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In his amended notice of motion filed in Court on 31 March 2009 the applicant moved for the following orders: Pursuant to Order 13 rules 1 and 2 of the Federal Court Rules ("FCR") the applicant have leave to amend "STATEMENT OF CLAIM" filed on 21 September 2007 by filing "AMENDED STATEMENT OF CLAIM" exhibited to "AFFIDAVIT" of Nick Jim Combis sworn on 3 March 2009 and marked with the letter "B" and serving a copy on the respondent within seven (7) days from the making of this order. Pursuant to Order 11 rules 16(a) and (b) of the FCR, paragraphs 10a to 10i of "DEFENCE..." filed by the respondent in this Honourable Court on 6 November 2007 be struck out. The costs of the notice of motion be reserved. Further or other orders as this Honourable Court may seem meet. In her notice of motion filed 19 March 2009 the respondent moved for the following orders: That these proceedings be stayed pursuant to Order 20 rule 5 of the Federal Court Rules as an abuse of the process of the Court. Such further or other Orders as the Court considers appropriate. That the respondent pay the costs of the Application. It is common ground that the key issue for consideration in these proceedings is that raised by the respondent in her notice of motion, namely whether the substantive proceedings should be stayed as an abuse of the process of this Court, in accordance with O 20 r 5 of the Federal Court Rules . The hearing before me to consider the two notices of motion was argued on that basis. It does not appear to be in contention that if the substantive proceedings are stayed, the questions relating to further amendments to the amended statement of claim and the striking out of parts of the defence as raised by the applicant become redundant in this Court. A further question raised by the respondent relating to the application for a stay is whether the whole of the proceedings should be transferred to the Family Court pursuant to s 35A of the Bankruptcy Act . No formal application is before me although Mr Griffin QC submitted that, in light of the circumstances of this case, transfer of the proceedings by this Court to the Family Court would be possible and appropriate (TS pp 58-59). Mr McQuade made no submissions at the hearing as to whether the matter should be transferred to the Family Court, on the basis that it was not an issue before the Court at this time. During the hearing it became clear that, if I were to find against the respondent in respect of the orders sought in her notice of motion, the respondent would not oppose the amendments proposed by the applicant to his statement of claim (TS p 57 l 42 to p 58 l 5). However Mr Griffin QC for the respondent submitted that if the statement of claim was amended the respondent should be entitled to replead her defence. This submission was opposed by Mr McQuade for the applicant. I shall first consider the issue as to stay of the proceedings, and then turn to the balance of the issues raised in these proceedings later in the judgment. Prior to entering into a financial agreement in accordance with s 90C of the Family Law Act on 22 January 2002, Mr Jensen and the respondent held property at 646 Nerang-Broadbeach Road, Carrara ("the Carrara property") as joint tenants. The Carrara property was the matrimonial home of Mr Jensen and the respondent. Pursuant to that financial agreement, Mr Jensen agreed to transfer the interest he held as a joint tenant in the Carrara property to the respondent, and declared that he held that interest on trust for the respondent. On 28 August 2002 a form 1 transfer was executed by Mr Jensen and the respondent transferring the interest of Mr Jensen in fee simple in the Carrara property to the respondent. The consideration identified for the transfer was the provision of a financial agreement by the respondent under s 90C of the Family Law Act . Mr Jensen became bankrupt on 14 February 2006 pursuant to a sequestration order made by the Federal Magistrates Court. The applicant was appointed trustee in bankruptcy to Mr Jensen's estate. By originating application filed in the substantive proceedings in this Court the applicant has sought to set aside the transfer by Mr Jensen of the Carrara property under s 120 and s 121 of the Bankruptcy Act , and consequential orders in respect of the Carrara property. The applicant makes no challenge to the financial arrangement of 22 January 2002, nor is it pleaded that the financial agreement was not one to which Part VIIIA of the Family Law Act applies, or that the agreement failed to comply with requirements of the Family Law Act . In the absence of such a challenge it is not open to the applicant to have the transfer effected by Mr Jensen of his former half interest in the property declared void. By force of the financial agreement the respondent became equitable owner of the land. Under the Family Law Act : financial agreements can only be set aside by the Family Court under s 90K ; financial agreements can only be terminated by the parties pursuant to s 90J ; financial agreements have a special status by reason of the provisions of the Family Law Act . In Official Trustee in Bankruptcy v Mateo [2003] FCAFC 26 ; (2003) 127 FCR 217 the Full Court of the Federal Court held that the effect of consent orders of the Family Court made under s 81 of the Family Law Act pursuant to which the Family Court ordered that the husband transfer his half interest in jointly-owned land to the wife was that the Family Court orders themselves vested in the wife all of the husband's equitable estate in the land. The Full Court also held that the transfer by a person having a bare legal title perfected the title of the equitable owner of the property, was not a transfer of property within the meaning of s 121 of the Bankruptcy Act . The application by the Official Trustee should have been to the Family Court to set aside the orders under s 79A of the Family Law Act . In these proceedings the critical divesting event with respect to the Carrara property was the financial agreement, which resulted in the equitable estate in the Carrara property passing to the respondent in January 2002. The actual transfer, executed by Mr Jensen on 28 August 2002, was of no significance because Mr Jensen had already divested himself of his interest in the property pursuant to the financial agreement. If the matter is dealt with by the Family Court, both the interests of the respondent and the creditors can be brought into account. The present proceedings are calculated to bring only the interests of creditors into play. If the transfer to the respondent of the interest in the matrimonial home is to be set aside, the whole matter will have to be reviewed, and that review can only occur in the Family Court. To hold otherwise runs contrary to Mateo . In Macks v Edge [2006] FCA 1077 ; (2006) 156 FCR 302 Besanko J declined to transfer proceedings by a trustee under s 120 and s 121 of the Bankruptcy Act to the Family Court but primarily because of the lateness of the application. His Honour reached no conclusion as to any of the legal issues involved. The decision of Ryan J in Rambaldi (as Trustee of Bankrupt Estate of Volkov) v Volkov [2008] FCA 1957 is authority for the proposition that if a trustee in bankruptcy seeks to utilise s 121 of the Bankruptcy Act in the context of any existing financial agreement, the trustee needs to confront the financial agreement itself. The Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth) amended the term "maintenance agreement" in the Bankruptcy Act to delete the term "financial agreement". This simply means that the automatic exemption of financial agreements from the operation of s 120 of the Bankruptcy Act was removed --- it does not have the effect of declaring that the fact that a transaction occurred in pursuance of a financial agreement ceases to have any relevance. Financial agreements continue to retain all the protection that the Family Law Act expressly or implicitly provides. The amendment does not envisage the circumvention of s 90K of the Family Law Act by applications made with respect to "trust transfers". In any event, the exemption in favour of financial agreements only ever applied to claims made with respect to s 120 --- it never extended to claims under s 121. On a plain reading of s 120 and s 121 a trustee may challenge a specific transfer which answers the description of a "transfer of property" by a person --- who later becomes a bankrupt --- to another person, notwithstanding that the transfer is made under or pursuant to a financial agreement. The expression "transfer of property" bears its ordinary meaning save to the extent to which this is expanded by s 120(7) and s 121(9). Section 120(2) exempts from the operation of s 120(1) a transfer to meet a liability under a maintenance agreement or maintenance order. "Maintenance agreement" is defined in s 5. Following amendments introduced by the Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth) "maintenance agreement" does not include a financial agreement within the meaning of the Family Law Act . The rationale for the removal of financial agreements from the definition of "maintenance agreements" can be found in the Explanatory Memorandum to the Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth). It was not the intention of Parliament to require a trustee in bankruptcy to apply to set aside a financial agreement in either the Family Court or the Federal Magistrates Court before making application to set aside a transfer of property under s 120 or s 121. There was never an exclusion or exception for a maintenance agreement under s 121 of the Bankruptcy Act . The amendments introduced by the Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth) had no impact on the ability of the applicant to commence proceedings pursuant to s 121 in respect of the relevant transfer in this case. So, a superior court has power to prevent an abuse of process when process is predominantly used as a means of obtaining an advantage for which the proceedings were not intended ( Williams v Spautz [1992] HCA 34 ; (1992) 174 CLR 509 at 521-522, 529, Goldsmith v Sperrings Ltd (1977) 1 WLR 478 , Metall & Rohstoff AG v Donaldson Inc [1990] 1 QB 391). A manifestation of this principle can be seen in cases where a litigant, having been unsuccessful in respect of one application, seeks to bring substantially the same application in the same or another court ( Reichel v Magrath (1889) 14 App Cas 665 at 668-669, Williams v Hunt [1905] 1 KB 512 , Wilson v Commonwealth of Australia [1999] FCA 1308 at [11] - [12] ), Lindsey v Philip Morris Ltd [2004] FCA 797 , Coffey v Secretary, Department of Social Security [1999] FCA 375 ; (1999) 86 FCR 434). The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process. The difficulties which can arise where family law issues and bankruptcy issues interact have been the subject of numerous attempts at legislative resolution. These difficulties have consistently flowed from the uncertainty and hardship for either or both the creditors and non-bankrupt spouse arising from inconsistencies created between family law and bankruptcy law (cf para 9 Explanatory Memorandum, Bankruptcy and Family Law Legislation Amendment Bill 2004). Section 120 applies to transfers occurring within five years prior to the commencement of bankruptcy at an undervalue. Section 121 focuses on the intention with which the transferor effected the transaction, and is not subject to time limits. However the application of these provisions in circumstances where the transfer of property takes place in the family law context is potentially affected by provisions of the Family Law Act . As I have already observed, this transfer took place by either (or a combination) of creation of an interest by agreement and declaration of Mr Jensen, and the form 1 transfer. As I have already observed, in this case s 90C of the Family Law Act , which applies to financial agreements made during a marriage, is relevant. Financial agreements were introduced into the Family Law Act by the Family Law Amendment Act 2000 (Cth). People will be encouraged, but not required, to make financial agreements. For these agreements to be binding, each party will be required to obtain independent legal advice as to the legal effect of the agreement before concluding their agreement. The Family Court may set aside financial agreements in the circumstances provided by s 90K of the Family Law Act . Section 90K was inserted by the Family Law Amendment Act 2000 (Cth) following the decision of the Family Court in ASIC v Rich & Rich (2004) Fam LR 31,667 where O'Ryan J found that the Family Court had no jurisdiction to set aside a binding financial agreement at the request of a third p arty. Section 90K of the Family Law Act allows the Court to set aside a financial agreement if a party to the agreement entered the agreement for the purpose or for purposes that included the purpose of defrauding or defeating a creditor or creditors of the party , whereas s 121 of the Bankruptcy Act provides that a transfer is void as against a trustee in bankruptcy if, inter alia , entered with the main purpose of preventing the transferred property from becoming divisible among the transferor's creditors or hindering or delaying the process of making property available for division among the transferor's creditors. To that extent the provisions of the Family Law Act contemplate broader grounds for intervention than the provisions of s 121 of the Bankruptcy Act . In these proceedings the applicant's case as pleaded in his statement of claim falls squarely within the terms of s 121(1)(b) of the Bankruptcy Act , namely that the main purpose of the bankrupt in making the transfer was to prevent the Carrara property from becoming divisible among his creditors and to hinder or delay the process of making the Carrara property available for division among his creditors. Amendments introduced by Sch 1 to that Act gave the Family Court additional jurisdiction to deal with bankruptcy matters where those matters run concurrently with matters under the Family Law Act . I understand there are currently no Family Court proceedings in respect of these issues between these parties. Significantly for the purposes of these proceedings, one of the objects of the Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth) was to prevent the misuse of financial agreements under the Family Law Act as a means of avoiding payment to creditors (para 2(b) Explanatory Memorandum, Bankruptcy and Family Law Legislation Amendment Bill 2004). The Bill also proposes amendments to ensure that a bankrupt cannot use financial agreements under Part VIIIA of the Family Law Act to defeat the claims of creditors. One amendment will exclude financial agreements from the definition of "maintenance agreement" in the Bankruptcy Act to ensure that trustees can use that Act's "clawback" provisions to recover property transferred prior to bankruptcy pursuant to such an agreement. A further amendment will introduce a new act of bankruptcy which will occur when a person is rendered insolvent as a result of assets being transferred under a financial agreement --- this will mean that the person's bankruptcy will be taken to have commenced at the time of that transfer which will extend the "relation back" period. This will allow the trustee to claim property transferred under the agreement as divisible property in the bankrupt's estate. However I note in any event that transfers pursuant to maintenance agreements are subject to the provisions of s 121: s 123(6) of the Bankruptcy Act . In Official Trustee in Bankruptcy v Mateo [2003] FCAFC 26 ; (2003) 127 FCR 217 a husband and wife jointly owned land which had been their matrimonial home. They separated and applied to the Family Court for consent orders in relation to that property. The Family Court ordered the husband to transfer to the wife his interest in the property, and the wife to pay money to the husband. The husband executed a transfer of his interest in the property to the wife, and later became bankrupt. The Official Trustee, as trustee in bankruptcy of the husband, issued a notice requiring the wife to pay the value of the husband's interest in the property or to transfer to the Official Trustee a half interest in the land, on the basis that the transfer by the husband was void as against the Official Trustee pursuant to both s 120 and s 121 of the Bankruptcy Act . At first instance, Tamberlin J set aside the notice ( Mateo v Official Trustee in Bankruptcy [2002] FCA 344 ; (2002) 117 FCR 179). For the purposes of s 120 , his Honour held that the "transfer" in this case consisted of the whole transaction ranging from the signing of the consent orders through to the completion of the transfer of the interest by the husband. Further, full faith and credit must be given to the orders of the Family Court unless they are set aside. In relation to s 121 , the main purpose of the Family Court orders was to resolve outstanding matrimonial issues. The Full Court dismissed an appeal by the Official Trustee, although for reasons other than given by the trial judge. The judges acknowledged that, in addition to unsecured creditors, the wife and children of the bankrupt had an interest in his estate. However the key reason for the decision of the Full Court in Mateo [2003] FCAFC 26 ; (2003) 127 FCR 217 was the fact that orders had been made by the Family Court, and a transfer was made by the husband --- who eventually became bankrupt --- pursuant to such orders (Wilcox J at 235, Branson J at 248-249, Merkel J at 254). Accordingly, the transfer of the husband's interest in the matrimonial home had not been "by a person who later becomes a bankrupt" for the purposes of s 120 and s 121. No order was made either at first instance or on appeal for the matter to be transferred to the Family Court. The facts in Macks v Edge [2006] FCA 1077 ; (2006) 156 FCR 302 were more similar to those in contention before me. In that case a husband and wife entered an oral "separation agreement" by which the husband agreed to transfer his interest in property to the wife. The agreement was entered in or about September 2002. On 22 May 2003 the parties entered a written financial agreement giving effect to the oral agreement. A sequestration order against the estate of the husband was made on 31 July 2003. The trustee in bankruptcy commenced an action in the Federal Court to have the transfers set aside on the basis that no or inadequate consideration was given by the wife for the transfer of the properties, and that the transfers were void within the provisions of s 120 or s 121 of the Bankruptcy Act . The wife issued proceedings in the Family Court against the trustee in bankruptcy and the husband seeking certain orders under the Family Law Act , including a declaration that the financial agreement and transfers were valid and binding, or, in the alternative, if the transfers were void, an order pursuant to s 90K(1)(b) and (c) of the Family Law Act terminating the financial agreement and such order as was just and equitable pursuant to s 90K(3) preserving the rights of the wife in relation to the property the subject of the terminated binding financial agreement. Besanko J considered in some detail historical legislative developments, including amendments to s 79 of the Family Law Act , the accretion of jurisdiction to the Family Court in relation to bankruptcy matters in terms of s 35 of the Bankruptcy Act , and the enactment of s 35A of the Bankruptcy Act which empowered the Federal Court to transfer matters to the Family Court. The Family Court has jurisdiction to alter the trustee's rights with respect to vested bankruptcy property, but this Court retains jurisdiction to determine the prior questions of whether the transfers are void because they fall within the provisions of s 120 or s 121. If the trustee is successful then Mrs Edge may make an application against the trustee under s 79(1) of the Family Law Act , with respect to the freehold property, leasehold property and speedboat, seeking an order "altering the interests of the bankruptcy trustee in the vested bankruptcy property". It seems to me that that is the substance of any proceedings she may bring in the Family Court. Her claim is in a sense a contingent claim in that it only becomes relevant if the trustee's claim is successful. If the trustee is unsuccessful then Mrs Edge's claim falls away because there is no relevant vested bankruptcy property. Should the trustee be successful, the Family Court has the power to alter the interests of the trustee in the vested bankruptcy property. This Court can hear and determine the trustee's claim, but it cannot hear and determine Mrs Edge's claim should it become necessary to do so. If I make the order for transfer, the Family Court can hear and determine both claims. That is a powerful reason for making an order for transfer. On the other hand, the proceedings in this Court are nearly ready for hearing and, so far as I can see, involve some fairly concise issues. The hearing of the trustee's claim should not take very long. If the trustee's claim is unsuccessful, there will be no need for Mrs Edge to pursue the claim against the trustee in the Family Court. On balance, I am of the opinion that the proceedings should not be transferred to the Family Court. The husband and wife had entered into a financial agreement which acknowledged the desire of the parties to make provisions to "recognise existing equitable interests" in those real properties. The Court found that the husband had held certain property on a constructive trust for the sole benefit of the wife prior to execution of the financial agreement. In relation to other property in relation to which the financial agreement purported to create --- and transfer to the wife --- an equitable interest, the Court considered the application of s 123(6) and s 121 of the Bankruptcy Act . Although Ryan J analysed the position prior to the 2005 amendments to both the Bankruptcy Act and the Family Law Act , for reasons I explain later in this judgment I consider that the reasoning in Rambaldi [2008] FCA 1957 in respect of the application of s 121 is useful in these proceedings. Specifically, his Honour found that: an equitable interest in the relevant property arose only following execution of the financial agreement between the parties pursuant to s 90C of the Family Law Act ; section 123(6) and s 121 of the Bankruptcy Act were relevant; the financial agreement, as a maintenance agreement, was prima facie entitled to the protection against invalidity afforded to it by s 123(6) of the Bankruptcy Act , however that protection was subject to s 121 of the Bankruptcy Act ; the financial agreement clearly effected a transfer, by a person who later became a bankrupt, of property to the non-bankrupt spouse. The main purpose of the bankrupt in entering into the financial agreement was to prevent the property becoming divisible among his creditors or to delay the process of making it available for division among his creditors; the non-bankrupt spouse provided no consideration for the transfer in the sense identified in Official Trustee v Lopatinsky [2003] FCAFC 109 ; (2003) 129 FCR 234 ; and the only consideration provided by the non-bankrupt spouse was the entry into the financial agreement, however because of the application of s 121(6) this was of no value for the purposes of s 121 of the Bankruptcy Act . I form this view for the following reasons. First, in the circumstances of this case it is not clear to me how the commencement of proceedings by the applicant in the Federal Court is an "abuse of process". To paraphrase comments in Williams v Spautz [1992] HCA 34 ; (1992) 174 CLR 509 , it is not clear to me how the process was issued for some collateral advantage, nor how the proceedings are being used by the applicant to obtain some advantage for which they were not designed. In support of her claim of abuse of process, the respondent contends in summary that: In my view, the highest at which the respondent can place her case for abuse of process is in terms of Mr Griffin QC's contention that the applicant has sought to "stifle the respondent's legitimate claims" under the Family Law Act . However, no evidence to that effect has been produced, nor motive demonstrated to substantiate that claim other than the lawful entitlement of the applicant to pursue his rights under the Bankruptcy Act , and put a case based upon those rights to the Court. Second, in my view a more accurate articulation of the respondent's claim in these interlocutory proceedings is that the Federal Court lacks jurisdiction to deal with the applicant's claims, allegedly because the correct forum for the claim of the applicant is the Family Court, and because the applicant should have commenced proceedings pursuant to s 90K of the Family Law Act in the Family Court. Clearly this Court has power to permanently stay or dismiss proceedings where the Court has no jurisdiction because of lack of power, absence of legislative grant of jurisdiction, or otherwise ( Rahman v Director-General Department of Education & Training [2005] NSWCA 285 , Ramsay v Accident Compensation Corporation [2007] NZCA 367 , Simundic v University of Newcastle [2007] FCA 676 , Mentyn v Westpac Banking Corporation [2003] FCA 1521 , Coffey v Secretary, Department of Social Security [1999] FCA 375 ; (1999) 86 FCR 434). A claim by a litigant that the court has no jurisdiction is however distinguishable from a claim that the litigation constitutes an abuse of process, unless of course the commencement of process for an improper purpose in the sense explained in Williams v Spautz [1992] HCA 34 ; (1992) 174 CLR 509 can also be identified. Absence of jurisdiction is commonly pleaded as an alternative to a claim for abuse of process. However even if I am wrong as to the basis of the respondent's claim in these interlocutory proceedings, the respondent has clearly contended that it was appropriate for the Court to permanently stay the substantive proceedings on the grounds that the proper course of the applicant in seeking to impugn the transfer of the Carrara property by Mr Jensen was to apply to the Family Court to have the entire financial agreement set aside pursuant to s 90K(1)(aa) of the Family Law Act . For reasons to which I now turn, I do not agree. The respondent points to the decision of the Full Court in Mateo [2003] FCAFC 26 ; (2003) 127 FCR 217 as authority for the proposition that, in the context of an application by a trustee in bankruptcy under s 121 , the "transfer" consists of the whole transaction ranging from the signing of the consent orders (or in this case, the execution of the financial agreement) through to the completion of the transfer of the interest by the husband, and that accordingly it is not possible for this Court to make a determination as to the transfer of the Carrara property without disturbing the financial agreement as a whole. However to the extent that this was the finding of the judge at first instance in Mateo (see in particular Mateo v Official Trustee in Bankruptcy [2002] FCA 344 ; (2002) 117 FCR 179 at 186) the Full Court were by no means supportive of this proposition (see for example Wilcox J at 235, Branson J at 249). He found support for this approach in Silvera v Savic . This term is not defined by the Act, other than by the statement in s 121(9)(a) (and s 120(7)(a)) that it includes a payment of money. It seems to direct attention to the particular transaction, commonly a document, that changes title to the relevant property. However it is important to note that the transaction will not necessarily affect the legal title to the property... If the effect of a s 79 order requiring a party to a marriage to transfer an interest in real estate to the other party is to cause the designated transferor to become a bare trustee of the relevant legal interest, that is because the order has vested an equitable interest in the proposed transferee. The first event took place on 22 June 2000, when the Family Court made orders requiring, amongst other things, Mr Mateo to transfer to his wife all his right, title and interest in the home. The effect of that order was to vest in Mrs Mateo an equitable interest in the one-half legal estate that continued to be held by Mr Mateo, but which, thereafter, had only a nominal market value. The second event was the transfer of the legal estate that was effected by the registration of a transfer document on or about 10 August 2000. Rather, as submitted by Mr McQuade, I consider the correct approach to be that in considering an application under s 120 and s 121 of the Bankruptcy Act , the Court considers the creation or transfer of the interest which is sought to be avoided, not the provision in the legal document (or other mechanism) which has created it. To illustrate this principle I need look no further than Rambaldi [2008] FCA 1957. The respondent in these proceedings claimed that Rambaldi [2008] FCA 1957 is authority that an applicant seeking to set aside a transaction pursuant to a financial agreement needs to "confront the financial agreement itself". However the clear outcome in Rambaldi [2008] FCA 1957 was that the Court set aside the purported equitable interest in the relevant property sought to be created by the financial agreement, not the financial agreement itself (cf [2008] FCA 1957 para [47]). While the terms of the financial agreement in Rambaldi [2008] FCA 1957 were clearly critical to the questions whether the relevant provisions of the Bankruptcy Act were satisfied and accordingly whether the interest of the non-bankrupt spouse should be set aside, the orders of the Court in Rambaldi [2008] FCA 1957 with respect to the financial agreement were limited to the validity of the creation of an interest in land purportedly created by the financial agreement. This outcome did not require an order that the financial agreement be avoided pursuant to s 120 or s 121. I consider that similar principles apply in the case before me. Whether the "transfer" in this case was the creation of an equitable interest in the Carrara property in favour of the respondent, or the actual transfer effected by the form 1 (an issue I need not resolve for the purposes of this notice of motion) the transfer can nonetheless be the subject of challenge pursuant to s 120 or s 121 of the Bankruptcy Act without the applicant being required to make application to set aside the financial agreement executed by Mr Jensen and the respondent. I consider that this approach is consistent with the findings of this Court in Macks v Edge [2006] FCA 1077 ; (2006) 156 FCR 302 and Rambaldi [2008] FCA 1957 , as well as the Full Court in Mateo [2003] FCAFC 26 ; (2003) 127 FCR 217. In any event, as I have already observed, the key principle in my view emerging from the decision in Mateo [2003] FCAFC 26 ; (2003) 127 FCR 217 is that where property is transferred pursuant to orders of the Family Court --- and accordingly, the transfer of property is not "a transfer of property by a person who later becomes a bankrupt" for the purposes of s 120 and s 121 of the Bankruptcy Act --- the appropriate remedy of a trustee in bankruptcy seeking to have those orders set aside is to make application to the Family Court for variation of those orders (per Wilcox J at 236, Branson J at 252, Merkel J at 258). The facts in Mateo [2003] FCAFC 26 ; (2003) 127 FCR 217 are clearly distinguishable from the case before me --- in these proceedings the Carrara property was not transferred pursuant to orders of the Family Court, but pursuant to a financial agreement under the Family Law Act (which is very different from orders made by a superior court). Further, in my view the current legislative framework applicable to financial agreements contemplates that a trustee in bankruptcy may make application pursuant to both s 120 and s 121 of the Bankruptcy Act in the Federal Court to set aside a transfer pursuant to a financial agreement executed by the parties. In relation to the trustee's application pursuant to s 120 of the Bankruptcy Act in the instant proceedings, it is clear that: The inference necessarily drawn as a result is that the legislature intended that a transaction pursuant to a financial agreement would not be protected in circumstances where subsequently a trustee in bankruptcy of a party to such an agreement seeks to have transactions set aside pursuant to s 120 of the Bankruptcy Act . This is notwithstanding the operation of s 90G of the Family Law Act , which provides that financial agreements are binding on the parties thereto without the necessity for an order of the Family Court. The position is less clear in relation to s 121 of the Bankruptcy Act . Unlike s 120 , s 121 makes no mention of maintenance agreements (or financial agreements). As I have already observed in this judgment, s 123(6) specifically provides that subject to s 121 , nothing in the Bankruptcy Act invalidates, inter alia , a transfer made by the debtor before bankruptcy pursuant to a maintenance agreement. It therefore follows that a transfer of property pursuant to a maintenance agreement by a debtor who subsequently became bankrupt could be challenged by a trustee in bankruptcy pursuant to s 121. As I have also noted in relation to s 120 , s 5 of the Bankruptcy Act now excludes financial agreements from the definition of maintenance agreement. This is a curious outcome, the reason for which is not clear. In my view a reasonable and logical explanation is that submitted by Mr McQuade for the applicant, namely that in the absence of a specific exemption for transactions undertaken pursuant to a financial agreement, such transactions are capable of being the subject of application by the trustee in bankruptcy of the transferor pursuant to s 121 of the Bankruptcy Act . Indeed this was the position prior to the 2005 amendments and in this respect there is (as I indicated earlier) particular relevance to the decision of Ryan J in Rambaldi [2008] FCA 1957 , where his Honour accepted that a trustee in bankruptcy could apply pursuant to s 121 of the Bankruptcy Act to set aside an interest in real property following a financial agreement between parties to a marriage. (Another possible explanation, namely that the effect of the 2005 amendments to the Bankruptcy Act resulted in financial agreements being excluded from the operation of s 121 , in my view is completely anomalous and has no merit. This approach is echoed in observations of Wilcox J in Mateo [2003] FCAFC 26 ; (2003) 127 FCR 217 (at 237-238). It is not necessary for the applicant to apply to the Family Court to have the financial agreement between Mr Jensen and the respondent terminated as a necessary element of an application to have the transfer of the Carrara property set aside pursuant to s 120 and s 121 of the Bankruptcy Act . In the circumstances, I do not consider that the substantive application of the trustee in bankruptcy is an abuse of process of this Court. It follows that I do not consider that the substantive proceedings should be stayed or dismissed. I note the submission of the respondent that the Court can transfer the proceedings to the Family Court of its own motion pursuant to s 35A of the Bankruptcy Act . In the circumstances of this case I am not prepared to do so, particularly in light of the facts that: The respondent's notice of motion is dismissed. In light of this result, I understand that the respondent does not object to the amendments sought by the applicant to his statement of claim as stated in the applicant's notice of motion currently before the Court, and I am prepared to make an order in terms sought by the applicant in relation to those amendments. The applicant has submitted that costs in relation to its notice of motion be reserved, and in my view this is an appropriate order. However in relation to proposed Order 2 of the applicant's notice of motion I am persuaded by the respondent's submissions that she should be entitled an opportunity to replead her Defence in light of amendments to the applicant's statement of claim. I am not prepared to make an order as sought by the applicant in terms of Order 2 of its notice of motion. While at the hearing Mr McQuade for the applicant urged the Court that any amendment to the Defence should be very limited, nonetheless the function of pleadings is to state, with sufficient clarity, the case that must be met by the other party. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and to define the issues for decision: Banque Commerciale SA En Liquidation v Akhil Holdings Ltd [1990] HCA 11 ; (1990) 169 CLR 279 at 286 per Mason CJ and Gaudron J (cf Dawson J at 296, Toohey J at 302-303). In my view it is appropriate to allow the respondents a reasonable time to serve a draft amended Defence, and to set a date for hearing submissions as to whether leave ought be granted for the Defence in a repleaded form. Any issues the applicant has in relation to the nature of any amendments to the Defence can be ventilated at that hearing. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.

jurisdiction application for stay pursuant to order 20 rule 5 of the federal court rules abuse of process application for leave to amend statement of claim financial agreement between former husband and wife under section 90c of the family law act 1975 (cth) trustee in bankruptcy of husband applied in substantive proceedings to set aside transfer of property to respondent pursuant to financial agreement under section 120 and section 121 of the bankruptcy act whether trustee in bankruptcy should have commenced proceedings under section 90 k of the family law act to set aside financial agreement in the family court whether abuse of process to bring action under section 120 and section 121 of the bankruptcy act instead of under section 90k of the family law act whether matter should be transferred from the federal court to the family court under section 35a of the bankruptcy act interaction of provisions of the bankruptcy act and part viiia of the family law act impact of bankruptcy and family law legislation amendment act 2005 (cth) whether federal court can entertain an application under section 120 and section 121 of the bankruptcy act to set aside a transfer of property pursuant to a financial agreement practice and procedure bankruptcy and insolvency

I will do so without reserving my decision. The power to order discovery in judicial review proceedings is clear. Over the years there has been a plethora of authority dealing with the circumstances under which it ought to be granted. Beyond saying that there is a certain restraint to be observed, in my opinion it is not necessary to encrust a judicial discretion to be exercised as a matter of practice and procedure with all sorts of judge-made rules. Some of the more modern authorities were referred to recently by Siopis J in Hayes Knight GTO Pty Limited v Australian Securities and Investments Commission [2005] FCA 1509 ; (2005) 147 FCR 468 and the comprehensive submissions of the parties have identified a number of other relevant authorities. 2 The issue needs to be focused upon the basis for the judicial review application. In the present case, there are several broad grounds of attack. The first is the natural justice ground and it is said that there should be discovery related to cl 1(a) of the grounds of application. With all respect, I fail to see any basis for discovery in relation to the failure to afford natural justice as alleged. The relevant facts are clear and are within the knowledge of the applicants. 3 The next broad ground is that the Australian Securities and Investments Commission (ASIC) failed to take relevant considerations into account. That involves three steps. One is the existence of the consideration; secondly, is the relevance of the consideration; and, thirdly, there is the failure to take it into account. The disclosure or discovery of the documents which I have indicated I will order should make clear those circumstances or considerations which were not taken into account or, at least, will do all that can be done to establish that proposition. It is tempting to leave any other aspect of the matter until after consideration has been given to those documents. However, it seems to me that when I go through the individual paragraphs which are relied upon, there is no proper basis for discovery on this issue at this point because of two fundamental factors. The first is that the applicants were the subject of the investigation in question and much of what is alleged is within their own personal knowledge. Secondly, they received communications from ASIC which would establish many of the factual matters, in particular, the letter to which attention was drawn yesterday which was exhibit LMS17 dated 23 February 2004. That has been added to this morning by ASIC indicating a number of facts which it is prepared to admit for the purposes of the proceedings. It may be doubtful whether those admissions carry the letter any further, but they certainly do give formality to that situation. 4 I will run through the relevant paragraphs of the application. The first is the fact of ASIC's lengthy prior investigation into the conduct of the deed administrators and the affairs of the company. That seems to me to be clearly within the knowledge of the applicants supplemented by the communications from ASIC. The second is the examination of, amongst others, one of the deed administrators, and the mine manager in connection with that investigation. That again is a matter of which evidence has been given. The third is the fact that ASIC was assisted during its investigations and those examinations by, and reached its conclusions having regard to, both expert accounting evidence and independent legal advice from senior counsel. The source of that is the ASIC communication. The point has been made today that the content of the expert accounting advice and, in particular, the independent legal advice, may be relevant to the case. I do not prejudge that at the moment, but that has not been alleged in terms. It seems to me that if it is desired to persist in an application to inspect that material, then a particular application should be made for that purpose. 5 The fourth, the fact that at the conclusion of the investigation and those examinations ASIC reached the view that the prospects of success were insufficient to justify ASIC commencing litigation against the deed administrator, is again established by the letter and admissions. The fifth, the fact of the dislocation, disruption, and expense already experienced and incurred, etc, is a matter within the knowledge of the applicants. To the extent that particulars 9, 10 and 11 are pressed, it seems to me that they are not matters which call for discovery. 6 The next main heading (ground 2(b)) is ASIC taking an irrelevant consideration into account, namely, the desire by certain minority shareholders of the company to attempt to investigate and challenge past commercial decisions made by the deed administrators of the company in 2001 and 2002, notwithstanding certain particularised matters. That identifies the alleged irrelevant consideration. The initial question here is whether or not ASIC did take that matter into consideration when making the decision. Whether or not it is an irrelevant consideration is essentially a mixed matter of fact and law. I will go on and look at the particulars. First, there is reference in (i) to ASIC itself investigating the matters, and the co-operation provided by the administrators in providing information. Secondly, ASIC decided that it did not intend to take any action. Thirdly, in 2003 to 2005, ASIC raised a number of queries which were answered and there was a decision not to take any action. Insofar as those matters require establishment of those facts, again, it seems to me that they are either covered by the direct knowledge of the applicants themselves or supplemented by the communications and admissions on the part of ASIC. 7 It is put today that it may be relevant to know whether the certain minority shareholders alleged to have been satisfied by this decision have an identity with those who made earlier complaints called the identity issue. I can see that that might be a relevant matter to take into account in the broad sense, but it seems to me that before any form of discovery be ordered about that, it would be prudent to have the documents relating to the decision scrutinised to see whether there is any credible case of failure to take such a consideration into account. I also suggest that ASIC and those acting for it might give some further consideration to this topic, which was really only raised at the heel of the hunt today, to see whether or not there might not be some appropriate admission to be made or at least some limited discovery made which would bear upon that point. I do not, however, propose to make any order about discovery in relation to that issue today. 8 The last matter which is relied upon is the exercise of power in accordance with the rule or policy without regard to the merits of the particular case. I do not think that was pressed in oral argument, but even it were, it seems to me to provide no basis at all for discovery going beyond the documents which I have indicated should be provided. 9 So for those reasons, I do not propose to make any present order about discovery beyond that previously foreshadowed. I do not rule out the possibility that once the other documents have been looked at, there may be scope for making an application for further and particular discovery. That would, or might, also include any application in relation to the advice to which I have referred and perhaps to what has been called the identity issue, which has also been raised today. That is my ruling on discovery at the moment.

judicial review proceedings discovery

This followed a motion by the applicants in each case to strike out certain allegations in the Commissioner's Amended Statement of Facts, Issues and Contentions as irrelevant. 2 The applicants are entitled to their costs of the proceedings. They submit that these costs should be taxed and paid on an indemnity basis. They submit that the Commissioner has not acted as a model litigant in pursuing these actions. Issues raised by the Commissioner in them were not part of the objection decisions and are inconsistent with the income in question, being that of Raftland Pty Ltd, the applicant in Q173 of 202, the case which the Commissioner pursued. They allege that the Commissioner has not acted with propriety and that this is shown by the lateness of the concession. 3 I do not consider there is any evidence of impropriety. It is regrettable that costs were incurred on unnecessary issues and that they were not conceded at an earlier point. On the other hand if the actions were plainly not maintainable one would have expected the applicants to apply to strike them out at an early point. Litigation is often conducted on alternative bases and upon issues which cannot all be successful. A successful party may sometimes be deprived of costs on unmeritorious issues. I do not however think that it is suggested that, in every case where alternative claims are made, that an order for indemnity costs should follow. In the present case there are no matters in the Commissioner's conduct of the litigation which suggest that that course is appropriate. 4 There will be orders in each proceeding that the Commissioner pay the applicants' costs of the proceedings. I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel.

motion to strike out allegations motion successful whether costs should be taxed and paid on an indemnity basis costs

2 She applied to the Department of Immigration and Citizenship on 30 January 2007 for a Protection (Class XA) Visa. Her claim was based upon an assertion that she was a Falun Gong practitioner who feared persecution if she returned to China. A delegate refused to grant that visa on 24 February 2007 and an application for review was lodged with the Refugee Review Tribunal on 6 March 2007. The Tribunal affirmed the delegate's decision. 3 On 4 February 2008 the Federal Magistrates Court dismissed an application seeking review of the Tribunal's decision: SZLHA v Minister for Immigration & Citizenship [2008] FMCA 143. The Appellant now appeals to this Court. 2. the Tribunal no evidence or other materials to justify the making of the decision. 3. the Tribunal failed to grant to me a visa without any proper grounds or any proper investigation. 4 The Appellant appeared before the Court this morning unrepresented, but with the assistance of an interpreter. 5 The Grounds of Appeal , it is considered, are but an impermissible attempt to review the factual merits of the decision reached by the Tribunal and should be rejected. A court conducting judicial review of an administrative decision must " beware of turning a review of the reasons of the decision-maker upon proper principles into a reconsideration of the merits of the decision ": Minister for Immigration & Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; 185 CLR 259 at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ. The " weight " to be given to the evidence or particular pieces of information is for the Tribunal to assess: Abebe v Commonwealth [1999] HCA 14 at [197] , [2004] HCA 32 ; 197 CLR 510 at 580. But it did this in the context of assessing whether her claims that she had been persecuted in the past should be accepted. The Tribunal's reasoning does not reveal any failure to take account of relevant matters or any taking into account of irrelevant matters. In the end, the criticisms made by the applicant of the Tribunal's reasoning are criticisms of the factual findings it made and are criticisms that fasten upon the weight that the Tribunal attributed to various pieces of information that it had available for consideration. But what weight the Tribunal gave to those various pieces of information was for it to say. The task of making findings of fact, including findings as to credibility, is for the Tribunal alone: Kopalapillai v Minister for Immigration & Multicultural Affairs [1998] FCA 1126 ; (1998) 86 FCR 547 at 552, 559. 6 In assessing credit, however, the Tribunal needs to be careful as to the manner in which it proceeds: cf Kneebone S, The Refugee Review Tribunal and the Assessment of Credibility : an Inquisitorial Role? (1998) 5 AJ Admin L 78. A reading of the Tribunal's reasons in the present appeal exposes the fact that the Tribunal was indeed very conscious as to the consequences of making such adverse findings. ... This does not automatically mean that the applicant's evidence as to her practice of Falun Gong in China and related claims such as her detention is untrue. ... The Tribunal clearly proceeded carefully -- and quite properly so. 7 All of the Grounds of Appeal , it is considered, should be rejected upon this basis alone, namely that they are but an impermissible challenge to the merits of the decision as made by the Tribunal. 8 It should further be noted, however, that each of the contentions sought to be advanced by those grounds is in any event misplaced. 9 As to the first ground, the Tribunal did consider the information which was before it. It held a hearing on 16 April 2007 and the now Appellant attended. The " RRT Hearing Record " reveals that the hearing took some two and a half hours. The reasons provided by the Tribunal set forth at the outset the manner in which the Tribunal proceeded, the questions asked of the now Appellant, and her responses. Those reasons further set forth what it termed " INDEPENDENT COUNTRY INFORMATION " relevant to the treatment of Falun Gong practitioners. The Tribunal thereafter set forth its findings, based upon the evidence before it, and its reasons for decision. 10 Relevantly, the Tribunal made adverse findings as to the now Appellant's credibility. The Tribunal's view flows from its findings about her credibility. The Tribunal then recounted the now Appellant leaving China and returning. This is more consistent with someone just engaging in a scheme to show a record of return travel in order to get an Australian visa. The Tribunal proceeded to conclude that the now Appellant had practiced Falun Gong since arriving in Australia, but further found that " she has done this solely for the purpose of assisting her claim for refugee status in Australia ". The Tribunal has found that the applicant has not been a practitioner of Falun Gong in China in the past, has not been a genuine practitioner of Falun Gong while here in Australia and finds, following from this, that she will not be a Falun Gong practitioner should she return to China. Thus, the Tribunal finds that the applicant does not have a well-founded fear of being persecuted for a Convention reason should she return to China, now and in the foreseeable future. 11 These findings of the Tribunal were based upon a consideration of the entirety of the evidence which was placed before it, including the evidence advanced by the now Appellant. Those findings of the Tribunal were open to it to be made. Clearly, the ultimate findings and reasons were based upon an assessment of the Appellant's credibility. The task of making those findings has been entrusted to the Tribunal, and not the Federal Magistrates Court or (more relevantly) to this Court on appeal: Nguyen v Migration Review Tribunal [2008] FCA 524 at [15] per Logan J. Findings of credibility are findings " par excellence " entrusted to the Tribunal: Re Minister for Immigration & Multicultural Affairs; Ex parte Durairajasingham [2000] HCA 1 at [67] , 168 ALR 407 at 423 per McHugh J; SZKQQ v Minister for Immigration & Citizenship [2008] FCA 242 at [21] per Middleton J; SZEOQ v Minister for Immigration & Citizenship [2008] FCA 257 at [27] per Lander J. 12 The first ground is further without substance because the " information which was in favour of the applicant " -- and which it was contended was not " carefully consider [ed]" -- as referred to in the first Ground of Appeal , was in fact " carefully consider [ed]" . Although that " information " was not identified in the Notice of Appeal, it was identified by the Appellant during the course of her oral submissions, as translated. But each of these matters was in fact addressed and considered by the Tribunal. There has been no failure to consider that " information " which the Appellant claims was not considered. 13 Even if the ground can be construed as anything other than an impermissible attempt to revisit the merits of the Tribunal's decision, it is without substance. The findings as made by the Tribunal were findings of fact entrusted by the legislature to the Tribunal to make. Moreover, those findings were based upon a consideration of all the evidence, including that " information " which it erroneously was said was not considered. 14 The first Ground of Appeal is thus rejected. 15 The second Ground of Appeal is equally difficult to understand. The oral submissions as advanced by the Appellant at the hearing of the appeal, as translated, explained that this ground was intended to focus attention again upon the discrepancies as between the information set forth in her business visa application and her protection visa application. Rather than there being " no evidence " to support the findings as made by the Tribunal, the reasons of the Tribunal set forth the basis upon which it proceeded. There may be repercussions against the above-named organizations and reputations would be at stake. The Tribunal considers that the relevant China Chamber of Commerce, the organizer of the Trade Expo, with Government Departments would have carefully selected the participating companies and the companies would have carefully selected their candidates for the Expo. The Tribunal does not consider that the evidence provided by the applicant shows that the Department's file documents are not genuine. It further considers that the applicant's claims are implausible: the Tribunal does not accept that a person who was not actually the person described in the business visa application could obtain a business visa in this way. The Tribunal considers that it is more plausible that a business person who has a previously unblemished police record could obtain a passport and an Australian visa and attend a Trade Expo and then seek asylum without any knowledge of the relevant China Chamber of Commerce or the person's employers. The Tribunal therefore does not accept that the documents on the Department's file are fabrications used to create a new business identity for the applicant for the purposes of seeking asylum. The Tribunal therefore concludes that the Department's file documents are genuine. Thus, the implausibility of the applicant's claim and the weight of the documentary evidence on the business visa file suggests to the Tribunal that what is stated on the Department's business visa file about the applicant is indeed her true identity. That finding is, again, one entrusted to the Tribunal and it is not considered that it is possible to sustain a contention that the conclusion of the Tribunal was without evidential support. 16 The second ground is also rejected. 17 The final ground is also misconceived. The task of the Tribunal was to review the decision of the delegate in accordance with the Migration Act 1958 (Cth). On 15 May 2007 the Tribunal wrote to the now Appellant pursuant to s 424A of the Migration Act and specifically identified those matters in respect to which her comments were invited. That letter in part referred to evidence which had been given as to the work carried out by the now Appellant and evidence as to her true identity. This in turn may cause the Tribunal to doubt your truthfulness in relation to other parts of your evidence, such as your Falun Gong practice both here and in China, and it may also lead the Tribunal to find that you deliberately set out to contrive a claim for refugee status through your attendance at Falun Gong activities and related protests and demonstrations here in Australia. Further time was sought by the now Appellant to respond to that letter and further time was in fact granted by a Tribunal officer. The now Appellant attended before the Tribunal at a hearing conducted on 16 April 2007 and ultimately replied to the May 2007 letter in July 2007. 18 The Tribunal, it is considered, thereafter proceeded carefully and fairly and properly set forth in some detail the " grounds " upon which it based its decision. 19 The final Ground of Appeal, it should finally be noted, refers separately to the Tribunal proceeding without " any proper grounds " and to proceeding without " any proper investigation ". The reference to " proper grounds ", it is considered, adds nothing to the first two Grounds of Appeal . What further " investigation " should have been undertaken, but was not undertaken, was again not set forth in the Notice of Appeal but was developed during the Appellant's oral submissions, as translated. The contention was that the Tribunal failed to call as a witness -- or failed to make inquiries of -- a fellow Falun Gong practitioner. 20 That more specific contention must also be rejected. On 21 March 2007 the Appellant signed a " Response to Hearing Invitation " as forwarded to her by the Tribunal. That document asked a limited number of questions of the now Appellant. There is no further evidence to support a contention that the now Appellant asked the Tribunal to call the fellow practitioner as a witness or that the Tribunal denied a request to call that witness. Reference was made in the Tribunal's reasons to the prospect of another person providing evidence, but the Tribunal noted that the now Appellant said of this person that she " had stated a few months ago that she was not writing letters for anyone any more to help in refugee applications ". 21 In such circumstances it cannot be concluded that there was any failure on the part of the Tribunal to make a " proper investigation ". Nor was such a contention advanced before the Federal Magistrates Court. It should further be noted that even had the Appellant requested that a witness be called before the Tribunal, the Tribunal was under no duty to allow such evidence to be given: Migration Act 1958 (Cth), s 426(3). As was the like conclusion in VJAF v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 178 , there is not considered in the present proceedings to be any reason to find that an obligation was imposed upon the Tribunal to call or to hear further evidence from the fellow Falun Gong practitioner referred to by the now Appellant. 22 The final ground is thus also rejected. 23 An Affidavit was filed in Court on the day of hearing seeking a fixed costs order in the event that the appeal was dismissed. That Affidavit sought a fixed costs order in the sum of $2,200. There is no reason to question that quantification. The appeal be dismissed. 2. The Appellant to pay the costs of the First Respondent fixed in the sum of $2,200. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

impermissible review of merits role of refugee review tribunal to determine facts task of judicial review need for care when making credibility findings no duty on part of tribunal to call or hear further evidence migration

This Court's power to extend time is contained in O 52 r 15(2) of the Federal Court Rules . For the reasons which follow, I will make the order sought by the applicant. The respondent brought a notice of motion seeking the punishment of the applicant for contempt of court, in disobeying orders of this Court and failing to honour undertakings given to the Court. The notice of motion was heard by a judge of this Court ("the primary judge"), who made a number of orders on 16 April 2009. On 13 May 2009, the primary judge made orders as to penalty and those orders included an order that the applicant be imprisoned for a period of three months. Orders have been made from time to time that the warrant for the arrest and imprisonment of the applicant lie in the Registry of the Court. On 22 May 2009, the applicant filed and served a notice of appeal against the orders made on 13 May 2009 and, if pursued, that appeal will in due course be heard and determined by the Full Court of this Court. The applicant also wishes to appeal against the primary judge's declaration made on 16 April 2009, but he needs an extension of time to do that because he did not file and serve a notice of appeal within the 21 day period prescribed by O 52 r 15(1) of the Federal Court Rules . The 21 day period expired on 7 May 2009. On 20 May 2009, the applicant issued an application for leave to appeal, supported by his own affidavit and an application for an extension of time to file and serve a notice of appeal. The applicant exhibited to his affidavit a document setting out 25 proposed grounds of appeal. Those documents were served on the respondent on 22 May 2009. The applicant's applications were heard on 28 May 2009. At the outset of his submissions, I asked counsel for the applicant to formulate the orders he was seeking; the applicant is seeking either leave to appeal or an extension of time within which to appeal. The respondent filed an outline of submissions before the hearing and in that outline he submitted that the primary judge's orders made on 16 April 2009 and, indeed those made on 13 May 2009, were interlocutory orders. One submission he made was the primary judge's orders were interlocutory orders because they were made in the main proceeding, being an action brought under the Racial Discrimination Act 1975 (Cth), not in a separate proceeding. It was necessary to adjourn the hearing for a short time at an early stage and, before doing so, I referred counsel to the decision of Lehane J in Real Tech Systems Integration Pty Ltd v Meuross (1998) 82 FCR 150. When the hearing resumed, counsel for the respondent advised the Court that he no longer contended that the declaration was an interlocutory order and he submitted that it was appropriate for the matter to proceed on the basis that the substance of the application was for an extension of time within which to file and serve a notice of appeal. I think it is appropriate to proceed on that basis. I do not propose to set out any further details of the factual background of this matter. It is fully set out in the primary judge's reasons for finding the applicant guilty of contempt ( Jones v Toben [2009] FCA 354) and on penalty ( Jones v Toben (No 2) [2009] FCA 477). The factors which are relevant to the discretion to extend time within which to appeal are well known. It is unnecessary for me to discuss the cases in detail. The leading authorities are Jess v Scott (1986) 12 FCR 187 ; Jeffers v The Queen [1993] HCA 11 ; (1993) 67 ALJR 288 ; 112 ALR 85 ; Parker v The Queen [2002] FCAFC 133. The first factor is the length of the delay. The period in this case is in the order of 15 days. That is not a period which suggests that an extension should not be granted. The second factor is the explanation for the delay. The explanation in this case is that the applicant was advised by his legal adviser that it was "more appropriate that an appeal be commenced when sentencing and the making of orders was complete". That explanation is not challenged by the applicant, and it is accepted by him as an adequate explanation for the delay. I am satisfied that there is an adequate explanation for the delay. The third factor is the prejudice to the applicant if an extension of time is not granted. The prejudice in this case is that the applicant will be unable to challenge the finding of contempt which ultimately led to a penalty of a period of imprisonment of three months. The fourth factor is the prejudice to the respondent if an extension of time is granted. Counsel for the respondent frankly acknowledged that he could not point to any prejudice if an extension of time is granted. The fifth factor which may be considered is the strength of the proposed appeal. If a proposed appellant is unable to demonstrate any prospect of success in the appeal then that will be a reason to refuse an extension of time: Jeffers v The Queen [1993] HCA 11 ; (1993) 67 ALJR 288 ; 112 ALR 85 at 289; 86 per Deane, Dawson and Toohey JJ. In this case, the respondent submits that the proposed appeal has no prospects of success and that, despite the other circumstances suggesting an extension of time should be granted, this factor is of sufficient weight to justify a refusal of the application for an extension of time. The precise formulation of this factor and its application sometimes proves difficult. If it is clear that the proposed appeal has no prospects of success then, no doubt, an application for an extension of time will be refused. However, care must be exercised and that conclusion should not be reached too readily because, as in the situation before me, the Court has not had the benefit of the full submissions which would be made on the appeal. A conclusion which goes no further than that the grounds of appeal appear weak or unlikely to succeed will not ordinarily lead to a refusal to extend the time within which to appeal where the other factors suggest an extension of time should be granted. I have read the primary judge's reasons for finding the applicant guilty of contempt, the proposed grounds of appeal and the outline of submissions filed by the respondent. In the outline, the respondent advances submissions as to why he contends each ground of appeal is doomed to fail. I have also had the benefit of oral submissions from both parties. I do not propose to traverse each ground of appeal and the respondent's submissions in relation to each ground. Certainly, I am satisfied that the proposed grounds of appeal appear weak and indeed some of the grounds appear to be without merit. However, I cannot reach the conclusion that the proposed appeal has no prospect of success without hearing a good deal more from the parties, and any further hearing would approximate the hearing of the appeal itself. It is not appropriate that I undertake such an exercise. I will hear the parties as to costs and any other orders. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

application for extension of time within which to file and serve notice of appeal from order declaring applicant guilty of contempt of court where all relevant factors other than merits of proposed appeal in favour of granting extension of time whether applicant able to demonstrate prospect of success practice and procedure

I have given the following earlier judgments in other proceedings relating to the same MISs: There are six MISs. They are related to the growing, marketing and harvesting of olives at Yallamundi in Queensland. The MISs are known as Australian Olives Projects 1, 2, 3, 4, 5 and 6. This proceeding relates to Projects 1, 2, 4, 5 and 6. In these reasons, any reference to 'Projects' generally should be taken as referring only these five Projects. The former RE is the defendant, Australian Olives Limited (AOL), which was removed by the investors in (members of) those MISs. The members appointed the plaintiff, Huntley Management Limited (Huntley), as RE in place of AOL. This proceeding relates to entitlements to management fees. Huntley seeks to recover that proportion of the management fees received by AOL in respect of Projects 1, 2 and 6 that relates to the period after the changeover, that is to say, the period during which Huntley was the RE. AOL, on the other hand, contends that it is entitled to retain the whole of the management fees it received because it had an entitlement to them that accrued prior to the changeover date. For its part, AOL has cross claimed. It contends that it is entitled to the whole of the management fees that Huntley received for the year ended 30 June 2009 in Projects 1 and 2 and for the year ended 30 June 2008 in Projects 4, 5 and 6, including fees relating to the period after the changeover date, because it had an accrued entitlement prior to the changeover date to the fees for the whole year. The main issue that arises is whether the management fees are apportionable in circumstances in which AOL and Huntley were REs for different parts of the year to which the fees related. There is a subsidiary issue. This is whether, if the fees are apportionable, the time for apportionment is the date of the members' resolutions removing AOL and appointing Huntley (in respect of any particular Project the two resolutions were passed on the same date and at the same meeting), or from the date when the Australian Securities and Investments Commission (ASIC) processed the notice of the alteration in the sense of recording in its register Huntley as RE in place of AOL. Apparently on the same day, Huntley lodged an ASIC Form 5107 (Notification of Change of Responsible Entity) in respect of each of Projects 5 and 6. On 28 March 2008, ASIC processed the Forms 5107 in the sense noted above of recording Huntley as RE in respect of Projects 5 and 6 in place of AOL. On 29 April 2008 the members of Project 4 resolved to remove AOL as RE for Project 4 and to appoint Huntley as RE in its place. On the following day, 30 April 2008, Huntley lodged ASIC Form 5107 for Project 4 with ASIC. On that same day, ASIC processed the Form 5107 in the sense noted above of recording Huntley as RE for Project 4 in place of AOL . On 6 November 2008 the members of Project 1 resolved to remove AOL as RE for that Project and to appoint Huntley as RE in its place. On the same day Huntley lodged ASIC Form 5107 with ASIC. On 12 November 2008 ASIC processed the Form 5107 by recording Huntley as RE for Project 1 in place of AOL. On 17 November 2008 the members of Project 2 resolved to remove AOL as RE for that Project and to appoint Huntley as RE in its place. On the same day Huntley lodged ASIC Form 5107 with ASIC. On 19 November 2008 ASIC processed the Form 5107 by recording Huntley as RE for Project 2 in place of AOL. Huntley received management fees for Projects 4 and 5 in respect of annual periods that included a period during which AOL was the RE for those Projects. Project 1 was established by a Project Deed dated 4 August 1997. After 1 July 1998 Project 1 was required to be registered with ASIC as an MIS. Under the MI Act, AOL was authorised to amend the Project Deed in certain respects and did so by a Supplemental Deed dated 5 June 2000. By reason of the Supplemental Deed references to "Trustee" and "Manager" in the Project Deed are to be read as references to the RE. The Constitution for Project 1 is therefore to be found in the Project Deed as amended by the Supplemental Deed. This consolidated document has a heading of "Trust Deed". I will refer to the "Trust Deed" and the " Constitution " for Project 1 indiscriminately. Projects 2 to 6 were established directly by "Constitutions" to which AOL and all persons holding interests in the Project are parties. Save for the due date for fees in Projects 4 and 5, the material terms of the Grove Agreements for all Projects are mutuatis mutandis identical. (In Project 5 fees are payable six-monthly in arrears and in Project 4 they are payable on the rendering of an invoice (clause 6.3(c)) --- as noted earlier, the parties agree that the fees have in fact been invoiced in arrears. ) Clause 4.3 of the Project 1 Grove Agreement lists the ongoing management and harvesting duties that the RE must perform. Clause 6.3 of the Project 1 Grove Agreement entitles the RE (Manager) to management fees. The parties approached the matter on the basis that this reference was to 12 calendar months commencing on the date of the Grove Agreement or the anniversary of that date. Clause 5.3 of the Project 2 Grove Agreement, to which I refer as an example of the Grove Agreements for the other Projects, is, mutatis mutandis , identical to cl 6.3 of the Project 1 Grove Agreement set out above, except that: "Responsible Entity" is substituted for "Manager"; and instead of a reference to cl "4.3(l)", the reference is to cl "4.3(k)". There are separate provisions in both Grove Agreements for the payment of harvesting fees to the RE. In the Project 2 Grove Agreement, "year" probably has the same meaning as "Year" in the Project 1 Grove Agreement (cll 5.2 and 5.3 speak of "second year of this Agreement" and "third year and onwards of this Agreement" respectively). Clause 6.5 of the Project 1 Grove Agreement and cl 5.5 of the Project 2 Grove Agreement provide that the RE will bear all costs of carrying out its duties under the respective Grove Agreements. Clause 17.1 of the Constitutions for Projects 2, 4, 5 and 6 provides that the respective Grove Agreements must be read subject to the terms of the Constitution . There is no such provision in the Constitution (Trust Deed) for Project 1, but see cl 21.2 of the Project 1 Grove Agreement referred to at [25] above. Unlike the other Projects, the Project 1 Trust Deed provided for both a Trustee and a Manager. The Trustee was Australian Rural Group Limited. The collapsing of the two roles into one apparently rendered cl 29.3 otiose. Clause 31.1 of the Project 1 Trust Deed provided that the Manager was entitled to be paid fees of the amount and in the manner set out in the individual Grove Agreements. Nothing in this clause 31.3 means the Manager is not entitled to be paid fees and costs for work performed properly. The fees and payments are noted here as a matter of record. [In the case of Projects 4, 5 and 6, there is no reference to the Grove Licence Agreement, and in the case of Projects 5 and 6, there is a penultimate sentence "The Responsible Entity's fees will be invoiced and payable in the manner provided in the Grove Agreements. Section 601FM(1) within that Division provides that if members of a registered scheme want to remove the RE they may take action under Div 1 of Pt 2G.4 for the calling of a members' meeting to consider and vote on a resolution that the current RE should be removed and a resolution choosing a company to be the new RE. Section 601FM(2) provides that if the members vote to remove an RE and at the same meeting choose as the new RE a company that consents in writing to be appointed, a notice must be lodged with ASIC asking it to alter the record of the scheme's registration to name the chosen company as RE, and that ASIC "must comply with the notice when it is lodged". After all, each Grove Agreement is between AOL and a Member. The dispute, however, concerns fees that have in fact been paid by Members under the Grove Agreements to AOL or to Huntley and neither of those parties has suggested that any Member is liable to pay a second time. Nothing that I say in these reasons will affect the Members. In my opinion, neither s 601FS nor s 601FT of the Act permits a re-writing of contracts to which the former RE was a party: see Australian Olive Holdings at [85]. Sections 60FS(1) and 601FT(1) place a new RE in the shoes of the former RE in relation to rights, obligations and liabilities that would have been those of the former RE in respect of the post-changeover period, but for the changeover. Paragraph (a) of s 601FS(2) is not inconsistent with this construction. There may be room for debate concerning the application of para (a) of s 601FS(2) to certain contractual provisions for the payment of fees that can be hypothesised, but at least it is clear that the paragraph does not detract from a former RE's right to retain fees that have been paid to it in satisfaction of a present debt. (One situation that would fall within para (a) would be a promise to pay the former RE at a point of time that, it transpired, post-dated its removal where the payment could be said to be for the performance of functions that occurred prior to its removal. ) It must be remembered too that para (a) is in the nature of an exception or carving out: the primary operative provision is found in s 601FS(1). Under para (c) of cl 6.3 of the Project 1 Grove Agreement and of cl 5.3 of the Project 2 Grove Agreement, a debt in favour of AOL came into existence at the commencement of each year. AOL would have been entitled at that time, upon a failure to pay, to sue the Member as for debt and to obtain judgment. AOL would have been entitled, after giving the Member seven days' notice to make the payment and a failure by the Member to comply, to terminate the Grove Agreement under cl 12.3 of the Project 1 Grove Agreement or cl 11.3 of the Project 2 Grove Agreement. As the new RE, Huntley will be entitled to enforce the provision as to payment of fees against Members in relation to future years but this is irrelevant to amounts of fees that were paid to AOL prior to the changeover. Huntley relies on what it describes as a " reductio ad absurdum ". It points out that according to AOL's argument, if the fees for the year were paid to an RE on the first day of the year and that RE was removed and replaced as RE on the second day of the year, the new RE would have no fees with which to perform its obligations under the Grove Agreements --- obligations that it must incur at its own expense according to cl 6.5 of the Project 1 Grove Agreement and cl 5.5 of the Project 2 Grove Agreement. In the same vein, it could be suggested to be absurd that the former RE should have an entitlement to a full year's fee for only one day's work. With respect, the answer to this submission is that it was for the Members and Huntley to take such considerations into account before the Members resolved to remove AOL and to appoint Huntley, and Huntley agreed to accept the appointment. Huntley relied on cl 29.3 of the Project 1 Trust Deed (see [29] above) but I do not think that that provision shows that apportionment was contemplated. It provides only, in effect, that when the Trustee acted as manager, it was entitled to receive the same fees that would have been receivable by a separate entity filling the role of manager. I do not think that cl 31.3 of the Project 1 Trust Deed (cl 7.3 of the Project 2 Constitution ) affects the position. That provision is concerned with the failure of the RE to perform its role "properly", meaning up to standard. It is not suggested for present purposes that AOL did not properly perform its role as RE during the part of the year down to the changeover. It was deprived of the ability to perform its role at all during the remainder of that year by reason of the Members' decision to remove AOL and, indirectly, Huntley's decision to accept appointment as RE in its place. Finally, if Huntley had an entitlement to be paid fees for the post-changeover part of the year, that would be a right against the Members. The Members might wish to make a third party claim against AOL (I say nothing of the prospects of success of such a claim), but that is another matter. I turn now to consider the fees for the changeover year that were paid to Huntley. I am not required to decide this question for present purposes because even assuming in favour of AOL that the latter construction is correct, this would not mean that AOL would be entitled to recover from Huntley fees for the year that the Members paid to Huntley in respect of the various Projects. There is no evidence that the Members did not intend to pay Huntley or that Huntley has intercepted and appropriated to itself payments that they intended to make to AOL. In the absence of the Members or a representative of them as parties, I am not at liberty to bring about a situation in which Huntley is deprived of the money that the Members intended it should have. Any remedy available to AOL is against the Members. It can sue them for debt, contending that it is no defence that they paid the wrong RE. Again, the Members might decide to make a third party claim against Huntley (and again, I say nothing of the prospects of success of such a claim). It is necessary now to refer to s 232 of the Property Law Act , subss (1) and (2) of which were set out at [35] above. There is a threshold question that I raised on the hearing but need not decide. This is whether the present fees payable for services to be rendered by the RE throughout the year fall within the expression "rents, annuities, dividends, and other periodical payments in the nature of income..." within s 232(1) or are "like interest on money lent" within that provision. I raised with the parties the possibility that the payments to which the statutory provision refers are limited to those that are passively "earned" by nothing more than the passing of time so that it is appropriate to conceive of them as accruing evenly from day to day. The argument would be that the management fees in the present case are not earned evenly from day to day because the RE's services for which the fees are paid are uneven, and vary according to time of the year and other circumstances. Be this as it may, in my opinion s 232 of the Property Law Act does not require an apportionment in favour of Huntley for the following reasons. First, authority establishes that the statutory provision has no application where, as in the case of Projects 1 and 2, payment is made in advance: see Ellis v Rowbotham [1900] 1 QB 740 at 743, 744; The Australian Guarantee Corporation Limited v Balding [1930] HCA 10 ; (1930) 43 CLR 140 at 152-154 per Isaacs J; Amad v Grant; Grosglik v Grant [1947] HCA 9 ; (1947) 74 CLR 327 at 338 per Latham CJ (as noted in AOL's submissions, Dixon J (as his Honour then was) at 346 also cited Ellis v Rowbotham with apparent approval of it as supporting the present proposition at 346); Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313 ; (2000) 10 BPR 18 ,235 at [147]. Second, even if the apportionment provision did apply, that would be a matter relevant to the rights and obligations as between Huntley and the Members, not as between Huntley and AOL. In view of the conclusion reached by me above, I need not address in relation to Projects 1 and 2 the question of the point of time (resolution of the Members or recording of the change by ASIC) as at which any apportionment would have to be made in respect of those Projects. The only difference relates to the time at which the debt comes into existence. In the case of Project 6 the fees are payable for years commencing on 1 July and ending on the following 30 June. Clause 6.3(c) of the Project 6 Grove Agreement provides that the RE will issue the Members with an invoice by 1 October in the year for the annual fee and that payment must be made by 31 October in that year. Clause 6.3(d) provides that the fees are a "debt due and owing by the Member to the Responsible Entity". In the case of Project 6, the debt arises either upon the issue of the invoice to the Member or, the invoice having first been issued, at the end of the day on 31 October. It was not suggested that anything turns on the difference between those two times. Clause 6.3(c) of the Project 5 Grove Agreement provides that the annual fees are payable "half yearly in arrears", and that the RE will issue the Member with an invoice by 1 December or 1 June in each year for one half of the annual fees, with payment due by 31 December or 30 June in the year, respectively. The parties have agreed that s 232 of the Property Law Act has the effect that the management fees are to be considered as accruing from day to day and as being apportionable in respect of time accordingly. According to this agreement, AOL's entitlement is to be calculated in respect of the period before the change of RE, and Huntley's in respect of the period after it. If the date of changeover is 18 March 2008, as Huntley submits, AOL's proportionate entitlement is said (by AOL) to be 42.5%. If, on the other hand, the changeover date is 28 March 2008, as AOL submits, AOL's proportionate entitlement is said (by AOL) to be 47.5%. In my opinion, provided there has been a valid removal and appointment at all (see Huntley Management Ltd v Australian Olives Ltd (No 2) (2009) 178 FCR 51 at [12]-[13]), the former RE remains RE until the ASIC record is altered to name another company as RE: see s 601FJ(1) of the Act. In the present case, AOL remained the RE for Project 5 until 28 March 2008 when ASIC's record in relation to that Project was altered to name Huntley as RE. There was a further issue in relation to Project 4 concerning AOL's claim to be entitled to a "Proceeds Fund" of some $90,970.48 representing the proceeds of the sale of Project 4 olives. Huntley has now agreed, however, that AOL is entitled to this amount (which is held by Huntley) subject to any set off of any amount for which AOL may be indebted to Huntley. I hope that the parties will be able to agree on the form of orders to be made and I will list the proceeding for a date for the making of orders. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

managed investment scheme removal of responsible entity (re) appointment of replacement re entitlement to management fees whether fees paid for full year apportionable as between the two res construction of "grove agreements" between individual investors and the removed re apportionment legislation whether apportionment legislation applied. corporations

The application is dated 28 February 2006 and is supported by an affidavit and a draft notice of appeal. The Minister sought the dismissal of the proceedings issued in the Federal Magistrates Court of Australia by the applicant and relied on various rules of the Federal Magistrates Court Rules 2001 (Pt 13 r 13.10(a), (b) and (c)). The proceedings issued by the applicant that were the subject of the Minister's application were an application under the Administrative Decisions (Judicial Review) Act 1977 (Cth), Judiciary Act 1903 (Cth) and Migration Act 1958 (Cth) seeking the review of the decision of a delegate of the Minister whereby the applicant was refused a protection visa. The applicant is a citizen of Bangladesh who arrived in Australia on 21 April 1999. On 20 May 1999 he lodged an application for a protection (class XA) visa. On 22 June 1999 a delegate of the Minister refused the application. On 29 November 2001 the Refugee Review Tribunal ('the Tribunal') affirmed the delegate's decision. The decision of the Tribunal was handed down on 19 December 2001. 4. On 16 January 2002 the applicant issued proceedings in the Federal Court seeking a review of the decision. 5. The application for review was dismissed by Gyles J on 30 April 2002: NABC v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 539. On 25 November 2002 the Full Court dismissed an appeal from that decision: Applicant NABC of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 418. 6. Two applications for special leave to appeal to the High Court did not proceed. The first was deemed to be abandoned and the other was dismissed. 7. On 5 October 2004 the appellant lodged a second application for the review of the Tribunal's decision in the Federal Magistrates Court, but that application was subsequently discontinued. 8. On 13 October 2005 the applicant lodged his current application for judicial review in the Federal Magistrates Court to review the delegate's decision and that application was dismissed on 13 February 2006. 5 I do not think that the applicant's proposed appeal enjoys any reasonable prospect of success. This case is similar to the case which came before Wilcox J in SZDFW v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1821. The Tribunal conducted a full merits review in relation to the decision of the delegate and the applicant was given every opportunity to present his case (see s 415 of the Migration Act 1958 (Cth), Zubair v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 248 ; (2004) 139 FCR 344). This Court found that the decision of the Tribunal was in no way affected by jurisdictional error. The delegate's decision is now of no significance having regard to the fact that it was reviewed by the Tribunal. 6 I think that in view of the history of this matter as I have outlined it, the order prohibiting without leave the filing of a further application to review the decision of the delegate and the decision of the Tribunal is justified. 7 The application for leave to appeal is dismissed. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

application for leave to appeal from orders made by federal magistrate dismissing applicant's application for review of decision of minister's delegate refusing applicant protection visa decision of minister's delegate previously affirmed by refugee review tribunal application for review of decision of tribunal previously dismissed by judge of federal court and full court of federal court application for special leave to appeal to high court also previously dismissed. migration

