priority over the other, the appellant was entitled to choose the timetable that best suited him. That is what occurred in this case, albeit the appellant did not know he was making a choice. At [25] their Honours said it was unnecessary to express any view on the correctness or otherwise of the second basis in H and in particular "whether there can be two operative and effective notifications made". They were of the opinion that in the case before them two methods of notification were not utilised giving rise to inconsistent timetables. In my view the Full Court in H was not endorsing both alternative bases. Only one can be the correct approach. An assumption is part of each of them. I understand the Court to have said that on whichever of the two bases argued was the correct one, the application for review was within time. It was thus unnecessary to decide which was the true view. For the reasons I have given, the first basis is to be preferred. That would appear to have been the opinion of the Court in Zhang . Ordinarily the Minister would have to pay the costs referable to the extension application and the respondent those referable to the appeal. In these circumstances the appropriate order is that there be no order as to costs. I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. | visa application refused by minister's delegate applicant validly notified of decision by registered mail later notification of applicant's change of address further notification to non-existent address invalid whether second notification invalidates or cancels effect of first notification. tribunal holds it has no jurisdiction to entertain application to review visa refusal federal magistrate quashes decision and orders minister to notify applicant of refusal of visa minister complies with order and then seeks an extension of time within which to appeal whether by not seeking a stay of magistrate's order minister has elected so as no longer able to appeal whether right to seek stay and right to appeal are inconsistent rights. migration election |
It has been sued by Boston Commercial Services Pty Ltd (ABN 87 114 658 070) (new Boston) which claims to be the assignee of the business, including rights under its contracts, of Boston Commercial Services Pty Ltd (ABN 75 003 990 583) (old Boston). 2 On 9 November 2004 old Boston entered into a contract with GE Capital which provided for old Boston to make what were described as 'field calls' on customers of GE Capital who were not paying their debts in accordance with their loan agreements. 3 On 1 July 2005 old and new Boston entered into a sale of business agreement which was completed at 8.30a.m. on that day (cl 1.1(e)). Under the sale agreement old Boston sold to new Boston the business of debt collection and related services which the former had conducted (Sch A). Mr Derryn Harrison was the sole director of both new Boston and old Boston at all relevant times (Harrison affidavit pars 1 and 2 and company searches Trinca E&F). Old Boston promised, under the sale agreement, to deliver to new Boston all assignments, consents to assignments, releases and incidental documents necessary for new Boston to operate the business but only to the extent that those documents were held by old Boston. In addition, old Boston promised to deliver to new Boston a notice of assignment, novation or such other form of transfer or notice as new Boston might reasonably require with respect to the GE Capital contract (cl 6.2(c) and (e)). 4 Later in July 2005 old Boston went into a form of external administration and later was subject to a creditor's voluntary winding up. In October 2005 old Boston's creditors resolved that it be voluntarily wound up and liquidators were appointed. The liquidators resigned on 7 April 2006 and the evidence before me is that old Boston no longer exists. As such, all invoices from July 2005 forwards will be issued under this new number. All other contact and trading details for Boston remain unchanged. In its application it sought unliquidated damages pursuant to s 82 of the Trade Practices Act 1974 (Cth) ('the Act'). New Boston's statement of claim is based on claims for breach of contract, misleading and deceptive conduct in contravention of s 52 of the Act and unconscionable conduct in breach of s 51AC of the Act. 7 The singular feature about the claim, as formulated in the statement of claim, was that new Boston is, in effect, suing GE Capital on the basis of its conduct affecting, its misrepresentations made to, and a contract entered into by, old Boston. New Boston has pleaded that the sale agreement constituted, or embodied, an assignment which in effect entitled it to succeed to old Boston's rights and liabilities, including choses in action, so as to entitle new Boston to exercise old Boston's causes of action in contract and under ss 51AC , 52 and 82 of the Act. 8 In essence new Boston's claim is that old Boston was invited in early February 2004 to tender for the supply of field agent services by GE Capital. GE Capital is alleged to have represented to old Boston that it would provide instructions to the successful tenderer to 'effect' field agent services in respect of 25% of its defaulting customers, that would result in approximately 282 field call instructions per month to old Boston. 9 New Boston pleaded that GE Capital specifically represented to old Boston that those services would be required for a period of two years with the possibility of a further extension and that that period was specifically provided for in the GE Capital contract. 10 The GE Capital contract did have a written term of two years. However, GE Capital also could terminate the GE Capital contract immediately by written notice without any liability or obligation if old Boston entered into liquidation or any other type of insolvency or ceased to conduct business to give effect properly to the GE Capital contract (cl 20(a)(v)). In addition, GE Capital also had the right to terminate the agreement at its discretion at any time by giving 14 days written notice, in which case it was liable only for the amount outstanding for services provided up to the date of termination (cl 20(b) and (c)). 11 The statement of claim also alleged that old Boston expended considerable time and cost to complete costing analyses for the purpose of preparing its tender, and in doing so it was alleged to have relied on the representations as to the volume of work which would be provided by GE Capital. The activity of inviting tenders and their responses took place between 4 and 13 February 2004. 12 On 8 March 2004 old Boston was advised by GE Capital that it had satisfied its criteria, subject to passing some form of auditing. This led to the formation of the GE Capital contract on 9 November 2004, to which I have referred. That contract contemplated that old Boston would be a contractor to provide services on the terms and conditions of the contract and that the relationship would be that of principal and independent contractor (cl 2(a)). The services schedule to the contract specifically provided that GE Capital gave no undertaking, representation or warranty as to the number or frequency of referrals of field calls that it may make to old Boston under the contract, but that old Boston was required to undertake such field calls as were requested in compliance with the provisions of the GE Capital contract (Services Sch cl 3). Somewhat confusingly, the GE Capital contract provided that old Boston must ensure that only persons who were its employees provided the services unless it obtained GE Capital's prior written consent to the contrary (cl 7(a)(vi)), while at the same time saying that old Boston should perform the services through employees, agents and servants and, provided that GE Capital had been advised of their identities, its contractors (cl 22(a)). However, old Boston was to remain fully responsible for the performance of all services provided under the GE Capital contract (cl 22(c)). 13 The statement of claim pleaded that old Boston incurred costs and expenses to prepare for complying with the service standards which were agreed between it and GE Capital on the basis that those expenses would be amortised over a two year term. Some hearsay evidence was relied on by new Boston that an employee was engaged at about $40,000 p.a. to co-ordinate field calls, expenses were incurred of approximately $18,000 associated with set up costs for the old Boston's information technology systems and $5,000 for reconciling payments made to old Boston which GE Capital paid by cheque in respect of each individual referral. 14 The statement of claim alleges that between November 2004 and November 2005 GE Capital provided less than half of the agreed number of defaulting customers on whom field calls might be made and set out a table showing the monthly numbers of instructions actually received by either old Boston or new Boston respectively. It is clear that on the monthly figures, on no occasion did GE Capital require 282 field calls per month to be made, and only on one occasion did the number of calls required exceed 200. 15 On 29 November 2005, GE Capital terminated the agreement. And, cl 29 of the GE Capital contract provides that it is, together with the services schedule and the purchase orders, to constitute the entire agreement between the parties relating to the provisions of services by old Boston. Victorian law was made the governing law (cl 28). I was not informed by the parties as to what, if any, relationship that claim has with those in these proceedings. 22 Prior to filing its motion, GE Capital's solicitors sought particulars and details of the arrangements pursuant to which new Boston claimed to be entitled to sue in respect of the representations made to and conduct experienced by old Boston and to exercise old Boston's rights under the GE Capital contract. They also pointed out that in National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Limited (1995) 132 ALR 514 Lindgren J had held that causes of action under the Act were not assignable. Eventually, new Boston provided GE Capital with a copy of the sale agreement. 23 On 20 July 2006, GE Capital's solicitors sought particulars of the statement of claim. When the matter came on for hearing, I was informed that although the letter had been received on 25 July 2006, no particulars had been supplied. The solicitor for new Boston asserted, but GE Capital does not accept, that this was because he had been engaged in settlement discussions from July 2006 and in preference to answering formal legal letters he had sought to concentrate on those discussions which were ongoing. This assertion was made during the hearing and confirmed in Mr Gower's affidavit, which was filed on the following day. GE Capital objected to the affidavit being read as its contents were not accepted as accurate. Given that the way in which new Boston's claims were being put was in issue on the return of the motion I will read the affidavit but limit its use under s 136 of the Evidence Act 1995 (Cth) to evidence of an assertion of Mr Gower's state of mind and not as evidence of the truth of the assertion. GE Capital has not had an opportunity to test Mr Gower's assertion. In any event, I regard the assertion as providing no adequate explanation of the failure to provide particulars in a serious piece of contested commercial litigation. The provision of particulars of the way in which new Boston claimed its case was being put would obviously have assisted, if it were possible, new Boston's case in resisting the motion. 24 New Boston sought to resist the application but propounded a fallback position that should be granted leave to amend its claims for relief in s 51AC to include an allegation of unconscionable conduct in respect of itself and, to plead continuing representations by GE Capital. I was informed that there were emails between GE Capital and both new Boston and old Boston addressing the issue of the agreed amount of referrals and the number actually provided. New Boston also made an oral application to plead a claim in quantum meruit on the basis that if there were no contract between GE Capital and new Boston for the services provided after 1 July 2005, then new Boston should be allowed to make such a claim. New Boston argued that the less generous negotiated rate between GE Capital and old Boston for the provision of field calls (calculated on the basis of the volume of 282 per month) could be revisited based on the higher fixed costs and lower number of referrals which new Boston had in carrying out those field calls. 25 I am of opinion that before any such claim could be considered the current statement of claim would need to be repleaded so as to make clear the way in which the allegations were to be put. Further, the matters relied on would have to be pleaded properly in a way that articulates in a satisfactory form the material facts relied on to support the causes of action for which the proceedings are brought. GE Capital argued that the Court should engage in a predictive assessment as to whether the proceedings had no reasonable prospect of success. It relied upon the analogy with the similar wording of s 345 of the Legal Profession Act 2004 (NSW) (and their analogues) although it accepted that there were differences in the way that that legislation worked. However, the concept of a claim so lacking in merit or substance as to be not fairly arguable was suggested as being helpful ( Lemoto v Able Technical Pty Ltd [2005] NSWCA 153 ; (2005) 63 NSWLR 300 at 331 [132] per McColl JA). In addition, reliance was placed on Bernstrom v National Australia Bank [2003] 1 Qd R 469 at [41] that a party who seeks to resist a claim for summary judgment on rr 292 and 293 of the Uniform Civil Procedure Rules 1999 (Qld), which are similar to, but not identical to s 31A, should provide evidence of this basic material to support the arguability of its claim. 27 GE Capital pointed out that the purpose to which s 31A was directed was to provide a more lenient test than the traditional one reflected by the exception which s 31A(3) creates. The latter provision identifies the concepts of hopelessness or being bound to fail which were part of the old test explained by Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 129-130 and provides that these are no longer the only basis for summary judgment. GE Capital relied on the second reading speech and explanatory memorandum for the introduction of s 31A to show that it was the intention of the Parliament to give the Court greater flexibility than Barwick CJ's well known test provided to strike out claims which were unlikely ever to succeed. 28 New Boston argued that GE Capital had to take the allegations in the statement of claim at their highest in an argument of the present kind. It pointed to the decision of the Full Court in Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101 at [77] which held that where there were inconsistent terms within the same contract, some being standard form terms while others were specially framed with the individual circumstances in mind, it will normally be appropriate to give greater effect to the specially negotiated terms. Here, new Boston had alleged that the promise for 25% or 282 field calls was contractual, and that its claim was clearly articulated. I am not sure that I could accept the clarity of the articulation in all respects, but the essential formulation was certainly able to be discerned in most instances. 29 New Boston argued that s 31A could not require both parties to put on evidence in detail or to conduct a mini trial. It submitted that it was not necessary for the case to be hopeless or bound to fail for it to have no reasonable prospect of success, but that the wording of s 31A did no more to change the previous law on the availability of summary remedies. 30 In particular, new Boston submitted that the new test to be applied should not equate to a finding that the claim must have reasonable prospects of success (see also Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232; Jackamarra v Krakouer [1998] HCA 27 ; (1998) 195 CLR 516 at 519-520 [3] - [4] Brennan CJ and McHugh J). In the latter class of liability an element of the test is whether the claim or defence 'has reasonable prospects of success' (see e.g. s 198J of the Legal Profession Act 1987 (NSW) and now; s 345 of the Legal Profession Act 2004 (NSW)). This analogy cannot be carried too far since the statutory provisions for such costs orders contain their own definitions and conditions in which the orders can be made. So much was made clear by McColl JA (with whom Hodgson JA and Ipp JA agreed) in Lemoto v Able Technical Pty Ltd [2005] NSWCA 153 ; (2005) 63 NSWLR 300 at 331 [134] . She pointed out, following what Gibbs J had said in The Queen v Moore; Ex parte Federated Miscellaneous Workers' Union of Australian [1978] HCA 51 ; (1978) 140 CLR 470 at 473 that the mere fact that a case is dismissed is not sufficient to establish that the proceedings were instituted 'without reasonable cause' under the provisions of s 197A of the Conciliation Arbitration Act 1904 (Cth). The concept of 'reasonable cause' for instituting proceedings is not the same as the statutory concept in s 31A, since, as McHugh J pointed out in Re Commonwealth of Australia; Ex parte Marks [2000] HCA 67 ; (2000) 177 ALR 491 at 499 [27] , a person may institute proceedings on the basis of legal advice so as to have 'reasonable cause'. 32 In Ex Christmas Islanders Association Inc v The Attorney-General for the Commonwealth (No 2) [2006] FCA 671 at [20] French J pointed out that the power to award costs against a legal practitioner has been approached in different ways by State appellate courts and Full Courts of this Court as exemplified in Levick v Deputy Commissioner of Taxation [2000] FCA 674 ; (2000) 102 FCR 155 (under provisions such as s 43 of the Federal Court Act and O 62 r 9 of the Federal Court Rules ). He reasoned that considerations of whether legal practitioners should be ordered to pay costs under the provisions governing this Court's jurisdiction depended upon whether there had been an error in the observation by a legal practitioner of a duty owed to the Court. ' (see also at [2001] 2 AC at 703 [49], 706 [57]; and Cook v Pasminco Ltd [2001] FCA 1277 per Stone J and, the article by N Beaumont, 'What are "Reasonable Prospects of Success? Williams JA (with whom McMurdo P at [1] and Atkinson J at [46]-[47] agreed) held that the approach adopted by Lord Woolf MR in Swain v Hillman [2001] 1 All ER 91 at 92 was appropriate. The word "real" distinguishes fanciful prospects of success or ... they direct the court to the need to see whether there is a "realistic" as opposed to a "fanciful" prospect of success. 35 Lord Hope discussed the scope of the enquiry occasioned by the English Rule saying ([2003] 2 AC at 260-261 [95]). He said, of a provision which was like s 31A, that it operates as an exception to the normal method by which issues of fact are tried in our courts: namely that once processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence. However, if it were clear as a matter of law at the outset that even if a party was to succeed in proving all the facts that he, she or it offered to prove, the party would not be entitled to the remedy that was sought, then in such a case a trial of the facts would be a waste of time and money and it would be proper that action should be taken out of the court as soon as possible. Lord Hope instanced that in other cases it could be possible to say with confidence before trial that the factual basis for the claim was fanciful because it was entirely without substance. The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgement. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence. As Lord Woolf said in Swain v Hillman, at p 95, that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all. He emphasised that the power was a discretionary one, being one where the choice the judge has is whether to exercise the power or not based on, ultimately, the judge's ultimate assessment of its appropriateness having regard to the prospects of success of the relevant party ([2003] 2 AC at 282 [158]). Whilst it must be remembered that the wood is composed of trees some of which may need to be looked at individually, it is the assessment of the whole that is called for. A measure of analysis may be necessary but the "bottom line" is what ultimately matters. ... The criterion which the judge has to apply under Part 24 is not one of probability; it is absence of reality. He said that the allegations could be legally adequate but may have no realistic chance of being proved. On the other hand, Lord Hobhouse noted, the limitations in the allegations pleaded, alongside any lack of particularisation, may show that the party's case was hopeless ([2003] 2 AC at 284 [161]). Although Lord Hobhouse and Lord Millett were in dissent, I do not think that their identification of the principles was different to those expressed by the majority (Lord Steyn, [2003] 2 AC at 237 [1], agreed with Lord Hope and Lord Hutton, and see [2003] 2 AC at 265 [111] per Lord Hutton). 38 These authorities suggest that under analogous, but differently worded, provisions in the Queensland and English rules the court assesses whether there is a realistic, not fanciful, prospect of success. A claim that is hopeless or bound to fail does not even have a fanciful prospect of success. But, as Lord Hobhouse pointed out, at the heart of the exercise is the Court's assessment, on the incomplete materials available on a summary application, of the prospects of success were the matter to proceed to trial in the ordinary way. 39 In Agar v Hyde [2000] HCA 41 ; (2000) 201 CLR 552 at 575-576 [57] - [58] Gaudron, McHugh, Gummow and Hayne JJ held that the old test for summary disposal had been expressed in various ways but that all had described a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way. They said that a less demanding test should not be applied where a defendant sought to have service of proceedings overseas set aside. The fundamental reason why their Honours rejected the general law adoption of a more lenient test was because it was unclear as to what new criterion was to be applied. That cannot be so. It would be wrong to deny a plaintiff resort to the ordinary processes of a court on the basis of a prediction made at the outset of a proceeding if that prediction is to be made simply on a preponderance of probabilities. And if it is not to be enough to persuade the court that it is more probable than not that the case against a defendant will fail, and some higher test (less than that now applied in applications for summary judgment) is to be applied, how is that test to be described? The attachment of intensifying epithets, such as "very" or "highly", offers little useful guidance for those judicial officers who would have to apply the test and who would have to do so, often enough, in a busy practice list. Such a test would be unworkable. They then referred with approval to the joint judgment in Agar v Hyde (2000) 201 CLR at 575-576 [57]. It is subject to the operation of the whole of the applicable procedural and substantive law administered by the court, whose processes are enlivened in the particular circumstances. This includes the principles respecting abuse of process. There the Court said that where a statute prescribes that there must be reasonable grounds for a state of mind, including suspicion and belief, it requires the existence of facts which are sufficient to induce that state of mind in a reasonable person. 42 I am of opinion that properly construed, s 31A(2)(b) requires a person moving a motion for summary disposal ('the moving party') to satisfy the Court that there is no reasonable prospect of the party claiming relief ('the plaintiff') successfully prosecuting the proceeding or the part of the proceeding in question. Experience shows that there are cases which appear to be almost bound to fail yet they succeed. Obviously, where there is a contested application under s 31A, both parties will be present to explain their case, but not in the context of a trial. The procedure envisaged by s 31A is summary. The concept of a party having 'no reasonable prospect of successfully prosecuting a proceeding' has some similarity to the test at common law for determining whether a jury properly instructed could reach a verdict for the plaintiff. The principle upon which the section is based is that it is for the jury to decide all questions of fact, and therefore to determine which witnesses should be believed in case of a conflict of testimony. But there must be a real issue of fact to be decided, and if the evidence is all one way, so that only one conclusion can be said to be reasonable, there is no function left for the jury to perform, so that the court may properly take the matter into its own hands as being a matter of law , and direct a verdict to be entered in accordance with the only evidence which is really presented in the case. And, one must be mindful that in Hocking v Bell (1945) 71 CLR at 487, Dixon J said that in effect, every judge who had heard the matter (through four trials, two Full Court appeals and, to that point, the appeal to the High Court) would have formed the view that the plaintiff should have failed had they been able to decide the facts, yet the Privy Council restored the second jury verdict in her favour and so concluded the litigation. This raises a very real question, as to what reasonable prospects are for present purposes. 45 I am of opinion that in assessing what reasonable prospects of success are for the purposes of s 31A, the Court must be very cautious not to do a party an injustice by summarily dismissing the proceedings where, in accordance with the principles in Hocking v Bell [1947] HCA 54 ; (1947) 75 CLR 125, contested evidence might reasonably be believed one way or the other so as to enable one side or the other to succeed. As soon as the evidence may have such an ambivalent character prior to a final determination, I am of opinion that then, as a matter of law, at that point there are reasonable prospects of success within the meaning of s 31A. Unless only one conclusion can be said to be reasonable, the moving party will not have discharged its onus to enliven the discretion to authorize a summary termination of the proceedings which s 31A envisages. In moving the second reading of the bill introducing s 31A (the Migration Litigation Reform Bill 2005) the Attorney-General said that it strengthened '... the power of the courts to deal with unmeritorious matters by broadening the grounds on which federal courts can summarily dispose of unsustainable cases'. 46 In Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146 at 154-155, Dawson, Gaudron and McHugh JJ said that a party should not be shut out from litigating an issue which was fairly arguable and that the power to grant leave to amend should be exercised with that in mind. They observed (189 CLR at 154) that '...the ultimate aim of a court is the attainment of justice'. Obviously, s 31A regulates the attainment of justice by creating an entitlement in a party to be protected from claims or defences which fail to meet the threshold prescribed in the section. In granting leave to appeal on a decision involving the application of s 31A, Wilcox J observed in Vans, Inc v Offprice.Com.Au Pty Ltd [2006] FCA 137 at [12] that it was arguable that the effect of s 31A was that there could be summary judgment for an applicant '... notwithstanding the possibility that the applicant's case will break down at trial; in other words, it is now not enough for a party resisting a summary judgment application to seek merely to put the other side to proof' (his Honour's emphasis). 47 GE Capital also argued that s 31A required the Court to dismiss a claim or defence based on a predictive assessment of its prospects, even though it may be possible that had the matter gone to trial it would have succeeded. I am of opinion that this is not how the section operates. It is engaged only to determine summarily a claim or defence which has no reasonable prospect of success. The purpose of the enactment is to enable the Court to deal with matters which should not be litigated because there is no reasonable prospect of any outcome but one. If there is a reasonable danger that a claim or defence could be dismissed under s 31A, which could succeed at a trial, the provision would create miscarriages of justice. It is a key feature of the judicial power under Ch III of the Constitution that the Court be in a position to, and in fact does, quell a controversy. The exercise of the judicial power to prevent the substantive agitation of a controversy in which each side has a reasonable prospect of success would defeat, not advance, the ends of justice. 48 It could not have been the intention of the Parliament in introducing s 31A to the Federal Court Act to require the Court to engage in lengthy and elaborate trials on an interlocutory basis for the purpose of determining whether or not a proceeding had no reasonable prospects of success. Obviously, there will be cases in which, because of their nature, it is necessary to undergo detailed analysis. However, the assessment of whether there is a reasonable prospect of successfully prosecuting the proceeding must depend upon the evidence and pleading the subject of the application. The statutory cause of action under s 82(1) of the Act arises '... when the plaintiff suffers loss or damage "by" contravening conduct of another person' ( Wardley Australia Ltd v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 525 per Mason CJ, Dawson, Gaudron and McHugh JJ). And, the plaintiff can only recover compensation for actual loss or damage incurred, as distinct from potential or likely damage (175 CLR at 526). What s 82(1) authorizes is the recovery of the amount of loss or damage at the suit of the person who suffers it. The terms of the section appear to confer a right which is personal to the person who suffers loss or damage by the conduct of another done in contravention of a relevant provision of the Act. Now s 82(1B) provides that those damages may be reduced to the extent to which the Court thinks just and equitable having regard to the claimant's share in the responsibility for the loss or damage 50 A number of decisions of this Court identify the cause of action for the recovery of damages under s 82 as not being one which is capable of assignment. 82 and 87 of the Trade Practices Act 1974 (Cth) is, in general, a bare right of action which cannot be assigned. I am not speaking of an assignment such as may occur on the bankruptcy or death of a person or on the merger of a company into another entity. Absent such special circumstances, a right to claim under ss. 82 and 87 cannot, in my opinion, be assigned. Both the terms of the statutory provision and the principle as enunciated in cases such as Dawson v Great Northern & City Railway Co. [1905] 1 KB 260 at 270-1, Defries v Milne [1913] 1 Ch 98 and Pulton v The Commonwealth [1952] HCA 70 ; (1953) 89 CLR 540 at 602, preclude Mrs Regan from suing for damages in respect of any loss suffered by Mr and Mrs Park. Mr and Mrs park have discontinued their claims and that is an end to them. Thus, if any ancillary relief under s. 87 depends upon the approval or request of the mortgagors, the remaining applicants now hold all interests in respect thereof. Lindgren J followed both these decisions in National Mutual Property Services (Australia) v CitiBank Ltd (1995) 132 ALR 514 at 539, as did von Doussa J in Chapman v Luminis (No 4) [2001] FCA 1106 ; (2001) 123 FCR 62 at 116-117 [204] - [207] . And, in Pritchard v Racecage Pty Ltd (1997) 72 FCR 203 at 218F-G Branson J (with whom Spender and Olney JJ agreed) applied the reasoning of Davies and Lindgren JJ to hold that the estate of a deceased person could not satisfy the statutory requirement of s 82 of being a 'person' who suffered loss or damage. Her Honour also held that the estate could not satisfy the statutory requirements of s 87 of the Act of being 'a person who is a party to the proceeding' or 'a person who has suffered, or is likely to suffer, loss or damage'. 53 While the High Court has not specifically determined this issue, I am of opinion that it is not reasonably arguable, having regard to the decisions to which I have referred and the authorities on which they are based, that new Boston could succeed in the enforcement of any assignment under the sale agreement of causes of action under s 82 of the Act to recover loss or damage suffered by old Boston. Only a person who suffers loss or damage by the conduct done in contravention of a relevant provision of the Act can recover under s 82. That depends on analysing the conduct of the defendant in relation to that plaintiff alone. However, I do not consider that in the circumstances of the pleading in the present case, any material difference can be established so as to entitle new Boston, which did not exist at the time that the alleged representations were made, to assert some freestanding cause of action under the Act quite divorced from anything to do with old Boston. 55 The construction arrived at by the authorities, on s 82, to which I have referred, is reinforced by a consideration of the subsequently introduced amendment to s 82 in s 82(1B). That subsection specifically provides that the damages 'that the claimant may recover' are capable of being reduced by reason of the claimant's share of responsibility. It is difficult to see how the Court could award a third party that which the statute only authorises the claimant to recover. Moreover, s 82(1B) shows that it is only the person entitled to recover damages who can have the damages recoverable reduced by reason of that person's share of responsibility for the loss of damage. It seems to me, therefore, that the plaintiff has no direct right of action here because he has not been damnified. The statement of claim also alleges that between November 2004 and November 2005, GE Capital provided old Boston with less than half of the agreed amount of defaulting customers on whom to effect the field agent services. During the course of argument the reference to November 2005 was amended to June 2005. Obviously, after 1 July 2005 old Boston did not purport to provide any services. For the reasons I have given above, in whatever way this claim is formulated, s 82 permits only old Boston to recover that loss or damage. 57 Because s 82(1) also gives a right to recover loss or damage to a person who suffers it by conduct of another person that was in contravention of s 51AC , for the reasons given above, that cause of action is not capable of assignment to new Boston. It has no reasonable prospect of being successfully prosecuted by new Boston against GE Capital. 58 I am of opinion that in respect of each cause of action which old Boston had to recover loss or damage against GE Capital under s 82 of the Act, new Boston cannot assert any rights to recover that loss or damage because it has not been damnified. 59 The sale agreement did not dispose of or deal with any rights of old Boston to sue GE Capital for conduct in contravention of the Act. Whether or not rights to bring proceedings for damages under s 82 of the Act are assignable, in my opinion there is no reasonable prospect of success in new Boston's argument that the sale agreement effected a disposition of whatever rights old Boston had against GE Capital under the Act. Moreover, I do not think that, had the liquidator of old Boston sought to do so, new Boston could have prevented the liquidator enforcing old Boston's claims under the Act against GE Capital. Because of that, it seems to me that there is no reasonable prospect that it could be successfully argued by new Boston that an effective disposition of those rights had occurred. There was no communication from old Boston to GE Capital that assigned or made over whatever rights old Boston had in any respect, whether under the Act or in contract, to new Boston ( William Brandt's Sons Co v Dunlop Rubber Co [1905] AC 454 at 462). 60 And, even though old Boston appears to have become deregistered, if the liquidator or creditors became aware that it had valuable rights against GE Capital, such as new Boston claims the rights it obtained under the sale agreement were, it is quite possible that steps might be taken to reregister old Boston to enable it to begin proceedings. I say all this because it seems to me to demonstrate the lack of efficacy of the basis upon which new Boston claims to assert old Boston's rights. I do not think that on the evidence before me there are reasonable prospects that such an argument could succeed. It may be countered that were old Boston reregistered, new Boston might be able to compel it to assign its rights in consequence of the provisions of the sale agreement. But no provision of the sale agreement offers reasonable prospects of success for new Boston to argue that it could compel the making over of old Boston's rights to sue under the Act. That agreement was silent on both that topic and the rights of old Boston to sue under that Act which were not part of the business the subject of the transfer. The damage which old Boston suffered, if any damage were suffered by the alleged contraventions, was a cause of action which appears, on any reasonably arguable construction of the sale agreement, to have been retained by old Boston. The sale agreement could not effect any assignment of the statutory causes of action to new Boston. 61 It follows that GE Capital is entitled to have the claims against it under the Act dismissed on the basis that they have no reasonable prospect of being successfully prosecuted against it. 62 Further, the claims under ss 51AC and 52 of the Act must be approached on the basis that there is a written agreement between the parties containing terms which are expressly in the teeth of alleged representations or of alleged oral contractual terms. Absent some misrepresentation, the written agreement executed by the person complaining must be taken as authoritative: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 ; (2004) 219 CLR 165 at 179 [39] , 180-183 [45]-[50]. The process of negotiation was pleaded and was also referred to by Mr Harrison in his affidavit. The time in which substantial cost and effort were said to have been expended causing old Boston damage in preparing its proposal, involved about 9 days in February 2004. Following that, whatever may have happened in the meantime about which no complaint is made, only in November 2004 was the GE Capital contract signed. 63 The GE Capital contract appears to have been the result of a long process of negotiation. There is no suggestion that its terms were misrepresented. However, the written form of the GE Capital contract expressly negated any promise of a particular level of referrals to old Boston by GE Capital (Services Sch par 3). Old Boston had every opportunity to review the proffered terms which, according to Mr Harrison, GE Capital had sent in early September 2004 before it signed them in November 2004. There is no basis that appears in the pleading or in Mr Harrison's affidavit to support a claim that the express terms of the GE Capital contract were misrepresented to old Boston before it signed. Further, the statement of claim pleads the claim under s 51AC in a way which is not easy to comprehend. It does not disclose any intelligible basis on which it could be found that GE Capital acted in contravention of s 51AC by proffering the GE Capital contract to old Boston for consideration before signing. The allegations have no substance. 