[18] Is the Project as approved the same "action" as that referred? The applicant, Blue Wedges Inc, challenges the legal validity of a decision of the first respondent (the Federal Minister) made on 20 December 2007 (the Approval Decision) approving the Project under s 133 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the Environment Act). 2 Blue Wedges' basic contention is that the Project has substantially changed since the legislative approval process began. The Federal Minister, it says, must start again. 3 The present litigation does not call for a decision on the environmental or economic merits of the Project. Rather, the Court is asked to find that the Approval Decision is invalid because the procedures laid down by law have not been followed. The Federal Government's role is limited to matters in which the Federal government has specific powers and responsibilities, as for example in the present case, obligations under international treaties or the management of Federal lands and waters. 6 The process adopted is to "refer" to the Federal Minister an "action" which may have an environmental impact on areas of Federal responsibility. The Minister then decides whether the action needs Federal approval because of its potential impact on those areas, that is to say, whether it is a "controlled action". At the same time the Minister identifies the specific areas of Federal responsibility that are likely to be impacted by the action ("controlling provisions"). The Minister must then select how the relevant impacts on those areas are to be assessed. 7 In the present case, the Federal Minister chose the process of EES and public panel hearing under Victorian law. This made obvious sense. In the one process there could be an assessment of the Federal issues at the same time as the wider Victorian environmental enquiry. As a consequence, it argues, there was no lawful basis for the Federal Minister approving the Project because it had not been the subject of a referral, a decision under s 75, the selection of a mode of assessment under s 87 or the receipt of assessment documentation under s 133. I shall refer to this ground of alleged invalidity as "the identity of action ground". 9 Alternatively, Blue Wedges says that even if the Project the subject of the Approval Decision is not relevantly different from what was described in the Referral, the Assessment did not adequately assess the relevant impacts of the Project and/or provide enough information to enable the Federal Minister to make an informed decision. The Minister, it is said, could not make a valid decision without requesting further information under s 132 of the Environment Act. I shall refer to this ground as "the adequacy of assessment ground". 10 Blue Wedges has not yet received the Minister's reasons for the Approval Decision, those reasons having been requested by it under s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth). Under that Act such reasons are due by 18 January 2008. Blue Wedges sought an adjournment of the present hearing until the reasons are supplied. I refused an adjournment. Both grounds relied on by Blue Wedges turn on material which is already before the Court and cannot be affected by the reasons of the Minister. Whether or not those reasons, when supplied, disclose some further ground for legal challenge can only be a matter of speculation at this stage. When the reasons are received, Blue Wedges will be free to take such action as it sees fit. They are both the same "action". 12 In any case, according to the respondents, such differences as there are between Referral and Assessment do not matter for present purposes. First, if the proposal of the Project in 2002 had been in the same form as that in the 2007 Assessment, the Federal Minister would have still decided under s 75 that it was a "controlled action". (Indeed, the more potentially harmful to the environment, the more likely it is that the Minister would decide the proposal was a "controlled action". There are other matters in Pt 3 but they are unarguably irrelevant --- eg nuclear actions (s 21) or National Heritage places (s 15B), the only National Heritage place in Victoria being the Exhibition Building and Carlton Gardens. (Some brief mention will be made below as to one other Pt 3 matter, viz Commonwealth marine areas (ss 23 and 24A)). 14 Thirdly, of all the assessment options available under s 87 the Federal Minister chose that which was the most rigorous and open, involving environmental effects statements (as it turned out, two of them) and lengthy public hearings before independent panels. Blue Wedges does not say that the Minister should have chosen another of the modes of assessment that were available to him under the Act. Blue Wedges' complaint is not that the Project could not be assessed in the Assessment --- rather, it is that the Project was a different one from the Project in the Referral. 16 The conclusion is said to be that the Project in its final form (assuming, contrary to the primary argument, that this is materially different to its Referral form) has been subject to an assessment process contemplated by the Environment Act. Can changes to a proposed "action" be made between Referral and Approval? It is common for circumstances and priorities to change as a proposal to take an action is refined. 20 More importantly, a proposed action may change in a way that is positive for the environment. For example, in the present case there could have been a change in the design of the Project which meant less dredging. In such a case, it would be surprising if no approval decision could be made because the "action" was not the action the subject of the referral. 21 It is likely that the Act was drafted on the assumption that it would be preferable that proposed actions be referred at an early stage in their development in order that proposals could evolve in a direction that is positive for the environment. If a proposed action can be referred when its details are still being formulated, the Department (the Minister's advisers) can play a role in the development of the proposal having regard to the principles and objectives of the Act. Referral at an early stage permits, amongst other things, early identification of possible impacts on relevant environmental matters and allows the opportunity to address and possibly avoid those impacts as the proposal is developed. 22 The function of the referral step is not to fix in stone all the details of a proposed "action" for the subsequent approval process. Rather, this mechanism results in the proposal either being brought within the Environment Act assessment and approval regime, or being exempted from the requirements of assessment and approval under the Act. It is not the function of the triage nurse to make a detailed diagnosis, let alone prescribe treatment. 23 Since the environmental approval process for a major project can stretch out over years, as witness the present case, it would be a strange result if making an environment positive (or environment neutral but cost positive) change meant proponents were forced to start all over again, with inevitable cost and delay. If Blue Wedges' argument is correct there would be a strong disincentive for proponents to keep looking for environmentally friendly changes to a project. 24 The text of the Environment Act does not support Blue Wedges' construction. 25 The term "action" is defined in the broadest terms. 26 When it comes to particular proposed actions, the Act does not purport to define a particular proposed action by reference to a description of the proposed action given in any document. Further, subject to certain limited exceptions described below, the Act does not require the referral to contain any particular information or to descend to any particular level of detail about the proposed action. 27 The form and content of referrals are matters left to be prescribed by regulations under the Act. (2) A referral of a proposal to take an action must include the information prescribed by the regulations. By Sch 2, Pt 2 , item 3 of that Act, the amendment "applies in relation to a proposal" referred to the Minister before the "commencement time" (12 December 2006) and thus "applies" to the Referral in the present case. The practical result would seem to be that where, as will be seen happened in the present case, a pre-amendment referral included alternatives, any doubt as to the validity of such referral is removed. 29 The regulations made under the Act, the Environment Protection and Biodiversity Conservation Regulations 2000 (Cth), provide by reg 4.03 that a referral must include the information mentioned in sch 2. 30 It will be seen that the description required is in the most general terms, and implicitly recognises that the detail existing at the time of referral may, and probably will, develop and change by the time of assessment. This suggests that, as already mentioned, drafters of the Act understood that the earlier a referral was sought, the better, and that change was almost inevitable. 31 In my view this is one of the exceptional occasions where regulations can be used as an aid to the construction of an Act. The Act, in this case the Environment Act, "provides a framework built on contemporaneously prepared regulations": Hanlon v Law Society [1981] AC 124 at 193; Elazac Pty Ltd v Commissioner of Patents (1994) 125 ALR 663 at 667. 32 Blue Wedges argued that the regime established under Ch 4 of the Act proceeds on the assumption that the nature of an action referred for assessment will remain consistent throughout the assessment process. It said the regime is predicated on a series of decisions designed to ensure that the impacts of the action which has been referred are adequately assessed for each of the designated controlling provisions. That regime, it is said, would be subverted if the action changed during the course of the referral process such that the impacts of the action were likely to be different from the impacts of the action which was originally referred for determination. It is for this reason, so the argument went, that the Act places such importance on the accuracy of the information provided for the purposes of assessment. The Environment Minister must make a decision on the information provided in the referral. This consideration renders it all the more important that the referral document must contain information that is truthful and complete, so as not to mislead. Nor is there any reason to suppose that the Minister could not seek advice on factual matters from the Department or from any other person who might be able to assist the Minister in making a decision. Further, s 78 enables the Minister to reconsider his or her decision under s 75 in various circumstances, including where new information becomes available or where there has been a substantial change in circumstances relating to the likely impacts of a proposed action. So while obtaining truthful and accurate information is without doubt important, the freedom explicitly given to the Minister to obtain information from any source suggests, amongst other things, that it was contemplated the Minister might want information about a change in the proposed action. 34 Although in the present case the Referral came for the (then) proponent of the Project under s 68, the Environment Act also provides that a referral may come from a State or Territory (s 69), or a Commonwealth agency (s 71). There is a further provision that if the Federal Minister believes a person proposes to take an action that the Minister thinks may be or is a controlled action, the Minister may request that person, or a State or Territory that has responsibilities relating to the action, to refer the proposal (s 70). 35 Thus the Environment Act contemplates that a proposed action may be referred and made subject to the Act's processes whether the proponent likes it or not. This is hardly surprising; it could not be left up to proponents to decide whether or not the Act should apply. The significance of this for present purposes is that a proposed action may be referred to the Federal Minister against the wishes of the proponent, and regardless of its stage of development, and whether or not the proponent has had the opportunity to respond to issues raised by the Minister or anybody else. It would be quite unworkable if in such circumstances the proposed action could only be assessed in its form as at the time of referral. 36 Moreover, none of the decisional steps along the way --- the controlled action decision, identification of controlling provisions, selection of assessment method --- require a detailed assessment of the proposed action. That step only comes when the assessment itself is carried out and the subsequent approval given or refused. There seems to be no point in insisting that all the details of the proposed action remain the same throughout the whole process. Note: The Minister may request further information for the purpose of making a decision under this subsection. See section 156C. (2) The Minister must not decide to accept the varied proposal unless the Minister is satisfied that the character of the varied proposal is substantially the same as the character of the original proposal. This subsection does not limit the matters the Minister may consider in deciding whether or not to accept the varied proposal. 39 The effect of Div 1A is not that a proposal may only be varied by means of the formal variation process contained in that Division. So much is clear from the permissive terms in which s 156A(1) is cast; the person proposing to take the action "may" request the Minister to accept a variation of the original proposal. There is no reason here not to give "may" its ordinary meaning. 40 No power is given to the Minister to require or request a person to use the Division 1A process, in contrast to s 70, which empowers the Minister to request a person to make a referral of a proposal. 41 Further, no explicit provision is made by the Act for what is to occur if a proposal has been varied but that variation has not been subject to the Div 1A process. There is no provision, express or implied, to the effect that a proposal may be varied under Div 1A, but not otherwise. 42 The construction for which the Federal Minister contends is consistent with what was said in the Explanatory Memorandum for the 2006 Bill that introduced Div 1A. ... The purpose of this amendment is to provide greater flexibility for dealing with changes during the assessment process by providing a formal process for the variation of proposed actions. Further, the proposition that every variation to a proposal must be subject to the relatively elaborate and time-consuming process in Div 1A is incompatible with s 156A's objective of enhancing flexibility. 43 The Federal Minister's construction of Div 1A does not render it redundant. A proponent can use Div 1A to achieve a degree of certainty about the implications of any change to the original proposal. Div 1A is analogous to the tax legislation provisions which give a taxpayer the option of obtaining a binding ruling from the Commissioner: Taxation Administration Act 1953 (Cth) Sch 1, Div 359. 44 I conclude that elements, and substantial elements, of an "action", in this case the Project, can be changed between Referral and Approval Decision without rendering the latter invalid. Obviously there might come a point where the "action" becomes a different action. This has not been reached in the present case, for reasons to which I now turn. Is the Project as approved the same "action" as that referred? The changes between the referral and the EES were the subject of review (and criticism) by the First Panel in its report to the Victorian Minister for Planning. If detailed calculations of operational protocols lead to the view that the Great Ship Channel at The Heads channel requires to be deepened by a further 1 or 2 metres, or that it needs to be widened further over and above the maximum values assessed in the EES, these changes could have profound consequences for assessments undertaken elsewhere in the EES. 49 Following the First Panel's report, the Project changed even further, with the undertaking of a trial dredging program for the purposes of clarifying the design at the Heads and the preparation of a SEES by the PoMC. Blue Wedges argued that the SEES amounted to a "fresh start" by the PoMC, which intended that the SEES should "stand-alone from the EES". Blue Wedges contended that the result of these changes is that, in activities, location, scale or impacts, the project no longer can be said to be the same project which was the referred to the Minister under s 67 of the Environment Act. 50 The differences between the action the subject of the 2002 Referral and the action the subject of the 2007 Assessment have been summarised by Dr Simon Roberts, a scientific witness who swore an affidavit on behalf of Blue Wedges. (I interpolate here that I agree with the respondents that Dr Roberts' evidence was strictly speaking inadmissible since it went beyond the areas of his expertise and amounted to comparing documents which speak for themselves. However, since, by the same token, his report could be made as a submission I will receive it on that basis: Federal Court Rules O 10 r 1(2)(j). 52 The differences identified by Dr Roberts are summarised in a report attached to his affidavit (the Roberts Report). The 2007 Action is described as a proposal to deepen the shipping channels for a particular purpose ("to accommodate vessels with a draught of 14 m at all tides with the exception of severe metocean conditions"). The consequence of this fundamental shift in approach is that, whereas the 2002 Action is specifically confined in its dredging depth, the 2007 Action provides for dredging of an unspecified depth, provided it is sufficient to achieve the stated objective. The co-ordinates by which the location of the 2002 Action is defined do not include the Heads, the Yarra River or South Channel east (although there is reference to dredging of the Great Ship Channel and Yarra River estuary in the body of the referral). By contrast, the 2007 Action expressly includes dredging outside the shipping channels in the Entrance, the turning area at Hovell Pile in the South Channel East, the southern end of the Port Melbourne channel, and the Swanson Dock swing basin. The 2007 Action proposes to re-align and extend some of those channels and to extend the Great Ship Channel into parts of the existing Western and Outer Western channels. The 2007 Action also involves significant river works and works on berths and docks at locations which were not included in the 2002 Referral. (c) the activities included in the proposed action: Other than investigatory works, the only activities described in the 2002 Action are "deepenin g " or "dredging" of the channels and the Yarra River estuary. The 2002 Action makes no reference to the disposal of contaminated dredge material, either within the existing disposal areas or otherwise. It makes no reference to the need to construct a Confined Aquatic Disposal facility in the existing DMG or an entirely new DMG in the south of the Bay. It does not include river works to stabilise the banks of the Yarra River and expansion of the swing basin at Swanson dock; modification to berths and docks; the installation of new navigation aids; protection or decommissioning of infrastructure assets that traverse the shipping channels proposed for dredging; increased maintenance dredging until 2030; or ongoing use of the shipping lanes by larger vessels, including tankers. All of these activities are within the scope of the 2007 Action. (d) the depth of dredging involved in the proposed action: The most basic determinant of the nature, scale and likely impact of the two actions is the depth of dredging proposed to be undertaken. The 2002 Action clearly specified that "the expected deepening of the channels is of the order of 1.5 metres to 2 metres". By contrast, the 2007 Action provides for variable dredging of unspecified depth such as to accommodate vessels with a draught of 14m. In the 2007 Action the deepening of the channels in the Northern areas will be in the vicinity of 3 metres, and in the Entrance by more than 4 metres (and potentially as great as 8 metres, as a result of scour resulting from the trial dredging program). (e) the scale of the proposed action: While the 2002 Action does not give any direct indication of its size or the amount of material to be removed, its reference to the project taking place "within the existing shipping channel alignment", and its failure to refer to the need to either extend the existing DMG or create a new DMG suggests that it is a project of limited scope which will not be dissimilar to dredging works which have been carried out on previous occasions. By contrast, the 2007 Action will remove and dispose of approximately 23 million cubic metres of material from shipping channels and other areas of the Bay, with parts of the 2007 Action containing sections of continuous dredge area of greater than 10km in length. This dredged material will then be transported and dumped at two spoil grounds. If instead it were placed on the City of Melbourne's Hoddle Grid (the central city area), it would cover it to a depth of approximately 23 metres, the equivalent of a typical eight-storey building. In particular, the significantly greater scale of the 2007 Action, and its inclusion of the need to dispose of contaminated material, suggest that its environmental impact is likely to be far more extensive than the confined dredging "within the existing shipping channels" proposed in 2002. 54 In addition, Blue Wedges submitted that the elements of the each of the protected matters likely to be impacted by the 2002 Action and the 2007 Action are significantly different. [Ramsar is a city in Iran where the applicable international treaty was signed. ] The 2007 Assessment identifies a slightly different set of wetlands which are likely to be impacted by the proposal: Swan Bay, Mud Islands, and the Spit Wildlife Reserve component of the western shoreline of Port Phillip Bay. (b) Listed threatened species : The 2002 Controlled Action decision considers the impact on five listed threatened species and determines that the action is likely to have an impact only on the orange-bellied parrot. Significantly, the 2002 Controlled Action decision determines that the 2002 Action is not likely to threaten any important habitat or population of the Australian Grayling. By contrast, the 2007 Assessment considers the impact on eighteen listed threatened species and determines that the action is likely to have an impact only on the Australian Grayling. (c) Listed migratory species : The 2002 Controlled Action decision considers the impact on four listed migratory species and determines that the action is likely to have an impact only on the orange-bellied parrot. The 2007 Assessment considers the impact on nine listed seabirds and twenty-six listed shorebirds, none of which are determined to be threatened by the action. (d) Commonwealth land : The 2002 Controlled Action decision identifies one area of Commonwealth land which may be impacted by the 2002 Action: Swan Island. The 2007 Assessment identifies three areas of Commonwealth land which it considers may be impacted: Swan Island Defence Precinct, Swan Island and Naval Waters, and Point Nepean Commonwealth area. As a result, these actions were the subject of separate referrals to the Minister under s 67 of the Environment Act. By contrast, the 2007 Assessment expressly encompasses the protection of infrastructure assets that traverse the shipping channels and builds on the results of the trial dredging. (b) The 2002 Referral includes reference to maintenance dredging, while the 2007 Assessment expressly excludes consideration of maintenance dredging except insofar as it impacts on " options for management of dredged material ". The action changed substantially in 2004 and then again in 2007. At either of these points the proponent could have initiated the process for a new referral or, in relation to the most recent changes, requested a variation under s 156A of the Environment Act. Instead, however, it has ignored the processes of the Act and sought thereby to exclude the new project from the scrutiny afforded by the Act's protections. 57 Blue Wedges argued that those protections serve a vital public function by ensuring that all of the impacts of a proposed action are adequately assessed. The proponent's failure to recognise the differences between the 2002 Action and the 2007 Action undermines that function and in doing so subverts the purposes of the Act. Accordingly, Blue Wedges asked that this Court give effect to that purpose and declare the Approval Decision invalid because it was based on a referral for what was essentially a different "action". (This was no criticism of him as the report had not been made available to him. ) Certainly the Maunsell report in a number of important instances puts forward alternatives or ranges. For example, in Table 2.4 there is a Summary of Spoil Volumes which provides estimates for the range of approximate volumes of spoil at the various sites. The upper limits add up to 27.02 million cubic metres, which is greater than the quantity said by Blue Wedges to be a 2007 expansion of the original figure. 59 However, it is not necessary to descend into further detail. I accept that there are differences in the Project the subject of the Approval Decision as compared with the Project in the Referral (including the Maunsell report). For the reasons already mentioned, in a project of this magnitude it would be surprising if there were not. Whether those differences can be characterised as "significant" or "substantial" or by some other adjective suggesting importance is not to the point. It is not for any other work. Deepening channels necessarily involves disposal of the material removed. The Project is to take place at Port Phillip Heads, in Port Phillip Bay and the Yarra River and its approaching channels, and nowhere else. It is the same "action". That action has been the subject of public hearings over 63 days. The Approval Decision is lawful. The law does not require the process to be started all over again. 60 For the sake of completeness I should add that a complaint was made in the course of the hearings that the "controlling provisions" identified in the Controlled Action Decision did not include Commonwealth marine areas. The short answer is that Blue Wedges' application does not attack the validity of the Controlled Action Decision. In any event, that matter was considered at the time of the Controlled Action Decision. Port Phillip Bay is State waters and Commonwealth waters commence 3 nm [nautical miles] from the Heads. There is no basis for concluding that his aspect of the decision-making process was unlawful. In particular, there was no consideration of whether the Project in its 2007 form might impact on the environment of a Commonwealth marine area. 62 The 2007 Assessment also expressly excluded consideration of maintenance dredging, notwithstanding that it was a significant component of the project and has the potential to have far-reaching effects, particularly in the context of the scour caused by the trial dredging program. 63 Accordingly, Blue Wedges submitted, the Assessment did not adequately assess all of the impacts of the Project. By making his decision on the basis of the Assessment and by failing to request additional information under s 132 of the Act, the Minister has failed to have regard to all considerations relevant to his decision under s 133 of the Act: see Minister for Environment and Heritage v Queensland Conservation Council Inc [2004] FCAFC 190 ; (2004) 139 FCR 24. Indeed, s 132 (amongst other sections) assumes that the Minister may have other sources of information available on which to base a decision under s 133, and may need to utilise those sources even after the receipt of an Assessment report. As to the difficulty of making out a legal challenge to decisions made under such powers, see Buck v Bavone [1976] HCA 24 ; (1976) 135 CLR 110 at 118-119, and Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 275-277. 67 There is no evidence in this case that the Federal Minister believed that he did not have enough information to make an informed decision. On the contrary, the fact that the Minister has made the Approval Decision in itself provides a very strong indication that the Minister believed that he had sufficient information to make an informed decision. The point about Commonwealth marine areas has been discussed above. The usual consequence would be that costs follow the event, that is to say that Blue Wedges should pay the respondents' costs. Counsel for all respondents submitted that such an order should be made in the event of the application being dismissed. 69 Costs are in the discretion of the Court: Federal Court of Australia Act 1976 (Cth) s 43. In considering the award of costs under a similarly broad statutory discretion in Oshlack v Richmond City Council [1998] HCA 11 ; (1998) 193 CLR 72, a majority of the High Court held that the trial judge's discretion had not miscarried by taking into account such matters as the unsuccessful party's motivation to ensure obedience to environmental law and preservation of an endangered koala habitat, the fact that a significant number of members of the public shared that view, and that the basis of the challenge was arguable: see per Gaudron and Gummow JJ at [20],[49] and per Kirby J at [133], [136]-[144]; see also Save the Ridge Inc v Commonwealth (2006) 230 ALR 411 (discussing departures from the ordinary costs rule in public interest cases). 70 Blue Wedges represents the interests of over 65 community and environment groups. It has been actively campaigning to raise public awareness of threats to the environment of Port Phillip Bay over many years. As such it qualified for the express conferral of standing to bring proceedings such as the present one conferred by s 487(3) of the Environment Act. (The respondents in their defences objected to Blue Wedges' standing but did not pursue such objections at the hearing. He has notified to PoMC potential claims for compensation on their behalf. Nevertheless this commercial element of the case does not gainsay the public interest which lies at the base of the present application. 72 Mr Morehead initially had the services of counsel acting pro bono in a directions hearing in December but was unable to obtain such assistance for the hearing which, because of the urgency, took place during the holiday period. So Mr Morehead, who runs a one-man practice at Portsea, conducted the case himself. Against the combined resources of the Commonwealth and the State of Victoria, who were able to retain five barristers, including four senior counsel, Mr Morehead on his own advanced serious and competent argument, for which the Court is grateful. He frankly informed the Court that his appearance was not pro bono. Nevertheless, I doubt if his earnings from this case will propel him into the Australian Financial Review list of top fee earners. 73 In my view, however, this is a clear case for the application of the Oshlack approach. The condition of Port Phillip Bay is a matter of high public concern, and not only for the four million or so Victorians who live around it. As might be expected, the Project has attracted much controversy. On Saturdays the Melbourne Age publishes a list of which it considers to be the "Five Big Issues" of the week. Last Saturday, 12 January, Port Phillip Bay channel deepening was third, topped only by Andrew Symonds in the Sydney Test and Hillary Clinton in New Hampshire. Although, as has been said in another context, there is a difference between what is in the public interest and what is of interest to the public ( Lion Laboratories Ltd v Evans and Others [1985] QB 526 at 553), in the present case the two happen to coincide. There is a public interest in the Approval Decision itself, and equally in whether it has been reached according to law. Also, the application raised novel questions of general importance as to the approval process under the Environment Act: cf Save the Ridge Inc v Commonwealth (2006) 230 ALR 430 at [11]-[12] (acknowledging that the existence of a novel and important question of statutory construction will be relevant to a court's discretion in public interest litigation to depart from the ordinary costs rule, but concluding that the issues of construction presented in that case were not questions of general importance. But it by no means necessarily follows that the case of the party who loses could have been seen from the start as hopeless and without merit. Certainly that is not so in the present case. Further, there was not unreasonable delay by Blue Wedges in bringing its application. Until the Victorian Minister provided his assessment to the Federal Minister, an application could well have been attacked as premature. 75 Accordingly, although I will order that the application be dismissed, there will be no costs order. I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey .

project for deepening shipping channels in port phillip bay referral under environment protection and biodiversity conservation act 1999 (cth) changes in project between referral and approval costs in public interest litigation subordinate legislation as aid to construction "action" environmental law costs statutory construction words and phrases

She arrived in Australia on 21 December 2003. On 27 January 2004 she lodged an application for a protection (class XA) visa under the Migration Act 1958 (Cth). 2 On 15 November 2004 a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs ('the Minister') refused to grant a protection visa. On 7 December 2004 the appellant applied for review of the delegate's decision to the Refugee Review Tribunal ('the RRT'). On 17 March 2005, after a hearing conducted on 17 February 2005 the RRT affirmed the decision not to grant a protection visa. 3 On 8 April 2005 the appellant sought judicial review, in the Federal Magistrates Court, of the decision of the RRT. That application was heard by Lloyd-Jones FM. On 16 November 2006 he dismissed the application for judicial review with costs. From that judgment the present appeal is brought, by Notice of Appeal dated 1 December 2006. An amended Notice of Appeal was filed in Court, without objection, at the hearing of the appeal, on 26 February, 2007. The Applicant lived at Pandrikaithakulam (various spellings) near Omanthai (in the Vanni) from 1993 to 1998 and from 1998 to 2003 she lived at Mulliyavalai near Mullaitivu (also various spellings and in the Vanni but on the east coast). The Applicant was a cook from 1988 until 2003. She obtained her current passport without difficulty in November 2003, and her Australian visa on 9 December 2003; she left Sri Lanka legally shortly afterwards. In 1987 when the Indian Peace Keeping Force (IPKF) fought the LTTE the Applicant suffered at the hands of the LTTE; she lived in fear amid shelling and bombing from both sides, and the LTTE forced all Tamils to support it in various ways. The Applicant had to inform the LTTE when IPKF soldiers came to neighbouring areas. When LTTE youth learned that her husband was a police officer they threatened her as they suspected her of passing information to the Government forces through her husband. After the IPKF left, LTTE cadres dragged her out of her house and kicked her in front of villagers and called her a traitor; she had to convince them that she supported them. Her husband never came home after the IPKF came to the Vanni; the LTTE told her to produce her husband but she sent messages to him saying not to return home and to get the family out of there. He did not reply and in 1988 she learned that he had a mistress and was not interested in getting the family out of the Omanthai area. In 1990 after the IPKF left, the Applicant had to cook for the LTTE and they refused to let her leave the Vanni area they controlled. After collapse of the (then) peace talks in June 1990 she had to treat injured LTTE cadres. As the LTTE was recruiting youths the Applicant sent her daughter out of the Vanni. Even in 1995 when Jaffna was captured by the Sri Lankan Army and many Tamils fled from the Vanni to Colombo, the Applicant was not allowed to go. She earned money selling food to refugees from Jaffna and when the LTTE realised this they demanded half her earnings. The worst thing was when the LTTE demanded her 14 year old son (therefore about 1995/6) be trained for the LTTE; she sent him to Colombo and then overseas. As a result the LTTE harassed her to work for them. The Applicant lost touch with her daughter and was worried about her education as the Applicant couldn't earn enough money. In 2000 the LTTE regained most of the land they'd lost to the Army; the LTTE mined the area, hid arms and munitions there, and didn't allow residents to return to their land. The Applicant's well was ruined when ammunition was buried in it. In 2000 the Applicant's daughter married and in 2001 she left Sri Lanka. The Applicant had no other place to go and was taken by agents to settle in Colombo. All the Applicant's relatives in Jaffna had fled Jaffna and there was no one in the Vanni to look after her. The Applicant feared living alone in Colombo in the midst of the Government's continuous search for LTTE members; the Applicant was well known "as an LTTE woman in our area" and feared being taken by the authorities for interrogation, and severely tortured in identifying LTTE militants or having worked for the LTTE. When the Applicant arrived in Colombo she met the woman who had helped her daughter there; this woman contacted an agent and they helped the Applicant get an Australian visa. It was hard to obtain oral evidence from the Applicant as she had difficulty focusing and in giving a coherent account and her responses were often somewhat confused, ambiguous or vague. The RRT found that neither aspect of the claim was made out. The Tribunal also accepts that the Applicant is a Tamil originally from Jaffna, that she was married in the Vavuniya district in 1977, that the family moved to Pandrikaithakulam near Omanthai in about 1980, that the Applicant's husband, a police officer, abandoned her and her two children in 1988, and that for many years the Applicant lived in LTTE controlled or administered areas, before going to Colombo and then to Australia. The Applicant claims to fear persecution by the LTTE because she left them, and/or because the LTTE may think that she gave information about them to the Sri Lankan authorities, or because they regard her as a traitor or because she broke her promise to stay with the LTTE, or because they thought she had joined Karuna. However the Tribunal is not satisfied that the Applicant has a well-founded fear of persecution within the meaning of the Convention from the LTTE if she returns to Sri Lanka. The RRT's analysis of this material included examination of whether, accepting that she had suffered as she claimed, consideration of the past history led to a conclusion that she would suffer persecution if she returned to Sri Lanka. There were two aspects to the RRT's conclusions about this issue. 10 First, it was not satisfied that she had suffered persecution for a Convention reason in recent years. The Applicant does not claim to fear harm from her estranged husband if she returns to Sri Lanka and the Tribunal accepts this as her evidence indicates that he has not had any interest in her or in his children since he abandoned them in 1988, and he has made a new life for himself. The Tribunal also accepts that many years ago she was accused of being a traitor and physically assaulted by the LTTE. However since then and for many years to about 2003, she lived in LTTE areas, cooked for the LTTE and for passing travellers for money, and assisted the LTTE as required. Although the LTTE may have used harsh words to her and no doubt her life was very difficult after her husband left, the Tribunal is satisfied that even if the LTTE's treatment of the Applicant, as described in her evidence, amounted to persecution, the Tribunal cannot be satisfied that she was targeted by the LTTE in recent years, for a Convention reason, rather than because she was living in a particular area when the LTTE took it over and was caught up in the civil war and thus her well was ruined and her home or land, as was the property of others, taken over by heroes' families. The Tribunal accepts that the Applicant left the LTTE controlled area sometime in 2003 and that she did so without seeking permission, and that she fears returning to the Vanni. However the Tribunal is not satisfied that this gives rise to a well-founded fear of persecution or that she will be targeted on return for a Convention reason. This is because there is nothing in the Applicant's evidence to suggest that the LTTE was concerned about her "escape" or that they tried to find her and the independent country information does not suggest that it is plausible for the LTTE to expend its resources on locating her, one of many tens of thousands of Tamils who had lived for many years, in areas controlled by the LTTE. Furthermore, given that the ceasefire has been in place for three years now, and the LTTE is well established as the controlling authority in some parts of the Vanni where the Applicant lived, the Tribunal does not accept as plausible that the LTTE would try to find her and persecute her so that she doesn't give the authorities information about them or identify them. Nor is the Tribunal satisfied, on the Applicant's own evidence about why she fears the LTTE, that if she returns to the Vanni or more particularly to LTTE controlled areas, that she has a well-founded fear of persecution from the LTTE for a Convention reason. In her written evidence she claimed to fear being detained, interrogated and tortured by the Government's forces because she worked for the LTTE or that she would be treated this way by the Government's forces in that they'd force her to identify LTTE militants. It was submitted that she fears imprisonment on false charges, that she'll be treated as a slave and prisoner and that she "escaped from the Sri Lankan authorities from persecution". In her oral evidence the Applicant claimed to fear the Army in that if she was reported to them as being a stranger in the neighbourhood and is taken for questioning, the LTTE will think she gave the Army information about the LTTE. In her oral evidence the Applicant claimed to be scared generally but she did not say that she feared persecution from the Army, or more generally from the Sri Lankan security forces, or that she was persecuted by them before she left the country, and the Tribunal is satisfied that her fear of persecution from the Sri Lankan authorities is not well-founded. She then obtained a passport without difficulty and left the country legally some weeks later which indicates to the Tribunal that she is not of adverse interest to the Sri Lankan authorities. Therefore the Tribunal rejects the submission that the Applicant will be persecuted because of "religious bias" by the Sri Lankan authorities. In sum, the Tribunal is not satisfied that the Applicant has a well-founded fear of persecution within the meaning of the Convention, from the Sri Lankan security forces or from the LTTE if she returns to Sri Lanka. The Tribunal believes that the Applicant is genuinely scared of returning to Sri Lanka but much of her fear seems to stem from her feelings of depression and hopelessness as she feels alone and without support. She has had to fend for herself and raise her two children since her husband abandoned her in LTTE territory in 1988 and she successfully protected both children from forced recruitment into the LTTE by getting them away from LTTE dominated areas, but at great emotional and financial cost to them all. The Applicant has not been assisted by her brothers living abroad, or by her son, and she told the Tribunal that she is very depressed, even here in Australia, possibly at least in part because she feels she is a burden on her daughter. The tsunami devastation in the Mullaitivu area, the Applicant's recent home, will make it even more difficult for the Applicant to return there, an area she knows, given that her well had been ruined in the civil war and her land in Pandrikaithakulam was already taken over by LTTE heroes' families. However, the Tribunal's role is limited to determining whether an applicant satisfies the criteria for the grant of a protection visa and consideration of an applicant's circumstances on other grounds is a matter solely within the Minister's discretion. The Court erred in that holding that the second respondent did address the appellant's claim that after she left the Liberation Tigers of Tamil Eelam (the "LTTE") secretly, the LTTE were looking for her. The Court erred in finding that the Tribunal did address the claim that the appellant would be treated as slave by the LTTE were she to return to Sri Lanka. Both aspects were integers of the overall claim and the failure of the Tribunal to deal with both integers resulted in jurisdictional error. He did not accept either contention or that the RRT had fallen into jurisdictional error in its treatment of these matters. 20 The arguments before me on behalf of the appellant amount to a contention that a different view should be taken of the RRT decision, and the reasoning process it reveals, than was taken by Lloyd-Jones FM. Having regard to the way the argument is put, and because I have reached a conclusion that no jurisdictional error is disclosed by the decision of the RRT, it is not necessary in this case to consider whether issue should be taken with specific aspects of the reasons given by Lloyd-Jones FM. 21 A central difficulty for the appellant's argument is that the matters she wishes to suggest were not considered by the RRT are recorded in the RRT decision itself. The present is not a case where it might fairly be said that matters have been overlooked because no mention is made of them. Each of the supporting references is a reference to that part of the decision of the RRT where the RRT set out the evidence the appellant gave orally in response to questions posed by the RRT. Asked if she ever saw them again she said that until she came here they wouldn't let her go; there were Indian labourers around and LTTE women guarding her. This was 1998. Trying again the Tribunal asked when she went into hiding from the LTTE boys; the Applicant replied that after she wanted to come here she went into hiding. There are lots of houses and people like her helping the LTTE, such as elderly mothers, widows and others like her. The LTTE said they'd never release her as she has no-one so they will look after her. Daniel was shot about 5 months after she came here. The LTTE will be waiting to catch and kill her because she deceived them by telling a lie; she'd promised to stay with them until she died but she left with Daniel, hid, went to Colombo and then to Australia. She left all her things at the LTTE place and only took her money. The Applicant said she was never an enemy of the LTTE and she only ever helped them so they'll be angry that she left. The Applicant then said that they'll think she joined Karuna or someone (a renegade LTTE commander further down the Sri Lankan east coast); asked why the LTTE could think this given that she was with them in the north east for many years and Karuna was active further south, she replied that they'd think like that, and they're all mixed up in Colombo. She also fears being tortured and killed by the LTTE as a traitor. Nevertheless, counsel for the appellant argues that the RRT decision itself shows that important matters were wrongly decided or overlooked. I have given close attention, therefore, to the matters which are suggested to reveal a lack of proper consideration of the claims by the RRT. 26 The appellant's first complaint enunciated in the amended Grounds of Appeal is that the RRT failed to address the appellant's claim that the LTTE was looking for her. 27 The appellant argued that the decision of the RRT contains a critical error which shows it misunderstood the appellant's claims and thus failed to deal with them properly. This is because there is nothing in the Applicant's evidence to suggest that the LTTE was concerned about her "escape" or that they tried to find her and the independent country information does not suggest that it is plausible for the LTTE to expend its resources on locating her, one of the many tens of thousands of Tamils who had lived for many years, in areas controlled by the LTTE. Furthermore, given that the ceasefire has been in place for three years now, and the LTTE is well established as the controlling authority in some parts of the Vanni where the Applicant lived, the Tribunal does not accept as plausible that the LTTE would try to find her and persecute her so that the doesn't give the authorities information about them or identify them. There does not appear to have been any evidence from the appellant, apart from the statement of her subjective fear which the RRT records and acknowledges, that in fact LTTE is concerned or they tried to find her. Her own evidence does not suggest that her role, even though she was under compulsion, was of a character to generate, objectively speaking, the likelihood of concern about her departure. In her evidence the appellant said 'sometimes she hid' and 'one day' she left but there is no suggestion the earlier occurrences of hiding led to retribution. 30 At the hearing before the Federal Magistrates Court counsel then representing the Minister accepted that the RRT decision may contain a mistake but submitted it was not such a mistake as to involve jurisdictional error. That submission was also put to me on the appeal with the conventional admonition against too stringent a textual dissection of the reasons for decision. 31 If the RRT had made a factual error which was important to its disclosed reasoning that might indicate that a jurisdictional error had occurred. I have given the issue careful consideration but I am not satisfied that is what happened. 32 There are a number of reasons for my conclusion. First, I do not believe the RRT misunderstood the nature of the appellant's claims in the way suggested. It is very clear from other parts of the RRT decision that the RRT had firmly in mind the appellant's fears of persecution after having left without permission. Her evidence was that 'sometimes she hid' and that after her eventual escape she moved around for 4 --- 5 months. Elsewhere she said the main reason the LTTE wanted to keep her was for cooking. Seen in the whole context of the evidence recorded there is no objective material, arising from her evidence, suggesting any form of continuing concern about her departure or systematic inquiry after her whereabouts. 34 Thirdly, the passage in question is the first of three different, and more or less independent, reasons given for concluding that even if the appellant did suffer persecution for a Convention reason when she earlier lived under LTTE control the RRT was not satisfied that on her return she would be persecuted for a Convention reason. It is important to remember, moreover, that the RRT rejected the suggestion that the appellant had in fact been persecuted for a Convention reason in the recent years before her departure for Australia. 35 Fourthly, in light of the finding just referred to, the appellant needed to show something more than the possibility of return to her earlier situation, even if she came to the attention of the LTTE group for whom she earlier worked. The RRT expressed great sympathy for her personal circumstances, both earlier and if she were to return to Sri Lanka, but was not satisfied that she had been in recent years, or would be, persecuted for a Convention reason. The only possible reason suggested to me in argument for a fear of persecution was imputed political opinion. There is no basis to set aside the RRT factual conclusion that such a case was not made out. 36 The second complaint in the amended Notice of Appeal was that the RRT failed to properly address the appellant's claim that she would be treated as a slave if she returned to Sri Lanka. The suggestion is that the RRT only considered whether the Sri Lankan authorities might so treat her but not LTTE. It decided that she did not have a well founded fear of persecution at their hands. The passage relied upon to suggest error was clearly dealing with matters referred to in an earlier passage arising from written representations to the RRT on the appellant's behalf, which the RRT was also obliged to consider. It was submitted that she fears imprisonment on false charges, that she'll be treated as a slave and prisoner and that she "escaped from the Sri Lankan authorities from persecution". 43 It is clear, in my view, that the RRT had a good appreciation of the nature of all the appellant's claims and did not fail to deal with any material aspect of them. The balanced consideration of all the appellant's claims against the requirements to be satisfied to secure a protection visa is a matter for the RRT. It is not the function of this Court to attempt to weigh the various elements in the balance. 44 It follows from the foregoing discussion and reasons that I am not satisfied that Lloyd-Jones FM was in error to dismiss the application for judicial review and the appeal against his judgment must therefore be dismissed. The sympathy naturally generated by the appellant's situation and fears does not provide a reason why costs should not follow the outcome of the case in the usual way. 45 I shall dismiss the appeal with costs. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.

protection visa witness of credit no persecution in recent years no failure by tribunal to consider claims migration

It is not the task of this Court to resolve that controversy. The Court's task is to determine the application made by The Wilderness Society Inc. (TWS) under the Administrative Decisions (Judicial Review) Act 1977 (Cth) and the Judiciary Act 1903 (Cth) about whether two decisions made by the first respondent, the Commonwealth Minister for the Environment and Water Resources (Minister), are valid. Those decisions were made on 2 May 2007. That proceeding involves an application by The Investors for the Future of Tasmania Inc. (IFT), which is similar to the application in this proceeding. The reasons for judgment in each proceeding should be read together. • in making the 2007 controlled action decision, did the Minister fail to take into account a relevant consideration, being the impact of the forestry operations which will be undertaken to supply the pulp mill? • in making the 2007 controlled action decision, did the Minister fail to take into account a relevant consideration, being whether the pulp mill proposal will have or is likely to have a significant impact on the environment on Commonwealth land? • did the Minister misconstrue and/or misapply s 87(5) of the EPBC Act in making the 2007 assessment approach decision? • in making the 2007 assessment approach decision, did the Minister deny TWS procedural fairness? • was the 2007 assessment approach decision affected by apprehended bias in the Minister? • was the 2007 assessment approach decision manifestly unreasonable? • did the making of the 2007 assessment approach decision involve the Minister engaging in an improper exercise of power? The EPBC Act prohibits the taking of certain actions unless those actions pass an approval process. An "action" is defined in s 523 of the EPBC Act to include a project, a development, an undertaking, an activity or series of activities and an alteration of any of those things. Under s 67, an action that a person proposes to take is a "controlled action" if the taking of the action, without approval under Pt 9, would be prohibited by a provision of Pt 3 of the EPBC Act. 6 Certain actions, taken without approval by the Minister, are prohibited by Pt 3 of the EPBC Act. 8 Under s 74B, if, within 20 business days after receiving a referral, the Minister, based on information in the referral, considers that it is clear the action would have unacceptable impacts on a matter protected by a provision of Pt 3, the Minister may decide that Div 1A of the EPBC Act applies to the referral. If so, under s 74C, a written notice to that effect is to be given by the Minister to the person proposing to take the action. 9 Section 170C is an important provision in this proceeding. (2) The referral cannot be withdrawn after the Minister has decided, under Part 9, whether or not to approve the taking of the action. (3) If the Minister receives a notice withdrawing the referral, the Minister must publish notice of the withdrawal of the referral in accordance with the regulations. (4) If the referral is withdrawn, the provisions of this Chapter that would, apart from this subsection, have applied to the action cease to apply to the action. This decision must be made within 20 business days of the Minister receiving the referral (s 75(5)). Section 94 provides that Div 4 applies in relation to an action if the Minister has decided under s 87 that the impacts of the action must be assessed on preliminary documentation. 21 In accordance with s 95C, the Secretary of the Minister's department must prepare and give to the Minister a recommendation report relating to the action. The report must include recommendations on whether the taking of the action should be approved and, if so, any conditions that should be attached to the approval. 22 Under s 95C(2), the recommendation report must be given to the Minister after the Minister receives the documents under s 95B(1) and before the expiry of 40 business days from the date of receipt of those documents. 23 Section 130(1), when read with s 133, obliges the Minister to decide whether or not to approve "for the purposes of each controlling provision for a controlled action", the taking of the action. The Minister must make the decision on approval within 40 business days beginning on the first business day after the Minister receives the documents under s 95B(1). The Minister may specify, in writing, a longer period in which to make the decision. Under s 134, conditions may be attached to an approval. 24 Under s 131AA, before deciding whether or not to approve, for the purposes of a controlling provision, the taking of an action, the Minister must inform the proponent of the decision the Minister proposes to make, including any conditions attached to approval. The proponent is to be invited to give the Minister, within 10 business days, comments in writing on the proposed decision and any conditions. If the Minister proposes to approve, for the purposes of a controlling provision, the taking of an action, a range of documents referred to in s 131AA(2) must be provided to the proponent. 2004, No 111) (Order) was made under the State Policies and Projects Act 1993 (Tas) ( State Policies and Projects Act ). The Order declared the proposal by Gunns "for the development and operation of a bleached kraft pulp mill in northern Tasmania" as "a project of State significance". Clause 4 of the Order declared the project to include certain ancillary developments. That clause was amended by the State Policies and Projects Amendment Act 2005 (Tas). 27 On 26 November 2004, the Premier of Tasmania, Mr Paul Lennon, acting in his capacity as Minister administering Pt 3 of the State Policies and Projects Act , issued under s 20 of the State Policies and Projects Act , a Ministerial Direction to the Resource Planning and Development Commission to undertake an Integrated Assessment (Direction) of the project identified in the Order. The Direction contained requirements with which the Resource Planning and Development Commission (RPDC) had to comply, including the addressing of "the environmental, social, economic and community issues relevant to the Project". 28 On 13 December 2004, the then Commonwealth Minister for the Environment and Heritage, Senator Ian Campbell, received a referral from Gunns under the EPBC Act (first referral). The proposal outlined in the first referral was "to establish a bleached Kraft pulp mill in northern Tasmania". 29 On 16 December 2004, the RPDC issued a media statement announcing that it was "in the process of preparing draft guidelines that Gunns will be required to follow in the preparation of its draft Integrated Impact Statement". The RPDC also said that it would amend the guidelines to "take into account the Australian Government's involvement in the approval process and then the RPDC will invite public comment, early in the New Year". Among other things, Senator Campbell considered the action to be likely to have a significant impact on the Tasmanian wedge-tailed eagle as a result of the loss of potential breeding and foraging habitat and through the disruption of breeding opportunities, and, for substantially the same reasons, on the swift parrot. 32 On 23 March 2005, Senator Campbell decided that the assessment approach under s 87 of the EPBC Act for the action the subject of the first referral would be "an Integrated Impact Assessment" under the State Policies and Projects Act . This meant that the RPDC would provide an assessment on matters relevant to the controlling provisions under the EPBC Act, as well as complying with the requirements set out in the Direction issued under the State Policies and Projects Act . 33 Until 9 May 2005, the proposed action was contemplated to occur at one of two sites, Long Reach (Bell Bay) or Hampshire. On 9 May 2005, Gunns announced the proposal would be confined to the Long Reach (Bell Bay) site. Gunns also announced that there was no longer an option for a totally chlorine free pulping process and that a second wood type would be used to supply the pulp mill, with a consequent change to the composition of the pulp mill effluent and its toxicity. The RPDC halted its assessment process shortly after Gunns announced these changes. 34 On about 15 August 2005, a notice appeared on the website of the then Department for the Environment and Heritage. That notice stated that the first referral had been withdrawn and "a new referral made which contains a revised description of the project". The notice also stated "(t)he project is a nominated controlled action and therefore comment will not be sought on the referral. All comments received on the earlier referral will be taken into account". 35 This new referral (second referral) was dated 11 August 2005. In the second referral, Gunns stated that it thought the proposed action was a controlled action. 37 Senator Campbell described the action as one "to construct and operate a bleached Kraft pulp mill at Bell Bay, in northern Tasmania, and associated infrastructure". Senator Campbell provided reasons for his controlled action decision on the second referral on 14 November 2005. They are substantially similar to his reasons for his controlled action decision on the first referral. 38 The RPDC released revised guidelines for the assessment of the pulp mill project on 24 October 2005. On 26 October 2005, Senator Campbell made a decision under s 87 of the EPBC Act that the proposed action the subject of the second referral be assessed by an accredited assessment process, being the process conducted by the RPDC under the State Policies and Projects Act . Senator Campbell provided reasons for that decision on the same day. 39 In December 2005, the RPDC released its final scope guidelines and accompanying report for public comment. 40 On 14 July 2006, Gunns submitted its draft Integrated Impact Statement (IIS) to the RPDC. It comprised some 7500 pages, reflecting, according to Gunns, in excess of 350 000 hours of research, study, modelling and reporting. Essentially, it was Gunns' case for approval of the pulp mill. The IIS was placed on public exhibition from 14 July 2006 until 25 September 2006. 41 Also on 14 July 2006, the Commonwealth Minister for Fisheries, Forestry and Conservation, Senator Eric Abetz, issued a media release in which he challenged opponents of the pulp mill to "abandon their anti-pulp mill position and support the development of an environmental best-practice mill in Tasmania". 42 On 25 October 2006, the RPDC held a directions hearing and directed Gunns to provide, on or before 15 December 2006, additional information concerning the proposed action, which the RPDC referred to as "supplementary information". Earlier in October 2006, the RPDC had released five reports from consultants it had retained and who had examined aspects of the draft IIS. The RPDC received 780 public submissions concerning the draft IIS. 43 In a media release published on 4 December 2006, Senator Abetz announced the payment to Gunns of the remaining funding (of a total of $5 million) "to assist in the development of an environmental best-practice pulp mill in Tasmania". The media release went on to express support for the pulp mill. 44 On 22 December 2006, the RPDC extended the time for Gunns to provide the supplementary information to 31 January 2007. Gunns lodged the supplementary information, which was about 2500 pages, on 16 February 2007. 45 The RPDC held another directions hearing on 22 February 2007. The Chairman of the RPDC, the Hon. Christopher Wright QC, noted that the assessment process had been delayed largely due to "...Gunns failure or inability to comply with [its] own prognostications or the panel's requirements...". At the directions hearing, Gunns voiced no concern about the time the RPDC process was taking. 46 On 14 March 2007, Gunns advised the Australian Stock Exchange that it had, on that day, "notified [the RPDC] of its decision to withdraw the Bell Bay Pulp Mill project from the RPDC process". In a media release also dated 14 March 2007, Gunns said, "a lack of certainty over an end date for the pulp mill approval process has necessitated this action". 47 On 15 March 2007, Premier Lennon announced "special legislation for a separate approvals process from the RPDC" was being prepared and that the approvals process would have "a definite timeline". On 30 April 2007, the Pulp Mill Assessment Act 2007 (Tas) was enacted. Effectively, the legislation provided for the pulp mill to be approved if a consultant appointed by the relevant Minister reports that the project should proceed and each House of the Tasmanian Parliament passes a resolution accepting the "Pulp Mill Permit" prepared by the relevant Minister. 48 Also on 15 March 2007, Mr John Gay, the Executive Chairman of Gunns, wrote to Mr Gerard Early, the then First Assistant Secretary of the Approvals and Wildlife Division of the Department of Environment and Water Resources (Department). Mr Early advised Mr Frame that because of the withdrawal of Gunns from the RPDC process and the likely termination of that process by proposed Tasmanian legislation, Gunns "would need to withdraw the existing referral and submit a new referral for consideration". The Minister stated, "I am interested in progressing an Australian Government assessment process as soon as possible to ensure that a decision can be made in a reasonable timeframe". In order to meet your mid year goal a new schedule which is both timely and ensures a robust, transparent decision will need to be agreed as soon as possible. I encourage early contact with officers in my department as soon as practicable to discuss the process. (Emphasis added. The letter referred to "Gunns decision to withdraw from the RPDC process and refer the project to the Government". 54 Mr Early gave evidence that he and other officers from the Department met with Gunns representatives on 22 March 2007 "to discuss how a new referral from Gunns Limited would work, should Gunns Limited formally withdraw from the existing referral process and make a new referral". 55 The notes of that meeting, which were settled by Mr Early, record that Gunns "had commenced drafting a new referral for submission to the Department as soon as possible". 56 On 28 March 2007, by letter dated that day and sent electronically, Mr Gay responded to the Minister's letter of 19 March 2007. We appreciate your willingness to assist with progressing our EPBC Act referral in a timely manner to meet our commercial imperatives. That email from Ms Dickman forwarded another email from a Mr Joe Biggs, on which Ms Dickman was courtesy copied, which stated "(t)he withdrawn action for the Gunns pulp mill 2005/2262...is on the public website [website address]". 58 At 7.43 pm on the evening of Friday, 30 March 2007, Gunns lodged electronically a third referral of the pulp mill project with the Department. The Minister asked Mr Early if a decision by August 2007 would be possible. Mr Early said, "yes, but that would depend upon [the Minister's] statutory decision on the assessment process to be adopted". The Minister told Mr Early that if a decision by August 2007 was not possible he "would want to know". Mr Early gave evidence that the Minister would want to know if August 2007 was not possible because the Minister knew that the Tasmanian Government and Gunns wanted a decision by the end of August 2007. Mr Early gave evidence that the Minister had explained that he did not want to "be accused later on of misleading people about what was possible or not" regarding the timeline. 60 By an email dated 2 April 2007, Mr Early sent the Minister a "gantt chart" headed "EPBC Timeline --- Gunns Pulpmill". That gantt chart listed nine "Task Name[s]". The final task name is "Minister's decision" and the date in the column headed "Finish" next to that task is "Mon 6/08/0[7]". Mr Early said that the gantt chart was "based on an assumption that the level of assessment would be by preliminary documentation". 61 Mr Early gave evidence of the use of gantt charts in planning for assessments under the EPBC Act. He referred to a gantt chart as "a process chart outlining the steps in the process and the timeframes so that you can then work out where the whole process finishes". Mr Early said that the only purpose of the gantt chart referred to at [60] was to see whether or not it was possible to achieve the timeline Gunns wanted and that he concluded it was possible. Mr Early also gave evidence that "preliminary documentation" is the most common form of assessment under the EPBC Act. Mr Early said that, based on his experience and judgment, he favoured this form of assessment for the proposed action. Mr Early said that, "my judgment was that there wouldn't be anybody out there who couldn't make comment within 20 business days". That evidence was given in the context of a 20 business day period for public comment on material provided by the proponent relevant to the controlling provisions under the EPBC Act. Mr Early said that it was the job of the Department, and not of the public, to perform the assessment. 62 Mr Early said that the Department had not planned for any assessment approach, other than assessment on preliminary documentation. This was because, based on his judgment, Mr Early considered preliminary documentation to be the correct assessment approach. He said that there was no guarantee that that approach would be concluded by any particular time because the Minister might "stop the clock" for some reason. Mr Early said that if the process concluded within a timeframe that coincided with what Gunns wanted, that was "fine". He said that officers of the Department assisted Gunns, from mid-March 2007, with preparing the third referral, but said that such conduct was not unusual and that similar assistance is given to other proponents. The new referral will remain open for public comment, for 10 business days, until 18 April 2007. A decision will then be made on whether further assessment of the pulp mill is required. If further assessment of the pulp mill is required, the Australian Government would be aiming to conclude it before the end of August 2007 and the assessment would include an additional opportunity for public comment. 65 On 24 April 2007, Mr Early signed a briefing note to the Minister and recommended that he decide the proposal is a controlled action "for listed threatened and migratory species and Commonwealth marine", that Gunns is the proponent and that "the proposal will be assessed on preliminary documentation". Mr Early said that he had discussions with the Minister before and during the making of the 2007 assessment approach decision. Mr Early said that the Minister wanted to know why the Department was not recommending assessment by environmental impact statement (EIS). PER is a reference to "public environment report" which is another assessment approach under the EPBC Act. It's been highly controversial. Everybody who's got a view on it has got a view already". They also contend that the EPBC Act does not permit the referral of a proposal to take an action where a referral of the same proposed action has been withdrawn. Was there a valid withdrawal of the second referral? Regulation 6B.01 is headed " Publication of a notice withdrawing a referral ". The date of publication of the notice is unclear, it appears from the emails referred to at [57] that it was posted by 10.30am on 30 March 2007, but nothing turns on this. They point to the reference in s 170C(3) to "a notice withdrawing the referral" and the Minister's obligation to publish "notice of the withdrawal". 73 I reject that submission. Section 170C does not require any particular form of written notice by a person who has referred a proposal to take an action that it is withdrawing a referral. All that is required is written notice to the Minister of withdrawal of the referral. There is no provision for a separate document of withdrawal, such as a notice of withdrawal of appearance under O 22 of the Federal Court Rules 1979 (Cth), which permits a party who has entered an appearance to "withdraw the appearance, by notice in accordance with Form 28, at any time with the leave of the Court". 74 Once the Minister receives a written notice withdrawing the referral, the Minister "must publish notice of the withdrawal of the referral in accordance with the regulations". The Minister is not required to publish the notice of withdrawal, but notice of the withdrawal. It is what the Minister publishes which must be "in accordance with the regulations" and not the notice provided by the person who has referred a proposal to take an action. Support for this construction is found in regs 6B.01(2)(e) and (f) which refer to the referral being withdrawn before the reg 6B notice is published. 75 In the third referral, Gunns mentioned the second referral (2005/2262) as being "replaced by this referral". It was effected by written notice given in the making of the third referral. 77 The Minister considered that the second referral had been withdrawn on 28 March 2007, presumably as a consequence of Mr Gay's letter of that date referred to at [56]. On my analysis, the withdrawal occurred late on 30 March 2007 in the making of the third referral. This means that the notice under reg 6B.01 was premature and referred to an incorrect date of withdrawal. However, this does not affect the validity of the withdrawal, it means that the obligation to publish notice of the withdrawal in accordance with s 170C(3) and the EPBC Regulations remains unfulfilled. The notice itself has been given and the failure to publish that notice is not intended to affect the validity of the withdrawal of the second referral (see Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1998) 194 CLR 355 at [91] --- [97] (especially at [92]) per McHugh, Gummow, Kirby and Hayne JJ). There is no indication in s 170C that failure to publish notice of the withdrawal in strict compliance with the EPBC Regulations results in the invalidity of the withdrawal. On withdrawal of the second referral was Gunns able to make a valid third referral? Counsel submit that, as a consequence, the third referral was invalid and not capable of supporting the impugned decisions. Counsel point to s 170C(4) and Ch 4 generally drawing a distinction between a referral and the action that is referred. It is not designed to allow the proponent to start again with a fresh referral in respect of the same action in order to avoid some unpalatable decision that has been made under Chapter 4. It is not intended to assist proponents who want to proceed with an action but who wish to change the assessment process that has been chosen. It is not intended to permit forum shopping through a change of Minister, or indeed (not relevant in the present case) a change of government. It fractures the continuity of the decision making. Having made decisions under s 75 or 87, there are express but limited powers for the Minister to change his decision....To construe s 170C as enabling a proponent to clean the slate and start again in respect of the same action would be inconsistent with the express limitations imposed on how even the Minister can change his own decision. It is submitted that the language in those provisions was "carefully chosen" and that certain provisions apply specifically and variously to a "proposal", a "person", an "action" or a/the "referral" and are "very deliberate legislative choices". 84 Counsel refer to s 74B which deals with actions which the Minister considers it is clear would have unacceptable impacts on a matter protected by a provision of Pt 3 of the EPBC Act. 88 Counsel also refer to s 156A which is headed " Request to vary proposal to take an action ". Under s 156A(1), if a proposal by a person to take an action has been referred to the Minister and the person wishes to change the proposal, the person may request the Minister to accept a variation of the original proposal. 89 However, s 156A(2)(e) guides the proper construction of s 170C. The referral being a mechanism by which the action is drawn by a proponent to the attention of the Minister. Consequently, when s 170C(4) refers to provisions of Ch 4 of the EPBC Act ceasing to apply to the action, they cease to apply to the action which is the subject of the referral rather than to the action itself. So it cannot be said that the same action could never again be the subject of a referral. 91 While the provisions of ss 74B, 74C, 78, 156A and 156D variously focus on a/the referral, a proposed action, an action and a proposal, each word or phrase must be considered in the context of the particular provision in which it is found. Section 170C, in terms, enables a proponent of a proposed action to withdraw a referral given to the Minister in respect of that action. The purpose of s 170C(4) is to absolve the Minister from any decision-making process he or she is to undertake in respect of the action as a consequence of the referral. Once the referral is withdrawn, no further obligations arise with respect to the action the subject of the referral. The section does not say that no further referral may be made concerning the same action. I would expect such a drastic consequence to be stated very clearly, but it is not. 92 The scope of s 170C cannot be read down or limited by reference to the facts of this case. In any event, it should not be assumed that Gunns was seeking to "avoid some unpalatable decision" made under Ch 4 or that it wanted to change the assessment process. The assessment process was about to be changed by the Tasmanian Parliament when Gunns withdrew the second referral. It is not a question of forum shopping, but a question of withdrawing a referral subject to a redundant accredited assessment process and re-submitting it by way of a new referral to enable the proposed action to be the subject of an effective assessment process under the EPBC Act, in so far as matters of national environmental significance were concerned. 93 Further support for this view is contained in the explanatory memorandum accompanying the Bill inserting s 170C (Environment and Heritage Legislation Amendment Bill (No 1) 2006) (Bill). (Emphasis added. ... The Minister did not have power under the EPBC Act to vary or revoke his earlier assessment approach decision. THE S 75(2B) POINT --- A RELEVANT CONSIDERATION? The Minister stated in his reasons for making the 2007 controlled action decision that "...as required by subsection 75(2B) of the EPBC Act, I did not consider any adverse impacts of forestry operations before 2017 for the supply of wood chips to the proposed mill". The difficulty with that submission is that under s 38 of the EPBC Act, approval is not ordinarily required for RFA forestry operations. Sections 38 and 40 of the Act exempt RFA forestry operations and forestry operations in RFA regions from the need for approval under the Act. If these sections do not apply because of section 42 then the new section 75(2A) inserted by this item does not apply. 103 The reference to s 42 of the EPBC Act in the explanatory memorandum to the Bill is a potential source of some confusion. Section 42 is headed "This Division does not apply to some forestry operations". The relevant forestry operations are those in a property included in the World Heritage List, those in what I call a Ramsar wetland and those incidental to another action whose primary purpose does not relate to forestry. In each case, in s 42, the focus is on an action which is a forestry operation. For current purposes, the action is an action for the construction and operation of a pulp mill. Consequently, s 42 is not relevant. Forestry operations in Tasmania used to source wood for the pulp mill will not require approval under s 38 because of the existence of a Regional Forestry Agreement which nominally expires in 2017, provided those forestry operations are undertaken in accordance with the Regional Forestry Agreement. Section 75(2B) has the effect that any adverse impacts from such forestry operations must not be taken into account by the Minister in making a controlled action decision. 105 In his reasons for the 2007 controlled action decision, the Minister said that because of s 75(2B) of the EPBC Act, he did not consider "any adverse impacts of forestry operations before 2017 for the supply of wood chips to the proposed mill". The Minister interpreted s 75(2B) correctly by not considering any adverse impacts of forestry operations to be undertaken before 2017 when making his 2007 controlled action decision and thereby did not fail to take into account a relevant consideration. The Court can be satisfied the Minister failed to consider this because it is absent from his reasons. 110 "Commonwealth land" is defined by s 27 of the EPBC Act as "so much of a Commonwealth area as is not a Commonwealth marine area". "Commonwealth area" is defined in s 525 and includes land owned, and areas of land leased, by the Commonwealth or a Commonwealth agency and air space over such land. The submissions of TWS state "(t)here are numerous portions of Commonwealth land in the area, which should be easily ascertainable by you. They include many workplaces for Commonwealth employees and contractors". TWS cite "the Australian Maritime College and Defence Housing" as examples. 111 A briefing note from the Department to the Minister dated 24 April 2007 refers to TWS's submission that "(i)ncreased air emissions from the pulp mill will have a significant impact on the environment of Commonwealth land (eg Australian Maritime College and Defence Housing)". The assessment and approval process will consider the possible impacts relative to relevant guidelines and standards that will apply. The Department is of the view that indirect impacts of air emissions on matters protected are not likely to be significant. 114 At p 3 of Attachment C to the briefing note, a discussion commences under the heading "Potential Impacts on Protected Matters". In respect of Commonwealth land, counsel for the Minister submit that "not applicable", when read fairly, advises "that the proposed action was not likely to have a significant impact on the environment of Commonwealth land". I consider it suggests that the Minister formed the view that it was not applicable for the purpose of identifying controlling provisions relevant to the action. 118 I reject the contention of TWS that the Minister failed to consider whether the action will have or is likely to have a significant impact on the environment on Commonwealth land. It cannot, therefore, be established that the Minister failed to take a relevant consideration into account in this regard. They further submit that an informed decision means a decision informed by the assessment process and one which comes at the end of that process. 121 Counsel for TWS submit that the Minister's reasons for the 2007 assessment approach decision show that he was satisfied, before the assessment process was undertaken, that he was able to make an informed decision whether or not to approve the taking of the action. Counsel contend this demonstrates prejudgment and that the Minister misunderstood what an informed decision is for the purposes of the EPBC Act. 122 In order to decide on assessment on preliminary documentation, the Minister must be satisfied under s 87(5) that the assessment approach will allow an informed decision to be made on whether or not to approve, for the purposes of each controlling provision, the taking of the action. Such satisfaction is to be attained after a consideration of the matters set out in s 87(3). • appropriate investigations have been undertaken and adequate relevant information is available regarding the impact of the proposed action on the environment in a Commonwealth marine area "...to enable [the Minister] to make an informed decision whether or not to approve the taking of the proposed action for the purposes of sections 23 and 24A of the EPBC Act". In those circumstances, the assessment approach that requires the least additional information was his preferred approach. I found that a further comprehensive process of seeking public comment on the proposed action (as would occur through an assessment by public environment report, environmental impact assessment or public inquiry under Divisions 5, 6 or 7 of Part 8 of the EPBC Act) would not be required in order to enable me to make an informed decision whether or not to approve the proposed action. I found that such a process would not be required in order to enable adequate public participation in the assessment and approval process. That is all s 87(5) of the EPBC Act required of him. 132 In making the 2007 assessment approach decision, the Minister did not misunderstand or misconstrue s 87(5) of the EPBC Act. They contend that the 2007 assessment approach decision itself, or the Minister's conduct in relation to an approval decision under s 130(1) of the EPBC Act, involved a denial of procedural fairness to TWS and to those members of the public interested in the assessment of the action and whether it should be approved. 134 Counsel contend that in making certain decisions under the EPBC Act, including controlled action decisions, assessment approach decisions and decisions about whether or not to approve the taking of an action, the Minister must accord members of the public and interested persons such as TWS a reasonable opportunity to be heard about whether the action should be approved and the conditions, if any, attaching to the approval. Counsel point to s 131AA(7) of the EPBC Act which they say is an exhaustive statement of the requirements of the natural justice hearing rule in relation to approval of the taking of a controlled action under s 133 or the attaching of conditions on approval under s 134 of the EPBC Act. 137 There may be differences of opinion on whether the source of authority to approve the taking of an action is s 130(1) or s 133 of the EPBC Act. Section 130 is expressed as an obligation to decide, while s 133 is expressed in language of actual approval. The better view is that s 133, in conjunction with s 130, is the source of power to approve the taking of an action "for the purposes of a controlling provision" and that s 134 is the source of power to attach conditions to that approval. 138 In this context, s 131AA(7) is an exhaustive statement of the Minister's duty to accord procedural fairness to any person in relation to the Minister's decisions under s 133 or s 134. Section 131AA concerns inviting the person proposing to take the action to comment on the Minister's proposed decision on approval and, if relevant, conditions attached to the approval. The controlled action and assessment approach decisions are steps along the way to the decision on approval. 139 Any obligation to the public or persons interested in an action in the context of those decisions is found in the EPBC Act. There is no general obligation to accord procedural fairness. The words "in relation to" in s 131AA(7) are broad. Compare the similar expression "in connection with" which Gibbs CJ held in the context of an eligibility rule of a registered industrial organisation "very considerably widens the scope of the rule" ( R v Isaac; Ex parte Transport Workers' Union of Australia [1985] HCA 80 ; (1985) 159 CLR 323 at 335). 140 Even if I am wrong in considering that there is no obligation to accord procedural fairness, otherwise than as is set out in the EPBC Act, it would be difficult to establish a denial of procedural fairness in the circumstances. For example, issues of general air quality are not relevant. The relatively confined scope of the inquiry bears on the reasonableness of the opportunity to be heard. That tells against a requirement for the Minister to accord procedural fairness in making an assessment approach decision. 142 In making the 2007 assessment approach decision, the Minister did not have an obligation to accord procedural fairness to TWS other than in accordance with the provisions of the EPBC Act. They contend that the facts and circumstances of this matter are such as would give rise in the mind of a fair-minded and informed member of the public, to a reasonable apprehension of a lack of impartiality on the Minister's part, and to an apprehension that the Minister prejudged the outcome of the decision he was required to make (see Webb v R [1994] HCA 30 ; (1994) 181 CLR 41 at 47 per Mason CJ and McHugh J and Brooks v The Upjohn Company (1998) 85 FCR 469 at 477). The evidence of Mr Early demonstrates that the Minister did not have a closed mind on the assessment approach. As late as during the course of making his decision, the Minister questioned Mr Early concerning why he did not recommend assessment by an EIS. There is no doubt that Mr Early formed the view in the initial stages of consideration of the proposed action that an assessment on preliminary documentation was his preferred approach. This approach was taken by Mr Early in the honest discharge of his duties as a senior public servant. It is also understandable that many of them would wish to engage experts to challenge what Gunns had put before the RPDC and are angry at being denied that opportunity. Further, it is understandable that such persons would be suspicious of the assistance given by officers of the Department to Gunns in its preparation of the third referral and of meetings where officers of the Department discussed timelines with Gunns for the completion of the EPBC Act assessment. As long as the steps required by the EPBC Act are taken by the Minister, the Australian Government is not prevented from having a policy position on the pulp mill project (see Hot Holdings Pty Limited v Creasy [2002] HCA 51 ; (2002) 210 CLR 438 at [50] ). The Minister received strong advice from Mr Early, who firmly believed in the preliminary documentation assessment approach. Gunns lobbied him in favour of that approach. That approach also suited the Tasmanian Government and enhanced the chances of synchronisation of approval under the EPBC Act with approval by the Tasmanian Parliament. By 2 April 2007, the Minister wanted to know if an approval timeline ending in August 2007 was possible because he knew that was what the Tasmanian Government and Gunns were pursuing. However, the Minister did not consider the preliminary documentation assessment approach to the exclusion of all other approaches. Even during the course of making the assessment approach decision, the Minister questioned Mr Early about why another approach was not being recommended. At the time of making his decision, I do not consider that a well-informed observer could reasonably form the view that the Minister was biased towards the preliminary documentation assessment approach to the extent that he was not prepared to even consider alternative approaches, because he plainly did. 149 The allegation that the 2007 assessment approach decision is invalid due to apprehended bias is rejected. The 2007 assessment approach decision was made for the reasons set out in the Minister's reasons for decision. The third referral was received electronically by the Department on 30 March 2007 and by hard copy on 2 April 2007. At that time, the Minister knew the RPDC process was at an end. He also knew that Gunns desired a decision on approval under the EPBC Act by the end of August 2007. 153 As indicated earlier in these reasons for judgment at [125], the Minister stated at [22] of his reasons for the 2007 assessment approach decision that he was satisfied that assessment on preliminary documentation "will provide enough information about the relevant impacts of the proposed action to allow [him] to make an informed decision on whether or not to approve the taking of the proposed action...". Earlier in those reasons, the Minister stated that he considered "adequate information is available" to enable him to make an informed decision. The Minister chose assessment on preliminary documentation because he viewed it as the most suitable approach in all the circumstances. Whilst he could not have been unaware of Gunns' or the Tasmanian Government's desires and that assessment on preliminary documentation suited their timeframes, that was not the purpose for which the Minister exercised his power under s 87 of the EPBC Act. He exercised it under s 87(1), because he decided that the best approach to fit the facts and circumstances was assessment by preliminary documentation. 155 In any event, I am not satisfied that, even if Gunns' commercial imperatives influenced the Minister's 2007 assessment approach decision, that this was a dominant or substantial purpose in the Minister's choice of assessment process (see Wang v Minister for Immigration and Multicultural Affairs (1997) 71 FCR 386 at 397 per Merkel J citing Thompson v The Council of the Municipality of Randwick Corporation [1950] HCA 33 ; (1950) 81 CLR 87 at 106). Nor am I satisfied that it was the "operative subjective purpose of the decision maker" (see Re MacTiernan, Ex parte Coogee Coastal Action Coalition Incorporated [2004] WASC 264 at [51] per McLure J). v Inland Revenue Commissioners; Ex parte Rossminster , per Lord Diplock. This is the least arguable ground raised in the third amended application. 159 The 2007 assessment approach decision cannot be said to be "irrational, illogical and not based upon findings or inferences of fact supported by logical grounds" (see Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 198 ALR 59 at [34], per McHugh and Gummow JJ). The 2007 assessment approach decision was made after the Minister considered an alternative approach, such as an EIS. In all the circumstances, having regard to the advice given to the Minister by Mr Early, and taking into account the demise of the RPDC process, it cannot be said that the 2007 assessment approach decision was manifestly unreasonable. If these are merely emphatic ways of saying that the reasoning is wrong, then they may have no particular legal consequence. The courts are not equipped to evaluate the policy considerations which properly bear on such decisions, nor is the adversary system ideally suited to the doing of administrative justice: interests which are not represented as well as interests which are represented must often be considered. Moreover, if the courts were permitted to review the merits of administrative action whenever interested parties were prepared to risk the costs of litigation, the exercise of administrative power might be skewed in favour of the rich, the powerful, or the simply litigious. I certify that the preceding one hundred and sixty-three (163) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.

application for review of two decisions made by minister under the environment protection and biodiversity conservation act 1999 (cth) (epbc act) first decision designating proposed action as controlled action and specifying controlling provisions second decision that relevant impacts of controlled action be assessed on preliminary documentation whether valid referral under epbc act to support decisions whether in making first decision the minister failed to take into account relevant considerations or took into account an irrelevant consideration s 75(2b) of epbc act rfa forestry operation commonwealth land whether minister misconstrued s 87(5) of epbc act in making second decision whether denial of procedural fairness in making of second decision whether second decision affected by apprehended bias whether second decision involved improper exercise of power whether second decision manifestly unreasonable administrative law

They are Dennis Sambo, Elizabeth Sambo, Carlene Sceghi, Linda Champion, Nancy Wilson, Sue Wyatt and Victor Cooper. There is a schism between the first five named persons, and Ms Wyatt and her brother, Mr Cooper. The first five named persons seek by this application to have Ms Wyatt and Mr Cooper removed as "parties" to this proceeding. Ms Wyatt and Mr Cooper have stopped attending meetings of the applicant group. They have opposed a proposal made by the rest of the members of the applicant group for the appointment of a trustee under a land use agreement that the applicant group entered into with Portman Iron Ore Limited on 12 July 2002. In the absence of the appointment of a trustee, Portman has refused to make any payments under the agreement and has placed the amounts due in an interest bearing account. The rest of the applicant group have applied to the Supreme Court of Western Australia for orders that the court appoint a trustee notwithstanding that Ms Wyatt and Mr Cooper refuse to consent thereto. Ms Wyatt and Mr Cooper have sought separate representation in that proceeding. There is also uncontradicted evidence that Ms Wyatt and Mr Cooper have taken a different view to the rest of the members of the applicant group in relation to other future act applications with the result that the intervention of the National Native Title Tribunal has been necessary. 3 Further, it is said that Ms Wyatt and Mr Cooper have not cooperated with the rest of the members of the applicant in progressing this native title claim. The uncontested evidence is that Ms Wyatt and Mr Cooper have failed to respond to requests from the legal representative of the rest of the members of the applicant to provide substantial connection evidence relating to their place in the claim group. Further, for a time Ms Wyatt and Mr Cooper sought to be separately represented in this proceeding. 4 On 5 November 2007, the first five named members of the applicant (the applicant movers) filed a notice of motion seeking orders that Ms Wyatt and Mr Cooper be removed as applicants and that the Register of Native Title Claims be amended accordingly. 5 The evidence relied on by the applicant movers comprises affidavits from Ms Sambo, one of the applicant movers, and Mr Shayne Daley, their solicitor. I issued a certificate under O 80 of the Federal Court Rules (the Rules) so that Ms Wyatt and Mr Cooper could have representation before the Court. Ms Wyatt and Mr Cooper did not read any affidavits. 6 No claim group meeting has been held to authorise the removal of Ms Wyatt and Mr Cooper and to approve the applicant movers making this application for the replacement of the applicant, with a differently constituted applicant. Ms Sambo deposed that convening a claim group meeting of the Central West Native Title Claim group would involve considerable expense, time and other personal resources because members of the claim group live in places widely dispersed. Ms Sambo estimated that up to 300 members of the claim group live in South Australia or in areas of Western Australia from which they would need to travel for more than half a day to attend a claim group meeting, likely to be held in Kalgoorlie. These members would then need to arrange accommodation in Kalgoorlie. Ms Sambo also estimated that the direct costs of holding a meeting would range from $10,000 to upwards of $20,000, which would include notification and advertising costs, venue hire costs, meals, accommodation and fuel and travel expenses. She said that it would also be difficult for the claim group to organise a meeting and arrange the logistics. She noted that many of the applicants and their families do not have the resources to pay for these costs. 7 Ms Sambo further deposed that even if a claim group meeting was held, she was not confident that Ms Wyatt and Mr Cooper would be removed as members of the applicant. Ms Sambo also pointed out that there had been a claim group meeting to approve the current members of the applicant group and that from 1999 to 2003 the Goldfields Land and Sea Council paid the costs of the claim group meetings. At such meetings, the claim group members adopted a decision-making process, as there is no traditional decision-making process that must be complied with in matters of this nature. 8 The applicant movers rely primarily on O 6 r 9 of the Rules, rather than s 66B of the Native Title Act 1993 (Cth) (the Act) in support of their motion. 9 The applicant movers contend that the conduct of Ms Wyatt and Mr Cooper has hindered the native title claim application and that the Court should find that they have ceased to be proper or necessary parties to a proceeding within the meaning of O 6 r 9(b) of the Rules. The applicant movers also submit that the applicant members were authorised on the basis that they were willing and able to act reasonably in the timely management and advancement of the claim and in other ancillary matters. It is said further that no authorisation of the persons comprising the applicant could be reasonably construed as permitting the conduct alleged in respect of Ms Wyatt and Mr Cooper. The conduct of Ms Wyatt and Mr Cooper shows that they are no longer willing and able to act as members of the applicant. (Original emphasis. The other parties submit that Chapman should not be followed. 15 In Chapman , Kiefel J removed as a "party" to a native title proceeding, each of three of the persons comprising the named applicant. One of those persons was deceased and Kiefel J found that the other two had evinced an intention to no longer act in a representative capacity because they had failed to cooperate with the other members of the applicant and failed to attend meetings of the applicant group. Kiefel J found that the three members of the applicant were not proper or necessary parties to the proceeding within the meaning of O 6 r 9 of the Rules, and removed them as parties on that basis. In coming to this conclusion Kiefel J followed her decision in Butchulla People v Queensland [2006] FCA 1063 ; (2006) 154 FCR 233 ( Butchulla People ). 16 Before examining the reasoning of Kiefel J in Butchulla People and Chapman , it is necessary to record that at the time of each of those decisions the Act was, in important respects, different to its current form. The respondents to the motion submitted that another authorisation meeting had to be convened before the remaining persons could act as the applicant. They submitted that the "applicant" authorised for the purpose of the bringing of the native title proceeding had "something of a corporate character" and could not be viewed as being made up of "individual applicants". 19 Kiefel J rejected the contention of the respondents. Kiefel J found that the Act contemplated that each of the persons comprising the applicant would be authorised to act personally and that the persons comprising the applicant were not authorised collectively. Further, Kiefel J observed that, as there was no statutory provision to the contrary, the usual presumption as to personal appointments would operate, namely, that the authorisation would "continue until revoked" and whilst the person was "willing and able to act in their representative capacity". It followed, observed Kiefel J at 244-245, at [43], that the inability of one of the persons comprising the applicant group to continue did not affect the continuing authorisation of the other persons to act as the applicant. Further, said Kiefel J, this approach, which her Honour referred to as the "preferred approach", did not "cut across any statutory provision or purpose". Order 6, r 9 of the Federal Court Rules contemplates that there may be a need in some cases to remove a person as a party to the proceedings. A "party" in the context of a native title claim the "applicant", would be all persons who together make up the applicant, since the "applicant" referred to in the NTA is not an entity itself capable of suing. There seems to me to be good reason why the Court should be in a position to exercise the power given by O 6, r 9 in native title claim proceedings as it does in any other litigation. I do not think it could be suggested that the need to do so would not arise. In my view s 251B should be understood to refer to the authorisation of each person who is to represent the claim group and act with others as the "applicant". The authorisation is personal to them and continues until revoked or whilst they are willing or able to act. Sections 66B(1) and 64 (5), dealing with replacement and appointment respectively, should be read in a way consistent with this approach. The reference to the "current applicant" being no longer authorised would be taken to refer only to those persons whose authority has in fact been revoked. This may not be all persons comprising "the applicant". The "new applicant" referred to in s 64(5) is each person who is authorised to make up the applicant when a change is made to one or more of them. The evidence that the subsection requires about their authorisation would be satisfied by those persons not newly appointed referring to their prior authorisation and the fact that it has not been revoked. For administrative convenience and clarity, their authorisation might also be ratified at the same meeting which authorises the new appointment or appointments, but this is not necessary. 21 It is apparent from these observations that Kiefel J construed s 64(5) of the Act as comprising the means of changing the composition of the applicant by supplementing their number with a person not hitherto a member of the applicant group. It is also apparent that Kiefel J did not regard it as necessary for the existing members of the applicant to be "re-authorised" as part of this process. Further, Kiefel J gave s 66B(1) a construction which limited its operation to the circumstance where the authority of an existing member had in fact been revoked. Accordingly, on the construction of the Act favoured by Kiefel J, s 66B would have no role to play where a member of the applicant died, or no longer wished to act as a member of the applicant. It was in circumstances of that kind that O 6 r 9 presented the Court with a means of changing the composition of the applicant without the necessity for an authorisation of the applicant as comprised by remaining previously authorised persons. It followed from the ruling in Butchulla People that there was, depending on the circumstances, more than one way to change the applicant to a native title proceeding. 22 In Doolan v Native Title Registrar (2007) 158 FCR 56 , Spender J followed the reasoning of Kiefel J in Butchulla People . 23 As already mentioned, in Chapman , Kiefel J used the O 6 r 9 method of changing the applicant where one of the persons comprising the applicant had died, and also where two others had, by their non-cooperation, manifested an intention no longer to act in a representative capacity. Kiefel J again rejected the notion that "the applicant" was to be construed as having an indivisible character. I note that the decision in the Butchulla People's application has been followed by Spender J in Doolan v Native Title Registrar (2007) 158 FCR 56. The approach which I consider to be open does not limit the grounds for the effective removal of a person to those in s 66B(1), rather it gives effect to the basis upon which authorisation was originally made. It should not be inferred that it was intended that s 66B(1) be the only means by which the constitution of the applicant in proceedings before the Court can be altered. 25 After the decision in Chapman , amendments to the Act were made by the Native Title Amendment (Technical Amendments) Act 2007 (Cth) (the 2007 amendments). These came into operation on 1 September 2007. 26 The 2007 amendments included the expansion of the circumstances in which s 66B(1)(a) would apply to include the death or incapacity of a member of the applicant, or a member consenting to his or her removal (see [12] above). Further, the 2007 amendments provided for the repeal of s 64(5). This was a provision which provided for the replacement of the applicant, and was referred to by Kiefel J in Butchulla People in her discussion of what she described as "the preferred approach" (see [20] above). 27 The Explanatory Memorandum in respect of the 2007 amendments referred to the proposed s 66B and to the proposed repeal of s 64(5) of the Act and commented that after s 64(5) was repealed, the "proposed section 66B would be the only mechanism through which any changes to the applicant could be made". 28 The 2007 amendments and the comments in the Explanatory Memorandum that the proposed s 66B was to be the only mechanism through which any changes to the applicant could be made, are inconsistent with the observations of Kiefel J in Chapman (see [24] above) that "it should not be inferred that it was intended that s 66B(1) be the only means" of making changes to the applicant. 29 Further, the 2007 amendments are inconsistent with the premise that underlies the decision in each of Butchulla People , Chapman and Doolan , namely, that the authorisation given by the claim group is personal to each member of the applicant, rather than being given to the particular group of persons comprising the applicant collectively. This is evident, for example, from the inclusion of the death of a person comprising the applicant in the circumstances listed in s 66B(1)(a). When s 66B(1)(a)(i) is read with s 66B(1)(b) it is clear that even when a person comprising the applicant has died, it is Parliament's intention that there is to be an authorisation by the claim group of the replacement applicant, whether or not the deceased person is replaced by another person as part of the applicant. 30 It follows that since the passing of the 2007 amendments there is only one means whereby any changes can be made to the composition of the applicant and that is through s 66B of the Act. The decisions in the cases of Butchulla People , Chapman and Doolan have been superseded by the amendments. Accordingly, I reject the applicant movers' contention that it is open to the Court to remove Ms Wyatt and Mr Cooper as members of the applicant by reference to O 6 r 9 of the Rules on the basis that each is not a proper or necessary party. 31 As an alternative contention, the applicant movers sought also to rely on s 66B(1) to effect the removal of Ms Wyatt and Mr Cooper from the applicant. 32 The applicant movers submitted that the conduct of Ms Wyatt and Mr Cooper is such that they no longer have authority on behalf of the claim group. There was no evidence as to the terms on which the members of the applicant were originally appointed. However, even if it could be said that the authority of Ms Wyatt and Mr Cooper has ceased in accordance with the terms of their original appointment (on which I express no view), that would not be sufficient for the applicant movers to succeed. Unlike the position in Daniel , the applicant movers have not been authorised by a claim group meeting to bring this motion to replace the applicant as currently constituted with an applicant as constituted by the five applicant movers. There has, therefore, been no compliance with s 66B(1)(b). Accordingly, I reject the applicant movers' contention based on s 66B(1) of the Act. 33 I dismiss the applicant movers' notice of motion. I express the appreciation of the Court to pro bono counsel. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.

members of applicant in a native title determination claim did not cooperate with other members of the applicant whether a member of an applicant can be removed as a party by reference to o 6 r 9 of the federal court rules native title

Section 13(6) relevantly has the effect that, if the amount per week payable to employees in a class to which an employee belonged when that employee became incapacitated, is later increased, the compensation payable to the employee as a result of the incapacity must be increased by the same percentage as that by which that amount per week was so increased. 2 The Tribunal found that the appellant, Steven Sidney Wood (the Seafarer), was employed by the respondent, ASP Ship Management Pty Ltd (ASP), as a catering attendant although he is also referred to as a catering assistant. Nothing appears to turn on the difference. The Seafarer was employed by ASP until his career ended in January 1997 as a result of incapacity connected with his employment. The Seafarer received compensation payments from ASP but contends that they have been incorrectly calculated in that increases required by s 13(6) of the Act have not been taken into account. The Tribunal held that there are no longer any members of the class of employees to which the Seafarer belonged at the time of his incapacity. The Tribunal concluded, therefore, that s 13(6) could have no operation and the payments to the Seafarer should not be adjusted under that provision. 3 The Seafarer contends, in his notice of appeal, that the Tribunal made an error of law in reaching that conclusion. ASP disputes that there was any error on the part of the Tribunal in reaching its conclusion. ASP says, in addition, that, if there was any error on the part of the Tribunal, it was not an error of law and, accordingly, there is no appeal under s 44 of the Tribunal Act, which limits the right of appeal to an error of law. No suggestion has been made that the Seafarer seeks Constitutional writ relief pursuant to s 39B of the Judiciary Act 1903 (Cth). The evidence indicated that the two segments are quite distinct industries, although seafarers could move between industries in their work. 5 The evidence indicated that the conditions of employment in the two segments are different. Thus, crew employed in the blue water segment have greater security, more regular working hours, more generous quarters and fewer crew members to look after than crew employed in the offshore segment. The cyclical nature, the less regular working hours and more cramped quarters of crew in the specialist vessels of the offshore segment have the consequence that pay rates are higher than the pay rates for the blue water segment. 6 At the time of his incapacity in 1997, the Seafarer was employed by ASP as an assistant caterer on " Australian Endeavour ". Australian Endeavour was a container ship trading in the blue water segment, mainly to south east Asian ports. The Seafarer was paid under the Maritime Industry Modern Ships Award (the Award). The Award applied only to the blue water segment. 7 The Award set pay rates by reference to category of vessel and number of crew. Australian Endeavour was classed as a dry cargo vessel of over 39,000 tonnes, manned by more than 18 crew. At the time of his incapacity the Seafarer was being paid pursuant to the Award specifically as a catering assistant on a Category 3 Dry Cargo vessel with a crew of more than 18. 8 In about 1997 or 1998, following a rationalisation in relation to the blue water segment, whereby the position of catering assistant was abolished, ASP, as operator of vessels in the blue water segment, no longer employed catering assistants. The Seafarer's duties on Australian Endeavour involved helping prepare meals, cleaning the vessel, loading stores and similar work of that kind. His duties were similar to those of a chief steward, but without the administrative duties of ordering stores, keeping records and making price calculations. The classification of chief caterer after the rationalisation combined both roles, with the nature of the duties being essentially the same as prior to the rationalisation. 9 However, vessels operating in the offshore segment maintained their existing manning. The evidence indicated that over the years, the blue water segment has reduced and the offshore segment has expanded. 10 As at January 1997, when the Seafarer became incapacitated, ASP employed 35 catering assistants. None of those individuals are now employed by ASP, the latest having terminated in March 2000. The bulk of the individuals terminated their employment in 1997 or 1998. Catering assistants affected by the rationalisation either took voluntary redundancy or found employment as chief caterers with ASP or employment as catering assistants on other vessels. About one-third accepted redundancy, the remaining two-thirds finding work elsewhere. He says that the calculation of any percentage variation under s 13(6), therefore, should be done on the basis of figures attaching to catering assistants under a range of enterprise agreements concerning such offshore vessels. He proposed that the Tribunal choose one of those enterprise agreements or direct that an average be taken in order to arrive at an indicator for an appropriate percentage increase. 12 There was evidence before the Tribunal, for example, that enterprise agreements entered into in relation to some six offshore vessel operators provided identical rates of pay for caterers from October 2001 to July 2004. Enterprise agreements entered into by other offshore vessel operators provided for similar rates of pay for periods from January 2005. The Seafarer contended, in effect, that the work performed by caterers under those enterprise agreements was the same type and kind of work that he was performing on Australian Endeavour prior to his incapacity. Accordingly, the Seafarer contended, caterers who were subject to those enterprise agreements were employees in a class to which the Seafarer belonged at the time when he became incapacitated. It was, therefore, possible to make an adjustment under s 13(6) by reference to the amount payable to caterers under such agreements. 13 ASP contended, on the other hand, that s 13(6) requires, not only the identification of a class, but the identification of the amount per week payable to employees in that class. ASP said that, because it no longer employs any catering assistants, the class to which the Seafarer belonged no longer exists. It also argued that, even if the class of catering assistants is not restricted to employees of ASP, no such class exists because of various differences between the blue water industry and the offshore industry and the importance of those differences to levels of remuneration. 14 The Tribunal concluded that s 13(6) requires the identification not only of a class to which an employee belonged, but also of " the amount per week payable to employees in the class to which such an employee belonged ". The Tribunal said that the class is inextricably tied to, and identified by, the amount of its remuneration and must be linked in that way in order for the percentage variation under the provision to be calculated. 15 The Tribunal approached its task by identifying the class to which the Seafarer belonged by reference to the Award and the Award's categorisation of size of vessel and manning. The Tribunal said that it would " accommodate " the changes wrought by the rationalisation concerning cargo vessels " by extending the class to all vessels of at least that size and manning in the blue water industry ". The Tribunal concluded, on that basis, that the class to which the Seafarer belonged when he became incapacitated was the class of catering assistants working on vessels of over 39,000 tonnes with a crew of more than 18. 16 However, since the Tribunal considered that it had no evidence of the continuity of that class, it concluded that the calculation provided for by s 13(6) could not be performed. The Tribunal considered that, since there are no longer any members of that class, s 13(6) can have no operation and there can be no percentage increase. For that reason, the Tribunal concluded that the amount of weekly payments to the Seafarer could not be adjusted under s 13(6). 17 The Tribunal rejected the contention on behalf of the Seafarer that the class be identified simply as " catering assistants ". The Tribunal considered that, to do so, would be to ignore " the central feature of remuneration " and that, while it would identify a class whose continuation is beyond doubt, it would render impossible the task of identifying a percentage increase. He says that the Tribunal erred in concluding, substantially on the basis that the Tribunal could not discern evidence of parity of income or something like it, that the class had ceased to exist so that there was no scope for the operation of s 13(6). 19 The Seafarer complained that the Tribunal's reasons proceed as though the definite article were used in s 13(6), so as to compel a search for a job virtually identical with the Seafarer's old job, essentially by reference to income or remuneration. The Seafarer contended that the Tribunal's approach overlooked that, as a matter of logic, work will identify a class, because the work must be done by someone. That in turn will identify an income stream or range of income relevant for the application of s 13(6). He says that the Tribunal's approach was erroneous in looking at income first and crucially, when it was but one factor to include in a broader inquiry. 20 The Seafarer pointed out that, on the evidence, it was not correct to say that a class of work involving catering had disappeared. By its very nature, work of that kind must continue to exist or there could be no shipping industry. No matter what the title or designation may be, there is always going to be work, performed by the seafarer, of the type that can be described as catering. 21 ASP accepted that, while it is appropriate to identify the work or the kind of work that was done by the Seafarer prior to his incapacity, it is equally important to identify the total context in which that work was done and the conditions that applied to the employment. ASP says that the class of employees of which the Seafarer was a member at the date of incapacity must specifically be those who have a common interest in the amount of remuneration paid to them, notwithstanding that the particular features that identify such persons may change over the years. 22 For example, there may be instances in which persons with such a common interest may be identified by the type of work that they perform, the qualifications that they hold, the category or level of position that they hold or any combination of these or other features. It is imperative, however, that regard is had to the features that identified those who had " a common interest " in remuneration at the date of the Seafarer's incapacity. Particular reference was made by ASP to a decision of the Tribunal relied upon by a Tribunal in this case: Re Thompson and Comcare [2002] AATA 733 ; (2002) 69 ALD 762 at [28] . 23 ASP emphasised the evidence before the Tribunal, to which it referred in its reasons, that, although seafarers could move between industries in their work, the blue water and offshore industries are quite distinct. ASP pointed to the different regime under which seafarers are employed in the offshore segment compared with the regime that operated in the blue water segment at the time of to the Seafarer's incapacity. The latter was regulated by the Award. Since at latest 2001, employment in the offshore segment has been regulated by enterprise agreements negotiated against the background of the different conditions that apply to employment in that segment as compared with employment in the blue water segment. Employment under such enterprise agreements involves a different factual matrix to employment under the Award (see Comcare v Thompson [2000] FCA 790 ; (2000) 175 ALR 163 at [45] ). 24 ASP contended that the Tribunal made no error of law in its approach to the task of identifying a class to which the Seafarer belonged at the time of his incapacity. The Tribunal sought to find a category of employees whose basis of remuneration was sufficiently similar to that of the Seafarer for a conclusion to be reached that the Seafarer belonged to that class of employees. That, ASP said, involved no error of law and the Tribunal's conclusion that there are no longer employees in that class is a finding of fact. It is a question of law as to what the phrase " class to which [the Seafarer] belonged " means when it is used in s 13(6). However, whether or not there is a continuing class, as the term is properly understood, to which the Seafarer belonged, is a question of fact which is within the province of the Tribunal alone. If the approach adopted by the Tribunal discloses a misapprehension of its task so as to indicate a misconception as to the meaning of " class of employees to which [the Seafarer] belonged " it made an error of law. 26 The object of s 13(6), clearly enough, is to ensure that the relativity is maintained between the compensation payments received by an incapacitated employee and the amount of salary payable to employees doing the same sort of work as the injured employee was doing at the time of his injury. It is conceivable that, over a period of time, the type of work performed by a particular employee at the time of incapacity is no longer performed anywhere because, for example, automation and technological advances mean that a particular type of work is no longer needed and is no longer performed. It is conceivable that, in such circumstances, the intended operation of s 13(6) might be frustrated. 27 Section 13(6) must be construed in its context. Section 13(1) provides that, if an employee who is a seafarer suffers an injury, the employee's normal weekly earnings , for the purposes of determining compensation payable under the Act, is to be an amount equal to the amount payable weekly to the employee by way of salary immediately before the injury happened. Sections 13(5) and 13(6) provide for adjustment of that amount of the employee's normal weekly earnings in two ways. Under s 13(5), if the amount per week payable to an employee would have been increased because that employee reaches a particular age, completes a particular period of service, or receives an increase in salary by way of an increment in a range of salary that applies to that employee, the normal weekly earnings must be increased by the same percentage as that by which the amount per week would have been increased. In the case of s 13(5), the increase does not depend upon being able to identify a specific class to which an employee belonged. 28 Nevertheless, the purpose of both s 13(5) and s 13(6) is to ensure that the compensation payable to a seafarer does not remain static but is to be adjusted in much the same way as the salary of the employee would have been adjusted but for the incapacity. It follows that the reference to class in s 13(6) must be construed broadly as a reference to the type of work that was being performed by a seafarer at the time of incapacity. That involves an enquiry as to the salary being paid to seafarers who perform that or similar work from time to time. 29 ASP contends that, even if work of the type that was performed by the Seafarer prior to his incapacity is being performed on any vessel, increase in the remuneration for that work would be an appropriate indicator for the application of s 13(6), only if the context in which, and the conditions under which, that work is performed are similar to the context in which and the conditions under which the Seafarer was employed as a catering assistant at the time of his incapacity. 30 In making a finding as to a class of employees whose remuneration is to be the comparator for adjustment under s 13(6), the Tribunal is engaged in a fact finding exercise. It is a question of fact as to whether there is a class of employees presently performing work of the same kind or type as and in a context and such conditions sufficiently similar to the work being performed by the Seafarer at the time of his incapacity. The Tribunal rejected the Seafarer's contention that caterers working under enterprise agreements on vessels engaged in the offshore segment of the Australian shipping industry are performing work of a kind or type sufficiently similar to that being performed by the Seafarer prior to his incapacity. 31 As a matter of principle, in determining whether the work is of a kind or type that is sufficiently similar, the Tribunal ought to have regard to the context in which, and the conditions under which, work was performed by the Seafarer and under which work is being performed by the putative class. However, the Tribunal does not appear to have directed proper attention to that question. The Tribunal identified the class to which the Seafarer belonged by reference to the Award. It did not undertake an enquiry as to whether the work performed by caterers on vessels engaged in the offshore segment, and the context in which and conditions under which that work is performed, is sufficiently similar to the circumstances in which the Seafarer worked as a catering assistant prior to his incapacity. 32 The amount per week payable to employees is a factor to be considered in determining whether work is of a type or kind that is sufficiently similar. However, it is not decisive and factors other than remuneration are also relevant. There is nothing in s 13(6) that requires a class to be identified only by the amount of remuneration as the Tribunal appears to have concluded. 33 I consider that the Tribunal misdirected itself by treating the remuneration received by the Seafarer on the one hand and caterers engaged under enterprise agreements on vessels in the offshore segment on the other hand, as paramount to the question required to be addressed by it. The Tribunal accepted that by identifying the relevant class of employees as " catering assistants ", a class whose continuation is beyond doubt would be identified. Quite clearly, the Seafarer was a catering assistant and must therefore be taken to have been a member of class whose continuation is beyond doubt. 34 While remuneration is a relevant, and no doubt an important consideration, in determining whether there is a class of employee, it should not have been given the paramountcy given by the Tribunal. The Act does not limit the investigation called for by s 13(6) to employees of a single employer. As I have said, the evidence before the Tribunal indicated a degree of commonality among enterprise agreements. To suggest that the task of identifying a percentage increase was impossible indicates a misapprehension on the part of the Tribunal of the task that it should have undertaken. The conclusion of the Tribunal that there is no class of employees still in existence of which the Seafarer had been a member involves an error of law. The decision of the Tribunal should be set aside. The matter of the review by the Tribunal of ASP's determination not to increase the Seafarer's incapacity payments should be remitted to the Tribunal for reconsideration in accordance with these reasons. The constitution of the Tribunal, of course, is a matter for the President of the Tribunal. ASP should pay the Seafarer's costs of the appeal. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

appeal from a decision of the administrative appeals tribunal calculation of worker's compensation payments whether the tribunal applied proper construction of s 13(6) of the seafarers rehabilitation and compensation act 1992 (cth) administrative law

2 The substantive proceeding before the Federal Magistrate was an application by Mr Maher to set aside a bankruptcy notice. His Honour, by consent, made an order on 28 July 2005 to set aside the bankruptcy notice the subject of the proceeding. 3 His Honour then dealt with an application by the respondents for what he described as "an order for costs arising out of a number of adjournments". The respondents succeeded in part in seeking their costs of those adjournments. Mr Maher contends that his Honour erred in making a costs order in favour of the respondents. The issue for determination in this appeal is whether the Court below erred in the exercise of its discretion to award costs to the respondents in respect of two occasions on which the proceeding was adjourned. On that day Mr Maher sought an adjournment to enable him to obtain legal representation. McInnis FM did not consider it appropriate to award costs in respect of the 11 April 2005 adjournment, in his 28 July 2005 reasons for judgment. 6 The matter was next before the Court below on 30 May 2005. Pro bono counsel for Mr Maher, recently appointed, sought an adjournment. 7 His Honour said that he was satisfied that at least part of those costs should be borne by Mr Maher. He assessed those costs at $600. 8 On 18 July the matter was again listed for hearing and again adjourned. Counsel for Mr Maher appeared on a limited basis to inform the Court that he would not be further appearing for Mr Maher and to inform the Court that Mr Maher was seeking urgent medical attention in Sydney. Counsel also told his Honour that Mr Maher had filed an application in this Court to set aside the order which founded the bankruptcy notice. He also submits that as the successful party, in that the notice was set aside by Court, he should not have costs awarded against him. He further contends that the conduct of the respondents disentitles them to costs. That Mr Maher ultimately succeeded in having the bankruptcy notice set aside is not a decisive factor in the determination of who should bear the costs of those adjournments. A party may have an excellent case and may achieve the relief sought in an application but the party's conduct may result in the proceeding not being dealt with as quickly as it may have been. In such circumstances it may not be fair and just that the appellant, although ultimately successful, be immune from paying the costs of an adjournment which he sought. 14 His Honour had a wide discretion to exercise on the question of costs; see s 79 Federal Magistrates Act 1999 (Cth). That discretion must be exercised judicially. No basis has been disclosed to show that his Honour failed to do so. His Honour was mindful that the steps taken in the Federal Court to set aside the bankruptcy notice did not occur until after the adjournment on 20 July 2005. 15 Mr Maher contended that the costs order should not have been made because of the conduct of the respondents. There was no evidence before his Honour of any conduct of the respondents which would have disentitled them to costs. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall J.

appeal from judgment of a federal magistrate ordering costs against appellant arising out of adjournments scope of the federal magistrates court's power to award costs whether discretion to order costs exercised judicially costs

Mark Heathcote served in the Royal Australian Navy (the "RAN") from 24 July 1979 to 23 July 1985. He was born on 30 December 1961. He was 17 years and six months of age when he enlisted and 23 years and six months of age when discharged. During his six years of defence service, he performed the duties and tasks of an Aircraft Technician Stoker. The Tribunal found that during Mr Heathcote's six years of defence service, he was exposed to hydrocarbons. The evidence of exposure to hydrocarbons that supported that finding consisted of a statement from Mr Steve Daviess who was a member of the RAN and who worked with Mr Heathcote in 1983, and a statement from Mr Robert Miller, one of Mr Heathcote's supervisors between 1980 and 1982. Our duties included the maintenance, repair and cleaning of the ships propulsion systems and auxiliary machinery. The tanks were emptied as low as possible with the remainder of the fuel being removed manually by ... sailors. Tanks were ventilated prior, for 24 hours using forced air from fans and ducting. No air monitoring equipment was used, prior to or during the tank cleaning procedure, where ... sailors would enter the diesel fuel storage tanks for cleaning. The sailors wore overalls and work boots and used rags to manually wipe down all bulkheads and decks of the fuel tanks. No gloves were worn or provided. Mark carried out these duties ashore at HMAS Albatross and on-board HMAS Melbourne, during the S2 aircraft carrier based operations. Mark's duties, as an Air Technical Aircraft (ATA) sailor, bore additional responsibilities of aircraft refuelling and de-fuelling operations and regularly exposed him to the lead based aviation fuel (AVGAS 155/145) after flying operations. During embarked operations, personnel were exposed to asbestos dust, lead based paint and exhaust gasses from HMAS Melbourne (burning furnace fuel oil) during flight deck operations. There was no evidence before the Tribunal as to whether the RAN or, for example, the Royal Australian Air Force, as part of its current workplace world's best practice, now requires men or women performing the tasks Mr Heathcote performed for six years between 1979 and 1985 to wear protective clothing, a breathing apparatus of a particular kind, masks or any other equipment to mitigate the risk of exposure to petrochemical toxins. Mark Heathcote died on 25 February 2004 aged 42. The cause of his death was cardiomyopathy. He was survived by his wife, Priscilla Heathcote, and four children then aged 11, 7, 6 and 4. On 5 May 2004, Priscilla Heathcote on behalf of herself and her children lodged a claim for a pension from the Commonwealth by way of compensation on the footing that her husband's death arose out of or was attributable to his defence service and thus his death was defence-caused for the purposes of the Entitlements Act. The contention advanced on behalf of Mrs Heathcote of a connection between her husband's death and his defence service was this. Mark Heathcote was exposed to a range of hydrocarbons including aviation gasoline (benzene) throughout the six years of his defence service. That exposure gave rise to a condition, probably asymptomatic, called "monoclonal gammopathy of uncertain significance" otherwise known as "M G U S" which was the "primary source" of the development of "abnormal amyloid material" due to the over-production of light chains of immunoglobulin (the protein-base for amyloid material). Amyloid material is material consisting of a complex protein of particular structure and chemical composition deposited in tissues of the body. The amyloid material so produced became distributed throughout Mr Heathcote's organs and, importantly, amyloid material invaded the myocardium (the muscular tissue of the heart) giving rise to "cardiac amyloidosis" otherwise called "amyloid cardiomyopathy", which pathologically is the same phenomenon described as "amyloid infiltration of the myocardium". Mr Heathcote's Death Certificate recites the cause of death as "amyloid cardiomyopathy". Thus, Mr Heathcote's death, it was contended, arose out of or was attributable to his defence service for the purposes of the Entitlements Act having regard to a sequence of steps along a continuum stepping back from the event of death due to amyloid cardiomyopathy, to the development of amyloidosis which developed out of his condition described as M G U S which was attributable to Mr Heathcote's exposure to the hydrocarbons as explained by Mr Daviess and particularly Mr Miller in their statements in evidence. The final step in the sequence of steps said to support the contention of a connection to defence service was the notion that cardiac amyloidosis at age 42 is an extremely young age to exhibit the condition. The median age of the diagnosis is said to be about 60 years of age. Thus, the early age at which Mr Heathcote was diagnosed implied, it is said, a causal connection with Mr Heathcote's exposure to petrochemical agents (hydrocarbons) such as diesel fuel and benzene, at an early age, and thus a causal connection, on the balance of probabilities, with Mr Heathcote's Naval service. This contention, so formulated, was rejected by the Commission. The rejection was affirmed by the Board. The contention so formulated was however made out to the satisfaction of the Tribunal. The Commission says several errors of law were made on the part of the Tribunal. Before examining the Tribunal's decision, the findings and the contended errors reflected in the questions of law to be addressed, the statutory framework needs to be borne in mind. Sections 68(1), 69 and 70(1) of the Entitlements Act have the effect that the Commonwealth is liable to pay in accordance with the Entitlements Act a pension by way of compensation to the dependants of a member of the Forces who has served continuous full-time service after 6 December 1972 and before 7 April 1994 for a period of three continuous years, where the death of the member was defence-caused. Section 70(5)(a) of the Entitlements Act provides that the death of a member shall be taken to have been defence-caused if the death arose out of or was attributable to any defence service of the member. The use of the disjunction in the phrase manifests a legislative intention to give the term defence-caused a broad meaning and s 70(5)(a) does not import any notion of sole or dominant or direct or proximate attribution: Roncevich v Repatriation Commission (2005) 222 CLR 115 at [27] per McHugh, Gummow, Callinan and Heydon JJ. Section 120(4) of the Entitlements Act provides that in making any determination or decision in respect of a matter arising under the Entitlements Act or Regulations (other than a determination to which s 120(1) or (2) applies, and those subsections do not apply here), the statutory standard to be applied by the decision-maker is a standard of "reasonable satisfaction" which adopts the civil standard: Repatriation Commission v Smith (1987) 15 FCR 327 per Northrop, Beaumont and Spender JJ. Therefore, if the decision-maker is satisfied on the balance of probabilities that Mr Heathcote's death was attributable to any defence service on his part, the death is taken to be defence-caused. However, s 120B(1)(b) has the effect of applying s 120B to Mrs Heathcote's claim made under s 70(1) of the Entitlements Act. The Authority has issued a Statement of Principles concerning "Cardiomyopathy" (No. 24 of 2007). This definition excludes all heritable forms of hypertrophic cardiomyopathy. The Commission accepts that Mr Heathcote died from cardiomyopathy and therefore the Statement of Principles concerning cardiomyopathy applies. The Commission also accepts that factor (p) is made out as Mr Heathcote's myocardium had been infiltrated by amyloid material by reason of a specified disorder, namely, amyloidosis. Since factor (p) exists, it is open to the decision-maker to conclude, on the balance of probabilities, that Mr Heathcote's death from cardiomyopathy is connected with the circumstances of his defence service provided that the final question is answered in the affirmative. That question is whether Mr Heathcote's death from amyloid cardiomyopathy, being the specified disorder contemplated by the Statement of Principles, was, on the balance of probabilities, related to the defence service rendered by Mr Heathcote in the sense that it arose out of or was attributable to that service (s 196B(14); Collins v Repatriation Commission [2009] FCAFC 90; (2009) 177 FCR 280 at [46]; Hill v Repatriation Commission [2009] FCAFC 91; (2009) 177 FCR 434 at [24]). That might be so if Mr Heathcote's M G U S was attributable to his defence service and M G U S gave rise to the development of amyloidosis causing amyloid cardiomyopathy and death. However, the Commission contends that a Statement of Principles concerning "myeloma" also applies as the kind of disease or kind of death Mr Heathcote suffered is a manifestation of a condition known as "myeloma", having regard to the evidence accepted by the Tribunal. Clause 2 of the Statement of Principles concerning myeloma (No. This definition includes plasma cell leukaemia, multiple myeloma and solitary plasmacytoma of bone or extramedullary plasmacytoma, but excludes monoclonal gammopathy of undetermined significance. The Commission contends that the Tribunal erred by failing to apply the Statement of Principles concerning myeloma in reaching its decision, having regard to the findings of fact made by the Tribunal concerning the evidence of Dr Malcolm Davison and Dr Marion L. Woods, Associate Professor of Medicine and Senior Specialist in Infectious Diseases at the Royal Brisbane Hospital and the Royal Women's Hospital. The Tribunal then set out some of the background circumstances concerning the history of Mr Heathcote's condition during the period approximately one year prior to his death. At [12] the Tribunal referred to the evidence of Dr Malcolm Davison set out in his report dated 11 October 2004. Dr Davison provided the report of 11 October 2004 as the consulting cardiologist who had been supervising Mr Heathcote. The report sets out a chronological description of the symptoms exhibited by Mr Heathcote upon presentation, the physiological causes of those symptoms and the treatment administered to him. Dr Davison notes that Mr Heathcote was admitted to the Nambour Hospital on 13 November 2003 complaining of right upper quadrant pain. An extensive evaluation was undertaken. A stress test was administered on 13 February 2004 after Mr Heathcote experienced increasing breathlessness and fatigue upon exertion. Dr Davison notes that an "infiltrative cardiomyopathy" was considered possible at that time. A diagnosis of amyloid heart disease was considered. A left ventricular biopsy was taken on 20 February 2004. The histology report became available on 23 February 2004 confirming the diagnosis. Mr Heathcote suffered a sudden death on 25 February 2004. The mode of death is typical of an arrhythmic death to which Mark would have been vulnerable as a consequence of this disease process. .... I know of no link between his service history and a risk of developing amyloid heart disease. Amyloidosis develops as a consequence of a "malignant" plasma cell dyscrasia resulting in an overproduction of light chain immunoglobulins which are then deposited throughout various tissues in the body including bone marrow, liver, spleen, bowel, skin and heart although distribution is variable. The condition is invariably fatal. Once cardiac involvement is present, the infiltration cannot be eradicated. The cause of cardiac amyloidosis is unknown. I do not believe the amyloid can be attributed to his service history. Further, there is evidence that Mr Heathcote had an underlying monoclonal gammopathy of unknown significance (MGUS) associated with over production of lambda light chains. Thus, it is likely that the condition of MGUS will have been the primary pathology with the cardiac amyloidosis being a secondary consequence. For the record, it should be noted that cardiac amyloidosis is the same entity as amyloid cardiomyopathy which in turn is pathologically, the same phenomenon as amyloid infiltration of the myocardium. These terms could all be used interchangeably. The light chains represent the protein base for the amyloid material which ultimately was deposited and invaded the myocardium. 24 of 2007) to determine whether death by cardiomyopathy for the purposes of the Statement of Principles reflected a factor consistent with infiltration of the myocardium due to a specified disorder, namely, amyloidosis. There is no issue between the parties as to factor (p). I would reiterate, that Mr Heathcote died as a consequence of cardiac amyloidosis (amyloid cardiomyopathy, amyloid infiltration of the myocardium). The amyloid disease, developed as a consequence of the underlying monoclonal gammopathy of uncertain significance (MGUS) in association with excess production of Lambda light chains. All of Mark's other cardiological problems ... have occurred solely as a consequence of the underlying amyloid disease process. The Tribunal noted that Dr Grant caused three reports to be obtained from Dr Poh See Choo ("Dr Choo"). Dr Choo's reports were responsive to the reports of Dr Davison and Dr Marion Woods. Dr Woods provided three reports dated 11 November 2004, 20 February 2006 and 4 January 2008. Dr Woods gave evidence before the Tribunal. At paras 15, 16 and 17, the Tribunal reviewed aspects of the reports of Dr Woods. The risk of primary AL amyloidosis is 8.4 times more likely in MGUS patients compared with non-MGUS patients. It is likely that Mr Heathcote had asymptomatic MGUS for many years prior to the eventual diagnosis in November 2003. MGUS ("smoldering myeloma") is considered to be a forme fruste of multiple myeloma. There is a significant body of evidence in the medical literature that links environmental exposure to hydrocarbons with the pathogenesis of multiple myeloma. The risks include exposure to diesel exhaust and fumes, petrochemical byproducts, carbon monoxide, and aviation fuel. Multiple myeloma incidence is increased in aviation maintenance workers. Mr Heathcote had ample exposure to hydrocarbons during his duty in the RAN that would have increased his risk over the non-exposed population. The exposure included entering fuel tanks for cleaning, exposure to fumes and solvents such as methylethylketone, jet fuel (AVGAS), diesel fuel and benzene (contained in AVGAS and diesel) and engine exhausts. MGUS ("smoldering multiple myeloma") is a recognized consequence of workplace exposure to these agents and such exposure puts these workers at significantly increased risk of myeloma and its consequences (such as AL amyloidosis). In Mr Heathcote's case, I think it is entirely plausible and likely that workplace exposure to these hydrocarbons contributed to the cause of MGUS. The 19-year time lag between end of service (1985) and death from cardiac AL amyloidosis (2004) make it very likely that MGUS was present for many years, perhaps developing during the service or soon afterward, although unrecognized. Given that MGUS transforms into full-blown multiple myeloma and/or primary (AL) amyloidosis at a rate of 1% per year on average, this 19-year interval is quite plausible. Those patients with a level greater than 3 g/L of monoclonal IgG have a 64% chance of transformation to multiple myeloma/AL amyloidosis. We do not know what Mr Heathcote's monoclonal protein levels were when he first developed MGUS. However, the very high level (10g/L of monoclonal lambda IgG) in November 2003 would have been a very poor prognostic factor for progression to full-blown myeloma or to the AL amyloidosis of the heart that had already developed and was the cause of his death. The condition is actually a rare manifestation of a form of multiple myeloma, a type of bone cancer. ... The biopsy showed amyloid infiltration of the myocardium. In general: Patients with IgG or IgA MGUS may progress to multiple myeloma, primary amyloidosis, or a related plasma cell disorder (eg, plasma cell leukaemia, light chain deposition disease)". Accordingly, in Dr Davison's opinion, there was evidence of a primary source or primary pathology for the abnormal amyloid material being MGUS associated with excess production of light chain related immunoglobulin. Dr Woods was of the same view and placed emphasis upon the laboratory tests of 18 November 2003 as confirmatory of MGUS as the primary cause of Mr Heathcote's amyloidosis. Dr Woods thought the protein electrophoresis report of 18 November 2003 confirmed Mr Heathcote had "at the least" MGUS. Dr Choo provided reports responsive to the reports of Dr Davison and Dr Woods. Dr Choo said he could not be certain with regard to the diagnosis of MGUS. The information that is very definite is that Mr Heathcote had diagnosis of AL amyloidosis and that was the cause of his death. Mr Heathcote had cardiac symptoms since March 2003 and the final diagnosis of cardiac amyloidosis was made in February 2004 via a cardiac biopsy. He was found to have elevated serum monoclonal Lambda IgG level of 10g/litre, however there was no documentation of any investigations including skeletal survey or bone marrow biopsy to exclude multiple myeloma. The issue was that indeed Mr Heathcote might have early myeloma rather than MGUS in November 2003 especially with the monoclonal IgG level as high as this. There is a definite link between myeloma and amyloidosis however there is no link between MGUS and amyloidosis. There are definite diagnostic criteria to follow in order to make the diagnosis of MGUS and multiple myeloma. Unfortunately, the information[s] available to hand cannot help us form the diagnosis. In the absence of lytic bone lesion, other criteria have to be fulfilled to differentiate myeloma from MGUS, these include anaemia, high level (>3.5g) of monoclonal protein in the serum and urine (1g/24h) and marrow plasmacytosis (>5%). Amyloidosis is associated with deposition of lambda light chain in multiple organs, often involving the nervous system, kidneys and the heart. I am convinced that the atypical myocardial infarction on the 21 st March 2003 was related to his amyloidosis. I believe this is related to his primary (AL amyloidosis). There was no information or any evidence in the report to suggest that Mr Heathcote had evidence of multiple myeloma. Primary amyloidosis and multiple myeloma are separate entities. All the clinical evidence we have pointed to the fact that Mr Heathcote had a diagnosis of amyloidosis rather than multiple myeloma. The monoclonal protein demonstrated in the blood test is part of the diagnosis of his amyloidosis. There was no evidence to suggest that Mr Heathcote had diagnosis of monoclonal gammopathy of uncertain significance or multiple myeloma. There is no link between primary amyloidosis and exposure to any chemicals that Mr Heathcote may potentially be exposed to. No evidence to link between his exposure to chemicals to the diagnosis of primary amyloidosis. Dr Catalano says that he examined the protein electrophoresis test result of 18 November 2003 and noted that it shows an abnormal but modest monoclonal protein concentration of immunoglobulin. He described it as abnormal. MGUS), one can be completely comfortable that the two are related and that the subtype of amyloidosis (for what it's worth) would be labelled AL amyloidosis. One could argue the toss as to the underlying aetiology of his MGUS. If further tests did not reveal one of those conditions, the diagnosis would be M G U S. The biopsy result of 24 February 2004 showing cardiac amyloidosis was consistent with a pre-existing M G U S, in Dr Catalano's view. Dr Woods also gave oral evidence before the Tribunal and it will be necessary to have regard to some of that evidence later in these reasons. At [18], the Tribunal member, Dr Levy (who has a PhD in another discipline) said that he had considered "all of the documentary and oral evidence" and relevant law. Dr Levy noted that the most accurate diagnosis of the physiological condition of Mr Heathcote was only able to be made shortly before his death. At [21], Dr Levy said that the evidence demonstrated that Mr Heathcote's condition at death was a complex one and that even the medical experts "grappled with the exact developmental pattern of the disease" and explained its "etiology in somewhat different terms in some respects". Dr [Choo] supports the diagnosis of AL Amyloidosis but is not satisfied on the medical evidence that a diagnosis of MGUS or myeloma can be justified. At [23], Dr Levy referred to the careful analysis of Dr Grant and the expert assessments of Dr Choo. Dr Levy noted the "uncertainty" on this question and the evidence of Dr Davison as the treating cardiologist and the opinion of Dr Catalano. That empirical evidence shows that progression to AL Amyloidosis is 8.4 times more likely where MGUS is present and the pattern of the debilitating illness of Mr Heathcote tends to indicate some abnormal factor was present to explain the acceleration of the disease and particularly in someone who died at 42 years of age whereas the expected median age is closer to 60 years of age. Accordingly, ground 3.1(a) which relies upon a contention that the Tribunal failed to make a finding on the balance of probabilities as to whether Mr Heathcote had contracted M G U S prior to contracting amyloidosis, is not made out. Grounds 3.1(b) to (d) rely upon a contention that the Tribunal was required to apply the Statement of Principles concerning myeloma, Instrument No. 56 of 2003, and failed to do so. Grounds 3.2(a) to (c) rely upon a contention that the Tribunal was precluded from finding that Mr Heathcote's death was defence-caused because the Statement of Principles concerning myeloma did not uphold the contention that myeloma could be caused by exposure to benzene. Ground 3.3 asserts that the Tribunal erred in its construction of ss 120B and 196B of the Entitlements Act and the Statement of Principles relating to myeloma by accepting the opinion of Dr Woods (and also potentially that of Dr Choo) that exposure to benzene was a cause of myeloma when such exposure was not included as a factor in the Statement of Principles. Ground 3.4 of the grounds of the application asserts that the Tribunal made findings of fact for which there was no evidence. The Tribunal's reasons demonstrate that Dr Levy was astute to the evidence concerning the "developmental pattern" of Mr Heathcote's condition [21], the controversy as to the emergence of M G U S ([22] to [26]), the evidence concerning the progression to amyloidosis in those patients diagnosed with M G U S and the relationship between M G U S and amyloidosis [26]. Dr Levy was also astute to the controversy as to whether a diagnosis of M G U S or myeloma could be justified [22] and the question of whether there is a differentiation between M G U S and myeloma [24]. Although Dr Choo's evidence as to the likely presence of M G U S in Mr Heathcote was not preferred to that of Dr Woods, Dr Davison and Dr Catalano, Dr Choo was retained to consider the careful analysis of Dr Grant going to these issues. In Dr Choo's report of 20 June 2007, Dr Choo identified one issue as whether indeed Mr Heathcote might have early myeloma rather than M G U S. Dr Choo noted the accepted presence of a link between myeloma and amyloidosis. Dr Choo in his report of 16 October 2007 noted that determining whether Mr Heathcote exhibited M G U S or myeloma would in part depend on lytic bone marrow tests and other criteria. In his report of 18 February 2008, Dr Choo considered the final state of the test results concerning Mr Heathcote and noted that the test of 18 November 2003 suggested AL amyloidosis and, at Item 1, that there was no information or any evidence to suggest that Mr Heathcote "had evidence of multiple myeloma". That conclusion suggests that the condition AL amyloidosis is treated, understood and tested for by those clinicians skilled in the relevant art as something different from myeloma. That impression is made clear by Dr Choo's view expressed at Item 2 of his report of 18 February 2008 that primary amyloidosis (ie. AL amyloidosis) and multiple myeloma "are separate entities" and, speaking as an expert clinician, "All the clinical evidence we have pointed to the fact that Mr Heathcote had a diagnosis of amyloidosis rather than multiple myeloma". Moreover, Dr Choo noted that, "the monoclonal protein demonstrated in the blood test is part of the diagnosis of his amyloidosis". This analysis caused Dr Choo to conclude that since the monoclonal protein present in the blood test led to a clinical condition of AL amyloidosis, the evidence did not support a diagnosis of M G U S. The evidence of Dr Woods, Dr Davison and Dr Catalano as to the progression to primary amyloidosis and the earlier presence of M G U S was found to be more persuasive in enabling the Tribunal to reach a finding as to the earlier presence of M G U S but on the question of clinical differentiation, Dr Choo recognises in his reports a differentiation, as a clinician, between M G U S and myeloma; between M G U S and amyloidosis; and, between amyloidosis and myeloma. Dr Woods also expressed views about the relationship between M G U S, amyloidosis and myeloma in his reports and in the course of giving oral evidence. In his report of 11 November 2004, Dr Woods described the term monoclonal gammopathy of undetermined significance, as a misnomer because 1% of M G U S patients per year progressed to multiple myeloma. Therefore, its significance is not truly undetermined. There is a recognised statistical progression from M G U S to multiple myeloma. As to the progression from M G U S to primary amyloidosis, there is an 8.4 times greater risk of an M G U S sufferer developing primary amyloidosis than a non- M G U S sufferer. Dr Woods describes M G U S as "("smoldering myeloma")" which is perhaps an analogical reference to embers waiting for a wind to turn them into an actual fire, something much more difficult to deal with. Dr Woods also describes M G U S as a forme fruste of multiple myeloma. Dr Woods in his report of 11 November 2004 then considers the molecular and biochemical structure of the type of amyloidosis diagnosed in Mr Heathcote. It was immunoglobulin-light-chain-related and developed because light immunoglobulin (polypeptide) chains called lambda chains (having antibody activity) found in immunoglobulin molecules became incorporated into complex protein deposits called amyloid deposits which infiltrated Mr Heathcote's heart. Dr Woods identifies the sequence of events that caused Mr Heathcote's death as starting with M G U S and leading to AL amyloidosis. Dr Woods says that M G U S can however transform into amyloidosis or multiple myeloma. In his report dated 20 February 2006, Dr Woods repeats these views. However, he introduces the remarks with the explanation that the light chains of immunoglobulin which he describes as small fractions of antibodies are made by abnormal plasma cells. Dr Woods then says that the condition, AL amyloidosis, is actually a rare manifestation of a form of multiple myeloma, a type of bone cancer. Dr Woods further explained these reports in the course of his evidence. In evidence, Dr Woods explained that M G U S can change from just that disease to multiple myeloma or AL amyloidosis. Dr Woods explained that M G U S, myeloma (which clinicians and researchers test for by means of a bone marrow analysis) and AL amyloidosis are different manifestations of the same process . The process Dr Woods was referring to at that point in his evidence was explained by him immediately after that statement as a process of exposure to benzene contained in jet fuel (T 17 April 2008, P - 3M, ll 25-39). Dr Woods gave evidence that researchers think that M G U S, amyloidosis and multiple myeloma are all characterised by "an exposure" (ie. to benzene) of a B lymphocyte plasma cell which causes the plasma cells to become abnormal or cancerous. Dr Woods says that M G U S is the mildest form of that exposure and in 1% of cases per year, M G U S develops into serious conditions such as AL amyloidosis or multiple myeloma. Dr Woods says that "plasma cells can become myeloma which is bone cancer" (T 3M, ll 45-47). The rarest form of plasma cell abnormality is AL amyloidosis. It's just making it out of the blue, but it's always the same antibody and what we get concerned about is [is] this patient going to develop multiple myeloma or will he develop amyloidosis which is so rare that we hardly ever look for it. Dr Woods says that each of these conditions is a different manifestation of plasma cell dysfunction and that logically the diseases have a common cause and might be thought of as a different spectrum of the same disease. However, it is clear that Dr Davison, Dr Woods and Dr Choo, although the diseases may have a common cause, approached the clinical diagnosis of each disease as a differentiated expression or manifestation of a particular condition. M G U S clinically is not regarded as myeloma. AL amyloidosis is not clinically regarded as multiple myeloma. Either condition may emerge out of M G U S. Accurate diagnostic isolation of the particular condition is regarded as important for treatment purposes. Although there may be similar molecular and biochemical processes, in part, at work, AL amyloidosis and myeloma are "different entities". They are not the same thing. Nor are they regarded clinically as the same condition. AL amyloidosis involves the distribution throughout organs of amyloid material which once the myocardium is infiltrated, cardiomyopathy ensues relatively quickly causing death. Myeloma was treated as far as the analysis of Mr Heathcote's position was concerned as finding its expression in and diagnosis through bone marrow analysis. The Tribunal noted the reference in the evidence of Dr Woods to the different manifestations of the same process and was conscious of the debate as to characterisation [24]. AL amyloidosis is a condition that is not the subject of a Statement of Principles and M G U S is expressly excluded from the definition of myeloma in clause 2(b) of the Statement of Principles for myeloma. The Tribunal determined on the balance of probabilities that Mr Heathcote suffered from M G U S at a time sufficiently early in his life to explain the condition, amyloidosis, evident at his death. M G U S is excluded from the definition of myeloma in clause 2(b) of the Statement of Principles governing myeloma. However, the condition at the date of Mr Heathcote's death based on the biopsy of February 2004 was amyloidosis and Mr Heathcote's cause of death was amyloid cardiomyopathy. Nevertheless, the medical evidence preferred by the Tribunal was that M G U S was evident in the blood test of 18 November 2003 and was the "primary source" of the abnormal amyloid material. The "primary pathology" was M G U S with cardiac amyloidosis regarded as a "secondary consequence". That being so, Mr Heathcote's condition was excluded from the Statement of Principles governing myeloma. The Commission says that the central question to be addressed is whether the condition or manifestation of a disease called AL amyloidosis confirmed by the biopsy results of 23 February 2004 (the results becoming available two days before Mr Heathcote died) is a condition characterised as myeloma for the purposes of the definition of myeloma in clause 2(b) of the Statement of Principles, notwithstanding that the specialist clinicians giving evidence in this case regarded M G U S, AL amyloidosis and myeloma as separately expressed conditions, as a function of diagnostic evaluation. Clause 2(b) of the Statement of Principles defines myeloma as "a malignant disease of plasma cells, in which a single line of plasma cells accumulates and produces a monoclonal immunoglobulin". The application of that definition to the clinical circumstances confronting Mr Heathcote involves a question of fact. The Tribunal grappled with the differentiation in the conditions M G U S and myeloma and the differences of opinion expressed by Dr Woods, Dr Davison and Dr Choo on these issues. The evidence of the clinicians is that amyloidosis is an identifiably different manifestation or expression of an underlying plasma cell abnormality. Although the clinicians identify the molecular and biochemical abnormality of plasma cell behaviour, the conditions M G U S, amyloidosis and myeloma are separate points in the spectrum of conditions which might emerge from that underlying abnormality and from a clinician's point of view, they are different things. Although, of course, the question of whether AL amyloidosis falls within the textual definition of clause 2(b) of the Statement of Principles having regard to the findings of fact, is a different question from whether a clinician might regard a particular condition as differentiated from another, in a clinical diagnostic sense, the views of clinicians as to whether AL amyloidosis is myeloma or something different ought to be given great weight in informing the approach to the definition of myeloma in clause 2(b). The definition of myeloma in clause 2(b) of the Statement of Principles suggests that the molecular and biochemical abnormality that causes a single line of plasma cells to accumulate and produce a monoclonal immunoglobulin is myeloma, that is, the myeloma is the malignant disease of the plasma cells . AL amyloidosis is not a malignant disease of plasma cells, on the evidence. It is a secondary disease that develops, as Dr Davison points out in his report of 11 October 2004, consistently with the views of Dr Woods (and consistently with Dr Choo's views of distinctiveness and separateness), "as a consequence of malignant plasma cell dyscrasia resulting in an over-production of light chain immunoglobulin". AL amyloidosis is not plasma cell dyscrasia. It is a disease or condition diagnosed by determining whether amyloid deposits have been distributed throughout particular organs of the body which, if the myocardium is infiltrated, AL amyloidosis will cause death relatively quickly. Mr Heathcote was not diagnosed with "myeloma" and did not suffer a "death from myeloma" which is what the Statement of Principles (Instrument 56) "is about" (clause 2(a)). Rather, Mr Heathcote was diagnosed with "cardiomyopathy" and suffered a "death from cardiomyopathy" (exhibiting a special disorder in the form of amyloid infiltration of the myocardium as contemplated by factor (p) of that instrument) which is what Statement of Principles 24 of 2007 "is about" (clause 3(a)), No. 24 of 2007). It follows therefore that the Statement of Principles concerning myeloma has no application as a matter of construction having regard to the evidence before the Tribunal and, on the findings of fact, Mr Heathcote's primary pathology was M G U S which is excluded from the definition of myeloma. The final question is whether it was open to the Tribunal to conclude that Mr Heathcote's exposure to hydrocarbons (benzene) gave rise, on the balance of probabilities, to M G U S as the primary pathology which caused amyloid deposits to develop resulting in death by amyloid cardiomyopathy. In determining that question the Tribunal at [18] recorded that it had considered "all of the documentary and oral evidence" put before it. The Tribunal said that it preferred the evidence of Professor Woods, Dr Davison and Dr Catalano in general, [24], [25] and [26]. The resolution of the final question involved a finding of fact or findings of facts from which inferences might be drawn as to the ultimate question in issue. If there is no evidence to support the finding or no proper basis for drawing any inference upon which the Tribunal has relied, an error of law arises. As to findings "unsupported by any evidence", see SFGB v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 77 ALD 402 per Mansfield, Selway and Bennett JJ. Want of logic or faulty logic on the part of the Tribunal is not synonymous with error of law. As to inferences that might be drawn, so long as the particular inference is reasonably open even if the inference appears to have been drawn as a result of illogical reasoning, there is no error of law: Minister for Immigration and Multicultural Affairs v Al-Miahi (2001) 65 ALD 141. As to the "no evidence" ground see SZDTZ v Minister for Immigration and Citizenship [2007] FCA 1824 at [32]. The applicant says that there is no evidence to support the finding of a causal relation or connection between Mr Heathcote's death from amyloid cardiomyopathy and his defence service. Dr Woods contended that Mr Heathcote's death from amyloid deposits started with M G U S. The Tribunal so found. Dr Woods contended that a diagnosis of AL amyloidosis in a man of 42 should raise epidemiological questions "in his specific case". Dr Woods contended that there is a significant body of evidence in the medical literature that links environmental exposure to hydrocarbons with the pathogenesis of myeloma . Dr Woods says that the literature suggests a range of risks are known including exposure to diesel exhaust and fumes (International Journal of Cancer V 107, pp 134-138, Multiple Myeloma and Diesel and Other Occupational Exposures in Swedish Construction Workers ); petrochemical by-products (Journal of Environmental Health V 64, pp 9-16, Risk Factors for Acute Myeloid Leukaemia and Multiple Myeloma ); and, aviation fuel (Toxicology and Industrial Health V 13, pp 43-55, Immunotoxicological Effects of JP - 8 Jet Fuel Exposure ; Occupational and Environmental Medicine V 60, pp 969-976, Benzene and Naphthalene in Air and Breath as Indicators of Exposure to Jet Fuel ; Occupational and Environmental Medicine, V 55, pp 161-71, Mortality and Cancer Incidence of Aircraft Maintenance Workers Exposed to Trichloroethylene and Other Organic Solvents and Chemicals: Extended Follow Up ). Dr Woods notes that Mr Heathcote's duties involved "ample" and "significant" exposure to hydrocarbons during his service in the RAN. It follows therefore in Dr Woods's view that Mr Heathcote had elevated risk factors as compared with the non-exposed population. Those risk factors identified by Dr Woods as material to his opinion were Mr Heathcote having entered fuel tanks for cleaning, exposure to fumes and solvents such as methylethylketone, jet fuel (AVGAS), diesel fuel and benzene (contained in AVGAS and diesel) and engine exhausts. Dr Woods expressed the opinion that M G U S (which he regarded as "smoldering multiple myeloma" because in 1% per year of the cohort of M G U S patients, M G U S progresses to multiple myeloma), is a "recognised consequence" of workplace exposure to the risk agents he emphasised. The ultimate conclusion was that Dr Woods thinks it "entirely plausible and likely" that workplace exposure to the nominated hydrocarbons "contributed to the cause of M G U S". Dr Woods then notes the 19-year period between the end of Mr Heathcote's service in 1985 and his death from amyloid cardiomyopathy and considers it "very likely" that M G U S was present in Mr Heathcote for many years. Dr Woods thinks it possible that M G U S developed during Mr Heathcote's service or "soon afterward", although it remained asymptomatic. The transition of 1% per year on average of the cohort of M G U S patients from that condition to either AL amyloidosis or multiple myeloma suggested to Dr Woods that a 19-year expression period is "quite plausible". Dr Woods put the same point slightly differently in his report of 4 January 2008 when he said that on the balance of probabilities, Mr Heathcote's exposure to petrochemical agents including benzene during the six years of naval service "caused the [M G U S] that caused AL amyloidosis ... of the heart that caused [Mr Heathcote's] death". Dr Woods again emphasised that death from cardiac amyloidosis at 42 is extremely young as compared with the median age diagnosis of 60 years, which, in Dr Woods's view, "implied", or from which he inferred, a "significant toxic exposure when in the Australian Navy". That fact need not have been implied or inferred as there was direct evidence of exposure. What Dr Woods was suggesting in his evidence was that early death at 42 from amyloid cardiomyopathy suggested a relationship between toxic exposure and early onset of M G U S which led to amyloidosis and premature death. Dr Woods supported his opinion and methodological approach with the reports of two studies. The first is A Long-Term Study of Prognosis in Monoclonal Gammopathy of Undetermined Significance , The New England Journal of Medicine, V 346, No. 8 pp 564-569, Robert A. Kyle et al (7 authors). The second is " Benzene Exposure and Multiple Myeloma: A Detailed Meta-analysis of Benzene Cohort Studies , Annals of New York Academy of Sciences (2006) V 1076, pp 90-109, Peter F. Infante. The first study was based on a study of 1,384 patients diagnosed with M G U S at the Mayo Clinic from 1960 to 1994 involving 11,009 person-years of follow-up. M G U S was defined by the presence of serum monoclonal protein at concentrations of 3gms per decilitre and (if a determination was made) a proportion of plasma cells in bone marrow of 10% or less. The median age for diagnosis of M G U S was 72 years of age (59% were 70 years or older). M G U S in 115 of those patients progressed to another condition. The study isolated the separate conditions that became manifest. The risk of progressing to multiple myeloma was 25 times the average (comparative benchmark) population and the risk of progression to primary amyloidosis was 8.4 times (see pp 565 and 566 and Table 1). The average risk of the development of a serious disease was almost 1% per year (see p 568). The second study is an evaluation of data arising out of all of the published epidemiological benzene cohort studies for inclusion in a meta-analysis to determine whether there is a demonstrated statistical excess risk of developing multiple myeloma by reason of exposure to benzene. The analysis involved an evaluation of all published studies and the selection of initially eight studies (see the studies at Table 1 and the discussion) based on the identified evaluative criteria for determining whether the study was rigorously conducted, pp 94 to 101, and an assessment of the latency periods for the emergence of the relevant conditions reflected in the studies. The study also discusses the Australian studies of petroleum workers and observes that the significant elevation in multiple myeloma risk among terminal workers is noteworthy. The latency period reflected in the study is 20 years. At pp 102 and 103, the author identifies the basis on which he says there is a "biologically plausible" basis for establishing benzene as a cause of myeloma including the demonstrated toxicity and genetic alteration of cells from which plasma cells are derived. The study finds, based on the use of data from seven of the benzene cohort studies, that those studies demonstrate a statistically significant elevation in the risk of death from multiple myeloma and that the "epidemiological evidence for benzene and myeloma is supported by other study results related to the biological plausibility for such an effect from benzene exposure". The pooled weighted estimate of multiple myeloma risks demonstrates a 95% confidence interval in a period of 20 years following exposure (see pp 101 and 102 and the related discussion). Dr Woods expresses the opinion that since there is a demonstrated statistically significant elevation in the risk of death from multiple myeloma by reason of exposure to benzene, it is "entirely plausible and likely" that workplace exposure to the nominated hydrocarbons including benzene contributed to the cause of Mr Heathcote developing M G U S which, having regard to the latency period of 19 years, makes it "very likely" that M G U S was present in Mr Heathcote for many years. Having regard to the demonstrated risk rate of 25 times the benchmark population of developing multiple myeloma having been diagnosed with M G U S and that benzene exposure significantly elevates the risk of death from multiple myeloma, Dr Woods thought it open, in his view, to conclude that it is plausible that benzene exposure presents an elevated risk of developing M G U S, as M G U S seems to be a precursor risk to myeloma. Once developed, M G U S has a risk progression to AL amyloidosis of 8.4 times the benchmark population. Accordingly, it was open to the Tribunal to conclude that there was a foundation for the views expressed by Dr Woods and in any event, the Tribunal was entitled to rely upon the opinion of Dr Woods as to the conclusions he reached. To the extent that it may have been necessary for the Tribunal to satisfy itself that there was an arguable foundation for Dr Woods's views, that foundation existed. It may be that on the question of fact that fell for decision by the Tribunal, the Tribunal reached an arguably incorrect finding. However, there was evidence before the Tribunal upon which it could reach the conclusion it reached. On this question, the Commission did not put any epidemiological evidence before the Tribunal or any literature searches of scientific material. It follows therefore that on the evidence before it, the Tribunal was entitled to conclude that Mr Heathcote's death from cardiomyopathy was defence-caused because he developed M G U S, on the balance of probabilities, by reason of exposure to hydrocarbons including benzene. That condition was the primary pathology that gave rise to a secondary consequence of emergent amyloidosis and caused Mr Heathcote's death from amyloid deposits infiltrating his heart giving rise to amyloid cardiomyopathy reflecting the special disorder contemplated by factor (p) in the Statement of Principles governing death from cardiomyopathy. Amyloidosis and death from amyloid cardiomyopathy was not myeloma or death from myeloma notwithstanding that amyloidosis might not have developed in the absence of a molecular or biological abnormality of the plasma cells. Because the Statement of Principles relating to myeloma has no application due to the exclusion of the diagnosed primary pathology M G U S (as found by the Tribunal on the evidence of Dr Davison, Dr Woods and Dr Catalano), and amyloid cardiomyopathy is not itself a molecular or biological abnormality of plasma cells but rather a different expressed condition, the factors which must exist by reason of Instrument 56 of 2003 before it can be said that on the balance of probabilities the veteran's death was connected with the circumstances of his service, namely, that Mr Heathcote was, apart from all of his other physiological compromises, also infected with human immunodeficiency virus (HIV) at the time of the clinical onset of what is sought to be characterised as myeloma, namely, primary amyloidosis, or alternatively that Mr Heathcote was unable to obtain appropriate clinical management for primary amyloidosis (clause 5 factors), have no application. Accordingly, the applicant has not demonstrated error on the part of the Tribunal and the application must be dismissed with an order that the Commission pay the costs of the respondent of and incidental to the application. I certify that the preceding eighty-five (85) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

appeal from a decision with the administrative appeals tribunal consideration of whether the veteran's death arose out of or was attributable to his defence service for the purposes of the veterans' entitlements act 1986 (cth) on the footing that the veteran by reason of exposure to hydrocarbons and benzene developed a condition described as m g u s which was the primary pathology for a condition described as primary amyloidosis giving rise to death from amyloid cardiomyopathy consideration of the statement of principles governing cardiomyopathy (no. 24 of 2007) consideration of the statement of principles governing myeloma (instrument no. 56 of 2003) consideration of whether amyloid cardiomyopathy falls within the definition of myeloma consideration of whether it was open to the tribunal to conclude on the evidence before it that the veteran's death from amyloid cardiomyopathy arising out of m g u s was related to the veteran's defence service having regard to the veteran's exposure to benzene and hydrocarbons defence and war