64 The manner in which GE Capital was performing during the period in which old Boston purported to carry out the GE Capital contract indicated that the GE Capital was not acting on the basis of any such promise. Both old and new Boston knew this by July 2005. These factors induce me to consider that the claims have no reasonable prospect of succeeding although I cannot say that it is hopeless or bound to fail. I think that this view is reinforced by the difficulty with which the pleader has sought to articulate the claims. On that premise the pleading goes on to allege first, that new Boston can recover both the damages alleged to have been suffered by old Boston for the breach of the GE Capital contract, as opposed to damages for a misrepresentation preceding the entry into that contract, and, secondly, damages for the breach of that contract which it alleges was assigned to new Boston by the sale agreement. 66 No particular formality is required for an assignment for value to be valid and effective in equity. All that is necessary is that the debtor should be given to understand that the debt has been made over by the creditor to some third person. 68 The letter sent by new, not old, Boston on 1 July 2005 in terms related future invoices to new Boston's ABN. It was silent about the payment of the debts due on any old invoices. But in any event, old Boston did not write the letter and so it gave no instruction to GE Capital. Whatever debt GE Capital may have owed old Boston on 1 July 2005 was never made over to new Boston. GE Capital could not have received a good discharge of any existing obligation to old Boston by paying new Boston, because old Boston never authorized GE Capital to do so. 69 I am of opinion that there was no assignment of the GE Capital contract to new Boston because old Boston never gave any notice in that behalf to new Boston. And old Boston did not give any notice of assignment to new Boston of any cause of action for any damages or debt which had accrued prior to 1 July 2005. These matters may not be fatal in themselves because it may be possible to reregister old Boston and to have it then give a formal notice of assignment of whatever causes of action in contract for damages or debt it had against GE Capital. 70 But, I do not think though that re-registration of old Boston would save any cause of action new Boston claims to have acquired under the sale agreement in respect of dealings after 1 July 2005. That is because anything that new Boston and GE Capital did after that date cannot be said to be referable to the contractual rights the subject of any assignment between new Boston and old Boston. No assignment made now can rewrite the history of the dealings between GE Capital and new Boston from 1 July 2005. 71 New Boston argued that the decision of the House of Lords in Trendtex Trading Corporation v Credit Suisse [1982] AC 679 at 694, 702-703D, F-G supported its title to sue. New Boston said that it had a sufficient interest independent of the assignment in the sale agreement to justify it being able to assert old Boston's rights. 72 But it is clear from the way in which the matter has been pleaded and from the evidence, that there was no pre-existing relationship (ie before the sale agreement) between old Boston and new Boston. The sale agreement was intended to, in effect, have new Boston step into old Boston's business and carry it on for reasons which are not currently before me. This is not a case such as where a mortgagee having lent money to a mortgagor finds itself in the position where both were induced to enter into the original financing and undertaking of the purchase by misleading or fraudulent conduct of the third party so as to support some interest independent of contract. 73 New Boston argued that I should not follow the decision of the High Court in Poulton v The Commonwealth [1952] HCA 70 ; (1953) 89 CLR 540 at 602-603 which denied that a right of action in tort was assignable at all. It was suggested that this was the old view of the law. New Boston argued that I should follow what what Debelle J said of it in South Australian Management Corporation v Sheahan (1995) 16 ACSR 45 at 58, namely that the decision could be explained as relating to an assignment of a claim in tort where the assignee had no genuine commercial interest. However, in Garcia v National Australia Bank Ltd [1998] HCA 48 ; (1998) 194 CLR 395 at 403 [17] Gaudron, McHugh, Gummow and Hayne JJ made it clear that the doctrine of precedent in Australia binds me to follow the decisions of the High Court unless and until that court decides that the time is right for a change in the law. I propose to do that. There is no basis to read down the considered judgment of Williams, Webb and Kitto JJ in Poulton v The Commonwealth (1953) 89 CLR at 602 that a right of action in tort is incapable of assignment at law or in equity. I am of opinion that Debelle J was wrong not to have applied this binding authority. 74 Next, it was said that cl 6.2(e) of the sale agreement imported an obligation on old Boston to effect an assignment or novation. The trouble is, that old Boston never did. A novation is required in order to transfer both rights and liabilities: see Linden Gardens Ltd v Lenesta Ltd [1993] UKHL 4 ; [1994] 1 AC 85 at 103E where Lord Browne-Wilkinson said that the burden of a contract cannot be assigned. The principle is that the benefit of a contract is capable of assignment but the burden cannot be assigned at all. Rather, if an existing contract is to be reordered, so that the obligations for which it provides are owed by as well as to a person not originally a party, a novation must occur. 75 Moreover, under the GE Capital contract, old Boston had to ensure that only those persons who were its employees provided the services, unless it obtained GE Capital's prior written consent to the contrary (cl 7(a)(vi)). Old Boston also provided a warranty that it and any agent or contractor used by it in the performance of the services, would have and continue to have during the term of that contract, full capacity and all necessary licences, permits and consents to enter into and perform the GE Capital contract (cl 10(j)). 76 While cl 22 of the GE Capital contract entitled old Boston to perform the services through employees, agents and servants, and, provided that GE Capital had been advised of their identities, contractors, obligations were imposed on old Boston to ensure that any such person who performed the services or to whom any confidential information, as defined in the GE Capital contract, was disclosed, was aware of and observed and performed the provisions of the GE Capital contract as though they were a party to it. Thus, it was clear that while not all the obligations under the GE Capital contract had personally to be performed by old Boston, the contract itself had no mechanism for transferring the obligations to perform under the contract from old Boston to someone else (cf Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104 at 118E-120E). 77 While value appears to have been given in the sale agreement so as to enable principles of equity to support the enforcement by new Boston of whatever rights it was entitled to receive under that contract, the form of the letter of 1 July 2005 from new Boston to GE Capital was not an assignment. There is nothing from old Boston in writing informing GE Capital that new Boston is entitled to exercise old Boston's rights and nor is there any evidence that GE Capital ever agreed or appreciated that a different entity was in effect taking over the whole of the performance of the GE Capital agreement, contrary to its terms. One might infer from the evidence that GE Capital continued to deal with new Boston under the impression that nothing had changed until termination occurred. On the other hand, this is not so clear that an argument to the contrary could be said to have no reasonable prospect of success. The letter does seem to suggest that there being a different ABN there might be a different company. There is no evidence from GE Capital that this was not appreciated at all. So there may possibly be some claim which new Boston could articulate in quantum meruit or for contractual remuneration in the period after 1 July 2005. But this is speculation. 78 However, it seems to me that it is fanciful to suggest that there is any claim which new Boston can bring based on representations GE Capital allegedly made to old Boston. Old Boston never sought to pursue whatever rights it might have had to bring those claims and has now ceased to exist. It is not pleaded that any contract or pre-contractual representation alleged to give rise to a contractual term was ever made to new Boston, on the contrary, it is pleaded that all relevant dealings going to the formation of the GE Capital contract were between GE Capital and old Boston. In Rossetto v Meriton Apartments Pty Limited [2006] FCA 1290 at [15] - [16] , Bennett J held that a company incorporated after representations were made to its director who at the time of the incorporation had been informed that the representations were untrue and had been offered rescission of the contract, had no arguable cause of action for the purposes of O 11 r 16. There is, of course, a distinction here. While new Boston must have been aware at the time of the sale agreement that the representation was untrue (if it became a contractual term) because it had been breached by GE Capital in relation to the number of field service calls, no offer had been made for rescission. 79 In Warwick Entertainment Centre Pty Limited v Alpine Holdings Pty Limited (2005) 224 ALR 134, the Court of Appeal of the Supreme Court of Western Australia held that it may not have been unreasonable for a party, who had been induced to enter into a contract by misrepresentations in breach of statutory norms such as s 52 of the Act, to affirm the contract (see e.g. 224 ALR at 152 [76] per Steytler P). However, here, new Boston did not have any representations made to it. By voluntarily entering into some new arrangements with old Boston, it could hardly be said to have any damage to it caused by the breach of GE Capital's obligations owed to old Boston. In my opinion any such contention is unarguably bad. New Boston was correct in arguing that in an application under s 31A the Court should take the allegations in the disputed pleading at their highest ( Bernstrom v National Australia Bank Ltd [2003] 1 Qd R 469 at [39]). In that context it is possible to see an argument that an express representation may have been made as to the volume of business which GE Capital would provide to old Boston under the GE Capital contract. It is also possible that new Boston may be able to establish, as it alleges, that an effective assignment occurred of the rights which old Boston had under the GE Capital contract. However, the claim sought to be assigned is of a right to sue for unliquidated damages for breach of contract which new Boston claims to have acquired only because of the effect of the transaction in which it acquired old Boston's business. 81 Old Boston is not a party to the proceedings. It does not exist. New Boston has made no application to amend, to reinstate it or join it. For the reasons given above, I do not consider there are any reasonable prospects of success of an argument for new Boston that an effective assignment of contractual rights can be proved. 82 The claim in contract alleges that GE Capital was in breach of the GE Capital contract because 'the entire agreement was for [GE Capital] to provide [old Boston] with instructions in respect of 25% of defaulting customers per State in Australia to effect the field agent's services based on representations made by [GE Capital]'. 83 However, cl 29 of the GE Capital agreement provides that it, together with the services schedule and purchase orders, constituted the entire agreement between the parties and that any additions or alterations made to it had to be in writing. Clause 6(a) provided that the services which GE Capital required old Boston to supply from time to time would be specified in the services schedule. That schedule provided that during the term of two years the services were those specified in Appendix A. And, cl 3 of the services schedule provided expressly that GE Capital gave no undertaking, representation or warranties as to the number or frequency of referrals of field calls it may make to old Boston under the GE Capital contract. 84 In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 ; (2004) 219 CLR 165 at 180-183 [45] - [50] the High Court held that where parties had signed a written contract, they were to be taken as intending the act of signature to be conclusive, absent misrepresentation or fraud. While misrepresentations had been pleaded as to the statements made many months earlier in February 2004, when the parties actually signed the written agreement on 9 November 2004, there is no material before me which suggests that old Boston could have been acting under the influence of any misrepresentation as to the terms of the GE Capital contract. Its terms were in writing, they had been provided to old Boston in advance. They were not in the form of a contract of adhesion. Old Boston was free to sign or not the GE Capital contract as it pleased. Old Boston had the opportunity to review and consider the draft or proffered terms. In those circumstances, I consider that there is no reasonable prospect that old Boston would be able to establish, as alleged in the statement of claim, that there was a term of the GE Capital contract that some minimum number of field calls would be referred to old Boston per month. Such a proposition is not only expressly excluded by express words in the services schedule of the GE Capital contract, it is also inconsistent with the entire agreement clause. 85 In considering the claim in contract, it is important to appreciate that there is no claim that the GE Capital contract was vitiated by misrepresentation. Rather, it is claimed that an additional term was made either orally or by conduct which was part of that contract, although inconsistent with the express terms to which I have just referred. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 ; (2004) 219 CLR 165 at 179 [39] , Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ referred to the position of a person acting on behalf of a company who signed a contractual document without reading it. They noted that the person could have read the contract had he wished and that the other party did not set out to conceal from him the terms and conditions on the document or to encourage him not to read them. As their Honours said, the other party '... had no way of knowing that he did not read the document. No case of mistake or non est factum is advanced'. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction ( Pacific Carriers Ltd v BNP Paribas [2004] HCA 35 ; (2004) 218 CLR 451 at 461-462 [22] ). Here the parties entered into a contract at arms length in which there was a full opportunity to negotiate and where, as also in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 ; (2004) 219 CLR 165 at 179 [39] - [40] , 182 [47], the parties had a full opportunity beforehand to consider the written terms which they signed. Neither party insisted on including what is now said to be a critical and agreed term which is inconsistent with what they signed. I do not think that there is any reasonable prospect that old Boston would have been able to establish that the alleged term as to the minimum number of field calls per month was in fact a term of the GE Capital contract. The representation is that the person who signs either has read and approved the contents of the document or is willing to take the chance of being bound by those contents, as Latham CJ put it, whatever they might be. That representation is even stronger where the signature appears below a perfectly legible written request to read the document before signing it. By cl 20(b) GE Capital was also able to end the GE Capital agreement or a particular services schedule at its discretion at any time by giving 14 days written notice. Next, cl 20(d), provided that if GE Capital did terminate the GE Capital contract, other than pursuant to cl 20(b) no further amounts would be payable to old Boston even if they had already been invoiced. Again, the existence of those clauses tends to suggest that any term involving the non-termination of the GE Capital agreement for the proposed two year term could not be implied into the agreement and no such representation would have any reasonable prospect of being established. 88 Accordingly, while it may be arguable that old Boston incurred expenses in performing the task of preparing a response to GE Capital's invitation to provide field services in February 2004, and to that extent incurred some damage, I am of opinion that by the time the GE Capital contract was entered into in November 2004 the effect of those representations was well and truly spent. There is nothing in the material before me to indicate there is any reasonable prospect of new Boston establishing that it is entitled to enforce a contractual term to the effect alleged or that it can rely upon any representations or contraventions of s 52 of the Act. 89 New Boston sought to argue that the GE Capital contract was constructed on the basis of a price per call which old Boston had provided in February 2004 after doing the analysis based on the minimum number of calls per month. While that may have been the subjective intention of old Boston, the written agreement which it and GE Capital signed in November 2004 does not reflect anything other than a price which both parties were prepared to agree would be payable upon GE Capital referring any calls to old Boston: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 ; (2004) 219 CLR 165 at 179 [40] . 90 GE Capital also argued that on its proper construction the sale agreement did not purport to assign the right of old Boston to claims it may have had as at the date of the sale agreement for breach of contract or under the Act, even if the latter were assignable. 91 The effect of the decision of the House of Lords in Trendtex Trading Corporation v Credit Suisse [1982] AC 679 was debated in argument. In particular, new Boston relied on passages in the speeches of Lord Wilberforce ([1982] AC at 694) and Lord Roskill ([1982] AC at 702-703 esp at 703D and F-G). There, Lord Wilberforce said that provided that the assignor had a genuine and substantial interest in the success of the litigation, by giving a guarantee of the costs previously incurred, it would have been able, without offending the common law against maintenance or champerty, to have taken a security interest in the litigation or its proceeds ([1982] AC at 694D-E). Ipp JA noted that such an interest, as is described by Lord Roskill, had to be a 'legitimate interest' which was distinct from the benefit the person supporting the action sought to derive from the litigation and something beyond a mere personal interest in profiting from the outcome of the proceedings ([2005] NSWCA 240 at [41]; see also Zhu v Domson Pty Ltd [2006] NSWCA 232 at [18] - [19] per Spigelman CJ). Since judgment was reserved in this matter, the High Court has decided Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41. There, Gummow, Hayne and Crennan JJ referred to this issue, although, as Callinan and Heydon JJ pointed out it only 'received some mention before this Court' (see [2006] HCA 41 at [260] ). Gleeson CJ and Kirby J did not discuss this point. Gummow, Hayne and Crennan JJ observed that the House of Lords' conclusion in Trendtex Trading Corporation v Credit Suisse [1982] AC 679 was that an agreement permitting a bank, which guaranteed the costs of a party to litigation in which the bank itself was also interested, to sell the party's claims in a litigation 'savours of champerty', 'since it involves trafficking in litigation --- a type of transaction which, under English law, is contrary to public policy' ([2006] HCA 41 [79]). 93 Accordingly, the House of Lords held the assignment of the cause of action there was void. However, as Gummow, Hayne and Crennan JJ pointed out their Lordships' decision to stay the proceedings was founded upon an exclusive Swiss law jurisdiction clause, not upon any consideration of public policy concerning maintenance or champerty ([2006] HCA 41 at [81]). They noted that there was no case where maintenance or champerty had been held to be defence to, or reason enough to stay, an action that was maintained ([2006] HCA at [82]). Ultimately, Gummow, Hayne and Crennan JJ (with whom Gleeson CJ (at [1]) and Kirby J (at [146]) agreed on this issue) held that there was no abuse of process involved in someone seeking out those who may have claims, offering terms which gave the seeker control of the litigation and would also yield to the seeker, as it hoped and expected, a significant profit ([2006] HCA 41 at [88]). Whether in an endeavour to escape that consequence, or for some other reason, the transaction took a different form. They referred, among other things, to what Williams, Webb and Kitto JJ had said in Poulton v The Commonwealth [1952] HCA 70 ; (1953) 89 CLR 540 at 602. 96 I do not think that the issue about the question of whether the claim in contract which old Boston may have had against GE Capital was or was not assignable is one which, having regard to the state of authorities referred to above, should be determined under s 31A in this case. 97 The substantial issue here is whether there was any transaction or notice effective to prove an assignment of a cause of action for damages for breach of contract, leaving aside the question of new Boston's capacity to enforce it. No notice of assignment was ever given by old Boston to GE Capital. I am of opinion that the sale agreement did not assign any cause of action old Boston had for debt against GE Capital. If, as new Boston contended, the sale agreement assigned the whole of old Boston's rights under the GE Capital agreement, since it is impossible to assign both the burden or obligations of a party owed to another party under a contract without the other's consent, the whole structure must fail. But, I am of opinion that the contention is fatally flawed for a further and fundamental reason, namely that the sale agreement did not give new Boston any assignment of old Boston's accrued rights. As I have noted, there is no evidence that any document amounting to notice of an assignment or an assignment was ever delivered by old Boston to new Boston. But cl 6.2, if it created an independent obligation of old Boston to deliver a document amounting to an assignment of whatever rights old Boston had against GE Capital, would nonetheless be enforceable in equity. However, the clause is concerned with perfecting, by delivery of an appropriate instrument, that which some other part of the sale agreement has made over from old Boston to new Boston. Indeed, cl 6.2(e) contemplates that old Boston will need to do something about ensuring that GE Capital becomes bound to perform the GE Capital contract through the services offered by new Boston, in place of old Boston. That is very different to an obligation on the part of old Boston to assign its existing causes of action in contract to new Boston. 100 I am of opinion that cl 6.2 did not create any obligation in equity on the part of old Boston to assign any cause of action for breach of contract which it had against GE Capital. New Boston did not point to any other clause in the sale agreement which effected such a disposition. Rather, new Boston alleged that the defined term 'the Business' had this effect. However, the definition of 'the Business' in cl 1.1(a) defined that term as meaning the business identified in item 1 of Schedule A (set out above) and included the work in progress as at completion, the total of accounts receivable owed to new Boston at that date and any other items specifically referred to in the sale agreement forming part of the 'Business'. So while it is clear that the sale agreement assigned the total of the accounts receivable owed to old Boston at the date of completion, being 1 July 2005, the cause of action in damages in breach of contract (or for that matter under s 82 of the Act) does not ever appear to have been assigned or to have been the subject of the sale agreement at all. 101 On the material before me there is no basis to suggest there had been any novation of the contract between old Boston and GE Capital. No notice was given by old Boston of any assignment to GE Capital and there is nothing pleaded by which GE Capital could be bound to perform the GE Capital contract with new Boston. There is nothing which appears in the evidence and pleadings before me to reveal a case with any reasonable prospects of succeeding, in which new Boston could argue that either it or GE Capital could enforce against the other the provisions of the GE Capital contract. The claim old Boston may have had is for damages not debt, based on breach of the alleged term for a minimum number of referrals. 102 No doubt there may be some issues between new Boston and GE Capital relating to their rights inter se in respect of work performed by new Boston for GE Capital, but the subject matter of the proceedings before me does not relate to those rights (e.g. quantum meruit). Rather, the proceedings concern the rights asserted by new Boston as assignee, and only as assignee, of the rights of old Boston under the GE Capital contract and in respect of that contract's formation and performance. I am of opinion that there are no reasonable prospects of success for new Boston to argue that it became entitled to enforce old Boston's rights under the GE Capital contract or that the document signed by both of those parties did not contain the entire agreement between them. 104 I have considered whether I should allow new Boston an opportunity to replead. At the hearing, new Boston orally sought leave to amend its claim under s 51AC of the Act to allege that the conduct relied on in the statement of claim was also addressed to new Boston. It sought leave to plead that GE Capital made continuing representations to not only old Boston but also to new Boston and to plead a claim in quantum meruit. There is no evidence to support the claim of new Boston under s 51AC or the allegation of continuing representations. I do not consider that claims which are entirely unsupported by evidence, and are inherently unlikely, should be allowed to be made by an amendment of the kind proposed. As explained above, if new Boston wishes to make a claim in quantum meruit, it will need to do so in fresh proceedings on a basis that is properly articulated. There is nothing on the material before me to show that any such claim is fairly arguable: Queensland v JL Holdings Pty Limited (1997) 189 CLR 146 at 154-155. I consider that the pleading and the material before me is so fundamentally flawed that I should not grant leave to amend. Because this is not a decision on the merits, it will be open to those advising new Boston to take further proceedings, if some can be formulated, which can articulate a cause of action which has reasonable prospects of success. 105 I am of opinion that these proceedings should be dismissed. | application for summary dismissal of proceedings under section 31a of the federal court of australia act 1976 (cth) test to be applied claim for damages for breach of contract and under section 82(1) of the trade practices act 1974 (cth) assignment of choses in action claim for damages for breach of contract and under section 82(1) of the trade practices act 1974 (cth) where claim brought by person claiming to be assignee under a contract for sale of a business to enforce rights of assignor in contract and under section 51ac and s 52 of the trade practices act 1974 (cth) where assignor company now deregistered whether purported assignment effective whether statutory claim capable of assignment trade practices whether claim for damages under section 82(1) of the trade practices act 1974 (cth) capable of assignment practice and procedure assignment assignment |
2 There is agreement as to the form of the orders to be made with one exception. That exception is whether an order for the removal of the Gallo Winery trademark should be made as from today's date (and that order stayed for 21 days) or whether the order for removal should take effect retrospectively as from 8 May 2007. That date was the conclusion of the three-year non-use period. The stay was properly not opposed presumably upon the basis of preserving the rights of Gallo Winery should it wish to appeal. 3 The discretionary power to order removal of a mark is that conferred by s 101(2) of the Trade Marks Act 1995 (Cth). No Australian decision has apparently addressed the question now posed by the competing submissions of Lion Nathan and Gallo Winery . 4 It is considered that that discretionary power can only be exercised as from the date upon which a court makes an order for the removal of a mark from the Register and does not confer a power to order removal from a date prior to judgment. Rejected is the submission advanced on behalf of Lion Nathan that an order for the removal of a trademark for non-use should normally be an order that it be removed as from the conclusion of the non-use period otherwise than " in exceptional circumstances ". No reason was advanced as to why such a qualification should be read into the discretion otherwise conferred by s 101(2). 5 Section 101(2) is silent as to the date from which an order may be made; the sub-section simply provides that " the court may order the Registrar to remove the trade mark from the Register ". 6 The conclusion that s 101(2) should not be construed as permitting, in effect, a retrospective removal of a trade mark is primarily based upon two considerations. 7 First, there is considered to be a significant public interest in maintaining the integrity of the Register established pursuant to s 207 of the Act. That public interest may be prejudiced if it is subject to orders of this Court ordering the Registrar to remove a mark as from a date which may in some cases be years prior to the date of delivery of judgment. Such orders, if made, may only be productive of considerable uncertainty. 8 Second, there is an absence of any indication in the terms of s 101(2) that the power may be exercised in the manner contended for by Lion Nathan. By way of contrast stand other provisions of the 1995 Act. Where the legislature has intended that action may be taken with effect from a particular date, it has expressly so provided. Also, the trade mark is taken not to have been removed from the Register. Neither of those provisions relate to the making of orders by this Court. But they do provide some support for the conclusion reached. 9 Although no Australian decision has been cited to support the contention of Gallo Winery , reliance is placed upon Second Sight v Novell UK [1995] RPC 423. Specific provision is made in the Trade Marks Act 1938 where an event or decision is to have retrospective effect (see: e.g. section 19). Likewise specific provision is made in the Trade Marks Act 1994 (see e.g. section 46(6)). I can find neither in the language used nor in principle any grounds upon which it can sensibly be held that such a determination under an application under section 26 or section 32 can have any retrospective effect. ... This decision also provides some support for the conclusion reached. Lion Nathan did not point to any Australian decision in which an order of the kind that it now seeks has previously been made (even if the question of statutory construction now in issue was not debated). 10 Section 127 does not dictate any contrary conclusion. Nor does s 127 manifest a legislative intent that normally the discretionary power conferred by s 101(2) should be exercised such that an order for the removal of a mark should take place as from the end of the non-use period. 11 If this construction of s 101(2) be wrong, and should it be concluded that that sub-section confers a discretion unconfined as to the time from which a mark may be ordered to be removed from the Register, it is considered in the circumstances of the present case that, as a matter of discretion, any order should operate only as from today's date. The hearing of the proceeding was expedited and there has been no delay that can be attributed to Gallo Winery perhaps indicating that it has had the benefit of registration for an inappropriate period of time. 12 Before leaving the matter and before making final orders, it should be noted that in the reasons for decision as published on 20 June 2008, the question as formulated in paragraph [23(iv)] expressed the question as being whether the Radler beers of Lion Nathan were goods of the same description as the "BAREFOOT wine " of Gallo Winery . Although that is the manner in which the question was there expressed, it is not the question which was resolved at paragraphs [65]---[88] inclusive of those reasons. The question, as answered, is understood to be the question as properly framed, namely whether the Radler beers of Lion Nathan were goods of the same description as " wine ". 13 For these reasons, the proposed Order 3 will not have added to it the words urged by Lion Nathan , namely " with effect as from 8 May 2007 ". The Amended Application be dismissed. 2. The Applicant to pay the Respondent's costs of the Amended Application . 3. The Registrar of Trade Marks remove the Australian Trade Mark No 787765 from the Register of Trade Marks. 4. 5. The Cross-Respondent pay the Cross-Claimant's costs of the Cross-Claim . I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | non-use for 3 years order for removal of trade mark removal sought as from end of non-use period order made with effect from date of decision trade marks |
2 The administrations are of five companies forming the 'Yourhealth' group. Mr Morgan was appointed under s 436A of the Act as administrator of each of the companies on 18 January 2007. Section 436E of the Act required Mr Morgan to convene the first meeting of each company's creditors within five business days after the administration began. The administrations began on 18 January 2007 (see s 435C(1)(a) of the Act). Since 18 January was a Thursday, 20 and 21 January were a Saturday and Sunday, the period of five business days expired on Thursday 25 January 2007. The first meetings of creditors were in fact held on that day. In each case, the creditors appointed a committee of creditors. 3 Section 439A of the Act requires an administrator to convene the second meeting of a company's creditors within, relevantly, the period of 21 days 'beginning on' the day when the administration begins. As noted above, these administrations began on 18 January 2007. 4 On the hearing there was some discussion as to whether the 21 day period expires today 7 February 2007 or tomorrow 8 February 2007. The period of 21 days expires today, 7 February 2007 because references in statutes to periods 'beginning on' or 'commencing on' a particular day or date, are calculated on the basis that that day or date is counted as the first day of the period: Darwin Broadcasters Pty Ltd v Australian Broadcasting Tribunal (1990) 21 FCR 524 at 526-527; Watson v Uniframes Limited (1994) 55 FCR 556 at 560; Re Madden (1996) 131 FLR 430 at 432-434. Neither s 105 of the Act nor s 36(1) of the Acts Interpretation Act 1901 (Cth) is relevant, because they are concerned with the expressions 'before' and 'after' (s 105) and 'from' (s36(1)). I note, however, that the line of authority in the cases just cited is consistent with s 3(2) of the Acts Interpretation Act 1901 (Cth), which provides that where an Act or instrument is expressed to come into operation 'on' a particular day, it shall come into operation 'immediately on the expiration of the last preceding day'. Similarly, the 21 day period here began immediately on the expiration of 17 January 2007 and ends immediately before the beginning of 8 February 2007. 5 Mr Morgan's affidavit shows that he has conducted inquiries into the financial affairs of the five companies but needs more time in which to complete his task and to make an adequate report to the creditors. 6 Prior to Mr Morgan's appointment, the Yourhealth companies carried on the business of operating medical practices in Manly and Edgecliff in New South Wales, Camberwell in Victoria, and Carina in Queensland. The parent company is Yourhealth Group Pty Limited which owns 100 per cent of the share capital in Yourhealth Manly Pty Limited, Yourhealth Edgecliff Pty Limited, Yourhealth Camberwell Pty Limited and Yourhealth Carina Pty Limited. 7 Mr Morgan's investigations suggest that although some of the clinics operated profitably, as a whole the Yourhealth group traded at a loss, particularly because the head office expenses, principally the rental and executive salaries, were high. 8 In his affidavit in support of the present application, Mr Morgan sets out the numbers of creditors of the various companies as well as the numbers of the staff and the doctors who worked in the clinics. 9 The principal creditor and shareholder of the Yourhealth companies is a publicly listed Singaporean company, Eu Yan Sang International Limited ('EYSI'). EYSI has funded the cash flow of the Yourhealth group of companies for some time. The companies owe EYSI some $2.5 million. This is well above one-half of the total of the amount owed to all creditors of some $3.7 million. EYSI has agreed to indemnify Mr Morgan in respect of his costs and expenses of the administration. 10 Mr Morgan's preliminary view is that the return to creditors will be greatest 'if the businesses conducted by the Yourhealth Companies are able to be sold as a going concern (or a deed of company arrangement is approved by the creditors)'. 11 Mr Morgan seeks an extension of time to 21 March 2007 in order to enable him to report adequately. Importantly, all members of the committee of creditors support his application. The committee includes a representative of EYSI. 12 In my view, the case is made out for an extension and there will be orders generally as sought in the originating process. | voluntary administration extension of time for convening of meeting of creditors under corporations act 2001 (cth) s 439a(6) whether period of 21 days 'beginning on' day when administration begins counts that day as the first of the 21 days held : yes. calculation period 'beginning on' a particular day whether period calculated so as to include that day 'on' which the period begins held : yes. corporations time |