The adult appellants arrived in Australia from Albania in September 2000 and lodged applications for protection visas in November 2000. The basis of their claim as initially made was that the husband's sister had been engaged to a man whom she was later told was organising prostitutes in Italy. She broke off the engagement thus giving rise to a blood feud between her family and that of her ex-fiancé. I interpolate that at the time of the Tribunal hearing with which this appeal is concerned, the appellants' claim was broadened to include claims that the husband's sister had been raped by her ex-fiancé and that the family had difficulty in dealing with corrupt officials in Albania in relation to land owned by them. 2 On 6 May 2002 a delegate of the Minister refused to grant the appellants protection visas. Two separate decisions of the Refugee Review Tribunal ('the Tribunal') affirming the decision of the delegate have been set aside by consent orders of this Court. On 7 May 2007 Lindsay FM made an order dismissing the appellants' application for judicial review of a third decision of the Tribunal affirming the decision of the delegate. The Tribunal prepared two sets of written reasons for decision, the second set being in the same terms as the first except that it additionally deals with matters that relate solely to the husband's sister. 3 This appeal is from the judgment of the Federal Magistrates Court constituted by Lindsay FM. His Honour, as the appellants accept, correctly identified the test for apprehended bias by reference to the reasons for judgment of Allsop J, with whom Moore and Tamberlin JJ agreed, in NADH v Minister for Immigration & Multicultural & Indigenous Affairs (2005) 214 ALR 264. The critical passages from the reasons for judgment of Allsop J are set out in [9] below. As those passages make clear, the test for present purposes is whether the relevant circumstances are such that a fair-minded and informed person might reasonably apprehend that the decision-maker might not have brought an impartial mind to bear on the decision. 5 At various points in his reasons for judgment the Federal Magistrate asked himself questions in terms that, as the appellants submit, suggest that he departed from the proper test. would] the fair-minded observer think that the applicant was before a Tribunal whose mind was open to persuasion? It is an appeal by way of rehearing on the evidence adduced before the Federal Magistrate ( Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17 ; (2001) 205 CLR 507). In the circumstances it is appropriate for me to review that evidence which includes both the audio tapes of the Tribunal hearing and the transcript of that hearing. Having done so, I should set aside the judgment of the Federal Magistrates Court only if persuaded that his Honour's conclusion is wrong ( Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd (2005) 220 ALR 211 at [46]). However, it is not necessary for me to be satisfied that his Honour failed to apply the proper test. If, after giving appropriate weight to the view of the Federal Magistrate, I were persuaded that the conduct of the Tribunal member gave rise to a reasonable apprehension of bias, the appeal would succeed; I would have identified error in the judgment of the Federal Magistrates Court. 8 However, for the reasons set out below, I am not so persuaded. In my view the Federal Magistrate correctly dismissed the application for judicial review of the decision of the Tribunal. The tribunal does not administer public justice. The elements which affect the public confidence in the adjudication of disputes by an independent and impartial arm of government (in the broad sense) and which may be seen to inform what might be said to be freestanding norms of conduct and behaviour by judges conducting public hearings are not necessarily as easily transposable as strict obligations of administrative decision-makers acting in private. The tribunal here must investigate the facts for itself unaided by counsel presenting the parties' cases, to the degree and extent it thinks appropriate. The tribunal which has to reach a state of satisfaction may want to test and probe a recounted history. It may have particular matters troubling it for resolution, which require questioning and expressions of doubt which are entirely appropriate, but which if undertaken or said by a judge in open court in adversary litigation might give rise to an apprehension of a lack of impartiality. That is, the predisposition of the tribunal towards a result, other than a result reached by an evaluation of the material before it in a fair way with a mind that was open to persuasion in favour of the person in question. Unless that be demonstrated, it is hard to see how a decision-maker has failed to conform to standards of procedural fairness. Such an approach accords with the need for neutral and fair decision-making, without imposing on decision-makers in an administrative context the burden of behaving at all times as would a judge in public in the deployment of judicial power. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge ... to decide a case other than on its legal and factual merits. The second step is no less important. We put it in this way because it is well recognised not only that a judge may and commonly will begin forming views about the evidence as it goes along, but that he or she may legitimately give assistance to the parties by telling them what is presently in the judge's mind. This may properly include ... letting the parties know before reaching the defence case that the judge did not think much of the claimant's evidence. 12 Consistently with what I told counsel during the hearing of this appeal, I have read the entire transcript of the Tribunal hearing but, generally speaking, I have only listened to those portions of the audio recording upon which the appellants placed reliance. As counsel for the appellants accepted, these portions provide the best illustrations of the appellants' case. 13 In doing so I have borne in mind the critical importance to most applicants for review of a decision to refuse to grant them a protection visa of any hearing by the Tribunal. I have also borne in mind the importance of Tribunal members dealing sensitively and patiently with applicants who come before them, particularly when they are giving evidence of distressing events of a personal nature. On the other hand I have also had regard to the need for a Tribunal member to test evidence and, as appropriate, probe for weaknesses in an applicant's case. Additionally it is necessary to acknowledge that Tribunal members are not only subject to ordinary human frailties, but are also under pressure to conduct hearings expeditiously. 14 The appellants placed weight on the cumulative effect of a number of instances of conduct of the Tribunal member of which they were critical. While I do not overlook that their reliance is on the cumulative effect of the conduct, it is necessary to examine the instances separately. They all arose out of the evidence of the husband's sister who for convenience I will describe as "the witness". 15 I accept that at an early stage of the hearing the Tribunal member spoke in a peremptory tone when, after being asked if she was minded to take evidence from a counsellor, she responded 'I'm not' . She went on to explain 'That's hearsay. I like to explore these things myself. ' Shortly thereafter the Tribunal member refused to allow the witness to speak to her brother to reassure him about why he was being asked to leave the room. The transcript and the audio recording reveal that at this point in the hearing the Tribunal member was concerned that unwarranted delay might prevent the hearing being completed in the allocated time. She expressed dissatisfaction with the appellants' legal adviser not having earlier addressed with the brother the likelihood of his being required the leave the hearing room. Her dissatisfaction was, in the circumstances, understandable. 16 Additionally the appellants complained of the Tribunal member repeatedly using the phrases 'I have difficulty with that' and 'I'm still fascinated' in respect of evidence given by the witness. While more gracious ways of letting the witness know that the Tribunal member inclined to the view that her story was inherently implausible can be identified, the Tribunal member behaved appropriately in alerting the witness to the desirability of providing support for her story if she could. 17 The appellants characterised one of the Tribunal member's comments to the witness as 'gratuitous'. The comment in question followed a statement by the witness that after finishing an English course she was 'waiting ... to find the right person to get married ....' The Tribunal member interjected: 'So that was all you wanted to do --- was get married? ' While the relevance of this question is not apparent, and the tone in which it was asked perhaps condescending, it would not, in my view, incline a fair-minded person to the view that the Tribunal member might deviate from considering the appellants' claims to be entitled to protection visas on the merits. 18 The appellants also complained that the Tribunal member questioned the witness on an incorrect factual basis and then did not deal in an appropriate way with the resulting complaint made by the appellants' legal adviser. The Tribunal member sought an explanation from the witness as to why she didn't leave Albania legally by going through customs. The witness replied that a customs officer might have informed her ex fiancé. The Tribunal member then stated that, in effect, the border was closed at the relevant time. Having listened to the audio tape it seems to me that the Tribunal was genuinely confused at this stage of the hearing. It also seemed to me that she reacted defensively to interjections made by the appellants' legal adviser. I did not gain the impression, nor do I think that the hypothetical fair-minded observer would have gained the impression, that she was trying to trick the witness or was otherwise inclined to treat her unfairly. 19 Further, the appellants complained that the Tribunal member failed to identify aspects of their claim which she found to be implausible despite being asked by their legal adviser to do so. The request for the Tribunal member to put to the witness the aspects of her claims that the Tribunal member had described as implausible arose in the following circumstances. The witness told the Tribunal member that, as it was unsafe for her to remain in Albania, she escaped to Montenegro where she went into hiding in an old house belonging to an uncle on her mother's side. At one stage she described the house as being 'his old house on the land far away' with ' [n] o other houses around'. However, when she had earlier been asked where her uncle's place was she had replied: 'It's just across the border, you know. It's not far away to go just --- we could walk, you know. It's very near ....' The Tribunal member put to her that that area of Montenegro was 80 to 90% Albanian and she replied: 'That's why I'm telling you that our cousin over there told us not to go outside'. What you would like me to believe is that you went into hiding in Montenegro and you stayed in a place which was about five kilometres away from your village and the people who were pursuing you in your village didn't know that you were in Montenegro? Immediately after the second of those occasions the appellants' legal adviser asked the Tribunal member 'to perhaps put to Ms [name omitted] the aspects of that claim that you find implausible ....' The Tribunal member responded: 'I'll get to that. ' Thereafter the Tribunal member asked the appellant for more information about the house in which she claimed to have stayed and about the land on which it was situated. She queried whether other Albanians in the area knew that she was in the house. The Tribunal member then turned to another topic, namely, why the appellant left Albania illegally rather than using a border crossing. 21 It was, of course, entirely proper for the Tribunal member to test the claims being made by the appellants. She was required to determine whether she was satisfied that they, or any one of them, had a well-founded fear of persecution in Albania. If, as it appears that she did, she found that this aspect of the witness's claim did not have the ring of truth, it was appropriate for her to let this be known. It seems to me that she did let this appellant know what it was that, in her view, made this particular aspect of her claim implausible. The questions and comments summarised above disclose that the Tribunal member found it hard to accept that an Albanian who feared harm from her ex-fiancé, and perhaps his family, could live in safety in an area largely populated by Albanians only five kilometres from her home village. She sought support for the story being advanced by asking for details of the house and its surrounds. I note, incidentally, that no real details of this kind were provided. 22 There is no dispute between the parties as to the appropriate test for apprehended bias. Ultimately a determination of whether the totality of the conduct of the Tribunal member in this case was such that a fair-minded and informed person might reasonably apprehend that she might not have brought an impartial mind to bear on the issue that she was required to determine involves the making of a judgment. Having given careful attention to the transcript and relevant portions of the audio tape I am not satisfied that the judgment of the Federal Magistrate was erroneous. Indeed, it is the judgment that I would have made had I been sitting at first instance. 23 Mere discourtesy or abruptness, particularly when not of a severe character, does not give rise to a reasonable apprehension of bias. As the High Court has observed (see [10] above) the apprehension of bias principle admits of the possibility of human frailty. Having listened to the audio recording, I formed the impression that most, if not all, of the conduct characterised by the appellants as discourteous in reality evidenced human frailty. I formed the impression that the Tribunal member lacked confidence and was, to some extent, uncertain as to the best way to proceed. As mentioned above, it also appears that she felt under pressure of time and perhaps somewhat pressured by the appellants' legal adviser. I do not mean any criticism of the appellants' legal adviser. 24 While it is desirable for any person taking evidence from a person who claims to have been the victim of sexual assault, including rape, to act with tact and sensitivity, the manner of, and the comments made by, the Tribunal member in this case, while regrettable, were, in my judgment, not such as to lead a reasonable person to apprehend that she might deviate from the course of deciding the case on its merits. Rather it seemed to me that a reasonable person would be likely to recognise that the abrupt manner in which the Tribunal member dealt with the allegation of rape reflected, at least in part, her uncomfortableness with the need to test this allegation. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

appeal from a decision of federal magistrates court where allegation of apprehended bias on behalf of refugee review tribunal member held: decision of federal magistrates court affirmed appeal dismissed. migration

What follows are my reasons for doing so. The Bankruptcy Notice claims that Mr O'Meara owes the respondent creditor ('the Commissioner') costs in proceeding No. NSD 1000 of 2002 assessed at $19,953.00, together with $5,659.55 interest. By entry stamped 30.8.06, the Court, pursuant to O 62 r 54(3) of the Federal Court of Australia Rules , ordered Mr O'Meara pay the sum of $19,953.00 to the Commissioner. The application, which was filed on 21 August 2009, sought, inter alia, orders that the Bankruptcy Notice be 'dismissed' which, having regard to the header of the application, I read and construe as 'set aside'. On the hearing of the application, Mr O'Meara did not suggest otherwise. Other relief was sought including an order that time for compliance with the Bankruptcy Notice be extended until the application is heard and finally determined. There has been no actual extension of time for compliance with the Bankruptcy Notice, however, if the provisions of s 41(7) of the Bankruptcy Act 1966 (Cth) are engaged, time for compliance with the Bankruptcy Notice will be deemed to have been extended until and including the day referred to therein. Apparently, the application was not served on the Commissioner and certainly no affidavit was filed with or accompanied the application. On 9 September 2009 the application was listed before a Registrar of the Court. On that occasion, Mr O'Meara filed in Court two affidavits sworn by him, the first on 7 August 2009 and the second on 18 August 2009. On 10 September 2009 Mr O'Meara filed a further affidavit sworn by him on 3 September 2009. Rule 3.02 of the Federal Court (Bankruptcy) Rules 2005 mandates what is required for an application to set aside a bankruptcy notice. Although the application was filed before the expiration of the time fixed for compliance with the Bankruptcy Notice, no affidavit satisfying the requirements of either para (b) of sub-rule 3.02(1) or sub-rule 3.02(2) was filed by Mr O'Meara before the expiration of that time. It follows that whether Mr O'Meara relies on para 40(1)(g) (when sub-rule 3.02(2) would be relevant) or some other ground (when para (b) of sub-rule 3.01 would be relevant) to set aside the Bankruptcy Notice, his application is not competent. It is as if no application to set aside the Bankruptcy Notice was ever filed. Moreover, because the deemed extension of time under s 41(7) is not triggered and in the absence of an actual extension of time for compliance with the Bankruptcy Notice, Mr O'Meara committed an act of bankruptcy on the expiration of the time prescribed in the Bankruptcy Notice for compliance with its requirements. Even if Mr O'Meara's application to set aside the Bankruptcy Notice was competent and I could rely on all the evidence contained in his affidavits sworn 7 August, 18 August and 3 September 2009, I would nevertheless dismiss the application. First, I am not satisfied that Mr O'Meara has a counter-claim, set-off or cross demand equal to or exceeding the amount of $19,953.00, being the amount the subject of this Court's order entered on 30 August 2009. Second, Mr O'Meara does not contend that the issue and service of the Bankruptcy Notice is an abuse of process. Third, neither the form or content of the Bankruptcy Notice, its service on Mr O'Meara, nor the existence of the debt upon which the Court's order and, in turn, the Bankruptcy Notice is founded, are put in issue by Mr O'Meara. The Act permits the issue of a bankruptcy notice and, if the notice is valid, prescribes the consequences to the bankrupt of non-compliance. The grounds upon which a bankruptcy notice may be set aside must relate to the form or content of the notice, service of the notice or the existence of the debt upon which the judgment, and, in turn, the notice, is founded. Reference to the existence of a debt includes the existence of a counterclaim, set-off or cross demand equal to or exceeding the amount of the debt: Re Briggs; Ex parte Briggs v Deputy Commissioner of Taxation (WA) (1986) 12 FCR 310 ; Re Athans; Ex parte Athans (1991) 29 FCR 302. Since jurisdiction to set aside a defective bankruptcy notice is not a general discretionary jurisdiction, it differs from the jurisdiction to make a sequestration order under s 52(1), which is expressly discretionary. Because I believe the leave of the Court will be required if Mr O'Meara wants to pursue an appeal, having regard to the time of the year, I will order an extension of time, within which a notice of motion seeking that leave may be filed. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds.

application to set aside bankruptcy notice application not accompanied by supporting affidavit as required by r 3.02 of the federal court (bankruptcy) rules 2005 application not competent. bankruptcy

His Honour dismissed the proceedings before him as being an abuse of the process of the court and also found that they were frivolous and vexatious within O 20 r 5(1)(a) and (b): Croker v Commonwealth of Australia [2008] FCA 452. 2 His Honour set out in detail in his reasons why the proceedings were an abuse. In my opinion there is not the slightest reason to doubt that his Honour was correct, for the reasons that he gave, that they are correctly characterised as an abuse of the process of this Court. As his Honour noted, the claim arose out of Mr Croker's dissatisfaction with his purchase of a pair of cufflinks for $50 from the High Court of Australia in late 2003. 3 Despite a number of attempts by him to litigate those matters of dissatisfaction in the Consumer, Trader and Tenancy Tribunal of New South Wales, before the Supreme Court of New South Wales, in the High Court of Australia and in this court, Mr Croker ultimately had proceedings, which he had instituted in this Court, transferred to the Federal Magistrates Court in early 2007. They came before Lloyd-Jones FM, who ordered Mr Croker to provide security for costs of the Commonwealth in the sum of $30,000 by 4.00 pm on 11 September 2007 and Mr Croker was also granted leave to file and serve an amended application by that date. He neither provided the security for costs nor filed any amended pleadings pursuant to the leave granted to him. Instead, before the expiry of the time fixed by the Federal Magistrates Court for those steps to be taken, he filed an application in this Court seeking leave to appeal against those orders. Buchanan J dismissed that application on 17 October 2007: Croker v Commonwealth of Australia [2007] FCA 1593. 4 On 31 October 2007, Lloyd-Jones FM stayed the proceedings in the Federal Magistrates Court pending the payment of the amount for security for costs and ordered that, if that security were not paid by 5.00 pm on 16 November 2007, the proceedings in that court would be dismissed. Mr Croker did not pay that amount. On 6 March 2008, Lloyd-Jones FM dismissed the proceedings and ordered Mr Croker to pay the costs of the Commonwealth. 5 In the meantime, on 4 December 2007 Mr Croker instituted proceedings that were ultimately the subject of Cowdroy J's judgment in which he claimed $200,000 based on, as his Honour found, the same facts as had been relied on in the Federal Magistrates Court proceedings. 6 The absurdity of this claim is self-evident from the damages sought, the basis for which Mr Croker never particularised. The purchase of a $50 pair of cufflinks, however defective, could not conceivably give rise to a claim for damages of $200,000. The proceedings had, on their face, a demonstration of their vexatiousness and absurdity. Cowdroy J, found that the facts giving rise to Mr Croker's claim and the relief he sought were the same as he had sought in the Federal Magistrates Court, except that the damages he had claimed had increased from the original $100,000 to $200,000. 7 Although Mr Croker made claims under s 52 of the Trade Practices Act 1974 (Cth), in contract for breach of warranty and damages for "wrongfully defending a claim", it is impossible to see how anyone could claim for a simple consumer purchase of $50, damages in an amount of either $100,000 or $200,000. His Honour found that Mr Croker had a genuine belief that the proceedings before him had been instituted after the Federal Magistrates Court proceedings had come to an end on 31 October 2007. However, Cowdroy J said that the institution of the current proceedings before him had been made in respect of the same claim. He found that identical circumstances prevailed except that Mr Croker had increased the amount of damages which he particularised as having been suffered. 8 His Honour pointed out that Mr Croker had led no evidence to suggest he might be impecunious or otherwise unable to pay the amount of security for costs ordered by Lloyd-Jones FM. His Honour set out Mr Croker's explanation, as to why he had not proceeded in the Federal Magistrates Court, which he gave to Cowdroy J at the hearing of the application in which his Honour found the proceedings to be an abuse of process: see Croker [2008] FCA 452 at [54] . Cowdroy J also asked Mr Croker how he quantified his claim for damages. He suggested that "opportunity costs would be won", identifying the opportunity in the following exchange which his Honour set out: Croker [2008] FCA 452 at [55] . "MR CROKER: Your Honour, I would have to go into more detail to give you --- I'd have to more time. HIS HONOUR: All right. I'm ready to hear that detail. MR CROKER: Your Honour, I wouldn't be able to do it straight away. I'd have to do some research and give you exactly what would be legally - - - HIS HONOUR: You mean to say at the moment you cannot quantify your loss. In the absence of any response it was also appropriate that the Commonwealth sought an order that Mr Croker provide documents to support that claim. He did not comply with that order and that led to the Commonwealth's application for security which Lloyd-Jones FM granted. 11 Cowdroy J found no basis for Mr Croker's assertion that the Commonwealth had acted otherwise than in accordance with the standards expected of it as a model litigant under the Legal Services Directions 2005 made pursuant to s 55ZF of the Judiciary Act . His Honour was mindful that the power to strike proceedings out or to dismiss them should only be used in exceptional cases where the facts disclosed a clear case of abuse. He found that the current proceedings before him had been instituted solely for the purpose of circumventing the orders made by Lloyd-Jones FM in the proceedings before the Federal Magistrates Court. Such conduct obstructs the administration of justice and accordingly constitutes an abuse of process. Far from seeing any possible error or injustice in his Honour's reasoning, it appears to me to be entirely apposite and correct. The orders of Cowdroy J were made on 8 April 2008. Pursuant to O 52 r 10(2A)(b) an application for leave to appeal from an interlocutory judgment of the Court must be made on motion within seven days after the date on which the interlocutory order was made. 14 An order striking proceedings out or dismissing proceedings on the basis that the proceedings are frivolous or vexatious or an abuse of the process of the court or do not disclose a reasonable cause of action is an interlocutory order: Re Luck [2003] HCA 70 ; (2003) 203 ALR 1 at 3-4 [6] - [10] per McHugh ACJ, Gummow and Heydon JJ. Accordingly, having regard to his Honour's decision and his invoking of power under O 20 r 5, the proceedings were interlocutory. 15 Mr Croker swore an affidavit on 28 April 2008 seeking to set out why leave should be granted. He asserted that this was a Commonwealth consumer claim by a citizen of the Commonwealth alleging a series of contraventions of Commonwealth consumer law and uncalled for participation in formal proceedings to protest such unlawful contraventions. He asserted the action was also under a law of the Commonwealth for wrongfully defending a claim for breach of warranty, false or misleading representations and misleading and deceptive conduct. He asserted that the questions involved whether the Commonwealth had contravened its own consumer laws, the Legal Services Direction 2005, to which I have referred, and whether O 20 r 5(2) and in particular O 20 r 5(1)(b) authorising the Court to dismiss an application was a valid order or rule of the Federal Court of Australia. 16 In my opinion those questions have no substance. While it may be that Mr Croker originally had a claim that the pair of cuff links which he purchased was defective, that was able to be litigated in the proceedings before Lloyd-Jones FM. Mr Croker chose neither to litigate them nor to comply with the Federal Magistrates Court's orders. There is no reason to doubt the correctness of Cowdroy J's findings that Mr Croker had not shown any arguable basis on which the Commonwealth could be said to have contravened the Legal Services Direction 2005. 17 The power of the Court to make a rule, such as O 20 r 5, is incontestable in any event. The court has an implied or inherent power to protect its own processes from abuse and his Honour's order could be equally supported by use of those powers, as Re Luck [2003] HCA 70 ; 203 ALR 1 shows. Rules such as O 20 r 5 have been a part of the armoury of courts to protect themselves from vexatious and abusive claims for well over a century. There is no basis on which it could be suggested that O 20 r 5 is not a valid rule of the Court. 18 Mr Croker seemed to assert that the terms of O 20 r 5(2) did not relate to a finding under subr 1 of that rule. I was unable to understand any rational basis for the argument. The terms of the rule are plain. Sub-rule 2 applies when the court is satisfied of either of the elements in subr 1 (i.e. O 20 r 5(1)(a) or (b)). Cowdroy J was satisfied that the proceedings were an abuse of the process of the court under O 20 r 5(1)(b) and, therefore, had power to, and did, dismiss them under O 20 r 5(2). 19 Mr Croker asserted that the reasons why he should be granted leave were that it would be in the interests of the administration of justice, Cowdroy J's decision constituted a gross miscarriage of justice and it would be in the public interest. None of these matters has the slightest substance. On the 10/4/2008 I was in attendance at the Federal Court of Australia registry at Queens Square, Sydney. I requested to the counter officer to make inquiries to the Registrar in regards to the judgment of the Federal Court of Australia Croker v Commonwealth of Australia 8/4/2008. 11. The counter officer failed to inquirer to the registrar and consulted the rules and made a decision himself. In regards to the judgment and the practice and procedure inquire. Having regard to Mr Croker's litigious history I am far from satisfied with such an explanation. But I am prepared to give him the benefit of the doubt that he misunderstood the obligation to file an application for leave to appeal within seven days. 22 In such a case the principles upon which the Court proceeds are well settled. An application for an extension of time in which to lodge an appeal is governed by considerations discussed in Jackamarra v Krakouer [1998] HCA 27 ; (1988) 195 CLR 516 ; Jess v Scott (1986) 12 FCR 187: see also SZAPG v Minister of Immigration and Citizenship [2007] FCA 372 at [7] - [8] per myself. In essence the court seeks an outline of the merits of the case sought to be brought out of time. If it appears to be a case that is strong on the merits and which ought to be heard in fairness to the parties and the court thinks it proper that it ought to be allowed to proceed, time is usually extended. However, if it appears to be a flimsy case, weak on the merits, the Court will not extend time. The Court does not go into detail on the merits but likes to know something about it. That was the approach taken by Lord Denning MR in R v Secretary of State for the Home Department; Ex parte Mehta [1975] 1 WLR 1087 at 1091 which was approved in Jackamarra 195 CLR at 519-520 [3]-[4] by Brennan CJ and McHugh J and similarly at 540-541 [66] par 4 by Kirby J. These proceedings, as the history set out by Cowdroy J and in part recited above shows, have no legitimate forensic purpose. They are simply an attempt to re-litigate a case which was properly before the Federal Magistrates Court with whose directions Mr Croker, without explanation, failed to comply and was unsuccessful in his application to appeal from those orders. 24 Instead he sought to use the processes of this Court to circumvent Lloyd-Jones FM's orders in a way which would only bring the administration of justice into disrepute among right-thinking people were it allowed to succeed. The jurisdiction of a superior court at such a case was correctly described ... as 'the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people. 26 For these reasons, I am of opinion that Mr Croker has failed to make out any reason upon which an extension of time ought to be granted. I am satisfied that even if an extension of time were granted, leave to appeal would never have been granted because Cowdroy J's decision is not attended with sufficient doubt to want the grant of leave, being in my opinion, undoubtedly correct. Also, no injustice, let alone substantial injustice, would result from a refusal of a leave to appeal: Bienstein v Bienstein [2003] HCA 7 ; (2003) 195 ALR 225 at 231 [29] per McHugh, Kirby and Callinan JJ. For these reasons the application for leave to appeal must be refused. I am satisfied for the reasons that I have given that these proceedings had no legitimate forensic purpose and were the plainest abuse of the process of the court. Mr Croker failed to identify any error in Cowdroy J's judgment which could have warranted a grant of leave being made. As Cowdroy J found, the proceedings before him had been instituted solely for the purpose of circumventing the orders made in the Federal Magistrates Court. 28 The application for leave to appeal was without foundation and unsupported by any evidence of any injustice. I am satisfied that the vexatiousness of the proceedings and their abusive nature warrants an order that Mr Croker pay the Commonwealth's costs taxed on an indemnity basis. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

consumer protection claim for damages application for leave to extend time in which applicant could seek leave to file application for leave to appeal from interlocutory order relevant principles single judge of federal court held that proceedings were abuse of process and frivolous and vexatious proceedings dismissed pursuant to o 20 r 5(2) of federal court rules nature of such order is interlocutory trade practices practice and procedure

They applied in April 2008 for an order that they proceed to make the distribution of funds to EBM's unsecured creditors in accordance with a Notice of Intention to Declare a Second Dividend (Notice) dated 4 March 2008. The Notice had been given to EBM's Members, Creditors and Noteholders. The application was supported originally by the affidavit of Martin Bruce Jones, one of EBM's joint liquidators, sworn 18 April 2008 and most recently by his further affidavit sworn 14 October 2009. From the date of issue of the Notice the only person who has objected to the declaration and distribution of the intended second dividend has been the defendant, Emu Brewery Developments Pty Ltd (EBD). EBD claims that EBM is not entitled to make a distribution to its creditors, as proposed, because EBD is entitled to the money which is to be distributed. The total amount of EBD's claim is $12,492,370. This slightly exceeds the funds held by EBM. However a settlement has been agreed between EBM and EBD. The terms of settlement are set out in a Deed of Settlement and Release (Settlement Deed) entered into between the parties dated 13 October 2009 by which EBM has agreed to pay EBD $1.5 million in compromise of its claim. A significant part of this will go to payment of EBD's legal and other costs. The defendant earlier made an application for an order that its reasonable costs and expenses be paid from the fund from which the joint liquidators propose to make a distribution to creditors. If that application were to have proceeded and an order was made in those terms, the legal costs incurred by both parties would, it seems, be significant and possibly in the order of hundreds of thousands of dollars. Additionally, the continuation of the proceedings would extend even further the already lengthy delay in making the distribution to creditors. The delay has caused, and is continuing to cause, considerable economic hardship and emotional distress for creditors. A significant number of the creditors are "mums and dads" investors, many of whom are retired. Mr Jones and his staff have received many telephone calls from creditors advising that they are desperate for the second dividend to be distributed as a matter of urgency. Sandhurst Trustees Limited, the trustee for the Mezzanine Note Holders appointed under the Mezzanine Note Trust Deed, has received telephone calls and letters from Mezzanine Note Holders concerning the distress and financial hardship being endured by those callers and writers. The plaintiffs do not consider that the defendant has a strong case. However the prospect of it succeeding cannot be dismissed. The plaintiffs have been advised by senior counsel that the settlement is, in all the circumstances, reasonable. The effect of the Settlement Deed is that, upon the distribution of the second dividend, the creditors of EBM will have received an overall dividend of 95.3 cents in the dollar in respect of their principal investment, inclusive of the interim dividend, which represents 59 cents in the dollar in respect of their principal investment, already paid to creditors on 15 November 2007. In the event that the proceedings continue and the defendant succeeds in its claim, there will be no further funds available for the liquidators to distribute, and the creditors will therefore not receive any further dividend. Accordingly, the joint liquidators believe that it is in the best interests of EBM to settle the claim made by EBD on the terms set out in the Settlement Deed which will enable them to proceed without delay to distribute a second dividend to unsecured creditors. I am satisfied that, in these circumstances, the requirement imposed on the plaintiffs by Regulation 5.6.69 of the Corporations Regulations 2001 (Cth) to publish a further notice of intention to make a distribution ought be dispensed with. The requirement to publish a further notice of such intention to distribute a second dividend would delay the distribution by at least a further 28 days. There will be orders as sought. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

liquidator's compromise of debt continuation of proceedings further delay distribution to creditors financial hardship and distress for creditors immediate distribution ordered. corporations

He comes from a village in Preshevo, Serbia. He arrived in Australia in December 2003 and applied for a protection visa in January 2004. 2 The appellant's application for a protection visa was refused by a delegate of the then Minister for Immigration and Multicultural and Indigenous Affairs. This decision was affirmed by the Refugee Review Tribunal. The appellant's application for judicial review of the decision of the Tribunal was dismissed by the Federal Magistrates Court ( SZEPN v Minister for Immigration & Anor [2005] FMCA 1664). 3 The Tribunal in its written reasons for decision noted that the appellant claims that he will face harm if he returns to Serbia and Macedonia because he avoided conscription and because he assisted Kosovo refugees flee to Montenegro during the war between Kosovo and Serbia. The appellant does not challenge the Tribunal's conclusion that he would not now face harm in his country of nationality because he avoided conscription. However, he continues to maintain that he will face harm as a Muslim who assisted Kosovo refugees during the war between Kosovo and Serbia. 4 The appellant has appealed to this Court from the judgment of the Federal Magistrates Court. For the reasons set out below, I conclude that his appeal should be dismissed with costs. 6 First, the appellant required an extension of time within which to appeal from the judgment of the Federal Magistrates Court. His solicitor swore an affidavit in support of the application for an extension of time in which he deposed to attempting to send a notice of appeal to the NSW District Registry of this Court by facsimile transmission within the time allowed by O 52 r 15 of the Federal Court Rules . It appears that he did not wait to sight a transmission verification report before departing overseas. The transmission verification report annexed to the solicitor's affidavit shows that the fax number to which the solicitor attempted to send the notice of appeal was busy. This is perhaps fortunate as the number shown on the transmission verification report is not a Federal Court number; one digit was wrongly entered. 7 On 17 March 2006 this Court ordered that the time within which the appellant could file and serve a notice of appeal be extended up to and including 24 March 2006 ( SZEPN v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 268). 8 No notice of appeal was filed in the period between 17 and 24 March 2006. It appears that an attempt was made to file a notice of appeal on 29 March 2006. The Registry properly refused to accept the notice for filing. 9 The respondent thereupon consented to the period of time within which the appellant could file and serve a notice of appeal being further extended. A notice of appeal was filed and served within the further extended period of time. 10 Only one ground of appeal is set out in the notice of appeal filed by the appellant. That ground asserts that the learned Federal Magistrate erred by failing to find that the Tribunal made a jurisdictional error because it 'overlooked' a single passage in the independent material available to the Tribunal. The passage in the independent material to which this ground of appeal refers can be identified by reference to the reasons for judgment of the Federal Magistrate (at [19]). It is an extract from the US State Department Report on the Federal Republic of Yugoslavia for 2001. The Federal Magistrate found that the Tribunal was justified in not referring to that passage because it instead placed reliance on a passage dealing with the same subject matter in the 2003 version of the same report (at [23]-[24]). 11 I conducted a direction hearing in respect of this appeal on 30 May 2006. On that day I ordered that the appeal book be filed and served by the solicitor for the appellant 14 days ahead of the hearing date fixed for the appeal. I also ordered that the appellant file and serve any further written submissions by no later than five clear working days before the hearing date. Neither of these orders was complied with. The appeal book was filed and served four days ahead of the hearing date fixed for the appeal and the appellant's written submissions were filed only 2 clear working days ahead of that time. 12 At the hearing of the appeal the appellant's solicitor, who appeared on his behalf both in this Court and in the Federal Magistrates Court, indicated that he wished to amend the notice of appeal --- although he was not able to provide the Court, or the respondent, with a draft of the amendments he wished to make. Ultimately it emerged that the appellant, perhaps unsurprisingly, wished to abandon reliance on the only ground of appeal set out in his notice of appeal. No evidence was adduced to explain why the arguments were not advanced below. The appellant's solicitor simply advised the Court that he 'missed' the arguments. The initial application for an extension of time within which to file and serve a notice of appeal had been supported by an affidavit to which a draft of the appellant's notice of appeal had been annexed (see O 52 r 15(b)). It was not argued before me, and it is in any event unnecessary for me to determine, whether the appellant would require a fresh extension of time to allow him to file and serve a notice of appeal raising entirely new grounds of appeal. SHOULD LEAVE BE GRANTED TO ADVANCE NEW ARGUMENTS? That leave will only be granted where it is expedient in the interests of justice for the leave to be granted ( NAJT v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 134 ; (2005) 147 FCR 51 esp at [163]-[166]). However, the authorities reveal that leave is less likely to be granted where the appellant has been legally represented at all times ( Wimalaratne v Minister for Immigration & Multicultural Affairs [2000] FCA 1737 (FC); Iyer v Minister for Immigration & Multicultural Affairs [2001] FCA 929 (FC)). 17 I heard the parties in full on the merit of the grounds of appeal on which the appellant wishes to rely, as well as on the question of whether leave should be granted to the appellant to rely on them as they do not reflect arguments made to the Federal Magistrates Court. I considered it appropriate to adopt this course because the merit of the arguments is a significant consideration in determining whether it is expedient in the interests of justice to grant the appellant leave to rely on them. I reserved ruling on the application to amend the notice of appeal until the publication of these reasons for judgment. The Tribunal referred to the independent evidence as set out in the primary decision maker's decision, and the independent evidence cited below, which indicated that hostilities were at an end and that Serbian forces had withdrawn from Preshevo . Moreover, free and fair elections had been held to form a government representative of the local population. The Tribunal asked in the light of this, why he should still be afraid to return. I do not accept this submission; no jurisdictional error is involved in the Tribunal's seeking an applicant's comments on the Tribunal's understanding of the independent evidence. The position might be different if it were established that the Tribunal based its decision on a wrong understanding of the independent evidence. Was this a wrong understanding? 22 The independent evidence does not contain a statement that 'Serbian forces had withdrawn from Preshevo' . However, it may be inferred from the independent evidence that, as hostilities are at an end, Serbian military forces are no longer in the region as an active fighting force. It may also be inferred from the independent evidence that there are now no exclusively Serbian forces in the region, as opposed to ethnically diverse forces. Certainly the independent evidence suggests that civil order in the Preshevo region is now maintained by the new multi-ethnic police force rather than by Serbian military forces. 23 The reasons for decision of the Tribunal should not be scrutinised over-zealously ( 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). It is not entirely clear what the Tribunal meant by the expression 'Serbian forces' . However, when the reasons for decision of the Tribunal are read as a whole, I do not consider that they suggest that the Tribunal misunderstood the independent evidence to which it referred. The Tribunal rightly looked to that evidence to see what light, if any, it threw on the question of whether the appellant had a real chance of being harmed by Serbian authorities should he return to his country of nationality. I think it likely that the Tribunal intended to convey that the exclusively Serbian military forces which the appellant feared were no longer responsible for maintaining order in Preshevo; for that reason the appellant would be able to look to the multi-ethnic police force for protection. This view of the situation in Preshevo finds support in the independent evidence to which the Tribunal referred. 24 The independent evidence to which the Tribunal referred was fairly characterised by it as revealing that the situation in Preshevo has changed and that ethnic Albanians are no longer oppressed by Serbians. Albanians are included in administrative and political structures including in a new multi-ethnic police force. Municipal elections in July 2002 returned Albanian mayors in two out of three municipalities. There is considerable international presence in Presevo, which keeps the actions of the authorities under scrutiny. In short, there is no reason for Albanians from Presevo to fear returning unless, of course, they have committed some genuine criminal offence. Counsel for the Minister thus attended the hearing of this appeal prepared to defend the judgment of the Federal Magistrates Court against criticism of its treatment of the appellant's arguments concerning that passage. 27 However, as is also mentioned above, the appellant did not press that ground of appeal. Rather the appellant sought to advance a new argument, not made to the Federal Magistrates Court, based on other content of the independent material available to the Tribunal. 28 The appellant's written submissions on the appeal contained as an annexure sixty pages of independent evidence from the 2003 US State Department Report mentioned in [10] above, with certain passages highlighted in green to indicate that the Tribunal referred to them and others in pink to indicate that the Tribunal did not refer to them. It appears that this coloured highlighting did not appear in the copy submissions provided to the respondent's legal representatives. The single passage to which the appellant's notice of appeal must be understood to refer was not one of the highlighted passages; that passage is contained in the 2001 version of the report. 29 I have examined the passages highlighted in pink. They indicate that at the time with which the report was concerned, human rights abuses to some degree continued in Serbia and Montenegro generally. They also indicate that poverty and unemployment were highest in southern Serbia and amongst refugees and displaced persons from Kosovo. Some of the passages have little, if any, relevance to the situation in Preshevo. Importantly, the passages highlighted in pink do not contradict the material upon which the Tribunal placed reliance. They do not suggest that it was inappropriate for the Tribunal to conclude, as it did, that there was no reason why the local authorities, who are now representative of the local population and no longer represent the former Milosevic regime, would be interested in the appellant. 30 I consider that this proposed ground of appeal has no realistic prospects of success. The additional factors to which I give weight are that the appellant has been legally represented at all material times, that no satisfactory explanation has been advanced for the proposed grounds of appeal being identified for the first time at the appeal hearing and the apparently cavalier manner in which the appellant's case has been conducted in this Court. The application to amend the notice of appeal is therefore refused. 32 As the only ground contained in the notice of appeal was understandably not pressed, the appeal will be dismissed with costs. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

appeal reliance on sole ground of appeal in notice of appeal abandoned at hearing seeking to amend notice of appeal to include two grounds not advanced before court below circumstances where leave will be granted by appellate court merits of proposed grounds of appeal consideration of serious consequences where refusal of protection visa involved where applicant legally represented at all material times grounds of appeal concerning treatment of independent evidence by tribunal migration

On that day the Court ordered the reinstatement of Mr Colin Williams and deferred consideration of penalty and compensation pending the receipt of written submissions. These reasons for judgment should be read together with the reasons for judgment published on 18 November 2005. Counsel also contended that it was action which Mr Gillholme and Mr Minniti believed they were entitled to take under the Act. The decision was opportunistic and not premeditated, counsel submitted. 4 Even if it is accepted that the decision was an opportunistic one, it was nonetheless unlawful and, in the circumstances set out in the previous judgment, it constituted a blatant and serious breach of the Act. I do not accept the submission that the termination of Mr Williams flowed from a failure to appreciate the scope of s 298L(1)(a). Mr Gillholme and Mr Minniti are both experienced in industrial relations. They should not have been in any doubt about the illegality of their conduct. 5 I reject the contention that Mr Minniti's reaction to Mr Williams' putting the telephone down showed that Mr Minniti was merely reacting to provocation rather than acting in deliberate defiance of the Act. Mr Minniti had the opportunity to put a considered recommendation to Mr Gillholme. The recommendation was not a spur of the moment decision. 6 Mr Williams' failure to hold the meeting at lunchtime should be considered as only a minor mitigating factor. To class it as a major mitigating factor would reward Mr Pillen's even more inappropriate conduct in failing to accept the existence of a dispute. 7 I further reject the submission that Mr Williams' status as team co-ordinator was "an ameliorating circumstance". Such a contention is inconsistent with the reasons for judgment of 18 November 2005, in which the Court found that Mr Williams' status as a team coordinator was not a basis for his termination. 8 I agree with the submission of counsel for ACI that the Court should not take into account the breach of the disciplinary code, in itself. However, as counsel for the Union submitted, adherence to the code may have avoided the situation which ACI now finds itself in as a result of its summary dismissal of Mr Williams. 9 An examination of the relevant facts shows that two senior industrial relations managers, in important roles, made a decision to terminate the employment of an active shop steward, whose industrial representation of the members of the Union working at ACI had displeased them. In the circumstances, a penalty in the high range of those available is appropriate, but for the matters set out below. 10 I now turn to the other factors relevant to the question of penalty as discussed by Branson J in Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231, as foreshadowed at [79] in the previous judgment. 11 There is no evidence that ACI has previously contravened Pt XA of the Act, or any predecessor provision. That is a mitigating factor. 12 Given that Mr Williams has been reinstated and that ACI has been admonished for its conduct in the 18 November 2005 judgment, there are no continuing consequences in respect of ACI's conduct. 13 The protection of industrial freedom of association and, in this case, freedom of representation, has been upheld by the reinstatement order. 14 The maximum penalty available to the Court is 300 penalty units or $33,000, see s 298U(a)(i) of the Act and s 4AA(1) of the Crimes Act 1914 (Cth). 15 Having regard to the totality of the above matters I consider that a mid-range penalty is appropriate and set the penalty at $16,500. 16 There is no reason why the penalty should not be paid to the Union; see Finance Section Union v Commonwealth Bank of Australia [2005] FCA 1847 at [71] , per Merkel J and s 356(b) of the Act. Counsel for the Union informed the Court that ACI has, since 18 November 2005, agreed to make adjustments necessary to ensure Mr Williams' financial position is restored. However, counsel noted that the agreement between the parties had not been fully implemented and submitted that the Court should defer consideration of compensation to allow the agreement to be implemented. 18 It is preferable to allow sufficient time to elapse to permit the parties' agreement to take effect. I will place the onus on the Union to re-agitate this issue within 28 days of these reasons for judgment, failing which there will be no order made under s 298U(c) concerning compensation and the file will be closed. Should the Union wish to re-agitate this issue the Court will convene a directions hearing at 10.15 am on 14 March 2005 to deal with that aspect of this proceeding. Pursuant to s 298U(a)(i) of the Workplace Relations Act 1996 (Cth) a penalty of $16,500 be imposed on the respondent for its contravention of s 298K(1)(a) of the Act for the prohibited reason referred to in s 298L(1)(a) of the Act. Pursuant to s 356(b) of the Act the penalty be paid to the applicant. The applicant have liberty to apply to the Court within 28 days of the date of this order, for an order requiring the respondent to pay to Mr Colin Williams an amount by way of compensation as the Court thinks appropriate. 4. In the event of liberty to apply under Order 3 not being availed of in the time permitted, the Court will make no order for compensation.

penalty freedom of association contravention of part xa of the workplace relations act 1996 (cth) whether penalty should be paid to applicant compensation industrial law

One of its principal objects (FICS insists it has several key objects) is "to act as the complaints resolution body of the financial services industry in Australia": FICS Constitution , cl 2.3(a). FICS has Rules that provide procedures for resolving complaints against its members. One of its members is the defendant, Deakin Financial Services Proprietary Limited (admin apptd) (Deakin) a company that is in the business of providing investment advice. Deakin is in dispute with several of its clients. Each contends that Deakin or its representative recommended that the client invest in a project undertaken by the Westpoint group. Following the collapse of the Westpoint group, several clients (at least sixteen and perhaps more) filed complaints with FICS against Deakin. In broad outline each client alleges that Deakin or its representative recommended the investment in the Westpoint group without giving adequate warning of the risk involved. One complaint came on for hearing before a panel established by FICS. Deakin argued that the panel lacked jurisdiction to deal with the complaint. The panel ruled that it had jurisdiction to deal with the complaint. This action is designed to resolve this dispute. The other complainants, who are waiting in the wings, will be affected by the ruling. 2 The background to the dispute is as follows. In 1991, the life insurance industry established a voluntary system for dealing with complaints by policy-holders who had taken out life insurance or superannuation policies. An integral element of this system was the establishment of the Life Insurance Federation of Australia Incorporated whose members where underwriters, insurers and brokers. The Federation set up a Complaints Review Committee, later known as the Life Insurance Complaints Board, to resolve disputes between its members and their clients. If complaints were not settled by negotiation they were referred to the Committee for resolution in accordance with procedures outlined in a document entitled Terms of Reference. 3 In 1995, FICS was incorporated under the name Life Insurance Complaints Services Limited to take over the activities of the Federation. According to its Memorandum of Association one of FICS' objects was "[t]o act as the central complaints resolution body of the life insurance industry in Australia ... and in that capacity to deal with policy-holder complaints arising from life insurance policies": Memorandum, cl 2(a). Members of the Federation transferred their membership to the new organisation which then took over responsibility for dealing with complaints. 4 In March 1997, ASIC announced that with effect from the beginning of 1998 licences issued to investment advisers under s 784 of the Corporations Law (the legislation then in force) would be made subject to several conditions, one of which was that the licensee was required to have an internal complaints handling procedure and also be a member of an external complaints resolution scheme that had been approved by ASIC: ASIC Policy Statement 121 issued on 3 March 1997. The new policy soon found its way into the legislation. Section 786 of the Corporations Law provided that an investment advisers license was subject to such restrictions as were prescribed. A new regulation, reg 7.3.02B, was introduced into the Corporations Regulations. This regulation provided that if a licensee gave advice to a retail investor the licensee was required, among other things, to be a member of an external complaints resolution scheme approved by ASIC: reg 7.3.02B(4). For the purposes of this regulation "retail investor" was defined to mean, in substance, every investor other than professional investors and large corporations. ASIC could not approve an external complaints resolution scheme unless satisfied with its procedures, having regard to series of guidelines set out in s 12FA of the Australian Securities and Investments Commission Act 1989 (Cth). 5 The new policy affected many of FICS' members. While most operated in the life insurance industry quite a few also provided investment advice and for that purpose held an investment advisers licence under s 784. Rather than join an outside external complaints resolution scheme these members suggested to FICS that complaints concerning investment advice should be dealt with by FICS under revised Terms of Reference. FICS took up the suggestion and amended its Terms of Reference accordingly, renaming them Rules. In September 1998, it applied to ASIC to have its scheme, as described in the Rules, approved "for the purpose of receiving complaints relating to the providing of investment advice on securities to retail investors. " Approval was granted later that month. 6 In 1999, FICS implemented several changes to its dispute resolution scheme. The most significant change was the extension of the scheme to deal with complaints against anyone in the "financial services industry". To make sure it had the requisite authority to expand the scheme, on 10 September 1999 FICS adopted a new Constitution to replace its Memorandum of Association. Part A, cl B(a) of the Constitution provided that one of FICS' objects was "[t]o act as the complaints resolution body of the financial services industry in Australia, including but not limited to resolution of complaints involving any aspect of life insurance, superannuation, retirement savings accounts, funds management, provision of mortgages, financial advice or securities investment ("the Industry") and in that capacity to deal with any complaints arising from any form of products, investments, advice, dealings or transactions involving members of the public and participants in the Industry". It was also necessary for FICS to broaden its membership base. Accordingly, the Constitution provided (Part B, cl 3) that members would be divided into the following categories: Category A Members (Life Insurance), Category B Members (Reinsurers), Category C Members (Managed Investments), Category D Members (Superannuation), Category E Members (Brokers, Financial and Securities advisers) and Category F Members (non-voting). Investment advisers fell within Category E Members which, by cl 8, were defined as "any individual or any entity that provides insurance broking services, financial advice, financial accommodation (including mortgages), general advice or other services in relation to the industry". 7 The expanded scheme was contained in Rules that were adopted in October 1999. The Rules, which formed "a contract between the member and the company," (Constitution, Pt A, cl B(c)) were formulated by FICS' Board which had power to "create, modify or terminate any rules [dealing with complaints involving members]": Constitution , Pt B, cl 44. Rules created by the Board came into effect within sixty days of members being informed of them, unless disallowed by an Extraordinary Meeting: Constitution , Pt B, cl 44. If a member did not obey the Rules or failed to comply with a decision on a complaint, he could be expelled from membership: Constitution , Pt B, cl 11(d). 8 On 28 October 1999, ASIC approved the scheme for investment advisers who were required to comply with reg 7.3.02B(4). It is clear from ASIC's letter advising of the approval that the scheme which it approved was that described in the Rules as authorised by the Constitution . 9 In August 1999, Deakin obtained a dealers licence under s 784. In February 2000 it applied for membership of FICS on the basis that it was eligible for membership in Category E. The application was made on a form provided by FICS. The form was accompanied by the prescribed fee. The application form included the following paragraphs. The applicant authorises the company to be its external complaint resolution scheme under the relevant Acts of Parliament. The applicant understands that by submission of this application it is bound by the Rules of the company and acknowledges that it has received a copy of the Rules and the Constitution and understands the operation of them. 10 In 2001, the Corporations Law was repealed and replaced by the Corporations Act 2001 (Cth). No significant changes were made by the new statute to the licensing of investment advisers. The system of licensing was, however, overhauled by the amendments to the Corporations Act introduced by the Financial Services Reform Act 2001 (Cth) which came into operation on 11 March 2002. The Reform Act established a new regulatory framework for the financial services industry, which now covered a wide range of activities and products some of which had previously been regulated by other statutes. Under the new regime a person who carries on a "financial services business" must hold an Australian financial services licence covering the provision of the financial services: Corporations Act s 911A. "Financial service" providers are defined in s 766A to include those who provide "financial product advice" (which is defined in s 766B) and those who deal in "financial products": ("dealing" is defined in s 766C). A licensee that provides financial services to "retail clients" (defined in s 761G) must have a dispute resolution procedure that complies with s 912A(2): s 912A(1)(g). In order to comply, the system must have an internal procedure for resolving disputes with retail clients for the provision of services covered by the licence: s 912A(2)(a) ; reg 7.6.02(1)-(2). The licensee must also be a member of an external dispute resolution scheme approved by ASIC that covers complaints by retail clients in connection with the provision of all financial services covered by the license: s 912A(2)(b) ; reg 7.6.02(3)-(4). 11 By ss 1430 and 1431 of the Corporations Act , investment advisers who held a dealers licence under the old Corporations Law were given two years within which to apply for a licence under the new provisions. Moreover, on 28 November 2001 ASIC published a policy statement (PS 165) in which it explained how it would administer the new dispute resolution provisions. The statement indicated that external dispute resolution schemes that had been approved before the Reform Act came into operation would continue to be approved for the purposes of s 912A(2)(b). 12 In 2002, FICS amended its Constitution . One reason for the amendments was the replacement of the Corporations Law by the Corporations Act . The only amendments that need be noted are the following: each reference to the Corporations Law was replaced by a reference to the Corporations Act ; Part B cl 2.2 imposed a requirement that "[a] Member must be registered in a Membership Category"; Part B cl 7 introduced a new description of Category E members namely "any entity that deals in, advises, makes a market, operates a registered scheme, or provides a custodial or depository service in respect of securities, derivatives, debentures, stocks or bonds (including those issued by a government), or provides a deposit taking facility or a credit facility (including mortgages), and any other person operating in the Industry that the Board approves is eligible for membership"; The rule making power and the expulsion power were renumbered as Part B, cl 28 and Part B, cl 10.1 (e) respectively. 13 The Constitution was again amended in 2004, in part to take account of the Reform Act. It is likely that the expressions were intended to be understood in that sense. A new object was introduced (cl 2.3(l)(iii)) by which FICS is to "provide an ASIC approved External Dispute Resolution Scheme for Australian Financial Services Licensees, and other providers of financial services as required by the [Corporations] Act". The definition of Category E members was altered slightly. The rule making power (now found in cl 29) was redrawn but its effect was not altered. The same is true of the expulsion power which is now contained in cl 11.6. 14 This brings me to the Rules that contain the procedures for resolving complaints. The meaning and effect of the Rules is at the heart of this dispute. Like the Constitution , the Rules have been amended from time to time. The Rules which were adopted on 22 October 1999 detail the jurisdiction, procedures and structure of the external dispute resolution scheme that had been approved by ASIC on 28 October 1999. The changes since the scheme's approval were made known to ASIC which saw no need to revoke its approval. Nonetheless it will be necessary to determine whether the changes made after Deakin became a member of FICS are binding on Deakin. First, however, it is convenient to examine the 1999 Rules in some detail. 15 The 1999 Rules establish a procedure for resolving complaints which is referred to as an "arbitration". The arbitration is by an adjudicator who can deal with the complaint "if the amount is no more than $10,000 or such lower amount as is nominated by the Board from time to time": r 3. A complaint must be dealt with "on its merits" on the basis of what "is fair in all the circumstances" having regard to "any applicable legal rule or judicial authority [and] general principles of good industry practice and any applicable code of practice": r 5. As regards standing, r 6 provides that the procedures "are available to any person regarding any dealings or transactions he or she has had directly or indirectly with members of [FICS] [and] to individuals who demonstrate to [FICS] that they have a beneficial interest or other special interest in a dealing or transaction". FICS can only deal with a complaint if it has previously been raised with a member and has not been resolved or has not been dealt with within 45 days: r 7. The complaint must be in writing and the details of it set out: r 9. Upon receipt, the complaint is subject to "a preliminary assessment ... to determine whether or not [it] falls within [the] rules": r 11. 16 The kinds of complaint that are covered by the Rules are described in rule 14. The meaning of "retail investor" (which I have already paraphrased) was found in the Corporations Regulations then in force. 18 Several important expressions in rule 14 and in the Rules' definitions are not defined. In particular, there is no definition of "investment advice", "financial product" or "product". Somewhat similar or related expressions were defined in PS 121 which set out ASIC's guidelines regarding complaint resolution procedures: "advice" was defined as "personal securities recommendations or general securities advice"; "investment advisory services" was defined as "advice on securities whether provided with another service (eg dealing or discretionary portfolio services) or on its own"; and "investment products" was defined as "securities (eg shares, bonds and unit trusts) and superannuation products. " "Securities" was not defined in PS 121 but I assume ASIC intended it to have the broad meaning found in s 92 of the Corporations Law. There, "securities" was defined to include interests in managed investment schemes and debentures. The definition of "debenture" in s 9 excluded a promissory note having a face value of $50,000 or more. 19 It is difficult to know what to do with these definitions. It occurred to me that it might be appropriate to use them to give meaning to some of the undefined expressions in the Rules. In the end, I did not adopt that approach. It was not suggested by any party. And, in a document where some terms are defined it seems to me preferable to give other terms their ordinary meaning unless they are terms of art. 20 In about 2002 (the precise date is not in evidence) the definitions of "responsible entity" and "retail investor" were changed by the replacement of "the Corporations Law" by "the Corporations Act 2001 ". The Corporations Act does not, however, have a definition for "retail investor". The new expression is "retail client". I assume that it was by oversight that "retail client" was not substituted for "retail investor" in the Rules. For that reason I will read the Rules as if that change were made. This is potentially important because the definition of "retail client" in s 761G brings in the defined concepts of "financial products" and "financial services". By s 761G a "retail client" is a client to whom the advisor provides a "financial product" or a "financial service". The definition of "financial product" in s 763A , together with the additions in s 764A and the exclusions in s 765A , give that expression a much wider meaning than it could have in ordinary usage. The same can be said of the expression "financial service" which is defined in s 766A and which in turn picks up the meaning of "financial product advice" in s 766B and "dealing" in s 766C. 21 There is a nice question whether the changes to "responsible entity" and "retail investor" were intended to alter or add to the definition of "financial services" in the Rules or affect the meaning of the undefined terms "financial product" or "product". This is not an approach that has been suggested by any party. Rather, an assumption which I think lies behind FICS' submission on the meaning of the Rules is that, as a result of the changes in 2004 to the objects clause which incorporated several expressions that are defined in the Corporations Act , for example, expressions such as "custodial or depository services", "financial product service", "financial advice" among others, it is proper that those statutory meanings be applied to like or similar expressions in the Rules. It will be necessary to deal with this later. 22 Returning to r 14, its broad structure is easy to discern. Par (a) covers non-money complaints. It is concerned with complaints about a member's internal handling of a complaint. FICS reads par (a) as dealing with two topics, first, a complaint about the service provided by a member and, second, a complaint about the manner in which a member handled a complaint. That reading is not supported by the language of par (a), or by the general structure of r 14. As regards pars (b) to (d), each deals with money complaints against a member. Paragraph (b) is concerned with complaints against Category C and Category D members, par (c) with complaints against Category E members and par (d) with complaints against Category A and B members. Paragraph (e) stands alone and deals with ad hoc submissions to "arbitration". 23 FICS asserts jurisdiction to deal with complaints lodged against Deakin by reason of par (c). That paragraph is concerned with complaints relating to "investment advice ... in relation to a financial service or product". "Investment advice," as I have said, is not defined by the Rules. It appears not to be a term of art. The ordinary meaning of the expression is, I think, to recommend or suggest an investment of one kind or another. The definition of "financial services" in the Rules is rather clumsy (especially when the definitions of other defined terms are read in) but its intention is clear: It includes the provision of investment advice by investment advisers. 24 A little less clear is the meaning of "financial product" or "product". The problem is in determining what kind of "product" may be the subject of complaint. The likely intention of the Rules is, I think, for "financial products" to be given a wide meaning. Typically financial products would include shares, stocks and bonds, bills of exchange, debentures (as ordinarily understood), units in unit trusts and various kinds of contracts such as futures contracts and option contracts. A managed investment scheme would be a "product". 25 Another aspect of the controversy between the parties concerns the money limits on FICS' jurisdiction. One question is whether the limit is on the amount sought to be recovered or on the value of the claim itself. It is also unclear whether the limits apply to all kinds of complaints. 26 The limits are set out in r 12. The 1999 Rules explain how the limits were to operate. The limits apply to all complaints and [FICS] cannot consider a complaint where the limit is exceeded unless the parties agree in writing. [FICS] cannot take any steps in relation to the complaint until the issue is determined. The first table comprises two columns, the first headed "Insurance Product/Service" beneath which appear four different kinds of insurance products. The second column, headed "Claims" specifies a money limit for each kind of product. The second table follows the same pattern. The first column is headed "Securities and Related Advice", beneath which are two categories of advice; "Licensed Security Dealers providing retail advice to Retail Investors" and "Securities issued by Responsible Entities". In the second column the money limit for each category of advice is $100,000. Immediately following the tables is a statement that: "The limits apply on a per claim basis. However, where a single claim relates to several product or services, they are considered in aggregate as a one claim". Rule 13 states that the monetary limits do not include interest. 27 Since Deakin became a member of FICS, rr 12 and 13 have been amended. FICS says, and the case has been argued by both sides on the assumption that, the amendments have not brought about any relevant change to the meaning of the Rules. I am prepared to go along with this assumption which is likely to be correct. It is possible, however, that some of the changes were intended to bring about a change in meaning. 28 In its present form r 12 no longer contains the explanatory paragraphs. The rule is now divided into two sections: The first is headed "Limits applying to complaints concerning life insurance" and the second "Limits applying to complaints concerning financial services other than life insurance". With regard to life insurance the rule provides that: "Subject to rule 13, [FICS] may determine a complaint: (i) In respect of a policy of insurance dealing with lump sum risk or advice in relation to a lump sum product --- unless the dollar value of the complaint exceeds $250,000; and (ii) In respect of a policy of insurance dealing with income stream risk or advice in relation to an income stream product --- unless the face value of the product exceeds $6,000 per month. " Provision is then made for determining "the face value of the product" and in what circumstances FICS may, notwithstanding rule (ii), deal with a complaint concerning a policy where the "face value of the product exceeds $6,000 per month. " The first of the two tables is then set out. This table is in the same form as the first table in the 1999 Rules. The second table, which immediately follows the first, is different in some respects from the version in the 1999 Rules. One difference is in the heading of the first column which now reads: "Financial Services Advice". Rule 13 where the money limits are further explained and qualified is in part an amalgamation of parts of former rr 12 and 13. It also contains some new material. In particular there is a sentence which reads: "Should there be a disagreement as to whether a complaint is within the monetary limit the issue will be referred to the Panel for decision. I need only mention some of the difficulties to make good the point. The second table applies to "Financial Services Advice". On one view (the view that is taken by FICS) the limits set out in the table do not apply to complaints about advice relating to superannuation, retirement savings accounts, funds and investment management and custodial or depository services. The other (and probably better) view is that all complaints are subject to a money limit, and it is just a matter of fitting a particular complaint into the most appropriate part of the table. Another difficulty concerns the reference to "Licensed Security Dealers". In 1999, investment advisers were issued with a "dealers licence" under the Corporations Law. Now there is no such licence, the old dealers licence having been replaced by an "Australian financial services licence". FICS interprets "Licensed Securities Dealers" as referring to the holders of "Australian Financial Services Licences" but only as a matter of practice rather than as a matter of law. FICS' interpretation may, however, be the correct interpretation in point of law. 30 Coming back to the money limits, FICS contends that the limit that applies to complaints relating to "Financial Services Advice" (the limit is $100,000) refers to the amount which the complainant seeks to recover from the investment adviser. On this view a complainant who has a cause of action for, say, $500,000 may lodge a complaint with FICS to recover $100,000 and pursue the balance of his claim elsewhere. 31 Putting to one side the impermissibility of splitting a cause of action (as to which see Pioneer Concrete (Vic) Pty Ltd v L Grollo & Co Pty Ltd [1973] VR 473) or whether the principles in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45 ; (1981) 147 CLR 589 would provide a defence to such an action if pursued in court, on FICS' approach it would be a simple task to determine whether a claim is within jurisdiction. On the other hand, it would permit a claimant to make a claim which is fictitiously low to bring it before FICS. If a plaintiff were to take the same course in an inferior court his action would be struck out as an abuse of process unless the excess was abandoned: Donelan v Incorporated Nominal Defendant [1973] VR 490; affirmed on other grounds: (1973) 47 ALJR 138. FICS, of course, could not exercise such a power because by its nature it is only available to a court. However that may be, I do not see the money limits as directed to the amount which the claimant seeks to recover. The limit relates to the value of the claim. I think this position is made quite clear by the opening paragraphs of r 12 as it stood in 1999. FICS' obligation was to "determine whether the dollar value of the claim exceeds [its jurisdictional] limits". This required FICS to make a bona fide estimate of the claim to ascertain whether it was covered by the Rules. If it could not value the claim from the information at its disposal, FICS was required to obtain the information from the member. Until the information was obtained the claim was held in abeyance. None of this would be necessary if all FICS needed to do was discern what amount the complainant was seeking to recover. If it were not clear from the face of the complaint the information could be obtained from the complainant. There would be no need to go to the member to obtain the information. 32 That the limits refer to the value of the claim is confirmed when one considers the money limits on complaints concerning life insurance. The limit depends upon the "dollar value of the complaint" or the "face value of the [relevant] product". The reference to the "dollar value of the complaint" requires a value to be placed on the underlying claim. The contrast is with complaints about life insurance products where FICS' jurisdiction depends upon the "face value of the product". 33 In its current form, r 11 still requires FICS to carry out a preliminary assessment of the complaint to determine whether it is within jurisdiction and r 13 provides that "should there be disagreement as to whether a complaint is within the monetary limit the issue will be referred to the panel for decision". This elaborate structure would be unnecessary if FICS jurisdiction were dependent on the amount claimed in the claim lodged by a complainant. 34 To complete the review of the Rules, a few additional rules need be mentioned. Rule 36 in the 1999 Rules (now r 37) provides that FICS expects complainants to abide by the decision of a panel but recognises that complainants may wish to pursue their rights in a court. (For what it is worth, my view is that this rule is unreasonable but not so unreasonable so as to make unreasonable ASIC's approval of the rules). Former r 37 (now r 38) stated that members have agreed to abide by the panel's decision. Importantly, former r 38 (now rr 39 and 40) provides that FICS may take any necessary action, including legal action, to enforce a panel's decision and that a member who does not comply with a decision may have its membership terminated. 35 Before addressing the construction of the Rules, it is now convenient to address the principal issue in dispute which is whether cl 2.3(a) of the Constitution or r 14(c) authorises FICS to resolve complaints by retail investors (scil clients) who contend they were advised by Deakin or one of its representatives to purchase promissory notes with a face value of $50,000 or more issued by a company in the Westpoint group. In a nutshell, FICS contends that "the fount of [its] jurisdiction is cl 2.3(a) [of the] 2004 Constitution " and the clause is sufficiently broad to permit it to deal with the complaints. The jurisdiction, so the argument goes, may be augmented or restricted by the Rules which merely contain the procedures needed to implement FICS' constitutional power. The basis for this argument is the common law rule, now enacted in s 140(1) of the Corporations Act , that "a company's Constitution (if any) and any replaceable rules that apply to the company have effect as a contract: (a) between the company and each member". The minor premise is that cl 2.3(a) covers all complaints against members by retail investors and therefore, it is argued, Deakin is contractually obliged to submit to FICS' jurisdiction with respect to any complaint against it by a retail investor (subject to money limits). 36 Until relatively recently in Australia a company's constitution (or memorandum of association as it was previously called), which every company must have, was required to state the objects of the company. Those objects determined the powers of the company by conferring all powers reasonably necessary to achieve the objects. The objects clause had two purposes; first to protect investors who would know how their money would be invested and, secondly, to protect creditors so that the company's capital was not spent in unauthorised activities: H A Street, A Treatise on the Doctrine of Ultra Vires (1930). With the abolition in Australia of the ultra vires doctrine, the objects clause is no longer mandatory: Corporations Act , s 125. 37 In my view, FICS' ability to resolve disputes is not conferred by cl 2.3(a) (or its predecessors) alone but by that clause (or its predecessors) in combination with rules made under cl 2.3(c) which were intended to create a complete complaint resolution structure that would apply in relation to all complaints. In the current Constitution that construction is confirmed by cl 2.3(l)(iii). 38 As the Rules are the cornerstone of FICS' ability to resolve disputes the following question arises: Is Deakin bound by the Rules by reason of s 140? The cases show that members are only bound to observe such of the provisions of the constitution of a company as concern their rights, privileges, powers and obligations as members . Provisions that deal with matters of internal management, regulation and control are of that character. If provisions purport to have effect on a member in another capacity they will have no operation unless they have been incorporated into a private contract between the company and the member. See generally Bailey v New South Wales Medical Defence Union Ltd [1995] HCA 28 ; (1995) 184 CLR 399 and the cases therein referred to. From this general principle, two subsidiary questions arise. The first is whether the Rules bind Deakin by reason of the deemed or "statutory" contract created by s 140. If the answer to that question is in the negative, the second question is whether there is a private contract by which Deakin agreed to be bound by the Rules. 39 On the first question, the authorities indicate that although the constitution is a deemed contract it is nevertheless not possible by this contract to do everything that can be done by a private contract. In particular, a company cannot by its constitution enter into what is in effect a commercial arrangement with its members. 40 The first group of cases to which I will refer hold that a company cannot impose a financial obligation on a member in addition to his obligation to pay up the amount due on his shares. By parity of reasoning, in a guarantee company a member cannot be required to contribute any more than the amount due on his guarantee. One of the leading cases is Dibble v Wilts & Somerset Farmers Ltd [1923] 1 Ch 342. There it was held that a company could not impose an obligation on its members to provide further capital. A similar arrangement was declared void in Shalfoon v Cheddar Valley Co-Operative Dairy Co Ltd [1924] NZLR 561. Any attempt by a company to attach to its shares any accessory or collateral pecuniary liabilities is ultra vires and void as being contrary to the fundamental principle of limited liability which lies at the heart of the company at law. The cases also establish that a company cannot impose an obligation on its members to submit to the arbitration of disputes which arise in the course of the member's trading activities. Thus, in Beattie v E & F Beattie Ltd [1938] Ch 708 it was held that an article that required a member, in his capacity as director, to refer disputes with the company to arbitration was not contractually binding. The well known case of Hickman v Kent or Romney Marsh Sheep Breeders' Association [1915] 1 Ch 881 was cited as authority. In London Sack & Bag Co Ltd v Dixon and Lugton Ltd [1943] 2 All ER 763 the parties were members of a trade association, the United Kingdom Jute Goods Association Ltd, whose rules required "all disputes arising out of transactions connected with the [jute] trade ... [to] be referred to arbitration". A dispute arose out of that trade. The court held that the rule was not binding because the dispute concerned "rights of action created entirely outside the company relationship". This decision was applied in Norths Ltd v McCaughan Dyson Capel Cure Ltd (1988) 12 ACLR 739 in relation to a dispute between members of the Australian Stock Exchange Ltd, a company limited by guarantee, whose articles of association provided that disputes between members should be referred to arbitration before a sub-committee of the board of directors. In view of these cases, it is clear that s 140 does not create a statutory contract obliging Deakin to submit to FICS' jurisdiction with respect to disputes with its clients. 42 This, however, does not dispose of the question whether Deakin is otherwise contractually bound to submit to arbitration. A company may enter into what in Allen v Gold Reefs of West Africa Ltd [1900] 1 Ch 656 was referred to a "special contract" with its members, that is a contract the terms of which embody one or more provisions of its constitution or rules. The "special contract" (in truth there is nothing special about it --- it is an ordinary contract) may be express or it may be implied: In re Anglo-Austrian Printing and Publishing Union [1892] 2 Ch 158; The Land Mortgage Bank of Victoria Ltd v Reid [1909] VLR 284. The main, but not the only, difference between a "special contract" and a statutory contract is that the "special contract" cannot be altered except with the consent of the parties. The consent may be ad hoc if supported by consideration or there may be a term that the contract may be altered in accordance with changes made to the constitution or the rules. Even if the "special contract" contains a power of variation it is unlikely that the power will permit a variation that would retrospectively avoid a breach of contract or prevent the doing of an act which is a right conferred by the contract. 43 In my view, the external facts establish the existence of a contract between Deakin and FICS to the general effect that Deakin would be bound by FICS' rules that establish its dispute resolution scheme. The external facts are, on the one hand, Deakin's application for membership of FICS and its payment of the applicable membership fee (conduct that might be described as an offer to contract) and, on the other hand, the acceptance by FICS of Deakin's application for membership and the entry of Deakin as a Category E member in FICS' register of members (the acceptance of the offer). The contract came into existence no later than 27 April 2000, the day on which Deakin became a member of FICS. The rules which Deakin agreed to be bound by were the rules in force at the time of the contract, namely the 1999 Rules. 44 This contract has a term that it may from time to time, and under certain circumstances, be amended without the consent of Deakin. Rule 60 of the 1999 rules provides that "the Board may amend [the] Rules in accordance with the Constitution after consultation with [various groups]. An amendment will not apply in respect of complaints already accepted by [FICS] unless expressly provided for in the amendment. Here the dispute is whether the Rules permit FICS to resolve all complaints lodged by retail clients against Deakin. Mr Harris contends that all that can be considered by FICS is a complaint made by one of Deakin's retail clients provided it is "in connection with the provision of financial services covered by [Deakin's] licence". This submission tracks the language of s 912A(2)(b)(ii) which requires a licence-holder to be a member of an external dispute resolution scheme that "covers complaints ... against the licensee made by retail clients in connection with the provision of all financial services covered by the licence". Mr Harris' argument is that this being the minimum content of Deakin's obligation, it is not appropriate to read into the authority that Deakin conferred on FICS the power to deal with any other type of complaint. 46 The purpose of putting the argument this way is that Deakin's licence authorises it to provide financial services in relation to specific financial products as listed in the licence and it is said that the complaints relate to other kinds of products. Let me illustrate this argument by reference to one of the complaints that has been lodged with FICS. A married couple claim to have been advised by a representative of Deakin to invest in a property development promoted by the Westpoint group. The investment involved the purchase of a promissory note offered by special purpose company in the group. By the note the special purpose company made an unequivocal promise to pay interest at 12 per cent per annum plus a flat 2 per cent with the repayment of the capital. The purchase price, together with money raised from other investors, (in all it was proposed to raise $20 million from the investors and a further $100.4 million from outside lenders) was to be on-lent to a property trust that would plan and construct a large building containing residential, retail and commercial space at a particular site. The special purpose company was to be granted a charge by the property trust to secure the repayment of the loan. The loan would be repaid on the sale of units in the development, the expectation being that when 80 per cent had been sold there would be sufficient funds to repay the loan to the special purpose company which would then be able to repay the notes. 47 There is authority that this kind of arrangement is a managed investment scheme for the purposes of the Corporations Act : Australian Securities and Investments Commission v Emu Brewery Mezzanine Ltd (2004) 52 ACSR 168. Mr Harris says that this case is wrongly decided, but, in any event, he makes the point that if the investment that I have described is an interest in a managed investment scheme, it is an unregistered scheme and Deakin's authority under its licence does not run to giving advice in respect of unregistered schemes. Thus, so his argument goes, a complaint about advice relating to the acquisition of an interest in a managed investment scheme by the purchase of the promissory note is not a complaint about an activity covered by Deakin's licence and accordingly is not a complaint which FICS has jurisdiction to determine. 48 There are, in my view, one or two hurdles that confront Mr Harris. The first is that s 912A(2)(b)(i) requires Deakin to be a member of an external dispute resolution scheme that has been approved by ASIC. Mr Harris would have it that if ASIC has approved a scheme that is wider than what is required of a licensee by s 912A the licensee can adopt so much of the scheme as will meet its obligation under s 912A(2)(b)(ii) and discard the balance. I am not sure this is so. If a licensee attempts to limit the operation of the scheme as regards that licensee, I cannot see how it can be said that the licensee is a member of a scheme that has ASIC's approval. Deakin clearly did not intend this consequence. 49 Secondly, the language of the contract is inconsistent with the argument. As regards the words used, it is always important to bear in mind that there is no "lawyer's Paradise where all words have a fixed, precisely ascertain meaning ... and where, if the writer had been careful, a lawyer, having a document referred to him, may sit in his chair, inspect the text, and answer all questions without raising his eyes. ": J Thayer "A Preliminary Treatise on the Law of Evidence" (1898) p 428-429. That said, when it applied to be admitted as a Category E member Deakin "authorised [FICS] to be its external complaint resolution scheme under the relevant Acts of Parliament" (par 4) and agreed "to be bound by the Rules of [FICS]" (par 7). For the most part the authority clause is not difficult to understand. The "scheme" referred to in the authority clause is the scheme approved by ASIC. The "relevant Acts of Parliament" so far as Deakin is concerned was the Corporations Law and is now the Corporations Act . The authority clause does not define the scope of the "authority" conferred on FICS. That topic is dealt by par 7, in particular the acknowledgement by Deakin that it "is bound by the rules of FICS". This is not a qualified statement. Nevertheless it is necessary to read it down because it was not, in my view, contemplated that FICS could deal with every complaint covered by the Rules. I am of opinion that Deakin only authorised FICS to deal with complaints that arose out of Deakin's activities as a Category E member but there is no basis for cutting down the application of the Rules in the manner suggested by Deakin. 50 On any approach the complaints lodged with FICS fall within r 14(c). The complainants appear to be "retail investors", although if that is disputed it must be investigated by the panel. The complaints relate to "investment advice" allegedly given by Deakin or its representatives. In ordinary parlance, the expression "investment advice" is of wide import. It is sufficiently wide to cover advice given to a client to purchase a promissory note as a means of securing a return, especially where the return is by way of interest plus a 2 per cent capital profit. 51 The only remaining controversy concerning the application of cl 14(c) is whether the advice allegedly given by Deakin relates to a "financial service" or "product". Mr Harris has submitted that these terms should have their statutory meaning. However, for reasons which I have explained, the better view is that those expressions should bear their ordinary meaning. On that basis I am in no doubt that a promissory note issued by a Westpoint group company is a "financial product". This is not an expression that has, as far as I am aware, been judicially defined. It is, in any event, probably incapable of a precise definition. A promissory note is an unconditional promise to pay a certain sum on a certain date or dates. Consideration is presumed, in the absence of fraud. Promissory notes are often used as a security for a loan. That may be their most common use, apart from use as a negotiable instrument, if negotiation is permitted. They are aptly described as a "financial product". 52 Even if a promissory note is not a financial product, having regard to the broad definition the Rules give to "financial services" it is impossible to avoid the conclusion that the complaints concern advice in relation to "financial services". "Financial services" is defined in the Rules to mean "all forms of services, advice or products provided by persons participating in the financial services industry". According to the definition of "financial services industry", the services advice or products must be "connected with ... investment, securities and derivatives", among other things. While the language is not perfect, it is clearly attempting to cover complaints about advice given in relation to any form of investment, securities or derivatives. The purchase of a promissory note from a Westpoint group company is an investment. 53 If I am wrong to apply ordinary meanings, and the proper course is to apply the statutory meanings, the same results follow. This is because the complaints lodged with FICS relate to a "financial product" or the provision of "financial services" within the meaning of the Corporations Act , in my opinion. 54 "Financial product" is defined by reference to a general definition (s 763A) , some specific inclusions (s 764A) and specific exclusions (s 765A). A product may be included under either the general or specific inclusions but the specific exclusions have overriding force: s 762A. 55 If it be assumed that what the complainants allege is true, there are two ways in which the Westpoint investments to which the complaints relate will meet the statutory definition of a "financial product". First, a Westpoint company issued promissory notes. It was intended that the proceeds of the notes issue would fund a Westpoint project and that the profit generated by that project would, at least in part, be used to meet the issuing company's obligation under the notes. The purchaser of the notes (the investor in the project) had no day to day control over how their contributions were to be used by Westpoint. This arrangement satisfies the general definition of a "financial product" in section 763A(1)(a) which, among other things, includes a facility through which, or through the acquisition of which, a person makes a financial investment as defined in s 763B. The "facility" through which the investment is made is the promissory note. Section 763B is satisfied because the investor makes a contribution (the purchase price of the promissory note) which is intended to be used in combination with other contributions to generate a benefit for the investor. 56 Secondly, each arrangement appears to be an unregistered managed investment scheme in which each investor acquired an interest through the acquisition of a promissory note. This interest is a financial product by reason of s 764A(1)(ba). The reason for this is as follows. This is not a defined term. In Clowes v Federal Commisioner of Taxation [1954] HCA 10 ; (1953) 91 CLR 209, 225 Kitto J said "The word "scheme" is not satisfied unless there is some programme, or plan of action. " This authority was cited by Mason J in Australian Softwood Forests Pty Ltd v Attorney-General (NSW); Ex rel Corporate Affairs Commission [1981] HCA 49 ; (1980) 148 CLR 121, 129 when he said "all that the word "scheme" requires is that there should be "some programme, or plan of action"". Clearly, the programme or plan of action must be one of which the members of the scheme are aware and in which they have chosen to participate. 58 The nature of the arrangements described by the claimants identifies a plan to develop real estate assets for profit in which the investors (the purchasers of the notes) chose to participate. There is no doubt this constitutes a scheme. The remaining features of a managed investment scheme also appear to be present: money was contributed (the purchase price for the notes) to acquire benefits produced by the scheme (the profits which would be applied to pay the interest and capital due on the notes); the money was to be pooled and used in the common enterprise (by funding the development) to produce financial benefits for the investors. The investors did not have day-to-day control of the scheme. 59 I note that the definition of "managed investment scheme" specifically excludes "the issue of debentures or convertible notes by a body corporate" (paragraph (j)) but this does not apply here because a promissory note having a face value of $50,000 or more is excluded from the definition of a "debenture" in s 9. 60 I note also that an interest in an unregistered managed investment scheme for the purposes of s 764A(1)(ba) , will only be a "financial product" if the scheme is one which, by reason of s 601ED , should have been registered under s 601EB. It was not suggested that if a Westpoint arrangement constituted a managed investment scheme it was not required to be registered. 61 Finally it is necessary to show that what is being dealt with is an "interest" in the managed investment scheme. The definition of an "interest in a managed investment scheme" in s 9 is "a right to benefits produced by the scheme (whether actual, prospective or contingent and whether it is enforceable or not). " Here the "interest" is a benefit in the scheme. The promissory notes were the means by which the investor obtained the benefit. The benefits were the interest and capital profit which were to come from the proceeds of the sale of the scheme assets. 62 While the Westpoint products are financial products within the general and specific definitions of "financial product", the exclusionary provisions are overriding and so it remains necessary to examine whether products are otherwise specifically excluded. It was argued that the Westpoint products are excluded from the definition of financial product by s 765A(1)(h) as they are a "credit facility. " However, the definition of credit facility in Regulation 7.1.06 excludes provisions of credit which are financial products under the general definition in paragraph 763A(1)(a) or under the specific definitions in paragraphs 764A(1)(a), (b), (ba), (f), (g), (h) or (j). As the promissory notes in this case fall within the definition in paragraph 763A(1)(a) they are not credit facilities. Similarly, an interest in an unregistered managed investment scheme is not a credit facility because it falls within the definition in paragraph 764A(1)(ba). 63 According to Deakin, "to attribute to parliament an intention to include promissory notes with a face value of $50,000 or more in the definition of managed investment scheme, when those with a face value of less than $50,000 are not, would be absurd and contrary to the overall consumer purpose of the legislative provisions". Deakin may be right about this, however the definitions in the Act are clear and in the absence of evidence of a contrary legislative intention I must assume that this is what Parliament intended. 64 Moreover, it follows from the conclusion that by issuing promissory notes and making available interests in an unregistered managed investment scheme the Westpoint company was providing a financial product, it was also providing a "financial service". This is because a person is deemed to provide a financial service if, among other things, they deal in a financial product: s766A(1). Dealing in a financial product includes issuing a financial product: s766C(1)(b). Issuing a financial product in relation to a managed investment scheme includes making available that interest: ss 9 and 761E. The exclusion from "dealing" in a financial product that applies to transactions relating only to securities of a body corporate will not apply here, as undertakings to pay money under a promissory note that has a face value of at least $50,000 are excluded from the definition of a security for the purpose of the Act. 65 The parties are also in dispute concerning the manner in which FICS applies the money limits to complaints that otherwise fall within r 14. According to a Practice Note issued by FICS, if FICS receives "joint complaints the monetary limit 'is applied' to the individual beneficial interest rather than the total joint amount claimed even when administratively the complaint has been handled as a single complaint". By way of example if a husband and wife have suffered a loss of, say, $180,000 from the negligent advice of their investment advisor, for the purposes of the complaints procedure both the husband and the wife are treated as separate complainants each with a claim for $90,000 which is below the money limit. A similar approach is adopted in relation to superannuation funds. A trustee of a fund cannot lodge a complaint if the claim is in excess of $100,000. But if, as is often the case, the fund has several beneficiaries and a beneficiary's aliquot share of the fund is such that his "share" of the trustee's claim is worth less than $100,000 the beneficiary is permitted to make a claim for that amount. The justification for FICS approach seems to be r 6 which deals with standing. The vice in its approach is that it ignores so much of r 5 which requires FICS to have regard to "any applicable legal rule or judicial authority". 66 The "legal rules" regarding claims by beneficiaries of a trust are as follows. Where a third party acts adversely to a trustee, it is the trustee who must enforce the claim whether it be a claim at law or in equity: Sharpe v San Paulo Railway Co [1873] LR 8 Ch 597, 609-610; Alexander v Perpetual Trustees WA Ltd [2004] HCA 7 ; (2004) 216 CLR 109. The only exception is where the third party has committed a tort that causes damage to trust property and thereby injures the beneficiaries' equitable rights in that property. In that event the beneficiary may maintain his own action: 4 Scott on Trusts 3rd ed SS 282. Notwithstanding the general rule, in special circumstances the action which should be brought by the trustee may be brought by a beneficiary. So, if the trustee in breach of duty refuses to bring an action against the third party, or is unable to do so, the beneficiary may either sue the trustee for an order compelling him to bring the action or, as an alternative, the beneficiary could himself sue the third party, joining the trustee as a defendant: Vandepitte v Preferred Accident Insurance Corporation of New York [1933] AC 70; Hayim v Citibank NA [1987] AC 730. The action against the third party is that which the trustee should have brought: Lidden v Composite Buyers Ltd (1996) 139 ALR 549. It is not a claim for any injury suffered by the beneficiary. As Nourse LJ said in Parker-Tweedle v Dunbar Bank plc (No 1) [1991] Ch 12, 19-20 "[W]hen a beneficiary sues under the exception he does so in right of the trust and in the room of the trustee. He does not enforce a right reciprocal to some duty owed directly to him by the third party. " Thus, any one of several beneficiaries of a trust can bring the claim: 4 Scott on Trusts SS 282.4. Translated into the present context, while it might sometimes be appropriate for the beneficiary of a trust (including a superannuation trust) to lodge a complaint with FICS, in respect of a wrong done to the trustee the complaint is in respect of the trustee's claim . In that circumstance the beneficiary cannot be treated, as FICS is presently treating him, as a complainant with a claim for a proportionate share of the loss suffered by the trust estate. He must be treated as a temporary representative of the trust who is acting for the benefit of all the beneficiaries --- Bogert on Trusts & Trustees (2nd ed, Revised) SS 869. 67 The "legal rules" regarding claims in contract are as follows. Joint claims cannot be "split" because a promise made to two or more persons jointly creates only one obligation: King v Hoare (1844) 13 M&W 494 [153 ER 206]; Kendall v Hamilton (1879) 4 App Cas 504; Foley v Addenbrooke (1843) 4 QB 197 [114 ER 872]. Accordingly, a joint promisee has no several right of action: Australian Securities Limited v Western Australian Insurance Co Ltd (1929) 29 SR(NSW) 571; Peabody v Barron (1884) 5 NSWR 72; Cullen v Knowles [1898] 2 QB 380. Moreover, being joint, the cause of action will merge whenever it is pursued to judgment. In In re Hodson; Beckett v Ramsdale (1885) 31 Ch Div 177, 189 Bowen LJ said that "the old debt disappears and the judgment is left in its place". On this basis, if a joint promisee's claim is resolved there is no longer a debt for the remaining joint promisee to pursue. 68 The position regarding actions in tort is not so clear, but appears to be the same as in contract, in my opinion. Thus persons who suffer a joint loss have a single cause of action. A V Dicey in his treatise "Parties to an Action" (1870) at p 380 writes that "persons who have a joint interest must sue jointly for an injury to it". He gives an example (at 382) of joint owners of a chattel --- and partners generally --- whom he says must join in an action for injury to their common property. See also Foley v Addambrooke (supra). It is different if the injury is to a separate and distinct interest, as for example in the case of a chattel that is owned in common. Then each owner in common may bring a separate action for injury to his individual interest: Sedgworth v Overend (1797) 7 TR 279 [101 ER 974]; Roberts v Holland [1893] 1 QB 665. The authors of Salmond on Torts (at least in each edition since the 10th edition which was published in 1945 --- I have not looked at the earlier editions) take a different view. According to them, since the abolition of pleas in abatement by rules of court victims of a joint tort need not sue jointly. In any event, if the defendant complains about a non-joinder the judge can allow the missing person to be added as a plaintiff (if he consents) or as a defendant (if there is no consent). The case cited in support of the authors' view is Roberts v Holland (supra). But that was an action by one of several tenants in common in reversion who on any view of things was entitled to maintain a separate action for damage caused to his separate interest. Although this is not an easy point the better view seems to me to be that there is no distinction to be drawn between claims in contract and claims in tort. 69 I will hear the parties on the appropriate form of orders. Subject to what they have to say, I propose to answer the questions raised for consideration in the following way. Answer --- No, the source of the power is the private contract between FICS and Deakin. clause 2.3 of FICS' Constitution ? Answer --- Does not arise. b. rule 1 of FICS' Rules? Answer --- Does not arise. c. Rule 14 of FICS' Rules? Answer --- Does not arise. Answer --- Does not arise. Within clause 2.3(a) of the Constitution by reason of them involving aspects of funds and investment management? Answer --- Does not arise. b. Within clause 2.3(a) of the Constitution by reason of them involving aspects of securities investment? Answer --- Does not arise. c. Within clause 2.3(a) of the Constitution by reason of them involving aspects of financial product advice? Answer --- Does not arise. d. Within clause 2.3(a) of the Constitution by reason of them involving aspects of other financial advice? Answer --- Does not arise. e. Within Rule 1 by reason of them being about the service by a provider of financial services covered by the scheme? Answer --- Does not arise. f. Within Rule 14 being investment advice provided by a member to retail investors in relation to financial services or products? Answer --- Does not arise. sixteen) complaints received in respect of Deakin? Answer --- Yes, provided the complaint is within the money limits fixed by the contract with Deakin. Question 6 --- Are the Corporations Act 2001 and the regulations made thereunder a source of the power and authority of FICS to hear and determine the sixteen complaints made against Deakin? Answer --- No. Question 7 --- If "yes" to Question 6, are the investments in the several Mezzanines, the subject of the sixteen complaints against Deakin, financial products as defined in s 763A of the Corporations Act 2001 ? Answer --- No. Question 2 : If yes to question 1, is the Fairless Complaint a complaint made in connection with the provision of a financial service covered by Deakin's Licence? Answer --- Does not arise. Question 3: In circumstances in which a complaint could not be brought by the " retail investor" (as defined by the Rules) in connection with in a dealing or transaction with Deakin because the claim would be for more than $100,000, does Rule 12 nevertheless permit FICS to hear and determine that complaint when it is brought by complainants with a "beneficial or other special interest in [that] dealing or transaction" (as defined by Rule 6) provided their individual interests the amount claimed is for not more than $100,000? Answer --- No.