Following his appointment as liquidator, in his capacity as liquidator and on behalf of the defendant company in liquidation, Mr Hamilton sought orders relating to some funds allegedly paid by the defendant to a third company, Casino Busters International. I made the orders that Mr Hamilton sought, and indicated that I would provide reasons for making both the winding up orders and the orders sought by Mr Hamilton at a later date. These are my reasons. As creditors, the plaintiffs may apply for an order under s 459A without the leave of the Court: s 459P(1). 3 On 5 January 2007, I heard an ex parte application for the appointment of Mr Hamilton as a provisional liquidator of the defendant ( Elderslie Finance Corporation Limited v Newpage Pty Limited [2007] FCA 4). On that occasion I granted Mr Hamilton leave to seek to be appointed and to act as provisional liquidator of the defendant and appointed him as provisional liquidator. 4 Both Mr Hamilton and Mr Jones, a process server, deposed that on 3 January 2007, Newpage was served at its registered address with, among other things the originating process seeking the winding up of Newpage and the appointment of Mr Hamilton as liquidator. Ms Silvana Jovcevska, a solicitor employed by the solicitors for the plaintiff, gave evidence that a notice of application for a winding up order had been placed in the newspaper, The Australian , on Thursday 11 January 2007, in accordance with rule 5.6 of the Federal Court (Corporations) Rules 2000 . The defendant has not entered an appearance in this proceeding, and did not appear at the hearing of the application for a winding up order. 5 I am satisfied, for the reasons that I expressed on 5 January 2007, that from 15 December 2006, the defendant owed the plaintiffs $3 million and accrued interest. This debt has not been contested in this Court or in any of the correspondence with the representatives of the defendant or its principals. According to the affidavit of the second plaintiff, Mr George, who is also a director of Elderslie, which was sworn on 24 January 2007, the principal and interest on this loan have not been repaid. 6 There is no evidence before the Court that the defendant is able to meet its liability to the plaintiffs. Indeed, the truth appears to be quite to the contrary and there has been no indication to the Court, either formally or informally, by the representatives of the defendant or its principal that the company is anything other than insolvent. Exhibited to Mr Hamilton's affidavit was a copy of a statement from Newpage's bank account with Westpac, which shows a closing balance, as at 29 December 2006, of only $1,949.62. Mr Hamilton's enquiries, although hampered by apparently inadequate book keeping on Newpage's behalf, revealed that although Newpage had lodged its 2005 income tax return, it had failed to lodge a 2006 return; that return is now overdue. Newpage's 2005 tax return showed a net taxable income of $2,469 and included a balance sheet which indicated owners equity of approximately $42,000. I am satisfied that Newpage is insolvent and that it ought to be wound up. 7 Mr Hamilton sought leave to seek to be appointed and to be appointed as liquidator of the defendant (as required by s 532 of the Act) and filed his consent to act as liquidator in accordance with rule 5.5 of the Corporations Rules. Mr Hamilton's affidavit exhibited evidence as to his expertise as an accountant and insolvency practitioner. As a receiver of the company and therefore an officer of the company for the purposes of the Corporations Act 2001 (Cth), Mr Hamilton requires leave both to seek to be appointed and to be appointed as liquidator of the company under s 532(2)(c)(i). In addition, Mr Hamilton gave evidence that he had incurred expenses while acting as receiver in excess of the statutory threshold for a creditor provided in s 532(2)(b) and accordingly he is also required to seek leave under that provision. In this case Mr Hamilton gave evidence that he had no connection with either the defendant or Mr Yii prior to being appointed as a receiver and that his appointment as provisional liquidator would not give rise to any conflict of interest. He has only acted as a receiver since 29 December 2006, a mere seven days. Since his appointment Mr Hamilton has undertaken various investigations into the affairs of the defendant and presumably is relatively familiar with these affairs. Any other provisional liquidator would need to expend time and money to reach the same degree of familiarity with the defendant's affairs. The basis of this claim is either that the transaction pursuant to which the money was paid is an uncommercial transaction within the meaning of s 588FB of the Corporations Act or that the money is owed to Newpage as a debt due and payable. The background appears to be that money advanced by the first plaintiff was intended to be advanced by Newpage to a company called Penthouse Concepts. For some unknown reason this money has ended up in the bank accounts of Casino Busters. The reason why Newpage was advancing the money to Penthouse Concepts is itself unclear, although there is some suggestion that it was either a loan to Penthouse or a fee paid to Penthouse for securing a substantial loan to Newpage. 11 Proof that the money was paid to Casino Busters was produced in the form of a letter from Westpac Banking Corporation to Mr Hamilton, attaching several pages of Newpage's bank statements. The bank statements show that on 1 June 2006 $1 million was deposited into Newpage's bank account from Elderslie Finance and on 22 September 2006 a further $1.6 million was deposited. Westpac's letter identified two withdrawals from Newpage's account, the first on 1 June 2006 for $610,000 and the second on 22 September 2006 for $1,527,000. The letter stated that these amounts were paid into the account of Casino Busters International. It seems clear that almost immediately after the money from Elderslie was received by Newpage, a substantial portion of it was transferred to Casino Busters. 12 The sole director, sole shareholder and company secretary of both Penthouse Concepts and Casino Busters is Mr Roumald Parson (sometimes referred to as Mr Roumald Parsons). Mr Hamilton gave evidence that on 9 January 2007, in his capacity as receiver and manager and provisional liquidator of Newpage, he contacted Mr Parson by telephone. Mr Parson's response was belligerent and replete with expletives. His attitude was unco-operative. Mr Hamilton explained that it appeared from the books of Newpage that Casino Busters owed Newpage over $1 million. Mr Parson replied that he dealt with sums of money in the millions "every day" and couldn't remember "that sort of detail". 13 Mr Hamilton had further telephone conversations with Mr Parson on 12 and 23 January 2007. Although Mr Parson was more polite in these later conversations he was no more co-operative. On 12 January he indicated that he had not received any funds from Newpage and was not aware of any funds being paid to Casino Busters. On 23 January he said he had spoken to Mr Yii, the former director of Newpage, and was trying to arrange a personal loan for Mr Yii. He advised that over 10 years, Mr Yii or his companies had made in excess of $100 million worth of payments to Mr Parson and that he could not recall the specific payments that Mr Hamilton had mentioned. Mr Parson indicated that he was working to secure a loan to Mr Yii for approximately $5 million which would be used to provide funds to Newpage to enable it to pay its creditors. Mr Parson reiterated that he did not know whether the money in question had been transferred to Casino Busters' bank account. During the period of over two weeks between the first and last of these conversations Mr Parson apparently made no attempt to verify Mr Hamilton's claim or to provide any useful information or explanation why the money had been paid to Casino Busters. 14 Counsel for Mr Hamilton and Newpage in liquidation, Mr Johnson, submitted that Mr Parson's attitude supported the applicants' claim that the money paid into Casino Busters' bank account should be subject to an asset preservation order while the issues surrounding its payment to Casino Busters were sorted out. The power of the Federal Court to grant such relief was recognised by the High Court in Jackson v Sterling Industries Limited [1987] HCA 23 ; (1987) 162 CLR 612 at 623 per Deane J (with whom Mason CJ, Wilson and Dawson JJ agreed). It is important to bear in mind, however, that the purpose of such an order is to protect the processes of the Court from abuse not to provide security for the applicant for such an order; see generally Jackson v Sterling Industries Limited. The Court does not have the benefit of hearing argument as to why such an order should not be made from the person against whom the order is sought. For this reason the Court needs to be circumspect in making such orders. In this case, however, I am satisfied that on the evidence before me the applicants have made a prima facie case that the payment by Newpage to Casino Busters is a voidable transaction under s 588FE of the Corporations Act . Given Mr Parson's refusal to assist the provisional liquidator in the exercise of his duties and his denial of any knowledge of the transaction, there is reason to suspect that any order of the Court made to recover the money paid to Casino Busters and apparently still held in its bank account may be frustrated by prior dispersal of the assets. In the circumstances it is appropriate that I make the orders sought by the applicants, in the form of the penal notice that is annexed to these reasons, freezing the relevant bank account of Casino Busters up to but not exceeding the amount of $2,137,000 and requiring Mr Parson to give disclosure of the circumstances under which Casino Busters received the two payments mentioned above at [11]. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone. (a) The application for this order is made returnable immediately. (b) The time for service of the application, supporting affidavits and originating process is abridged and service is to be effected by 4.00pm Monday 29 January 2007. Subject to the next paragraph, this order has effect up to and including 9 February 2007 (' the Return Date '). On the Return Date at 10.15 am there will be a further hearing in respect of this order before the Corporations Judge, Sydney Registry of the Federal Court of Australia. 3. Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified. 4. (a) If you are ordered to do something, you must do it by yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions. (b) If you are ordered not to do something, you must not do it yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions or with your encouragement or in any other way. (a) You must not remove from, transfer out of or in any way dispose of, deal with or diminish any amounts standing to the credit of the Account up to the amount of AUD$2,137,000.00 (' the Relevant Amount '). (b) If the amount standing to the credit of the Account exceeds the Relevant Amount, you may deal with or remove that surplus in the Account, so long as the total amount standing to the credit of the Account still exceeds the Relevant Amount. 8. You and the applicants may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the applicants or you must as soon as practicable file with the Court and serve on the other a minute of a proposed consent order recording the variation signed by or on behalf of the applicants and you, and the Court may order that the exceptions are varied accordingly. 11. (b) Any such payment and any such security will not provide the applicants with any priority over your other creditors in the event of your insolvency. (c) If this order ceases to have effect pursuant (a), you must as soon as practicable file with the Court and serve on the applicants notice of that fact. The costs of this application are reserved to the judge hearing the application on the Return Date. Set off by banks: This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order. 14 . Bank withdrawals by the respondent: No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order. The applicants and the First Plaintiff undertake to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order. 2. As soon as practicable, the applicants will cause anyone notified of this order to be given a copy of it. 4. The applicants will pay the reasonable costs of anyone other than the respondents which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent's assets. 5. If this order ceases to have effect the applicants will promptly take all reasonable steps to inform in writing anyone to who has been notified of this order, or who he has reasonable grounds for supposing may act upon this order, that it has ceased to have effect. 6. The applicants will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding. 7. The applicants will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a charge or other security against the respondents or the respondents' assets. 8. The applicants will on or before 2 February 2007 file either an Interlocutory Process in these proceedings or an Originating Process seeking final relief for the repayment by Casino Busters International Pty Ltd and/or Roumald Parsons of the debt constituted by the payments totalling $2,137,000.00 made by Newpage Pty Ltd to Casino Busters International Pty Ltd, namely $610,000.00 on 1 June 2006 and $1,527,000.00 on 22 September 2006, or alternatively as an uncommercial transaction under Section 588FB of the Corporations Act, 2001 . | insolvency winding up on insolvency appointment of liquidator application for mareva injunction corporations practice and procedure |
The agreement had this effect notwithstanding that particular employees may have voted against it being approved, or were not even employed at the time the agreement was approved. Blue Star Pacific Pty Ltd ('Blue Star') claims it obtained approval from its employees in accordance with s 340(2) of the WR Act to an employee collective agreement. It says it did this in a postal ballot of its employees which was concluded on 20 February 2009. The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia ('the CSU') challenges that claim in these proceedings. It is self evident that a union, like the CSU, would have preferred the workforce to enter into union collective agreements, with which it was directly involved, rather than employee collective agreements, with which it was not necessarily involved at all. They are: In the circumstances, Blue Star did not give its employees a reasonable opportunity to decide whether they wanted to approve the agreement because it did not afford them the opportunity to meet and confer as a collective group; The ballot paper circulated by Blue Star was misleading in that it stated that the proposed agreement was to operate for a period of two years, when in fact, it was to operate for a period of four years; and The voting process used by Blue Star did not allow it to determine whether a majority of valid votes had been cast. By 30 June 2009, I had come to a decision. At the time, I was conscious of the fact that the WR Act was to be significantly altered by the Fair Work Act 2009 (Cth) which was to come into effect on 1 July 2009. While s 340 was not significantly altered, the changes made to other provisions of the WR Act could have affected the orders I proposed to make. To remove any doubt, I advised the parties of my decision on the afternoon of 30 June 2009 and made the orders sought by the CSU. I gave that decision on the basis that I would provide my reasons at a later date. These are those reasons. I should add that since the WR Act is no longer in force, I have referred to the various sections of that Act in the past tense throughout these reasons. That business is divided into two divisions: a commercial construction division and a client services division. In February 2009, more than 40 employees were employed in its commercial construction division and about 14 in its client services division. The construction division employees worked at a number of different sites in and around Brisbane, including: the Northlakes Health Precinct site; the Polo Club site; the ICB Central site; the Browns Plain site and the Queen Street site. The CSU had 21 members among Blue Star's commercial construction division employees and one or two among its client services division employees. In sending this package of material to its employees, Blue Star was endeavouring to comply with s 337 of the WR Act. Among other things, that section required that all eligible employees are to have ready access to the proposed agreement for a period of seven days before the proposed agreement is approved. Under s 337(4)(a), this information statement was required to contain information about the time at which, and the manner in which, approval was to be sought for the proposed agreement. The inclusion of the waiver form arose from s 338 of the WR Act. That section allows the employees to waive the seven day period mentioned above. However, s 338 is of no significance in this matter because the CSU does not raise any issue about Blue Star's compliance with it. He said they talked about arranging a meeting at the ICB Central site so they could get together and discuss the proposed agreement. At the time, there were four employees employed at the ICB Central site. However, at about the same time, the management of Blue Star sent a facsimile notice to all of its sites stating that a meeting of all its employees would be conducted at the Blue Star offices at Meadowbrook on Tuesday 17 February 2009, to discuss the proposed agreement. Mr Brown said that upon receiving this notice of meeting, the proposed meeting at the ICB Central site was called off. Not long after that, he said he was advised by his foreman that the Meadowbrook meeting had been cancelled. As a result, he said there was no opportunity for the employees at the ICB Central site to meet and discuss the proposed agreement. Mr Cane, an electrician employed at that site, said that at that meeting, Mr McInnes explained the proposed agreement in these terms: "... there should be a gap between trades assistants and trades people ... that people were undercutting him when he was quoting ... this collective agreement was the best proposed deal and in the event that the industry picked up that he would be open to re-negotiating some of the terms ... if everyone else in the industry started paying their staff higher than his agreement, then he would follow suit. " Another employee who attended the same meeting, Mr Fletcher, said Mr McInnes discussed the allowances for prescription glasses and tool replacement in the proposed agreement and added that: "if the economic climate picked up in the next two years or so ... he would be happy to look at the agreement and then maybe re-negotiate pay rises". In fact, the proposed agreement was to extend for a period of four years. As a consequence, on 19 February 2009, representatives of the management of Blue Star went to its various sites and told those employees present that there was an error on the ballot paper and the proposed agreement was to operate for four years, not two years as stated. Mr Wermizyari, an electrician employed on the ICB Central site, said he was given this information by Mr Davidson, a foreman on that site, on 19 February 2009. However, he said by that time he had already voted. This is hardly surprising given that the votes had to be posted back to Blue Star in time for the count which was to be conducted at 1.00pm on 20 February 2009. It appears that the vast majority of the employees were in a similar position to Mr Wermizyari because the evidence shows that only about 10 ballot papers were received on 19 and 20 February 2009. Mr Wermizyari also gave evidence that before Mr Davidson told him about the error on the ballot paper, he thought the proposed agreement was to operate for two years. On the morning of 20 February 2009, she said she removed the envelopes from that locked filing cabinet and placed them in a sealed ballot box. According to Ms Linnegar, 59 ballot papers were issued by Blue Star and 47 were received back by mail. In addition, on the morning of 20 February 2009, Ms Linnegar received two ballot papers by facsimile transmission. The employees concerned had signed their names on these ballot papers. At 1.00pm on 20 February 2009, Ms Linnegar along with two employees, Mr Brasher and Mr May, opened the self addressed envelopes and counted the ballot papers enclosed. After the count was completed, Mr May told Ms Linnegar that there were 38 'yes' votes, 10 'no' votes and 1 invalid vote. A short time later, Ms Linnegar undertook a further count of the ballot papers herself. It appears that Mr Brasher and Mr May were not aware of this recount. During this recount, Ms Linnegar noticed that the two employees who had faxed ballot papers to her had also submitted ballots by post. Both of these ballots were for a 'yes' vote. We have a valid majority. If anything, this alteration to the result of the ballot favoured the CSU. However, the CSU has pointed to it to cast doubt on the conduct of the postal ballot and the absence of any independent scrutineers at the count. To the same end, the CSU also called evidence from 13 eligible employees of Blue Star: Messrs Wermizyari, Brown, Cane, Ormond, Coombes, Sloan, Fletcher, James, Lillman, Wells, Vandermatt, Cumming and Alexander. All of them gave evidence that they had voted 'no' to the proposed agreement and that they had either posted the self addressed envelope themselves to Blue Star, or had someone reliable do so on their behalf. Obviously, none of these employees could vouch for the delivery of the self addressed envelope to Blue Star. Furthermore, none of them had marked the self addressed envelope with his return address on the back of the envelope, so that it could have been returned to him if it were not delivered to Blue Star. WERE BLUE STAR'S EMPLOYEES GIVEN A REASONABLE OPPORTUNITY TO DECIDE WHETHER THEY WANTED TO APPROVE THE PROPOSED AGREEMENT? Mr Friend, on behalf of the CSU, identified the relevant circumstances as follows: Blue Star's business was divided into two divisions; The two divisions were engaged in different work and the proposed agreement had a different effect on each division; There was no opportunity or ability for the employees to meet and exchange views about the effect of the proposed agreement. Blue Star convened; and then cancelled, a general meeting of all employees, thus forestalling and ultimately preventing employees from calling such a meeting themselves. Ricegrowers Co-operative Mills Ltd v Bannerman [1981] FCA 211 ; (1981) 38 ALR 535 at 543---544, Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 at 335). In my opinion, in a context referring to a decision to be taken by the members of a group of employees on whether to adopt proposed conditions of employment which will bind that group collectively, and not just bind those employees who accept an agreement, the natural reference of these words in s 340(2)(a) and (b) is to an overt process of taking and recording the group's collective decision. The language of paragraph (a) confirms this, by referring to "all of the persons" and "whether they want to approve the agreement" . These plural terms, in effect, compress the meanings of "each and all of the persons". The natural meaning of the paragraph is that the "reasonable opportunity" is to be afforded to the whole of the group whose approval is required to be sought as well as to each of its members. The "reasonable opportunity" relates to the "manner" or procedure in which the employer obtains the decision of the group. A process of decision-making must be afforded to all of the members, and all of them are to be given a reasonable opportunity to participate in the process in which a majority of the group's individual decisions is obtained. ... The object of the provisions of ss 337 and 340(2), is to allow all the eligible employees to be aware of the proposed manner for seeking a majority approval of the agreement which will bind them all, so that they can discuss its contents, take individual and collective advice, and assist each other to arrive at their collective decision. In my opinion, the construction submitted by DHL Exel, would allow an employer to follow procedures inconsistent with this object, and is inconsistent with the objectives of the Act generally which support collective decision-making by employees (cf. s 3 paragraphs (d), and (e)). Mr Boyce submitted that s 340(2) did not require Blue Star to call a meeting of its eligible employees concerned, or to provide for any form of communication or discussion between them. He submitted the word 'collective' in the expression 'employee collective agreement' was a reference to the valid majority vote. There the High Court held that a legislative provision should be construed: "by reference to the language of the instrument viewed as a whole"; by considering: "the context, the general purpose and policy of a provision and its consistency and fairness ...", and beginning by: "... examining the context of the provision that is being construed": at [69]. In the same case the High Court also held that: "a court construing a statutory provision must strive to give meaning to every word of the provision" (at [71]) and referred to the decision of The Commonwealth v Baume [1905] HCA 11 ; (1905) 2 CLR 405 at 414 where Griffith CJ cited R v Berchet [1794] EngR 1653 ; (1688) 1 Show KB 106 [89 ER 480] to support the proposition that it was "a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent". It follows from these principles that s 340(2) should be construed by reference to its context, language and purpose. As indicated in Project Blue Sky , I will begin by considering the context of s 340(2). It occurred in Part 8, Division 4 of the WR Act: Workplace Agreements - Pre-lodgement Procedure. The divisions immediately following Division 4 dealt with lodgement (Division 5), the fairness test (Division 5A) and the operation of workplace agreements and the persons bound (Division 6). Most of the sections in Division 4 have already been mentioned above, however to recount, they are: s 336 which defined eligible employee; s 337 which dealt with providing employees with ready access to the proposed agreement and an information statement; s 338 which dealt with the waiver of the seven day period; s 339 which placed a prohibition on withdrawing from a union collective agreement; s 340 itself and s 341 which provided that an employer must not lodge an unapproved agreement. Of these provisions, s 338 is not relevant in these proceedings: see [13] above. As to s 337, in Shop, Distributive and Allied Employees' Association v Karellas Investments Pty Ltd (No 2) (' Karellas ')(2007) 166 IR 51; [2007] FCA 1425 , Graham J observed that s 340(2)(a) of the WR Act could not be simply concerned with timeliness, nor access to the relevant employee collective agreement, because those matters were covered by s 337: see at [49]-[50]. I respectfully agree with his Honour's observations in this regard. Section 340(2)(a) must therefore serve some other purpose, apart from timeliness or ensuring access to the proposed agreement. Section 340(2) was also preceded by s 340(1). That section detailed how an AWA ie, an agreement in writing between an employer and an employee as an individual (see s 326), was approved or made: see s 333(a). It provided that the employer and the employee approved the agreement by signing and dating it and having those signatures witnessed. This follows the traditional means of making an agreement in writing between two parties. There is a clear distinction between a more traditional agreement of this kind and a collective agreement under the WR Act, cf: ACTEW Corporation v Pangallo [2002] FCAFC 325 at [33] . Once an AWA was duly signed and witnessed under s 340(1), notwithstanding other provisions of the WR Act that may have affected the operation of the AWA eg, the fairness test in Part 8, Division 5A, neither the employer nor the employee could escape the consequences of signing the AWA by saying that he or she did not read the agreement, or know, or understand its contents: see Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 ; (2004) 219 CLR 165 at [42] - [45] . In this respect, it is worth noting that there was no provision in s 340(1) or (2) that required the employee to have read and understood the proposed AWA or collective agreement before he or she signed the agreement. While s 337 clearly required the employer to provide timely access to the proposed AWA or collective agreement, it was obviously encumbent upon the employees to read it and ensure they understood it before signing it or voting (or otherwise indicating) to approve it. This was reinforced by the fact that under s 340(1)(c) no additional obligation was placed on the employer where the employee was under the age of 18 years. In that instance, an appropriate adult person had to consent to the underage employee signing the AWA and, it must be inferred, ensure that the underage employee had read and understood the agreement. It follows, in my view, in relation to both sub-sections, that the usual legal consequences applied once the agreement was signed or approved ie, it was binding notwithstanding a failure of any employee to read it, or understand its provisions. It follows further from these contextual considerations, that s 340(2)(a) must serve some other purpose. There is also a distinction between the course available under s 340(1) and that available under s 340(2) which provides some indication as to the purpose of s 340(2)(a). It is this. In theory, an employer could have all of its employees progressively sign the same AWA under s 340(1). If it did, it would achieve the same outcome as would be achieved by the approval of an employee collective agreement under s 340(2) viz an agreement which is universally binding on all its employees. However, to obtain this by the AWA course under s 340(1), the employer would effectively need to obtain unanimous support for the agreement. Moreover, the employer would not achieve another significant benefit that is obtained from the approval of an employee collective agreement, viz the agreement binding all future employees for the period of its operation. Instead of obtaining unanimous support for an AWA --- a task that is obviously open to unreasoned veto by one or more employees and is much more demanding on the employer --- an employer may obtain the benefit of an agreement that is universally binding on all its employees by obtaining majority support for an employee collective agreement under s 340(2). Furthermore, that course provides the employer with the significant benefit mentioned above, viz an agreement that is binding on all future employees for the period of its operation. It therefore stands to reason, in my view, that s 340(2) is directed to placing some further obligation on the employer when it seeks to obtain these benefits by way of an employee collective agreement. Finally, on the question of context, there is the juxtaposition of s 340(2)(a) and s 340(2)(b). On this aspect, Mr Boyce submitted that the expression 'reasonable opportunity to decide' in s 340(2)(a) referred, in this matter, to the opportunity to cast a vote in the postal ballot conducted by Blue Star under s 340(2)(b)(i). I do not agree. I consider that the opportunity to cast a vote in the postal ballot is provided for by s 340(2)(b)(i) itself, together with s 337, particularly s 337(4)(a), which required Blue Star to inform each employee that the approval would be sought by a postal ballot. If I am correct in this, s 340(2)(a) would serve no purpose if it also was directed to that end. This construction is, therefore, contrary to what was said in Project Blue Sky about striving to give meaning to every provision: see [29] above. Next, I turn to consider the language of s 340(2)(a). To recap, s 340(2)(a) relevantly provides that: "the employer has given all of the persons employed at the time whose employment will be subject to the agreement a reasonable opportunity to decide whether they want to approve the agreement". Before turning to consider the various words and expressions used in s 340(2)(a), it is convenient to mention two matters. First, in Karellas , Graham J pointed out that there was nothing in the relevant Minister's Second Reading Speeches or any Explanatory Memorandum to indicate what may have been intended by the use of the phrase "a reasonable opportunity to decide" in s 340(2)(a) of the WR Act: see Karellas at [51]. Secondly, I consider the use of the word "collective" in the expression 'employee collective agreement', to which s 340(2) relates, is of some significance in construing that subsection. formed by collection . 2. forming a collection or aggregate; aggregate; combined. 3. relating to a group of individuals taken together. 5. a collective noun. 6. a collective body; aggregate 7. Government a unit of organisation or the organisation in a collectivist system. 8. a communal enterprise or system, working towards the common good, as opposed to one admitting competition between individuals. Turning to the words in s 340(2)(a) itself. First, the section begins with words 'the employer has given'. In my view, these words were clearly intended to place an obligation on the employer to give its employees 'the reasonable opportunity' to which the section is directed. Secondly, Mr Boyce referred me to a decision of the Australian Industrial Relations Commission in Australian Nursing Federation v Alcheringa Hostel Inc (2004) 134 IR 446, which dealt with s 170LE of the Workplace Relations Act 1996 (Cth) (since repealed). That section contained a provision (in sub-section (c)) to the following effect: "the employer gives all of the persons so employed a reasonable opportunity to decide whether they want to make the agreement or give the approval ...". This provision is obviously in similar terms to s 340(2)(a) , at least in relation to the critical words 'reasonable opportunity to decide'. The word give is a word of very wide purport. In the context of s 170LE the meanings most apposite are to grant permission or enable. The word reasonable is an adjective meaning endowed with good reason, agreeable to reason or sound judgment, not exceeding the limit prescribed by reason, not excessive. The noun opportunity has the meaning an appropriate or favourable time or occasion. Clearly the meaning that we attribute to the words used in the statute cannot replace the statutory test. It does however, provide a guide to its intent. Thirdly, (further to the observations above), the word 'reasonable' when used in legislation is usually taken to mean reasonable in all the relevant circumstances of the case: see Australian Crime Commission v NTD8 [2009] FCAFC 86 at [62] and the cases there cited. See also: Bankstown Foundary Pty Ltd v Braistina [1986] HCA 20 ; (1986) 160 CLR 301 at 308-309 re reasonable care, David Jones Limited v Willis [1934] HCA 47 ; (1934) 52 CLR 110 re reasonable fitness for the purpose, Rudi's Enterprises Pty Ltd v Jay (1987) 10 NSWLR 568 at 575-576 re reasonable time and Thorpe v South Australian National Football League (1974) 10 SASR 17 re reasonable notice. Fourthly, the expression "all of the persons employed" and "whether they want to approve the agreement" were considered by Smith FM in TWU : see TWU at [19], set out at [27] above. There, his Honour considered they meant: "that the "reasonable opportunity" is to be afforded to the whole of the group whose approval is required to be sought as well as to each of its members. " I respectfully agree with these observations. Finally, there are the words 'to decide'. In Ricegrowers Co-operative Mills Ltd v Bannerman [1981] FCA 211 ; (1981) 56 FLR 443 at 453, Northrop J, albeit in a somewhat different context, viz administrative decision making, drew a distinction between the word 'decision' and the process of 'deciding'. The mere thought processes taking place in the mind of the person when considering whether or how to exercise a power or to perform a duty of an administrative character under an enactment do not, in my opinion, constitute a decision. In addition to thought processes, there must be some overt act by which the conclusions reached as a result of those thought processes are manifested. The manifestation may take many different forms. It may take the form of a verbal or written communication of the conclusion to the person affected. It may take the form of action taken to give effect to the conclusion. It may take the form of no action being taken when otherwise a definite action would have been taken. Notwithstanding the different context, I consider this distinction arises in s 340(2). In my view, the words 'to decide' in s 340(2)(a) are referring to the thought process taking place in the employees' minds when considering whether to vote for or against approving the proposed agreement. This is to be contrasted with the word 'decision' in s 340(2)(b) which, I consider, is referring to the manifestation of the outcome of that thought process by engaging in the physical process of casting votes for or against the approval of the proposed agreement. If I am correct in this, it provides a further basis for distinguishing between the requirements of ss 340(2)(a) and 340(2)(b) to that set out in [36] above. I should add that in this regard, I respectfully disagree with the observations of Smith FM in TWU in so far as his Honour may be equating the words 'decide' and 'decision' and distinguishing them from the mental process of 'deciding': see TWU at [19] set out at [27] above. In other words, I consider the words 'to decide' and the word 'deciding' refer to the mental process of deciding and the word 'decision' refers to the manifestation of the outcome of the mental process of deciding. This is what I consider Northrop J said in Ricegrowers. Further, I do not consider anything said in Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 at 335 is to the contrary. I would add that this disagreement may well be explained by the fact that his Honour was addressing a quite different issue in TWU to the one that arises here. In TWU, the employer conducted a formal ballot for the approval of the proposed employee collective agreement and obtained an unfavourable result. It then took a second informal vote by show of hands at a staff barbeque which was in favour of the proposed agreement. Thereafter, the employer sought to rely upon the second informal vote. The main issue was whether the employer could do so. For present purposes, the question in this case is whether the employer afforded the employees the opportunity required by s 340(2)(a), not the validity of the approval process under s 340(2)(b). Taking into account these aspects of the context and language of s 340(2)(a) and the various indications as to its purpose mentioned above, I consider the purpose of the subsection is to require an employer wishing to have its employees approve and, therefore, be bound by an employee collective agreement, to provide an opportunity for all the employees who will be affected by the proposed agreement, to meet together as a group, to discuss the provisions of the proposed agreement. This provides the subsection with a purpose additional to, and beyond those mentioned above: being provided with timely access to the proposed agreement; reading and understanding the proposed agreement; specifying the requirements for an individual agreement between an employer and an employee; or providing for a means of ascertaining whether the majority of the employees approve of the proposed agreement by voting (as in this case) for or against it. Consistent with this purpose and its context and language, I therefore consider that the sub-section is to be construed to place an obligation on such an employer, to provide the employees concerned with an appropriate time and occasion to meet together as a group, to discuss the provisions of the proposed agreement and to decide whether they wish to approve it. Thereafter, I consider the word 'reasonable' comes into play to determine the content of the basic obligation outlined above. That calls for a consideration of all the relevant circumstances of each case. The sorts of circumstances that will