constitution obligation to arbitrate disputes whether binding on members contract with members special contract effect of contract corporations

As to the absence of a specific traverse of allegations in the Statement of Claim, the complaint may be illustrated by reference to a paragraph in the Statement of Claim and in the Further Amended Defence. Paragraph 26 of the Statement of Claim by the ACCC alleges, "Each of O'Keefe and Dargie knew each of the matters pleaded in paragraph 2, 5 to 9, 11 to 17 and 19 to 21". Paragraph 20 of the Further Amended Defence is in these terms, "The Respondents deny the allegations in paragraph 26, 27 and 28 of the Statement of Claim by reason of the matters pleaded in paragraphs 3 to 16 aforesaid". It is therefore improbable in the extreme that Mr Dargie and Mr O'Keefe did not know the matters pleaded in par 2 of the Statement of Claim, as par 20 of the Further Amended Defence in effect asserts. Paragraph 20 is really a broad-brush general denial. Proper pleading of the Defence would require a statement as to whether knowledge of each of the matters alleged in par 26 of the Statement of Claim is contested by Mr Dargie, or Mr O'Keefe. Counsel for the respondents indicated in the course of argument that deficiencies in the Further Amended Defence of which this is but one example, will also be rectified. The principal complaint, however, is directed to whether the respondents are required to plead to a number of allegations made by the ACCC in the Statement of Claim. The nature of this complaint is encapsulated in par 19 of the submissions on behalf of the ACCC: Paragraphs 8.3 to 8.6 of the [Statement of Claim (SOC)] allege facts said to support the allegation that the pleaded representations made by the LAN (the LAN Representations ) are untrue and misleading. Paragraph 5 of the [Further Amended Defence] (FAD) simply denies the relevant LAN Representations were made, and does not address the facts pleaded in paragraphs 8.3 to 8.6 of the SOC. [These paragraphs allege that each of the representations alleged were untrue. Paragraph 13 of the FAD denies paragraph 16 "by reason of the matters pleaded in paragraph 12 [of the FAD]". Paragraph 12 of the FAD denies the relevant representations were made. Again, the FAD does not traverse the facts pleaded in paragraph 16 SOC, which go to whether the representations were untrue (not whether they were made). The question then becomes: if a party alleges that certain representations were made, and each of them was untrue, is it sufficient for the respondents to deny the making of each of those allegations, or is it necessary, in addition to the denial of the making of the representations, to plead specifically to the allegation that the representation (which the party denies making) was untrue? The function of pleadings is to state with sufficient clarity the case that must be met and to define the issues for decision: Banque Commerciale SA En Liquidation v Akhil Holdings Limited [1990] HCA 11 ; (1990) 169 CLR 279 per Mason CJ and Gaudron J at 286. That is a matter of elementary and natural justice; the claim cannot be answered until it is known. When a sufficient defence has been filed to a sufficient statement of claim, a further function will generally have been performed --- that of defining the question or questions for decision. This definition is required, of course, from an early stage, or else discovery and other interlocutory procedures are likely to prove misdirected, wasteful and unproductive. In particular, the purpose of the words "Subject to sub-rule (3)" at the start of subr (1) is something of a puzzle. Subrule (3) does not appear to contain a derogation from the effect of subr (1), as the words "subject to" suggest, and as O 43, r 7 undoubtedly does. Rather, subr (3) appears to provide an explanation of what is meant by the word "traversed" in subr (1). It is really to be read as "having regard to subr (3)". Even if subr (1) is read in this way, it does appear that the effect of O 11 r 13 is to both to impose a requirement (that every allegation be traversed specifically, unless admitted) and to provide for a consequence of non-compliance with that requirement (that every allegation not specifically traversed is deemed to be admitted). This is so even if the pleading manifests an intention not to admit allegations. As the submissions on behalf of the ACCC acknowledge, pars 8 and 16 of the Statement of Claim "constitute a core part of the applicant's case". The ACCC says that it is clear that the respondents dispute that the relevant representations were made. However, if the applicant succeeds in establishing they were made, it will be necessary for the Court to consider if they were untrue. It is therefore important to know whether the respondents contest the facts alleged in pars 8 and 16, or otherwise put them in issue. In my opinion, the effect of O 11 r 13 is that in the absence of a specific denial or non-admission of an allegation, there is deemed to be an admission. This is so even if the pleading manifests an intention not to admit allegations. This view is consistent with the view expressed by Gray J in Francis earlier set out. The consequence is that unless the respondents specifically deny or plead the non-admission of the allegations in pars 8.3 to 8.6, and in 16.1 to 16.5, and 16.7 of the Statement of Claim, there is deemed to be an admission of those allegations, and if the ACCC succeeds in establishing that the representations were made, the consequence of the absence of a specific denial or non-admission of those paragraphs has the effect that they are deemed to be admitted. The respondents have repeatedly declined to plead that the allegations were untrue. The position, in my opinion, is that should that remain the position on the pleadings, and the ACCC succeeds in its allegation that the representations were made, the consequence is that the effect of O 11 r 13 is that the allegations of the untruth of the representations is deemed to be admitted. In the light of these reasons, it is appropriate to give an opportunity to the respondents to consider their position in relation to the non-pleading of the allegations of untruth, and to remedy the deficiencies that have been earlier acknowledged. In the circumstances, it seems to me to be appropriate to order that the respondents have leave to file a fresh Defence, rather than to attempt to amend the most recent Further Amended Defence. It is, in my opinion, clearly inappropriate to order costs on that basis. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender .

striking out of a pleading whether the defence ought to be stuck out pursuant whether the defence complies with o 11 r 1b(1) , o 11 r 13(3) and o 11 r 18 of the federal court rules whether it is sufficient for the respondents to deny the making of allegations in certain paragraphs of the statement of claim or whether it is necessary in addition to the denial to plead specifically to the allegation in the absence of a specific denial or non-admission there is deemed to be an admission appropriate to give an opportunity to the respondents to consider their position in relation to the non-pleading of the allegations respondents have leave to file a fresh defence practice and procedure

2 They applied to the Department of Immigration and Multicultural Affairs on 11 July 2006 for Protection (Class XA) Visas. The husband claimed to be a refugee and the wife was included within that application as a member of the same family unit. A delegate refused to grant the visas on 26 July 2006 and on 17 August 2006 an application for review was filed with the Refugee Review Tribunal. 3 The Tribunal conducted a hearing on 16 November 2006 and affirmed the decision not to grant the visas. The husband alone attended that hearing. The Tribunal handed down its decision on 12 December 2006. 4 The Federal Magistrates Court on 12 September 2007 dismissed an application to review the decision of the Tribunal: SZJXP v Minister for Immigration & Citizenship [2007] FMCA 1603. The Appellants now appeal to this Court. 5 A Notice of Appeal was filed on 24 September 2007 and an Amended Notice of Appeal was filed on 1 May 2008. None of these grounds has been made out and the appeal is dismissed. 6 The Appellants appeared before this Court unrepresented, although they had the assistance of an interpreter. That annexure, however, as filed is obviously incomplete as it appears to be (at least) the second page of a document -- it commences with what is assumed to be part of paragraph [5] and thereafter sets forth paragraphs numbered [6] and [7]. The complete version of the annexure, however, is to be found on the Federal Magistrates Court file of the proceedings before that Court and it is upon the basis of that complete version that the present appeal proceeded. 9 The first two contentions fail at the outset. The alleged contradictory findings were not further identified -- it is, accordingly, difficult to further consider this submission. Moreover, it is not considered that the Tribunal " ignore [ed]" any of the claims that were advanced for consideration by the now Appellants. However, the Tribunal finds it would be reasonable in the applicants' particular circumstances to relocate to another city such as New Delhi where they might live safely and where the Catholic Church is well established and where they might pursue their faith. The Tribunal finds the independent evidence cited above ("The vast majority of Indians of every religious faith lived in peaceful coexistence") supports a finding that the applicant's claim that inter-religious violence exists throughout India not to be credible. Further, the Tribunal does not find as credible the husband applicant's claim that he would be pursued across India, even to New Delhi, by those in Kerala who have harmed him in the past. The Tribunal finds that there is considerable evidence that New Delhi, the national capital, is a well-ordered city (http://delhigovt.nic.in/) and the Tribunal has before it no evidence that speaks of inter-religious violence there. In the light of the evidence before it, the Tribunal is not satisfied that the applicants have a well-founded fear of persecution within the meaning of the Convention. Therefore the Tribunal finds their fear is not well-founded. 11 A variant of the first two submissions is a further contention advanced by the Appellants that the " RRT did not address in their findings of fact that how my wife and I could relocate elsewhere in India without continuing to face a risk of persecution based on my Convention claims ". 12 The findings of fact made by the Tribunal were findings open to it given the account of the evidence and claims previously set forth in its reasons. Parliament has determined that ordinarily the Tribunal is to be the final arbiter of the merits of an application, and not the Federal Magistrates Court or this Court: Kopalapillai v Minister for Immigration & Multicultural Affairs [1998] FCA 1126 ; (1998) 86 FCR 547 at 558. No jurisdictional error is exposed in the reasons for decision of the Tribunal. Even a wrong finding of fact alone does not constitute an error of law: Abebe v Commonwealth [1999] HCA 14 at [137] , [2004] HCA 32 ; 197 CLR 510 at 560 per Gummow and Hayne JJ. 13 The Appellants' complaint is properly characterised as dissatisfaction with the findings made by the Tribunal. (5) ... the Tribunal failed to accept the fact that the Applicant would face serious harm if he returns back to India even after he was ordered to leave the country by the above criminal elements. The task of accepting or rejecting evidence, and weighing such evidence that is available, is a task entrusted by the legislature to the Tribunal alone -- it is not a task that can be undertaken by either the Federal Magistrates Court or this Court on appeal: cf Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 41 per Mason J. 14 Nor is there any substance in the contention that the Tribunal erred by not offering another date for hearing. Before the Federal Magistrates Court, and before this Court, there was a copy of the transcript of the Tribunal hearing. I have lost my voice. We will begin by having the interpreter promise not to divulge any information he hears during the hearing. Thank you. Nothing in the transcript reveals anything further being said in respect of the Tribunal member being unwell. Furthermore, nothing in the transcript gives any support to a submission found in the " particulars " that the Tribunal proceeded " in haste ", had any " pre-conceived notion ", or had not given " the Applicant the opportunity to reply to the Tribunal ". [Tribunal member]: I understand that. I will have to think about what you have said. Ok. Anything else you want to say? [SZJXP]: I am just asking my life back. Rather than being dismissed " in haste " and not giving the First Appellant an " opportunity to reply ", the Tribunal member quite properly invited him to add to the matters which had been covered if he so wished. 15 The present contention that the Tribunal member should have adjourned due to his being unwell is both curious and factually unsupportable. It is curious to the extent that a failure to accede to a reasonable request for an adjournment can constitute procedural unfairness: Minister for Immigration & Multicultural Affairs v Bhardwaj [2002] HCA 11 at [40] , 209 CLR 597 at 611 per Gaudron and Gummow JJ. Further, proceedings of the Refugee Review Tribunal have been held to have denied procedural fairness where an adjournment should have been granted: Xiang Sheng Li v Refugee Review Tribunal [1994] FCA 1550 ; (1994) 36 ALD 273. 16 Normally it is the party appearing who makes the application. No application was made by the now First Appellant for the proceedings to be adjourned to another date. Nor did the Tribunal member suggest that it was necessary for the proceedings to be adjourned or stood over to another day for hearing. There was no suggestion on the part of the Tribunal member and there is certainly no other evidence to suggest that the Tribunal member was so unwell that he was not able to entertain the evidence and arguments being presented. Circumstances may possibly be envisaged in which a Tribunal member proceeds to hearing where he is so unwell that he thereby effectively denies a party an opportunity to be heard, or where it may reasonably be perceived that he has done so. But such a conclusion in the present case is factually unsupportable. All that the Tribunal member said was " I have lost my voice ". To proceed from that statement to a conclusion that an effective opportunity to be heard was not extended to the now First Appellant is without merit. 17 One submission made by the Appellants during the course of the hearing of the appeal, by means of the interpreter, was that further time should have been taken by the Tribunal in conducting the hearing. It was contended that 25 minutes was an inadequate opportunity to allow the now First Appellant to present his evidence. An order was sought remitting the proceedings to the Tribunal. Whether such an order could or even should be made by this Court -- even if there be appellable error in the reasons of the Federal Magistrate -- may be left to one side. The utility in remitting the proceedings to the Tribunal, it was understood, was to permit the Appellants to place before the Tribunal further documents. Included within that material was what was described as a " summons " (dated 6 March 2006) and a " warrant " (dated 25 May 2006). Those documents, it was said, were not available at the date of the Tribunal hearing in November 2006. 18 The situation of claimants appearing before the Tribunal, it is considered, must be approached with some considerable understanding as to the circumstances in which they find themselves: Taylor S, Informational Deficiencies Affecting Refugee Status Determinations: Sources and Solutions (1994) 13 U Tas LR 43; Kneebone S, The Refugee Review Tribunal and the Assessment of Credibility: an Inquisitorial Role? (1998) 5 AJ Admin L 78. They are unrepresented and facing an administrative hearing of fundamental importance to their future. But, in the present proceedings, the now First Appellant husband made a detailed submission to the Tribunal by letter received on 12 October 2006. There is no reference in that written submission to the prospect of placing further documents before the Tribunal, other than those expressly referred to at the conclusion of that submission. Nor was there any reference to any further documents not then available to the now Appellants but relevant to the proceedings before the Tribunal when that hearing took place in November 2006. Nor was there any application made to the Tribunal to either adjourn or postpone the hearing or to produce to the Tribunal further documents subsequent to the conclusion of that hearing. 19 In those circumstances, it is not possible to conclude that the now Appellant husband, when he attended the Tribunal hearing, was deprived of the opportunity to make submissions as set forth in s 425(1) of the Migration Act 1958 (Cth). ... This right to a hearing is " clearly an important and central right " in the review system established by Part 7 of the Migration Act : Liu v Minister for Immigration & Multicultural Affairs [2001] FCA 1362 at [44] , [2001] FCA 1362 ; 113 FCR 541 at 552; Amankwah v Minister for Immigration & Multicultural Affairs [1999] FCA 1162 at [13] , [1999] FCA 1162 ; 91 FCR 248 at 251. The invitation to attend an oral hearing " must not be a hollow shell or an empty gesture ": Mazhar v Minister for Immigration & Multicultural Affairs [2000] FCA 1759 at [31] , [2000] FCA 1759 ; 183 ALR 188 at 194---5. The obligation imposed upon the Tribunal is an obligation to give a " real and meaningful invitation to comment ": SZJBA v Minister for Immigration & Citizenship [2007] FCA 1592 at [53] , [2007] FCA 1592 ; 164 FCR 14 at 27---8 per Allsop J. 20 Albeit not raised by any of the Grounds of Appeal , Counsel for the Respondent Minister quite properly did not oppose exploring the question as to whether there had been a breach of s 425 by reason of the Appellant not having the opportunity to place further documents or further information before the Tribunal. However, it was contended by the Minister that, in the absence of any basis upon which it could be concluded that the Tribunal was on notice that potentially there may have been further information or documents relevant to its consideration (but not then available to the now First Appellant at that hearing), it is difficult to conclude that the obligation in s 425 to afford an opportunity has been breached. The Tribunal in discharging its function is engaged in an " inquisitorial process " -- but there must nevertheless remains a reason or a basis upon which it can be said that it should inquire beyond that factual material placed before it. That obligation involves such mundane things as opening letters, reading them once opened and taking at least basic simple steps that would be taken in any well-run commercial, professional or governmental office, conformable with the recognition of the importance of the response to the invitation to the rights of the applicant and the review process contained within Pt 7 of the Migration Act . This does not rest on some posited duty of inquiry. It is not engaging in steps that require for their enforcement some express statutory power. ... ... [57] These conclusions can be fortified by the recognition, so often stated, that the Tribunal is engaged in an inquisitorial process ... [58] This inquisitorial function has become relevant in a number of contexts. In Applicant S 217 CLR 387 at [76] McHugh J said: If the Tribunal had considered the issue that it was legally required to consider, it was open to the Tribunal to investigate whether such a perception existed, whether within the Afghan society or some section of it, or objectively. Indeed, arguably in the context of its inquisitorial process, the Tribunal had a duty to seek evidence concerning this vital matter. Where there is material which on its face suggests that the Tribunal is not in receipt of all materials, the Tribunal should normally " take simple administrative steps to address the issue ": SZHVM v Minister for Immigration & Citizenship [2008] FCA 600 at [63] per Middleton J. 21 The opportunity " to appear before the Tribunal to give evidence and present arguments " is ultimately an opportunity which places a primary responsibility upon those appearing. It is not the task of the Tribunal to ensure that that opportunity is utilised by those appearing to their best advantage. This is not to say that circumstances may not arise during the course of a Tribunal hearing which imposes an obligation upon the Tribunal to pursue particular issues further. But, in the absence of such circumstances, it must normally remain a matter for those appearing before the Tribunal to inform the Tribunal of the evidence they wish to rely upon and to present their own arguments. Circumstances may also emerge that make it apparent that a hearing before the Tribunal is not a meaningful opportunity to be heard. Section 425(1) thus may not be satisfied merely because a time and place has been set aside for a hearing and a hearing member is present. 22 But such circumstances are not the present case. Notwithstanding the fact that the hearing before the Tribunal took a comparatively short period of time, there is nothing to indicate that the Appellants were denied an opportunity to place before the Tribunal all such materials as they then considered relevant and nothing arose during the hearing to impose upon the Tribunal any duty to make further inquiries. 23 No breach of s 425 has been discerned, nor is there any basis for concluding that the Appellants should be given a further hearing to present such further information or documents as they may now wish to rely upon. They have already been given the hearing which the legislation envisages. The fact that a party appearing before the Tribunal may subsequently consider that his case may have been better advanced had further or additional documents been placed before the Tribunal is not to deny the effectiveness of the hearing already extended. Indeed, to conclude otherwise may well only encourage an administrative process whereby a party could sequentially produce further or more documents over the course of a series of hearings until he ultimately prevails. And such a sequential process of producing further documents would be but one means of a party being impermissibly informed as to whether he had already persuaded a Tribunal as to the merits of his case. Such a course is not that envisaged by s 425. 24 There is no basis upon which it can be concluded that the Tribunal was biased in the manner in which it proceeded. 25 No appellable error has been exposed by the reasons provided by the Federal Magistrates Court. Compliance with s 424A is mandatory: SAAP v Minister for Immigration & Multicultural & Indigenous Affairs [2005] HCA 24 , 228 CLR 294 ; SZBYR v Minister for Immigration & Citizenship [2007] HCA 26 at [13] , [2007] FCA 26 ; 235 ALR 609 at 614 per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ. 27 This Ground of Appeal (without alteration) relevantly contends that the " RRT breached of section 424A as the adverse information found in the hearing and in the RRT decision was not put to me in writing before the RRT is made a decision ". 28 The difficulty confronting the Appellants is the fact that the " adverse information " alleged is not further identified. Nor has any breach of s 424A otherwise been identified. Attempts during the course of the hearing of the appeal to shed light upon what was intended by the present contention proved unsuccessful. The Appellants were unable to explain what was intended to be conveyed by their reliance upon s 424A. The ground was apparently inserted upon the suggestion of a migration agent who had attended a Church service one Sunday and who proffered his " assistance ". Such " advice ", it is considered, is neither of " assistance " to the Appellants or this Court. 29 Moreover, there was no reliance placed upon any asserted breach of s 424A before the Federal Magistrates Court. Leave is thus required to raise it as a ground on appeal to this Court. There is no explanation as to why the ground was not raised before the Federal Magistrates Court and it is considered that the ground is also without merit. 30 Leave to now place reliance upon an asserted breach of s 424A is thus refused. Fixed costs were sought in the sum of $3,403. There is no reason not to make such an order and no reason to question the quantification of costs. The appeal be dismissed. 2. The Appellants to pay the costs of the First Respondent fixed in the sum of $3,403. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

alleged contradictory findings by refugee review tribunal failure to accept claims impermissible merits review no failure to provide " adverse information " leave to raise new ground refused no denial of opportunity to give evidence and make submissions inquisitorial function of tribunal migration

The applicant alleges infringement of certain claims of or in the patent by the respondent, and, among other claims, he makes a claim for pecuniary relief. The respondent has brought a cross-claim in which it claims revocation of the patent on the ground of invalidity. It is convenient for me to refer to the parties as they are in the proceeding rather than on the notice of motion, and to the three claims in the proceeding as the invalidity claim, the infringement claim and the claim for pecuniary relief. The notice of motion issued by the respondent seeks two orders. The first order is that the applicant discover all documents in his possession, custody or power, in seven categories of documents. The documents are said to be relevant to the respondent's invalidity claim. The application for that order is opposed by the applicant. The second order sought in the notice of motion is that, under O 29 r 2 of the Federal Court Rules , the issues relating to the invalidity claim and the infringement claim be decided separately from and prior to the claim for pecuniary relief. The parties are agreed that the second order should be made. It is alleged by the applicant that the complete specification of the patent was published and became open to public inspection on 23 November 2004. The priority date for the patent is 28 April 2003. A transportable building as in any one of the above claims wherein said elongate beams are tubular beams having a rectangular cross-section. A transportable building as in any one of the above claims wherein each said longitudinal channel includes a plurality of spaced apart stiffening plates extending laterally across said channel. A transportable building as in any one of the above claims wherein extending between each said I-beams and said front and rear members are a plurality of bracing members. A transportable building as in claim 1 wherein said elongate beams and said front and rear members are welded to said I-beams. A transportable building as in any one of the above claims wherein the width of said chassis is adapted to be smaller than the width of a conventional road-train. The respondent seeks an order revoking the claims in the patent. The respondent has filed and served Particulars of Invalidity. In those particulars, the respondent identifies 14 matters, which it alleges are part of common general knowledge, and 14 pieces of prior art information , including as the first piece of prior art information "[t]ransportable buildings made or marketed in Australia, particulars of which will be furnished after discovery". On 29 October 2008, I made a number of orders by consent under O 35 r 10A. One order I made on that date was that the parties exchange categories of documents to be discovered by 17 November 2008. The parties have been unable to agree the categories of documents to be discovered by the applicant; hence the order sought in paragraph 1 of the notice of motion. The respondent seeks an order that the applicant make discovery of the following categories of documents: "Category 1: All documents that will be relied upon by the claimant to support the claim of patent infringement. Category 2: All documents that disclose, describe or note buildings and/or transportable structures that have a frame connected to and extending around a plurality of elongate beams where said frame is adapted to support a side wall of the building or structure. This request is limited to documents that fall within (a)(i) of the definition of 'prior art base' in Schedule 1 to the Patents Act 1995, i.e. documents publicly available before 28 April 2003, and documents that describe or disclose buildings and/or transportable structures that were made before 28 April 2003 and which fall within (a)(ii) of the said definition. Category 3: Deleted Category 4: Documents that disclose, describe or note buildings and/or structures that have or had the following features: (i) at least two elongate spaced apart load-supporting I-beams disposed parallel to the longitudinal axis; (ii) each I-beam having a top flange and bottom flange connected by a web and respective front and rear ends; (iii) a plurality of elongate beams extending laterally across the top flange of both I-beams adapted to support a floor of the building or structure. (iv) a pair of spaced apart longitudinal channels extending through the web of each I-beam for engagement with forks of a forklift for lifting the building or structure. This request is limited to documents that fall within (a)(i) of the definition of 'prior art base' in Schedule 1 to the Patents Act 1995, i.e. documents publicly available before 28 April 2003, and documents that describe or disclose buildings and/or transportable structures that were made before 28 April 2003 and which fall within (a)(ii) of the said definition. Category 5: Inventors books, inventors notes, and all other documents created during the time of inventing and that relate to the invention claimed in AU2003227102 or PCT/AU2003/000947 Category 6: All documents that fall within (a)(i) of the definition of 'prior art base' in Schedule 1 to the Patents Act 1995, i.e. documents publicly available before 28 April 2003, and documents that describe or disclose buildings and/or transportable structures that were made before 28 April 2003 and which fall within (a)(ii) of the said definition listed or referred to in patent search reports pertaining to the applicant's invention claimed in AU2003227102, whether they be search reports of a Patent Office, or by a patent attorney firm or patent search company and all such reports which list or refer to matter falling within the definition of 'prior art base'. This category is limited to documents that disclose buildings or structures that have or had the following features: (i) a longitudinal chassis or frame including two elongate spaced apart load-supporting I-beams disposed parallel to the longitudinal axis; (ii) each I-beam having a top flange and bottom flange connected by a web and respective front and rear ends; (iii) a plurality of elongate beams extending laterally across the top flange of both I-beams adapted to support a floor of the building or structure. Category 7: All documents describing or disclosing a building described in the background to the invention section of AU2003227102 or PCT/AU2003/000947 including specifically buildings (rectangular or otherwise) which prior to the priority date were lifted by crane as described in the background to the invention and that were made before April 28 2003. Category 3 is no longer pressed by the respondent, and categories 1 and 5 are not opposed by the applicant. The description of the categories of documents sought by the respondent has changed considerably since the parties first started their efforts to agree categories. As will be seen, this fact is relevant to the question of the costs. (4) However, a document is not required to be disclosed if the party giving discovery reasonably believes that the document is already in the possession, custody or control of the party to whom discovery is given. (6) If the party does not search for a category or class of document, the party must include in the list of documents a statement of the category or class of document not searched for and the reason why. (2) The Court may make such orders under subrule (1) as are necessary to prevent unnecessary discovery. It provides that the Court will not make an order for general discovery as a matter of course. The Court will scrutinise proposed orders for discovery with a view to eliminating or reducing the burden of discovery. Orders for discovery will ordinarily be limited to the documents required to be disclosed by O 15 r 2(3). In considering the formulation of categories of documents for the purposes of discovery, two matters are important. First, it is trite to say that the categories will be formulated having regard to the issues between the parties as revealed in the pleadings. Secondly, the criteria in O 15 r 2(3) generally provide an appropriate guide to the formulation of appropriate categories. The categories can be formulated by reference to O 15 r 2(3) without specific reference to that rule, or O 15 r 2(3) can be incorporated into the categories as a limiting factor: Australian Competition & Consumer Commission v Advanced Medical Institute Pty Ltd [2005] FCA 366 at [17] - [23] per Lindgren J; Aveling v UBS Capital Markets Australia Holdings Ltd [2005] FCA 415 at [9] - [11] per Lindgren J; Egglishaw v Australian Crime Commission (No 2) (2009) 253 ALR 354 at 360 [21]-[22]. It seems to me, however, that the Court retains a general power to fashion an order for discovery which is appropriate to the circumstances of the case. Although it is perhaps most unlikely, it is within the Court's power to make an order for discovery in accordance with the "train of inquiry" test (see The Compagnie Financiere et Commerciale du Pacifique v The Peruvian Guano Co (1882) 11 QBD 55 at 63; see also O 15 r 8, which uses the expression, "any document relating to any matter in question in the proceeding"). It contends that they are relevant to prior art information in s 7(3). The respondent submits that I should make an order in terms of the categories because: the determination of appropriate categories under O 15 r 3 is guided by the criteria in O 15 r 2(3) and two of the criteria in that sub-rule are satisfied in this case, namely, "documents that adversely affect the party's own case" ((b)), and "documents that support another party's case" ((d)); and the use of the word, "could" in s 7(3) of the Patents Act is significant because there may be documents which fall within s 7(3) even though an expert engaged by one of the parties for the purposes of the proceeding has not identified them. The applicant submits that I should not make an order in terms of the categories because: although the categories relate to prior art information and identify the relevant prior art by reference to one or more integers of the claims of the patent, the categories in fact identify a wider class of documents than the documents which are relevant for the purposes of s 7(3) ; the respondent has identified in its Particulars of Invalidity the prior art information upon which it relies; and the modern practice is to confine discovery to what is truly necessary and that means to documents which are clearly relevant. In essence, the applicant contends that the categories put forward by the respondent identify a wider class of documents than are relevant for the purposes of s 7(3) of the Patents Act . In the alternative to what might be called the issue of principle, he contends that the wording of some of the categories is too wide and therefore inappropriate. I start with the issue of principle. There is a good deal to be said in favour of the applicant's submissions. Order 15 r 2(3) is framed in terms of documents which will adversely affect the party's own case, or will support another party's case, rather than may have these consequences. It cannot be said with certainty at this stage that the documents in the categories meet this criteria because, although they fall within the definition of prior art information , it is not known if a person skilled in the relevant art could, before the priority date, be reasonably expected to have ascertained them, understood them and regarded them as relevant. On the other hand, I have the power to determine categories of documents for discovery by reference to the particular circumstances of this case. The categories are limited and there is no evidence that discovery in accordance with them will impose an unnecessary burden on the applicant in terms of time or cost. The categories are limited to prior art information of a particular type, being prior art information linked (by reference to various integers) to the claims under challenge. Discovery in accordance with the categories may produce documents which ultimately prove relevant to the issues raised under s 7(2) and s 7(3). Subject to my consideration of the applicant's complaints about the wording of some of the categories, I think an order for discovery in accordance with the categories should be made. The respondent submitted that I could, if I considered it appropriate, add the criteria in O 15 r 2(3) as a limitation on the categories. The applicant submitted that this would not be appropriate, and I accept this submission. I have reached the conclusion that an order for discovery in terms of the categories should be made and there is no reason to complicate the matter by adding a qualification in terms of O 15 r 2(3). The applicant submitted that Category 2 was too wide and that I should add to it the integers of the claims identified in Category 4. The applicant submitted that that would then make one or other of Categories 2 or 4 otiose. I reject this submission. I think both Categories 2 and 4 are sufficiently material or relevant to be the subject of orders. Finally, the applicant submitted that the reference in Categories 2, 4 and 6 to buildings or buildings and/or structures was too wide and the categories should be restricted to transportable buildings and/or transportable structures. I reject this submission. The question is one of degree and it is not suggested that the question of whether there is an inventive step is necessarily so confined. I think the formulation of the categories is appropriate as it presently stands. I will also make an order that, pursuant to O 29 r 2, the following questions be decided separately from and prior to any question of pecuniary relief for infringement of Australian Patent No 2003227102 (the "patent"): The question of the validity of the patent as raised in the respondent's Cross-Claim for revocation of the patent; The question of alleged infringement of the patent by the respondent as raised in paragraphs 1-6 of the applicant's Amended Statement of Claim as read with the Particulars of Infringement. There should be no order as to the costs of the respondent's notice of motion. Although the respondent has achieved a measure of success on the discovery application, the correspondence exhibited to the affidavits establishes that the respondent has, on a number of occasions, reformulated the categories and, even on the hearing of submissions, the respondent reformulated certain categories by adding substantial qualifications. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

categories of discoverable documents in proceeding involving patent where documents potentially relevant to question of inventive step under s 7(2) and (3) of patents act 1990 (cth) whether court has power under o 15 to order discovery of limited categories of documents not necessarily satisfying criteria in o 15 r 2(3) discovery