probably fall to be considered may include: the size of the employer's operations, the number of employees involved and the geographic distribution of those employees. The circumstances of each case will therefore dictate whether or not the employees should be offered an opportunity to meet together as one group, or in a number of groups and the form and location of that meeting, or those meetings. The circumstances may also dictate whether or not a meeting could be conducted by the use of modern technology such as a video or audio conference facility. In this case, Blue Star is a relatively small electrical contracting business. In February 2009, 57 of its employees were affected by the proposed agreement. This is not a particularly large number of employees. Blue Star's business was split into two divisions, with the construction division operating on five or more sites. There was, therefore, little opportunity in their daily work activities for all of the employees to meet their fellow employees affected by the proposed agreement. However, all of these divisions and sites were located in and around Brisbane, within a relatively confined geographic area. Given all these circumstances, I consider that the obligation imposed on Blue Star by s 340(2)(a) in this case required it to provide an opportunity for all of the employees affected by the proposed agreement to meet together at the same time and place and discuss the proposed agreement as a group. There is no evidence that Blue Star provided this opportunity to its employees. To the contrary, Blue Star actually called a meeting of all of the relevant employees at its Meadowbrook site on Tuesday 17 February 2009, to discuss the proposed employee agreement and later cancelled that meeting. I therefore conclude that Blue Star did not comply with the obligation imposed on it by s 340(2)(a). This conclusion would be enough to dispose of this matter in favour of the CSU, but in case I am wrong in this conclusion, I will briefly consider the other two issues raised by the CSU. DID THE ERROR ON THE BALLOT PAPER DEPRIVE THE EMPLOYEES OF A REASONABLE OPPORTUNITY TO DECIDE WHETHER THEY WANTED TO APPROVE THE PROPOSED AGREEMENT? In Karellas, Graham J did not have any evidence before him as to the actual effect of the alleged misinformation on the minds of any of the employees concerned. Nonetheless, his Honour held in favour of the applicant on the basis of the likely effect that the alleged misinformation had upon an employee's decision to vote one way or another: see at [54]. Karellas submits that such a finding was not open to his Honour in the absence of evidence concerning the effect of the information on the employees. His Honour had regard to the likely effect of the information on employees. We consider that his Honour was correct to do so. An employee who is given false and misleading information that may affect his or her decision on whether to approve an agreement is, by the very provision of that information, denied a reasonable opportunity to decide whether to approve the agreement. That is, because there is information available to the employee which has the capacity to distract him or her on voting on the agreement and from considering its actual effect. A decision that is capable of being affected by false and misleading information is not a decision about approving the agreement, but a decision about extraneous matters not given effect to by the agreement. This information was plainly false because clause 7 of the agreement actually provided the agreement was to operate for a period of four years (see [16] above). With one exception, I am in the same position as Graham J in Karellas , in that I do not have any evidence of the actual influence of this false information on any of the employees. The exception is Mr Cane. He said in his affidavit that this false information did not worry him because he: "knew it was a four (sic: year) agreement. " In contrast, Mr Wermizyari said that before he was told about the error in the ballot paper, he thought the proposed agreement was for two years. However, neither he nor any of the other employees called to give evidence by the CSU said whether this false information affected his vote. Perhaps this is not surprising because it should be recalled that they all voted 'no' to the proposed agreement. The question, then, is whether this false information about the proposed agreement was likely to affect any of the employees in his or her decision on whether to approve the proposed agreement. In my view, this false information was likely to have that effect. It related to one of the essential parts of any agreement ie, its period of operation. In quantative terms, it represented twice the period of time during which the proposed agreement was to operate, ie four years instead of two years. It was therefore not trivial or insignificant. In this respect, it is worth noting that the maximum period allowed under the WR Act has fluctuated between three and five years and currently stands at four years under the Fair Work Act: see Forsyth A and Stewart A, Fair Work --- The New Workplace Laws and the Work Choices Legacy (The Federation Press, 2009) p 106. Furthermore, this false information was provided against a background of dire and uncertain economic conditions and an expectation that those conditions may change for the better in the next few years. Indeed, this expectation appears to have been a factor playing upon Mr McInnes' mind because he expressed it to the employees at the Browns Plain site meeting: see [16] above. For these reasons, I consider the employees were likely to be adversely affected by the false information on the ballot paper about the period of operation of the proposed agreement, such that they were denied a reasonable opportunity to decide whether they wanted to approve the proposed agreement within the terms explained by the Full Court in Karellas : see [51] above. WAS THERE A MAJORITY OF THE VALID VOTES CAST? Of course, s 340(2)(b)(i) allows the employer to choose the manner or process by which it obtains the approval of the eligible employees to the proposed agreement: see John Holland Pty Ltd v Maritime Union of Australia [2009] FCA 437 at [19] per Graham J. In this case, consistent with this observation, Blue Star chose to conduct a postal ballot. In my view, the words 'valid vote' in s 340(2)(b)(i), in this context, mean a vote that is cast by an eligible employee and one that clearly indicates that employee's intention to vote for, or against, the approval of the proposed agreement. The CSU's main complaint about the process used by Blue Star is that it did not allow it to check that the ballot papers returned to it by post were cast by eligible employees. According to the CSU, this was so because Blue Star did not require each employee returning a ballot paper to put his or her name, or other details, on the self addressed envelope provided to them. Thus, it claimed, there was no means of checking each envelope against a list of eligible employees to ensure the person who cast the vote in each case was an eligible employee. In my view, Blue Star did use a system that effectively ensured that only eligible employees could cast a vote in the postal ballot. I consider this was achieved by the distinctive nature of the self addressed envelope that was sent to each eligible employee and in which they were to return their vote. We wouldn't receive any other mail that had that stamp on it because it's for outgoing mail, and the front had a --- had a pre-printed label on it. So with the stamp and the label, it made them very, very distinct, especially the stamp, which is a one-off that was --- that we have had made. Given the distinctive nature of these self addressed envelopes and the fact that they were only despatched to the 57 eligible employees involved, it would follow that the 47 self addressed envelopes that were returned could only have come from an eligible employees. Of course, it would have been possible for a person to duplicate these distinctive envelopes, but that would require some prior knowledge of their form and access to the special "one-off" stamp that Blue Star used to prepare them. I do not understand CSU to be alleging any malpractice of this kind in its challenge to the postal ballot. I therefore consider that Blue Star used a process which ensured that eligible employees, and only eligible employees, cast the votes in the postal ballot. Finally, on this aspect, I do not consider the discrepancies in the vote pointed to by the CSU detracts from this conclusion (see [23]-[24] above). Firstly, the discrepancy of two votes in the 'yes' votes ie initially 38 and later 36, was adequately explained by Ms Linnegar's evidence that she undertook a re-count and discovered the two facsimile votes that had been included twice. Secondly, the evidence of the CSU that 13 employees had voted 'no' when only 10 'no' votes were recorded in the official result could easily be explained by mistake on the part of the employees as to how they voted, or a mistaken belief that they had posted the vote back to Blue Star, when they had not. In any event, I do not consider this discrepancy has any bearing upon the validity of the system used by Blue Star to ensure that only eligible employees cast votes in the postal ballot. For these reasons, I reject this aspect of the CSU's challenge to the approval of the proposed agreement. 62.2 The employees were likely to be adversely affected by the false information on the ballot paper about the period of operation of the proposed agreement, such that they were denied a reasonable opportunity to decide whether they wanted to approve the proposed agreement. 62.3 Blue Star did adopt a process which ensured that only eligible employees were able to cast votes in the postal ballot. For these reasons, I made the declarations sought by the CSU on 30 June 2009. Before leaving this matter, I should record that after I reserved my decision on 16 June 2009, Mr Boyce submitted some further written submissions. I did not give him any prior leave to do this and he did not seek leave before doing so. I rejected those submissions and have not considered them in this decision. In my view, this practice should be strongly condemned. It should not occur. If new points of importance arise in the case whilst a matter stands for judgment, the proper course (unless statute or court rules permit otherwise) is for the proceeding to be relisted so that an application to enlarge the record can be made and determined in open court. I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves. | employee collective agreement requirements of the workplace relations act 1996 (cth) for approval of an employee collective agreement reasonable opportunity to decide within the meaning of s 340(2) obligation on employer to provide the employees concerned with an appropriate time and occasion to meet together as a group, to discuss the provisions of the proposed employee collective agreement whether false and misleading information on the ballot paper deprived the employees of a reasonable opportunity to decide whether the ballot was conducted in a manner that ensured only eligible employees took part in the ballot. industrial relations |
The first in time is the plaintiff's application for orders that the examinee sign by 11 April 2008 the written transcript of his examination held on 12 February 2008. The other motion (brought by the examinee) is for the plaintiff to provide the examinee with copies of all of the documents contained in the bundle of examination documents provided by the plaintiff that were referred to during the course of his examination referred to above. 2 The two motions were preceded with exchanges of correspondence in which documents were requested and declined. Several arguments were advanced in the correspondence. 3 The examinee does not object to signing the transcript but objects to being required to sign the transcript without having access to those pages of the documents on which he was questioned and to which reference is made in the transcript. 4 The plaintiff contends that the examinee is not entitled to insist on the plaintiff providing copies of the relevant pages of the documents which are now the property of the plaintiff. It contends that orders should be made now for the transcript to be signed in the near future. 5 There are three principal areas of argument between the parties. The first is on the question of whether or not the written record of the examination includes the documents on which the examinee was questioned. The second was whether or not a discretion should be exercised pursuant to s 596F(1) of the Corporations Act 2001 (Cth) (CA). The third was whether or not the interests of justice would require that as the transcript of the examination may well be used against an examinee who is compelled to verify it, he or she should, in fairness, also have the documents to which he or she was taken in the examination so that the content of the transcript is fully comprehensible. The person who applied for the examination, and any officer or creditor of the corporation, may inspect without fee. Those subsections indicate other purposes of the legislation, first, being to enable the public to know how corporations are being managed and secondly, to achieve the deterrent effect of a public examination. The legislation acts to remind those who act as examinable officers of the corporation, or who deal with a corporation, that they are at risk that, if any of the circumstances giving rise to an application by an eligible applicant arise, they may be called upon to be publicly examined about their conduct in relation to the corporation. It is in the public interest that those who act as examinable officers of corporations and those who take part or are concerned in the examinable affairs of a corporation are obliged to impart their knowledge of the affairs of the corporation in the event that the corporation becomes subject to administration or winding up. In that sense the legislation serves the public interest as well as the private interest of creditors. "The honest conduct of the affairs of companies is a matter of great public concern today": see Rees v Kratzmann [1965] HCA 49 ; (1965) 114 CLR 63 at 80 per Windeyer J. 9 Santow J in Re New Cap Reinsurance Corporation Holdings Ltd [2001] NSWSC 835 dealt with a case in which a liquidator was willing to give a third party creditor access to examination records. It is this. The liquidator's paramount duty is to bring about the beneficial winding-up of the company, primarily in the interests of its creditors, though subject to that overriding requirement, also in the interests of contributories. That in the present context is the documentation produced by the examinees or the corporations they represent for the purpose of that examination. In particular, an assistance thus voluntarily afforded by a liquidator to an individual creditor of the company in liquidation must satisfy the overriding requirement that it assist the liquidator in the beneficial winding-up. That would be so, if such assistance offers sufficient prospect of increasing or protecting the assets available in the winding-up. The difficulty arises because I cannot confirm that quotations from documents, and references to portions of documents, are accurate. 13 Counsel for the plaintiff, correctly in my view, points out that this should not preclude the examinee signing the transcript to confirm the accuracy of the words used on the day in the examination. If there was a misquotation from a document, then that is a matter that can be raised at a later time. In the course of the hearing, counsel for the examinee moved away from this explanation of the difficulty and pointed to a more straightforward difficulty in that without hearing the entire oral recording of the transcript, the examinee could not confirm that what had been reproduced from the audio recording in relation to words or numbers was accurate. It was said that provision of the documents would enable the examinee to be assisted in that regard. Precisely how that would be so is less clear. 14 Additionally, it was submitted that without the examinee having access to the documents, it would not be possible for the examinee to recall what page numbers, for example, were referred to in the course of the examination which lasted for approximately one day. 15 On its face the latter submission would appear to be correct. An examinee could not reasonably be expected to remember what page numbers had been referred to in the course of a lengthy examination. It would be wrong to compel the examinee, without qualification, to sign a transcript verifying its accuracy when such detail could not be known. Counsel for the plaintiff however observes, again correctly in my view, that consistent with the practice adopted in a number of other jurisdictions, it would be open to the examinee to indicate in a margin note or at the commencement of the transcript that he does not recall what page number or numbers was or were referred to in the course of questioning. 16 On a more technical level, the examinee contends that the written record of the examination includes the documents, or more specifically the pages of the documents, to which the examinee was taken. The plaintiff contends it does not, saying that the 'written record' is the record of questions and answers alone. This it is said, is clear from the fact that it is only such a record that he or she may be compelled to sign. Given the language of the surrounding subsections, this argument is not without merit, but on balance I favour the examinee's contention on this issue. 17 The examinee relies upon a purposive construction of s 597 CA. A submission is made that pursuant to s 597(14) CA any such written record may be used in evidence in any legal proceedings against an examinee. Further, pursuant to s 597(14A) CA any such written record is open for inspection to any person with or without a payment of a prescribed fee depending on the circumstances. It is said that the obvious purpose of those subsections is that the written record will be a complete record which may be adduced in evidence or inspected by the public. It is submitted that a construction which does not incorporate those documents referred to during the examination as part of that written record would be contrary to that purpose and ought not be preferred in accordance with the principles contained in s 15AA of the Acts Interpretation Act 1901 (Cth). 18 The expression 'written record of an examination' where it appears in subs 13 and referred to in ss 14 and 14A of s 597 CA is narrower than the term 'records of the examination' used in s 596F(1)(e) CA (see New Cap [2001] NSWSC 835 at [39] - [43] per Santow J). 19 Nevertheless the examinee argues that New Cap may be taken as authority for the proposition that the narrower term still includes documents that are incorporated into the record being 'any documents which are marked for identification and shown to a witness in the course of the examination': New Cap [2001] NSWSC 835 at [42] and Winterbottom; Re Eurostar Pty Ltd (In Liquidation) (Receivers and Managers Appointed) [2003] NSWSC 633 at [23] per Campbell J. 20 Santow J at [42] in New Cap [2001] NSWSC 835 observed that it would be straining language unduly to include in the expression 'written record' in ss 13 , 14 and 15A of s 597 CA documents produced for the examination but not referred to in it. From this, the examinee argues that conversely, if documents have been referred to in the examination then they are part of the written record. That view appears to have been taken as 'common ground' in Winterbottom [2003] NSWSC 633. On the other hand, there can be little doubt that documents referred to are also catered for by the broader expression 'records of the examination' in s 596F CA, just as that expression caters for documents produced but not referred to. The "written record" in s 597 (14A) can be inspected as of right by any creditor of the corporation. That includes, it is common ground, any documents which were marked for identification and shown to a witness in the course of the examination. Thus, there is no basis upon which the receiver could resist, even if he wanted to, a request by a creditor of the corporation to inspect that material. A creditor and the examinee asserts he is one, may have inspection access to documents as well as the transcript. 23 It is a different question however whether s 597(14A) entitles the Court to order that copies of such documents or pages must be made and produced to an examinee who is ordered to sign the transcript of the examination to authenticate it. The distinction may be subtle but in my view is valid. On the other hand, there is no reason why the examinee should not attend the Registry of the Court to examine those documents before or at the time of signing the transcript of the examination. 24 The alternative argument for the examinee is that the Court should give a direction 'about access to records of the examination' pursuant to s 596F(1)(e) CA. As previously noted in New Cap [2001] NSWSC 835 at [39] and [43] 'records of the examination' extends to all 'documents which were utilised in the examination either by directly being marked for identification or as otherwise been produced for the examination'. 25 Santow J observed at [43] in New Cap [2001] NSWSC 835 that when one considers s 596F, there is nothing in s 597 (to which s 596F is subject) which precludes the Court making in terms of subpar (e) a 'direction about access to records of the examination'. Such a direction would be one which would permit access to all of the documents produced in aid of the examination, whether marked for identification or not and whether specifically put to the examinee or not. His Honour observed that it would be entirely artificial to draw a distinction between documents on the basis of some such criteria and that the wider expression 'records of the examination' was chosen deliberately to provide a broad discretion in the Court to make a direction permitting access either to be granted or restricted. 26 However, New Cap [2001] NSWSC 835 is to be understood in the context of the Court providing assistance to achieve the objects of a liquidation. In New Cap a fundamental issue was whether the liquidator in assisting a third party creditor by providing such documents would be advancing the beneficial winding up of the company. 27 If there is power to order such a plaintiff to supply copies of documents, the question is on what basis the discretion to make such a direction should be exercised. The plaintiff submitted there was no such power. It seems to me the discretion, to be exercised judicially, is not fettered as the plaintiff suggests. If the Court considers it appropriate to compel the examinee to sign the written record, it would do so only on whatever terms were just and expedient. However, in this case, the support for the alternative approach argued for the examinee in my view is not compelling. It is contended that without copies of the documents referred to during the course of the examinee's examination, the examinee cannot be certain that the references to and quotations from documents which are contained within the transcript of his examination are accurate. I prefer the plaintiff's submission on this point. Insofar as accuracy is concerned the only question of accuracy which arises is whether the transcribed version of the examination accords in all respects with what was actually said at the examination. 28 It is also submitted for the examinee that if there were inaccuracy in the transcript recording a page number to which the examinee was referred, the examinee could sign the transcript and in so doing wrongly verify documents or extracts of documents. Again, in my view, the plaintiff's argument is to be preferred on this point. In signing the transcript, the examinee is doing no more than confirming the accuracy of what was said on the day in the examination. He is not confirming that what was put to him accurately expresses the content of documents. 29 I do, however, certainly accept the examinee's submission that the signing of the transcript is a significant step and can have serious consequences. It is contended for the examinee that it is unjust to require an examinee to sign a transcript verifying references to and quotations from documents or extracts from documents without the examinee being accorded an opportunity to check the relevant documents or extracts so as to satisfy himself that the references and quotations recorded on the transcript were recorded accurately. While I accept the significance of signing the transcript and its potential consequences, I do not accept that by doing so the examinee gives a verification that the words purportedly extracted from documents in the course of questioning the examinee are in fact the actual words in the documents. 30 The arguments raised as to the need to have copies of the specific documents on which the examinee was questioned were not, in my view, compelling. It seems not in dispute that the examinee has copies of most if not all of the documents. To compare his copies with those on which he was examined, he may, if he wishes, examine the record at the Court Registry. This will include those documents on which he was examined. 31 One further issue which I raised with the parties was whether in the exercise of the discretion for the purpose of s 596F(1)(e) it may be unjust to require the examinee to confirm the correctness of the transcript (with its attendant potential consequences) without the parts of documents described in the transcript being attached. In my view, the same considerations, namely, the ability to examine the actual record of the examination preclude any unfairness in the circumstances of this case. It should be possible, if not as convenient, for the examinee to check the documents on which he was examined. On any view of the matter, however, it is not open to the examinee to re-write the written record. If he disagrees with or cannot recall a particular passage he should make a suitable note in the margin, without obscuring the text of the transcript. That being so, I would not accede to the examinee's motion under either section. 32 I have referred to some unconvincing arguments from the examinee on this debate. For completeness I should add that the plaintiff also raised other arguments on which I was not persuaded. It was said that the examinee should not have an opportunity to 'learn his evidence'. That time has passed --- the evidence has been given. The transcript and documents may be inspected by him. It was also suggested that a decision ordering the plaintiff to supply copy documents would create a dangerous precedent requiring the plaintiff to ransack its documents and give up its property. This is also unpersuasive. There are not a particularly large number of documents in this instance which is why the entitlement to inspection of the written record is a suitable solution and in this instance a court officer will isolate the relevant pages for inspection. In other instances, more convenient orders may have to be fashioned under the discretionary access power. In instances where documents or parts of them are separately marked for identification (rather than contained within others in a more general bundle), the usual inspection rights would seem adequate. The examinee is to pay the plaintiff's costs of the motions to be taxed. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | examination examinee order to sign transcript of examination hearing whether copy of documents on which examinee questioned should be provided to examinee whether access to the documents is available through the court corporations law |
The second appellant (Robert Klewer or Robert) is Ms Klewer's son. At the time the sequestration order was made, Ms Klewer resided in and was the registered proprietor of 30 Coachmans Close, Korora, New South Wales ('the Korora property'). The respondent, the Official Trustee, is the trustee of Ms Klewer's estate and currently the registered proprietor of the Korora property by virtue of the operation of s 58(1)(a) of the Bankruptcy Act 1966 (Cth) ('the Act'). Both appellants presently reside in the Korora property, with Ms Klewer continuing to make mortgage repayments to the Commonwealth Bank of Australia. 2 The appellants appeal from a decision of Raphael FM dismissing their application for a declaration that the Korora property is non-divisible among Ms Klewer's creditors ( Klewer v Official Trustee in Bankruptcy [2008] FMCA 274). Ms Klewer argued before Raphael FM that the Korora property is not divisible amongst her creditors for two reasons: that the moneys used to purchase the property constituted "protected money" within the meaning of s 116(2D) of the Act and that the Korora property was held in trust by Ms Klewer for Robert Klewer and was therefore not property divisible amongst Ms Klewer's creditors by virtue of the operation of s 116(2)(a) of the Act. The ground of appeal was: ' That the evidence supports the existence of a trust '. On 18 June 2008, an amended notice of appeal was filed from the whole of the judgment of Raphael FM. The sole ground of appeal is: ' Procedural unfairness '. No particulars are provided. 5 The issue of "protected money" did not form part of the stated grounds of appeal. However, Ms Klewer did advert to this issue in her written and oral submissions. The matter was stood over for further directions on 6 May 2008. 7 At the directions hearing on 6 May 2008, Ms Klewer made submissions to the effect that she needed time, in the order of at least three months, to prepare her written submissions. I made orders requiring the appellants to file and serve written submissions (including further particulars of the ground of appeal) by 26 August 2008, the respondents to file and serve written submissions by 9 September 2008 and the appellants to file and serve any written submissions in reply by 12 September 2008. The appeal was listed for hearing on 16 September 2008, the parties having indicated that half a day would be sufficient for the hearing. 8 The appellants did not file any written submissions by 26 August 2008. The respondent filed its written submissions on 9 September 2008. 9 On 5 September 2008, the appellants filed a notice of motion seeking an adjournment of the hearing pending the fitness of Ms Klewer to attend Court. In affidavits in support of the motion, Ms Klewer stated that she is unable to deal properly with the hearing of the appeal due to her poor health. In particular, Ms Klewer stated that when she participates in legal proceedings, she suffers chest pains and tightness similar to the symptoms experienced during a cardiac event. She indicated that, when this occurs, she suffers shortness of breath. She also stated that Robert Klewer is disabled and unable to participate in the proceedings. Ms Klewer provided letters from medical practitioners in support of the notice of motion. Ms Klewer also advised at this time that she and Robert had been refused legal aid and pro bono assistance in respect of these proceedings. 10 The notice of motion for an adjournment was heard on 11 September 2008. Ms Klewer said that she was unable to appear in person. She initially declined to take the telephone call that had been arranged to effect her appearance for the hearing of the notice of motion. After Ms Klewer agreed to take the call, I asked her whether she felt that she could make her submissions in writing rather than in person, thereby making it unnecessary for her to travel to Sydney or to appear in Court in person. Ms Klewer did not provide a clear answer to that question and hung up the telephone. 11 In summary, the various medical reports confirmed Ms Klewer's repeated complaints of chest pains and tightness. Investigations were said to be continuing but no structural damage had been found. The medical reports suggested that Ms Klewer's symptoms may be stress-related or a result of "reflux". The medical reports also highlighted a number of other medical problems from which Ms Klewer suffers, although these were not described in Ms Klewer's supporting affidavits as the reason for her request for an adjournment. 12 The medical reports referred to Ms Klewer's difficulties in participating in any lengthy court hearings. However, the matter had been fixed for hearing for half a day. The medical reports did not suggest that Ms Klewer's stated problems were other than ongoing. That is, there was no indication that her stated inability to deal with problems was for a closed period. Ms Klewer was seeking, in effect, an indefinite adjournment of the appeal. 13 There was no indication that Ms Klewer was unable to prepare written material. I declined to adjourn the hearing for an indefinite period but ordered that the hearing listed for 16 September 2008 be vacated and relisted on 30 September 2008 in order to give the appellants some further time to provide written submissions. The time for the appellants to file and serve their written submissions was extended to 25 September 2008. The appellants also had the benefit of the respondent's submissions. I ordered that the appeal proceed by way of written submissions on behalf of the appellants, thereby removing the requirement for the appellants to attend Court either in person or by telephone. 14 The appellants did not file any written submissions pursuant to this extension of time. 15 On 25 September 2008, the appellants filed a second notice of motion seeking orders that I '[m] ake a referral for legal assistance ' in respect of both appellants under O 80 of the Federal Court Rules and that I appoint a tutor for Robert Klewer under O 43 of the Federal Court Rules . The Court advised Ms Klewer by letter that I was not prepared to make a referral under O 80 and that the application regarding O 43 should be supported by medical evidence (to be filed and served by 29 September 2008) and should comply with the Federal Court Rules . 16 At the hearing on 30 September 2008, Mr Philippe Doyle Gray of Counsel appeared as amicus curiae following contact made by the Court with the NSW Bar Association. Mr Doyle Gray informed the Court that he was unable to identify any error in the Federal Magistrate's decision based on the evidence that was before his Honour. However, Mr Doyle Gray sought to have the hearing adjourned to allow a line of enquiry to be pursued regarding the appeal. Mr Doyle Gray identified, in Ms Klewer's affidavit in the Federal Magistrates Court, a reference to a request made by Ms Klewer to the Commonwealth Bank of Australia ('the CBA') in 2001 to transfer the Korora property to Robert Klewer. I granted leave to the appellants to issue a subpoena to the CBA in relation to its file regarding the Korora property for the year 2001, the subpoena to be returnable before me on 8 October 2008. 17 The respondent opposed any adjournment of the appeal. Ms Klewer was telephoned to effect her appearance at the hearing. Ms Klewer remained on the telephone for several minutes before she terminated the call. I proceeded to hear the respondent's submissions. The respondent relied on his written submissions with some short elaboration of those submissions. 18 As a result of the termination of the phone call, Ms Klewer was not able to hear the respondent's oral submissions or to make any oral submissions on behalf of herself or Robert Klewer. 19 By letter dated 1 October 2008, the Court advised Ms Klewer that the respondent's oral submissions had not added substantively to his written submissions filed on 9 September 2008. In a second letter dated 1 October 2008, the Court advised Ms Klewer that I had again extended the time for the appellants to file and serve any written submissions in support of their appeal, this time to 7 October 2008. 20 While I accept that Ms Klewer has a number of health problems which may make it difficult for her to participate in lengthy court proceedings, at no time has Ms Klewer provided a sufficient explanation regarding any inability to provide written submissions regarding the appeal. As noted above, on 11 September 2008, I indicated that the appeal could proceed by way of written submissions on behalf of both appellants, thereby removing the need for either appellant to appear in Court in person or by telephone. 21 Ms Klewer has sent over 20 separate items of correspondence to the Court since filing the notice of appeal. The majority of this correspondence relates to Ms Klewer's medical problems which, she says, prevent her from dealing with this appeal. Ms Klewer's correspondence also describes the difficulties which she and her son have had in obtaining legal assistance through Legal Aid or on a pro bono basis. 22 In an affidavit filed on 25 September 2008, Ms Klewer stated that her health had worsened over recent weeks and that she was unable to provide written submissions regarding her appeal as directed by the Court. However, I note that, immediately prior to and after that date, Ms Klewer was able to make a number of extensive submissions, by way of correspondence sent to the Court, as to why her hearing should be adjourned. 23 On 1 October 2008, Ms Klewer sent a facsimile to my chambers indicating that, unless the Court advised otherwise, she would file affidavits adducing further evidence on the appeal. By letter dated 2 October 2008, the Court advised Ms Klewer that she would need leave to adduce further evidence. On the same date, I made an order that '[a] ny notice of motion seeking leave to adduce further evidence is to be made returnable, for hearing, on Wednesday 8 October 2008 at 9.45am '. Ms Klewer filed a notice of motion seeking leave to adduce further evidence on 3 October 2008. Ms Klewer filed four affidavits in support of the motion. Two of these affidavits were sworn by Lisa Klewer and Andrew Klewer and represent the additional evidence which Ms Klewer wishes to adduce on appeal. The respondent does not object to that additional evidence. 24 Ms Klewer filed written submissions on 7 October 2008. 25 On 8 October 2008, Ms Klewer and Robert Klewer appeared in Court in person for the return of the subpoena issued to the CBA and for the hearing of the notice of motion for leave to adduce further evidence. From my observation, Ms Klewer had no difficulties hearing what took place in Court. Her hearing problems, to which she referred in correspondence, were not manifest. 26 The CBA produced a number of documents regarding the Korora property. I ordered that the parties have access to the documents, which were then tendered. The documents did not mention or confirm that Ms Klewer had approached the CBA in 2001 seeking to transfer the Korora property to Robert Klewer. 27 When Ms Klewer was informed on 8 October 2008 that the appointment of a tutor for Robert Klewer did not automatically entail free legal advice, she did not press for such appointment. In any event, I note that Robert Klewer had filed an affidavit in the Federal Magistrates Court in which he refers to ' some disabilities and health problems ' but said that he has registered for employment. He says that he has difficulties communicating with people and is very shy. I accept that Robert has disabilities, described in a report by Dr Duguid, but there is insufficient evidence to support the application of a tutor. 28 I proceeded on 8 October 2008 to hear Ms Klewer's submissions regarding the appeal and some further short submissions from the respondent. The expression "the property of the bankrupt" is defined in s 5 of the Act to mean the property divisible among the bankrupt's creditors and any rights and powers in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt. Relevantly, s 116(2)(a) provides that subs (1) does not extend to property held by the bankrupt in trust for another person. One issue before Raphael FM was whether such a trust existed. 32 Sections 116(2), (2D), (3) and (4) of the Act are also relevant to the issue of Ms Klewer's protected money claims. Ms Klewer gave oral evidence. The respondent relied on two affidavits of a Deputy Official Receiver. From that evidence, his Honour compiled a history. His Honour expressed the view that the history itself was not controversial. Mr Klewer was subsequently ordered to apply to the Insurance and Superannuation Commission to release funds to discharge the mortgage over the Boambee Gardens property. These orders were not "splitting orders" under Part VIIIB of the Family Law Act 1975 (Cth) ('the Family Law Act ') for the purposes of s 116(2)(d)(iva) or s 116(2)(d)(vii) of the Act, as at that time, no such orders existed. The Boambee Gardens property was transferred to Ms Klewer on 26 June 1999. • Ms Klewer entered into an agreement to purchase the land at Korora for $90,000 and to build a house on the land at the cost of approximately $171,000. This was funded by two mortgages with Poinciania Housing Co-operative Society Ltd ('the Society') for $150,000, secured over both the Korora property and the Boambee Gardens property. At the time, the house on the Korora property had not been built. • On 26 June 2000, the mortgage over the Boambee Gardens property in favour of the Society was discharged and the property was re-mortgaged to the CBA for the same amount, $150,000. • On the same day, the mortgage over the Korora property in favour of the Society was discharged and the property became the subject of a mortgage to the CBA to secure $231,000. • The house on the Korora land was built and the builder was paid. Apart from CBA funds, two monetary payments were made: the first payment of $50,000 was described as "client funds (Lucy Klewer)" and the second payment of $44,202 as "solicitor payments". • His Honour seemed to accept that at least one of these payments was from moneys due to Ms Klewer following a personal injury claim that she had made. As his Honour noted, whether the first or second of these payments represented the personal injury payment to Ms Klewer is not relevant for present purposes, although it may be relevant for the purposes of a claim for payment by Ms Klewer on realisation of the Korora property under s 116(4) of the Act. • The Boambee Gardens property was sold in November 2002 for the sum of $146,000. • Ms Klewer arranged for a number of improvements to be made to the Korora property. To the extent that this work was carried out in 2003, it seems to have been paid for by the sale of the Boambee Gardens property. • On 11 October 2004, the orders made by Justice Chisholm of the Family Court in 1998 were varied to include a splitting order under s 90MT ( in Part VIIIB ) of the Family Law Act . • Ms Klewer stated that she has used moneys released to her from Mr Klewer's superannuation funds pursuant to the 2004 orders of the Family Court either to pay the mortgage or to effect improvements on the Korora property. • Ms Klewer also says that she utilised the proceeds of a workers compensation commutation in the sum of $20,000 and another payment of $6,000 for injury to her ankle by a dog to pay the mortgage or to effect improvements on the Korora property. • Further, Ms Klewer says that she applied a payment from a property damages claim, in the sum of $7,410 plus $654 interest, in the same way. • Moneys are owed to the CBA under the mortgage over the Korora property. As at the date of judgment of Raphael FM, the amount outstanding on that mortgage was approximately $211,000. This was because of Robert's disabilities. She told her eldest son that he would be the executor of her estate and that the estate would be left to Robert. • Ms Klewer maintained that it was her intention to declare a trust over the property immediately and not upon death. • There was no written evidence of the declaration of the trust. • There was no admissible evidence of the conversations between Ms Klewer and her children, other than from Ms Klewer. • In her statement of affairs, Ms Klewer said that she was buying the Korora property. • In response to the question: ' Do you own or are you buying any land or buildings in Australia or overseas? ', Ms Klewer answered ' Yes '. • In response to the question: ' Are there any other owners? ', Ms Klewer answered ' No '. • In correspondence with solicitors in October 2005, under the heading: "Re: Whether my residential property is divisible under s 116 of the Bankrupcty Act 1966 ", Ms Klewer made no mention of a trust and referred only to payments made out of what she claimed to be non-divisible funds. His Honour concluded that the letter indicated a sophisticated knowledge of the workings and effect of s 116 of the Act. In other correspondence in October 2005, with the Deputy Official Receiver, Ms Klewer debated legal distinctions and again made reference to s 116 of the Act but made no reference whatsoever to a trust. • In Walton v Klewer [2005] FMCA 878 , Ms Klewer had refused to pay a debt to Mr Walton. She said that she was a solvent but recalcitrant debtor. Federal Magistrate Driver made reference to unchallenged evidence presented by Ms Klewer that she owns a house and land in which she has equity and that she was taking steps to refinance the property to pay her debts, if she were willing to pay them. She planned to rent out the property to increase her income. There was reference to Robert Klewer and the fact that he would be ' disadvantaged by the loss of his home ' but there was no suggestion that he had an interest in that home, being the Korora property. • No evidence was ' provided of any existing trust to the assets of which the Korora property could have been added '. • The evidence is that at some time after the purchase of the Korora property, Ms Klewer declared a trust to her children. • There was no suggestion from Ms Klewer that, in regard to the whole of the Korora property, there was a resulting, implied or constructive trust in favour of Robert Klewer. • Ms Klewer admitted that there is no instrument in writing as required by s 23C of the Conveyancing Act , although she stated that the trust was declared in her will, which she lost on her computer. The declaration of a trust by will does not take effect until the will takes effect. I am satisfied that there is no enforceable trust in favour of Robert Klewer. Federal Magistrate Raphael said at [16] that s 116(2)(d) clearly relates to the original payments and not to the asset which the payment is used to purchase, except under s 116(3) and s 116(4). His Honour concluded that ss 116(3) and 116(4) are the provisions by which an indirectly acquired asset can be held to be non-divisible. 39 Federal Magistrate Raphael noted the difficulty for Ms Klewer to satisfy the Court that the whole or substantially the whole of the money paid for the purchase of the Korora property was protected money (s 116(3)) so that s 116(2)(n) applies to remove that property from division amongst her creditors. "Protected money" is defined to include "exempt money". That in turn is described as, inter alia , an amount to which s 116(1) does not extend because of s 116(2)(d)(ii) or s 116(2)(d)(iv). Section 116(2)(d)(ii) refers to the proceeds of a life assurance policy. Section 116(2)(d)(iv) refers to a payment to the bankrupt from a superannuation fund received on or after the date of bankruptcy. The money used to pay off the mortgage over the Boambee Gardens property was neither of these (at [16]). The proceeds of sale of the Boambee Gardens property was not exempt money (at [18]). 40 Federal Magistrate Raphael also considered the use made by Ms Klewer of payments for personal injury, workers compensation and other settlement moneys which are not divisible amongst her creditors by reason of s 116(2)(g) and which are exempt money and protected money within s 116(2D). His Honour was not able to find that, for the purposes of s 116(3), these moneys constituted the whole or substantially the whole of the moneys paid for the purchase or used in the acquisition of the Korora property. However, his Honour observed that, subject to proof, Ms Klewer would have a right to make a claim to part of the proceeds of sale of the Korora property by the trustee pursuant to s 116(4) if she can establish that the payments were used either in the original purchase of the Korora property, in making mortgage repayments or in effecting improvements to the property. The particulars of the alleged denial of procedural fairness assert that the Federal Magistrate ought to have cross-examined the appellants' witnesses, that Ms Klewer appeared by telephone, that she had difficulty hearing and that she and her son lacked legal representation. 42 The Federal Magistrate was under no obligation to adduce evidence or to ensure that the appellants were legally represented. Ms Klewer chose to appear by telephone. There is no suggestion that his Honour was aware of any hearing disability which would have prevented Ms Klewer from hearing what was said during the proceedings in the Federal Magistrates Court. 43 This ground of appeal has not been made out. IS THE KORORA PROPERTY DIVISIBLE AMONGST MS KLEWER'S CREDITORS UNDER S 116(1) OF THE ACT? Other than to reassert the fact that she holds the Korora property on trust for Robert Klewer which his Honour did not accept, she has not suggested any error on the part of the Federal Magistrate in respect of his Honour's finding that there was no trust. Ms Klewer has not suggested that his Honour's findings of fact in relation to the alleged trust were ' glaringly improbable ' or that his Honour had in some way ' failed to use or ... palpably misused his advantage ' as the trial judge ( Fox v Percy [2003] HCA 22 ; (2003) 214 CLR 118). She also asserts that there is a written will, which accords with a testamentary disposition of the Korora property. 46 Ms Klewer maintains that she made a 'living will' and intended to and did transfer the Korora property to Robert Klewer, so that she held the property in trust for him. However, apart from an assertion that a written version must exist somewhere on a computer disk which she has not been able to locate, there is nothing in writing evidencing such a trust. 47 In further evidence adduced in the appeal, to which the respondent did not object, two of Ms Klewer's children address the statements that were before Raphael FM regarding the issue of the trust. They state that they each understood that, from 2000, Ms Klewer declared a trust over the Korora property in favour of Robert Klewer. An affidavit sworn by Robert Klewer and filed in Court on 8 October 2008 states that, from 2000, Robert understood that the Korora property was his. However, this does not avoid the problem that there was no writing evidencing such a trust. It was at such time that I informed the older children that the home was Robert's by way of trust due to his condition and his bleak future. I made eldest son Andrew the executor of the estate to ensure that those were my wishes. When I created such trust it was akin to a living will. ... I created such trust at such time because I have been a suicide risk since 1994 after a truamatic [sic] event ... Their [sic] ought to be no doubt about such trust especially when one takes into account the life long incapacity regarding Robert, the sibling rivalry with regards to their liklyhood [sic] of contesting a will. I was prevented from creating a documented trust on the basis that the Commonwealth Bank held title, refused to transfer title to Robert, albeit that the Bank was maybe in error in that regard, the family accepted from the onset [sic] that a trust by way of an understanding that the Korora home was in safe keeping for Robert and even though they were not happy about it they honoured my wishes. ... It's highly probable that other reasons why she [the first appellant] wanted to ensure the Korora home was in trust for Robert was because she [the first appellant] may have felt that she could die from an overdose and wanted Robert to live in his own home ... . 49 In this evidence, Ms Klewer makes it clear that any trust she intended to create over the Korora property was a testamentary trust and not an inter vivos trust. She acknowledged that no express written trust has ever existed. Ms Klewer's daughter confirms the testamentary nature of the alleged trust. 50 As the respondent has pointed out, there is an inconsistency between Ms Klewer's continued assertion that she created a testamentary trust and her statements to the effect that she intended the trust over the Korora property to take effect while she was still alive. If Ms Klewer's intention was to create a testamentary trust, then even if the will were in writing, this would not give rise to any legal or equitable right on the part of Robert Klewer while Ms Klewer remains alive. A ' beneficiary under [a] will derives, while the testator remains alive, no legal or equitable right or title from the will: all the beneficiary has is the prospect of acquiring a right or title if the testator dies in the lifetime of the prospective beneficiary without revoking or altering the will ' (R Meagher, J Heydon and M Leeming, Meagher, Gummow and Lehane's Equity: Doctrines & Remedies (4 th ed, LexisNexis Butterworths, 2002) at [6-190]). During the life of such person no one can have more than a spes successionis, an expectation or hope of succeeding to his property. If the trust property is an equitable interest in land, and a trust is to be created by assignment, writing is essential to its validity both under s 23C(1)(a) and under s 23C(1)(c). Where the trust property is either a legal or an equitable interest in land, if it is proposed to make it the subject of a declaration of trust, it must also comply with the evidential requirements of s 23C(1)(b). J Heydon and M Leeming, Jacobs' Law of Trusts in Australia (7th ed, LexisNexis Butterworths, 2006) at [706]. 52 Ms Klewer admits a lack of documentary evidence creating an inter vivos express trust. No evidence was presented to support the existence of an implied trust. Raphael FM was correct in holding that there is no enforceable express or implied trust over the Korora property. 53 Ms Klewer asserts that she used Robert Klewer's money to pay for the mortgage over the Korora property. In particular, she cites the child support payments made by Robert's father. However, those payments are made to the parent, not to the child. They are not "Robert's money". The evidence before Raphael FM, in particular from Ms Klewer's statement of affairs, went into some detail regarding the payment for the Korora property and for improvements to the property from Ms Klewer's own funds. 54 The respondent draws attention to the fact that there was no suggestion before Raphael FM that Robert Klewer contributed any funds towards the purchase of any real property. I have an exclusive agreement with Ray White Real Estate Coffs Harbour ... I have great prospects of success in my appeal to the Full Federal Court and accordingly a Stay on the Sequestration order ought to be made and an additional staying the bankruptcy so that my property, that being the family home ceases to vest in the Trustee. I ask this so I can continue to have my property marketed without the huge costs incurred by a private trustee which the Official Trustee is currently seeking to appoint. Robert Klewer has filed an affidavit supporting this contention. Robert is presently 20 years of age. Even if part or all of his moneys were used to pay mortgage payments since his 18 th birthday as alleged, any trust resulting from this would not represent a substantial interest in the Korora property. If Robert can satisfy the respondent that such payments were made, he may be entitled, upon sale of the Korora property, to a part of the proceeds of sale that reflects his proportional interest. Broadly speaking, s 116(2)(d) relates, inter alia , to policies of assurance and to interests in and payments from superannuation funds. Section 116(2)(g) relates to damages or compensation recoverable or recovered by the bankrupt. 57 Section 116(3) (in conjunction with s 116(2)(n)) provides that where the whole or substantially the whole of the money paid for the purchase, or used in the acquisition, of particular property is protected money, the property is non-divisible amongst the bankrupt's creditors. Section 116(4) provides that where s 116(2)(n) does not apply but the outlay in relation to particular property is part protected money the trustee, upon realisation of the property, shall pay to the bankrupt so much of the proceeds of realising the property as can fairly be attributed to the protected money. "Protected money" is defined in s 116(2D) and includes "exempt money". "Exempt money" is also defined in s 116(2D) and includes money of a kind referred to in s 116(2)(d)(ii) and s 116(2)(d)(iv) as well as damages or compensation of a kind referred to in s 116(2)(g). 58 As Raphael FM concluded, save for the application of s 116(3) and s 116(4), s 116(2)(d) applies to remove payments from the divisible property of a bankrupt, not the asset to which the payment was applied. 59 If the whole or substantially the whole of the purchase price of the Korora property was protected money, the Korora property would be non-divisible amongst Ms Klewer's creditors (s 116(3) and s 116(2)(n)). 60 Ms Klewer relies on the payment of moneys from Mr Klewer's superannuation fund. Moneys were released from this source by order of the Family Court in 1998 and were used to free the Boambee Gardens property from encumbrances before it was transferred to Ms Klewer. These moneys did not constitute splittable payments for the purposes of s 116(2)(d)(iva) or s 116(2)(d)(vii) of the Act because at that time payment splits were not part of the law of Australia. Provisions dealing with payment splits were introduced by the Family Law Legislation Amendment (Superannuation) Act 2001 (Cth). 61 Ms Klewer also states that, following the splitting order made by the Family Court in 2004, she has received payments from Mr Klewer's superannuation fund. These payments have been used to make mortgage repayments in relation to the Korora property or to effect improvements to that property. 62 The money released from Mr Klewer's superannuation fund in 1998 to free the Boambee Gardens property from encumbrances before the transfer to Ms Klewer was not a payment made to Ms Klewer on or after the date of bankruptcy (s 116(2)(d)(iv)). It was not the proceeds of an assurance policy (s 116(2)(d)(ii)). It was not "exempt money" and not "protected money" for the purposes of s 116(2D); nor were the proceeds of sale of the Boambee Gardens property. These moneys could not be said to have been protected money used for the purchase or acquisition of the Korora property. 63 Ms Klewer has not provided evidence regarding the date of any payments from Mr Klewer's superannuation fund following the splitting order made by the Family Court in 2004. However, even if the payments received by Ms Klewer as a result of the splitting order and the various moneys received by Ms Klewer as damages or compensation for personal injury or wrong were to be considered as "protected money" (see ss 116(2)(d)(iv), 116(2)(g) and 116(2D) of the Act), Ms Klewer has not established that they formed the whole or substantially the whole of the moneys paid for the purchase or used in the acquisition of the Korora property in order to make the property not divisible (s 116(3) and s 116(2)(n)). 64 It is s 116(4) that applies where "outlay" in relation to property, defined in s 116(2D) of the Act, is claimed. "Outlay" includes money paid for the purchase or acquisition of property and money paid in respect of extensions, alterations or improvements since purchase or acquisition. Where protected money is so applied, as would seem to be Ms Klewer's case, the claim is, under s 116(4), to part of the proceeds of sale of the Korora property upon realisation by the trustee. 65 I agree with Raphael FM that, subject to proof, Ms Klewer has a right to make a claim pursuant to s 116(4) for so much of the proceeds of realising the property as can be attributed to protected money which constituted an "outlay" with the definition in s 116(2D). But the proceeds of sale of the Boambee Gardens property is not exempt money. For the avoidance of doubt, I would make it clear that my finding in relation to the s.116(2)(g) moneys is that if Mrs Klewer can satisfy the trustee that those moneys were used either in the original purchase of the property or in paying back some of the mortgage loan (in which case they would become exempt loan moneys) or in affecting improvements of the property, then it would appear she has the right to make a claim under s.116(4) but because of the amounts involved I am unable to find that they constitute substantially the whole of the moneys paid for the purchase so that s.116(3) would not apply. Those findings and s 23C(1) of the Conveyancing Act led his Honour to conclude that there is no presently enforceable trust over the Korora property in favour of Robert Klewer. 67 His Honour gave detailed consideration to the application of s 116 of the Act and to the extent to which Ms Klewer could claim that the Korora property was not divisible among her creditors. 68 I can see no error on the part of the Federal Magistrate. 69 The appeal should be dismissed with costs. I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | appeal whether appellants' residence is divisible amongst first appellant's creditors under the bankruptcy act 1966 (cth) appellants allege that trust exists over property in favour of second appellant appellants allege that "protected money" used in purchase of property no evidence to support existence of trust for the purposes of s 116(2)(a) of the bankruptcy act no writing evidencing a trust as required by s 23c(1) of the conveyancing act 1919 (nsw) protected money not used to pay for the whole or substantially the whole of the property for the purposes of s 116(3) of the bankruptcy act s 116(4) of the bankruptcy act may operate to allow the first appellant to make a claim for so much of the proceeds of sale of the property as can be attributed to protected money and which constituted an outlay within s 116(2d) bankruptcy |
I did not, at that time, give reasons for the order. What follows are my reasons for making the orders on 22 February 2008. 2 The applicant wished to bring an appeal against a judgment of the Federal Magistrates Court of Australia ('the FMCA') ( SZHXH v Minister for Immigration and Anor [2007] FMCA 915) which was delivered on 5 June 2007. She took no step to do so until 24 September 2007 when she filed an application for an extension of time in which to file and serve a Notice of Appeal. The procedural difficulties which face the applicant before any appeal can be heard are greater than she appears to appreciate. 3 The decision of the FMCA was a decision under Rule 44.12(1)(a) of the Federal Magistrates Court Rules to dismiss an application as one not disclosing an arguable case. Rule 44.12(2) of the Federal Magistrates Court Rules indicates that such a judgment is an interlocutory one. Authority in this Court supports that conclusion (see Nguyen v Minister for Immigration and Citizenship [2007] FCAFC 38 at [17] ). Apart from an extension of time leave is required to file the appeal which the applicant wishes to pursue ( Federal Court of Australia Act 1976 (Cth), s 24(1A)). No application for such leave has been made. Although, in a draft Notice of Appeal attached to her affidavit in support of the application for an extension of time, the applicant suggests that leave to appeal was granted on 5 June 2007 (the date of the decision of the FMCA), I am satisfied that this is an error due to the applicant's misunderstanding of the necessary procedures. It may be assumed that the applicant would make an application for leave if she appreciated it was necessary to do so. In the circumstances I will treat her application for extension of time as also indicating a desire to obtain leave to appeal against an interlocutory judgment. But it is too late for me to lodge application to the Federal court. I am late to lodge the application. I applied for extension. Hope you could take my application. I fear to go back. I was persecuted in China. If I return, I would be put in jail. No explanation for the delay was offered. Under O 52 r 5 of the Federal Court of Australia Rules an application for leave to appeal must be made within 21 days after judgment was pronounced. The applicant did not make an application until more than three months had passed. Her present application to this Court was liable, for that reason alone, to be dismissed. 6 The applicant did not appear at the hearing of her application. I permitted the Minister's representative to file material showing advice of the date for hearing the application and service of the Minister's written submissions. The Minister's representative asked that I dismiss the application pursuant to s 25(2B)(bb)(ii) of the Federal Court of Australia Act 1976 (Cth). I was satisfied that was an appropriate course as it allows a further opportunity to engage the jurisdiction of the Court should the absence of the applicant prove to be by reason of circumstances beyond her control. However, in my view, it was desirable that any such right be exercised within a reasonable time --- i.e. before the end of April. I made an order to that effect and directed that further documents not be accepted for filing from the applicant after that time unless the leave of a judge was obtained. 7 At the request of the Minister's representative I made an order for costs. In the circumstances as these appear at the moment such an order is appropriate. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. | application for an extension of time to appeal against a judgment of a federal magistrate application received outside of time prescribed by the federal court rules no explanation for delay provided no basis on which an application for an extension of time could be granted leave to appeal required in any case no application for leave to appeal made no basis disclosed on which leave to appeal could be granted no appearance at the hearing application dismissed pursuant to s 25(2b)(bb)(ii) migration |
Michael Slaven was appointed liquidator. During the course of the liquidation, the liquidator was represented in a public examination of a number of persons conducted pursuant to Div 1 of Pt 5.9 of the Corporations Act 2001 (Cth). The public examinations commenced in August 2006 and ran over 10 days until March 2007. The examinations were funded and conducted by the Australian Capital Territory Commissioner for Revenue. PAAN owed a significant amount under an assessment for payroll tax. The Commissioner used the public examinations to make an assessment of the prospects of success of claims to recover the unpaid tax against the former directors and shareholders of PAAN, Peter and Angela Georgiou, and PAAN's accountant, Peter Beames. The Commissioner applied to the Court for leave to commence proceedings in the company's name, as part of proceedings he wishes to bring in his own name. Mr Beames applied under r 2.13(1) of the Federal Court (Corporations) Rules 2000 for, and I granted him, leave to appear to oppose the relief sought by the Commissioner. (2) Whether the Commissioner has established that it is appropriate for the Court to grant the relief so as to displace the liquidator in discharge of his functions. (3) Whether the Commissioner has established that the action proposed to be taken by him in the company's name has some arguable foundation: Magarditch v Australian & New Zealand Bank Group Limited (1999) 32 ACSR 367 at 384 [70]-[71] per Spender, French and Kenny JJ. I was taken to only a few of over 850 pages of the transcripts of the public examinations in the course of the hearing. The following account of facts is based on Mr Bayliss' assertions in his affidavit so as to provide the background in which the application can be considered and the passages in the transcripts to which I was taken. There was no cross-examination or other evidence. Thus, any findings or opinions on the evidence that I express in these reasons should not be understood as final conclusions arrived at after a contested trial. Rather, I have assumed the material on which the Commissioner relied could be proved in a trial in order to assess whether it established that the claims have some arguable foundation: Magarditch 32 ACSR at 384 [70]-[71]. Between about 1992 and 1 September 2003 PAAN conducted a security business, called Star Security. Mr Georgiou became a director of PAAN in 1995 and has remained in office since according to a company extract of the Australian Securities and Investments Commission in evidence. Mr Bayliss said that Mrs Georgiou was a director and company secretary from around 1996 until 2000. When she ceased to hold office, Mr Georgiou also assumed the role of company secretary. Each of Mr and Mrs Georgiou held 10 of the 20 issued ordinary shares in PAAN. In either 1995 or 1998, PAAN established a trading trust of which it was trustee. Mr and Mrs Georgiou were beneficiaries of the trust. Mr Bayliss said that PAAN, as trustee, purported to grant a licence to itself in its own right, to operate the security business. Thus, it appeared that PAAN, as trustee, held the assets of the security business on trust, and obtained a licence, from itself, to operate the business for its own benefit in consideration of the payment of the consideration due under the licence. Mr Bayliss said that this arrangement had led Mr and Mrs Georgiou to be confused about how to implement the differing rights of PAAN as operator of the business in its own right and trustee. He said that this confusion was evident from the public examination of Mr Georgiou. In his examination Mr Beames said that his firm had recommended to Mr Georgiou that the trust grant a licence to the company to operate the business for administrative reasons. He said that one reason for this arrangement was to overcome the need to make new employment declarations for several hundred guards that were used in the security business from time to time. Mr Beames said that he advised Mr Georgiou to register PAAN for payroll tax effective from 1 July 2001 and to set up systems to capture the guards' employment information on an ongoing basis. He said that subsequently he and his firm provided advice to Mr Georgiou about payroll issues and, at Mr Georgiou's request, conducted negotiations with officers of the Commissioner. Mr Beames said that his role was that if Mr Georgiou had issues, including the need to make representations to the Commissioner about payroll tax, they would meet and discuss them. In his examination Mr Georgiou said that Mr Beames advised him to sign the trust deed to assist in the administration of PAAN's taxation affairs. Mr Bayliss claimed that in early 2001 PAAN had entered into an agreement to sell the security business to MIL Security. The sale fell through and a deposit of $50,000 paid by MIL was forfeited to PAAN. The deposit had been banked in a separate trust account but in 2002 it was paid, together with interest, to Mrs Georgiou by way of a distribution to beneficiaries. In mid 2003 PAAN agreed to sell the security business to Sydney Night Patrol and Inquiry Co Pty Ltd. On completion on 1 September 2003, $1,327,847.85 was paid to PAAN. On 14 October 2003, Mr Georgiou attended a meeting with Mr Beames and officers of the Commissioner and they discussed the amount the Commissioner was then claiming for payroll tax due by PAAN. Mr Georgiou said in his examination that he understood from that discussion that the potential liability of PAAN for payroll tax exceeded the then amount held in PAAN's cheque account (which I infer to be in the order of $600,000 paid out between 20 and 23 October 2003). PAAN used the settlement money to pay business creditors their debts, but no payment was made to the Commissioner. (2) On 23 October 2003, a total of $264,861 said to be in respect of loans owing to Mr and Mrs Georgiou were paid to them. (3) On 5 December 2003, a tax refund of $130,598 was received by PAAN, and on the same day this was paid to Mr and Mrs Georgiou. In his examination, Mr Georgiou said that he was not sure how the company would pay the payroll tax liability if it came to be assessed in the amount discussed with the officers. He claimed that Mr Beames had advised him to make the above payments to his wife and himself notwithstanding that both he and Mr Beames had been told by the Commissioner's officers that the likely payroll tax assessment would be in the order of $800,000. And, Mr Georgiou admitted that it was obvious that PAAN would not have been able to pay such an assessment because it would not have had sufficient funds after those payments. Mr Bayliss also said that a number of PAAN's documents made inconsistent assertions about the ownership of assets. He said that the licence agreement provided that the trust owned the assets of the business such as cars, firearms, uniforms and the like. He claimed that, in contrast, PAAN's tax returns declared that the income and expenditure of the business had been received and incurred by PAAN as licensee, not as trustee, and that it, as licensee for the trust, owned the assets and had claimed depreciation for them. He claimed that no tax returns had been filed until 2008. Mr Bayliss also claimed that in the contract for sale to Sydney Night Patrol, PAAN, as trustee, transferred title to the assets used in the conduct of the business to the purchaser, but that there was no evidence of a transfer of those assets by PAAN back to the trust for the purposes of the sale. On 1 November 2004 the Commissioner issued an assessment by way of estimate pursuant to s 11(2) of the Taxation Administration Act 1999 (ACT) claiming a total amount of $578,291.34 in respect of unpaid payroll tax together with penalty tax. The amount was payable within 30 days of the notice. PAAN did not pay the amount of the assessment and the resolution for the creditor's voluntary winding up followed shortly afterwards. The Commissioner has applied by an originating process under the Corporations Rules seeking to excuse the liquidator from the proposed proceedings. Following the first hearing on 2 June 2009, the liquidator (who had filed a submitting appearance) has reviewed the available materials including the transcripts of the public examinations, and has formed the view that the relief sought by the Commissioner is appropriate. The liquidator appeared at the hearing on 3 July 2009 and tendered his solicitor's letter to the Court of 1 July 2009. The liquidator gave his consent under s 588R of the Corporations Act to the Commissioner, as a creditor of PAAN, beginning proceedings under s 588M in relation to PAAN's having incurred debts for payroll tax owed to the Commissioner. The statement of claim alleged that: Finally, the statement of claim alleged that: Mr Beames was liable either in contract or tort for his negligent failure to advise PAAN of the likely incurring of payroll tax liabilities in each relevant year of income and of its need to make provision in its accounts for the likelihood of an assessment for payroll tax liabilities; alternatively, Mr Beames had been negligent in: advising that it was not likely that PAAN would be assessed for payroll tax liability in any financial year ending 30 June between 1999 and 2004; his failure to warn PAAN that non-payment of its likely payroll tax liabilities would incur penalties; failing to make provision in the accounts for the likely payroll tax, penalty tax and interest liabilities; advising PAAN to enter into the facility agreements to lend monies to Mr and Mrs Georgiou in 2001, 2002 and 2003 and to make the payment of $58,000 in 2000; advising PAAN to make payments to creditors other than the Commissioner, including Mr and Mrs Georgiou in distributing the sale receipts in late 2003; in consequence, Mr Beames was liable in damages to PAAN because it had incurred liability for penalty tax and interest and made the distributions of monies in late 2003 so as to be left insolvent and it continued to incur the costs of winding up over and above what would have been incurred had PAAN been able to pay all its debts at the time of the winding up. Mr Beames opposed the Commissioner's application for leave to commence proceedings in PAAN's name. During the course of that opposition his counsel identified a matter that raised some concerns in relation to the Commissioner's conduct. Prior to the bringing of this application the Commissioner's legal representatives, including Mr Bayliss, and the liquidator and his legal representatives had been in discussions. An offer had been made by Mr Georgiou to the liquidator, which the liquidator had passed on to the Commissioner. The details of that offer were excluded from evidence by me, because they appeared to be the subject of without prejudice privilege pursuant to s 131 of the Evidence Act 1995 (Cth). In late December 2008 a meeting occurred between representatives of the Commissioner and the liquidator, but there is no direct evidence of what happened in it. Then, on 19 December 2008 the Australian Capital Territory Government Solicitor wrote to the solicitors for the liquidator confirming that the Commissioner proposed to apply to the Court for leave to bring the proposed litigation in the name of the company. The letter referred to a number of authorities supporting the existence of the jurisdiction to permit that to occur. It noted that because the proposed litigation involved two applicants only one of which was the company in liquidation there were advantages of efficiency and avoidance of duplication flowing from having only one active moving party with one set of legal advisors. It asserted that the liquidator was unfunded and that the Commissioner was the only creditor. The letter noted that for the liquidator to take any independent steps to pursue the company's claims he would require funding from the Commissioner and that would involve a duplication of the analysis that the Commissioner had already undertaken. The letter acknowledged the possibility of a challenge to the notice of assessment. The letter said that the authorities dealing with the grant of leave would involve the liquidator being, in effect, excused from any involvement in litigation and from responsibility for its conduct. The Commissioner indicated that he would offer indemnity to the liquidator for the reasonable costs of the proposed litigation, even though it seemed improbable that the liquidator would incur any. The letter asked for the liquidator's views. Later the same day, the Government Solicitor sent a further letter seeking consent of the liquidator for the insolvent trading allegations to be brought by the Commissioner. On 28 January 2009, the liquidator's solicitors responded, having referred to the meeting held on 18 December 2008. The liquidator proposed rejecting Mr Georgiou's offer on the basis that a release of claims against Mrs Georgiou was not appropriate. The liquidator's position was that he had a duty to perform and while he understood that the likely scope