I will refer to that factory as "Acacia Ridge". The first applicant ("Mr Harrison") worked as a machine operator at Acacia Ridge for some years prior to 6 May 2008. From 18 February 2002 until 6 April 2003 Mr Harrison was employed by Palmer Tube Mills (Aust) Pty Ltd. From 7 April 2003 until 24 September 2003, he was employed by The ANI Corporation Ltd, trading as Smorgan Steelmark Metals. From 30 September 2003 until 6 May 2008 he was employed by One Steel. Despite the missing days, the case has been conducted on the basis that he was continuously employed from 18 February 2003 until 6 May 2008. Mr Harrison was employed pursuant to the Metal Engineering and Associated Industries Award 1998 (the "award"). At some time prior to 8 June 2007 Mr Harrison became a member of the second applicant (the "union"). His application form was dated 25 May 2005. In his affidavit filed on 25 June 2008, Mr Loggie wrongly said that it was dated 25 June 2008. On 8 June 2007 Mr Harrison was elected as a workplace delegate of the union at Acacia Ridge and subsequently appointed to that position. Mr Harrison was the first delegate of the union at Acacia Ridge. As at 12 February 2007 the union had four financial members employed there. By 20 June 2008 membership had increased to 25. The union and One Steel were parties to the award which was an industrial instrument for the purposes of s 779 of the Workplace Relations Act 1996 (Cth) (the "Act"). On either 1 or 2 May 2008 Mr Harrison was stood down from work until 10.00 am on Tuesday 6 May 2008, allegedly for reason of his conduct. Mr Harrison said that this event occurred on 1 May 2008, but the evidence otherwise suggests that it occurred on 2 May 2008. I will proceed on that basis. The discrepancy is of no consequence. On 6 May 2008 Mr Harrison's employment was terminated. In these proceedings the applicants allege that One Steel contravened s 792(1)(a) of the Act for a reason set out in s 793(1)(a). The relevant events, and the background to them, are primarily dealt with in the affidavits of Mr Hasemann and Mr Allard. He supervised the operation of all four mills at that site. A mill is a manufacturing line for tubular steel products. He supervised 114 staff members over three shifts. Employees' work was heavy and could be both demanding and dangerous. As a result One Steel had strict safety policies and procedures. There were two mills in each of two bays on the shop floor. The mills were operated by three operations crews on each shift. Each shift had about 37 operators. There were also maintenance and trades people on the floor and, from time to time, administrative staff. Mr Hasemann was a member of the Electrical Trades Union from 1986 to 1995. He said that he accepted that unions had a role to play on site and claimed to have been more than willing to deal with the union in his role as Operations Supervisor. One Steel communicated with its employees in numerous ways. There were monthly meetings of the Staff Advisory Board on which there were elected employee representatives. There were also tool box meetings once every three weeks. Shift supervisors held pre-shift meetings with crews before the start of each shift. Issues such as safety were discussed. There were also notice boards. A television set in the lunch-room screened general announcements. Major changes on site were implemented only after consultation with staff. Early in 2007 Mr Harrison became active in union affairs. At some stage in that year Mr Harrison and two other employees, Mr Butler and Mr Wharton, commenced to wear AMWU stickers on their helmets, to distribute AMWU stickers and pamphlets in the lunch-room and to place AMWU stickers about the site. Stickers appeared on cups and notice boards in the lunch-room, on toilets and in the locker rooms. On a few occasions pamphlets were distributed at the front gate. On one occasion they held a sausage sizzle. The three men frequently spoke to employees about the benefits of joining the union. This occurred in the lunch-room and, whilst employees were working, in the maintenance and mill areas. Mr Hasemann stopped the practice of speaking to employees whilst they were working. He had received complaints from "quite a few employees on site" to the effect that Mr Harrison was heavy-handed in his methods of promoting the union. The complaints had a common thread. Such employees considered that Mr Harrison had gone about things in the wrong way. They felt "bombarded" by his campaign of union propaganda, and that there was too much of it in the lunch-room and around the site. Three people who complained were Ray Tavita, Rob Lawson and Steve Booth. In May 2007 about 20 employees started wearing "Say No" stickers on their helmets. They included Graham McDonald, Richard Murphy and Ray Tavita. Mr Harrison complained about the "Say No" stickers, asking that they be removed. Other evidence suggests that he thought that the stickers demonstrated opposition to the union. Mr Hasemann said to Mr Harrison, "Shane they could be saying 'no' to anything". He also said, "It's a two-way road mate, you have your stickers, they have theirs, they're harmless". He also invited Mr Harrison to raise the matter at the Staff Advisory Board meeting. On another occasion Mr Harrison said that he considered that the "Say No" stickers on helmets raised a safety issue. He suggested that the glue might attack the plastic of the helmets. Again he was told to raise the matter at the Staff Advisory Board meeting. On 1 June 2007 Mr Hasemann learned that Mr Tavita had made an oral complaint to Ms Rankin, contact officer for discrimination and bullying complaints, concerning harassment by Mr Harrison. Mr Tavita subsequently told Mr Hasemann and Ms Rankin that "Shane had walked in, looked at the 'Say No' sticker on Ray's helmet; and then (after a short exchange of words) said twice: 'I'm going to fuck you up the arse'. " Mr Hasemann spoke to three other employees who had been identified as witnesses, Philip Nipress, Michael Wilson and Solomon Tauo. He told Mr Harrison that he expected him to apologize to Mr Tavita. He told both men that he wanted them to work professionally together despite their differences. On one or two occasions Mr Harrison complained that Mr Tavita was favoured by Steven Booth. He regularly complained that the wrong people were promoted at Acacia Ridge and expressed vocal opinions about nepotism. Mr Booth is related to one of the managers. On 1 June 2007 Mr Warren Vine complained to Mr Hasemann that Mr Harrison had harassed him whilst he was oxy-cutting. He had talked about joining the union and the benefits of so doing. Mr Vine said that Mr Harrison would not listen when he said that he was not interested. He eventually told him to "Piss Off" and walked away. Mr Vine said he was sick of seeing Mr Harrison's union propaganda, and that there was so much of it about the site that it had become ridiculous. Mr Vine swore an affidavit in this matter but, in the end, it was not read. I therefore proceed upon the basis that he made a complaint to Mr Hasemann, but I make no finding as to its content or factual correctness. On 4 June 2007 Mr Hasemann and Mr Newbegin (from One Steel management) met with Mr Harrison, Mr Newbegin and Mr Antal to discuss complaints about Mr Harrison visiting workers on the floor and distributing union propaganda. Mr Antal seems to have been a friend or ally of Mr Harrison. He frequently accompanied him to meetings with management. Mr Hasemann told Mr Harrison that he was not to be on the shop floor unless he was working a shift. Otherwise he was to respect the fact that employees had jobs to do and were not to be distracted. There were good safety reasons why people should not be distracted in the mill and maintenance areas. On 5 June 2007 there was another meeting between Mr Patterson, Mr Allard, Mr McGuire, Mr Antal, Mr Harrison and Mr Hasemann. All but Messrs Harrison and Antal were supervising or managerial staff members. Mr Hasemann said that he had suggested the meeting because he understood that Mr Harrison was telling employees that management did not listen enough and did not do enough. He wanted to give Mr Harrison an opportunity to air any concerns. On 26 June 2007 there was a meeting of the Staff Advisory Board at which Mr Harrison demanded that the "Say No" stickers be removed. Two other employee representatives complained about Mr Harrison's conduct. The meeting became heated. After the meeting Mr Hasemann discussed the question of stickers with Mr Patterson, One Steel's Executive Manager --- Operations. They agreed that there was too much tension on the site concerning stickers, and that the only solution was to ban all stickers on helmets (where they seemed to be most prominently displayed). Mr Patterson and Mr Hasemann addressed all crews on the site, informing them that stickers on helmets were banned and were to be removed. Many men had worn stickers other than "Say No" or AMWU stickers. There was substantial compliance with the direction. Shortly after the direction Mr Harrison complained to Mr Hasemann that Mr Tavita still had a sticker on his helmet. Mr Hasemann's recollection is that it was a "Say No" sticker. Mr Hasemann spoke to Mr Tavita's supervisor. The sticker was removed. On 12 July 2007 Mr Patterson gave a presentation to staff in the training room concerning a proposed merger of the employer with another company. Other evidence suggests that some employees had expressed concern that the merger might lead to their being forced to join the union. Mr Patterson said that being in a union was like a religion and sport. It was the right of the individual to decide and keep their opinions to themselves. Over the next few weeks some of the men started wearing stickers on their ear muffs. They said that the earlier direction related only to helmets. Mr Hasemann then issued a direction banning stickers on ear muffs. In the lead up to the federal election in November 2007 an increasing number of stickers and other union material appeared in the lunch-room. There was union literature on every table and union posters on the wall and on the notice board. A number of people complained about the quantity of such material. Those complaining included Warren Vine, Rob Lawson and Steve Booth. Mr Vine was particularly vocal and made derogatory remarks, apparently about Mr Harrison. On 29 October 2007 Mr Hasemann learned that Mr Harrison had made a complaint concerning Mr Tavita. In effect, it was that Mr Harrison had asked Mr Tavita not to swear in the lunch-room. Mr Tavita had then allegedly threatened Mr Harrison on two occasions. Mr Hasemann and Mr Croxford interviewed the relevant witnesses, including Mr Harrison, Mr Tavita, Rob Lawson, Craig Frahm, Steven Booth and Ray Whalley. Subsequently, Mr Hasemann spoke to Mr Allard. They agreed that there had been childish behaviour by both men, and that they had probably contributed equally to the incident, given their history of conflict. Mr Allard decided to give both men final written warnings. On the same day Mr Harrison contacted Ms Rankin, handing her a written complaint of harassment against Mr Tavita arising out of the incident. Ms Rankin gave the complaint to Mr Hasemann. Later that afternoon Mr Hasemann was in the lunch-room talking to Mr Harrison and heard a few men swearing. Mr Harrison did not complain about the language. On 1 November 2007 Mr Harrison advised Mr Hasemann by telephone that he was ill and not coming to work. He said that he had a medical certificate for "work stress", excusing him from work until 6 November. He claimed that his condition was related to the incident with Mr Tavita. He was absent from work until about 16 December 2007. The medical certificate stated that his stress was due to "bullying by his '2IC' ". Mr Tavita was not Mr Harrison's "2IC". He was the leader of a different team, having no supervisory authority over Mr Harrison. On 9 November 2007 Mr Croxford, Mr Allard and Mr Hasemann met with Mr Tavita to give him his final written warning for unacceptable workplace behaviour. Mr Hasemann told him that both he and Mr Harrison had behaved childishly, and that this was unacceptable. Mr Tavita said that he would change his behaviour and signed the record of interview. His behaviour had subsequently been exemplary. At about that time One Steel proposed to give employees a bottle of wine or spirits. On 16 November 2007 Mr Hasemann rang Mr Harrison at home to ask him about his choice of liquor. His wife said that he drank rum. On 28 November 2007 there was a meeting in Mr Allard's office, attended by Mr McGuire, Mr Croxford, Mr Harrison, Mr Antal and Mr Hasemann. The purpose of the meeting was to give Mr Harrison his final written warning for unacceptable workplace behaviour. He was told that the substance of his complaint had not been substantiated, that both he and Mr Tavita had behaved childishly, and that this was unacceptable. Mr Harrison refused to sign the "record of interview". That afternoon, Mr Croxford spoke to Mr Bradley from the union. As a result the final written warning was amended by removing any reference to childish behaviour. A copy of the amended final written warning was later faxed to the union. The union notified the Australian Industrial Relations Commission (the "AIRC") of a dispute. On 20 December 2007 a conciliation conference was held in the AIRC. At the conference Mr Hasemann raised other aspects of Mr Harrison's behaviour which had not formed part of the final written warning. They included ignoring directions as to the parking of his motor cycle, continually putting his cap on mugs in the lunch-room or inside the refrigerator and chanting union slogans in the lunch-room or on the shop floor in a manner that other employees found annoying. It was agreed that there would be a further meeting in the new year to discuss Mr Harrison's behaviour. On or about 24 January 2008 Mr Newbegin, Mr Allard, Mr Harrison, Mr Bradley and Mr Hasemann met on site to discuss the issues raised at the conciliation conference on 20 December 2007. Mr Harrison agreed to stop putting his cap on the mug rack in the lunch-room or in the lunch-room refrigerator, to stop singing "loud" union chants in the lunch-room or on the shop floor and to stop parking his motor cycle in the shift workers' car park. Mr Allard and Mr Hasemann agreed to look into the possibility of providing Mr Harrison with a notice board in the lunch-room. In late 2007 or early 2008 Mr Harrison, Mr Butler and Mr Wharton started wearing AMWU stickers on their clothes. On a few occasions they did not remove them before putting them into the site washing machine. The stickers clogged the washing machine. Mr Hasemann had to unclog it. He raised the matter in tool box meetings, asking that stickers be removed from shirts before they were put in the wash. On one occasion Mr Hasemann asked Mr Harrison why he was wearing stickers on his shirt. He said words to the effect that, "Well, you know, you can't wear them on your helmet". At around this time stickers on lockers started to be a problem. Some lockers were plastered with stickers. Complaints became more frequent. It seemed that stickers had become a real point of contention amongst the staff. Mr Wharton complained several times that stickers were being taken off other lockers and put on his. Mr Harrison also complained that stickers which he had placed around the site, and material which he had placed around the lunch-room, were missing. He said that this was stealing. He wanted Mr Hasemann to dismiss the person responsible. On one occasion he said that he thought Mr Tavita was responsible. He had no proof. Mr Harrison made similar complaints at a tool box meeting and at a pre-shift meeting. In January and February 2008 Mr Patterson called a series of staff meetings involving all crews. Mr Hasemann was present at all meetings. Mr Patterson and Mr Hasemann gave a ten or fifteen minute presentation, asking staff to respect each other's property, not to put stickers on other people's lockers and not to remove other people's stickers. Mr Patterson said words to the effect of, "Guys, I do not care if you are in the union or not in the union. I treat it the same as religion or sport. You should keep your opinions to yourself. We are here about making tube and keeping the harmony. " A few months later Mr Hasemann had to address the crew again on the same issue. In or about March 2008 Mr Hasemann saw Mr Wharton carrying a very large union sign upstairs. Mr Wharton asked if it could be hung in the lunch-room. This may not have been a serious suggestion. Mr Hasemann said, "I doubt it very much. You'd probably have to ask Jason [Mr Allard]. " He next saw the sign in a supervisor's office. In or around February or March 2008 a meeting was held in Mr Allard's office to discuss with Mr Harrison and Mr Wharton their proposal to put AMWU signs on notice boards. As a result of the meeting permission was refused for the hanging of large AMWU notice boards and signs, including a sign at the gate saying "AMWU Site". However One Steel agreed to erect an additional cork board in the lunch-room for Mr Harrison's use. In or about April 2008 Mr Hasemann heard that Mr Harrison was telling employees on the shop floor that One Steel was going to adopt an eight hour shift roster. Mr Hasemann received numerous enquiries about the matter. He was unaware of any such proposal. One employee said that he had joined the union because of the threat. Mr Hasemann inquired of various persons as to the source of the rumour and was told by two men that they had heard it from Mr Harrison who said he had got it from "high authority". Mr Hasemann was concerned that the matter was upsetting both employees and their families and so spoke to Mr Harrison on 15 April 2008. Mr Harrison attended the meeting with Mr Antal. Mr McGuire was also present. Mr Harrison said that he had heard a rumour about the matter. Mr Hasemann said that two people had alleged that he had told them about it. In the course of the interview Mr Hasemann formed the view that Mr Harrison was yawning in an exaggerated manner. He terminated the meeting and Mr Harrison said, "I'll just write in my diary, 'Graham is exiting the room during an interview' ". Mr Hasemann then called a meeting of the three crews and said that he was distressed and disappointed about the rumour. He said that no change to the roster was planned. By later April 2008 stickers were still creating friction amongst employees. In particular Mr Hasemann received complaints from Robert Moreton, Matty Parr, Chris Durham and James Patterson. At a supervisors' meeting on 23 April 2008, (Mr Allard and Mr Newbegin also attending) one of the supervisors said that the issue was out of control. The others agreed. It was said that the crews were constantly bickering about it. Mr Allard said that he would issue a memorandum regarding the matter. On the afternoon of 23 April 2008, at a tool box meeting attended by Mr Hasemann, both Mr Harrison and Mr Antal complained about AMWU stickers being stolen or vandalized. Mr Antal said that the matter was getting personal and that something had to be done about it. Mr Harrison and Mr Antal criticized Mr Hasemann for not having identified the culprit. Mr Hasemann said, "You're right, I haven't caught the person, and it's obvious I'm going to have to do something about this to bring it to a halt. " He again discussed the matter with Mr Allard and Mr Newbegin and suggested that they ban all stickers on site. As a result Mr Allard issued a memorandum dated 24 April 2008. However it may be arguable that it only applied to the use of stickers on clothing and lockers. On 29 April 2008 Mr Hasemann sent a memorandum to all supervisors, asking them to enforce the memorandum from 30 April 2008. Mr Harrison's next day shift after publication of the memorandum was on 2 May 2008. On that day there was a barbeque for staff. At the barbeque Mr Hasemann saw Mr Harrison showing other workers something on his neck. It was an AMWU sticker. Later, Mr Hasemann spoke to Mr Allard about the sticker. Mr Allard said that he had asked Mr Harrison to remove it. At about 10.15 am Mr Hasemann saw Mr Harrison in the office area. He spoke to him. Mr Gerry Witt was standing nearby. Mr Hasemann referred to the fact that Mr Allard had asked him to remove the sticker. Mr Harrison replied, "I'm not removing the sticker and I won't remove the sticker until I get it in writing. " Mr Hasemann said, "He's given you an instruction to remove the sticker". Mr Harrison again said, "When I get it in writing I'll do that. I have all the information in my diary. " Mr Hasemann said, "Well if that's the case I'll organize a meeting with Jason Allard to discuss it. " Mr Harrison said, "I'm just here to keep everyone happy and make [tons]. " At 1.00 pm there was a birthday cake for employees in the lunch-room. Mr Hasemann asked Mr Harrison to "Come and have a chat in Jason's office". He invited Mr Harrison to bring someone with him if he wished. Mr Harrison said, "That's fine. I'll just finish my cake. " At 1.15 pm the meeting convened. Mr Newbegin, Mr Harrison, Mr Antal, Mr Hasemann and Mr Allard attended. The sticker was still on Mr Harrison's neck. Mr Hasemann asked why he had not obeyed Mr Allard's direction to remove it. Mr Allard asked the same question and referred to the memorandum. Mr Harrison said, "If management want to be childish about stickers I'll be childish as well. Give me the instruction in writing and I'll take it to the union. They'll reply within 7 days. " Mr Allard said, "I have given you the instruction to remove it. I do not have to give every instruction in writing and we don't usually give every instruction in writing. We couldn't possibly run a business that way. " Mr Harrison leaned back and yawned, allegedly in an exaggerated way. Mr Allard then outlined the disciplinary procedures which would be followed. He referred to possible outcomes, including summary dismissal for serious misconduct. He said this on two or three occasions. Mr Allard said, "This is serious, you are disobeying a reasonable instruction from the site manager. " Mr Harrison said, "The meeting is over. I am being victimised. " Mr Allard said, "The meeting is not over. Am I clear as to how serious the issue is? " Mr Harrison again leaned back and yawned in an exaggerated style and said, "Well, Jason, do what you need to do. " At this point Mr Allard suspended Mr Harrison. Mr Hasemann followed Mr Harrison out of the office and heard him telling employees in the lunch-room that, "I've been suspended for wearing a sticker. " He said to Mr Harrison, "Shane, you've been asked to leave the site. " Mr Harrison said, "I've come to get my helmet. " Mr Hasemann said, "Mate, you do not need your helmet, your helmet doesn't leave site. " He then told the other employees in the lunch-room that, "Shane has been suspended for disobeying a reasonable work instruction from Jason Allard three times. This has nothing to do with the sticker. " On 6 May 2008 there was a further meeting attended by Mr Hasemann, Mr Allard and Mr Newbegin (from One Steel), Mr Bradley (from the union) and Mr Harrison. Mr Newbegin took notes of the meeting which Mr Hasemann inspected after the meeting and found to be accurate. Mr Allard said to Mr Harrison, "This is an opportunity to respond to your failure to follow a lawful and reasonable instruction". Mr Allard said that the purpose of the meeting was: Mr Harrison did not say very much at the meeting. Mr Bradley used the words "freedom of expression" and said, "you should be able to wear what you want on your body". He discussed turbans and tattoos, saying, "It's unlawful to request the removal of a sticker". Mr Harrison said in his own defence that, "If management are being childish I'll be childish as well". Mr Allard said that, "It is a serious breach of the disciplinary policy and Shane could face dismissal". Mr Harrison was invited to add any further comments. The meeting was then adjourned. Mr Allard had a telephone conversation with Mr Clement, the National Operations Business Manager. The meeting was resumed, and Mr Allard said to Mr Harrison, "I have found your response inadequate. I have followed our disciplinary process and I am summarily dismissing you". There was then a discussion concerning Mr Harrison's entitlements. Mr Bradley also said, "This won't be the end of it". Mr Hasemann escorted Mr Harrison to his locker and said to him, "I'm sorry it has come to this. I don't understand why you pushed the issue. " Mr Harrison looked teary and said words to the effect that, "I did what I believed in. " "You've got to start giving the jobs to the right people. " "There's heaps of work out there I'll find a job pretty quick. " "Unemployment is low. It will be no drama to get a job. " Mr Hasemann then escorted Mr Harrison to the front of the site where they met Mr Bradley. As Mr Harrison reached the maintenance area he called out "Workers united will never be defeated". Mr Hasemann gave evidence concerning a number of incidents at the site between mid-2007 and January 2008 involving Mr Harrison, being the incidents referred to in the AIRC proceedings and associated meetings. Car parking on the site was limited. The front car park was generally reserved for shift workers. However, during 2007, Mr Harrison frequently parked his motor cycle in the car park rather than in a designated motor cycle parking space. Some staff, particularly those who started after 7.00 am, complained about this. On a number of occasions Mr Hasemann asked Mr Harrison to park his motor cycle in the motor cycle park. Mr Harrison's initial response was to argue that One Steel was discriminating between motor cycles and cars. Mr Hasemann replied on those occasions, "Are you refusing to move your bike? " Mr Harrison would generally reply with words to the effect of, "I'm just here to make [tons]. I want to keep everyone happy". He would then move his motor cycle. Such conduct occurred frequently, particularly when Mr Harrison was on day shift for a period of weeks. On one occasion he moved his motor cycle but parked it in front of the door to the first aid hut in the maintenance department. Mr Hasemann told him, "That's a safety hazard, you know people can't get in there". He then moved it. The issue was raised at a Staff Advisory Board meeting on 26 June 2007. Mr Harrison continued to park his motor cycle in the car park. He said that the motor cycle park did not have 24 hour security. On a number of occasions Mr Hasemann heard Mr Harrison chanting in the lunch-room, sometimes after tool box meetings. He frequently used the well-known chant "Workers united will never be defeated". Some non-union members took offence at this. Mr Hasemann raised the matter with Mr Harrison, asking him to desist from the practice because it was offending other workers. Mr Harrison said, "I'm just trying to make the place better for everyone", or "I just want to make [tons]," or, "I just want to keep everyone happy. " Such responses were usually accompanied by laughter. Mr Hasemann also received complaints from other employees that Mr Harrison was leaving his AMWU hat on the coffee cup rack. The unhygienic nature of this practice was pointed out to him, and he was asked to stop. He then put his hat in the refrigerator. He would remove it from the refrigerator when asked to do so, but it would be back the next day. After a meeting on 21 January 2008 Mr Harrison relocated his hat to the top of the coke machine where it remained until he left the site. Another matter of complaint was that Mr Harrison was talking loudly on the two-way radio about union issues so that everybody could hear him. Mr Hasemann was told that other employees had become annoyed. He asked Mr Harrison to stop doing so. It was in response to this incident that Mr Patterson said that opinions about things such as sport, religion and union membership should be kept "to yourselves". Other evidence indicates that Mr Harrison used the two-way radio for union purposes on only one occasion. He said that he had used it only to say that he could not discuss union business. In cross-examination it was put to Mr Hasemann that the union stickers had appeared after the "Say No" stickers. He considered that they had appeared at about the same time. Concerning Mr Harrison's complaint against Mr Tavita, Mr Hasemann agreed that there had been a difference in their versions of the incident. Mr Harrison claimed to have said, "Do you mean say no to being fucked up the arse". He was cross-examined about the decision that Mr Harrison should apologize to Mr Tavita. He said that the decision was taken by anti-harassment personnel, and not by him. Mr Hasemann was cross-examined about his instruction that Mr Harrison not go on to the shop floor before his shift commenced. He said that Mr Harrison was regularly early to work. He agreed that it was not unusual for him to go to the shop floor prior to the shift meeting. He agreed that employees were permitted to sell raffle tickets on site. He did not agree that Mr Harrison had sold them on the shop floor. Mr Harrison's own evidence suggests that he sold raffle tickets on one occasion. Mr Hasemann also said that Mr Harrison would go to the shop floor 10 or 15 minutes before his shift to "do a changeover with his shift partner". When Mr Hasemann gave Mr Harrison his final written warning he said that it was for childish behaviour between him and Mr Tavita. The relevant conduct was the continual bickering between Mr Tavita and Mr Harrison. Prior to 27 October 2007 Mr Hasemann had spoken to both men "one on one in different times throughout that period where one complained about the other about what I call trivial things". Mr Harrison had complained about stickers on Mr Tavita's helmet. Mr Tavita had complained about Mr Harrison hanging his hat on a cup handle. Mr Harrison had also complained about Mr Tavita removing union literature. However Mr Harrison had no proof that he had done so. Mr Hasemann said that such conduct was occurring every two weeks over a period of about six months. Mr Hasemann was aware of an allegation that Mr Tavita had assaulted Ben Wharton. He did not consider Mr Tavita to be aggressive towards other employees. He had heard a rumour that there had been trouble and had inquired of Mr Wharton. Mr Wharton said that an incident had occurred, but that it was finished with, and that there was no ongoing problem. They had got into a fight. Both had been drinking. Mr Hasemann accepted that Mr Harrison genuinely believed that Mr Tavita had threatened him. However there were inconsistencies in the statements and a "history" between the two men. Mr Hasemann agreed that he and other managers believed that people should keep views about unions to themselves. He did not regard Mr Harrison as a trouble maker simply because he spoke about unionism. Mr Hasemann had asked a Mr Edwards about his reasons for joining the union. He was cross-examined as to why he had done so. Mr Hasemann said that he thought it was unharmonious and wanted to know what had occurred to cause Mr Edwards to make that decision. He considered that such information would provide "feedback" about his own performance. He said that he had never had a bad relationship with Mr Harrison. He was not aware of any suggestion that the "Say No" stickers had been produced by One Steel. He was first employed as an operator. Acacia Ridge had not been a union site during the time he worked there, although there had always been a fair proportion of union members on the site comprising approximately 20-25% of the workforce. Union membership was concentrated in the maintenance area which employed about 42 workers. In the mill area, where about 115 workers were employed, the level of union membership was lower. About a year prior to May 2008 the union increased its activity at the site. Organizers attended at the site about once every two months and, sometimes, twice a week. Mr Allard considered that the relationship between the "site" and the union was not "great" but was improving. There was some friction between a number of workers who were "anti-union" and others who were vocally "pro-union". The level of agitation increased, particularly in the mill area. It was not a significant problem as the workforce generally appeared to be fairly happy with the terms and conditions of their employment. The union delegates on site were Shane Harrison and Ben Wharton. In the months leading up to the 2007 federal election a number of anti-union workers began wearing "Say No" stickers on their helmets. Mr Allard understood the reference to be to union membership. The stickers were causing friction on the shop floor. Mr Harrison complained to Mr Hasemann about them. Mr Vic Patterson, the National Operations Manager of One Steel, issued a directive that all stickers be removed from helmets. Mr Harrison complained thereafter that another employee, Ray Tavita, had a sticker on his helmet. According to Mr Allard it was not a "Say No" sticker. Mr Tavita was a prominent "anti-union" employee. He was directed to remove the sticker. He complied with that direction. In early 2008 Mr Allard became aware that some mill workers on the shop floor were wearing union stickers on their uniforms. Mr Allard was not greatly concerned about this, although he understood that some employees were unhappy about it. Over the twelve months prior to May 2008, Mr Harrison had become more vocal regarding the union and the benefits which, as he perceived it, employees would derive from membership. Mr Allard did not consider this to be a problem from management's point of view. At some time prior to November 2007, Mr Harrison began to have issues with Mr Tavita. Although there is some ambiguity in Mr Allard's affidavit, it seems that Mr Tavita worked on a different shift from Mr Harrison, so that contact was minimal. In any event, there was a personality clash between them, involving threats of physical violence. At this stage Mr Allard intervened, issuing a final written warning to each of them regarding their conduct. The union filed a notice of dispute in the AIRC, challenging the final written warning to Mr Harrison. Following a conciliation conference, both final written warnings were downgraded to first written warnings. The union distributed promotional material such as cups, posters and the like on the site. Management had no issue with this, but some of the "anti-union" employees were unhappy about it and began to remove or damage such material. Mr Harrison and Mr Wharton approached Mr Allard and Mr Hasemann, saying that people were disposing of union literature left in the lunch-room. They asked that a notice board be erected for union literature. This was done. Mr Allard was not aware of any interference by employees with material which was posted on the board. In early April 2008 Mr Hasemann drew to Mr Allard's attention the fact that union members were wearing union stickers on their uniforms and were placing them on lockers, to which conduct some workers had taken objection. Union stickers were being placed on the lockers of both union members and non-members. Mr Allard told Mr Hasemann to, "let it go", in the hope that it would resolve itself. On 23 April 2008 Mr Hasemann reported to Mr Allard that he had received complaints from some employees at tool box meetings. Both union and non-union employees had complained to him about the stickers. He considered that the stickers were causing significant disharmony and agitation on the shop floor, and that something should be done about it. On 24 April 2008 Mr Allard issued the memorandum to which I have previously referred. Mr Allard said that the shop floor was a potentially dangerous place. Employees worked with very heavy loads and were exposed to a range of potential workplace health and safety hazards including sudden recoil, hot material, falling loads, swinging loads and exposed electrical wiring. All of this led him to conclude that disharmony on the shop floor should be minimized. Following his directive Mr Allard received no representations from employees or the union as to his decision. He was aware that the union had other material on site which displayed union affiliation including mugs, caps, posters and the like but had no problem with those things. He had no problems with the stickers until they started to cause trouble. On 2 May 2008, which was Mr Harrison's first day shift following the memorandum, Mr Allard observed that he was wearing an AMWU sticker on his neck. Mr Allard directed him to remove it. Subsequently, there was a meeting between Mr Allard, Mr Hasemann, Mr Newbegin and Mr Harrison (who was accompanied by Mr Antal). Mr Harrison was still wearing the sticker on his neck. Mr Allard asked him why he had failed to follow the direction to remove the sticker. Mr Harrison said that he wanted the direction in writing, that he would send it to the union, and that they would reply in seven days. Mr Allard said that he could not run the site in that way, that management could not put every instruction in writing, that Mr Harrison had been given a direct instruction and that he expected him to follow it. Mr Harrison yawned at this point. Mr Allard considered that this action was "intentional, pre-meditated and designed to display Shane's contempt for my position". Mr Allard emphasized the seriousness of the situation and said that Mr Harrison could be dismissed for his failure to follow a direct instruction. He asked if Mr Harrison understood the seriousness of the situation. Mr Harrison said that the meeting was over and complained that he was being victimized. Mr Allard said that the meeting was not over and asked him again if he understood that the matter was serious. Mr Harrison yawned again and said, "Do what you need to do". Mr Allard then told him that he was suspended from duty until 6 May 2009, and that the matter would be discussed further at 10.00 am on that date. Mr Harrison said, "Well, that's it then", and left. Subsequently, Mr Allard spoke to Mr Loggie from the union explaining that: On 6 May 2008 Mr Allard, Mr Newbegin and Mr Hasemann (from One Steel) and Mr Harrison and Mr Bradley (from the union) met. Mr Bradley said that he was not taking any minutes and asked if One Steel personnel would be doing so. Mr Newbegin indicated that he intended to take notes. Mr Bradley said that he might want a copy. Mr Allard said that the meeting was to discuss prior events, including the suspension of Mr Harrison; to give him an opportunity to comment on the detail and respond to the allegations; to discuss the issues as One Steel saw them; to allow Mr Harrison to add anything further; to break in order that One Steel could discuss the situation and return with a decision; and to give Mr Harrison a final opportunity to respond to that decision. Mr Allard then gave an account of his instruction to Mr Harrison. Mr Harrison nodded in apparent agreement. He was asked if he agreed with Mr Allard's version of events and said that it was spot on and about 99% accurate. He said, however, that he had not said that he would not remove the sticker, but that he would remove it if he got the instruction in writing. He said that he had not heard Mr Hasemann say that he had arranged to get together with "Jason" to sort the matter out (referring to the conversation at the birthday function). Mr Allard then said that Mr Harrison had yawned twice during the meeting on 2 May 2008. Mr Harrison said, "Well you guys had the witnesses, so you should know". Mr Allard said that the meeting on 2 May was for the purpose of giving him a chance to respond and he had not done so. Mr Allard said that it was disappointing that, at the meeting, he still had the sticker on his neck and did not remove it, although he had been told to do so. He asked Mr Harrison if he realized that he was not following an instruction from him as site manager. Mr Harrison agreed and said that he wanted the instruction in writing. He said that he had seen the memorandum, thought that it was childish and had told others that he could be just as childish. Mr Bradley said that the sticker was on Mr Harrison's person, and that it was unlawful for One Steel to request that he remove it. He said that the sticker was much like a tattoo or a ring, and that a person could not be asked to remove such a thing. Mr Allard said that the issue did not relate to the sticker but to the fact that Mr Harrison had failed to follow a direction. Mr Bradley said that he had discussed the issue with union members at the May Day march. Many were vocal about Mr Harrison being entitled to ask for the direction in writing. Mr Allard said that the request to remove the sticker was not unreasonable, and that it and the original memorandum were clear about what was required. He reiterated the position communicated in the memorandum: that any further use of stickers had to be authorized by management. He again said that the matter was not about stickers but about Mr Harrison's blatant disregard for instructions given by him, by Mr Hasemann and at the meeting on 2 May 2008. He said that his instructions were reasonable and that he was concerned about other instructions which Mr Harrison might ignore such as safety instructions. Mr Bradley said that safety instructions were lawful, and that Mr Harrison would follow them. The instruction to remove the sticker was not lawful. Mr Allard again asserted that Mr Harrison had ignored instructions and wilfully disobeyed them. Mr Bradley again said that Mr Allard had no right to ask Mr Harrison to remove anything from his body. Mr Allard again said that his instruction was reasonable and lawful, and that the issue was Mr Harrison's refusal to follow his direction. Mr Allard then said that it was impossible to run the business and the floor safely and effectively if an employee refused to follow a reasonable and lawful direction. He then asked Mr Harrison if he had anything further to say about the matter. Mr Harrison said that there were plenty of stickers in the workplace, on walls and cups, and that management was not addressing them. Mr Allard asked Mr Hasemann if stickers had been removed since he issued the memorandum. Mr Hasemann said that the majority had been removed, but that some had been hard to remove. The supervisors were still addressing the matters. Mr Harrison said that the AMWU stickers had probably gone first. Mr Hasemann said that, in fact, company stickers such as "Be Smart" safety stickers were removed first. Mr Allard again asked Mr Harrison if he understood how serious the situation was. He made no response. He was asked if he had anything further to add and said that he had nothing to say. Mr Allard then told Mr Harrison and Mr Bradley that they would adjourn for 15 minutes whilst the One Steel representatives considered the matter. Mr Harrison asked if he could have a drink of water. Mr Allard said, "Of course mate". Mr Harrison said, "Okay, good, as long as I follow a directive". Following that meeting Mr Allard considered the matter and consulted with One Steel's solicitors and senior management. He then decided that Mr Harrison's behaviour constituted misconduct justifying his termination. In so doing he took account of the fact that the direction had not specifically targeted union stickers, but had applied to all stickers; that Mr Harrison had provided no reasonable excuse for his decision wilfully and unreasonably to disobey an instruction; that he appeared to have no insight into the seriousness of his actions; and that he had shown no remorse, despite it being clear that management viewed the matter very seriously. Mr Allard was mindful of the fact that Mr Harrison was a union delegate, and that his decision was likely to result in trouble with the union. However he felt that he had no reasonable alternative. The meeting then resumed. Mr Harrison was asked if he wanted to say anything further. He made no response. Mr Allard apologized for the delay. He said that he had taken legal and corporate advice, and that he had decided to dismiss Mr Harrison, effective immediately, for wilful disobedience of a work instruction. Mr Harrison said that he knew it was coming and was not surprised. He said that he was lucky that there were plenty of jobs out there, and that he would have no trouble finding something else. He also asked about his entitlements. He was told that as he had been summarily dismissed he was only entitled to annual leave and long-service leave. He was not entitled to payment in lieu of notice. There was a discussion about his age. Mr Bradley said that there were levels of summary dismissal. Mr Allard then agreed to pay Mr Harrison five weeks' wages in lieu of notice. Mr Harrison said that union membership would double on site because of the incident and said something to Mr Bradley about getting flyers made up with his face on them, stating that he had been terminated for wearing a sticker. With regard to other matters which Mr Harrison raised in his affidavit, Mr Allard said that overtime had been available on site for Mr Harrison if he chose to work it. One Steel had been supportive of Mr Harrison's education as a union delegate. He had been provided with time off to attend to union issues. One Steel had, on occasions, asked him for suggestions as to improved productivity. In a second affidavit Mr Allard elaborated upon certain aspects of his earlier affidavit. When he first told Mr Harrison to remove the sticker, he asked that the instruction be given in writing. At the meeting on 6 May 2008, after he had advised Mr Harrison that his employment would be terminated, there had been a discussion with Mr Bradley concerning entitlements. Mr Bradley suggested that Mr Harrison was entitled to four or five weeks pay. Mr Allard eventually agreed, after discussions with the payroll section, that he should have five weeks' pay in lieu of notice. Mr Allard said that his decision to dismiss Mr Harrison had nothing to do with his union membership or position as a delegate. When he arcs up, we'll tell him we'll see him at arbitration with the same judges that presided. She won't take to him lightly. Mr Allard said that he did not know what was meant by the statement "we could capitalise on the situation". He agreed that Mr Newbegin's email suggested that Mr Harrison was a problem. He had not previously realized that Mr Newbegin had that opinion. Mr Allard did not consider Mr Harrison to have been a problem. He was generally a good worker. Mr Allard said that he thought point 1 was the most important of the grounds, and that Mr Harrison's previous disruptive conduct had not been a key factor in his decision. He did not agree that Mr Harrison had been significantly disruptive in his conduct. Mr Allard said that stickers first appeared in about May 2007, and that the "Say No" stickers were first in time, ahead of the union stickers. He said that the "Say No" stickers appeared to have been printed on a label printer. He did not know whether One Steel's resources had been used to print them. He had not heard anything about that subject. However he knew that at some stage it had been alleged that they were so produced. He said that the stickers looked as if they might have been made on the label printers at One Steel. There had been complaints about the "Say No" stickers. As to the question of threats of violence between Mr Harrison and Mr Tavita, he said that in October (presumably 2007) Mr Harrison complained that Mr Tavita had said something about taking him outside the gate. Mr Hasemann and Mr Croxford investigated the matter. He said he did not really believe that there were any threats, but he accepted that Mr Harrison thought that there had been. Earlier in the year Mr Tavita had made a complaint about Mr Harrison. There was a certain degree of "tit-for-tat" about their relationship. Step 2 The first written warning; ... Step 3 The final written warning, ... He agreed that it was. He said that the reason for the final warning was the "niggling between both Shane and Ray, that had occurred over the ... months leading up to this incident and some of the other ... issues that were causing disharmony on site that were also raised at the AIRC". Mr Allard agreed that in June 2007 Mr Harrison was told not to go to the shop floor outside of his shift hours. He agreed that he had, for some years, visited the shop floor when he arrived early for work. Mr Allard was asked if he agreed that Mr Harrison had been told to stop this practice at about the time he was appointed a delegate. Mr Allard agreed that the times seemed to match, but said that the reason for the ban was that there had been complaints about his hassling people over joining the union. It was suggested that the final written warning in 2007 was given because of Mr Harrison's position as a union delegate. Mr Allard denied this. I should refer to two particular aspects of Mr Allard's evidence. Firstly, he obviously considered that Mr Harrison and Mr Tavita had been in conflict on an ongoing basis over an extended period of time. Although he was not able to give particulars of the conduct it was, in my view, his honest perception of the relationship between the two men. Secondly, in his email Mr Newbegin seems not to have contemplated Mr Harrison's dismissal, although he seems to have contemplated his reacting to a final written warning. The email certainly suggests that as far as Mr Newbegin was concerned, Mr Harrison's behaviour had been a significant issue at the last conciliation conference in the AIRC. Mr Allard appears to have been less concerned by Mr Harrison's previous conduct. During 2007 and early 2008 he was shift supervisor for Crew No. 1 which included Mr Harrison. He said that from mid-2007 Mr Harrison, Mr Butler and Mr Wharton became active in promoting the union on site. During early 2007 Mr McGuire became aware that some employees on site were not happy with such promotion, Mr Harrison's conduct and, to a lesser extent, that of the other two men. There were five common areas of complaint. Some men simply did not want to be represented by the union. Mr McGuire responded to them by saying that they did not have to be represented, and that they were entitled to their own views, as Mr Harrison was entitled to his. A second group complained about Mr Harrison's methods in talking to them about the union and in trying to convince them to join. They felt that he had intimidated and harassed them. Mr McGuire told these people to complain to Mr Hasemann. The third group were employees who complained about Mr Harrison's conduct simply because it was persistent and annoying. Some said that they would not go to the lunch-room when Mr Harrison was there. A fourth group complained about Mr Harrison's use of stickers and pamphlets. This was "more of a petty, niggling issue and one that I didn't take much notice of at the time, though it did become more serious later in the year and during early 2008". Fifthly, some employees complained about Mr Harrison singing union chants at the top of his voice. He did this in the lunch-room, the change room or when walking around the mill area. On or about Monday 4 June 2007 Mr McGuire was present at a meeting with Mr Hasemann, Mr Newbegin and Mr Harrison to discuss an issue which had occurred on a previous shift. Mr Harrison had been seen on the mill floor at 5.20 am, handing out a union T-shirt and talking to employees about the union. Mr Tavita had told him to leave the floor. During the meeting Mr Hasemann and Mr Newbegin reminded Mr Harrison that he was not allowed on the mill floor before the start of his shift. It was disturbing the men whilst they were working. He was not to do it again. Mr Harrison replied, "The wave is coming". On 5 June 2007 there was another meeting on site attended by Mr Patterson, Mr Allard, Mr Hasemann, Mr McGuire, Mr Antal and Mr Harrison. Mr Harrison had been agitating for some time for the union to become involved in site issues. Mr McGuire understood that the meeting had been suggested by Mr Patterson and Mr Hasemann to enable Mr Harrison to identify the issues in question. At the meeting he was invited to raise his concerns. Amongst other issues was an allegation that jobs were going to "knee padders". The meaning of the term is not immediately clear. It may have been related to Mr Harrison's perception that there was nepotism on the site. Mr McGuire said that in early June, 2007 a number of workers in the mill started wearing "Say No" stickers on their helmets. Mr Harrison complained about this and asked that they be banned. At about the same time Mr McGuire became aware that AMWU stickers and the "Say No" stickers were causing friction in the workforce. In about June 2007 Mr Patterson and Mr Hasemann directed that all stickers on helmets, other than company logo stickers and workers' names, be removed. This was an unpopular decision with employees. They had the custom of personalizing their helmets with stickers. However they generally complied with the direction. They later tried to avoid it by putting stickers on their ear muffs. This practice was also banned. On 27 October 2007 Mr McGuire walked into the smoko room (this may be the room elsewhere described as the "lunch-room") at about 5.20 am. He saw Mr Harrison and Mr Edwards sitting at a table. Mr Tavita came into the room and said something which Mr McGuire could not hear. Mr Harrison told him to stop swearing in the lunch-room. Mr Harrison and Mr Tavita then exchanged comments. Mr McGuire told them to stop doing so and then left. A few moments later Mr Harrison came into the supervisors' office and said, "I want to make a complaint. Ray just threatened to take me out the gate". Mr McGuire said, "Are there any witnesses? " Mr Harrison identified three witnesses. Mr McGuire said, "Where is Ray? " Mr Booth then left the room to get him. Mr Harrison said, "What are you going to do about it? He threatened to take me out the gate". Mr McGuire said that as there were no managers at the site (it being a weekend) it would have to wait until Monday morning. About half-an-hour later Mr Harrison burst into the room again, saying, "Ray just threatened me again. That's twice! This is bullshit. He said he's gunna get me". On 29 October 2007 Mr McGuire met with Mr Croxford, Mr Antal and Mr Harrison for the purpose of discussing the complaint. Mr Harrison repeated his allegation and said that he was offended by Mr Tavita's swearing. Mr McGuire found this difficult to believe given his experience with Mr Harrison's own language. Further, he had never previously heard him complain about bad language. On Wednesday 31 October, the crew had a rostered day off and played golf together, followed by a few drinks. Mr Harrison attended, playing with Mr Antal. On 1 November Mr McGuire learned that Mr Harrison was suffering from stress and would not be coming to work for his night shift. On 28 November 2007 there was a meeting on site at which Mr Harrison was informed of the outcome of his complaint against Mr Tavita. Present at the meeting were Mr Hasemann, Mr Croxford, Mr Harrison, Mr Antal and Mr McGuire. Mr Hasemann said that the witnesses did not support Mr Harrison's version of what had occurred. He said to Mr Harrison, "This childish behaviour is to cease immediately". He said that Mr Tavita had been given a final written warning about the incident, and that Mr Harrison would also be given a final written warning. Mr Harrison said that he was disgusted with the way in which he had been treated. He refused to sign the "record of interview". Towards the end of 2007, or at the beginning of 2008, Mr Harrison, Mr Butler and Mr Wharton commenced to wear stickers on their clothing. The issue of stickers on lockers also became a problem amongst employees. On 4 March 2008, Mr McGuire told Mr Wharton to put a large union sign in his car. He had left it in an office. Mr Allard subsequently complained that it had been propped up on the outside of the car and wrapped around the windscreen. Mr McGuire told Mr Wharton to put it inside the car. On 2 May 2008 Mr McGuire saw Mr Harrison at the pre-shift meeting at 5.55 am. He had a sticker on his neck. Mr McGuire said to him, "You're asking for trouble with that sticker on your neck mate". He next saw him in the smoko room prior to the barbeque. The sticker was still on his neck. He said to him, "Sometimes it's better to live to fight another day". Mr Harrison replied, "You know me Dan, I'm a shit stirrer. I gotta wear it. I can't take it off". Mr McGuire said, "You're being foolish". The barbeque started at 6.00 am, and at about 6.30 am, Mr McGuire saw that Mr Harrison still had the sticker on his neck. He subsequently heard from Mr Allard that he had directed Mr Harrison to remove the sticker, and that Mr Harrison had refused. Mr Hasemann told Mr McGuire that he was meeting with Mr Harrison at 1.15 pm and asked him to attend. Subsequently Mr McGuire spoke to Mr Harrison saying, "Mate, I think you've made your point. You probably want to remove the sticker off your neck please". Mr Harrison did not do so. He again said words to the effect of, "Come on Dan you know me. I'm a shit stirrer. I gotta stir the shit". Mr McGuire was late for the meeting and arrived as Mr Harrison was leaving. He said, "I've been suspended. This is fucking bullshit". Mr McGuire said, "Shane, I told you to take it off your neck. You made your point at the barbeque". Mr McGuire did not attend the meeting on 6 May 2008 at which Mr Harrison was dismissed. He saw him afterwards. Mr Harrison said that he would be back. Mr McGuire said that Mr Harrison frequently arrived at work early and went on to the floor before the commencement of his shift to obtain information about the state of work that he was to undertake when the shift started. At some stage, however, it was decided that employees should not go on to the shop floor before the start of the shift. Only team leaders were allowed to do so. Shift operators would attend the pre-shift meetings, presumably for the purpose of providing the information previously supplied on the floor. On 14 April 2008 he attended a meeting at Acacia Ridge with Mr Newbegin, Mr Harrison and Mr Loggie. The mood of the meeting was "very jovial and friendly". It was a "meet and greet" meeting and not a "union and management" meeting. At the commencement of the meeting Mr Harrison stood at the door and removed about five stickers from his work shirt. He then said words to the effect that, "I have removed them so you don't need to worry". Mr Clement did not understand the significance of these actions. The following conversation then took place. Sorry Terry cannot be here today, he's been called away, but I still wanted to meet with you to introduce myself and meet you. I know Vic Patterson and Terry did not get on and I know Vic has gone now and I am looking for a better relationship with management. He is from Victoria you know [laughing]. Mr Clement said, "Ok, let me give you a brief run down on myself and where I am from". Mr Clement then told Mr Loggie that he was once a delegate with the Electrical Trades Union, had a long association with unions and had worked at most levels in the company, starting at the shop floor. He said that his management style was to involve people, that he was not anti-union and intended to focus his energies on improving the business. He then explained his own role in the company. He was performing an operational role until a new manager was recruited. Mr Loggie again said that the union was keen to work with management to improve the business. This site and in fact our whole business needs to improve. We have very strong opposition from importers and we have been given a chance to survive by the merging of the two companies. If the unions or anyone else for that matter has ideas or solutions to make this happen I am more than happy to listen and work through the problems. This site survived over the Newcastle business because it has a "can do" attitude and it is a leaner, more productive lower cost pipe maker. Mr Loggie agreed to send Mr Clement a copy of a recent survey. He said that he was there to talk about moving the relationship forward rather than about a collective agreement. He said that the union had experienced problems in visiting the site to meet potential members. Yet, on each occasion you have not had a single person from the floor come to see you. I am not going to help or hinder this process. He also denied that there was any conversation concerning stickers. On 2 May 2008 Mr Clement received a telephone call from Mr Allard concerning Mr Harrison. Mr Allard said that an issue had arisen that morning. He described the history of the dispute concerning stickers. He said that the dispute had led him to issue a written memorandum banning all stickers on clothing and lockers. He outlined Mr Harrison's conduct on that day and at the meeting and said that Mr Harrison was stood down until 6 May 2008. He said that Mr Harrison was a union delegate, and that the sticker was a union sticker. Mr Clement said that Mr Harrison should be treated as any other employee would be treated and advised Mr Allard as to the conduct of the meeting. He also said that he would speak to the company's Employee Relations Adviser. He subsequently did so and then had a further telephone conversation with Mr Allard, reassuring him as to the approach which he was proposing to follow. On 5 May 2008, Mr Clement sent Mr Allard an email. The email is quite detailed. I will return to it in a moment. On Tuesday 6 May 2008 the Employee Relations Adviser, Mr Dunleavy, and Mr Clement had a telephone conference with Mr Allard before his meeting with Mr Harrison. They discussed legal advice which they had received and also the need to extend procedural fairness to Mr Harrison. About 40 minutes later Mr Allard telephoned to say that the meeting with Mr Harrison had been adjourned in order to consider the action to be taken. They discussed options. Mr Allard said that he thought termination was his only option, given Mr Harrison's conduct and attitude. Mr Clement advised him that he should not be influenced by any fear of union action. Returning to the email of 5 May 2008, it primarily recommended that Mr Allard focus upon the conduct in question, Mr Harrison's attitude towards it and his reasons for his conduct. Be clear with the wording --- document everything up. However Mr Clement left open to Mr Allard the option of not proceeding in that way, depending upon his feelings concerning the meeting. In cross-examination Mr Clement said that he was responsible for the three sites owned by One Steel. He said that the other two sites were covered by union collective agreements. The company had not, at that stage, considered the possibility of an enterprise agreement at Acacia Ridge. He was aware that the union was interested in negotiating such an agreement. He said that Acacia Ridge had "a lower conversion cost and was a more productive unit on a tonnes per man measure as well as a cost measure than the equivalent mills in the Newcastle business". He was cross-examined as to whether labour costs were lower at Acacia Ridge than at the other sites. He claimed only to know that the conversion cost was lower. I understand the term "conversion cost" to be the cost of turning raw product into pipe. Concerning the meeting on 14 April 2008 Mr Clement did not recall saying that he was happy to keep the site as a non-union site or that its success was because it was a non-union site. He agreed that he probably made it clear that in view of the large number of non-union employees, his focus would not be on "dealing with ... unions or non-unions", but rather on improving the business. He did not want to go too far down the path of dealing with any group at this stage, given that he was in an acting role. He did not recall Mr Loggie saying that the company had, in the past, encouraged a division between union and non-union personnel. He had no recollection of Mr Loggie saying that the "Say No" stickers had been produced by somebody using company equipment. From 27 August 2007 to 31 March 2008 he was the acting Operations Manager. On 29 October 2007 Mr Hasemann asked him to participate in a number of interviews in relation to a complaint by Mr Harrison against Mr Tavita. Mr Harrison was asked to attend a meeting on 28 November 2007 to finalize the investigation. Those attending were Mr Croxford, Mr Hasemann, Mr McGuire, Mr Antal and Mr Harrison. Mr Harrison was told that both he and Mr Tavita had acted inappropriately by engaging in childish behaviour. In the course of the meeting Mr Harrison responded by standing up and swearing. He received a final written warning and was told that Mr Tavita had been similarly warned. At about 1.30 pm on 28 November 2007 Mr Croxford received a telephone call from Mr Bradley. He objected to the words "childish behaviour" in the warning. Mr Croxford subsequently wrote to Mr Bradley indicating that the words "childish behaviour" would be deleted and the words "inappropriate and unacceptable behaviour" inserted. Mr Croxford was not cross-examined. Mr Newbegin's knowledge of matters relevant to this case was largely second-hand. He was, however, present at a meeting on 2 May 2008 between Mr Harrison, Mr Antal, Mr Allard and Mr Hasemann. When Mr Harrison entered the room he had a sticker on his neck. Mr Allard asked why he had not removed it as directed. Mr Harrison said that he wanted the instruction in writing, that he would send it to the union and that they would reply within seven days. Mr Allard said that he could not run the site in that way; that management could not put every instruction in writing; and that Mr Harrison ought to have acted on the instruction. Mr Harrison yawned intentionally. Mr Allard reiterated the seriousness of the situation and advised Mr Harrison that he could be dismissed for failure to follow a direct instruction. He asked Mr Harrison if he understood the seriousness of the situation. Mr Harrison said that the meeting was over, and that he was being victimized. Mr Allard said that the meeting was not over. He asked Mr Harrison again if he clearly understood the seriousness of the matter. Mr Harrison again yawned intentionally and said, "Do what you need to do". Mr Allard suspended Mr Harrison until Tuesday 6 May 2008, indicating that the meeting would reconvene on that date to discuss the outcome of Mr Harrison's actions. Mr Harrison said, "Well, that's it then", and left. Mr Newbegin was also present at the meeting on 6 May 2008, together with Mr Allard, Mr Hasemann, Mr Harrison and Mr Bradley. Mr Allard outlined the purposes of the meeting. He again said that he had instructed Mr Harrison to remove the sticker. He asked Mr Harrison if he agreed with his version of events. Mr Harrison said that it was "spot on" and "about 99% accurate". He said that there were only two points which he wished to address. Firstly, he had not said he would not remove the sticker. He had said that he wanted the direction in writing. If he had received it in writing he would have removed the sticker. Secondly, he had not heard Mr Hasemann say that he had arranged to get together with Mr Allard and sort out the matter. Mr Allard said that the meeting held on 2 May 2008 had been for the purpose of giving Mr Harrison a chance to respond to the allegation that he had disobeyed a direction. He had not done so. Mr Allard said that it was disappointing that at that meeting, he still had the sticker on his neck and did not remove it during the meeting. He asked Mr Harrison if he realized that he had not followed an instruction from the site manager. Mr Harrison said that he wanted the instruction in writing. He had seen Mr Allard's memorandum and thought that it was childish. He had told others that he could be just as childish. Mr Bradley said that the sticker had been on Mr Harrison's person, and that it was unlawful to request that he remove it. He described the sticker as being much like a tattoo or ring and said that you could not ask people to remove such things. Mr Bradley said that he had discussed the issue with union members at the May Day march. Many were vocal in supporting Mr Harrison's entitlement to ask for the direction in writing. Mr Allard said that the request to remove the sticker was not unreasonable, and that it and the original memorandum were clear about what was required. He said that any further use of stickers had to be authorized by management. The issue was not about stickers but about Mr Harrison's blatant disregard of an instruction. Mr Allard said that his instruction was reasonable, and that he was concerned that Mr Harrison might ignore other instructions such as safety instructions. Mr Bradley said that a safety instruction was lawful, and that Mr Harrison should follow it. The direction to removal a sticker was not. Mr Bradley again said that Mr Allard had no right to ask Mr Harrison to remove anything from his body. Mr Allard said that the request was lawful and reasonable, and that the issue was Mr Harrison's failure to comply with his direction. Mr Allard asked Mr Harrison if he had anything to say about the matter. Mr Harrison said that there were plenty of stickers in the workplace, on walls and cups, which were not being addressed. Mr Allard asked Mr Hasemann if stickers had been removed since the memorandum was issued. Mr Hasemann said that the majority had been removed, but that some had been hard to remove. The supervisors were still addressing the matter. Mr Harrison said that the AMWU stickers probably went first. Mr Hasemann said that company stickers, such as "Be Smart" stickers, were removed first. Mr Allard asked Mr Harrison if he understood how serious the situation was. Mr Harrison made no response. He was asked if he had anything further to add and said that he had nothing. Mr Allard then indicated that he would adjourn the meeting for 15 minutes so that the issue could be discussed. Mr Harrison asked if he could have a drink of water. Mr Allard said, "Of course mate". Mr Harrison said, "Ok. Good. As long as I follow a directive". The meeting adjourned for 30 minutes during which Messrs Allard, Hasemann and Newbegin discussed Mr Harrison and Mr Bradley's comments. The meeting was reconvened and Mr Allard asked if there was any further response from Mr Harrison. He made no response. Mr Allard apologized for the delay, explained that he had sought legal and corporate advice and said that, on the basis of wilful disobedience of a work instruction, he had decided summarily to dismiss Mr Harrison, effective immediately. Mr Harrison said that he knew that it was coming and was not surprised. He said that he was lucky that there were plenty of jobs, and that he would have no trouble finding something else. He asked about his entitlements. Mr Allard said that on summary dismissal the company had only to pay annual leave and long service leave and did not have to pay money in lieu of notice. Nonetheless, One Steel was willing to pay Mr Harrison for two weeks. Mr Harrison and Mr Bradley were not happy with that as Mr Harrison was over 45 years of age. Mr Bradley said, "There is summary dismissal and there is summary dismissal". Mr Allard agreed to pay five weeks' pay in lieu of notice. Mr Harrison said that union membership would now double on site and, addressing Mr Bradley, said something about getting flyers made up with his face on them and stating that he was terminated for wearing a sticker. Mr Newbegin swore a further affidavit in which he set out the various events in rather more detail. However it is not necessary that I summarize it. He also responded to statements in other witnesses' affidavits but again, the matters are not of great significance. Little in his cross-examination added to, or detracted from, his other evidence save that he expressly denied having said that an employee had been counselled about the production of "Say No" stickers. He said, concerning his email, that the Commissioner had, on the previous occasion, expressed a desire to see Mr Harrison again if his behaviour should deteriorate. Whether or not that was a fair assessment of events in the AIRC is disputed. I cannot readily resolve that dispute. He was responsible for the Melbourne and Brisbane sites. He reported directly to the General Manager. From January 2008 he was also responsible for the Newcastle site. He said that staff were free to choose whether or not to join a union, a message which he reinforced whenever the opportunity arose. Between early and mid-2007 there was difficulty at Acacia Ridge concerning stickers. A small group of employees, including Mr Harrison, were distributing union stickers and material in the lunch-room and around the site. They also wore union stickers on their helmets. Mr Patterson considered that they were entitled to have their views. However another group of employees, who were opposed to union representation on site, felt that Mr Harrison and his colleagues were being "a little too heavy-handed in their approach". A number of workers approached him to complain. Such workers commenced to wear "Say No" stickers on their helmets. The matter was raised at a Staff Advisory Board meeting on 26 June 2007. Other employees at the meeting expressed concern about Mr Harrison's conduct. In particular they objected to the volume of union material in the lunch-room and on notice boards and to Mr Harrison's harassment aimed at persuading them to join the union. The meeting became heated. Eventually Mr Schreiber told them that they needed to get back to the basics, doing what they did best. That was making tube. Mr Patterson said that he would consider directing that stickers on helmets be removed, and that Mr Harrison had to stop harassing employees about joining the union. In about June or early July 2007 Mr Patterson and Mr Hasemann spoke to all staff on site, informing them that stickers on helmets were banned. A small number of employees then put stickers on their ear muffs. A further direction was issued, banning that practice. In the lead-up to the federal election in November 2007 Mr Harrison, Mr Wharton and Mr Butler placed quite a lot of union literature in the lunch-room, either on tables or on notice boards. Again, a number of complaints were received about this practice. Mr Patterson asked Mr Harrison to, "tone it down a bit". He said that if he wanted to be in the union that was his business. However he was offending some people by being a little too aggressive in his approach. Mr Patterson spoke to him in this vein on a few occasions during 2007. Each time Mr Harrison said that he would try to be more sensitive to others' views. In late 2007 and early 2008 Mr Harrison and a few other workers started to wear AMWU stickers on their shirts. Initially, Mr Patterson did not intervene. However unidentified persons then started to put stickers on other people's lockers. Some stickers on lockers were vandalized. The general mood of the workplace was becoming tense and unhappy. On 12 July 2007 Mr Patterson, with Mr Schreiber, attended a meeting organized by Mr Harrison and Mr Butler. The purpose of the meeting, as explained by Mr Harrison, was to give him and Mr Butler an opportunity to raise matters which were "issues ... on site". Initially only Mr Schreiber, Mr Patterson, Mr Harrison and Mr Butler were present. Then Mr Loggie and Mr Bradley (both of whom were union officials) arrived, apparently expecting to participate in the meeting. Mr Schreiber and Mr Patterson had not been told that they were attending. This seems to have caused some tension. In cross-examination Mr Patterson agreed that as compared to the Melbourne and Newcastle sites, the Acacia Ridge site had a relatively low level of union membership. It was also the only site which did not have a collective agreement. He denied that One Steel wished to maintain that situation at Acacia Ridge. He said that it was more an agreement between the company and the employees. There had never been any indication that the employees wanted a collective agreement. He was referred to certain slides, copies of which were attached to his affidavit. He used them at a staff meeting, also held on 12 July 2007, concerning a proposed corporate merger. Some of the slides explained the course of negotiations where a union was involved. They would have been appropriate to inform a largely non-union audience concerning such matters. Others related to corporate amalgamation. Some compared operations at the three One Steel sites, although the point of the comparison is not clear. It was suggested to Mr Patterson that this meeting had occurred after the union had notified a bargaining period, and that the purpose of his presentation had been to give the company's perspective on that process. Mr Patterson said that the purpose of the meeting was rather to answer questions which employees had raised. Mr Patterson conceded that there may be less disruption during any bargaining period if there are fewer, rather than more, union members on site. However he denied that One Steel had an interest in minimizing the level of union activity. He denied that the company had a "strong preference" against union activity in support of an enterprise agreement. However he agreed that it was important that any disruption be minimized. He agreed that on the day on which he left One Steel, he had a conversation with Mr Harrison in which he said that he had seen militant unions in Melbourne, and that "it" just did not work. She was also the contact officer for bullying or harassment complaints. On 1 June 2007 she received a complaint from Mr Tavita concerning an incident in the lunch-room involving Mr Harrison. She attended a meeting with Mr Tavita, Mr Frazer and Mr Hasemann to discuss the complaint. Minutes of that meeting were annexed to her affidavit, as were minutes of the Staff Advisory Board meeting held on Tuesday 26 June 2007, which meeting Mr Harrison attended. The motor cycle parking issue was raised at the latter meeting, although without any suggestion (in the minutes) that Mr Harrison was involved. Mr Harrison raised a number of matters. Need to get back to basics what we do best in is making tubes. SAB provides venue to bring these issues for resolution. Each member takes responsibility for presenting issues, listening and informing their team. " Ms Rankin said that an employee other than Mr Harrison had used the term "witch hunt". On or about 29 October 2007 Mr Harrison handed to Ms Rankin a written complaint against Mr Tavita, arising out of an incident said to have occurred on 27 October 2007. The complaint is set out in my summary of Mr Harrison's evidence. Generally, neither he nor the company considered that membership or non-membership of a union was relevant to a person's capacity to do a job. It was a matter of complete indifference to him whether or not Mr Harrison was a member of the union and whether or not he expressed his views on site. For a long time One Steel accepted Mr Harrison's conduct in distributing stickers and placing union pamphlets and notices in the lunch-room and elsewhere on the site. During 2007 and 2008 the company provided the union with meeting facilities for use during visits to the site. It also allowed Mr Harrison to post notices advising staff of the times, dates and locations of such visits. At some time in mid or late 2007 Mr Harrison's behaviour started to cause concern. Mr Schreiber received reports of an increasing number of formal and informal complaints by workers. They were to the effect that Mr Harrison was pressing them to join the union and/or was otherwise harassing or annoying them. As a result various directives concerning stickers were issued. Mr Schreiber was concerned that the tensions on site generated by the issue might lead to some form of physical altercation. On 26 June 2007 Mr Schreiber, Mr Patterson, Mr Allard and a number of workers' representatives, including Mr Harrison attended a Staff Advisory Board meeting. This was the meeting referred to by Ms Rankin. Mr Harrison particularly complained about the "Say No" stickers. Mr Schreiber understood that those stickers had emerged in response to the appearance of AMWU stickers. Mr Harrison said that the "Say No" stickers were anti-union and asked management to ban them. He was quite passionate about the issue. Two other employee representatives interrupted Mr Harrison to complain about his conduct towards them. They said that he had been conducting a witch hunt to recruit new union members, and that his aggressive style was inappropriate and offensive to them and others. They felt that they were being pressed by him to join the union and/or to share his views, or at least not to oppose them. Mr Harrison did not take these comments with good grace. The meeting became heated. One of the other workers said words to the effect of, "Stop jamming it down my throat". At some stage Mr Patterson said that he would be willing to consider banning the "Say No" stickers if Mr Harrison also did his part and stopped bailing people up at the gate and doing other things that upset and annoyed them. It was as a result of this meeting that helmet stickers were banned. In early July 2007 Mr Harrison came to Mr Schreiber's office. This seems to have been the meeting which, according to Mr Harrison, occurred on 11 June 2007. Mr Schreiber denied that any meeting occurred on that day. Mr Harrison said that he "represented the employees". Mr Schreiber said that the Staff Advisory Board represented the employees. He said that if Mr Harrison were elected to the Staff Advisory Board he would represent employees. (Other evidence suggests that Mr Harrison was already a member of that board. ) Mr Harrison said nothing about being an elected union delegate. It may be that at this meeting, whenever it occurred, Mr Harrison intended to tell Mr Schreiber that he was now a union delegate, but that Mr Schreiber had not understood him. Mr Schreiber said that he had not expected union representatives at the meeting on 12 July 2007. He also disputed a complaint by Messrs Bradley and Loggie that the room provided for meetings with employees during visits was unsuitable. There was more private access to the room through an outside entrance. On 2 May 2008 Mr Schreiber was in Mr Clement's office in Newcastle when Mr Allard rang concerning Mr Harrison's refusal to remove a sticker from his neck. They discussed the handling of the matter. Mr Schreiber stressed the need for Mr Allard to put the complaint to Mr Harrison and offer him an opportunity to respond. It was said that if Mr Harrison apologized suitably, Mr Allard should record "the kind of behaviour he would promise to abide by in the future". Mr Schreiber did not, at that time, contemplate the possibility of dismissal. Later that day Mr Allard advised him of the outcome of the meeting. Mr Schreiber was shocked by Mr Harrison's refusal to explain or apologize for his behaviour and by the fact that he had worn the sticker to the meeting. Since February 2007 he had been team leader for Crew No. 3. During 2007 and 2008 he was not in the same crew as Mr Harrison, nor had he ever been his supervisor. He had never been his "2IC". Mr Tavita had always understood One Steel's position to be that union membership was a matter of choice for individual employees. He remembered a presentation by Mr Patterson in July 2007. There had been concern amongst employees that a proposed merger would mean that they would have to join a union. Mr Patterson made it clear that this was not the case. In the first half of 2007 Mr Harrison became very aggressive in connection with union membership. Mr Tavita started to avoid the lunch-room in order to avoid Mr Harrison and Mr Harrison's talk about the union. Mr Tavita found such talk to be loud and annoying. Mr Harrison also left union material around the lunch-room and put union notices on the notice board. He would complain loudly that they had been thrown into the bin. At about 5.30 am on 1 June 2007 Mr Tavita was in the lunch-room talking to colleagues. He was wearing a hat with a "Say No" sticker on it. He had attached the sticker some weeks previously because he was "sick and tired" of Mr Harrison trying to force his union views upon him and others. A group of employees, including Mr Tavita, made the stickers and handed them to people who, they thought, were similarly "sick of being pressured" by Mr Harrison. On that morning Mr Harrison walked into the lunch-room with a couple of "Say No" stickers in his hand. He said to Mr Tavita words to the effect of, "I suppose you are one of those who said no". Then, according to Mr Tavita, he said that he was going to "fuck me up the arse" and repeated that comment. Mr Tavita said that the comment "came out of the blue", and that there had been no previous words between them at that time, although there was tension in the workplace between union members and people wearing "Say No" stickers. Mr Tavita became angry and left the lunch-room without saying anything to Mr Harrison. He went to Mr Hasemann's office to make a complaint. Three other people heard Mr Hasemann's comment: Michael Wilson, Philip Nipress and Solomon Tauo. Later that day Mr Tavita attended a meeting concerning his complaint. Also present were Mr Frazer, Ms Rankin and Mr Hasemann. In late June 2007 Mr Harrison was on the shop floor when Mr Tavita's crew were working. Mr Harrison was trying to talk to some of the men about the union. Mr Tavita, as team leader, told Mr Harrison to leave the floor immediately. He said that Mr Harrison was not happy about this direction. Mr Tavita said that he did not think it was a good idea to distract the men whilst they were doing dangerous work on the shop floor. It seems probable that this was the incident which other witnesses identified as having occurred on 4 June 2007. Other evidence suggests that Mr Hasemann directed Mr Tavita to tell Mr Harrison to leave the floor. Mr Tavita understood that in late 2007, Mr Harrison made a formal complaint to Mr Hasemann about the "Say No" stickers. The complaint was made at a meeting of the Staff Advisory Board. Mr Tavita was not present. Subsequently, Mr Patterson and Mr Hasemann spoke to staff on site, directing them to remove all stickers from helmets, including AMWU stickers and "Say No" stickers. At that stage Mr Tavita had two stickers on his helmet, a "Say No" sticker and another that said "Big Black Playboy King" which he wore as a reference to his Samoan heritage. He was very fond of it. Following Mr Patterson's direction he removed the "Say No" sticker but did not remove the other sticker. He was subsequently told to do so and complied with the direction. Towards the end of 2007 Mr Harrison caused friction amongst employees in a number of ways. He frequently hung his AMWU cap over one of the coffee mugs, or on a coffee mug hook, or put it in the refrigerator. The refrigerator had a clear door so that the union logo was visible. A number of people told Mr Harrison that this was a disgusting habit, and that he should hang his hat on the hat rack. Mr Harrison regularly sang union chants in the lunch-room, including the chant "Workers united will never be defeated". A number of employees asked him to stop. Mr Tavita found it annoying. Mr Harrison persisted. He often parked his motor cycle in a car park which was reserved for shift workers. Frequently, he used the "employee of the month" car park. Designated undercover parking for motor cycles was located about 100 metres away. On 27 October 2007 Mr Tavita walked into the lunch-room, talking and laughing. In response to something said to him he replied, "Bull shit". The comment was not directed at Mr Harrison. Swearing was quite common in the lunch-room. Nonetheless Mr Harrison said to Mr Tavita, "No swearing in the [lunch-room]". Mr Tavita responded, "Every day I hear you swearing in the [lunch-room]". Mr Harrison said, "You should respect people in the [lunch-room]". Mr Tavita said, "I do respect people in the [lunch-room]", and, "Does that mean that if I see you at the gate I can swear at you? " Mr Harrison walked out of the room. Later that morning Mr Tavita heard another employee in the lunch-room swear in the presence of Mr Harrison. Mr Harrison did not say anything. Mr Tavita walked past Mr Harrison and said to him, "Why didn't you say anything to Chris while he was swearing? " Mr Harrison asked him to repeat what he had just said. Mr Tavita did not reply and kept walking. Mr Tavita considered his language to have been relatively mild. He had frequently heard Mr Harrison swear in the lunch-room, including the occasion in June 2007 when Mr Harrison had insulted him. Mr Tavita had not had much to do with him since that incident. On 29 October Mr Hasemann and Mr Croxford interviewed Mr Tavita about the incident. He denied having said words to the effect of "out the gate". On 9 November 2007 he attended a meeting with Mr Croxford, Mr Hasemann and Mr McGuire in relation to the incident. He was told that his childish behaviour with Mr Harrison had to cease and he was given a final written warning which he signed. In about April 2008 Mr Tavita was talking to Mr Baker, a training officer, in the locker room. He noticed that someone had put an AMWU sticker on his locker. He was not happy about it. He showed it to Mr Baker and then ripped it off. Concerning the manufacture of the "Say No" stickers, he said that he and a number of other employees had conceived the idea of such stickers but he was not aware of how, or by whom, they had been manufactured. In this respect he seems to have resiled or, at least, qualified his affidavit evidence. Mr Tavita said that he was not opposed to unions. A statement made by him on 22 November 2007 was put to him. In it he said that, "historically I have been against unions". The statement was prepared in connection with a claim by Mr Harrison arising out of Mr Tavita's alleged threats. Mr Tavita asserted that he had not read the statement carefully before signing it. He said that he had been a member of a union prior to coming to Australia. He had no recollection of Mr Harrison ever apologizing to him for the incident which occurred in early June 2007. As to the assertion that he had previously had a physical exchange with Mr Wharton, he denied having "king hit" him. He said that after both of them had taken a considerable amount of liquor, Mr Wharton provoked him, threw a punch at him and missed. However Mr Tavita responded in kind and did not miss. In mid-2007 Mr Harrison was becoming increasingly vocal in support of the union. He often wore a union T-shirt or cap and often spoke to workers in the lunch-room about the benefits of joining the union. During his employment at Acacia Ridge Mr Baker had not previously known union membership to be an issue. The company always made it clear that it was a matter for each individual employee to decide whether or not to join a union. However, in 2007, there were union notices on notice boards in the lunch-room, including notices about future site visits. The issue of union membership was raised in mid-2007 in connection with a proposed corporate merger. A number of workers were concerned that they might be pressed to join a union at Acacia Ridge. Mr Patterson defused this concern in a presentation given in July 2007. Mr Baker did not take much notice of Mr Harrison's activities until workers suggested that he was upsetting or annoying them. They complained that Mr Harrison was harassing them about joining the union, that he would talk loudly about the union in the lunch-room and that he would "bombard" them with union literature and stickers. Mr Baker would normally respond by telling people that it was a matter for them whether or not they joined the union. He would also tell them that if they wanted to make a formal complaint about Mr Harrison they should speak to a supervisor. At some stage a number of the lockers in the locker room had stickers on them. The stickers were of all types. In addition to union stickers there were Harley Davidson stickers, West Coast Choppers sticker, and an Independent sticker (a clothing brand). From about the first half of 2007 union stickers started appearing around the site. They were in the lunch-room, on portable toilets, on mugs and on notice boards. This occurred at about the same time as the complaints about Mr Harrison's conduct. Mr Baker noticed that other employees were wearing "Say No" stickers, and that this caused considerable tension. Subsequently, Mr Patterson directed that all stickers be removed from helmets. He subsequently extended the direction to ear muffs. A few employees, including Mr Harrison, started wearing them on their clothing. In late 2007 or early 2008 stickers on lockers became a problem. Mr Baker received complaints from workers, including Mr Tavita, concerning AMWU stickers on lockers. Mr Tavita removed the sticker on his locker. Mr Baker said to Mr Tavita, "If you're really annoyed about it, you should go talk to Graham," meaning Mr Hasemann. Mr Tavita indicated that he would do so. About a week later, Mr Baker received a similar complaint from a mill operator called Minh Nguyen. Mr Nguyen said, "I see I've got more union stickers on my locker again. I don't like them". Mr Baker said that he should take the matter up with Mr Hasemann if he was concerned about it. In cross-examination Mr Baker said that he first became aware of the "Say No" stickers after union material started to appear on the site. It was put to him that stickers on lockers did not become an issue until after stickers on helmets and ear muffs were banned. He disagreed with that proposition. His duties included giving advice and guidance in relation to industrial and employee relations issues. He received a telephone call from Mr Clement in the late afternoon of 2 May 2008. It concerned Mr Harrison. Mr Clement had no personal knowledge of the matter but had received information from Mr Allard. A telephone hook-up with Mr Allard was arranged for 6 May 2008. Mr Dunleavy advised Mr Allard that as Mr Harrison was a union delegate their actions would be scrutinized by the union and probably challenged. He told Mr Allard that he had to make sure that he did everything by the book. Mr Dunleavy's evidence was not otherwise particularly relevant. There had been a number of issues arising out of union members placing union stickers on other employees' lockers. Mr Harrison had been involved in these incidents. Mr Durham had seen Mr Harrison wearing stickers on his uniform. Mr Harrison had not approached Mr Durham about joining the union. Mr Durham said that, on occasions, there were literally dozens of stickers on lockers. He did not know whether the relevant lockers belonged to union members. On occasions, stickers were damaged or removed. Stickers were a subject of conversation on the shop floor. He heard suggestions that stickers were vandalized in retaliation for stickers being placed on non-union, or anti-union, employees' lockers. Between October 2007 and April 2008 employees regularly made comments about the sticker issue, demonstrating annoyance concerning the AMWU stickers. In cross-examination Mr Durham said that pushing of the union cause seemed to be the major problem rather than the stickers themselves. In early to mid-2007 Mr Harrison, Mr Butler and Mr Wharton became very vocal concerning union affairs. At about this time AMWU stickers commenced to appear on the site. They were offered to employees who wore them on their helmets. In or around June 2007 a few employees made their own "Say No" stickers and wore them on their helmets. The "Say No" stickers annoyed Mr Harrison, Mr Butler and Mr Wharton. Mr Harrison, in particular, said that he thought that the stickers should be banned by management. At the same time the employees who wore the "Say No" stickers were asserting that Mr Harrison and his associates were going too far in promoting the union on site and harassing people about joining. Mr McClintock did not support either side. There was a fair bit of unrest in 2007 and 2008. Previously, the site had been happy and "pretty great". A few weeks after the "Say No" stickers appeared, Mr Hasemann issued a direction to all employees to remove all stickers from helmets. People then started wearing stickers on their ear muffs, which practice was also banned. Stickers then started appearing on lockers. People became unhappy about that. Some complained that stickers had been removed from their lockers. Others complained that they had been scratched off. A number of people said that they had made complaints to management. In late 2007 and early 2008 rectangular AMWU stickers and round white AMWU stickers appeared. About the same time Mr Harrison and others started wearing stickers on their clothing. On at least two occasions at the beginning of 2008, Mr Hasemann addressed employees concerning stickers. He said that people should leave other people's lockers alone, and that childish behaviour over stickers was to cease. On 24 April 2008 Mr Allard issued a written memorandum banning all stickers on lockers and on clothing. Mr McClintock was relieved by this. Other employees said that they were glad it was over. During 2007 and early 2008 Mr Harrison constantly approached him, talking about the union and hassling him to join. He complained to Mr Hasemann about Mr Harrison's conduct, but it did not stop. On one occasion Mr McDonald said, "Shut up about the union, I'm sick of talking about it". However Mr Harrison persisted. In about February 2008 he asked Mr Harrison for "papers", saying that he was going to join. He did this simply to get Mr Harrison to leave him alone. He did not join, but his actions had the desired effect. In mid 2007 he noticed that Mr Harrison's AMWU cap was hanging on the coffee mug rack, touching mugs. He said, "What's this dirty thing doing here? " He put it on the hat rack. On the next day the cap was again hanging on the mug rack, touching mugs. He again removed it. On the next day it was again there. Eventually, a complaint was made to Mr Hasemann. At some point Mr Harrison stopped hanging his cap on the cup hooks and put it in the refrigerator. He always positioned it so that the AMWU logo was visible through the door. On occasions Mr McDonald saw that Mr Harrison had parked his motor cycle in the car park during the week. Mr McDonald was one of the employees who had worn a "Say No" sticker on his helmet before such stickers were banned. He said that he had seen union and non-union stickers on lockers. His locker was in a different area. He had not had any problem with stickers on it. However he knew that stickers were causing dissatisfaction in the workplace. On 7 May 2008 Mr McDonald received an SMS message which said, "AMWU update: you will be aware that ATM One Steel sacked AMWU delegate Shane. Legal action is being prepared. Further updates to follow soon. Text or call 0425 784 811". Mr McDonald did not know who had sent the message. In cross-examination he was asked how many times he had complained to Mr Hasemann about Mr Harrison. He said that he had complained on three or four occasions over a period of two or three months, probably in mid-2007. He said that this was at about the same time as he was wearing the "Say No" sticker. He said that he had found a "Say No" sticker on the table and simply put it on his helmet. He had no idea who had placed it on the table. He did not think that the expression "Say No" related to anything in particular. It could have related to almost anything. On 2 May 2008 Mr Harrison came into the office which Mr Millard shared with Mr Hasemann. He had a sticker stuck to his neck. It was a large sticker with blue writing. Although Mr Harrison is a big man (over six feet tall) it took up the whole of one side of his neck. Mr Millard was aware that Mr Allard had issued a strong written direction concerning stickers. As site safety officer he was concerned that Mr Harrison was wearing a sticker on his skin. He considered that there was a risk of skin irritation in the event of any break in the skin. Mr Hasemann asked Mr Harrison to remove the sticker from his neck saying, "Look Shane, you've been told to take off the sticker. Come on mate, take it off". Mr Harrison replied, "I'm not removing the sticker unless I see it in writing so that I can pass it on to my local union member to review". Mr Hasemann said, "Look Shane, it's getting pretty serious now, I'm going to have to go and tell Jason". Mr Harrison said, "Do what you have to do". He walked away. At this stage Mr Millard was not aware that Mr Harrison had union connections or of any other aspect of his employment history. He had seen him with union stickers on his shirt. As a safety officer, Mr Millard believed that in a dangerous work environment such as that at Acacia Ridge, employees must follow managerial directions. Employees could not be allowed to pick and choose the directions which they would obey. Small slips about seemingly irrelevant matters could often have larger, potentially fatal, safety consequences. In the end it was a question of workplace culture. Workplaces which had good cultures generally tended to have good safety cultures. He had previously been a member of a union but was not a member at the time of swearing his affidavits. He did not see any need to be a union member, although he would have had no objection to joining if he had to. He said that over the six months prior to May 2008 there had been significant agitation between, on the one hand, employees who were committed to the union and, on the other, those whom he would describe as anti-union. This agitation impacted upon the work environment. In mid-2007 Mr Patterson requested that both union and non-union workers remove stickers and "paraphernalia" promoting political views from their helmets. Some anti-unionists were wearing "Say No" stickers in response to increased activity by members of the union on the shop floor. This was in the period leading up to the federal election. The stickers were removed, but some union members decided to place AMWU stickers on their uniforms. As far as Mr Murphy was aware, such practice was not prohibited by management. Subsequently, a small number of union members commenced to place stickers on their lockers. He saw Mr Harrison with a roll of AMWU stickers. The stickers appeared to have been placed "indiscriminately" on lockers. Mr Murphy was aware of complaints from both union and non-union members concerning the use of the stickers. These matters were discussed on the shop floor and at tool box meetings. He heard disputes concerning stickers placed on non-union supporters' lockers and disputes concerning the removal of stickers from union members' lockers. The matter was distracting and caused Mr Murphy to have concerns about safety. A couple of weeks prior to May 2008 Mr Harrison told Mr Murphy that One Steel was implementing eight hour shifts. Such a change was very significant as it would affect the earning capacity of employees. He asked Mr Harrison how he knew this. Mr Harrison said, "from an excellent source". This caused Mr Murphy concern. He was aware that Mr Harrison had made similar statements to other people on the shop floor. It caused great anxiety amongst staff. In a later affidavit, Mr Murphy said that he was a member of Crew No. 3 of which Mr Tavita was the team leader and Mr Booth, the shift supervisor. Mr Harrison was not in the crew. He said that in early to mid-2007 Mr Harrison, Mr Wharton and Mr Butler started to be "very vocal on site about the AMWU". They started putting pressure on people to join; holding sausage sizzles at the front gate; handing out union paraphernalia; talking to people about how good the union was and how bad the company was; and plastering stickers around the lunch-room and site. He found Mr Harrison's behaviour over the issue to be harassing and intimidating. He and a number of other employees decided to be a little more vocal in their opposition and created their own stickers which said "Say No" and stuck them on their helmets. Mr Murphy did not consider himself to be anti-union. The "Say No" stickers annoyed Mr Harrison. He raised the matter at shift hand-over meetings. At the time he was wearing an AMWU sticker on his helmet or an AMWU cap. A few weeks after the "Say No" stickers appeared, Mr Patterson and Mr Hasemann issued a direction that all stickers on helmets, other than names, be removed. Mr Murphy resented the direction because he thought it was motivated by Mr Harrison's complaints. However he complied with it. Some employees started wearing stickers on ear muffs. This practice was also banned. In late 2007 and early 2008 a few employees, including Mr Harrison, started to wear AMWU stickers on their clothing. Other AMWU stickers appeared in the locker room, the lunch-room and elsewhere on the site. AMWU propaganda material also appeared. Mr Murphy found this very annoying. He thought that Mr Harrison and his associates were taking the AMWU stickers and union propaganda to ridiculous lengths. Mr Harrison complained that unknown persons were throwing his pamphlets and notices in the bin and removing AMWU stickers. In cross-examination Mr Murphy said that he thought that the AMWU stickers had appeared before the "Say No" stickers. He was aware of tension arising out of the placing of stickers on lockers and the practice of wearing stickers on clothing. He was also aware of the memorandum from Mr Allard dated 24 April 2008. On 2 May 2008 he saw Mr Harrison with a sticker on his neck. He reached out as if to flick it off, saying, "What's that on your neck? " Mr Harrison responded, "It's my bandaid". On 2 May 2008 he noticed Mr Harrison in the lunch-room with a sticker attached to his neck. Later in the day he was in the production office talking to Mr Hasemann. Mr Harrison spoke to Mr Hasemann about an operational matter. Mr Hasemann then said, "Mate, I heard Jason ask you to remove the sticker, can you please do it". Mr Harrison said, "Put it in writing". Mr Hasemann said, "Shane, can you remove the sticker? I don't have to put it in writing because a notice went on the board about stickers on lockers and clothing". Mr Witt then heard Mr Hasemann ask Mr Harrison a third time to remove the sticker. Mr Harrison said again, "Put it in writing," and walked out of the office. Mr Witt said that from early 2007 Mr Harrison had often visited the maintenance workshop to create interest in the union cause. He would walk through the maintenance area calling out union slogans like "We'll win" and "Workers united will never be defeated". Mr Witt complained about it and about the fact that Mr Harrison was in the area without any reason for being there. In the lunch-room he would often hear Mr Harrison calling out slogans such as "Come on brothers, join up, they can't beat us if we join up". He could not get a moment's peace in the lunch-room and so tried to avoid it when Mr Harrison was there. On a couple of occasions in early 2007 Mr Harrison tried to talk to Mr Witt about the union. They then agreed that Mr Harrison would leave him alone. This followed an incident in mid-2007 when Mr Harrison spoke to Mr Witt about the union, telling him that they would get better pay. Mr Witt replied that every April, the company gave him a 4.5% pay rise without his asking for it. He said that in the 22 years in which he had been with the company, 90% or more of any problems had been sorted out without hassles. He said that Mr Patterson was a good manager, that he had faith in him and that if he could do something for his staff he would do it. Mr Witt asked why he should pay union dues of $700 a year when it was hardly likely to do a better job than he had been doing for himself. Mr Harrison did not like this and started talking over the top of him in a loud and aggressive voice. Mr Witt said that he'd given him his five minutes and now "I wanted my 5 minutes". Mr Harrison started yelling at him. Mr Witt yelled back. This developed into a full-blown argument. He told Mr Harrison that he was not interested in joining the union, and that if he ever approached him again to talk about it, or ever tried telling him that his views were wrong, he would make a complaint to management. Mr Harrison had not thereafter approached him. Mr Witt was aware that from early to mid-2007 Mr Harrison and others were wearing AMWU stickers on their helmets. Other employees were wearing "Say No" stickers. He was aware of tension concerning stickers, although it did not affect him or the maintenance area. In about June 2007 Mr Patterson gave a direction that everyone on site was to take all stickers off their helmets, except for the company logo and their names. Mr Witt had a sticker saying "Hell Yeah" on his helmet. It had been there for over ten years. He was very attached to it. He did not want to remove it. His supervisor said, "Gerry, without causing Vic any more hassles would you mind taking off the sticker? " Because he respected Mr Patterson, he removed the sticker within five minutes. By late 2007 or early 2008 there were stickers all over the site and union material all over the tables and notice boards in the lunch-room. When the memorandum of 24 April 2008 was issued, Mr Witt thought, "Oh no, this silly garbage has started again". Mr Witt said that he had often heard Mr Harrison swearing. He was no worse than anybody else. In his evidence Mr Harrison said that he would not have sought to recruit Mr Witt to the union. He was a supervisor. However he probably talked to him about the union. He had "a perfect employment record". After he became a delegate he had "a number of difficulties in dealing with management". Mr Harrison said that he became a union delegate on 8 June 2007 and then began to have difficulties with Mr Tavita. He said that he had no such difficulties prior to his becoming a delegate. However he gave details of an incident which allegedly occurred on 4 June 2007. On that day Mr Harrison was talking to other employees on the shop floor. During the conversation he offered a union member a union T-shirt. He spoke to him for no longer than a few minutes. Mr Tavita asked him to leave the shop floor until his shift began. Subsequently, Mr Hasemann said, "I don't want you talking to workers on the floor before your shift starts because it's taking their minds off the job". Mr Harrison said that he would not do so. He said that for six and a half years, he had been going to the floor for half-an-hour before his shift in order to find out how the mills were going and how the boys were going. Prior to his becoming a union delegate nothing had been said to him about it. He said that on one occasion he remembered raffling a jacket and flag for charitable purposes and selling tickets on the floor. Mr Harrison said that after the event on 4 June 2007, he had little contact with Mr Tavita until 27 October 2007. Obviously, this incident occurred prior to his becoming a union delegate. Hence it is a little difficult to understand its relevance. I will later refer to other evidence concerning it. After he became a union delegate Mr Tavita treated Mr Harrison in a way which made him feel intimidated. Apart from the incident on 4 June 2007 his first difficulty with Mr Tavita occurred later in June 2007 in the lunch-room. Mr Tavita was wearing his helmet with a "Say No" sticker on it. Mr Harrison said words to the effect of, "Ray, what does the 'Say No' sticker mean - does it mean, 'Say 'no' to getting fucked up the arse? ' " Mr Tavita looked at him and walked out of the room without saying a word. Mr Harrison understood that a complaint was made to Mr Hasemann about this matter. He subsequently met with Mr Hasemann and Mr Patterson. He agreed to apologize to Mr Tavita. He said that he apologized to him a few days later. Mr Tavita refused to shake hands with him. Mr Harrison said that Mr McGuire and Mr Booth were present and witnessed this incident. On the following day Mr Tavita approached Mr Harrison on the mill floor saying, "The only time I'll accept your apology is outside the gate". Mr Harrison claims to have been shocked by this statement, taking it to mean that he was being challenged to a fight outside the gate. He replied, "I don't care, Ray". He felt intimidated because Mr Tavita was a big man. He was also aware that Mr Wharton had alleged that Mr Tavita had assaulted him after a Christmas party. Other evidence demonstrates that the incident to which Mr Harrison referred occurred on 1 June 2007, prior to Mr Harrison's election as a union delegate. It may be that his attempt to apologize occurred after his election. In any event it is difficult to attribute the incident to any pre-existing hostility towards Mr Harrison on the part of Mr Tavita. Mr Harrison points to the alleged threat by Mr Tavita as being relevant in assessing a later incident involving the two men. In his affidavit filed on 27 May 2008, Mr Harrison said that in or around late 2007 he noticed that various employees were wearing "Say No" stickers on their helmets. He understood the message to be "Say No to the AMWU". He was offended by these stickers and thought that they would be divisive. He raised the issue with management. Clearly, Mr Harrison's suggestion that he first noticed the "Say No" stickers in late 2007 is incorrect. He was aware of them at least as early as 1 June 2007. His dispute with Mr Tavita concerned such stickers. In his oral evidence, he said that he first saw the "Say No" stickers in July 2007. On 27 October 2007, at about 5.30 am, Mr Harrison was sitting in the lunch-room with Craig Frahm and Rob Lawson, awaiting the start of his shift. Another co-worker named Tony was also present. Mr Tavita came into the room and started swearing. Mr Harrison cannot recall the words used, or to whom Mr Tavita was speaking, but he claimed that he was swearing quite loudly and disturbing his conversation. Mr Harrison said that he said to Mr Tavita, "Ray, do you mind not swearing? " Mr Tavita replied with words to the effect, "Shut up and drink your coffee". Mr Harrison said, "It's not coffee, it's water". Mr Tavita again said, "Shut up". Mr Harrison said, "Don't tell me to shut up". Mr Tavita said, "Oh well, outside the gate then". Mr Harrison took this to mean that Mr Tavita wanted to fight him outside the gate. He found this very intimidating. Mr Harrison left the lunch-room and went to see Mr Booth and Mr McGuire in the supervisor's office. He made a complaint that Mr Tavita had threatened him. At about 6.00 am Mr Harrison was again in the lunch-room for the pre-start shift meeting. Mr Tavita came up to him and whispered, "I'll get you". Mr Harrison said quite loudly so that it could be heard by others, "Hey Ray, speak louder so everyone can hear you! " He said this because he was intimidated and wanted Mr Tavita to back off. Mr Tavita left the room and as he walked past a window, smiled and waved at Mr Harrison. Mr Harrison took this to be an intimidating gesture. He again went to the supervisor's office and saw Mr Booth saying, "Steve, Ray Ray's just threatened me again and I want to make another complaint". Mr Booth laughed and did not appear to take him seriously. Mr Harrison said words to the effect of, "What, Do you think this is funny Steve? " He walked out of the room in disgust. On the following Monday, 29 October 2007, Mr Harrison made a written complaint to Delma Rankin, the contact officer for bullying complaints. I felt very intimadated [sic] and vunerable to his threat he made on me. I feel like he could attack me at any given time, as he knows I come to and from work on a motor-bike. I feel he could be waiting for me when I come to work and when I am leaving work, and run me off the road in his car and injure me and at any possible time. Ever since I became a union delicate I have felt intimidated by Ray Tivita. I only ask Ray not to use profanity because it had offended me and there was other people in the room, that also may have been offended. Then Ray Tivita offered me outside the gate, and I took this as he was going to attack me. After the first threat against me, as I am of forty-six years of age, and Ray was a lot younger than me I feared for my life and I am very stressed. At 5.55am we have a team meeting before we go to work. As Daniel Mcguire finished his talk I proceeded to get my helmet and Ray threatened me again. As he was whispering in front of me, "I'll get you". I asked Ray to speak up so everybody could hear what he was saying. As Ray proceeding past the glass window outside the smoko room, waving and smiling I was shocked. I went into the supervisor's office and made another report about another incident to Steve Booth he laughed at me when I told him about another threat made against me. I said "Do you think this is funny Steve do you" and I walked out of the office in disgust at Steve's attitude about this attack made against me. Thankyou for your time reading this, Shane Harrison. ps I feel that Ray Tivita should not be in the position of 2IC as he groesly [sic] abuses this position. Thankyou, Shane Harrison. Mr Booth and Mr McGuire had done nothing about it. He was also motivated by Mr Wharton's allegations concerning Mr Tavita, as Mr Harrison understood them, and by Mr Tavita's "intimating manner and his size". Mr Harrison claimed that on Wednesday 31 October 2007, whilst playing golf on his rostered day off, he began to feel ill and could not concentrate. He was depressed by the threats. On 1 November 2007 he called in sick and went to see his doctor. The doctor diagnosed work-related stress. On or about 28 November 2007, whilst he was still on sick leave, he was called to a meeting with Mr Hasemann, Mr Croxford and Mr McGuire. Mr Antal attended with him. He was told by Mr Hasemann that the purpose of the meeting was to tell him the outcome of the investigation into his complaint against Mr Tavita. He was handed a final written warning which cited the reason as "childish behaviour". He refused to sign the warning. He had done nothing wrong and was a victim. Mr Allard said to him at some stage, "The reason I am giving you a final warning is because you and Ray Tavita have been acting inappropriately for a long time". Mr Harrison's reference to Mr Allard was erroneous. Other evidence suggests that Mr Hasemann gave the warning. There is evidence from other witnesses concerning a union complaint to the AIRC and associated meetings. Mr Harrison gave evidence concerning a meeting on 5 December 2007. At that meeting, Mr Allard raised a list of complaints about Mr Harrison's behaviour. The list included: Mr Harrison said that of these matters, only that concerning parking had been previously drawn to his attention. At a meeting held on 24 January 2008 Mr Harrison agreed that he would not place his union hat in the refrigerator or on the coffee mug hooks in the smoko room, and that he would refrain from singing union songs. He also agreed to park his motor cycle in the designated parking space. One Steel agreed to separate him and Mr Tavita. Mr Harrison claimed to have taken six and half weeks off work on sick leave as a result of the incident with Mr Tavita. As to stickers, he said that since he commenced work at Acacia Ridge, employees had displayed various types of stickers. He had two union stickers on his locker, as had a number of other members. In February 2008 he noticed that union stickers were being defaced or removed. He complained to Mr Hasemann who told all employees to leave one another's lockers and stickers alone. On 4 March 2008 Mr Wharton told him that Mr McGuire had instructed him to remove an AMWU sign that was in his car in the car park. He was using it as a sun visor. Mr Harrison claimed that at some time in 2007, on a date that he could not recall, he was two minutes late for work as the result of a flat tyre on his motor cycle. He was docked half-an-hour's pay. He said that he raised the matter with Mr McGuire and was told that it was not his decision. Mr Harrison decided not to take the matter any further. On 15 April 2008 Mr Harrison was called to see Mr Hasemann. He went with Mr Antal. Mr Hasemann accused Mr Harrison of spreading rumours concerning the introduction of eight hour shifts. Mr Harrison denied the allegation. Mr Hasemann said that he had witnesses. Mr Harrison said that he should call them. Mr Hasemann then said, "This meeting is over", and walked out of the room. Mr Harrison said that in March 2008 he had heard rumours that the company would be switching from twelve hour shifts to eight hour shifts and made a note in a diary about it as follows "8 hours day? Closing? Rumour". He said that there was a lot of talk about the rumours. He discussed them with a few people but did not start the rumours. In late 2007 or early 2008 Mr Harrison noticed a three page article on the notice board in the smoko room, headed "Union Rules and Hookers". The article was exhibited to his affidavit. Whilst it might be thought to have been in poor taste and, perhaps, offensive to women, it is otherwise little more than a satirical comment upon trade unions. It is difficult to believe that any adult would have been seriously offended by it. In any event Mr Harrison removed the document. I cannot see that it has any great relevance in these proceedings. In particular, there was no suggestion that One Steel or managerial staff members had put the notice up or failed to remove it. Mr Harrison did not complain to management about the incident. Mr Harrison said that union material would not remain on the general notice board for very long. In early March 2008 he approached Mr Hasemann about putting up a union notice board. He said that Mr Hasemann refused. However Mr Allard said that a union notice board was erected. Mr Harrison said that he had a coffee mug with a union logo on it. He noticed that it was often turned so that the logo faced the wall. He put a union sticker on it, apparently so that either the logo or the sticker would always be visible. After the parking issue was raised with him, Mr Harrison began to keep notes about where people parked. He felt that he was being singled out, and that other people were not being reprimanded for parking outside designated areas. He said that on 8 February 2008 he noticed a black Honda motor cycle parked in the car park. He did not know who owned it. On another occasion he was forced to park outside the designated area because of absence of space. When he returned he found a note on his motor cycle saying, "Don't park your bike here". Mr Harrison made a number of other comments concerning the parking of motor cycles, but none of them demonstrated anything significant for present purposes. No doubt he invites the inference that he was treated unfairly, but it is a little difficult to deal with these allegations in the absence of any detailed evidence as to times, places and persons involved. I turn to Mr Harrison's evidence concerning the circumstances surrounding his dismissal. On 1 May 2008 he arrived at work at about 5.30 am in order to start at 6.00 am. I have previously mentioned the discrepancy concerning the date. When he checked the computer to identify the jobs for the day he noticed that there were, "some things that were wrong with the jobs and which required alteration". He went to the office to speak to one of the managers and there saw Mr Allard. He said to Mr Allard, "I have got some things to get sorted out". Mr Allard said, "What have you got on your neck? " Mr Harrison said, "What? " Mr Allard said, "Take it off your neck. It looks stupid". Mr Harrison said, "Put it in writing. Jason, I am not here about the sticker on my neck. I am here to get this all sorted out". The sticker was circular in shape, about eight centimetres in diameter with the words "Protecting Workers" and "Union Made" around the circumference. The letters "AMWU" were in the bottom half of the sticker. The top half featured the union logo. He said that he had placed the sticker on his neck, "to make a point in a humorous way about the attitude of the employer to attempts to promote the union in the workplace". The sticker was partially obscured by the collar of his shirt. It was on the right side of his neck, towards the back and below and behind his ear. He said that he would have complied with the direction had he received an instruction in writing. The requirement for writing was "to highlight the extent to which the employer was prepared to go to close off opportunities for the union to be promoted in the workplace". Later in the day he returned to the office and there saw Mr Hasemann. Mr Hasemann said, "Didn't Jason tell you to take that sticker off? " Mr Harrison replied, "As I told him, put it in writing". He pulled a diary out of his pocket and showed it to Mr Hasemann, asking him whether he wanted to look at what was in his diary. He said that he had recorded his conversation with Mr Allard. Mr Hasemann ignored this, grunted and did not take the matter any further. At about 1.00 pm there was a "get-together" to mark the birthday of another employee. Mr Harrison attended, wearing his union delegate's cap, with the sticker still on his neck. There were about 50 people in the room. Mr Hasemann came up to him and said that there was to be a meeting in Mr Allard's office, and that Mr Harrison could bring a witness. Mr Harrison inferred that there was to be a discussion about the sticker. Between 1.00 pm and 1.15 pm he went to Mr Allard's office with Mr Antal. Present in the office, apart from Mr Harrison and Mr Antal, were Mr Allard, Mr Newbegin and Mr Hasemann. Mr Allard said, "Shane, this is a serious matter". Mr Harrison said that there were three people there from One Steel and only two from "my side", and that he wanted somebody else. Mr Allard said that the meeting would continue. He then said that he had told Mr Harrison to remove the sticker. Mr Harrison said that if the instruction was put in writing, he would remove it. Mr Harrison said in his affidavit that as the meeting did not appear to be going well, he wanted to bring it to an end. He had not expected the issue to be taken so seriously. He said to Mr Allard that he wanted the matter put in writing and a copy sent to him and to the union. There would be a response within seven days. There was further discussion about the sticker and about Mr Harrison being stood down. At some stage he said that the meeting was going nowhere, that it was over and that he was leaving. Mr Allard said that the meeting was not over. Subsequently, after further discussion, Mr Allard told Mr Harrison that he would be stood down until 10.00 am on Tuesday 6 May 2008. Mr Hasemann then escorted him off the premises. He did not remember yawning during the meeting. He said that he wanted Mr Allard's direction put in writing so that he would be able to document the event. It is not clear why it would not have been sufficient to record it in his diary. He said that when he was working in Western Australia in 1979 his union had told him that if he did not agree with something from management he should ask for it to be put in writing. He said that he had found this to be good advice and maintained the practice. On Tuesday 6 May 2008 Mr Harrison attended a further meeting at the site with Mr Bradley, the state organizer of the union. Mr Allard, Mr Newbegin and Mr Hasemann were also present. Mr Newbegin took notes of the meeting. Mr Allard said that it was a serious matter and read out a record of what had occurred on the previous Friday. Mr Harrison said that, with a couple of exceptions, it was reasonably accurate. He denied that Mr Hasemann had said to him "Take the sticker off" and that he had replied, "No, I am not going to take it off". He said that he had never said that he would not take it off. His position had always been that he would take it off if directed to do so in writing. Mr Harrison also said that he had no recollection of yawning at the Friday meeting. After Mr Allard had read out his account of events at the Friday meeting, Mr Bradley said that the complaint against Mr Harrison was discrimination. He said that if an Islamic woman was wearing a burqa with "AMWU" on it, she would not be made to take it off. If a Sikh was wearing a turban with "AMWU" on it, he would not be made to take it off. If the letters were tattooed on a person's neck, that person would not be made to take it off. There was then a discussion between Mr Allard and Mr Bradley as to whether it was possible to remove a tattoo. Mr Allard, Mr Hasemann and Mr Newbegin went upstairs and were gone for about 40 minutes. When they returned, Mr Allard said words to the effect of, "This is a very serious charge and we are going to have to summarily dismiss you". He also said that he would check with the accountant as to Mr Harrison's entitlements. Mr Bradley said that as Mr Allard was the manager he should know his entitlements. Mr Allard left the room. He returned and told Mr Harrison that he was entitled to pro-rata long service leave, his holiday pay and his sick leave, and that he would receive two weeks' pay in lieu of notice. Mr Bradley said that Mr Harrison was entitled to four weeks' pay in lieu of notice and asked Mr Harrison whether he was older than 45 years of age. Mr Harrison said that he was. Mr Bradley said that he was therefore entitled to a further week, a total of five weeks. Mr Allard considered the matter and indicated that Mr Harrison would be paid for five weeks. Mr Hasemann then escorted him to his locker. He said that he was sorry to see Mr Harrison go as he was a good worker. Mr Harrison's evidence is spread over three affidavits which are not organized in temporal sequence. They are therefore a little difficult to summarize. I have summarized most of the material which appears in the first two affidavits. The third affidavit primarily contains responses to specific allegations in One Steel's material. I will not refer to all of the matters there mentioned. Some appear to be of little or no relevance for present purposes. Mr Harrison agreed that before the meeting held on 14 April 2008 Mr Loggie had suggested that he remove the stickers from his shirt, and that he had done so. Mr Harrison said that he was never made aware of any complaints concerning his conduct as a union delegate. He denied having harassed anybody, although he admitted regularly handing out literature, stickers and T-shirts. He did not intimidate anybody. He said that he would sometimes say things like, "Workers united will never be defeated" and make other comments about the union socially as a way of letting people know that he was involved with it. Mr Harrison disagreed with Mr Hasemann's statement that he did not regularly attend work celebrations. He denied that Mr Patterson had ever spoken to him about his union activities, asking him to, "Tone it down a bit". He said that he had spoken to Mr Patterson mainly about the Broncos football team. They were both supporters. Had Mr Patterson spoken to him he would have asked for details of the problem. He said that he did not recall ever speaking to Mr Witt about joining the union. Mr Witt was a supervisor, and so there would have been no point in so doing. He may have spoken to him generally about the union. He denied ever arguing with Mr Witt. Mr Harrison also referred to various industrial matters which he had raised at Staff Advisory Board meetings. They seem not to be particularly relevant for present purposes. He denied that at the meeting held on 26 June 2007 other employees had complained about his behaviour. He said that had they done so he would have asked for details. He said that there was no mention in the minutes of the complaints. However, as I have previously observed, other evidence suggests that some of the notes relate to such matters. Mr Harrison said that he had been elected as a union delegate on 8 June 2007 and told Mr Hasemann, and perhaps Mr Schreiber, of his election, probably on 12 June 2007. He accepted that he had not told Mr Schreiber or Mr Patterson about his intention to invite Mr Loggie and Mr Bradley to the meeting in July 2007. Mr Harrison gave brief oral evidence-in-chief. He agreed that Mr Hasemann had spoken to him on four or five occasions about parking his motor cycle in the incorrect area. He said that on occasions, the cycle parking area was full. He said that he had first seen people wearing the "Say No" stickers in about July 2007. Five or six people were wearing them. The stickers were on their helmets. He said that he and others then commenced to wear union stickers. In cross-examination Mr Harrison agreed that union literature had been distributed in the workplace prior to the "Say No" stickers appearing. It was left on lunch-room tables and posted up around the workplace. He said that whilst working, he was required to wear company-issued clothing including shirt, trousers, helmet, shoes, ear muffs and safety glasses. He agreed that Acacia Ridge was involved in heavy industry, and that there were particular workplace hazards and risks. He agreed that he had been supplied with a dedicated notice board for union notices. Mr Harrison agreed that although other people used bad language in the lunch-room, he had not chastised them as he had chastised Mr Tavita. At the meeting at which his employment was terminated he had claimed that he was entitled to wear stickers on his neck. He agreed that had he continued in employment, he would have continued to assert such a right. He wanted the direction in writing because he was gathering evidence to show that the company was anti-union and did not want the union on site. He denied that he had that purpose when he wore the sticker. He had not wanted to provoke a reaction from management. He wanted to show how silly the company was about the sticker issue. He said that the written direction concerning stickers had been concerned with lockers and clothing and not with wearing them on the skin. In re-examination he said that he did not consider that the earlier dispute concerning Mr Tavita had been resolved to his satisfaction. He felt that he was a victim, and that if he had not complained about Mr Tavita, he would not have received the final written warning. He was a union member. He attended numerous meetings with Mr Harrison. On 11 November 2007 he attended a meeting with Mr Croxford, the Production Manager, and Mr Hasemann. During that meeting Mr Hasemann handed Mr Harrison a final written warning for "inappropriate and unacceptable workplace behaviour --- childish behaviour". This related to Mr Harrison's complaint about Mr Tavita. Mr Hasemann said that there was no evidence to prove Mr Harrison's allegations, and that both men were being given final warnings. Mr Harrison said that he was disgusted with the outcome, and that he felt he was being victimized. He refused to sign the warning. Mr Antal signed it. It was exhibited to his affidavit. Later that day, in the absence of Mr Harrison, Mr Antal was called to a further meeting at which a new warning was produced. He was asked to sign it. The reference to "childish behaviour" had been removed. He signed it. On 15 April 2008 Mr Antal attended a further meeting with Mr Harrison. Others in attendance were Mr McGuire and Mr Hasemann. Mr Hasemann told Mr Antal not to speak. He said to Mr Harrison, "I have evidence that you have been spreading rumours around the mill about a move from the current roster to eight-hour shifts". People had been complaining about the alleged proposal. Mr Harrison's name had come up. He asked Mr Harrison if he had been spreading rumours. Mr Harrison denied it. Mr Hasemann said that he would come back with evidence proving that he had spread rumours. Subsequently, Mr Hasemann called a meeting to advise employees that the rosters were not going to be changed. Mr Antal said that a memorandum had been circulated by the site manager, (Mr Allard) concerning stickers. Mr Antal had not previously been aware that management had any concern about stickers. After the memorandum was issued all stickers were removed. There were different types of stickers on lockers, including union stickers. Union stickers had been removed and vandalized. On 2 May 2008 Mr Antal noticed that Mr Harrison had a sticker on his neck. Later in the day he and Mr Harrison went to a meeting with Mr McGuire, Mr Allard, Mr Newbegin and Mr Hasemann. He was again told not to say anything. Mr Allard said that he had instructed Mr Harrison to remove the sticker. Mr Harrison said, "I never said that I wouldn't remove the sticker, just that I had asked Jason to put the request to remove it in writing and copy it to the union, and that I would remove it if the request was written". Mr Allard said, "Not taking an instruction from the Site Manager is a sackable offence". Mr Harrison said, "I am disgusted by the company's attitude. The meeting is over, and I will call the union about it". Mr Allard said that Mr Harrison would be suspended with pay until Tuesday. Mr Antal did not notice Mr Harrison yawning during the meeting. He said that Mr Harrison took the meeting quite seriously and was upset. Mr Antal considered that the company was uncomfortable with the union, discouraged anything that was considered pro-union and "takes whatever steps it can to prevent the union spreading its message in the company". In Mr Antal's second affidavit, he said that he had nominated Mr Harrison for membership of the Staff Advisory Board. He had raised the matter with Mr McGuire. Mr Harrison was appointed shortly thereafter. He referred to a meeting "around June 2007" and to evidence from Mr McGuire and Mr Hasemann concerning that meeting. Mr Patterson was also present with Mr McGuire and Mr Hasemann. He said that at the meeting Mr Patterson asked Mr Harrison, "What issues do you have with the workforce". Mr Harrison made comments about "knee-padders", referring to leadership positions and the fact that he thought that jobs were going to people on the basis of friendship or family connections rather than merit. He also was concerned that jobs were not being advertised. Mr Patterson reacted badly to this because his son was working in the office. He asked Mr Harrison, "Are you talking about my son, Shane? " Mr Harrison said, "I was never talking about your son - your son hasn't ever crossed my mind". Mr Harrison raised other issues at the meeting, but Mr Antal could not remember their subject matter. He recalled, however, that at about this time Mr Harrison was raising issues concerning work conditions and pay. The union was not very strong at the site. Few people knew anything about it until Mr Harrison started to become more vocal. Mr Antal referred to the affidavits of Mr Croxford, Mr McGuire, Mr Newbegin and Mr Hasemann. He accepted that the meeting which he had described as occurring on 11 November 2007 had, in fact, occurred on 28 November 2007. He referred to the meeting on 2 May 2008 and to the affidavits of Mr Hasemann, Mr Newbegin and Mr Allard, saying that he did not think that Mr Harrison had been acting in a manner that was rude or disrespectful. Nor did he recall that he had yawned. However he said that they had both done two consecutive night shifts, and that shift changes affect the level of tiredness. He was tired during the meeting because he was still adjusting to a shift change. All of this was apparently designed to raise the possibility that if Mr Harrison had yawned, it may have been involuntarily. In oral evidence-in-chief Mr Antal said that he had been employed at Acacia Ridge since 2007. In May or June 2007 he became aware that some employees were wearing "Say No" stickers on their helmets and elsewhere on their clothing. He noticed that other employees commenced to wear union stickers. This was towards the end of June. He saw two or three members wearing such stickers. Ten or more employees were wearing "Say No" stickers. In cross-examination Mr Antal said that he had heard complaints about the "Say No" stickers. The matter was raised at tool box meetings on two occasions. Mr Hasemann was present at those meetings, as was Mr McGuire. He thought that Mr Orton and, possibly, Mr Harrison had made the complaints. There were also complaints at tool box meetings about the damaging or removal of stickers on lockers. This occurred on at least four occasions. He did not recall who had complained about that matter. He recalled a meeting on 12 July 2007 at which Mr Patterson said that union membership was a matter of employee choice. In re-examination he said that the stickers which were being damaged or removed from lockers were union stickers. Management had indicated that it would put a stop to the practice, but nothing was done prior to the memorandum issued in April 2008. He was an organizer with the union, based in Brisbane. In April or May 2007, as a result of a complaint by employees at Acacia Ridge, Mr Bradley claimed the right to enter the site for a safety inspection. However it was made clear to him that he would only be allowed to go to the sites which he had nominated for such inspection. He was not allowed to speak to workers on the shop floor. He was campaigning for a collective agreement at Acacia Ridge and thought that union members at the site were "quite keen for a collective agreement". He therefore filed a bargaining period notice with the AIRC. He and Mr Loggie met with Mr Patterson and Mr Schreiber. He said that Mr Patterson and Mr Schreiber refused to speak to them. They were only willing to speak to Mr Harrison and Mr Butler who were also present. Other evidence demonstrates that Mr Patterson and Mr Schreiber had not expected Mr Bradley or Mr Loggie to be present at the meeting. Any apparent lack of enthusiasm for speaking to them was apparently a result of that fact. Mr Bradley said that in the period leading up to the 2007 federal election the union was running a recruitment drive at Acacia Ridge. He understood that the "Say No" stickers appeared in the course of that campaign. The campaign involved the handing out of leaflets and stickers. Mr Bradley considered that One Steel had a "very negative attitude" towards the union. This view appears to have been based, at least in part, upon the fact that when he and other union representatives attended for meetings they were not allowed to speak to workers in the lunch-room. They were given a separate room for such meetings. Mr Bradley said that access to the nominated room was past management offices, and that management could identify persons who attended the meeting. This deterred workers from attending. Mr Schreiber's evidence suggests that there was another, more private, entrance. In November 2007 Mr Bradley became involved in the incident between Mr Harrison and Mr Tavita. After speaking to Mr Harrison about the warning which he had received, he spoke to Mr Croxford saying, "The company cannot give someone a final written warning because they have acted 'childishly'. This is not a proper basis for a final written warning". He said that neither Mr Harrison nor Mr Tavita deserved a final written warning on such a flimsy basis. Mr Croxford later said that the reference to "childish behaviour" would be removed, but that the company was firm in maintaining the final written warnings in relation to inappropriate and unacceptable behaviour. There was a subsequent meeting between union representatives and management concerning the final written warning, but no agreement was reached. As a result the union sought resolution in the AIRC. At a conciliation conference it was agreed that the parties would continue discussions on site, and that the dispute would remain open. No recommendation was made. On 24 January 2008, a subsequent meeting on site was attended by Mr Newbegin, Mr Allard, Mr Hasemann, Mr Bradley, Mr Loggie and Mr Harrison. The One Steel representatives identified aspects of Mr Harrison's conduct which they said should cease. He was to: Mr Harrison agreed to these requests. On the afternoon of 2 May 2008 Mr Bradley first learned that Mr Harrison had been suspended. Mr Harrison told him by telephone. On 6 May 2008 he and Mr Harrison attended a meeting at Acacia Ridge. The meeting was said to be "off the record". Mr Allard said that Mr Harrison had been suspended because he had disobeyed a lawful direction. Mr Bradley said that the direction had not been lawful. There was a discussion about a turban or a burqa bearing an AMWU sticker or a tattoo. Mr Bradley said that as Mr Allard's direction was not related to safety, Mr Harrison was not obliged to comply with it. He denied having made remarks about there being levels of summary dismissal. Mr Harrison was disappointed at being dismissed over such a trivial offence. He was cooperative during the meeting. He did not make any comment about his dismissal affecting union membership on the site. In a second affidavit Mr Bradley said that on the occasion of his visit on 1 June 2007, he and Mr O'Neill were not given an opportunity to speak to employees and were not provided with a space in which to meet them. From early 2007 Mr Loggie had been actively focussing on expanding union membership and awareness at Acacia Ridge. He found it difficult to contact the majority of workers at the site. The difficulty was caused by the company's control of the union's right of entry. One Steel would not allow it to meet workers in the lunch-room. Further, the shift breaks were staggered so that it was difficult to assemble groups of workers. He produced posters to be used as part of the campaign. He also conducted a survey as to whether or not workers would be in favour of a union-negotiated collective agreement. He asked Mr Harrison and Mr Butler to distribute the survey and collect the results. At other One Steel sites there were collective agreements. That was not the case at Acacia Ridge. The survey resulted in 112 workers indicating that they were in favour of a negotiated agreement and 31 workers indicating that they were not. On 12 July 2007 Mr Loggie and Mr Bradley went to the site to discuss with management the possibility of a collective agreement and other aspects of the relationship between One Steel and the union. This meeting had been organized by Mr Harrison who did not tell Mr Patterson or Mr Schreiber that union representatives would be attending. Mr Patterson and Mr Schreiber were unwilling to speak to them. On 14 November 2007 Mr Loggie sent a notice seeking access to the site at 5.45 pm on 15 November 2007. One Steel responded, saying that access would have to be during normal business hours, namely between 7.00 am and 4.00 pm Monday to Friday. Nonetheless Mr Loggie went to the site at the time which he had specified. He found Mr Allard and Mr Arnold waiting for him. He was taken to a training room. Mr Allard and Mr Arnold closely examined his documentation. Mr Arnold asked if he and another staff member could remain in the room during any discussions with employees. Mr Arnold said that he had notified workers that they could come to the room if they wished. Two workers came and had discussions with Mr Loggie in the presence of Mr Arnold and the other One Steel staff member. Towards the end of 2007 Mr Harrison told Mr Loggie that he was having difficulty with a co-worker, Mr Tavita. As a result Mr Loggie attended a meeting on 5 December 2007 at Acacia Ridge. Also present were Mr Bradley, Mr Harrison, Mr Allard and Mr Newbegin. The meeting finished with Mr Allard undertaking to consider a proposal that the warning be withdrawn or down-graded. He subsequently indicated that he would not do so, and the matter was referred to the AIRC. On 24 January 2008 Mr Loggie attended another meeting with Mr Bradley and Mr Harrison. Mr Newbegin, Mr Allard and Mr Hasemann also attended. Mr Loggie prepared a note of this meeting which is exhibited to his affidavit. In some respects it seems to differ from the account which he gave in the affidavit itself. In the affidavit paras 27, 28 and 29 are as follows: During the meeting Mr Newbegin, Mr Allard and Mr Hasemann raised a list of things against Shane that they had not previously raised, including grievances that: Shane was parking his motor bike in the car park rather than the motor bike shed on site; Shane was singing union songs on site; Shane was putting his AMWU cap on his lunch in the fridge in the worker's lunch-room and also hanging it off the mug rack; Shane was putting up AMWU stickers on company property. During the meeting Jason Allard, Shane and I exchanged mobile phone numbers and it appeared to me that communication between the AMWU and P & T Tube was going to get better. I could not get the company to retract Shane's final written warning, which had been issued on 11 November 2007, or get it removed or downgraded to a written warning, and the company was still refusing to allow the AMWU to meet with workers in their [lunch-room]. I recall that Mr Newbegin, Mr Allard and Mr Hasemann also agreed to look into providing the AMWU with an exclusive notice board in the [lunch-room], but they would not commit to providing a notice board. It is also curious that Mr Loggie said in his affidavit that communications seemed to be improving, given the assessment of the meeting in his notes. On 17 March 2008 Mr Loggie sent two notices seeking access to the site on 19 March 2008 in order to hold a general meeting of members. He attended on that day with Mr Bradley. They were escorted to a room at the top of the stairs, away from the working area. Nobody came to the meeting. Mr Loggie thought that the room was in an inconvenient location. Management would have been able to see who attended. He had no recollection of there being another entrance as alleged by Mr Schreiber. He also referred to the fact that lunch breaks were short. Workers did not have much time to attend such meetings. One Steel would not allow union representatives to go into the lunch-room or any other area apart from the designated room. When they left, Mr Bradley said to Mr Newbegin that it had been a waste of time for them to be sitting in a room by themselves, and that the company should relax its opposition to the union approaching workers in the lunch-room. Mr Newbegin said, "this is how OneSteel [sic] does it and this is how it is going to stay". On 14 April 2008 Mr Loggie attended a meeting with Mr Clement, Mr Newbegin and Mr Harrison to discuss the relationship between the union and One Steel. He hoped that problems of the past could be avoided, and that it would improve the ability of the union to come on site and meet with workers in the lunch-room. Much of what occurred at the meeting is largely irrelevant for present purposes. Mr Clement indicated that he thought that the non-union situation at Acacia Ridge site was a favourable environment from One Steel's point of view. As union membership on the site was very low he saw no reason to involve the union in One Steel's relationship with workers or to discuss agreements with it. Mr Loggie said that the arrangements for meetings were unsatisfactory, and that he wanted to meet employees in the lunch-room. Mr Clement indicated that he was not agreeable to that. Mr Loggie said that in his view the company had encouraged division between union and non-union members and referred to the "Say No" stickers, suggesting that they had been made by a staff member who had access to the company printers. Mr Newbegin said that they had been withdrawn soon after they appeared, and that the staff member involved had been counselled as the stickers were not authorized by management. (Mr Newbegin denied the latter statement. ) Mr Loggie said that at the recent meeting with Mr Allard and Mr Newbegin, they "have finally begun to turn some of management['s] suspicion and distrust around". He hoped to continue the progress achieved at that meeting. Mr Clement said that his role was to manage the company in such a way that the workers had no reason to join the union. Mr Loggie again referred to the unsatisfactory nature of the room provided for meetings. Mr Clement thought that the arrangements were serving the company well. He did not intend to change them. Mr Loggie said that he would like to talk to the maintenance workers in the future, and that the training room was totally out of the question. Mr Newbegin said that he would look for a room closer to the maintenance area. On 2 May 2008, Mr Loggie heard that Mr Harrison had been suspended. He spoke to Mr Allard, saying that he was disappointed that he had not been called. He suggested that Mr Allard had over-reacted. According to his notes he said, "Everyone know[s] Shane is passionate about [the] union --- and the company". He asked what might happen at the Tuesday meeting. Mr Allard said, "a final warning or [dismissal]". Mr Loggie said that neither was appropriate. He wanted to discuss the matter in advance. Mr Allard was unwilling to do so. Mr Loggie reminded Mr Allard that Mr Harrison had complied with the company direction that all union stickers be removed from the site, and that he should understand Mr Harrison a little better than he apparently did. In his second affidavit Mr Loggie responded to material in One Steel's affidavits. He gave some information concerning the survey, but this seems to be of no present relevance. He said, concerning the meeting on 14 April 2008, that he had met Mr Harrison in the car park prior to the meeting. Mr Harrison had an AMWU sticker on each arm of his shirt. Mr Loggie said to him, "Shane, you don't need the stickers mate". Mr Harrison removed them. When Mr Harrison entered the meeting room, he made a comment to Mr Clement and Mr Newbegin to the effect that, "Look, I don't have any stickers on my shirt". Mr Loggie said that there was some discussion about relative productivity at the various One Steel sites. It was said that Acacia Ridge had always been more productive than the other sites, particularly the Newcastle site which had a significant union presence. Mr Clement said that he had been a delegate for the Electrical Trades Union and had been involved in industrial disputes. Mr Clement claimed to have been a bit embarrassed or ashamed concerning his previous actions. Mr Clement denied that he had said this. Mr Loggie apparently had a note of the conversation. On 23 and 24 April 2008, Mr Loggie had attempted to speak to two shifts. On 24 April 2008 Mr Newbegin escorted him to a room where he was to meet workers. Mr Newbegin told him that later that day, the company would be putting out a memorandum requiring that stickers be removed from lockers, and that there would be a "no sticker" policy on site. Mr Loggie said, "It is crazy that it has got to this". Mr Newbegin said that the problem was "going both ways". He said, "There is a possibility that non-Union guys were putting Union stickers on lockers to wind up the union members. We don't know who is doing it". He also referred to Mr Harrison and said, "I don't know if this is going to cause any problems". The meeting room in question was in an alcove in the Maintenance Foreman's office. Workers had to walk past the Foreman's office and two planners' desks in order to get to it. Mr Loggie said that it was impossible to have a private conversation. He was not permitted to go to the lunch-room. Concerning the meeting on 12 July 2007, Mr Loggie said something about his intentions concerning it, but that matter seems not to have any relevance in view of the explanation given by Mr Schreiber and Mr Patterson for being reluctant to speak to Mr Loggie and Mr Bradley. Concerning the text message received by Mr McDonald, it was sent by Mr Loggie as the result of an error, possibly arising out of the fact that another employee had the same surname. Mr Loggie said that his database showed that as at 12 February 2007 there were four financial members of the union at the Acacia Ridge site. On 20 June 2007 there were 25 financial members. There may have been one or two other members who had not yet been entered into the database. Mr Loggie also said that Mr Harrison's application for union membership was filled out on 25 May 2008. In fact, it appears to have been dated 25 May 2005. He was a member of the union, having joined on 8 May 2007. Towards the end of 2007 union material was regularly removed from notice boards and/or vandalized. At a meeting Mr Hasemann told employees that the union could use one of the notice boards in the lunch-room. Material continued to be removed or vandalized. At one stage Mr Wharton took two large union promotional signs into the smoko room and left there. He understood that Mr Harrison was to seek Mr Allard's approval for their being hung in that room. His supervisor, Daniel McGuire, asked him to remove the signs and put them in his car. He did so. However he placed them in such a way that they could be seen through the front and rear windows. He said that Mr McGuire told him that Mr Allard wanted to see him as soon as possible. The meeting never took place. Mr Wharton assumed that the proposed meeting had something to do with his placing the signs in the car. Before the 2007 election Mr Harrison and Mr Wharton erected union stickers, placing them on helmets, clothing and lockers. Mr Harrison told him that he had approached management about the "Say No" stickers which other workers were putting on their helmets. Management told Mr Harrison that nobody should wear stickers on their helmets. Most people had stopped doing so. Mr Wharton said that when anybody wore a "Say No" sticker, he or Mr Harrison would complain to Mr Hasemann. They found the stickers offensive. He understood them to mean "Say no to the AMWU". He started putting stickers on his locker and on his uniform. Nobody raised the matter with him. He kept a pile of stickers in his locker and offered them to members and non-members of the union if they asked. People became more confident and commenced putting them on their lockers. On or about 17 March 2008 he took leave and subsequently became ill. He gave some details of the alleged incident between him and Mr Tavita, but they were excluded, Mr Wharton not being available for cross-examination. However his evidence establishes that there was an incident, and that Mr Hasemann asked him about it. He said that the incident was over and done with. He told Mr Harrison about it. Other matters canvassed in Mr Wharton's affidavits add little to the body of evidence generally. It is not necessary that I refer to them. It is therefore probable that the evidence concerning those events has involved reconstruction. Exceptions to this general proposition are the disciplinary proceedings arising out of the incident in October 2007 and the proceedings leading to Mr Harrison's dismissal on 6 May 2008. No doubt persons participating in those incidents would have treated them seriously. The case arises against a background of "doctrinal" differences concerning the role of the union at Acacia Ridge. Most, if not all, witnesses had views about that question. Such views may have influenced their recollections of relevant events. Although witnesses have different recollections of many events, most of the differences appear to be understandable in the circumstances. They are more likely to be the result of unconscious reconstruction or differing points of view than of deliberate dishonesty. I will explain this conclusion at a later stage. Clearly, Mr Harrison was dedicated to the cause and did not understand that he had to co-exist with others who were not so dedicated, and indeed even hostile to it. I am, at this point, speaking primarily about employees other than supervisors and managers. It is probable that, from time to time, employees who did not share his views acted unreasonably towards him and his supporters. However there is little or no evidence of such conduct, save for Mr Harrison's allegations concerning Mr Tavita's conduct after the incident on 1 June 2007, the incident on 27 October 2007 and, possibly, the incident on 5 June 2007. I am satisfied that One Steel had a formal policy of allowing employees freedom of choice as to whether or not they joined the union. I infer that One Steel would have preferred no union activity on site. However there is no evidence that the minimal level of union membership which existed on the site was seen as a problem. There is no reason to believe that One Steel was actively encouraging union members to resign from the union. One Steel provided facilities for union representatives to use for the purpose of meeting with members and other employees who might wish to speak to them. I do not accept that One Steel's unwillingness to allow the union representatives to use the lunch-room was in any sense evidence of an anti-union attitude. Given the differences of opinion concerning union membership amongst the workforce, it was quite reasonable for One Steel to provide meeting accommodation elsewhere at the site, particularly in view of complaints concerning Mr Harrison's union activities in the lunch-room. I do not accept that One Steel tried to discourage employees from meeting with union representatives. I accept Mr Schreiber's evidence that there was another, more private, door to the room which One Steel made available for such meetings. Mr Loggie said that he was unaware of it. That is no answer to Mr Schreiber's clear statement that there was such a door. Had One Steel regularly insisted that meetings occur in the presence of designated staff members, I may have reached a different conclusion as to One Steel's attitude. The evidence demonstrates that this occurred on only one occasion. I accept that One Steel considered that the Acacia Ridge plant was more productive than its other plants. Mr Clement was probably less than frank in saying that he did not know whether wage levels at Acacia Ridge were lower than those at other plants where unions were better established. I would be surprised if he did not have some idea of the makeup of the respective conversion costs. I accept, however, that comparisons between plants may have been a rather more complex exercise than was suggested by the applicants, given that some products are more labour-intensive than others. Mr Harrison commenced to be active in union affairs from about June 2007. One Steel probably became aware of his status as a union delegate during that month, or perhaps a little later. There has been no allegation that Mr Wharton or Mr Butler, the other identified union activists, encountered any personal hostility or discrimination. The applicants might suggest that Mr Harrison was chosen for special attention so as to provide an example to others. If so, then One Steel certainly chose the right candidate. Each of the major incidents which occurred appears to have been directly provoked by him. I refer particularly to the occasion on which he spoke to Mr Tavita on 1 June 2007, provoking a complaint by him; the incident in October 2007 when he gratuitously reprimanded Mr Tavita for relatively minor offensive language; and the incident on 2 May 2008. I will say more about these incidents at a later stage. It was impossible for One Steel to ignore any of them. It is Mr Harrison's case that many incidents which occurred between June 2007 and May 2008 were as a result of his union activity. In his affidavit filed on 27 May 2008 he said that his trouble with Mr Tavita commenced with his becoming a union delegate on 8 June 2007. He did not, at that stage, refer directly to the incident on 1 June 2007. In his affidavit filed on 30 June 2008 he said that his conflict with Mr Tavita started at about the time he "was becoming more prominent in the workplace regarding the union". He then outlined his version of the incident on 1 June 2007. That incident arose out of Mr Harrison's own conduct, but he claimed that a few days later, Mr Tavita threatened him. In exhibit 1, which was tendered by the applicants, Mr Tavita said that he had no contact with Mr Harrison after the incident on 1 June 2007 until the incident on 27 October 2007. Curiously, Mr Tavita was cross-examined on that basis, suggesting that Mr Harrison's allegation of threatening behaviour a few days after 1 June 2007 was not part of the applicants' case. There was also an ambivalent approach to the incident on 4 June 2007. In cross-examining One Steel's witnesses, counsel for the applicants sought to establish that it was evidence of some form of hostility towards Mr Harrison as a delegate. He was not, at that time, a delegate. Perhaps it was known that he was standing for election, but there is no evidence to that effect. Mr Harrison seems not to have attributed that event to any hostility on Mr Tavita's part when he referred to it in paras 2 and 3 of his affidavit filed on 27 May 2008. From about June 2007 until May 2008, Mr Harrison was very active in promoting union affairs on the site. He distributed literature, put up notices, handed out stickers and sang union chants. No doubt he also spoke to other employees about union business and about the benefits of union membership. He dealt directly with management. None of this, in itself, seems to have caused particular friction with management, save for the occasion on which he invited Mr Bradley and Mr Loggie to a meeting with Mr Schreiber and Mr Patterson, without telling the latter persons that the former persons would be there. It is neither unreasonable nor surprising that Mr Schreiber and Mr Patterson were concerned at being confronted in that way. Their reactions do not lead me to conclude that they were actively hostile to union activity on site. At the trial there was a significant factual dispute as to whether the "Say No" stickers appeared before or after the union stickers. There is evidence both ways. The preponderance of evidence probably favours the view that the "Say No" stickers appeared first. However they clearly appeared in the context of increased union activity on the site involving the distribution of union material. Although it was suggested that the "Say No" stickers had been printed using One Steel's facilities, there is no evidence to that effect, save for the suggestion that Mr Newbegin had said that somebody had been counselled concerning the matter. He denied that he had said that. Mr Allard agreed that the stickers looked as if they could have been produced on One Steel's label printers, but there is no evidence that there was anything particularly distinctive about them. Mr Harrison complained that the "Say No" stickers were offensive because their message was opposed to the union. I find it difficult to understand why he would feel offended by opposition to his own propaganda. At the very least he demonstrated a lack of sensitivity to other people's views, or their rights to have such views. There was a relatively low level of union membership on the site, particularly in the mill area. I am satisfied that numerous employees were either uninterested in union promotional activities or opposed to them. I accept, too, that there were complaints from other employees concerning the level of union activity generated by Mr Harrison and his supporters. I do not understand these matters to be in dispute. In those circumstances, it is difficult to see how One Steel could have responded to Mr Harrison's demands that the "Say No" stickers be banned without also banning union stickers. One can also understand why, for reasons of simplicity, the ban would have been extended to include all stickers other than those which related either to One Steel itself or identified employees by name, and that the ban should have been extended to ear muffs. Mr Harrison seems not to have considered that his involvement in bringing about the ban should have caused him to be circumspect in his own conduct concerning the use of stickers. His attitude was demonstrated by the events which occurred prior to, and at, the meeting with management on 14 April 2008. Mr Loggie said that Mr Harrison proposed to enter the meeting with AMWU stickers on his shirt. Mr Loggie showed appropriate prudence in suggesting that he remove them. He accepted the advice but nonetheless felt the need, when he entered the room, to draw attention to the fact that he was not wearing stickers. Despite Mr Harrison's involvement in initiating the ban on stickers, he was determined to demonstrate disapproval of it to the extent that it applied to him. Stickers on helmets were banned in late June or early July 2007, very soon after Mr Harrison became a delegate. The ban on ear muffs was imposed in either late July or early August 2007. However stickers continued to appear in other places on site including, in particular, on lockers. The memorandum banning stickers from lockers, company-issued clothing and more generally, was not issued until 24 April 2008 with effect from 30 April 2008. It cannot be suggested that One Steel was eager to exclude stickers, including union stickers, from the site. Further, there is no evidence of any attempt to prevent the distribution or display of other union material apart from the large signs to which specific reference has been made. To some extent One Steel facilitated the distribution of union information by providing a dedicated notice board. As I have said, I accept that One Steel generally considered that it was in its interests that union involvement not increase. I accept that One Steel tried to keep employees contented so that union membership was not particularly attractive. Mr Witt's attitude suggests that they had been successful in that approach, at least in his case. However management was also aware that some employees supported the union and were active in union affairs. Save for Mr Antal's very general assertion, there is no evidence that union members were discouraged from renewing membership or participating in union activities. One Steel was aware of its legal obligations concerning the union and seems to have been careful to fulfil them. The union complains of various matters but does not suggest breach of any legal obligation, other than in connection with Mr Harrison. It may be that One Steel was not inclined to do more than it was legally obliged to do in facilitating union activity, but it was entitled to take that approach. In the AIRC proceedings in late 2007 and early 2008, a number of aspects of Mr Harrison's conduct were raised with him. It was, at one stage, suggested that they had not previously been so raised. Mr Harrison subsequently agreed that the parking issue had previously been raised. Mr Hasemann said that in response to complaints from other employees he had spoken to Mr Harrison about his union chants and his habit of putting his hat on the cup hooks and in the refrigerator. The other matter raised, according to Mr Bradley, was putting union stickers on company property. Of course, the question of stickers on helmets and ear muffs (company property) had been dealt with by the ban. It may be that management had not raised the question of stickers on other company property, but Mr Harrison could have been in no doubt that stickers, including his stickers, were causing problems on the site. In any event, he agreed to desist from such conduct. These aspects of Mr Harrison's conduct were clearly resented by other employees. It is not surprising that, as Mr Hasemann claimed, they had complained to him about them. In those circumstances, it is also not surprising that he should have raised them with Mr Harrison. I accept Mr Hasemann's evidence that he had raised most of these matters with Mr Harrison on numerous occasions prior to their being raised in connection with the incident on 27 October 2007. For the purposes of meetings in connection with the AIRC proceedings, Mr Newbegin produced a table of the issues which One Steel had concerning Mr Harrison's conduct. I set it out below. In some minor respects, it may go beyond the evidence, but I have not used it otherwise than as a reflection of the position as management saw it. Mr Harrison claimed that he had been docked half-an-hour's pay for being two minutes late for work as a result of a flat tyre and being delayed in traffic. This incident was no doubt advanced as a basis for inferring some sort of hostility towards him on the part of One Steel. He raised the issue with his supervisor, Mr McGuire, who said that it was not his decision. Mr Harrison did not take the matter any further. There is no evidence as to how or when this incident occurred. Indeed, Mr Harrison said that he could not recall the dates. In those circumstances it is difficult to see how One Steel could be expected to respond to the allegation. Mr McGuire did not refer to the matter, and it was not put to him in cross-examination. It cannot be the basis for any adverse inference as to One Steel's attitude towards Mr Harrison. It was also implicitly suggested that Mr Hasemann's allegation, that Mr Harrison was spreading rumours about proposed shift changes, was evidence of hostility towards him. Mr Hasemann had received information from other employees that Mr Harrison was making such allegations. Mr Harrison admitted discussing the matter but denied starting the rumours. He may not have done so, but it is entirely understandable that Mr Hasemann should have raised the matter with him. Without any other provocation Mr Harrison, on his version, said to him, "Ray, what does the 'Say No' sticker mean? Does it mean Say 'no' to getting fucked up the arse? " According to Mr Tavita, Mr Harrison said, "I suppose you are one of those who said 'No' ". He then said that he was going to "fuck me up the arse". The comment was repeated. The difference between the versions is minimal. It is not surprising that management should have asked Mr Harrison to apologize. Three points must be made concerning this incident. First, it seems to have occurred prior to Mr Harrison becoming a union delegate. Second, there was absolutely no provocation by Mr Tavita, save possibly for his wearing the "Say No" sticker. Finally, Mr Harrison's words had a real potential to cause offence. They were directed at Mr Tavita and repeated. Mr Harrison has offered no explanation for his conduct. I infer that his intention was to be provocative. Whether or not Mr Harrison apologized to Mr Tavita, as he was asked to do, is in dispute. Mr Harrison said that he did. There is some support for this in Mr Newbegin's table which indicates that Mr Harrison had given an oral apology to Mr Tavita, and that Mr Tavita had not accepted it, saying that he did not believe that Mr Harrison meant it. Mr Tavita said that there was no apology. I accept Mr Harrison's evidence on this score. It seems unlikely that management would have allowed the matter to have passed without comment, had Mr Harrison failed to comply with the requirement that he apologize. It may have been ungracious for Mr Tavita to reject the apology, but Mr Harrison's conduct was unprovoked and could have been quite insulting to some people. From Mr Harrison's point of view, the significance of the incident was that, some days later, Mr Tavita threatened him. Mr Tavita seems not to have denied that allegation, but it was not put to him in cross-examination. In any event, at the time Mr Harrison did not complain about such threat. He offered him a union T-shirt and had been talking to him for no longer than a few minutes when he was approached by Mr Tavita, who asked him to leave the floor. Later that day Mr Hasemann called him to a meeting and said that he was not to talk to workers on the floor before his shift because it took their minds of their work. Mr Harrison agreed not to do so. Mr Hasemann said that he had received a complaint on 1 June 2007 from a worker that Mr Harrison had harassed him whilst he was oxy-cutting and had persisted, although the worker asked him to stop. Mr Hasemann called Mr Harrison to a meeting on 4 June 2007 to discuss the complaint and told him that he needed to respect the fact that employees had jobs to do; that they were not to be distracted by him; and that there were good safety reasons why people should not be distracted in the mill and maintenance areas. Mr Hasemann said that Mr Harrison was not to be on the shop floor unless he was working a shift. Mr Antal, who accompanied Mr Harrison to the meeting, understood that the meeting was about an incident which had occurred on that day. Mr Newbegin attended the meeting, as did Mr McGuire. Mr Newbegin made notes of the meeting. Graham Hasemann asked Ray to remove Shane from the floor. Shane was upset. We stipulated to Shane that if he was checking his workstation before his shift then this was being pro-active. But just talking can be disruptive to those still working. We also said that spruiking or handing union info out is no different to Religion or Politics. It should be left to his own time and/or meal breaks and that others rights should be respected who don't want to hear it. Shane said there were issues and employees felt they were not being heard so it has caused them to look at the union membership. The notes concerning the second meeting seem to commence with the heading "Other". Mr Hasemann gave evidence of two meetings. Save in that respect, I see no reason to doubt the accuracy of Mr Newbegin's notes. None of the other evidence discloses that Mr Hasemann had instructed Mr Tavita to tell Mr Harrison to leave the floor. I accept that Mr Newbegin's notice is accurate in that respect. There is nothing unreasonable, or even surprising, about the attitude taken by management to casual conversation in a relatively dangerous work environment, whether the topic of conversation was union membership or anything else. Further, the notes suggest that management had no objection to Mr Harrison discussing union activities on site other than with employees who were working. The notes of the meeting on 5 June 2007 suggest a fairly open relationship between Mr Harrison and management. He was certainly encouraged to raise matters of concern in the appropriate forum. Mr Harrison invites the inference that he was stopped from going on to the shop floor because he was discussing union affairs, claiming that for many years, he had gone on to the floor for other purposes. Neither Mr Hasemann nor Mr Newbegin seemed to be aware of any such long-standing practice involving Mr Harrison socializing with other employees on the shop floor or being there for any purpose other than to facilitate the shift change. It seems unlikely that there would have been as liberal an approach to entering the shop floor as Mr Harrison suggested, given the dangers present there. I accept that Mr Harrison was always early to work. It may be that, on occasions, he went on to the floor for his own purposes. However I do not accept that any such conduct was known to, or approved by, management. Mr Hasemann intervened on 4 June 2007 because of complaints from another employee and his own views as to safety. To intervene was both rational and responsible. I accept his evidence on that score. There may previously have been no clearly formulated policy as to this matter, but that may reflect the fact that it is little more than a matter of commonsense that people should not go into a dangerous work environment unless it is necessary that they do so. It may also suggest that such visits were not a common occurrence. There was no suggestion that he was addressing his remarks to Mr Harrison. Mr Harrison claimed that Mr Tavita's conduct disturbed his conversation. He said, "Ray, do you mind not swearing". Mr Tavita said, "Shut up and drink your coffee". Mr Harrison said, "It's not coffee, it's water". Mr Tavita said, "Shut up". Mr Harrison said, "Don't tell me to shut up". Mr Tavita said, "Oh well, outside the gate then". Mr Tavita said that he used the word "Bullshit" and that Mr Harrison responded, "No swearing in the [lunch-room]". Mr Tavita said, "Every day I hear you swearing in the [lunch-room]". Mr Harrison said, "You should respect people in the [lunch-room]". Mr Tavita said, "I do respect people in the [lunch-room]. Does that mean that if I see you at the gate I can swear at you? " Subsequently, Mr Tavita heard another employee swearing in Mr Harrison's presence and said, "Why didn't you say anything to Chris while he was swearing? " Mr Harrison said that on the second occasion Mr Tavita said to him, "I'll get you" and Mr Harrison responded, "Hey Ray, speak louder so everyone can hear you". These allegations should be seen in light of Mr Harrison's assertion that he had been intimidated by the incident on 1 June 2007 and the subsequent threat. However Mr Harrison's willingness to chastise Mr Tavita concerning his language was not consistent with any continuing feeling of intimidation. Further, the evidence suggests that Mr Harrison was no stranger to bad language. His language on 1 June 2007 demonstrated the contrary. There is also evidence that on other occasions he had sworn in the lunch-room, or had heard swearing in the lunch-room and not chastised the relevant person. Mr Harrison could not recall Mr Tavita's words, although he disputed Mr Tavita's version of events. Given that Mr Harrison could not recall the words used, there is no reason to reject Mr Tavita's account of them. Such language was relatively mild as compared to the remarks made by Mr Harrison on 1 June 2007. Once again, I infer that Mr Harrison was trying to provoke Mr Tavita. In my view the description of both men's conduct as "childish" was accurate. Counsel for the applicants suggests that the failure by management to follow the protocol established for dealing with misconduct demonstrated bad faith in One Steel's treatment of Mr Harrison, inviting an inference that he was discriminated against because of his union association. I see no justification for this submission. Step 2 --- The first written warning; (Appendix 2). Step 3 --- The final written warning; (Appendix 3). Step 4 --- Termination Forms No's PTM-1544, PTM-1545, PTM-1546 & PTM-1547 (Format Appendix 4). Mr Allard certainly considered that he was authorized to vary the process. There is no reason to doubt that he was correct in that view. The evidence suggests that management perceived there to have been a history of disagreement between the two men. The incident which occurred on 1 June 2007 is evidence of such disagreement. As far as I can see, it was provoked by Mr Harrison, suggesting some previous animosity. There is little evidence concerning relations between the two men between early June 2007 and 27 October 2007. Mr Harrison's affidavits suggest ongoing difficulties. Mr Tavita said that they had little contact. Management perceived an ongoing problem although actual incidents were identified only in a very general way. I am inclined to accept that view. If Mr Allard's conduct in giving a final written warning could readily be characterized as unreasonable or inexplicable (as was suggested by counsel for the applicants) then it may have been a basis for inferring some hostility on his part towards Mr Harrison. However I accept that there was justification for Mr Allard taking a serious view of the matter and choosing to impose a higher, rather than a lower, level of sanction, even if this involved the exercise of his discretion to depart from the usual course as prescribed in the protocol. Further, Mr Tavita and Mr Harrison received the same treatment. Given that management was not satisfied as to Mr Harrison's version of events this was understandable, and probably inevitable, particularly as he had, at least in part, provoked the incident by criticizing Mr Tavita for conduct which was common in the lunch-room. I am satisfied that the issue of the final written warning was not, itself, evidence of any hostility towards Mr Harrison, or of any desire to discriminate against him because of his union membership, status as a delegate, union activity or by any other feeling of personal animosity. He had brought about a situation in which employees were prevented from wearing stickers on their helmets and their ear muffs. Nonetheless he persisted in wearing them on his shirt and putting them on his locker. On one occasion he was advised by Mr Loggie that it was inappropriate for him to go to a meeting with management, wearing stickers on his shirt, presumably having regard to the history of stickers on the site. Notwithstanding such advice he subsequently chose to put a sticker on his neck and, so adorned, to go to the office where he was likely to encounter management personnel. He approached Mr Allard, wearing the sticker. He said that his purpose was to make a point in a humorous way about the attitude of One Steel to attempts to promote the union in the workplace. He said, at para 17 of his first affidavit, that he would explain the full background to his wearing the sticker later in the affidavit. However he only referred to the fact that stickers on lockers had been removed and defaced, making no reference to his own role in trying to have the "Say No" stickers removed from the workplace. Given the history of the ban on stickers, his conduct could not reasonably be seen as a humorous satirical comment on management's attitude towards promotion of the union. The ban applied to all stickers, including some to which the wearers had been emotionally attached, and the "Say No" stickers. Those wearing the "Say No" stickers may have held their views as strongly as Mr Harrison held his. His conduct could only be seen as a deliberate assertion of his capacity to defy management's attempts to avoid conflict in the workplace. If management had not responded, other employees would inevitably have wondered why they were not able to wear their stickers. As Mr Allard said, the issue was not about stickers. It was about solving a human relations problem and enforcement of management's solution. Much was made of Mr Harrison's request that the direction be put in writing. It was said that he had not refused to comply with the instruction, and that he would have complied with it, had it been given in writing. However his own evidence was not clear on this score. Mr Harrison said that he wanted the instruction in writing to, "highlight the extent to which the employer was prepared to go to close off opportunities for the Union to be promoted in the workplace". In his evidence he said that he had told both Mr Allard and Mr Hasemann that he wanted the direction in writing. However he did not say, in his evidence, that he would comply with the direction if it were given in writing. In cross-examination, Mr Allard agreed that on 2 May 2008, Mr Harrison said, on a number of occasions, that he would remove the sticker if the direction were put in writing. This concession did not necessarily apply to the first occasion on which the direction was given. Mr Hasemann said in his evidence that Mr Harrison had said to him that he told Mr Allard that he would remove the sticker if he received a written instruction. Mr Harrison's conversations with Mr McGuire did not suggest an intention to remove the sticker, nor did he refer to any request that the instruction be given in writing. Mr Allard, Mr Newbegin and Mr Hasemann all claimed that at the meeting on 2 May 2008 Mr Harrison said that if the direction were reduced to writing, he and the union would reply in seven days. Mr Harrison gave similar evidence at para 36 of his affidavit filed on 8 May 2008. He also said, at para 35, that at the meeting, he had said that he would remove the sticker if the direction were given in writing. One wonders why Mr Harrison should have asked that the direction be in writing. He said that Mr Loggie had advised him that if he felt that there was some difficulty with his employer, he should follow this course. However he also said, at para 29 of his affidavit filed on 27 May 2008, that he had asked for the direction in writing because he wanted to "document the event". He said that when he was working as a shop steward in Western Australia in 1979 his union told him that if he did not agree with something from management, he should ask for it to be put in writing. He had found this to be good advice and had maintained the practice. None of this advice appears to have involved advice that he need not comply with the direction until it was reduced to writing. His desire to document the event could easily have been satisfied by his own written note of the event or by later written confirmation. In any event, there was no reason to believe that management would deny that the direction had been given. The direction was either lawful and reasonable or it was not, regardless of whether it was in writing. There is a certain tension between an intention to make a humorous comment upon the policy concerning stickers (which intention, as Mr Harrison claimed, underlay his initial decision to wear the sticker on his neck) and the subsequent decision to use Mr Allard's inevitable direction to remove it as a basis for demonstrating One Steel's opposition to the promotion of unionism on site. The formalization of disobedience could only aggravate the situation. Further, as far as the evidence goes, the only steps taken by One Steel to limit union promotional material appear to have been in connection with the stickers and large signs. One Steel accepted the presence of union material in the lunch-room and, for a long time, accepted the placement of union stickers around the site. The restriction on stickers did not arise out of any desire to limit union publicity, but out of a desire to avoid conflict amongst employees. Mr Harrison knew that. He had demanded that the "Say No" stickers be banned, which demand eventually led to the banning of all stickers. It is also difficult to reconcile his claimed purpose in demanding the explanation in writing, namely to highlight One Steel's opposition to union propaganda, with his claim that he demanded it because of advice he had received from union officials. One wonders why Mr Harrison would distinguish between acting upon an instruction given orally and acting upon an instruction given in writing. A request for an instruction in writing is usually made where the recipient of the instruction is concerned as to the consequences of complying with it and wishes to record the fact that he or she is acting pursuant to an order given by a superior. Usually, this will be because the consequences of such compliance may be serious, perhaps themselves raising doubts about the legality of the order or its appropriateness. No significant consequences attached to compliance with Mr Allard's direction. Indeed, there may have been consequences as a result of non-compliance, in the form of renewed conflict on site. In any event, there was no reason to expect that Mr Allard would, at any later time, deny having given the direction. As the day went on, other managerial staff reiterated it, including Mr Hasemann (in the presence of Mr Millard) and Mr McGuire. Mr McGuire had also raised the matter before Mr Allard issued his instruction. Mr Allard, Mr Hasemann and Mr Newbegin were all at the meeting which was held later in the day. There can have been no perception of any risk that management would deny having given the direction, nor was there any room for ambiguity about it. Mr Harrison told Mr McGuire that, in effect, he was wearing the sticker to cause trouble, although he used more colourful language. I infer as much. It is probable that his request that the direction be put in writing was a further manifestation of this purpose. There is no basis for suggesting, and it has not been argued, that the lawfulness of the direction depended upon its being given in writing. Nor can I see that the request that it be given in writing went to the reasonableness of the order. However I will deal with these matters in more detail at a later stage. Another theme of the applicants' case was that Mr Harrison was acting on union advice that the instruction was unlawful. The first indication that the union had any view on the question of legality arose out of Mr Bradley's remarks at the meeting on 6 May 2008. Mr Harrison's own evidence did not suggest any earlier assertion that the order was unlawful, although he may have suggested that the memorandum of 24 April 2008 did not prohibit his wearing a sticker on his skin. However Mr Loggie's record of his conversation with Mr Allard on 2 May 2008 suggests that Mr Allard said that Mr Harrison had challenged One Steel's right to prohibit his wearing the sticker on his skin, as opposed to putting it on company property. The actual basis of any allegation of unlawfulness is unclear. It may have been that the memorandum of 24 April 2008 did not apply to stickers worn on skin. It may have been based upon an assertion of some alleged personal right. It may have been based upon an assertion that it was not sufficiently connected to Mr Harrison's employment and/or was unreasonable. On 6 October 2007, Mr Bradley asserted that the direction was unlawful, but also advanced no basis for that assertion. He referred to what may have happened in the case of a woman wearing a burqa with an AMWU insignia on it, a man wearing a turban with such an insignia, or a tattoo or ring. The first two examples appear to have been ineffective and irrelevant attempts to raise the spectre of anti-discrimination legislation. I see no reason why such an employee should not be ordered to remove the sticker from the turban or the burqa, without ordering removal of the turban or burqa itself. If the insignia were part of the fabric of the garment, I would have thought that management could insist on the employee wearing a garment without the insignia. As to the question of a tattoo, the question may be more difficult. A tattoo might be so offensive to others (for example, women, homosexuals, Jewish people or Aboriginal Australians) that it should be kept covered. If that were not possible, the person might not be suitable for employment. I see no reason to doubt that an employer could direct that an offensive ring not be worn. It is not necessary that these questions be resolved for present purposes. Probably, the allegation that the instruction was unlawful merely raised the question of whether it was reasonably incidental to the relationship of master and servant and whether it was reasonable in all the circumstances. I will address these questions at a later stage. In para 8 of the applicants' opening outline it is submitted that until Mr Harrison became a union delegate in mid 2007, there had been no complaint about his conduct. This is not correct. As I have pointed out, the incidents on 1 and 4 June 2007 preceded his election. At para 10 the applicants submit that Mr Harrison's vigorous campaigning on behalf of the union caused some concern amongst managers and employees. That misrepresents the situation. It is true that his actions caused concern amongst some employees, and that such concern was, in turn, a matter of concern for management. Management's only other concern was with his attempts to speak to employees on the shop floor and, possibly, with the sheer volume of material which he was distributing. In para 13 it is submitted that the allegations about Mr Harrison's conduct raised in the AIRC were, "almost all ... associated directly or indirectly with his role as AMWU delegate". That assertion should be put in perspective. Of the five matters identified by Mr Bradley as having been raised at the meeting, that involving parking had nothing to do with his union membership, status or activities. The other matters had some association with his union activities. That inevitably raises the question of the extent to which conduct is to be tolerated simply because it is allegedly done in the name of the union. No reasonable person would be surprised by the fact that other employees complained that Mr Harrison was placing his hat on the cup rack or in the refrigerator. One would not have to be particularly fastidious about personal hygiene to be concerned at such conduct in shared kitchen facilities. Nor can it be asserted that a union member or delegate is entitled to place union stickers on an employer's property. In any event, it seems that One Steel only became concerned about stickers when they commenced to cause conflict with other employees. It is unlikely that the occasional singing of a union song or chant would have attracted managerial opposition or discontent amongst other employees. However repeated conduct of that kind might well cause annoyance. In other words, the gravamen of management's concern was the effect of Mr Harrison's conduct on others rather than the conduct itself. Mr Newbegin's schedule of conduct identified rather more issues arising out of Mr Harrison's conduct. However it also generally focussed on the effects of his conduct on other people rather than upon his union membership, position or activities. Mr Allard (who made the decision to dismiss Mr Harrison) said that the reason for his decision was his conduct in declining to remove the sticker from his neck when told to do so. Mr Allard stressed the importance of the first point. The applicants point to the second point and suggest that it probably relates to the conduct raised with Mr Harrison following the incident on 27 October 2007, such conduct being largely union-related. Mr Allard suggested that such other matters were of little importance to his decision. However it is most unlikely that he did not, to some extent, consider Mr Harrison's previous conduct. It is important to note, however, that point 2 in the letter focusses upon the "significant disruption" caused by Mr Harrison's conduct rather than upon the conduct itself. Much of his prior conduct had the potential to cause disruption. I refer particularly to the incidents on 1 June 2007, 4 June 2007 and 27 October 2007, his conduct with respect to his cap in the lunch-room and, perhaps, his parking habits. In para 49 of the submission it is asserted that One Steel had led an "overwhelming" amount of evidence raising complaints about Mr Harrison's conduct in promoting the union and seeking to recruit employees, and that none of the issues raised pre-dated his appointment as a delegate. The issues to which the submission relates are not identified. As I have observed, the incidents on 1 and 4 June 2007 occurred prior to his becoming a union delegate. It is hard to say whether they were raised by the applicants or One Steel. In any event, I again point out that One Steel's focus was upon the consequences of Mr Harrison's conduct, rather than the conduct itself. At para 50 it is submitted that the sticker on his neck was not a safety issue. However Mr Millard (as a site safety adviser) had a different view. He was concerned at the possibility of skin irritation in the factory environment and at the possible threat to safety caused by disobedience. It is true that Mr Allard seems not to have been concerned about the safety aspect. In para 54 the question of the lawfulness of the direction is again raised. It is said that, "The respondent knew that it was sacking Mr Harrison for abiding by the advice of his union". Mr Harrison did not claim that he had been advised to refrain from compliance with a direction, or to require that a direction be in writing before he complied with it. The extent of the advice was that he might, in some circumstances, ask that an instruction be reduced to writing. There was no apparent reason for seeking a written direction in this case. Mr Bradley's advice was given after the event and was more argumentative than helpful. The applicants also submit that Mr Harrison's disobedience did not constitute a basis for terminating his contract of employment. I will refer to that matter at a later stage. In their final submissions, the applicants re-visit many of these matters, in some cases merely relying upon their opening outline. I will attempt to avoid unnecessary repetition. In para 16 it is asserted that until Mr Harrison became a union delegate Mr Harrison had a perfect employment record. This is, of course, his own assessment. It is not true to the extent that he had been involved in the incidents on 1 and 4 June 2007. In para 17 it is said with respect to the incident on 27 October 2007 and the subsequent final written warnings that, "No witness for the respondent was able to identify any specific conduct on Mr Harrison's part justifying a final (or any) warning". This submission overlooks the fact that management investigated the event and found that Mr Harrison's allegations could not be substantiated. Further, on his own version, he had, to some extent, provoked it. Various One Steel witnesses asserted as much when they said that they had previously heard Mr Harrison swearing and/or other people swearing in his presence without his reprimanding them. In para 18 it is submitted that there was no evidence of a history of differences between Mr Harrison and Mr Tavita. However management clearly had the view that there was ongoing disagreement between them. As much appears from the table prepared by Mr Newbegin. A long history of niggling conduct may not always be easily reduced to specifics. However I see no reason to doubt that those management witnesses who identified such history were accurately reflecting their observations. At para 31(ii) it is submitted that, "An explicit denial from the relevant decision-makers that a prohibited reason formed part of their decision-making will not generally discharge the onus of showing the conduct was not for a prohibited reason". Reliance is placed upon the decision of Buchanan J in Seymour v Saint-Gobain Abrasives Pty Ltd [2006] FCA 1452 at [128] - [129] and to that of Merkel J in Australian Municipal, Administrative, Clerical and Services Union v Ansett Australia Ltd [2000] FCA 441 ; (2000) 175 ALR 173 at [76] . However neither citation supports the proposition. Both references contain observations concerning the evidence of particular witnesses. It would be curious if witnesses appearing on behalf of an employer were to be put into a special category in which their evidence was to be treated as generally not discharging the onus of proving a matter which was peculiarly within their knowledge. It is one thing to say that denials which are self-serving should be closely scrutinized in the light of all other evidence. It is quite another to say, as the applicants have in the present case, that a particular class of evidence will not generally discharge an onus to which it relates. In General Motors-Holden's Pty Ltd v Bowling (1976) 51 ALJR 233, at 239, Gibbs J expressly disapproved of such an approach. However, it would in my opinion be wrong to think that there is any special difficulty in the way of an employer who seeks to prove that in dismissing an employee he was not actuated by the fact that the employee was a shop steward or other delegate of an organization. The onus of proving that the fact that the employee held the position was not a substantial and operative factor in the dismissal is to be discharged according to the balance of probabilities and is not to be made heavier by any presumption that if an employee who is dismissed for disruptive activities happens to be a shop steward the later circumstance must have had something to do with his dismissal. If in the present case evidence had been given by the directors responsible that the employee was dismissed because he was guilty of misconduct or because his work was unsatisfactory, and that in dismissing him they were not influenced by the fact that he was a shop steward or indeed that he was dismissed in spite of that fact, and that evidence had been accepted, the onus would have been discharged. His Honour's remarks at 241 concerning the reliability of evidence reflected only the fact that the evidence of relevant witnesses had not been accepted at first instance, and that other necessary witnesses had not been called. In the present case, in the absence of a prohibited reason, the dismissal is extremely puzzling and irrational. The submission then addresses the reasons advanced by the solicitors for Mr Harrison's dismissal, particularly the point concerning significant disruption. To the extent that Mr Allard implied that the letter may have been written other than on appropriate instruction, I do not draw that conclusion. As I have said, I think it unlikely that Mr Harrison's previous history could have been overlooked. However, as I have also said, it was the disruption, rather than the conduct, to which the letter referred. Counsel suggests that it was strange that Mr Allard identified the matters raised at the meeting in January 2008 as being the matters referred to in the solicitors' letter. It is submitted that there was no suggestion that any of these issues, "had any currency after the meeting of 24 January 2008". This seems to imply that such matters were no longer relevant to the assessment of any future misconduct by Mr Harrison. It may well be that between January and May 2008 there had been no repetition of the conduct raised at the January meeting. It does not follow that such conduct was irrelevant in considering the seriousness of Mr Harrison's conduct in May. It is then submitted that by analogy to the position addressed by the High Court in Bowling , the evidence indicated that Mr Harrison was treated as a troublemaker, and that such categorization of him must have had something to do with his position in the union. I will deal with the decision in Bowling at a later stage. For present purposes it is sufficient to say that even if Mr Harrison could be accurately described as a troublemaker, he was not a troublemaker in the sense in which that expression is generally used in the context of industrial relations. Whatever else he might have done, there is no suggestion that his conduct provoked industrial unrest directed against One Steel. One Steel's concern was, at all times, that he was causing conflict amongst employees. It is then submitted that Mr Harrison's dismissal was "so disproportionate to [his] conduct ... as to confirm that factors other than the sticker incident were operative". For reasons which I have touched upon, I do not accept that proposition. I similarly do not accept that the acceleration of the disciplinary process was inexplicable. I do not accept that in the circumstances of this case Mr Harrison's conduct in wearing the sticker was "a relatively trivial matter". Nor do I accept that it was arguable that One Steel had no lawful right to direct Mr Harrison to remove the sticker, or that such direction was unreasonable. I do not accept the characterization of the final warning given in connection with the incident on 27 October 2007 as being inexplicable other than by reference to Mr Harrison's union activity. It is said that Mr Harrison was not given an opportunity to respond or comment before he was given the final written warning. However he was absent on sick leave from shortly after the incident and was called in specifically to be given the warning. He had been interviewed by Mr Hasemann on 27 October 2007, in the presence of Mr Croxford, Mr McGuire and Mr Antal. He subsequently filed a written complaint with Ms Rankin. It is difficult to see that any useful purpose would have been served by a further interview. There were clear differences between his and Mr Tavita's versions. There was some, apparently independent, support for both versions. Mr Lawson supported Mr Tavita's version. Mr Wally supported Mr Harrison's version. However he said that he had not heard what was said, and that it was "something along the lines of, 'What if we take it outside? ' ". He heard Mr Tavita say, "Shut up! " Mr Frahm's evidence supported aspects of both versions. In any event, it was open to Mr Harrison to raise any further concerns at the meeting on 28 November 2007 when he was given his warning. It may have been prudent for management to have asked Mr Harrison if he had any further comments, but I do not accept that the failure to do so could, in the circumstances, be taken as indicative of some prejudice against him, attributable to his union position or otherwise. Concerning the warning, it is submitted (at para 54) that, "Mr Allard stated that other matters (which were never mentioned to Mr Harrison even at the time of issue of the Final Warning but were raised for the first time in subsequent AIRC proceedings) were taken into account". This is said to be supported by Mr Allard's evidence at TS 20 ll 25-43. The page reference is incorrect. It should be TS 80. Mr Allard said that in issuing the final written warning he took into account the matters which were subsequently raised in the AIRC. I have demonstrated that those matters, or most of them, had been previously raised with Mr Harrison. I do not accept that Mr Harrison was treated unfairly in connection with the final warning. The thrust of Mr Allard's evidence was that the decision was based upon the ongoing friction between him and Mr Tavita and a desire to stop it. As I have previously said, much of the applicants' criticism of One Steel's conduct in connection with the final written warning was based upon the misconception that the incident on 27 October 2007 was provoked by Mr Tavita when it was, at least in part, provoked by Mr Harrison. Mr Tavita's response may have been extreme (if Mr Harrison's version be accepted), but he did not initiate the confrontation. For reasons which I have given, I also do not accept that Mr Harrison was singled out for special treatment when he was directed not to discuss union matters on the shop floor. I decline to draw any adverse inference from his allegation that he was docked half-an-hour's pay for being two minutes late for work. At para 59 reference is made to Ms Rankin's note of a meeting concerning the incident on 1 June 2007. Graham H said that Shane is a ring leader to push union involvement and membership and he has his followers. Given that the incident was apparently provoked by Mr Harrison's dislike of the "Say No" stickers on the basis that they were "anti-union", it is hardly surprising that the question of his union membership and the possible involvement of the union should have been discussed. Whilst the expression "ring leader" can be derogatory, it is not necessarily so. Mr Harrison was leading the union push for increased union involvement on the site and increased membership. He certainly had his followers. Mr Hasemann was counselling caution, not demonstrating hostility. At para 61 the applicants submit that Mr Newbegin's email suggested some ulterior motive concerning Mr Harrison. Whatever "opportunity" Mr Newbegin had identified, it seems not to have involved dismissal. Mr Newbegin rather contemplated a final warning which Mr Harrison might not readily accept. The email certainly suggested that Mr Newbegin saw Mr Harrison's conduct as a problem which might be dealt with by further proceedings in the AIRC. However it is significant that Mr Newbegin also said that if One Steel proposed to proceed in that way, it should inform Mr Loggie "of our intent". This seems to have meant that Mr Loggie should be told of the intention to give Mr Harrison a final written warning. That would have given him the opportunity to advise Mr Harrison as to his response to the warning. I infer that Mr Newbegin expected that Mr Loggie would not be able to persuade Mr Harrison to control himself in face of such a warning. In cross-examination Mr Newbegin said that in the previous AIRC proceedings the Commissioner had said that she would like to see Mr Harrison again should his conduct deteriorate in the future. He thought that she would support the company in issuing a final written warning. As I have said, this view of the Commissioner's position is disputed. If Mr Newbegin saw Mr Harrison as posing a problem, Mr Allard did not have quite the same view. No doubt they had different degrees of contact with him. At para 62 it is submitted that the instruction to Mr Wharton to remove a union sign from his car parked in the car park was evidence of antipathy towards union activism. It certainly demonstrates that One Steel was not willing to permit the display of large union signs on the site. However the fact remains that One Steel continued to tolerate the display and distribution of union literature. It had intervened in connection with the use of stickers only because it was causing conflict. Even then, it was almost a year before the total ban was announced. The applicants then submit that dismissal for wearing a sticker is itself dismissal for union membership or status as a delegate. I will deal with that matter at a later stage. One Steel's submissions comprise a series of factual assertions, most of which I have already accepted. To the extent necessary, its other submissions can best be dealt with later in these reasons. The applicants' submissions in reply will also be best treated in that way. In other words, the lawful commands of an employer which an employee must obey are those which fall within the scope of the contract of service and are reasonable. ... But what is reasonable is not to be determined, so to speak, in vacuo . The nature of the employment, the established usages affecting it, the common practices which exist and the general provisions of the instrument, in this case an award, governing the relationship, supply considerations by which the determination of what is reasonable must be controlled. In that case an employee of Telecom was charged with disciplinary offences for refusing to obey a direction that he refrain from wearing a caftan and thongs to work. The majority (Fox and Sheppard JJ) concluded that the employee was obliged to comply with the direction. At 170, Fox J (Sheppard J concurring) cited Harvey: Industrial Relations and Employment Law 1982 and the decision in Boychuk v K.J. . By its directions concerning the wearing of stickers on helmets, ear muffs, clothing, lockers and otherwise, One Steel had established a usage or common practice which was to be the norm in the workplace. The applicants have not suggested that it was not entitled to do so. In formulating those directions it had regard to the fact that the wearing of stickers had become a source of conflict within the workplace, thus taking into account the effect of the wearing of stickers upon other employees. It is true that the various directions had dealt specifically with helmets, ear muffs, company-supplied clothing and lockers. However the concluding words of the memorandum of 24 April 2008, "and the use of stickers will need to be approved by management", were clearly intended to have a more general application. Even if the memorandum, on its proper construction, did not apply to a sticker worn on the skin, it was open to Mr Allard to extend the operation of the ban in face of Mr Harrison's conduct. One Steel's authority did not depend solely upon its owning the property to which stickers had previously been attached. Its authority arose out of the relationship of master and servant and its status as occupier of the site. If Mr Harrison was not in breach of the direction contained in the memorandum (because it should be construed as applying only to lockers and clothing), he was nonetheless obliged to obey Mr Allard's direction. There can be no doubt that the wearing of stickers on the person had caused a substantial degree of dissatisfaction and conflict. In those circumstances, both the memorandum and the direction to Mr Harrison were reasonable. He was fully aware of the history of the problem. Notwithstanding such knowledge, he took it upon himself to ridicule management and the course which it had chosen in order to ensure harmony on the site. If he were permitted to ignore the memorandum or the direction, there would be no reason why other employees, including those who had previously used the "Say No" stickers, should do otherwise. The atmosphere of conflict would have been regenerated, and the ban would have been ineffective. One Steel had a legitimate interest in maintaining harmony on site and an obligation to its employees to do so. In the circumstances the direction was both lawful and reasonable. In my view, Mr Harrison was obliged to comply with the direction, whether or not it was given in writing. Nothing about the direction justified his insistence upon its being in writing. He had no reason to believe that any adverse consequences would flow from it. He had no valid reason to doubt its legality. I do not accept that he did so. His purported willingness to comply with it if it were given in writing demonstrates this. However his failure to mention his expression of such willingness in his account of his first conversation with Mr Allard suggests that it was not an important part of his plan. His subsequent assertion that he and the union would respond within seven days was also inconsistent with his alleged intention of complying with a written direction. Finally, his statements to Mr McGuire suggested an intention to cause trouble. His request for a direction in writing was probably a further manifestation of this intention. In those circumstances Mr Harrison was obliged to obey the instruction. The only questions remaining, then, are whether the decision to dismiss him was to any extent motivated by his membership of the union or his position as a delegate, and whether his disobedience justified summary dismissal. This focus led One Steel to submit that the applicants were, in effect, relying on s 793(1)(o) although the pleaded case relied upon s 793(1)(a). The applicants eschewed reliance on s 793(1)(o), asserting that s 793(1)(a), "applies to conduct associated with union membership and office, as well as the mere holding of such status". There is, at least superficially, a difficulty in treating s 793(1)(a) as including conduct as opposed to actual, proposed or previous union membership or position as an officer or delegate. Prima facie, the section deals with membership or status and not conduct. On the other hand, s 793(1)(o) deals with conduct of an officer or member of a union, but only if such conduct is: If union-related conduct is within the proscriptive effect of s 792 and s 793(1)(a), then s 793(1)(o) is otiose. Further, much conduct would be protected by virtue of its being within s 793(1)(a), which conduct would not be protected by its being within s 793(1)(o). The applicants submit that analogues of s 793(1)(a) in earlier legislation have been construed as protecting conduct, and that there is no justification for giving it a narrower operation. It is therefore necessary to examine the cases. A convenient starting point is the decision of the High Court in Bowling . The appellant had dismissed the respondent who was a shop steward. The putative reason for the dismissal was that he was a "bad operator", meaning that he was not competent in his work. There was also some suggestion that he was considered to be a troublemaker, deliberately disrupting production and thereby setting a bad example to others. Although the plant superintendent was called to give evidence as to the reason for his dismissal, it appeared that the decision had actually been made at head office in Melbourne. At first instance the Industrial Court concluded that the dismissal was not for the stipulated reason, namely the respondent's poor work record and attitude to his job, this conclusion being based upon an assessment of the credibility of the witnesses. One member of the Industrial Court (Woodward J) concluded that the superintendent had been influenced in his decision by a belief that the respondent had deliberately disrupted production on several occasions and was setting a bad example to others. On appeal the appellant asserted that this was the real reason for the dismissal. The majority (Gibbs, Stephen, Mason and Jacobs JJ) appear to have accepted such assertion. No doubt this is an advance which could be made if officers of the appellant had said in evidence "We dismissed him because he was a troublemaker, because he was deliberately disrupting production and setting a bad example and we did so without regard at all to his position as a shop steward" and that evidence had been accepted. Yet this evidence was not given and, even if it had been given, there may have been a question as to its reliability. Once it is said that the appellant dismissed him because he was deliberately disrupting production and was setting a bad example it is not easy to say without more that this had nothing to do with his being a shop steward. Although the activities in question did not fall within his responsibilities as a shop steward his office gave him a status in the workforce and a capacity to lead or influence other employees, a circumstance of which the appellant could not have been unaware. It would be mere summise or speculation, unsupported by evidence, to suppose that the appellant's management, if concerned as to the bad example he was setting, divorced that consideration from the circumstance that he was a shop steward. The short answer to this suggestion is that s 5(1)(a) does not proscribe the circumstances which it lists as the sole or predominant reasons for dismissal. It is sufficient if the circumstance is a substantial and operative factor. And it does not cease to be such a factor because it is coupled with other circumstances or because regard is had to it in association with other circumstances not mentioned in the section. So much may be conceded, but this does not avail the appellant in the present case because we are concerned not with activities undertaken by the respondent in his capacity as a shop steward but with activities otherwise undertaken and the example that he set to others in which his position as a shop steward was of particular significance. The qualification is that a dismissal based on the activities of a union delegate or officer must fall within para (n), rather than para (a), if it is to be for a proscribed reason, unless the reasons proffered by the employer and accepted by the Court do not "exclude the possibility that (the dismissal) was associated with the circumstance that the (employee) was a (delegated officer)": see Mason J at 619 in GMH v Bowling . As noted above and relevantly, for present purposes, his Honour added that if the possibility was no more than "slender" the circumstance might be disregarded as one which was not a substantial and operative factor in the decision. ... Rather, his Honour was stating that in a case in which the dismissal of a union official or delegate occurs in circumstances that are closely associated with the activities of the employee in that capacity, the employer carries the onus of rebutting the very real possibility that the dismissal was associated with the circumstance that the employee was an official or delegate. A failure to do so can result in the Court determining that, under the statutory scheme, the dismissal was for a proscribed reason. As it asserts that it dismissed him by reason of his conduct, it must show that notwithstanding any apparent association between such conduct and his union membership or position, such membership or position played no part in the decision. It also protects the rights to participation in the lawful activities of a trade union. Prior to the 2006 amendments to the [Workplace Relations Act], Part XA of the pre-reform Act contain similar provisions dealing with freedom of association. The applicants also rely upon the decision of the Full Court in Davids Distribution Pty Ltd v National Union of Workers [1999] FCA 1108 ; (1999) 91 FCR 463 at [107] , that of Merkel J in Ansett at [63] and that of Wilcox J in Greater Dandenong City Council v Australian Municipal and Clerical Services Union [2001] FCA 349 ; (2001) 184 ALR 641 at [72] - [73] , citing his Honour's earlier remarks in Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd [2000] FCA 1008. I suspect that the applicants have misunderstood these cases. The proposition identified at [107] in Davids related to the purpose of the former Act as a whole and, in particular, Part XA. It was not concerned with the distinction between status as a member, office holder or delegate, on the one hand, and actions in advancing the industrial interests of the union, on the other. Further, I note that the quotation of the relevant extract in the applicants' opening outline is inaccurate in one respect. It is aimed at ensuring that employees may band together, if they wish, for collective bargaining of the type provided for in the Act to achieve the broader objectives of the Act as contained in s 3. ... That which is protected by such legislation is more than the right to be a member. It is the right to participate in protected union activities, including the taking of collective industrial action against an employer to seek to obtain better industrial conditions ... . Mr Harrison's conduct could hardly be described as "collective action". However, as I have said, the decision in Davids says nothing about the respective areas of operation of s 793(1)(a) and s 793(1)(o). It has been said to be to "remove fear of adverse action by an employer against an employee taking union office and performing the functions of that office" ( Bowling v GMH at 210 per Smithers and Evatt JJ) and to "ensure the threat of dismissal or discriminatory treatment cannot be used by an employer to destroy or frustrate an employee's right to join an industrial association and to take an active role in that association to promote industrial interests to both the employee and the association ...". Similar comments apply to the extract from the judgment of Wilcox J in BHP Steel to which his Honour referred in Greater Dandenong . In Finance Sector Union of Australia v Australian & New Zealand Banking Group Limited (2002) 114 IR 352 , Wilcox J applied the decision in Bowling as I have explained it. See that decision at [173] and [187]. See also the decision of Branson J in The Community and Public Sector Union v The Commonwealth of Australia [2007] FCA 1397 at [114] . The applicants also refer to the decision of Marshall J in Elliott v Kodak Australasia Pty Ltd [2001] FCA 807 ; (2001) 108 IR 23 and to that of North J in Australasian Meat Industry Employees' Union v Belandra Pty Ltd [2003] FCA 910 ; (2003) 126 IR 165 at [150] . Each case involved an examination of the history of the relevant industrial legislation. Both North and Marshall JJ concluded that s 298L(1)(a) of the Act, itself an analogue of s 793(1)(a), had an analogue in s 9(1) of the 1904 Act. Their Honours concluded that s 298L(1)(a) should be given the same breadth of operation as had been attributed to s 9(1), notwithstanding the fact that in s 298L(1) (as in s 793(1)) subsequent provisions might suggest that s 298L(1) should be given a narrower meaning. In Kodak , this view led Marshall J to conclude that the word "delegate" in s 298L(1)(a) should have a wider meaning than might be suggested by other parts of s 298L(1). In Belandra North J concluded that s 298L(1)(a) was intended to cover "conduct taken against employees because they had taken action as members of a union, and because a union had taken action as an incident of that employee's membership of a union. " To the extent that this implies that s 793(1)(a) addresses conduct as well as union membership or standing as an officer or delegate, it is inconsistent with the observations made by Mason J in Bowling . Unfortunately, it seems that neither his Honour nor Marshall J was referred to that decision or to the decision of Merkel J in Ansett . I proceed upon the basis that ss 792(1)(a) and 793(1)(a) proscribe dismissal because of union membership or status as an officer or delegate, but not because of conduct. However conduct is relevant to the question in the way explained by Mason J in Bowling . The question, then, is whether or not One Steel has satisfied me on the balance of probabilities that Mr Harrison's union membership or position as a delegate was not a reason for Mr Allard's decision. Mr Allard impressed me as a conscientious manager and an honest witness. He was willing to concede that, generally, Mr Harrison had been a good employee. He did not agree with Mr Newbegin's view that Mr Harrison posed a problem. His reluctance to put great weight upon the other grounds set out in the solicitors' letter seemed to reflect his own recollection of events rather than any perception that there was danger to One Steel in his so doing. If his evidence stood alone, I would have been inclined to accept that Mr Harrison's union membership and position as a union delegate were not reasons for his decision to dismiss him. However his denial does not stand alone. Notwithstanding attempts by the applicants to find sinister undertones in all aspects of One Steel's conduct and that of its managerial and supervisory staff, I am persuaded that management saw itself as facing a serious problem which had first emerged in the middle of 2007. The problem was, to some extent, caused by Mr Harrison's views concerning his position as a union delegate and his desire to advance the union cause. However the problem lay in the effects of his conduct, not the conduct itself. I accept that One Steel would have been happier without union activity on the site, but I see nothing in the evidence to suggest that it was other than proper in its attitude towards the union and its representatives. It co-operated with them without being enthusiastic about doing so. Further, One Steel was willing to accept Mr Harrison's conduct in distributing literature and other material in the lunch-room and in distributing stickers about the site. It was only when his conduct, and that of those opposed to him, raised the risk of conflict on the site that it intervened. Even then it did so in a measured way, limited to areas in which the conflict was emerging. Thus it was not until April 2008 that a general ban on the use of stickers on the site was enforced. I also see no real evidence of any hostility towards Mr Harrison personally on the part of management. I have previously referred to Mr Allard's views concerning him. Mr McGuire's approach to him on 2 May 2008, asking him to remove the sticker, appears to have been more designed to protect Mr Harrison's position than to advance any cause being espoused by One Steel. Mr Harrison claimed to have relations with Mr Patterson which involved discussions about their shared interest in a football team. Following the incident on 27 October 2007 concerning Mr Tavita, Mr Harrison played golf as a member of Mr McGuire's crew. Mr Hasemann went to the trouble of ringing him while he was on sick leave to inquire as to his choice of liquor and, on 6 May 2008, seemed to regret that Mr Harrison had provoked his own dismissal. Further, it is clear that Mr Allard's decision was not taken in haste, nor was it a foregone conclusion that Mr Harrison would be dismissed at any time prior to his refusal to resile from his position at the meeting on 2 May 2008. Indeed, had he resiled from his position at the meeting on 6 May 2008, Mr Allard might still have decided not to dismiss him. None of this is consistent with his union membership being a reason for his dismissal. Taking into account all of these things, I conclude that One Steel has satisfied me on the balance of probabilities that Mr Harrison's union membership and position as a delegate were not reasons for his dismissal. The only remaining question is whether or not his conduct entitled One Steel to terminate his employment summarily. But the conduct of the employee must itself involve the incompatibility, conflict or impediment or be destructive of confidence. An actual repugnance between his act and his relationship must be found. It is not enough that ground for uneasiness as to its future conduct arises. The first is the decision of Wootten J in Scharmann v APIA Club Ltd (1983) 6 IR 157. ..." The disobedience must at least have the quality that it is "wilful": it does (in other words) connote a deliberate flouting of the essential contractual conditions. That is a proposition I find it impossible to accept. One commanding circumstance is to ascertain the subject matter as a totality of which it is predicated that it must be wilful. Here the subject matter is not "disobedience", but "disobedience of a lawful order. " It is the whole compound expression that must be "wilful," and not the one word "disobedience" adding a provision "if the order be lawful. " It is no doubt a correct principle that, once the relation of employer and employee is established, obedience to lawful orders is, if not expressly, then impliedly, contemplated by the contract creating the relation, and mere disobedience of such orders is a breach of the bargain. But whether disobedience in a given case is of such a character as to justify a complete dissolution of the contract by one of the parties and, as here, a forfeiture by the other of the valuable accruing rights, together with some degradation --- altogether a severe penalty --- is, in my opinion, quite a different matter. Such a justification requires the disobedience to be as phrased "wilful disobedience of a lawful order. " That is, it must be not merely a breach but a radical breach of the relation, and inconsistent with its continuance. "Wilfully" does not necessarily connote in that connection anything criminal or immoral, but it does connote some deliberate design or purpose to derogate from duty. He was subsequently told that the organization was to be changed so that he would no longer be a member of the executive committee or report directly to the managing director. The employee asserted that the changes were in breach of his contract of employment, and that he was not willing to perform his duties on that basis. He remained willing to perform them in accordance with his understanding of the contract. He was dismissed upon the basis that he had repudiated his contract of employment. The contract provided that: "The duties of the above position are set out under establishment No 7100 or as directed by the Managing Director". The employer argued that the managing director was therefore empowered to dispense with the employee's "duties" of reporting to him and sitting on the executive committee, and to impose the duty of reporting to the general manager. Sundberg J concluded that the managing director was authorized to make the proposed changes. His Honour then had to consider the validity of the dismissal. First, there must be a breach by the employee of the terms of the contract or a demonstrated intention not to be bound by those terms. Secondly, the conduct must be sufficiently serious to allow summary termination. The right to rescind a contract in response to repudiation arises, not so much by reason of a failure of performance in the past as by reason of the manifestation of an intention not to perform contractual obligations in the future. Nominees Proprietary Limited v Mona Homes Proprietary Limited and Another [1978] HCA 12 ; (1976-1977) 138 CLR 423. That case concerned a contract for the sale of land, completion being conditional upon registration of a plan of subdivision, a copy of which was attached to the contract. At the date of the contract the vendor had not lodged the plan but had lodged a plan for a larger subdivision of which the subject land was part, seeking approval of so much of the subdivision as related to that land. That plan was approved and registered. The vendor then required completion within 14 days. The purchasers purported to rescind the contract on the basis that the plan attached to the contract had not been registered, and that the vendor had thereby repudiated the contract. The vendor asserted that the purchasers had wrongfully repudiated the contract and purported to rescind, forfeiting the deposit. The purchasers commenced proceedings seeking a declaration that the contract had been validly rescinded upon the basis that in lodging the plan of subdivision the vendor had repudiated the contract, or that subsequent correspondence, asserting compliance with the term as to registration and calling for completion, had constituted repudiation. In the High Court the first question was whether or not an intention to repudiate the contract could be inferred from the vendor's conduct. But there are other cases in which a party, though asserting a wrong view of a contract because he believes it to be correct, is willing to perform the contract according to its tenor. He may be willing to recognize his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation. In either event an intention to repudiate the contract could not be attributed to him. A party should not too readily be found to have refused to perform the agreement by contentious observations in a course of discussions or arguments ... . It was not a case in which any attempt was made to persuade the [vendor] of the error of its ways or indeed to give it any opportunity to reconsider its position in the light of an assertion of the correct interpretation. There is therefore no basis on which one can infer that the [vendor] was persisting in its interpretation willy nilly in the face of a clear enunciation of the true agreement. In Bruce , as far as the report goes, there had been no actual failure by the employee to perform his duties in accordance with the proposed changes in arrangements, or any exercise of a purported right to do that which he was no longer required to do. Similarly, in Mona Homes , time not being of the essence of the contract, either the vendor had not yet breached the contract, or any breach did not provide a basis for determining it. In the present case, however, Mr Harrison not only indicated that he would not comply with the direction, but did not do so. This conduct continued from the time at which Mr Allard first raised the matter with him until he left the meeting on 2 May 2008. He has not demonstrated any basis for believing the direction to be unlawful. On his own version he wanted it reduced to writing for reasons that were extraneous to his employment. Whilst it is true that on 6 May 2008 Mr Bradley suggested that there was some question of discrimination or, perhaps, illegality about the direction, he also made no attempt to demonstrate any basis for that view. I see no basis upon which such a submission could be made. I do not accept that either man genuinely believed the direction to be unlawful. There is no basis for asserting that on 2 May 2008 Mr Harrison refused to comply with the direction because he considered it to be unlawful, or that he asserted a construction of his contract of employment which was inconsistent with that impliedly advanced by Mr Allard in giving the direction. The only remaining question, then, is whether or not Mr Harrison's disobedience was of a kind which justified summary dismissal by connoting some deliberate design or purpose to derogate from his duty. Did it constitute a repudiation of the contract or one of its essential conditions? Did it evince an intention no longer to be bound by the contract? It is possible, at a superficial level, to characterize Mr Allard's direction as concerning only the employer's right to regulate the way in which employees present themselves for work. It may be suggested that Mr Harrison's departure from his employer's requirements in that regard was minimal and temporary. However such an approach would misrepresent the matter. The process of banning stickers had commenced in, or shortly after, June 2007 and had been progressively expanded in its operation to reflect the ways in which employees were seeking to avoid its effect. Mr Harrison was fully aware of the circumstances in which the ban had been imposed, including the fact that the wearing of stickers had caused considerable conflict on the site. He knew that the "Say No" stickers had been banned, at least partly as the result of his opposition to them. He could not reasonably have expected One Steel to tolerate his wearing a union sticker on any part of his person. In my view such conduct was prohibited by the concluding words of the memorandum of 24 April 2008. Even if it was not, Mr Allard made it clear to Mr Harrison that he was prohibiting his wearing of the sticker. Mr Allard also made it clear, if not initially, then at the meeting on 2 May 2008, that he intended to insist upon compliance. By that time Mr Harrison had also been asked by both Mr McGuire and Mr Hasemann to remove the sticker. The fact that Mr McGuire, Mr Allard and Mr Hasemann had all received negative responses indicated a clear commitment by Mr Harrison to his chosen course of conduct. One Steel's conduct in banning the stickers, and Mr Allard's conduct in directing Mr Harrison to remove his sticker were not capricious. The history of the matter, and the ill-feeling which had been generated, demonstrated the importance of the issue. Management was both obliged and entitled to ensure that the site was as harmonious as possible. Employees generally would not wish to work in an unharmonious workplace. Further, there was always the risk, mentioned on numerous occasions, that disharmony would lead to increased risk in a potentially dangerous workplace. In those circumstances Mr Harrison's stated intention of humorously commenting upon management's attitude amounted to nothing more than a desire to ridicule attempts to resolve a potentially serious situation. He must have realized that other employees were likely to respond adversely to his continued wearing of a union sticker whilst they were subject to the general restriction imposed by management, partly at Mr Harrison's behest. In short, Mr Harrison was mischief-making in an area in which the risk was only too obvious. In particular, he was trying to undermine management's capacity to resolve the problem and maintain harmony on the site. In those circumstances there can be no doubt that his conduct was deliberate, calculated to cause disharmony and likely to undermine management's capacity to manage the enterprise. It demonstrated his intention not to be bound by directions in respect of serious matters, if such directions were contrary to his own inclinations. It is impossible to see such conduct as other than fundamentally inconsistent with his obligations under his contract of employment. In my view summary determination was justified in the circumstances. The case has been conducted upon the basis that certain documents exhibited to Mr Hasemann's affidavit constituted his contract of employment, notwithstanding the fact that there was a change in the identity of the actual employer. The terms are primarily to be found in a letter dated 3 April 2003. As Mr Harrison received payment for the fifth week, the anomaly is of no consequence. These provisions explain the discussion which took place between Mr Allard and Mr Bradley after notification of the decision to terminate Mr Harrison's employment. He was dismissed summarily for serious misconduct. The question of notice did not technically arise. However Mr Allard indicated that he would be given two weeks' pay. Mr Bradley said that he was "entitled" to five weeks' pay. Mr Allard agreed. The applicants submit that a reasonable period of notice is nine months. It is impossible to understand that submission in light of the above provisions. If the employer could, in any event, have dismissed him pursuant to the letter of appointment with four weeks' notice or, pursuant to the disciplinary policy, with five weeks' notice, then an actual loss of nine months' wages cannot be demonstrated. One Steel put the matter slightly differently. It submitted that Mr Harrison's employment had been subject to the award, and that his entitlement should be fixed accordingly. Such entitlement was five weeks' notice. However the applicants submit that the award was not tendered in evidence, and that its terms cannot be considered. That is a curious submission, given that the applicants pleaded in para 12 of the statement of claim that both the union and One Steel were parties to the award, giving a print reference to it. It is difficult to avoid the conclusion that they intended to incorporate the award in their statement of claim. One Steel admitted the allegation contained in para 12. It may also be that I should take judicial notice of the terms of the award pursuant to Part 4.2 of the Evidence Act 1995 (Cth), although the point has not been argued. The applicants also submit that the award was not part of Mr Harrison's contract of employment. However the evidence establishes that his employment was subject to its terms. There is no suggestion of any more generous terms concerning notice in the contract of employment. Indeed, I have referred to the relevant term. The applicants seem to suggest that I should find an implied term in the contract, requiring reasonable notice of termination, although such evidence as there is suggests a quite different term concerning notice. In any event it is clear that at the meeting on 6 May 2008, Mr Bradley and Mr Allard negotiated concerning Mr Harrison's entitlements. We don't have to pay you any notice in lieu but we are willing to pay you two weeks. Shane has been here long enough that he should get four weeks and he is over 45 years of age so he should get an extra week which would make it five weeks. Come on, Jason, there is summary dismissal and then there is summary dismissal. I didn't say the words, "There's summary dismissal and there's summary dismissal. " What I said was that if Shane is being terminated for serious conduct which is summary dismissal then he could lose his entitlements. My intentions there were to make sure that Shane got all of his entitlements. That was the context of that conversation. And you nominated five weeks?---Yes. I would have expected Mr Harrison's present claim to be met by a plea of accord and satisfaction. However that has not been pleaded. In any event, it is clear that Mr Bradley was seeking to ensure that Mr Harrison would not lose any entitlements which he would have had in the event that he had not been dismissed summarily for serious misconduct. In other words, the discussion concerned his entitlements in the absence of summary dismissal. Mr Bradley asserted Mr Harrison's entitlement, and Mr Allard agreed to pay it. Both men could reasonably be expected to have known Mr Harrison's legal entitlements or to have been able to ascertain such information. Their agreement is adequate evidence as to Mr Harrison's entitlements had his employment not been summarily determined for serious misconduct. It is supported by the letter of appointment and the disciplinary protocol. This evidence offers a reliable guide to any award of damages for wrongful dismissal. I find that had Mr Harrison's dismissal been wrongful, he would have been entitled to five weeks' pay. He has received that amount. Damages for breach of contract would therefore be nominal. Should the parties require further findings of fact, they are to apply within seven days. I certify that the preceding three hundred and twenty-two (322) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