of the duty would reduce were the litigation conducted as proposed, he had incurred costs in investigating how he ought to proceed in the circumstances. He noted that his investigations had elicited a substantive offer from Mr Georgiou and had provided assistance in the consideration of the case that the Commissioner was interested in bringing. The letter asserted that the investigation and matters underlying that case was part of the discharge of the liquidator's duties. The letter then discussed various aspects of the claim as then formulated by the Commissioner's lawyers. It noted that there were a number of legal and factual difficulties with the claims proposed to be made in the company's name by the Commissioner. It concluded by saying that the liquidator had what he then believed were clear causes of action available to PAAN against Mr Georgiou for which he believed a substantial offer of payment would be made without the need for litigation together with a strong case against Mrs Georgiou to recover the alleged early termination payment of $326,781 made in October 2003. The liquidator's solicitors accepted that the case could well be carried forward by the Government Solicitor, particularly having regard to their previous efforts in gathering information. But the letter noted that the liquidator had a duty to form a view about the matters and that his costs of doing so ought reasonably to be covered by the creditor, should the liquidator relinquish control of the proceedings. The letter sought a proposal from the Commissioner. On 19 February 2009, the liquidator's solicitor, Mark Love, had a telephone conversation with Mr Bayliss that resulted in an exchange of correspondence between them. First, Mr Bayliss wrote saying that he had been instructed to file an application by 27 February to obtain the approval of the Court for the Commissioner to conduct the proposed proceedings. Mr Bayliss' letter indicated that the liquidator had not yet provided any costs estimates, but had said in the meeting of 18 December 2008 that they were between $6,000 and $8,000. The Commissioner was prepared to pay $7,000 to meet them. They sought particulars of the complaint which the Commissioner had and indicated that they would seek instructions to address that. They noted that the liquidator had endeavoured to co-operate with the Commissioner in the course of investigating the circumstances of PAAN and had supported the Commissioner undertaking the public examinations of officers and persons concerned in or having knowledge of the management of the company. Further information was sought in November 2008, after the offer had been received from Mr Georgiou. The letter noted that in August 2008 the liquidator had been asked by the Government Solicitor to execute a contract under which litigation would be taken in his name against officers of PAAN. The liquidator had indicated that would be an abrogation of his role and would be contrary to his public duty. The liquidator sought funds to enable him to understand the proposal properly and sought and obtained funding to do so from the Commissioner (although the Commissioner had apparently withheld the amount of GST payable). The letter referred to the meeting on 18 December as having clarified a number of concerns relating to the claims against Mrs Georgiou. However, Mr Love observed that the liquidator was not then convinced that Mr and Mrs Georgiou could not avail themselves of a defence that they had relied on Mr Beames' advice to them to act in the way they did. Whilst your client is convinced, we are not in a position yet to be convinced. Subsequently, the liquidator filed a submitting appearance. At the hearing on 2 June, counsel for Mr Beames drew attention to the Commissioner's threat to seek the liquidator's removal and the limited information that the liquidator had been given. He argued, after reading that correspondence, that the liquidator was entitled to be concerned at the apparently pre-emptory conduct of the Commissioner. Senior counsel for the Commissioner informed me that the government of the Territory considers itself to have a model litigant policy. I informed the parties that the apparent inference on that exchange of correspondence (which I was not told was incorrect) was that at the time that the Commissioner had threatened to remove him, the liquidator had not been given access by the Commissioner to the transcripts obtained at the public examinations held into the affairs of PAAN, which had been conducted in the name of the liquidator. The liquidator had the primary responsibility for considering what proceedings were open to be brought by PAAN or himself pursuant to rights vested in a liquidator under the Corporations Act . The liquidator was entitled to access to the material and to be put in a position in which he could give proper consideration to the question of how he, consistently with his duties under the Act, should progress the liquidation of PAAN, and recover its outstanding assets, if any. I should be glad to think that I am mistaken. Since then, the liquidator informed the Court by his solicitors' letter of 1 July 2009 that he has had a proper opportunity to consider matters and consents to the application. The liquidator also informed the Court that at the time he filed the submitting appearance, he was satisfied that there were serious causes of action available against Mr Georgiou both in respect of insolvent trading and failing to place the interests of PAAN above his personal and other interests, together with causes of action to recover funds paid to Mrs Georgiou. The liquidator was also satisfied that causes of action existed in respect of preferential payments made to some of PAAN's creditors and that there were causes of action relating to advice given by Mr Beames, associated with PAAN's exposure to its liability to payroll tax and the separation of the affairs of PAAN in its own right and PAAN as a trustee. The liquidator, at that time, had had access to sufficient information to form those views and that the evidence available, in his view, would sustain a prima facie case for each of the causes of action and would warrant bringing proceedings, in the absence of compelling evidence to the contrary. The liquidator considered, at that time, that there might be a possible conflict for PAAN to be arguing in favour of the existence of a payroll tax liability and considered it preferable that the Commissioner take over the running of the proceedings to contend for that case, as the question went to the heart of most of the substantive causes of action giving rise to PAAN's claims for damages. As at 1 July 2009, the liquidator, after receiving the transcript of the examinations and the hearing of 2 June 2009, had the view that the Commissioner was best placed to bring the proposed proceedings. The liquidator considered that the proposed claims by PAAN should be brought and he consented to the Commissioner doing so in the company's name. They addressed submissions on the basis that this jurisdiction may be an implied or inherent jurisdiction or power of the Court in a winding up. Part 5.5 of the Corporations Act deals with voluntary windings up. And under s 511 (which is within Pt 5.5) any of the liquidator, any contributory or creditor is given the right to apply to the Court to exercise all or any of the powers that the Court might exercise if the company were being wound up by the Court (s 511(1)(b)). If satisfied that the determination of the question or exercise of the power will be just and beneficial, the Court may accede wholly or partially to any such application on such terms and conditions as it thinks fit or may make such other order on the applications it thinks just (s 511(2)). The powers of a liquidator appointed by the Court are contained in Div 2 of Pt 5.4B of the Corporations Act . Powers enumerated in s 477 entitle a liquidator of a company, subject to exceptions in s 477 , to bring or defend any legal proceeding in the name and on behalf of the company (s 477(2)(a)) and to do all such other things necessary for the winding up of the affairs of the company and distributing its property (s 477(2)(m)). The exercise by the liquidator of the powers conferred under s 477 is expressly made subject to the control of the Court by s 477(6). Any creditor or contributory or the Australian Securities and Investments Commission may apply to the Court with respect to any exercise or proposed exercise of any of those powers. The statutory predecessors of these provisions were identified by the Privy Council in Ferguson v Wallbridge [1935] 3 DLR 66 at 83-84 (in a quotation cited in related proceedings by their Lordships in Lloyd-Owen v Bull [1936] 4 DLR 273 at 275-276) as evincing a statutory policy that all claims competent to a company should be brought within the scope and control of the winding up. It is his duty even if it be in a voluntary liquidation that opportunity offers to see to it that all assets of the company are brought into the winding-up. In authorizing proceedings, especially if they may or will involve some drain upon the assets, he must satisfy himself as to their probable success; where, as in the present case, they involve no possible charge on assets, he will nevertheless be careful to see that any action taken in the company's name under his authority is not vexatious or merely oppressive . Those proceedings had been dismissed as incompetent by the Privy Council in Ferguson [1935] 3 DLR 66 because the company had not been party to the proceedings and, subsequent to their commencement, it had gone into liquidation. The judge to whom the later application had been made to bring the action in the company's name (following the failure of the earlier proceeding) took into account all of the evidence tendered in the previous proceedings and concluded from the success of the majority shareholders there that the action proposed in the new proceedings would equally fail. Their Lordships held that the approach of that judge was wrong. Their Lordships' reference to vexatious or oppressive proceedings that I have emphasised above, had regard to unsustained allegations of conspiracy and fraud in the previous proceedings. They took the view that there was enough in the arguments presented to them to warrant allowing the contributories to bring the action in the name of the company because the liquidator had refused to do so. It is significant that the principle applied by their Lordships derived from the analogue of s 511. I am satisfied that that section is the source of the Court's undoubted jurisdiction and power to permit a person other than the liquidator to commence proceedings in the company's name when it is in voluntary liquidation. Likewise, where the liquidation is compulsory, s 477(6) is the source of the Court's jurisdiction and power in such a matter. In Aliprandi v Griffith Vintners Pty Ltd (in liq) (1991) 6 ACSR 250 at 252 McLelland J applied what their Lordships had said in Lloyd-Owen [1936] 4 DLR at 276 as to the approach to be taken by the Court. His Honour had noted in an earlier decision ( Wenham v General Credits Ltd (unreported 16 December 1988 Supreme Court of New South Wales at pp 21-22; BC8801203)) that there were two procedural methods by which the joinder as a plaintiff or co-plaintiff of a company being wound up could be made. The first method was by the Court giving a direction to the liquidator to cause the company to be joined as a co-plaintiff pursuant to the analogue of ss 477(6) or 511 (2). The second method was to order that the creditor or contributory be authorised to use the company's name as a co-plaintiff in the proceedings. McLelland J said that that procedure was "... of respectable antiquity and is sanctioned by high authority" citing among others the decisions in Lloyd-Owen [1936] 4 DLR 273 and Cape Breton Co v Fenn (1881) 17 Ch D 198 at 207, 208, where Jessel MR had said that the principle was based on the same one in the old Court of Chancery that permitted a beneficiary to bring a bill against his trustee so as to use the trustee's name to recover trust property. McLelland J said that ordinarily the first course (of directing the liquidator to sue in the name of the company) would be preferable to the second, "... in order that the conduct of the litigation may remain under the control or supervision of an officer of the Court". He pointed out that, in particular circumstances, the alternative course of permitting the creditor or contributory to sue in the name of the company could also have advantages. He said that the making of an order could be supported where the company was not to be the only plaintiff or applicant and, in practical terms, the conduct of the litigation would be in the hands and at the expense and risk of the other plaintiff (or applicant) and its solicitors. His Honour also considered it may be relevant that if the liquidator had expressed an unwillingness to take the proceedings and, if ordered to do so, would no doubt obey, it may be convenient to permit the creditor or contributory to bring the proceedings in the company's name. He applied similar reasoning in Aliprandi 6 ACSR at 252. There he said that the second method had the disadvantage that the conduct of the litigation in the name of the company would be taken out of the control and supervision of the liquidator as an officer of the Court. It is important to appreciate that the procedure is an incident of the winding up and has been treated as being distinct from an action either, at general law under what was known as the rule in Foss v Harbottle [1843] EngR 478 ; (1843) 2 Hare 461 ; 67 ER 189 and, since that rule's abolition, under Pt 2F.1A of the Corporations Act ; Chahwan v Euphoric Pty Ltd [2008] NSWCA 52 ; (2008) 245 ALR 780 at 815-817 [124] - [125] per Tobias JA, with whom Beazley and Bell JJA agreed; see also Promaco Conventions Pty Limited v Dedline Printing Pty Limited [2007] FCA 586 ; (2007) 159 FCR 486 at 496-497 [37] - [38] per Siopis J. In Russell v Westpac Banking Corporation [1994] SASC 4479 ; (1994) 61 SASR 583 at 586 King CJ, with whom Bollen and Mullighan JJ agreed, discussed the rationale of permitting a creditor or contributory to bring proceedings in the name of the company in liquidation where the liquidator had refused to do so. He said that the failure of a liquidator to institute proceedings to recover assets or debts of the company ought not to operate to the prejudice of the persons in whose interests the winding up is carried out and who are entitled to benefit from the assets of the company. The Chief Justice concluded that where an applicant sought an authorisation, entirely at its own risk and expense, to join the companies as plaintiffs and upon it providing a satisfactory indemnity to the companies and liquidators, the companies' assets would then be at no risk. He held that the absence of any potential benefit to third persons, other than the applying creditor or contributory, was not relevant to the exercise of the power: Russell 61 SASR at 587. In Magarditch 32 ACSR at 377 [43], 384 [70]-[72] Spender, French and Kenny JJ applied the above authorities and principles. They held that the Court had a responsibility to see that any action taken in the company's name under the Court's authority was not vexatious or merely oppressive, even where there would be no drain on the assets of the company. The Court had to consider whether the action proposed to be taken in the company's name had some arguable foundation; see also Christianos v Aloridge Pty Limited (1995) 59 FCR 273 at 281B-282B, 284A-B per Beaumont, Whitlam and Tamberlin JJ. The Commissioner and Mr Beames argued that the Court's jurisdiction to make an order authorising the Commissioner to bring the proceedings in the name of PAAN was part of its inherent powers as a superior court of record and a court of law and equity created pursuant to s 5(2) of the Federal Court of Australia Act 1976 (Cth). Because of the conclusion to which I have come, it is not necessary for me to determine whether the power is inherent or implied as an incident of the Court's jurisdiction. Jurisdiction and power are not discreet concepts as Gleeson CJ, Gaudron and Gummow JJ explained in Australian Securities and Investments Commission v Edensor Nominees Pty Ltd [2001] HCA 1 ; (2001) 204 CLR 559 at 590 [64] - [65] . The Commissioner raised an argument that if s 5(2) did not apply, these proceedings could be brought in the inherent jurisdiction of the Supreme Court of the Australian Capital Territory and, in turn, in this Court under s 9(3) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth). That provides that this Court may exercise jurisdiction conferred on it by s 4(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1993 (ACT). In my opinion this argument is not to the point. The Court is exercising federal jurisdiction in this matter because claims for relief are being sought under the Corporations Act . Proceedings are in federal jurisdiction where, as here, they involve rights, liabilities and obligations that arise under, or owe their existence to, or depend upon, federal law for their enforcement: LNC Industries Ltd v BMW (Australia) Ltd [1983] HCA 31 ; (1983) 151 CLR 575 at 581 per Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ; see also Edensor 204 CLR at 585-586 [51]-[52] per Gleeson CJ, Gaudron and Gummow JJ, 638 [216] per Hayne and Callinan JJ. Here, the Commissioner also seeks to exercise rights to recover preference payments under Pt 5.7B of the Corporations Act through use of the liquidator's rights, or in the Commissioner's own right as a creditor. Those rights exist solely as a result of an Act of the Parliament, the Corporations Act . In addition, the right of the Commissioner to bring the proceedings in the name of PAAN, including relief in the form of authorising proceedings to be taken in the name of PAAN against its directors and officers and advisers in respect of the conduct of its affairs, arises pursuant to a law made by the Parliament: s 511 of the Corporations Act . This Court has jurisdiction to decide any matter arising under any law made by the Parliament (except in respect of certain criminal matters) pursuant to s 39B(1A)(c) of the Judiciary Act 1903 (Cth). There is no reason to read down the statutory power in s 511 of the Corporations Act or to search elsewhere for some other explanation of a source of power to make the orders sought by the Commissioner, when the clear words of the statute are apt to ensure that the Court may do justice in the case. It is quite inappropriate to construe provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words of the statute: Owners of the Ship "Shin Kobe Maru" v Empire Shipping Co Inc [1994] HCA 54 ; (1994) 181 CLR 404 at 421 per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ. I am of opinion that the power which the Court is exercising in an application such as the present is now to be found in s 511 of the Corporations Act , in the case of a voluntary winding up, and s 477(6) , in the case of a winding up by the Court. The power conferred by these provisions is ample to ensure that, where a liquidator does not cause the company to bring proceedings, the Court can permit those proceedings to be brought so as to achieve the purposes discussed in the authorities to which I have referred. For these reasons I am satisfied that the Court has power to make the orders sought. I did not consider it appropriate, having regard to the then state of the evidence, to act on the liquidator merely submitting to whatever order the Court might make. His responsibility was to consider for himself whether the proceedings ought properly be bought in the name of the company. I am now satisfied that the liquidator has exercised that responsibility having regard to his solicitors' letter of 1 July 2009. I am satisfied that there is a sufficiently arguable case to justify the Commissioner using PAAN's name to proceed against each of Mr and Mrs Georgiou as is proposed, based on the evidence that I have summarised above ([3]-[11]). Mr Beames argued that the proceedings were vexatious and oppressive in the sense discussed in the authorities and ought not to be authorised to be brought against him. I reject this argument. It appears that a part of the defence likely to be raised by Mr and Mrs Georgiou will be to allege that they acted on Mr Beames' advice. Also the case that the Commissioner seeks to bring in PAAN's name against Mr Beames alleges that he did advise the company to act in the way it did. Thus, Mr Beames will be a proper and necessary party to the proceedings. The controversy between the other parties will involve an examination of Mr Beames' role in the events leading to the payments of the various sums complained of to Mr and Mrs Georgiou and of the company's failure to pay or provide for the payment of payroll tax at various times. The other claims which the Commissioner seeks to bring in his own right appear also to be part of the one matter or controversy: see Re Wakim; Ex parte McNally [1999] HCA 27 ; (1999) 198 CLR 511 at 585-586 [140] - [142] , 587-588 [145]-[147] per Gummow and Hayne JJ, with whom Gleeson CJ and Gaudron J agreed at 546 [25]-[26]. Mr Beames argued that there was not enough evidence that there was a real dispute to which he was a party and that the affidavit of Mr Bayliss went no further than a series of unsubstantiated assertions which did not identify the facts upon which they were made with any precision. During the course of argument, I was taken to passages in the transcript of the examinations which indicated, as I have set out above, a sufficiently arguable basis on which the claims could be made. In the examinations, Mr Georgiou swore that he acted in reliance upon Mr Beames advice. That raises a sufficiently arguable case to justify Mr Beames' joinder in the proposed proceedings. The trustee of the trading trust who has incurred liabilities in the performance of the trust is entitled to be indemnified against those liabilities out of trust property and for that purpose is entitled to retain possession of the property as against the beneficiaries. The trustee's interest in the trust property amounts to a proprietary interest because it is no longer property held solely in the interest of the beneficiaries of the trust. The trustee's interest in that property passes, in the case of a bankruptcy, to a trustee in bankruptcy. In the case of a trading trust, the trustee of which is a corporation, the corporate trustee's interest remains the property of that company under the power of the liquidator: see Octavo Investments Pty Ltd v Knight [1979] HCA 61 ; (1979) 144 CLR 360 at 369-370 per Stephen, Mason, Aickin and Wilson JJ. Those creditors are nevertheless subrogated to the rights of the trustee in relation to that property, and in the event of the trustee becoming bankrupt, it is those rights which are to be realized in their favour. Because the right of indemnity is a proprietary right of the trustee, it follows that the retirement of a trustee does not extinguish that retired trustee's proprietary right to resort to the assets of the trust, including any chose in action against overpaid beneficiaries to indemnify a trustee for liabilities properly incurred in the execution of the trust while the trustee held office. I am satisfied that the Commissioner has a sufficiently arguable claim of his being entitled to be subrogated to any right of indemnity PAAN may have as a trustee of the kind alleged in the draft statement of claim. Mr Beames sought that any order be confined to authorising proceedings to be commenced only in the terms of the proposed statement of claim annexed to Mr Bayliss' affidavit. Under the judicature system form of pleading, a plaintiff must plead the material facts which are relied on to entitle the plaintiff to the relief claimed. There is no need also to assert or identify a legal category or cause of action that the material facts pleaded may illustrate, involve or demonstrate. The role of pleaded material facts is to evince (at a high level) the factual basis on which the Court can grant the relief sought; it is not a set of submissions demonstrating the legal pathway to the desired result. In Agar v Hyde (2000) 201 CLR 552 at 577-578 [64] Gaudron, McHugh, Gummow and Hayne JJ noted there that it may be difficult for a court to say from the pleadings that a claim by a plaintiff that a defendant is liable in negligence is bound to fail because it is not arguable that the defendant owed the plaintiff a duty of care. In that example, the material facts pleaded will frequently be an assertion of the broad relationship between the parties and that in that scenario the defendant owed a duty of care to the plaintiff. Often the evidence given at the trial will become critical in ascertaining whether the material facts pleaded can be established. I am of opinion that a party granted leave to bring proceedings in a company's name under s 511 is not authorised under the grant to make a substantive expansion of the proceedings by adding new parties or significant new material facts (which may give rise to a new cause of action). The role of the Court in giving its authorisation requires it, not the party, to determine whether the proposed use of the company's name by the applicant is appropriate. The grant of authority to a party to bring proceedings in a company's name is not a delegation of the important role the Court plays in determining how the winding up is conducted. The later joinder of a new party, or the exploration of significantly new material facts, outside the broad area for which the authorisation was sought, involve the assertion, in the company's name, of rights that the Court has not examined. Under the Act, the liquidator remains in control of the company's other assets, including its other choses in action against a new defendant/respondent or the existing defendant/respondent. The grant of leave to commence proceedings in the company's name is a specific authorisation for a particular purpose that has been established to the Court's satisfaction in accordance with the tests that I have discussed above. An unconfined grant of authority to an applicant to add parties and causes of action could enable the applicant to assert the company's rights in relation to matters that may be unrelated to the matters that the court considered in making the original orders. For that reason the expansion of proceedings by the party authorised to bring them in the company's name into a substantively new area (by adding a new party or significantly different material facts), ordinarily, must be considered afresh both by the Court and by the liquidator, whose interests, as the person in control of the company's assets, may be affected. The nature of these proceedings could not permit any such finding to be made. The purpose of the material is to demonstrate that a sufficiently arguable case exists that ought to be allowed to go to trial in connection with the winding up of PAAN. The conduct alleged by the Commissioner in the proposed proceedings has arguably directly affected the recovery of payroll tax penalties and interest owed by PAAN to him as the principal, and possibly only, creditor in the winding up. These proceedings are not a rehearsal for a trial. The limited question, identified in the authorities, is whether a sufficiently arguable claim has been brought by a proper applicant to warrant the exercise of the power to authorise that person to litigate in the company's name. It would be wrong, as their Lordships pointed out in Lloyd-Owen [1936] 4 DLR at 277, to pour over the examination transcripts or other material with a view to determining prospects of success. That is not the role of the Court in such applications. Rather, the Court's role is to be satisfied that it is a proper use of the procedure afforded in the winding up to allow the company or its name to be used to recover debts, damages or assets, or to otherwise protect the interests of the company so as to realise the company's property for the purposes of the winding up. I am satisfied that the claim sought to be made against each of the proposed respondents by PAAN in the draft statement of claim is not vexatious or oppressive. The Commissioner should be allowed to file a pleading in the form of the draft statement of claim. There was no accompanying draft application in evidence. Before the draft statement of claim is filed some typographical and consequential amendments may need to be made to it that will not affect the substance of the pleading. Once the proceedings are commenced they will be in the control of the Court which will be able to regulate any subsequent applications to amend and, if necessary, any consequential requirement to vary the authorisation I have granted. Mr Beames was not a party. He provided assistance on the jurisdictional question and properly raised the concerns that the state of the evidence on 2 June 2009 had left open. Each party had played an appropriate and proper role in this application. It is not appropriate to make any order in respect of the costs of this application. I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | powers of the court in a winding up creditor's voluntary winding up application by creditor for order authorising it to commence and prosecute proceedings in the name of insolvent company as co-plaintiff creditor also bringing claims in own right source of court's power to make order corporations act 2001 (cth) statutory grants of jurisdiction must be construed broadly ss 511 and 477 (6) of the corporations act give the court jurisdiction over matters arising from the exercise of liquidator's powers in a winding up whether power is an incident of inherent or implied jurisdiction of superior court of record ss 511 and 477 (6) give court power to authorise third party to use name of company being wound up to commence and prosecute proceedings order authorising creditor to commence and prosecute proceedings in company's name appropriate terms of order whether creditor/plaintiff should be permitted to amend pleadings, add or remove parties and causes of action order limited to authorise commencement and conduct of the proceedings identified in the evidence entitlement of liquidator to be properly informed of nature and basis of proceedings sought to be brought by creditor in company's name prior to application to the court federal jurisdiction federal court's jurisdiction to make order authorising creditor to commence and prosecute proceedings in name of company being wound up creditor's right to apply to court for order in winding up under ss 511 and 477 (6) right exists by virtue of federal law trading trust entitlement of trustee or corporate trustee of trading trust who has incurred liabilities in performance of duties to indemnification out of trust property enforcement of entitlement of trustee to proprietary interest in trust property against beneficiaries or directors of trading trust who caused payments to be made before trustee or corporation had paid likely or known debts corporations corporations corporations high court and federal court equity |
2 For the purposes of Sch 2F of the Income Tax Assessment Act 1936 (Cth) the Subsidiary Trust is an "unlisted widely held trust": see subdivs 272-G, 272-H and 272-I. 3 As such, the Subsidiary Trust is one of four kinds, or "levels", of widely held trust which are subject to different tax treatments, particularly in relation to carry forward losses. 5 The Holding Trust and the Investment Trust are both listed widely held trusts. In a private ruling the Commissioner ruled that the Subsidiary Trust did not, by virtue of s 272- 127 , acquire the status of listed widely held trust. An objection to that ruling was disallowed. The applicant now appeals to this Court. The applicant submits that "each of one or more trusts of a higher level" is a composite phrase which describes a particular subject. The subject can be comprised of one trust; it can also be comprised of a group of two or more trusts. 7 The applicant's construction immediately confronts the problem that the section does not mention collectivity or groups. On the contrary the word "each", a quasi-pronoun (Oxford English Dictionary), usually denotes individuality. The Macquarie Dictionary gives the primary meaning "every, of two or more considered individually or one by one". 8 Nor does the language of the section suggest that, where there is more than one trust higher than the status-seeking trust, the higher trusts must be of the same level. The only requirement is that they be "of a higher level" than the status-seeking trust. For example, suppose trust A is on level (a). Since the section contemplates that there could be relevant trusts on as many as three levels higher, there could be a situation where trust B is on level (b), trust C is on level (c) and trust D is on level (d). Of each of trusts B, C and D it can be said that it is on a "higher" level than A's, that is to say on a level which has the quality or characteristic of being higher than (a). 9 At first blush, it may seem odd that the section provides that, where there is more than one trust, each must have fixed entitlements to all of the income and capital of the status-seeking trust. How can two or more each be entitled to all the income and capital? 10 The answer is to be found in the words "directly or indirectly". A fixed entitlement may be held indirectly where there is entitlement via interposed companies, partnerships or trusts: s 272-20. Thus, to take the example above, if trust B owns 100 percent of trust A and in turn trust C owns 100 per cent of trust B, and trust D owns 100 per cent of trust C, each of B, C and D has a fixed entitlement to all of the income and capital of A. In the case of B, it has its entitlement directly; each of C and D has its entitlement indirectly. 11 The concluding words of subs (1) speak of the trust of the highest level. In using the superlative rather than the comparative, the text is telling the reader that the status-seeking trust will attain the status of only one of the higher trusts (where there are more than one), namely the one that is on the highest level. 12 The use of the singular "trust" is fatal to the applicant's construction, which must accommodate the possibility of multiple trusts together conferring their status on the status-seeking trust. The applicant's argument did not suggest a way in which the singular word "trust" could be made to fit into its construction. An unlisted widely held trust, unlisted very widely held trust or wholesale widely held trust whose fixed entitlements to income and capital are all held, directly or indirectly, by another trust of a higher level will instead be a trust of the same kind as that higher level trust. The parent trust must be of a higher level so that the subsidiary trust will not be worse off. The C Unit Trust and D Unit Trust are re-classified as unlisted very widely held trusts because they are each wholly owned by the A Unit Trust which is of a higher level. The classification of the D Unit Trust is unaffected by the classifications of the B Unit Trust and C Unit Trust since neither of them owns 100% of it. 14 The concluding sentence is consistent with the Commissioner's construction and inconsistent with that of the applicant. The only response of the applicant was to point out that B and C in the diagram are not on the same level. But that is a bootstraps argument. It assumes the correctness of the applicant's argument that two or more trusts can confer their status on a collectively owned subsidiary as long as they are on the same level. For the reasons explained above, that is not so. 15 The ordinary and grammatical meaning of the section is as submitted by the Commissioner. The result could not be said to be arbitrary or capricious. To confer the benefit of the higher status only where the status-seeking subsidiary is wholly owned by the trust of that higher status is a rational legislative objective. That objective has been achieved in the language of the statute, which admits of only one meaning. The merits or otherwise of the objective are not a matter for the Court: Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation [1981] HCA 26 ; (1981) 147 CLR 297 at 304-305. 16 The appeal will be dismissed with costs, including reserved costs. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | classification of trust for purpose of determining tax liability where a trust wholly owned by a trust of a higher level deemed to be of the same level as the owner trust whether trust owned by two trusts of the same higher level could be deemed to be of that level on the basis of collective ownership income tax |
As it turns out, there is a significant question of statutory interpretation as to what is a "matter arising under the Workplace Relations Act 1996 (Cth) (the Workplace Relations Act )" that is central to any award of costs in each of the proceedings. On 20 August 2008, I delivered judgment in both of these matters, finding for the applicants in each case: Australian Workers' Union of Employees, Queensland and Others v Etheridge Shire Council and Another (2008) 171 FCR 102 ; (2008) 250 ALR 485 ; and (2008) 175 IR 383. At that time, I indicated that I would hear the parties as to costs in the matters. In proceedings QUD 481 of 2006, the applicants filed a submission on costs on 27 August 2008. On 3 September 2008, the first respondent filed submissions on costs, and on 5 September 2008, the applicants filed a submission in reply. In proceedings QUD 39 of 2007, the applicant filed submissions on costs on 27 August 2008, and on 3 September 2008, the first respondent filed submissions on costs. Those submissions were the same as had been filed in the other proceedings. In these proceedings, the applicants sought various declarations from the Court. The interest of each applicant was the same, and both were represented by the same counsel. The applicants were wholly successful, the Court granting the relief which they sought. The applicants submit that there is no special reason for the Court to depart from the ordinary rule that costs follow the event, and, accordingly, the first respondent should pay the applicants' costs. Further, the applicants submit that they attempted to resolve the matter without litigation, but the parties were unable to reach agreement, the first respondent not accepting the correctness of propositions put by the applicants that the Etheridge Shire Council was not a "constitutional corporation" and therefore could not lodge the relevant workplace agreement. The applicants contend they were therefore forced to commence litigation in respect of which they were wholly successful, and which the respondents vigorously, but unsuccessfully, defended. The first respondent seeks to avoid the "usual order as to costs" on two bases. In this respect the first respondent draws attention to the comments of Kirby J in Oshlack v Richmond Shire Council [1998] HCA 11 ; (1998) 193 CLR 72 that where a matter is a test case, the Court may exercise its discretion to refrain from following the usual principle that costs follow the event. The first respondent in this proceeding makes the same submissions as it did in QUD 481 of 2006, but argues, in addition, that the reliance by the State of Queensland on the judgment in Tristar Steering and Suspension Australia Ltd v Industrial Relations Commissioner of New South Wales (2007) 159 FCR 274 is distinguishable, it being said that that matter involved the invocation of s 109 of the Australian Constitution in the determination as to costs. That submission is determined by whether each of these proceedings is a matter arising under the Workplace Relations Act . The applicant in each proceeding submits that that proceeding is not a proceeding "arising under" the Workplace Relations Act and that therefore s 824 has no application. Each of the applicants relies on Re McJannet; Ex parte Australian Workers' Union of Employees (Q)[No 2] [1997] HCA 40 ; (1997) 189 CLR 654 ( McJannet ), which, the applicants assert, contains the relevant test. The High Court in McJannet said, at 656, that the test was " whether the right or the duty that is sought to be enforced owes its existence to a provision of the Act. " The applicants submit that, as they sought declarations to the effect that the first respondent had no right under the Workplace Relations Act , to act as it did, s 824 has no application. The applicants do not address the contention by the first respondent in each proceeding, that the first respondent had a right pursuant to the Workplace Relations Act to enter into a Workplace Agreement with its employees, and register it pursuant to the Workplace Relations Act . The Etheridge Shire Council argues that it had asserted that it was "an employer" within the meaning of the Workplace Relations Act and was therefore entitled to register a Workplace Agreement with its employees pursuant to that Act. It was the denial of that asserted right by the respective applicants that led to the proceedings being instituted. The Etheridge Shire Council argues that a party need not, in the end result, be successful concerning a claim advanced by it, provided the claim advanced by it, or on which it relies, is a claim to a right that owes its existence to the provision of Workplace Relations Act . The Etheridge Shire Council refers, in particular, to the decision of French J (as he then was) in BGC Contracting v CFMEU (No 2) [2005] FCA 908 ; (2005) 143 FCR 409 ( BGC Contracting ), where his Honour found that s 824 applied. In BGC Contracting , the applicant instituted proceedings seeking declarations that representatives of the CFMEU, a state registered union, had no right under the Industrial Relations Act 1979 (WA) (the IRA) to enter a construction site for an ammonia plant in Western Australia. The basis for that application was that the workers at the site were employed under Australian Workplace Agreements made under the Workplace Relations Act . Rights of entry created by that Act in respect of those employees were said to be inconsistent with the IRA, and therefore rendered inoperative the rights of entry conferred under the IRA, in so far as they purported to apply to the construction site. The application was dismissed and the CFMEU sought an order for costs, which was opposed by the applicants and the Minister. The respondents contended that the proceedings were proceedings in a matter arising under the Workplace Relations Act and that the then s 347 of the Workplace Relations Act confined the power to award costs to circumstances in which the proceedings had been instituted frivolously or vexatiously. French J concluded that the proceedings were proceedings in a matter arising under the Workplace Relations Act , and, for that reason, no order for costs should be made. In addition to McJannet , Etheridge Shire Council also noted R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett [1945] HCA 50 ; (1945) 70 CLR 141 , where Latham CJ said at 154, " If a right claimed is conferred by or under a Federal statue, the claim arises under the statute. In this case, however, the applicants argue the Workplace Relations Act had no application to the first respondent at all, and the matter did not, therefore, arise under the Act. The answer to these questions, in my judgment, relies on a precise identification of the "matter" in the present case. "Matter" in that sense, means the judicial controversy between the parties. The applicants asserted that the Etheridge Shire Council was not a constitutional corporation, and was therefore not an "employer" under the Workplace Relations Act , and was therefore not entitled to register a Workplace Agreement with its employees pursuant to the Workplace Relations Act . In my judgment, each proceeding was a "matter arising under the Workplace Relations Act ". The Etheridge Shire Council asserted that it was an "employer" under the Workplace Relations Act , being a constitutional corporation and therefore was entitled to register the Workplace Agreement, pursuant to the Workplace Relations Act . The right claimed by the Etheridge Shire Council, and denied by the respective applicants, was a right conferred by an order of the Workplace Relations Act , and therefore arose under that Act. It follows that the prohibition against the ordering of costs contained in s 824(1) applies in each of the present proceedings. It does not affect my conclusion that the exception referred to in s 824(1) is directed at the "institution" of proceedings. The Etheridge Shire Council did not institute either proceeding. It therefore follows that it could not have instituted either proceeding vexatiously, or have instituted either proceeding without reasonable cause. As a respondent in each proceeding, it has an immunity from an order to pay costs, if either proceeding was a matter arising the Workplace Relations Act . In my opinion, each proceeding was such a matter. That conclusion is consistent, in my view, with the conclusion and reasoning of French J in the BGC Contracting case. That is sufficient to dispose of the application for costs. For completeness, were my conclusion to be contrary to that expressed above, the contention that each matter was something of a "test" case, would not be a basis on which I would refrain from following the usual principle that costs follow the event. In proceedings QUD 481 of 2006, the State of Queensland intervened. For that reason also, I would not award costs to the State of Queensland in that proceeding. To do so would, in my opinion, go some way towards circumventing the operation of s 78A of the Judiciary Act 1903 (Cth). I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender . | whether the usual order as to costs should be made whether the matter was one to which the workplace relations act applied held that each proceeding was a matter arising under the workplace relations act held that the prohibition against the ordering of costs contained in s 824(1) of the act applies in each the proceedings held that the fact that each matter was something of a test case would not require a departure from the ordinary rule as to costs no order as to costs made costs |
They further apply, pursuant to s 447A of the Act, for an order that they be permitted to convene and hold the meeting of creditors at any time during the convening period as extended by the court. The primary application made by the administrators is that the convening period be extended by a period of up to 90 days. An alternative, which I shall describe a little later, is also put forward. The Australian Securities and Investments Commission, hereafter ASIC, has intervened in this proceeding, pursuant to s 1330 of the Act. Such interventions are not common in relation to an application of this kind. In the circumstances of this case, however, the intervention is entirely appropriate, indeed, welcome. What are those circumstances? Mr Worrell, one of the administrators, has filed a very comprehensive account, by affidavit, of the circumstances leading to the appointment of administrators, of events since then and of activities undertaken by the administrators since their appointment. Late in the afternoon on 9 January 2009, the directors of Storm Financial appointed Mr Worrell and his partner, Mr Khatri, as joint and several administrators of Storm Financial. Mr Worrell and Mr Khatri are each very experienced insolvency practitioners. Mr Worrell's affidavit is made with the authorisation of Mr Khatri. I have taken into account, particularly in light of the experience these gentlemen have, the views which are expressed in Mr Worrell's affidavit. On 15 January 2009, at the behest of the Commonwealth Bank of Australia, receivers and managers were appointed over assets of Storm Financial, pursuant to a fixed and floating charge. That bank apparently also holds security over the assets of a number of subsidiary companies of Storm Financial. As Mr Worrell correctly notes, the appointment of the receivers and managers has had the effect of shifting the control of Storm Financial's assets from the administrators to the receivers, including the immediate control of the books and records. The administrators, of course, remain in control of the company itself. It seems that the Commonwealth Bank's security is in respect of a debt of some $27 million owing to the bank. The investigations conducted by the administrators to date have necessarily been complicated by the appointment of the receivers and managers, in the sense that the books of account and other records are presently held by the receivers and managers. Obviously enough, there is a need for a reasonable liaison as between the administrators and the receivers and managers in relation to such material, so that each can perform the duties consigned to them, either under the Act or pursuant to the charge. (ab) most of the real property assets of the group are held by a subsidiary company, Storm Financial Property Pty Ltd, with the bank's receivers also being pointed to that company. (ac) the largest asset on Storm Financial's balance sheet, as at 30 June 2008, was an item, "intangibles", being goodwill having, as recorded on the balance sheet, a book value of $42 million. The administrators opine that it is not presently known whether this amount could be recovered. They therefore do not make, at the moment, any estimate as to the realisable value, if any, of this asset. The administrators understand from the directors that these loans were made to clients who were having difficulties meeting margin calls, and that the loans were unsecured, interest free, and repayable "in due course". The directors have informed the administrators of their belief that such loans were good marketing and added to the goodwill of the business. At present, the administrators are not sure as to the realisable value of these particular debts. The administrators report that the company, prior to its being placed in administration, had instituted proceedings in this Court against the Commonwealth Bank. The nature of those proceedings is described fully in a judgment delivered by Greenwood J, Storm Financial Ltd v Commonwealth Bank of Australia [2008] FCA 1991. An application was made in those proceedings for interlocutory injunctive relief as against the bank. His Honour, for the reasons that he gave on 24 December 2008, refused that application. The substantive proceedings remain on foot. In summary, the proceedings might be described as a claim for damages in respect of alleged contraventions of s 1041E and s 1041H of the Act by the bank in the despatch of correspondence to, and other communications with, clients of Storm Financial earlier in December 2008, which are said to contain false, misleading or deceptive statements. Following adjournments, the application for leave to appeal in respect of the interlocutory injunctive aspect of the proceeding is to be heard in this Court on 6 March 2009. The administrators report that they are presently in the process of seeking to form a view as to the prospects in respect of the substantive proceeding in the court. The position at the moment is that the administrators have not yet obtained legal advice on that subject. That is a matter that they are pursuing actively. The administrators also report, by way of Mr Worrell's affidavit, claims made by investors and clients and media coverage concerning the same and the prospect of the same. They are not yet in a position to give any further assistance to the Court or creditors concerning those claims. The administrators have already travelled to Townsville and undertaken considerable investigative work with Storm Financial's two chief financial officers, and also with the directors of Storm Financial. On 12 January 2009, in the exercise of the judgment consigned to them as administrators, the administrators determined to close Storm Financial's business. In so doing, they were sensitive to the effects such a course had on the employees. The administrators report that, though unpleasant, the decision was one which, having regard to the financial information that they had obtained, was necessary; indeed, it seems, almost inevitable. On 13 January 2009, the administrators issued an advice to creditors regarding their appointment as voluntary administrators and convening the first meeting of creditors. That meeting was held on 20 January 2009 in Brisbane. At that meeting, there were no resolutions made by creditors. Thus, the administrators remained in office and there was no formation of a committee of creditors. The operation of s 439A in the circumstances of this case is such that, unless extended, the convening period as defined will expire tomorrow. The administrators describe, in their affidavit, and at length, the very considerable tasks which have fallen to them and the work which they have undertaken to date. I have no doubt, having regard to this type of administration, the number of clients, the spread of offices and the investigations necessary to prepare a proper report to creditors, that an extension of the convening period is necessary. It will be necessary to reflect shortly about how best to achieve that extension, and on what terms. The administrators describe a number of claims or potential claims. It is not necessary at the moment to detail these other than to note that the administrators have received, up to 3 February, 10 claims for potential professional negligence with damages totalling $5,450,690.43, and 10 claims for prepaid fees totalling $658,915. In the time available, the administrators have not yet been able to make an assessment or adjudication in respect of the validity of these claims. This also is work yet to be done and not, unreasonably, quite impossible to do in the statutory convening period. The investigations the administrators have undertaken to date have also disclosed that on or about 15 December 2008, Storm Financial paid $2 million to Emmanuel Cassimatis and Associates Proprietary Limited, being a company related to Mr and Mrs Cassimatis. Prima facie , at least, that payment was made on the basis that it was a dividend. On 23 December 2008, there was, prima facie , so the administrators' investigations have disclosed to date, a meeting of the directors of Storm Financial in which resolutions were made in relation to the $2 million payment. The administrators are currently investigating whether or not this dividend payment may be a transaction that would be voidable as against a liquidator. They note, very properly, that it may be that the receivers and managers have an interest, pursuant to the Commonwealth Bank's security, in this payment if it were to be recovered. With the assistance provided by ASIC in the proceeding, further detail is to hand in relation to that $2 million dividend payment, at least insofar as controversy concerning it has manifested itself in litigation. In that regard, on 30 January 2009, ASIC instituted proceedings in the Supreme Court of Queensland (No 1020 of 2009) as against Mr Emmanuel Cassimatis, Mrs Julie Cassimatis and Emmanuel Cassimatis and Associates Proprietary Limited respectively as respondents. In those proceedings, ASIC sought injunctive relief requiring the respondents to repay, or cause to be repaid to Storm Financial, the amount of $2 million held by Emmanuel Cassimatis and Associates Pty Ltd in a bank account. Orders have been made in the Supreme Court for the "freezing" of that sum in that account, pending the disposition of that litigation. Directions have also been given for the conduct of that proceeding. The case is to come back to the Supreme Court for directions later this month. At the moment, the administrators are not in a position to make an assessment as to the worth, if any, to creditors that might flow in respect of litigation concerning that $2 million dividend payment, or, indeed, whether it might be in some way informally recovered. This provides yet another reason why an extension of the convening period is warranted. The administrators also report that, though they have not received a formal proposal for a deed of company arrangement, they have held a meeting with Mr and Mrs Cassimatis and their solicitors, Russell and Company. Mr Worrell met those persons on 28 January 2009. Mr Worrell deposes that Mr and Mrs Cassimatis have stated that, if they had sufficient time, they intend to put a proposal to creditors for a deed of company arrangement. Mr Worrell deposes that whilst the proposal concerned is likely to be complex, with many details, legal and commercial, yet to be resolved, the essence of it, at least as he understands it at present, is a proposal by the directors to inject funds into Storm Financial to pursue claims against, potentially, the bank and others. The directors of Storm Financial and their solicitors have stated to the administrators that they need a few weeks to formulate such a proposal in terms capable of being reduced to a deed of company arrangement for consideration by creditors. Mr Worrell deposes that he and his fellow administrator will then need time to review any such proposal, obtain legal advice concerning the prospects of any claim, and report to creditors about that. Mr Worrell has also provided in his affidavit some details concerning the cost that would be entailed in the calling of a creditors' meeting by way of giving due notice to those concerned. He further deposes as to a rationale behind his seeking a period of "up to" 90 days. He is, understandably for a practitioner of his experience, sensitive to the competing interest of creditors that any delay might cause them prejudice. His view is that provision for "up to" 90 days allows a degree of flexibility, which would not otherwise be available in the process contemplated by s 439A(2) and s 439A(5) , where one finds a strict requirement as to when the meeting can be held, by reference to the expiry of the convening period. Mr Worrell deposes that if the matters for which the extension is sought are addressed in a shorter period of time than currently anticipated, he will immediately look to convene a meeting of creditors. In other words, if able to do so, he will convene that meeting earlier than the 90-day extension. He does not wish to prolong the process of administration any longer than necessary. For its part, ASIC has voiced a concern in relation to the length of the extension proposed. ASIC's concern is derived from the object of Pt 5.3A of the Act. Particular emphasis is made on behalf of ASIC to the statutory intent that the process of administration not be unduly elongated. I should note that, apart from giving notice to ASIC of this proceeding, the administrators also gave notice to the receivers and managers. The latter have notified the administrators that, at least for the present, they do not propose to take part in the application. That course of notification was entirely appropriate behaviour on the part of the administrators. It is well understood that in complex administrations these two objectives can often be in collision. If they are in collision then, in many cases, priority will be given to obtaining sensible information and advice from the administrators to enable the creditors to have the material before them to make an informed decision. He used the term, prosaically with respect, a "substantial stretch of the statutory provisions" to describe it. His Honour noted that extensions of the order propounded in that case had been granted in other cases. In the result, his Honour reached the view that it was too early to commit to such a lengthy period before the creditors had what he described as "any real say" in the matter. Other courses which can be taken are, if a case is made out, to utilise section 447A to extend the period for which the creditors can adjourn the meeting pursuant to section 439B or to utilise section 447A to grant a further extension of the convening period under section 439A. The latter course has been taken in a number of matters. It seems to me that would be the appropriate course to be taken in these matters if necessary. In the result, his Honour came to grant an extension of up to 90 days, as had been sought by the administrators, rather than to adopt a form of order akin to that made in Hayes' case. Regard to his Honour's reasons for judgment at para 27 and para 28 discloses that there were three particular reasons why, in the circumstances of that case, Jacobson J determined to grant an extension of up to 90 days to the administrators rather than to make an order similar to that made in Hayes' case. In this case, by way of contrast, there is no such sale process. (b) The second reason evident in Mentha was that there was a disposition, sworn, it seems on behalf of the administrators, to convene a meeting in a shorter period of time than currently anticipated if the sale process concerned were able to be completed beforehand. Here, the administrators have a disposition likewise to convene a meeting earlier if, in their judgment, there is no advantage in delaying that particular meeting to the maximum permitted by the extension primarily sought. I have no doubt that that particular statement is one seriously made by responsible practitioners. In that sense, there is a similarity as between this case and Mentha , although, again, the occasion for the foreshortening is not, as it was in Mentha , the prospect or contingency of an earlier than anticipated completion of a sale process, but rather that of an earlier than anticipated completion, or at least practical completion, of investigations considered reasonably necessary. (c) The third reason found in Mentha was that the administrators considered that there was sufficient cashflow to enable the post-appointment liabilities to be met. Here, by way of contrast, the administrators have determined not to continue the trading operations of Storm Financial. In that sense, the outgoings, by way of wages and the like, have ceased upon the termination of staff. Nonetheless, the position, it seems to me, is different from Mentha in the sense that one does not have here the cost neutral situation of a business being continued and preserved for the purpose of sale by administrators. There are, thus, distinguishing features as between that which motivated, in what was undoubtedly a complex administration in Mentha , the granting of an extension of up to 90 days and the present case. Recognising this, the administrators, by way of an alternative, submitted that the Court might instead make orders which, in effect, hung off the receipt or otherwise of a written proposal for a deed of company arrangement on or before 23 March 2009. If such a proposal were not received by that date, the submission was that the convening period be extended to 7 April. If such a proposal were received by the date suggested, the submission was that the convening period then be extended to 7 May 2009. In a sense, the administrators and ASIC share a concern in relation to any proposal for a deed of company arrangement. That is that there is a need for the persons who would promote such a deed - be they the directors, insurers of Storm Financial or others - to act with the speed and dispatch envisaged by Parliament in the enactment of Pt 5.3A. A leisurely process is not, in any way, envisaged by Parliament. The question becomes whether or not the alternative proposal on behalf the administrators achieves a necessary or desirable degree of expedition in that regard or whether it might be better, as ASIC has submitted, to adopt a course similar to that undertaken in Hayes' case, ie, to fix, by way of an extension, a relatively short further period, but to make provision for the further extension of that period? Obviously enough, in the context of any further extension, the receipt by the administrators of a detailed proposal for a deed of company arrangement would be a material consideration. A concern which I have in relation to the alternative proposed by the administrators is that it may admit of some debate as to what constitutes a written proposal for a deed of company arrangement in the order as proposed, and further that it may admit, at the behest of the directors or some other promoter of a deed, of an extension of the administration period to 7 May 2009 in respect of a deed which one might regard as but superficial in its content. Reflecting upon these considerations, the complexity of this particular company's operations, their spread, the need for an adequate report to be made to creditors and the statutory objects involved, it seems to me that the interests of creditors are best served by at least making provision for the prospect of a relatively early decision by them in relation to the choices offered under Pt 5.3A , while at the same time giving the administrators some further weeks to undertake their necessary task of administration. It seems to me that the balance described in the authorities is best achieved, in the circumstances of this difficult and controversial administration, by the making of an order extending the convening period in the terms as proposed by ASIC. The order that I shall make therefore will be as per the draft submitted by ASIC, save that the date for mention will be 11 March 2009 rather than 12 March 2009. The further direction I make is that the order concerned be passed and entered forthwith. I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. | administration application to extend convening period for creditors' meeting whether circumstances justify extension extension granted corporations law |
On 1 December 2003, Senator Automation Pty Limited (Senator) applied for registration under the Act of two trade marks, which would be Nos 980194 and 980195 (Senator's Marks). Representations of Senator's Marks are set out in Parts 1 and 2 , respectively, of Schedule 2. 2 The Opponent opposed the registration of Senator's Marks under Part 5 of the Act. On 28 July 2006 a delegate of the Registrar of Trade Marks concluded that the grounds of opposition relied on by the Opponent were not established and directed that Senator's Marks may proceed to registration. However, the delegate also directed that registration would not occur until any appeal had been decided or discontinued. By notice of appeal filed on 17 August 2006, the Opponent appealed to the Federal Court from the decision of the Registrar's delegate. The appeal is before me today. 3 Section 52 of the Act provides that, if the Registrar has accepted an application for the registration of a trade mark, a person may oppose the registration by filing a notice of opposition. Under s 55 , the Registrar must, after giving the opponent and the applicant an opportunity of being heard on the opposition, decide either to refuse to register the trade mark or to register the trade mark, having regard to the extent, if any, to which any ground on which the application was opposed has been established. 4 Section 57 of the Act provides that the registration of a trade mark may be opposed on any of the grounds on which an application for the registration of a trade mark may be rejected. Section 44 relevantly provides that an application for the registration of a trade mark must be rejected if that trade mark is deceptively similar to a trade mark registered by another person in respect of similar goods. Section 10 provides that, for the purposes of the Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion. In addition, s 60 provides that the registration of a trade mark in respect of particular goods may be opposed on the ground that another trade mark had, before the priority date for the registration of the first trade mark, acquired a reputation in Australia and, because of the reputation of that second trade mark, the use of the first trade mark would be likely to deceive or cause confusion. Those are the grounds on which the Opponent now opposes the registration of Senator's Marks. 5 Section 56 of the Act provides that an applicant or an opponent may appeal to the Federal Court from a decision of the Registrar made under s 55. An appeal to the Court under s 56 requires a hearing de novo by the Court without any presumption in favour of the correctness of the Registrar's decision from which the appeal is brought. 6 The first question that requires consideration by the Court is whether Senator's Marks so nearly resemble the Opponent's Mark that they are likely to deceive or cause confusion. Related to that question is whether the use of Senator's Marks would be likely to deceive or cause confusion because of the reputation of the Opponent's Mark. While the two questions are not precisely the same, they raise the same issues as to likelihood of deception or confusion. That involves a comparison of Senator's Marks with the Opponent's Mark. That, in turn, involves a comparison between the marks, assuming notional use of both. Such notional use means a normal and fair use for all goods covered by the marks under consideration. 7 To determine deceptive similarity, the marks must not be placed side by side. Rather, consideration must be given to any common net impression inferred from the two marks. In making the comparison that is required, the Court must consider all surrounding circumstances, including the circumstances in which the marks will be used and the circumstances in which the goods to which they relate will be bought and sold, together with the character of the probable acquirers of the goods. 8 The Court must first estimate the effect or impression produced on the mind of consumers by the Opponent's Mark, being the impression or recollection that would be carried away and retained by the consumer. In making such an estimate, it is permissible to give more or less weight to particular features of the mark in recognition that one component may be more striking and memorable than another. Marks are remembered by general impression or by some significant detail, rather than by photographic recollection of the whole. 9 The Opponent's Mark is registered in Class 3 in respect of soaps, cosmetics, hair lotions, shampoos, make up, make up removers, shaving and aftershave preparations, suntan preparations and all other goods in the class. Such goods are likely to be sold from a shelf in supermarkets and pharmacies. 10 The Opponent's Mark is a combination of three words in a particular typescript together with an underlining. An endorsement in respect of the Opponent's Mark provides that registration is to give no right to the exclusive use of the French words " EAU THERMALE ", which, the endorsement says, may be translated as " THERMAL WATER ". 11 The evidence indicates that the Opponent's Mark is derived from the name of a small town in France. Promotional material distributed by the Opponent asserts that in 1736 the properties of thermal spring water near the town of Avène were discovered. The promotional material asserts that the beneficial properties of Avène thermal spring water were officially validated by the French National Academy of Medicine in 1874 and that in the same year the thermal spring was officially recognised as a " public benefit " site. 12 The applications in respect of Senator's Marks are for registration in Class 3 and Class 35. Relevantly, the goods in Class 3 include " soaps, perfumery, essential oils, cosmetics, hair lotions and dentifrices ". Trade Mark 980195 is for a single word " afene ". Trade Mark 980194 has three elements being the word " afene ", together with a stylised capital " A " and three Chinese characters. An endorsement in respect of Trade Mark 980194 states that Senator has advised that the Chinese characters may be transliterated as " Ai Fu Ni ", which may be translated into English as " girls who love hibiscus" . 13 The Opponent points out that the word " Avène " is the significant detail of the Opponent's Mark that would be carried away and retained by a consumer. That is because that word is given significant prominence in the way in which it is depicted in the Opponent's Mark and denotes the origin of the Opponent's goods. The Opponent also says that the words " EAU THERMALE " are descriptive of a characteristic of its goods and that, therefore, that part of the Opponent's Mark may be discounted. I accept the Opponent's contentions in that regard. 14 The Opponent also claims that the word " Avène " is a coined word and therefore has no meaning that can be readily ascribed to it as an aide memoire by the public. In the light of the promotional material to which I have referred, that is a curious submission. While the word has no meaning in English, it is not a coined word but is a French place name. 15 The Opponent also asserts aural similarity between the words " Avène " and " afene ". The Opponent suggests that the only difference is the substitution of the letter " f " for the letter " v " and the use of a grave accent. The Opponent suggests that the two words would, nevertheless, be pronounced similarly. 16 However, a consumer with any knowledge of French would pronounce " è " more or less in the same way as " air ". On the other hand the natural pronunciation of " afene " would be to pronounce the letter " e " in the same way as the middle " e " in the word " scene ". I do not consider that the natural pronunciation of the second vowel of the two words is similar, quite apart from the difference in the voiced and unvoiced fricatives " v " and " f ". I do not consider that any aural impression created by the Opponent's Mark is such that aural use of either of Senator's Marks is likely to deceive or cause confusion. 17 The visual impression created by the Opponent's Mark is of a phrase in the French language. It is in a particular typescript and is underlined. While the words " EAU THERMALE " may be descriptive, they are nevertheless part of the Opponent's Mark. 18 I do not consider that Trade Mark 980194 has any visual similarity to the Opponent's Mark. The stylised capital " A " is fairly dominant and the Chinese characters suggest no connection with the French language. The word " afene " may have some meaning in another language, but it certainly does not suggest any connection with the French language. I do not consider that there is any prospect that a consumer who had an impression from the Opponent's Mark of a phrase in French would be likely to be confused or deceived by seeing Trade Mark 980194. 19 The dissimilarities between the Opponent's Mark and Trade Mark 980195 lead to a similar conclusion. While each has a five letter word, the Opponent's Mark consists of three words, which are clearly recognisable as French. The word " afene " is not recognisable as a word of any particular language. The letters of the two five letter words differ in the ways that I have indicated, namely, one has " v " and the other has " f " and the Opponent's Mark has a grave accent over the middle " e ". Further, the five letter word in the Opponent's Mark begins with an uppercase " A " whereas the word in Trade Mark 980195 begins with a lowercase " a ". The underlining of the word " Avène " in the Opponent's Mark is part of the mark, while there is no underlining in Trade Mark 980195. While the underlining is not a matter of any significance, it is nevertheless a distinguishing factor. 20 The most significant impression that would be carried away by a consumer from the Opponent's Mark is the Frenchness of the expression, which is not reproduced in Trade Mark 980195. I do not consider that there is any likelihood of confusion or deception by reason of the use of Trade Mark 980195. 21 In the light of the conclusion that I have reached, it is not necessary to consider a further question that would arise in relation to opposition based on s 60 of the Act. Senator disputes that the Opponent has established, on the balance of probabilities, that it had a reputation, as at 1 December 2003, the date when Senator applied for registration of its marks, that the use of Senator's Marks would be likely to confuse or deceive having regard to that reputation. 22 The evidence of reputation of the Opponent in relation to its mark is somewhat skimpy. Mr Chris Van Niekerk is the General Manager of Douglas Pharmaceuticals Australia Limited. In a statutory declaration relied on by the Opponent, Mr Van Niekerk said that, since approximately September 2003, his company has " commercialised ' goods in Australia under the trade marks " Avene " and " Eau Thermale Avene ". He says that " the mark is applied to a wide range of personal care goods " and that the range of products has been substantially and continually available since his company began " commercialising " the products in 2003. It is significant that Mr Van Niekerk spells the word without the grave accent. In any event, the relevant date is 1 December 2003, when Senator lodged its applications. 23 The Opponent also relied on an affidavit of Mr Bruno Hostelet, the Asia-Pacific Regional Director of the Opponent. Mr Hostelet said that the Opponent's products under the Trade Mark " AVENE ", without the grave, were sold into Australia before September 2003 and distributed to retailers by the Opponent's Australian subsidiary. He produced invoices for the supply of products in Australia by the Opponent's subsidiary in the months of February, May and December 2002 and April, July and August 2003. 24 However, there was no evidence as to the actual distribution of the Opponent's products to the public or as to the manner in which such goods were sold to the public. While both the statutory declaration and the affidavit referred to the trade mark " Avene ", without the grave accent, there is no evidence at all that that word has been used in connection with the Opponent's products without the words " EAU THERMALE " and without the grave accent. 25 I would be disposed to conclude that the Opponent has not established, on the balance of probabilities, that it had a relevant reputation in the Opponent's Mark as at 1 December 2003. There is certainly no evidence that it had any reputation in the mark " Avene ". However, as I have said, it is unnecessary for me to determine that question in view of the conclusion that I have reached that there is no likelihood of confusion between the Opponent's Mark on the one hand and Senator's Marks on the other. 26 It follows that the Opponent's appeal should be dismissed with costs. Senator asks for an order that the costs of the appeal be paid on an indemnity basis. In support of that application it relies on a letter written by its solicitors to the Opponent's solicitors on 14 December 2006. By that letter, Senator's solicitors said that its client was confident that the appeal would be dismissed and offered to settle the proceeding on terms that the matter be dismissed with no order as to costs. There is no element of compromise of the substantive claim in the offer, but simply an indication of preparedness to forego costs. I do not regard the appeal as being so hopeless that it was unreasonable to prosecute the appeal after that offer was made. While I have concluded that the appeal should fail, I do not regard the Opponent's prosecution of the appeal as being so unreasonable as to justify a special order as to costs. I therefore decline to make any special order. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. | trade marks appeal to federal court from decision of registrar of trade marks marks applying to " personal care goods " whether marks likely to mislead or cause confusion where word significant detail of mark whether aural similarity between words reputation. intellectual property |
It is a matter of concern that his entitlement to be granted that visa has not yet been finally determined. 2 A delegate of the then Minister for Immigration and Multicultural Affairs in October 1997 refused to grant the applicant a protection visa. This decision was affirmed by the Refugee Review Tribunal. However, the decision of the Tribunal was set aside on judicial review and the matter remitted to the Tribunal for redetermination. The Tribunal, constituted by a different member, again reviewed the decision of the delegate and again affirmed it. The appellant's application to the Federal Magistrates Court for judicial review of this decision of the Tribunal was dismissed. The appellant has appealed to this Court from the judgment of the Federal Magistrates Court. 3 For the reasons set out below I have concluded that the appeal should be allowed. In that statement he claimed to have been born in Kandivli, Bombay-67 in Maharashtra State, India. He described himself as belonging 'to the Sindhi Community living in the midst of the local Maharashtrians' . 7 The delegate was not satisfied that the appellant had a genuine fear of Convention related persecution if he should return to India. He drew a negative inference from the fact that, despite having been in Australia for almost three years, the appellant did not apply for a protection visa until he was taken into detention as an unlawful non-citizen. The delegate found no evidence that Shiv Sena targeted low caste Hindus/Sindhis and concluded that, if the appellant and his family had suffered at the hands of Shiv Sena, it was not for a Convention reason. The delegate rejected as fanciful the claim that 'the Indian government encourages fundamentalist people to kill and eradicate low caste people' . We were actually not ... welcomed by the community because we were low caste people and we had been facing this problem when my father was alive for many years. Please, this is very important and you need to listen to it. If I don't tell you what I'm going to tell you, you may not have the benefit of some of my findings and that's not fair so you do need to hear what I have to say. In fact there was a report that one of the leaders in the Shiv Sena that ran the party was in fact a Sindhi. I acknowledge that just because I couldn't find reports of persecution that does not necessarily mean there isn't. On the other hand the reports I found did not describe a persecutory picture to me. Now, you've been here for almost 13 years and things have changed in India. What I need to think very carefully about is whether being a Sindhi without more means that there is a real chance of you being persecuted. The legal adviser said there are many castes within the Sindhi community. He explained that although 'Sindhis are seen as outsiders coming from Pakistan' , the appellant's claim to be entitled to a protection visa was based on fear of persecution as a Dalit; that is, as a low caste person. He has now claimed that he is also a Dalit and fears persecution on this basis as well. In the course of the hearing, the applicant contended that being Sindhi and Dalit is essentially the same as both groups are low caste. As can be seen from [5] above he claimed that the Shiv Sena hooligans, the fundamentalist Hindu religious groups, 'hated [him] and [his] families being Sindhi community since we belong to the low caste . ' (emphasis added). The delegate whose decision the Tribunal was reviewing had plainly understood that the appellant claimed to fear persecution because he belonged to the low caste (see [6] above). Further, as discussed below at [29]-[30], the transcript of the Tribunal hearing when read as a whole does not support the statement that the appellant 'contended that being Sindhi and Dalit is essentially the same as both groups are low caste' . 17 The Tribunal thereafter turned its attention for the first time to the position of Dalits in India. In Amnesty International, India's Unfinished Agenda: Equality and Justice for 200 Million Victims of the Caste System (6/10/05), it is reported that "... dalits are routinely subjected to beatings, mutilation, murder, rape, and destruction of property by members of the upper-castes and the police, a culture of impunity ensures that most of the perpetrators go unpunished ... Abuses against dalits are numerous and take many different forms ..." . In consideration of the evidence as a whole, the Tribunal is not satisfied that being low caste (Dalit and Sindhi), without more, means that there is a real chance of the applicant being persecuted as contemplated by the Convention, by the Shiv Sena, and/or the Indian authorities, and/or upper caste people. There are many Indian low caste people who achieved eminent status in India; Not all low caste people are persecuted in India. The Sindhi community in Maharashtra State are not generally ill-treated. In Maharashtra, the Sindhis have not figured prominently within the xenophobic discourse of the Shiva Sena. Some Sindhis have even held senior positions in the Shiva Sena membership. In consideration of the evidence as a whole, whilst the Tribunal is satisfied that the applicant has suffered what would amount to serious harm as contemplated by the Act, there have been changes, especially in relation to the Shiv Sena and the Sindhi community in Maharashtra State, over the eleven year period during which the applicant has been in Australia which leads the Tribunal to be satisfied that there is no real chance of the applicant being persecuted if he were to return to his State or indeed any other parts of India. This version of the appellant's application for judicial review of the decision of the Tribunal is not reproduced in the Appeal Book prepared for this appeal by the Minister although it does appear in the Appeal Book prepared by the appellant. The further amended application for judicial review identified three grounds of review. All other country information provided to the Tribunal by the [appellant] support this as well. The [appellant's] solicitor appears to have assumed a general knowledge of this on the part of the Tribunal, and the transcript and decision of the Tribunal suggests that it had such knowledge. This Court does not have such a knowledge, and neither party has sought to provide it to the Court to assist its understanding of the evidence. I do not accept that the applicant himself, or his solicitor, presented to the Tribunal a separate claim requiring the Tribunal to isolate a subgroup of Dalit people, whether Sindhi or otherwise, and address them separately. His Honour was satisfied that, when the sentence in which the Tribunal referred to many low caste people achieving eminent status in India and stated that not all low caste people are persecuted in India was read in context, it was intended to provide some explanation of the preceding sentence. For convenience these two sentences have been highlighted in the passage from the Tribunal's reasons for decision extracted in [18] above. 23 His Honour found that the Tribunal's ultimate conclusion was framed in terms of the 'real chance' test and did not reveal error of law. That conclusion is set out in the final eight lines of the passage extracted in [18] above. In written submissions to the Court before the commencement of the appeal, the appellant's representative indicated that the third ground of appeal set out in the notice of appeal would not be pursued. one of the divisions or social classes into which the Hindus are separated and by which privileges or disabilities are inherited. Judges regularly refer to authoritative dictionaries such as the Macquarie Dictionary for the purpose of determining or confirming the meaning of English words. Indeed, the common law rule is that evidence is not admissible for the purpose of interpreting ordinary English words ( Camden v Commissioners of Inland Revenue [1914] 1 KB 641; Cross on Evidence , 6 th Australian Edition at [11010]). It is unnecessary to give consideration here to whether this rule has survived the enactment of the Evidence Act . 28 It was open to the Federal Magistrate to refer to the above definitions. It goes without saying that it has always been open to the Minister's legal representatives to refer to them. 29 The above definitions of 'Sindh' and 'Sindhi' confirm that an assertion by a citizen of India that he is a Sindhi is an assertion of geographic significance; it is a statement that his, or his family's, geographic origin is in Sindh province which now forms part of Pakistan. The above definition of 'caste' confirms that an assertion by a Hindu that he is of a particular caste is an assertion of social significance; it is a statement as to the social class into which, as a Hindu, he was born. The Tribunal plainly understood that the appellant claimed to be of the Dalit caste and that Dalit is a low caste. 30 As the words Sindhi and Dalit denote personal attributes of entirely different characters, it would be surprising if the appellant had contended before the Tribunal that 'being Sindhi and being Dalit is essentially the same' (see [12]-[13] above). To determine whether or not he did so assert it is necessary to review the transcript of his Tribunal hearing. 31 A transcript of evidence is not to be analysed and construed as though it were a legislative instrument. The spoken words of even well-educated, articulate and confident individuals frequently evidence errors of syntax. A visa applicant responding to questions from a Tribunal member, even when he or she has the assistance of an interpreter, cannot be assumed to enjoy these advantages. Where a transcript is not proof-read by the witness whose oral evidence it records, its punctuation will reflect judgments made by the transcript provider rather than the witness. The appropriateness of those judgments may well prove contestable --- particularly if the transcript provider has limited understanding of the subject matter of the evidence. 32 The appellant is an educated man but the transcript of his Tribunal hearing records the Tribunal member expressing concern about his being anxious. The transcript additionally records the appellant's legal advisor, who understands some Hindi, questioning whether the appellant's answers were being completely interpreted. On occasions the appellant responded to the Tribunal member's questions in English, a language in which he is apparently not fluent. Having regard to all of these considerations, the true import of the appellant's evidence to the Tribunal is to be understood having regard to the totality of that evidence. It is not appropriate to isolate any single answer recorded in the transcript and construe it devoid of the context in which it is found. Nor is it appropriate to attribute undue significance to punctuation in the transcript. 33 Having read carefully the transcript of the appellant's evidence to the Tribunal I am satisfied that he did not contend that 'being Sindhi and Dalit is essentially the same' (see [12] above). Nor do I consider that anyone who understood the respective denotations of the words Sindhi and Dalit could reasonably have concluded that he did (see [8]-[11] above). I have your written submissions. Am I right in thinking that your client understands the Tribunal to have proceeded on the basis that the expression "Sindhi" and "dalit" essentially meant the same thing? There is a discernible difference between the two. 36 After confirming with the appellant's legal representative my understanding that being a Sindhi is to be someone who comes from the Sindh, and that a Sindhi could be of high caste, I asked counsel for the Minister if she would like time to consider her client's position with respect to the appeal. Counsel indicated that she might but expressed criticism of the appellant's failure to call expert evidence before the Tribunal as to the distinction between being a Sindhi and a Dalit. She submitted that the appellant had first claimed to be a Sindhi and then sought to change his position by reformulating that claim to a claim to be a Dalit with the consequence that his claims did not make much sense. She further submitted that the appellant's legal representative had failed in his attempt to clarify the position, that the appellant's grounds of appeal were unclear, and that the appellant's legal representative could not 'simply adopt propositions [identified by the Court] simply because he perceives that that may be something that [the Court] might look upon, favourably. It would have been both wiser and more courteous in the circumstances for her to have refrained from advancing submissions of the above character until she had taken the opportunity to confirm the meaning of the terms Sindhi and Dalit and, so informed, to review (a) the transcript of the Tribunal hearing, (b) the appellant's application to the Federal Magistrates Court, and (c) his notice of appeal, with a fresh and open mind. 38 Ultimately the hearing of the appeal was adjourned to allow the Minister to further consider his position. 39 The hearing of the appeal resumed approximately four weeks later. 40 At the commencement of the resumed hearing the appellant's legal representative sought to read two affidavits. The first was sworn by Associate Professor Rajagopalaiyer Jayaraman of the School of Humanities and Languages, University of Western Sydney. It contained further evidence that the appellant sought to adduce on his appeal. The second was sworn by an employee of the appellant's solicitors. It contained evidence that was relevant only to the application to adduce further evidence on appeal. The second affidavit explained the relevance of the affidavit sworn by Professor Jayaraman (ie that it concerned the nature of the Sindhi community in India and explained the caste system) but did not explain why evidence of this kind had not been adduced before the Federal Magistrates Court. The appellant's legal representative advised the Court, as I understood him, that the need to adduce such evidence below had not been recognised. 41 Counsel for the Minister opposed the receipt into evidence of the affidavit evidence of Professor Jayaraman. She did so on two bases. First, that it had not been shown that the evidence was not available, and could not with reasonable diligence have been obtained, at the time of the hearing in the Federal Magistrates Court. Secondly, that the appellant had provided no explanation for not adducing the evidence before the Federal Magistrates Court and for not making an earlier application to this Court to adduce further evidence on appeal (see O 52 r 36 of the Federal Court Rules ). To the extent that my friend has attempted to provide your Honour with evidence from the bar table today, he seems to indicate that for whatever reason he didn't think it was important in the Court below and, as a result, some of [sic] sort of forensic decision was taken not to adduce that evidence. She argued that the appellant now sought to highlight the distinction between being a Sindhi and being a Dalit when no ground of complaint of this kind was relied on before the Federal Magistrates Court. 44 The latter of these two submissions is, in my view, without substance. It may be that counsel for the Minister overlooked that the Federal Magistrate granted the appellant leave to file a further amended application. There is complete consistency between the first two grounds of that document and the appellant's grounds of appeal to this Court. 45 The submission identified in [42] above is capable of being understood as challenging the frankness of the legal representative of the appellant and as suggesting that a positive decision had been made that it would not be in his client's interest to adduce evidence before the Federal Magistrates Court to clarify the distinction between Sindhi and Dalit . If the submission is properly to be understood in this way it ought not, in my view, to have been made. Nothing has come to my attention which has caused me to conclude other than that the appellant's legal representative has consistently sought to draw to the attention of decision-makers in this matter the distinction between being a Sindhi and being a Dalit. That he may not have appreciated until late that expert evidence might be required to elucidate the distinction does not strike me as in any degree unlikely. I refer particularly to the content of [25]-[27] above. Section 27 of the Federal Court of Australia Act 1976 (Cth) provides that, in an appeal, the Court should have regard to the evidence given in the proceeding out of which the appeal arose and has power, in its discretion, to receive further evidence. 47 Order 52 r 36 of the Federal Court Rules , subject to any dispensation from compliance (see O 1 r 8), governs the practice of the Court where further evidence is sought to be adduced on appeal. Ordinarily the Court requires an application to adduce further evidence on appeal to be supported by an affidavit that explains why the further evidence was not adduced below ( Fodare Pty Limited v Official Trustee in Bankruptcy [2000] FCA 1721). However, I accept the submissions of the appellant's legal representative that the circumstances in which this Court, in the exercise of its appellate jurisdiction, may receive evidence not adduced below are to be determined as a matter of statutory construction rather than by reference to common law principles ( CDJ v VAJ [1998] HCA 76 ; (1998) 197 CLR 172 per McHugh, Gummow and Callinan JJ esp at [100]-[102]). The interests of justice must always be the paramount consideration ( State of Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146 at 155). 48 Having regard to the subject matter of the proceeding with which this appeal is concerned (i.e. a decision as to the entitlement of the appellant to remain in Australia where he has lived for well over a decade), the fact that the evidence sought to be adduced is not disputed by the Minister, and the nature of that evidence (i.e. that it confirms and expands upon information available to any person able to consult the Macquarie Dictionary), I consider it appropriate to receive the further evidence contained in the affidavit of Professor Jayaraman. 49 Professor Jayaraman has been engaged in academic work in Australia for 30 years. He holds a PhD and Master of Arts degrees from Delhi University, India and teaches in a number of discipline areas including South Asian (Indian Subcontinent) Studies. He also drew attention to the fact that he was a Sindhi; that is, that to some degree he is an outsider in his home state of Maharashtra. However, his legal representative, perhaps because of the provisions of s 91R(1) of the Migration Act 1958 (Cth), sought to make clear to the Tribunal that the appellant did not advance a claim to be entitled to a protection visa on the basis that he was a Sindhi. 51 In the circumstances the Tribunal was required to determine whether low caste Hindus (ie Dalits) were capable of constituting a social group for the purposes of the Convention Relating to the Status of Refugees 1951 as amended by the Protocol Relating to the Status of Refugees 1967 (together 'the Convention'). If it answered that question affirmatively, it was required to determine whether the appellant was a member of that social group. If it answered that question affirmatively, it had then to deal with the questions whether the appellant feared persecution if he returned to India, whether his fear was well-founded and whether his fear was by reason of his membership of the social group constituted by Dalits ( Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 ; (2003) 197 ALR 389 per Gummow and Callinan JJ, with whom Hayne J agreed, at [26]). 52 The reasons for decision of the Tribunal reveal that it did not follow the above process of reasoning. Rather it either accepted or assumed that the appellant was a member of a social group for the purposes of the Convention. It seems that the social group that it had in mind was either constituted by, or included in its membership, both Sindhis and Dalits as it proceeded on the basis that it was essentially the same to be a Sindhi and a Dalit. It then had regard to information concerning the treatment in India of members of the Sindhi community, including information which suggested that, generally speaking, the Sindhi community in Maharashtra State is not ill-treated. It thereafter noted, and apparently accepted, an Amnesty International report that Dalits 'are routinely subjected to beatings, mutilation, murder, rape, and destruction of property' . In doing so the Tribunal misunderstood and failed properly to deal with the claim advanced by the appellant. The social group of which the appellant is to be understood to have claimed membership was constituted by Dalits only; it did not include all Sindhis. Dalits and Sindhis are not the same and, as I have concluded above, the appellant did not assert that they are the same. In proceeding as it did the Tribunal constructively failed to exercise its jurisdiction because it did not address the claim advanced by the appellant ( Dranichnikov 197 ALR at [25]-[32]). 54 In retrospect it can be seen that both the Minister and the appellant could have provided greater assistance to the Federal Magistrate. His Honour would almost certainly have benefited from evidence of the kind now contained in the affidavit of Professor Jayaraman. However, more informal ways of clarifying the meaning of the terms Sindhi and Dalit were open to the parties. 55 For the reasons outlined above his Honour erred in concluding that the Tribunal addressed the claim advanced by the appellant. The first ground of appeal is made out. On the assumption, which is contrary to my finding, that the Tribunal did recognise that being a Sindhi and being a Dalit was not essentially the same, it made no finding as to why, having regard to the Amnesty International report which it apparently accepted, the appellant did not have a well-founded fear of persecution as a member of the social group constituted by Dalits. The explanation for its apparent failure to apply the real chance test in this regard is to be found, in my view, in its failure to distinguish between the two social groups, Sindhis and Dalits. In lieu thereof it will be ordered that orders issue in the nature of certiorari quashing the decision of the Tribunal and in the nature of mandamus requiring the Tribunal to determine the appellant's application for review of the decision of the delegate of the Minister according to law. The first respondent will be ordered to pay the appellant's costs in the Federal Magistrates Court and on appeal. I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson. | appellant claimed in his protection visa application to fear persecution because he was low caste discussion at tribunal hearing as to whether appellant claimed persecution on basis of being a sindhi or a dalit (low caste) whether tribunal misunderstood distinction between being a sindhi and a dalit whether tribunal considered appellant's claim to fear persecution on basis of being a dalit whether further evidence permitted to be received on appeal regarding the meaning of the terms sindhi and dalit held: further evidence received on appeal tribunal failed to address the claim advanced by the appellant migration |
Under s 36(2) of the Act the criterion for a protection visa is that the applicant for the visa is (relevantly) a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol (meaning, in accordance with s 5(1) , the 1951 Convention relating to the Status of Refugees and the 1967 Protocol relating to the Status of Refugees). Section 474 of the Act protects "privative clause decisions" (defined to include decisions with respect to protection visas) from challenge other than on the grounds of jurisdictional error. When the matter was called for hearing this morning the appellant did not appear. The Minister sought summary dismissal of the appeal under s 25(2B)(bb)(ii) of the Federal Court of Australia Act 1976 (Cth) which permits summary dismissal if an appellant fails to appear at a hearing relating to the appeal. In support the Minister tendered two letters (one from the Court Registry dated 8 January 2009 and one from the Minister's solicitors dated 4 February 2009) notifying the appellant of the hearing and advising of the possible consequences of a failure to appear. I am satisfied that the appeal should be dismissed by reason of the appellant's failure to appear. I am also satisfied that, in any event, the documents relating to the appeal do not disclose any jurisdictional error. My reasons are as follows. The appellant is a citizen of Nepal. He arrived in Australia on 6 June 2005 and applied for a protection visa on 30 June 2005. The Minister's delegate refused the application on 1 September 2005. The appellant applied to the Refugee Review Tribunal for a review of this refusal on 6 September 2005. The Tribunal affirmed the decision on 9 November 2005. The appellant sought judicial review of the Tribunal's decision. This Court, on an appeal from the Federal Magistrates Court, quashed the Tribunal's decision by orders dated 15 June 2007 and remitted the application for review to the Tribunal. The Tribunal conducted a further hearing and affirmed the decision under review on 31 October 2007. The appellant again appealed to the Federal Magistrates Court and that Court dismissed the appellant's claim on 25 July 2008. On 13 November 2008 this Court, pursuant to an application for leave to extend time, permitted the appellant to file an appeal against the orders of the Federal Magistrates Court. The appellant's notice of appeal to this Court specifies three grounds which may be summarised as follows: - (i) the Federal Magistrates Court failed to consider the serious nature of the appellant's claims of errors by the Tribunal, (ii) the Federal Magistrates Court failed to consider the effect of the appellant's employment at the Nepalese Embassy in Thailand given that the Maoists are presently in power in Nepal, and (iii) the Tribunal failed to consider the appellant's status as the parent of a child who had been kidnapped and asked to pay a donation. The second ground of appeal may be rejected immediately. The Federal Magistrates Court dealt with (and thus considered) the appellant's claim that his previous employment in an "esteemed position by the Royal Nepalese Embassy" meant that he would be persecuted on return to Nepal by the new Maoist regime. It was open to the Tribunal to proceed on the only independent evidence in this regard available to it (that is, evidence as at the date of the making of its decision). If events in Nepal have subsequently changed in this regard (and the Court is aware of current and recent media reports concerning the formation of a new government in Nepal, and its move from a monarchy to a republic) then such events post date the Tribunal's decision and do not assist in revealing jurisdictional error on its part. But they do not assist the applicant in the current proceedings before this Court. I agree with the conclusion of the Federal Magistrates Court that the appellant's claims about the circumstances in Nepal that postdate the Tribunal's decision cannot found any claim of error by the Tribunal. Insofar as this second ground related to the appellant's position at the Nepalese Embassy and potential profile in Nepal, the Federal Magistrates Court (at [39] to [47]) identified the way in which the Tribunal had dealt with this claim and concluded that the appellant sought an impermissible review of the Tribunal's findings on the merits (namely, that the appellant's position would not mean that the appellant had such a profile as to give rise to a well-founded fear of persecution as claimed). I agree with this analysis, as well as the Court's observations in these paragraphs rejecting the appellant's claims about the Tribunal concluding that the appellant could relocate to India or Kathmandu. As the primary judge said, the Tribunal considered that the appellant would live in Kathmandu if he returned to Nepal and that there was not a real chance of persecution for a reason relating to the 1951 Convention if he did so (being findings open on the material available to the Tribunal). The first ground must also be rejected. The reasons for decision of the Federal Magistrates Court disclose a comprehensive assessment of the appellant's claims of error by the Tribunal. Those reasons also show that the Federal Magistrates Court did not limit itself to the grounds on which the appellant relied but also considered (at [50] to [55]) whether the Tribunal complied with its obligations under s 425 of the Act ("The Tribunal must invite the applicant to appear before the Tribunal to give evidence and present arguments relating to the issues arising in relation to the decision under review") and to give the appellant procedural fairness. The third ground claims that the Tribunal was bound to consider the appellant's status as the parent of a child who had been kidnapped and asked to pay a donation. The Tribunal's reasons for its decision of 31 October 2007 disclose that the appellant attended the further hearing and gave evidence about, amongst other things, the kidnapping of his son which prompted the appellant to move his family to Kathmandu. The Tribunal noted inconsistencies in the appellant's claims about the abduction and concluded that it was not satisfied it had taken place. The Tribunal, having regard to the material available to it, did not accept that the appellant would come to the attention of Maoists if he returned to Kathmandu by reason of the alleged abduction (which it also did not accept occurred) or otherwise. Hence, while the Tribunal accepted that the appellant may come within a social group of Nepalese who have lived and worked overseas there was no factual basis for the Tribunal to consider any alleged social group of parents of children who had been kidnapped and asked for a ransom. It follows that the third ground of appeal cannot be sustained. On either the Tribunal's decision record, or either of the two transcripts before the Court, it is clear that the Tribunal put both issues to the applicant at the hearing, thereby enabling him to address those issues and provide explanations. In this regard, I am satisfied that the Tribunal fulfilled its obligations pursuant to s 425 of the Act, and its obligation in relation to procedural fairness. For the applicant to succeed in this application before the Court, such error would have to be discerned. In these circumstances, the application is dismissed. The Minister sought a fixed costs order in the sum of $3,452 based on the affidavit of Colin Thorpe, solicitor, sworn 9 February 2009. I consider that such an order should also be made. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | application for protection visa migration |
There is, as I have said on previous occasions, no precise formula in determining what is an appropriate level of security, nor the identification of the stages of the litigation in respect of which security should be provided, if it is to be provided on a staged basis at all. 2 In this case there is a need to have regard to the legitimate interests of both the applicant in seeking to pursue what he asserts are his rights, in this case a claimed copyright and remedies for infringement, and those of the respondents who are faced with a litigant residing out of the jurisdiction apparently with no assets in the jurisdiction. The respondents, if successful, could find themselves with a costs order in their favour which they are unable to enforce. 3 The provision of security is rarely, if ever, a complete indemnity against the risk faced by respondents and needs to be pitched at some level which involves a reasonable recognition of the competing interests. In this case the respondents have provided evidence, which is not contested, of costs estimates on a party-party basis with two different figures dependent upon whether the proceedings are to go ahead in Perth or in the Brisbane registry of the Court. In each case there is a division between pre-trial costs and trial costs. The pre-trial costs, if the proceedings were to go ahead in Perth, are estimated at $131,089.50. If they were to go ahead in Brisbane, they are estimated at $124,096.50. 4 The applicant has not been particularly forthcoming about the impact of a security order on his ability to conduct these proceedings. I have an affidavit sworn by his solicitor, Mr Mallon, in which he says that in relation to the suggested figure of $100,000 sought by the respondents, the applicant would need either to sell some of his available assets or borrow or obtain a bank guarantee against the security of those assets. It is not suggested that an order for security for costs would, even at the level of $100,000, have the effect of stifling the litigation in the sense that the applicant would be unable to proceed. The highest it seems to be put in his solicitor's affidavit is that the provision of the security would impose significant additional costs upon the applicant and place significant restrictions upon his personal financial freedom and planning. One can accept, of course, that exposure to an order for the provision of a not insignificant sum of money does have some impact upon a person's financial flexibility, but the quantum of that impact is difficult to judge without a more fulsome account of that person's financial position than has been offered in this case. 5 This is a case in which it is possible that when interlocutory processes have been completed, or in the course of interlocutory processes, there may be a negotiated resolution. I don't think it is appropriate yet to make an order for security to cover the whole of the litigation. I propose to do it on a staged basis covering security for costs up to the point of trial. I will allow liberty to apply if circumstances change to such an extent that a justification can be shown for varying the order that I propose to make. 6 I do not propose to order the full sum of $100,000 which was sought, albeit in respect of the proceedings by the respondents. I will make no distinction between Perth and Brisbane for this purpose as that suggests a false level of precision. It seems to me, having regard to the uncontested estimates of costs, that an appropriate figure is $60,000 up to the point of, but not including, the first day of trial. I propose that the security should be provided, by 26 February 2007, either by way of payment into Court or by way of bank guarantee in a form acceptable to the Registrar. I don't see much point in staying proceedings until then, but would stay proceedings from that date if the security has not been provided, and will give liberty to apply. I will hear the parties on the question of costs of the motion so far as it relates to security. The respondents seek its transfer to the Brisbane Registry. The question of the Registry from which the proceedings should be conducted does not raise matters of high principle. It is essentially a matter of case management and proper recognition of the legitimate interests of each of the parties reflected, in part, in the balance of convenience as between them and, of course, the convenience of the Court and any economies and efficiencies that may attach to one choice or another. These matters used to be more critically dependent upon choice of Registry than they are today and some of the earlier cases about the discretion to transfer from one Registry to another may have to be read in that context, without affecting the underlying criteria that inform this discretion. 8 In this case the applicant resides in the United States and from his point of view it probably makes little difference whether the proceedings have been commenced in Perth or Brisbane save for the fact that he has engaged legal representatives based in Perth. This is not a case in which the respondents are living in the Brisbane CBD. They are in Queensland but as Ms Cochrane points out, there is a degree of geographical dispersion that makes convenience of access to the Registry in Brisbane somewhat academic. The interests at this stage of the proceedings are fairly evenly balanced. 9 Mr Lamb has chosen to engage solicitors, in whom he no doubt has confidence, based in Perth. The respondents have engaged representation in Brisbane. So far as the interlocutory processes are concerned, unless some unusual circumstance occurs, it matters little whether the proceeding is in the Perth or Brisbane Registry because in either event the party not in the home Registry will be able to participate by way of video-link or even teleconference. The Court also has the facility for the electronic filing of submissions and the like and the conduct of litigation, in part, through that. The question of travel between Perth and Brisbane, Los Angeles, Perth and Brisbane, raised by the parties is, in my opinion, of little relevance at this stage of the proceeding. The question of transfer does not impact on the question of the place of the trial nor, ultimately, the judge who conducts the trial. 10 The docket system to which Ms Cochrane has referred offers the advantage of continuity in case management, at least up to the point of trial. While ordinarily the docket judge will hear the trial of the action which he or she has been managing, it is not unusual for there to be cases in which the trial is allocated to another judge for reasons of convenience. So it might be that if this case were not to be transferred but it were thought that it would be most conveniently heard and determined in Brisbane, a judge from the Queensland Registry could hear the case without having been involved in the pre-trial case management. Much will depend upon the geographical distribution of the witnesses and it may be that part of the trial will be conducted in one centre and part in another. It is too early to make a determination about that. 11 So far as the return of subpoenas to produce documents is concerned, production can readily be directed at the Registry, most conveniently located from the point of view of those who have to respond to those subpoenas. Those are all case management matters which can be dealt with in due course. 12 Although this proceeding, in terms of the location of the respondents, might broadly be called a Queensland case from the respondents' point of view, it is not inherently a Brisbane case. The interests of the parties at this stage are fairly evenly balanced. I think it is premature to transfer the matter. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | security natural person applicant outside jurisdiction no assets in jurisdiction limited evidence as to financial position uncontested estimate as to respondents' costs security ordered to point of trial transfer of proceedings proceedings commenced in perth registry respondents in queensland but remote from brisbane applicant represented by perth solicitors respondents represented by queensland solicitors balance of convenience no benefit in transferring proceeding at interlocutory stage motion to transfer dismissed practice and procedure |
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