alleged breaches of s 792 of the workplace relations act 1996 (cth) whether disciplinary process imposed for a prohibited reason or reasons whether lawful and reasonable direction by employer whether employee obliged to comply with direction whether breach of employment contract summary dismissal distinction between breach and repudiation whether contract repudiated employment law employment law contracts

The National Native Title Tribunal is requested, on or before 19 January 2007, in consultation with the parties, to file a minutes of proposed orders to give effect to these reasons to the extent that they are applicable to the application. 2. The directions hearing is adjourned to 29 June 2007 at 9am. The National Native Title Tribunal is requested, on or before 19 January 2007, in consultation with the parties, to file a minute of proposed orders to give effect to these reasons to the extent that they are applicable to that application. 2. The directions hearing is adjourned to 29 June 2007 at 9am. These hearings related to cases which are the subject of mediation referrals by the Court to the National Native Title Tribunal (the Tribunal). The cases are in the Court's "Provisional Docket" which is the class of native title determination proceedings under mediation and not requiring imminent programming to trial. When it is thought appropriate to submit an application to closer judicial case management with a view to its progress to trial or other disposition, it is generally allocated out of the provisional docket to the "Substantive" docket of a judge designated for that purpose. 2 A chronic problem of delay has arisen in the mediation of native title determination applications in the various regions of Western Australia. The delays are largely due to limitations on both the human and financial resources available to carry out the necessary work. Those limitations affect representative bodies, the applicants they represent, unrepresented applicants, the State Government and other respondents. The greatest difficulties have been associated with the resolution of overlaps between native title determination applications and the preparation, by or on behalf of applicants, of materials sufficient to satisfy the State Government of the relationship with the area of land or waters under claim necessary to support a native title determination. The provision of so-called "connection material" typically involves the services of an anthropologist to research the particular claim group, its traditional laws and customs and the nature of the connection of the group to the land and waters in question under those traditional laws and customs. That work may involve the collation of research literature and extensive field investigations. The amount of time required is substantial and may extend for many months and sometimes in excess of a year. There is a limited number of suitably qualified anthropologists available to carry out such work. Preparation of connection material may also involve the collation of historical, archaeological and linguistic evidence. Under the current practice of the State Government of Western Australia, connection material, when submitted to it, is assessed by an expert engaged by the State. The process of assessment is outlined in a document published, in October 2004, by the Office of Native Title of the State of Western Australia entitled "Guidelines for the Provision of Information in Support of Applications for a Determination of Native Title". 3 The mediation of native title determination applications is primarily a matter for the Tribunal. That priority is reflected in ss 86A and 86B of the Native Title Act 1993 (Cth) (the Act). The role of the Tribunal in mediation was heightened by the amendments made to the Act in 1998. They introduced a far more detailed regime for the mediation of native title determination applications than had previously been the case. Every such application must be referred to the Tribunal for mediation unless the Court orders otherwise (ss 86B(1) and (2)). The role of the Tribunal is reinforced by the Federal Court's facility to request it to provide reports on the progress of any mediation (s 86E). That role covers the process of information exchange of which the provision of connection material to the State is an important element. This includes the development of detailed negotiation protocol, the exchange of information between the parties, the identification of issues to be resolved and times and venues of conferences under the Act in furtherance of the mediation process. In so doing it is quite legitimate that the NNTT and the parties have regard to the resource limitations and other practical constraints under which each of them must operate. It is appropriate that within a particular region timetables may be staggered to reflect priorities within that region. It is legitimate for the protocols and timetables developed to provide for bilateral negotiations between parties with a report back to the NNTT. However, timetables for such bilateral discussions are an element of the mediation process undertaken by the NNTT in the exercise of its statutory function and in respect of which it may be required to report to the Court. 5 Shortly prior to publishing the decision in Frazer I made orders in relation to the Pilbara and Geraldton regions providing for the development of mediation timetables. The form of orders was along the lines of those made in Frazer (at [33[). They required the preparation by the applicants, overlapping applicants and the State of a program setting out a timetable for the exchange of information and specific issues to be negotiated. It was also directed that there be a detailed timetable including proposed meeting dates and venues set in a regional context and an outline of a negotiating protocol to be adopted by the State and the applicant. The parties were told that they had to lodge a copy of the relevant programs at the Court. Absent any agreement on such a program in a particular application, the applicant and any other interested parties were required to show cause why the application should not be referred to a substantive docket judge. In both the Geraldton and Pilbara regional areas mediation protocols and timetables were established pursuant to the Court's orders and have not been adhered to. Maps are attached to these reasons showing the claims in the two regions and charts provided by the Tribunal of the progress and anticipated progress of existing mediation protocols. 6 Directions were given on 1 August 2006 that the representative body for the Geraldton and Pilbara regions, the Yamatji Land and Sea Council (Yamatji), provide a report at the adjourned directions hearing on the feasibility of a single connection report covering a number of applications in the area as a means of progressing their resolution. Those applications are Budina (WAD131/2004), Malgana (WAD6236/1998), Nanda (WAD6136/1998), Thudgari (WAD6212/1998) and Gnulli (WAD6161/1998). Of 16 applications in the Geraldton region, nine have current mediation protocols and six have not been complied with. Of the 24 applications in the Pilbara region, 17 have current mediation protocols. Ten of those have not been complied with. In each case the Tribunal has expressed the view that parties must adopt a more rigorous adherence to the protocols if applications in the region are to be resolved within reasonable timeframes. It submitted to the Court that if by the time of the next directions hearing parties are unable to comply with the timeframes agreed in the mediation protocols, the Court should consider replacing them with programming orders. The Tribunal has proposed draft orders for applications grouped according to subregions which it has defined within each of the regions. It submitted that the draft orders were intended to expedite the resolution of applications with a particular focus on overlaps. I am prepared to make orders in the terms proposed by the Tribunal on the basis that closer support and engagement by the Tribunal with the parties offers more promise for progress than reliance upon the existing mediation protocol. It is important, however, to note that those protocols should not be regarded as displaced by the orders which I propose to make. Greater utilisation of the Tribunal in the resolution of overlaps. 2. More intensive mediation of key strategic applications. 3. Increased commitment to adherence to mediation protocols. The Tribunal referred to what it considered to be the very slow rate of progress for the resolution of applications which do not overlap and are to be found in the central and northern portions of the Geraldton region. While it acknowledged the resource limitations affecting Yamatji, it suggested that more timely and efficient progress could be achieved through greater utilisation of the Tribunal's significant research assistance capabilities. an area identity report which describes the naming of groups within the area and language/tribal boundaries. (iii) comprehensive geo-enhanced databases electronically linking historical facts to maps. the overlapping applications in the Southern Geraldton cluster ie Amangu (WAD6002/04); Hutt River (WAD6001/00); Naaguja Peoples (WAD 6194/98); Arnold Franks (WAD 6273/98); Taylor Group (WAD6006/01); Widi Binyardi (WAD286/04); Mullewa Wadjari (WAD6119/98); Widi Mob (WAD6193/98); Badimia (WAD6123/98) (to the extent of the overlap); Wadjari Yamatji (WAD6033/98) (to the extent of the overlap). That work is to commence in January 2007 and will require about two months to complete. By 31 March, applicants (and/or their representatives) of the Gnulli (WAD6161/98), Malgana (WAD6236/98) and Nanda (WAD6136/98) attend meetings convened by the Tribunal to discuss the content and status of existing research materials covering their respective claim areas. By 30 April 2007, the Tribunal, in consultation with [Yamatji], develop a program for the conduct of further necessary research in each of these matters and submit a copy to the Court. There are a number of overlaps between those applications and applications in the Central Geraldton subregion which comprises the Wadjari Yamatji, Mullewa Wadjari, Badimia, Yugunga-Nya, Widi Binyardi and Widi Mob. As appears, the Tribunal treats the Widi Binyardi and Widi Mob applications as falling into both sub-regions. 12 In relation to the Southwest Geraldton subregion and the Central Geraldton subregion there are some ten overlapping applications identified in a "South Geraldton Cluster Overlap Chart" which was Annexure A to the Tribunal's original report. These applications are Hutt River, Naaguja, Arnold Franks, Taylor Group, Widi Binyardi, Mullewa Wadjari, Widi Mob, Badimia, Wadjari Yamatji and Amangu. The representatives of the 10 applications listed in the Southwest Geraldton Cluster Chart ... attend meetings called by the [Tribunal] between January 1 and June 30 2007 for the purpose of resolving overlaps. By January 30 2007, the Tribunal provide the Court with a timetable of meetings with all parties. By March 31 2007, the Tribunal provide the Court with a progress report detailing the steps taken to resolve the overlaps. By 31 March 2007, [Yamatji] and the State provide the Court with a program for the preparation and assessment of connection material for all claims in the southwest Geraldton area. By March 31 2007, the Tribunal provide the Court with a progress report on the Tribunal research project examining the overlap area between Badimia (WAD6123/98) and Widi Mob (WAD6193/98). The letter was signed by its Acting Principal Legal Officer. 14 According to Yamatji a number of significant matters have progressed during the reporting period despite significant difficulties experienced by it. Its Geraldton office has suffered from significant staff shortages directly affecting its capacity to go forward with the mediation programs. Two new legal officers were engaged in September 2006, although the employment of one was terminated in November 2006. Between July 2006 and September 2006 the Acting Principal Legal officer was the only legal officer in Yamatji's Geraldton office. In the period July to December 2006 Yamatji had a significantly reduced capacity to progress claims. 15 Submission of connection materials on priority claims was said to be progressing largely according to plan. The submission of final supplementary material to the State for the Thudgari connection report occurred in October 2006, and was within two weeks of the nominated timeframe. It is expected that the State's assessment will be completed in March 2007 and that negotiations will commence immediately thereafter. Yamatji also said that final connection material for the Badimia claim would be submitted by March 2007. This was an extension of one month over the date previously agreed. It had instructions to organise a mediation meeting between the Badimia and Widi Mob applicants. A meeting was set for 19 October 2006. However, that meeting was postponed to allow the Tribunal to meet with the Widi Mob applicant, Mrs Martin, and to conduct research in relation to her asserted connection. The meeting was rescheduled to occur early in 2007 once the research had been completed. According to the Yamatji report regular group meetings for all claim groups in the region occurred throughout the reporting period as well as three significant community meetings which were held in the same period. As a result of those meetings s 66B applications to remove deceased and/or incompetent applicants were foreshadowed for 2007. 16 Specific reference was made to the Mullewa Wadjari claim which overlaps six other applications in the Geraldton region. Yamatji has been advised that although the application has no viable applicant remaining members of the native title claim group intend to amend it. The promised amendments have not yet been filed with the Court. The Mullewa Wadjari situation affects other mediation programs because of its overlaps with the Nanda, Amangu, Wadjari Yamatji and Naaguja claims. These programs are subject to resolution of the status of the Mullewa Wadjari claim. Yamatji remains willing to meet with the Mullewa Wadjari in early 2007 if the claim remains on foot. Mr George Irving, counsel experienced in native title matters, has been engaged by Yamatji and is endeavouring to organise a meeting with representatives of the Mullewa Wadjari claim group before the end of 2006 to consider resolution of overlaps in the Geraldton region. 17 The Yugunga-Nya claim is subject to programming orders as part of the North-West cluster under the control of Sackville J. Under his Honour's directions programming for mediation of overlaps will follow the handing down of the Wongatha decision in the Goldfields region, now to occur in February 2007. 18 The non-priority claims in the Geraldton region are the Malgana Shark Bay People and the Wadjari Yamatji People. As to the former it is said its overlap with Wadjari Yamatji has been resolved in principle and that Malgana claim amendments givng effect to the resolution are well advanced. The principal difficulty is the extremely high number of named applicants on the claim and the need to collect affidavits from each of them to give effect to the authorised amendments. There are in excess of 40 claimant affidavits in total. The whereabouts of some of the applicants has been unknown and others have been difficult to contact so this has been a very time consuming and difficult process. 19 Yamatji has taken instructions from Wadjari Yamatji to convene a mediation meeting with members of the Widi Binyardi claim group. The Wadjari Yamatji claim is subject to intense future act pressures with numerous small future act applications and several major future act agreements being negotiated during the relevant period. 20 Under separate cover, Yamatji also sent a letter, evidently in response to the directions of 1 August 2006 relating to a single connection report. It had received advice that it would be feasible and time could be saved if there could be a base report written which could be supplemented by individual connection reports for each application in the relevant area. The base report might contain a regional history report written by an historian and a regional anthropology report by an anthropologist. It could utilise research already done in relation to reports prepared but would probably need more research to be carried out over the whole region to be covered. This, it was said, would reduce the work necessary to be repeated for subsequent connection reports. 21 In relation to the Amangu, Hutt River, Naaguja, Widi Binyardi, Taylor and Mullewa Wadjari applications, the last three of which are not represented by Yamatji, Mr Irving was briefed on 14 April 2004 to assist in their resolution through an Alternative Settlement Agreement with the State. According to Mr Irving, the claims, in which Yamatji acts, are at the stage where some connection material could shortly be provided to the State. Yamatji is also providing funds to facilitate independent research for connection material for other claims. Given that one of the State's preconditions for an Alternative Settlement Agreement is that there must be only one agreement inclusive of all interests in the area covered by the overlapping claims, it is Mr Irving's view that the connection materials for all eight overlapping claims should, if possible, be submitted in the one report. 22 The historian's component of the base report has reached penultimate draft form. Meetings were held with working groups for each of the first three mentioned claims between 6 and 8 December 2006 to allow them to read it and to identify errors. Work has commenced on the analysis of historical references in relation to the Widi Mob, Widi Binyardi and the Mullewa Wadjari claimants. However further work on the last mentioned claim was postponed for cultural reasons. 23 At meetings held in Geraldton on 5 to 7 December 2006 each of the Amangu, Hutt River and Naaguja working groups agreed in principle to the establishment of a joint working group to advance negotiations with the State. Mr Irving's attempts to organise a meeting with representatives of Mullewa Wadjari group for 8 December 2006 were unsuccessful. He spoke with Mr Leedham Papertalk who agreed to give him a call and to meet with him when he gets to Perth in the next couple of weeks. He also met with representatives of the Widi Binyardi group on 18 August 2006. They agreed to the establishment of a joint working group and a proposed combination with Widi Binyardi, Taylor and Amangu claims into a single claim. Mr Irving had attended two meetings with the representatives of the Taylor group, the first in April 2004 and the second in July 2005. 24 According to Mr Irving the named applicant in the Widi Mob claim has stated, as a pre-condition to any joint meeting, that the overlapping claim groups must establish their connection to the area through their ancestors. While the historian's report maintains the confidentiality of individual families it will contain an opinion which addresses the issue in respect of each of the overlapping claims. Mr Irving is of the view that the work currently being done by the historian in respect of the Widi Mob applicant will assist in moving the claim forward. Until then, it is his view that nothing would be gained by a Court-directed meeting with the overlapping groups. The work undertaken over the past twelve months has been predicated on the possibility that the connection materials might be finalised before the State had finalised its policy on Alternative Settlement Agreements and the connection criteria to be met by claim groups. Each of the groups, it was said, have agreed that there is value in submitting connection material as soon as possible in the hope of influencing the State's policy. The remaining part of the connection materials will include affidavit evidence from members of each group and written submissions. 25 In addition to Mr Irving's comments the letter of 14 December 2006 from Yamatji raised the desirability of preservation evidence in relation to three claims. It appears that Yamatji proposes to commence proofing witnesses for such examinations in the new year. 27 The Northeast Pilbara subregion comprises the Ngarla, Ngarla # 2, Njamal # 10, Njamal, Warrarn # 1, Birrimaya, Palyku, Nyangumarta and Kulyakartu applications. The Northwest Pilbara subregion comprises Kuruma Marthudunera, Yaburara and Mardudhunera, Wonga-Tt-Oo, Yindjibarndi No 1, Kariyarra People and Bindurrna applications. The Central Pilbara subregion comprises Thalanyji (in the substantive docket of North J), PKKP, PKKP # 2, Jurruru, Innawonga, Innawonga Bunjima, Eastern Guruma (in the docket of Bennett J), Martu Idja Banyjima, Gobawarrah Minduarra Yinhawanga, Ngalawangga and Nyiyaparli. Before 31 March, the Warrarn and Njamal applicants shall, and Ngarla and Ngarla 2 applicants may, attend a meeting convened by the Tribunal to discuss the resolution of overlaps. The Tribunal, in consultation with the parties, is to prepare a plan for resolution of overlaps and submit it to the Court prior to the next directions hearing. Before 31 March the Kuruma Marthudunera, Yaburara & Mardudhunera, and Wong-Goo-To-Too (sic) are to attend a meeting convened by the Tribunal to discuss the resolution of overlaps. The Tribunal, in consultation with parties is to prepare a plan for resolving the overlaps between Kuruma Marthudunera, Yaburara & Mardudhunera, and Wong-Goo-To-Oo (sic) and present the plan to the Court before the next Directions Hearing. Before 31 March, the State and [Yamatji] are to attend a meeting convened by the [Tribunal] to develop a plan for the resolution of connection issues. The Tribunal shall provide a copy of the plan to the Court before the next Directions Hearing. Before the 31 st March [Yamatji] will provide the [Tribunal] with an outline of steps already taken to effect lodgement of a 'Single Innawonga' application and a plan and timetable for completion of the process. Before the next Directions Hearing the [Tribunal] shall convene a meeting between the Innawonga, GMY and Jurruru claimant groups to determine a process for implementation of the plan. The Tribunal will provide the Court with a copy of the timetable before the next directions hearing. Before the 31 st March [Yamatji] will provide the [Tribunal] with an outline of steps already taken to effect lodgment of a 'Single Bunjima' application and a plan and timetable for completion of the process. Before the next Directions Hearing the [Tribunal] shall convene a meeting between the Innawonga Bunjima and Martu Idja Bunjima claimant groups to determine a process for implementation of the plan. The Tribunal will provide the Court with a copy of the timetable before the next directions hearing. It pointed out that since the last directions hearing it had lost several senior staff including its Principal Legal Officer, the Manager of the Land Access Unit which deals with future acts and a Senior Legal Officer handling future acts. In addition, the Deputy Principal Legal Officer had taken a year's leave of absence. Although some existing staff have been promoted to or are acting in these positions, additional staff have not been able to be recruited to make up for this. As a result there have been additional workloads and pressure on existing staff. 32 Yamatji says that there has been extensive urgent future act work in the Pilbara particularly with major negotiations involving Pilbara Iron. The lack of available legal officers in its major projects area has meant that lawyers handling native title determination applications in the Pilbara region have had to take on the future act matters as well. It referred to ongoing negotiations with Pilbara Iron and its hope that an arrangement may be finalised soon whereby funding will be provided for up to five connection reports to be prepared in the next two years. Some of these reports, it is said, will be able to deal with two or more claims together. Thus research could be conducted for both the Bunjima claims and the Kuruma claims (PKKP 1 and 2 and Kuruma Marthudunera). The proposal would involve funding a project manager, senior lawyer and co-ordinating anthropologist. 33 Yamatji submits that it is not likely that court orders will be of much assistance in overlap strategies. Most of the difficulties involved in complying with mediation protocols have arisen from not being able to get claimants to reach agreement in relation to overlaps. It is submitted that it is not appropriate to make court orders requiring claimants to settle differences. 34 The letter then dealt with specific applications within the Pilbara region. This has been subject to a tolerance of up to two months on any given step before it was necessary to approach the Court to revise the program. These processes were designed to provide a fairly light-handed approach to Court supervision of the mediation process. It is evident that this scheme has met with only limited success and that the credibility of the mediation programs and protocols is in question. 36 The provisions of the Act mandate referral of native title determination applications to the Tribunal for mediation. The Court, however, has a discretion under s 86(2) to not refer a matter subject to the requirement that it consider factors set out in s 86(4). The Court may order a mediation to cease (s 86(c)(i)). Mediation of native title determination applications by the Tribunal is a central part of the legislative scheme of the Act. Nevertheless, the proceedings the subject of that mediation are proceedings in the Court and the Court ultimately controls the duration of the mediation. 37 Mediation is necessarily consensual. No party can be directed to reach agreement about a pending application or any part of it. Nevertheless the Court can take such steps as are appropriate to ensure the timely progress of mediation under the Act. That power derives from s 23 of the Federal Court of Australia Act 1976 (Cth). The generality of that provision enables the Court to make such orders as are properly incidental to or supportive of the timely progress of mediations under the Act. For although mediation of native title determination applications is a specific statutory process, it is established for the purpose of resolving pending proceedings in the Court. The link between the purposes of mediation and the resolution of issues in the proceedings in the Court is clear from the terms of s 86A. 38 In my opinion the Court has the power to make orders of reasonable specificity calculated to assist mediation to proceed expeditiously. The convening of further meetings at this time would not necessarily be a panacea. It was submitted that the parties were not in a position properly to negotiate until requisite research had been done. However, the parties other than Yamatji generally supported the position taken by the Tribunal. 40 In my opinion the Tribunal's approach offers a more structured basis upon which to move the mediations forward in the Pilbara region. The difficulties currently experienced by Yamatji underline the utility of closer support for the process generally from the Tribunal. That is necessarily subject to the proper maintenance of its role as a helpful neutral which is essential for the discharge of its mediation function. A closer involvement by the Tribunal in processes between overlapping applications, between applicants and the State and between represented and unrepresented applicants, will also enable a better information flow to other respondents who tend to be left on the sidelines wondering what is going on between the principal actors. 41 I propose to make orders substantially in terms of the Tribunal's proposals subject to the extension of the dates which it proposes. I will provide the parties with the opportunity to formulate precise minutes of orders in respect of the applications in each of the subregions to give effect to the Tribunal's proposals. Minutes of the proposed orders should be submitted by 19 January 2007. Generally speaking the time limited for compliance with the steps proposed by the Tribunal to be done by 31 March 2007 will be extended to 30 April 2007. Where the Tribunal's proposed draft orders specify 30 April 2007 that time will be extended to 31 May 2007. The next regional directions hearing in each case will be scheduled for 29 June 2007 at 9am. 42 I will request Deputy District Registrar Eaton to review the proposed minutes before they are submitted to me to make the formal orders to ensure that they adequately cover each of the relevant applications. In any case in which the global orders are inapplicable to a particular application, the directions hearing in respect of that application will be adjourned to 29 June 2007. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.

mediation court supervision of mediation process mediation protocols and programs delays resource and staffing limitations of representative body specific orders proposed by national native title tribunal power of court to make specific orders orders made accordingly native title

2 I have already dismissed his claims against four of the six respondents. Two remain, one relating to the Commonwealth Ombudsman, the other to the Human Rights and Equal Opportunity Commission ("HREOC"). 1. The decision made not to investigate the actions taken by Correctional Officers at Junee CC to sabotage the appeals and education of the Applicant. 2. The decision made not to investigate the failure of the Commonwealth to monitor the administration of sentences served by Federal Offenders. The decision made not to investigate the failure of the Commonwealth to amend the 1990 Commonwealth/State NSW Agreement to include terms designed ensure compliance with the ICCPR Protocols and otherwise according to law. He now seeks to have the application dismissed under s 31A of the Federal Court of Australia Act 1976 (Cth) on the basis that the application has no reasonable prospects of success. Put shortly, the Ombudsman contends that the matters Mr Clarkson sought to have investigated do not fall within the scope of the Ombudsman Act 1974 (Cth). In light of the reasoning in my previous judgment, Mr Clarkson in effect concedes that this application will also be dismissed, I having previously held that the relevant officials and/or employees of the sixth respondent are not officers of the Commonwealth with the consequence that an essential pre-condition of attracting the jurisdiction of the Commonwealth Ombudsman to review their actions cannot be made out. 5 In correspondence with Mr Clarkson the Ombudsman has repeatedly indicated his lack of jurisdiction to investigate complaints relating to State Government departments. Of the three decisions he seeks to have reviewed, the first clearly relates to administrative actions occurring in consequence of State governmental action. This is clearly beyond the jurisdiction of the Ombudsman. 6 The third decision relates to the failure of the Commonwealth to amend the 1990 "Arrangement" between the Commonwealth and State of New South Wales. This clearly relates to a matter of governmental policy and to the actions of portfolio Ministers and the Governor-General. It does not relate to a matter of administration by the department or by a prescribed authority. 7 Notwithstanding that all parties proceeded hitherto on the assumption that Mr Clarkson's incarceration was governed by the 1990 Arrangement, it is now conceded by all concerned that it is completely irrelevant to this matter and that Mr Clarkson's imprisonment is in virtue of s 120 of the Constitution and the warrant issued by the District Court judge. 8 The second of the alleged decisions is based upon a pre-supposition that the Commonwealth has responsibility to monitor the administration of sentences served by federal offenders. 9 In my earlier decision I indicated at par 22 that I was prepared to accept, for the purposes of this application, that notwithstanding the Arrangement, the Commonwealth may nonetheless retain tutelary responsibilities towards federal offenders in State prisons which might in exceptional circumstances found a claim in tort: cf S v Secretary, Department of Immigration and Multicultural and Indigenous Affairs [2005] FCA 549 ; (2005) 143 FCR 217; or for injunctive or mandatory orders against the Commonwealth. 10 There are several difficulties with the review sought of this decision. It is not apparent that the failure alleged related to a matter of administration being action taken by a department or by a prescribed authority. At best it seems to relate to a residual responsibility formally vested in the Governor-General as a party to the Arrangement or else to the Commonwealth acting through the relevant portfolio Minister. In either circumstance the matter does not fall within the jurisdiction of the Ombudsman to investigate. 11 I should add notwithstanding my reference to a residual tutelary responsibility in the Commonwealth, there is nothing in the material that has been filed by Mr Clarkson which, in my view, could properly be said to come near to exciting a duty in the Commonwealth to monitor his circumstances or for that matter the administration of sentences served by federal offenders. I will order that the application as against the third respondent be dismissed. 2. Mr Clarkson alleged that the New South Wales Department of Corrective Services (the Department) had breached his human rights while he was imprisoned. 15 On 19 June 2006 Mr Clarkson filed an application under the AD(JR) Act seeking review of the decisions of HREOC, (i) not to investigate the complaint; and (ii) not to decline to investigate the complaint on the basis that it did not disclose a breach of human rights. 16 What is noteworthy is that, though the application asserts decisions of HREOC, it does not identify the actual taking of the decisions alleged. This is unsurprising. It was not until 7 September 2006 that the President of HREOC wrote to Mr Clarkson advising him that he had decided to discontinue his enquiry into the complaint pursuant to s 20(2)(a) and s 20(2)(c)(ii) of the HREOC Act. 17 I ordered Mr Clarkson to file and serve an amended Application for an Order of Review on or before 27 November 2006. On 3 November 2006 though filing an affidavit enclosing, inter alia, a copy of a decision of the President of the Human Rights and Equal Opportunity Commission, Mr Clarkson did not file an amended application. Apparently he considered that his existing application contemplated the new material and any new matters which he wished to argue were satisfactorily embraced by the existing application. 18 The decision of the President, the Hon John von Doussa QC provides a very detailed response as to why he considered that HREOC's enquiry into Mr Clarkson's complaint should be discontinued. That decision, furthermore, indicated to Mr Clarkson that if he wished to apply to have the decision reviewed he should apply within 28 days of it under the AD(JR) Act to the Federal Court or to the Federal Magistrates Court. Mr Clarkson, as I have indicated, did not so act. Notwithstanding I have power, subject to limitations, to order an amendment of an application where a foundation in law for claim for relief arises out of the same or substantially the same facts as those already pleaded: see O 13 r 2(7) of the Federal Court Rules ; such cannot be said to be the case in this matter. The decision in question post-dated the application. Mr Clarkson seeks to challenge it by reference to alleged errors of fact, those errors arising because the President allegedly failed to have regard to material or affidavits filed in this proceedings, notwithstanding that material was not supplied to HREOC acting in its complaint enquiry capacity. There is no material before me to suggest that any of that affidavit material was before the President. 19 Mr Clarkson now seeks to challenge a quite different decision and fully reasoned decision that has a quite different provenance. I am not prepared in this proceedings to entertain that matter. I equally am not prepared to give an extension of time in which to amend the application. I consider it would be inappropriate in the circumstances to amend it under O 13 r 2(7) as it does not fall within the terms of that rule bearing in mind that the claim is one for judicial review of a decision. In the circumstances I will order that the application against the second respondent be dismissed. The net effect of my orders in this matter is that the entire application is dismissed. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.

applicant convicted of federal and state offences applicant serving consecutive terms of imprisonment in new south wales prisons applicant's imprisonment pursuant to s 120 of the constitution and issued warrant. applicant challenged alleged decisions of commonwealth ombudsman not to investigate certain matters whether matters fall within scope of ombudsman's jurisdiction. applicant claimed breaches of human rights applicant made complaint to hreoc applicant seeking review of decisions of hreoc where decision in question post-dated application for review. administrative law administrative law administrative law

That application was unsuccessful and the delegate's decision was affirmed by the Refugee Review Tribunal. Review was sought and the Applicant had some initial success before the Federal Magistrates Court which in May 2006 remitted the proceedings to the Tribunal. That Tribunal again affirmed the decision not to grant the visa in September 2006. The Federal Magistrates Court dismissed an application seeking review of the Tribunal's second decision: SZCZF v Minister for Immigration and Citizenship [2007] FMCA 506. An Appeal was lodged with this Court on 12 April 2007. The Applicant thereafter, apparently, sought Ministerial intervention. On 6 July 2007 he signed a " Consent Order " consenting to the dismissal of his Appeal to this Court. On 9 July 2007 a Judge of this Court, North J, dismissed the Appeal by consent. That Order has been entered. On 9 February 2009 a Notice of Motion was filed seeking to have the order as made on 9 July 2007 set aside. The Applicant maintains that he consented to the dismissal of his Appeal in good faith to enable the Minister to give consideration to his situation and further maintains that he has " an arguable case ". The Applicant appeared before the Court unrepresented, although he did have the assistance of an interpreter. His evidence in support of the Motion comprised an affidavit and a limited number of documents tendered during the course of the hearing. The Notice of Motion should be dismissed. It is not considered that, in the circumstances of the present application, the Court has any power to set aside the Order as previously made or --- even if there is power --- that the Order should be set aside. Although His Honour did not identify the source of the power he was exercising, it was presumably s 25(2B)(b). An order, once made and entered, is normally final. In DJL v The Central Authority [2000] HCA 17 ; (2000) 201 CLR 226 , the High Court held that the Full Court of the Family Court did not have power to re-open final orders after their entry. And, in reliance upon that decision, in Pantzer v Wenkart [2007] FCAFC 27 at [5] , Black CJ observed that it was " hard to see ... how, in the face of DJL v The Central Authority , there can be any foundation for the contention that the Full Court of the Federal Court has power to re-open final orders duly entered ...". The public interest in finality requires as much: see, albeit in a different context, Wentworth v Woollahra Municipal Council [1982] HCA 41 ; (1982) 149 CLR 672 at 684 (Mason ACJ, Wilson and Brennan JJ); Autodesk Inc v Dyason [No . 2] [1993] HCA 6 ; (1993) 176 CLR 300 at 302 (Mason CJ) and 317 (Dawson J). In addition to such express powers, there may be an " incidental power " of uncertain extent. But it is not considered that the Applicant can bring himself within any of the exceptions. One express exception set forth in the Act is s 25(2B)(bc) which permits the Court to " vary or set aside an order " made pursuant to s 25(2B)(bb), namely an order dismissing an appeal by reason of an appellant's failure to attend a hearing relating to the appeal. That power is a power conferred " in general terms " and " should be construed liberally and without the making of implications or the imposition of limitations not found in the words used by Parliament ": SZISM v Minister for Immigration and Citizenship [2007] FCAFC 61 at [20] , 158 FCR 292 at 298 per Black CJ, Weinberg and Allsop JJ. As contemplated in SZISM, the power conferred by s 25(2B)(bc) is a power which can be exercised even after the orders have been entered. See also: SZCOZ v Minister for Immigration and Citizenship [2007] FCA 641 at [1] ; Brannan v Minister for Immigration and Citizenship [2007] FCA 1900 at [3] ; SZJYK v Minister for Immigration and Citizenship [2007] FCA 1462 at [2] . But the orders as made in July 2007 were not made pursuant to s 25(2B)(bb). An express power conferred by the Federal Court Rules which is frequently invoked is that found in Order 35 r 7(2). (3) A clerical mistake in a judgment or order, or an error arising in a judgment order from an accidental slip or omission, may at any time be corrected by the Court. (4) Subrule (2) shall not affect the power of the Court to vary or terminate the operation of an order by a supplementary order. Order 35 r 7 is thus not an available source of power to vary or set aside the Orders made by North J. Nor can the present Applicant bring himself within Order 52 r 38A of the Federal Court Rules . In NAZL v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 718 , Allsop J had previously had to consider both Order 35 r 7 and Order 52 r 38A. Orders had there been made by a Full Court comprised of three Judges of this Court. He said that to the extent that the Court was proceeding under s 25(2B)(bb)(ii) of the Federal Court Act 1976 (Cth) (that is making an order for dismissal of the proceedings for failure of the appellant to attend a hearing relating to the appeal), there was no power to set aside the orders after entry. In any event it is by no means clear that a single judge can be "the Court" there referred to. Indeed, I do not think it is. It was not necessary for their Honours to resolve the question left open by Allsop J as to whether Order 52 rule 38A could be invoked after orders had been entered. Order 52 rule 38A cannot be invoked in the present proceeding for the simple reason that the Order as made by North J was not an order made in the absence of the present Applicant. Nor does Order 35A have any present application. AN INHERENT OR IMPLIED POWER? In S353 , for example, such an " inherent power " was referred to --- but not invoked. That is to say, it is an incident of the exercise of the judicial power of the Commonwealth that the Court may, in an appropriate case, set aside its own order if it is satisfied that there is a proper explanation for the non-attendance of a party at a hearing at which the order is made. However, given that the power exists, it is clearly discretionary (see Taylor at 8). In Singh v Secretary, Department of Family and Community Services [2001] FCA 1281 at [13] , Beaumont, Kiefel and Hely JJ also acknowledged a limited power in an " exceptional case " to revoke orders made by consent. Considerable doubt has been thrown upon the observations in S353 by the decision of the Full Court in SZISM. This, of course, was the subject of DJL v The Central Authority [2000] HCA 17 ; 201 CLR 226 in the context of a discussion of the powers of the Family Court of Australia. It is not appropriate for us to deal with these arguments and the issues raised by them, including the scope and effect of s 23 of the Act in the absence of the need to do so. We should note, however, that the reasons of the Judges of the Full Court in S353 of 2003 v Minister for Immigration and Citizenship [2007] FCAFC 13 were given in the context of a concession by the Minister that power existed to set aside the order, though entered. The comments of Emmett J at [20] with which Allsop J and Middleton J agreed referred to the inherent power of the Court to set aside an order made in the absence of a party or at a hearing of which the party had no notice. Reference was made by Emmett J only to Taylor v Taylor [1979] HCA 38 ; (1979) 143 CLR 1 at 8. In the light of DJL v The Central Authority [2000] HCA 17 ; 201 CLR 226 , such an unqualified proposition even supported by Taylor v Taylor [1979] HCA 38 ; 143 CLR 1 is difficult to maintain: see the comments of Black CJ in Pantzer v Wenkart [2007] FCAFC 27. The comments made by Emmett J, with which Allsop J and Middleton J agreed, were obiter dicta and made in the context of the concession to which we have referred. They should not be taken as authority for an unqualified proposition of the lack of relevance of DJL v Central Authority [2000] HCA 17 ; 201 CLR 226 to any examination of this Court's power. What authority this Court has by implication to take any particular step and the relevance of s 23 of the Act to any such question need not be considered for the disposition of this application. In VTAG , Heerey, Finkelstein and Lander JJ cited with approval the statement of Wilson and Dawson JJ in Jackson v Sterling Industries Limited [1987] HCA 23 ; (1987) 162 CLR 612 at 619, that the Court's " incidental and necessary powers " are " no less in relation to the jurisdiction vested in it than the inherent power of a court of unlimited, or general, jurisdiction ". From this, their Honours in VTAG held that the Court had power to set aside a consent order where the parties consent and had " in very limited circumstances " a power to set aside final orders made otherwise than by consent. See also: Remington Products Australia Pty Ltd v Energizer Australia Pty Ltd [2008] FCAFC 47 at [20] , 246 ALR 113 at 116. Section 25(2B)(bc), it was further held, did not " evince an intention that only orders under paras (ba) and (bb) can be varied or set aside ": [2005] FCAFC 91 at [32] , [2005] FCAFC 91 ; 141 FCR 291 at 295. The setting aside of consent orders, it was suggested, may attract different considerations than the setting aside of other orders. With a consent order, leaving aside the exceptional case of approval of compromises involving litigants under a disability, the Court does not inquire into the merits of the order proposed. It does not decide questions of fact or law. With a consent order there is not the possibility of error of fact or law which could found an appeal either from a single judge to the Full Court or from the Full Court to the High Court. The Court, it was said, had an " inherent jurisdiction to ensure that its procedures do not affect (sic) injustice ". See also: Lashansky v Legal Practitioners Complaints Committee [2005] WASCA 217 at [150] to [151]. In VTAG the Full Court concluded that there was power to set aside consent orders previously made and entered in circumstances where there was consent to the orders being set aside, there was no improper purpose and there were no rights of third parties affected. It is unnecessary to resolve the extent of any " inherent power " or any " incidental power ". The power referred to in S353 was a power which was said to be available to vary orders made in the absence of a party. Such was not the present case. The orders as made in July 2007 were made with the express consent of the now Applicant. The Minister does not consent to the July 2007 orders now being set aside and the facts do not come within the limited exception embraced by Harvey v Phillips . No injustice, it is considered, is occasioned by holding the Applicant to the decision he made in July 2007. The only remedy in such a case for a dissatisfied litigant is, where available, an appeal: Re St Nazaire Co (1879) 12 Ch D 88 ; Re Suffield and Watts; Ex parte Brown (1888) 20 QBD 693 at 697 per Fry LJ and at 698 per Lopes LJ; and cf Gamser v Nominal Defendant. One such exception is the "slip rule": see L Shaddock & Associates Pty Ltd v Parramatta City Council (No 2) [1982] HCA 59 ; (1982) 151 CLR 590 ; another exception is fraud and a third relates to self-executing orders. None of these is relied on in the present case. These examples largely reflect the common law position. None is here relevant. However, Caboolture relies upon what is said to be the power of courts to make supplemental orders where circumstances make it necessary so to do. That in an appropriate case a supplemental order may be made after judgment is entered, is clear from Preston Banking Co v William Allsup & Sons [1895] 1 Ch 141. Nor is it a case in which the order has not been drawn up. Here the order has been drawn up, and it expresses the real decision of the court; and that being so, the Court has no jurisdiction to alter it. If this summons had proceeded on the theory that the order of the 11 th of July was right, and that circumstances had since occurred which had rendered a supplemental order necessary, the Court might have entertained the application; but this summons proceeds on the theory that the order of 11 July is wrong. In my opinion, it is of the utmost importance, in order that there may be some finality in litigation, that when once the order has been completed it should not be liable to review by the judge who made it. The present application does not seek to do this. It is, in the sense used in the cases, a supplemental order. The Court has adjudicated upon the facts of the claim brought by a plaintiff against a defendant, found for one side and entered the relevant judgment. Neither the facts nor the law are to be agitated again, save on an appeal. But the issues involved where a claim is made against a solicitor for costs by a party to the litigation have not been determined by the judgment which has been entered. They remain yet to be resolved. The revocation of the July 2007 Order certainly cannot be characterised as " supplemental orders ". No other source of power to vary or revoke the order as made in July 2007 has been identified. First, unlike the position confronting Allsop J in NAZL where an application was being made to vary orders made by a Court comprised of three Judges, the orders as made by North J were made by His Honour sitting as a Full Court pursuant to s 25(1AA) of the Federal Court of Australia Act 1976 (Cth). But, even so, the propriety of a single judge of this Court entertaining a Notice of Motion filed in the same proceeding to vary or revoke an order as made by a different judge is not to be accepted unquestioningly. In the absence of a reason to do so, any such Motion should normally be heard by the Judge who made the order sought to be varied or revoked. Indeed, in circumstances where an application to vary an order is sought, much may depend upon the procedural history of the litigation or the substantive issues resolved. In those circumstances, the Judge who made the order is in the best position to resolve any subsequent application. In the present proceeding, the Order sought to be varied does not depend upon any understanding of any preceding history or the substantive issues to be resolved. North J has in any event consented to the Court as presently constituted hearing the Motion . The second difficulty, and one which cannot as easily be resolved in favour of the Applicant, is that the Affidavit filed in support of the Notice of Motion only provides an explanation as to the circumstances in which consent was given to the Appeal being dismissed. The Affidavit provides no factual basis upon which the Applicant could bring himself within any of the limited exceptions that there may be to the July 2007 Order otherwise being final. There is no suggestion that the Order as previously made involved any fraud or abuse of process. The simple fact is that in July 2007 the Applicant made a decision --- he could either proceed with the hearing of the Appeal in this Court or he could agree to have that Appeal dismissed so that the Minister would give consideration to his case. You should also be aware that the Minister is under no obligation to exercise or consider exercising that power. Accordingly, no further action will be taken in respect of this request. The Applicant made an assessment that he had greater prospects of success with the Minister than he had on Appeal to this Court. But the assessment was for him to make. A litigant before this Court cannot consent to orders and thereafter simply request that those orders be revoked and advance little (if any) reason as to why the Court should even entertain the application. There would be no finality in litigation if such a course were to be permitted. A further potential difficulty is whether the application which is now made to the Court should have been made by way of a new application rather than by way of Motion in the same proceeding in which North J originally made the July 2007 Order. After having referred to the ground upon which a consent order could be set aside in Harvey v Phillips , Handley JA in Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 at 697 observed that "... it is also established that the jurisdiction to set aside a consent order on such a ground should be invoked by a new action brought for that purpose and not by a motion in the original proceedings ..." The difficulty could, perhaps, have been overcome by simply treating the existing Notice of Motion as a fresh proceeding: cf Pembroke School Inc v Human Rights and Equal Opportunity Commission [2002] FCA 1020 at [22] , 78 ALD 151 at 158. No objection, however, was taken on behalf of the Respondent Minister to the manner in which the Applicant has proceeded and --- accordingly --- this further difficulty need not be resolved. The resolution of the present Notice of Motion is no occasion to conduct a de facto hearing of the Appeal which was dismissed by consent. It is sufficient for present purposes to note that the Refugee Review Tribunal set forth its reasons and findings in considerable detail. The learned Federal Magistrate also addressed each of the grounds advanced before that Court. I rely on the order dated 22 March 2007 and yet will provide further grounds when I receive the judgment. The decision of the Federal Magistrate previously under appeal dealt with each of the grounds being advanced before that Court. The reasons for decision are expressed in sufficient detail to set forth the basis upon which each of the grounds was rejected. The reference in the second Ground of Appeal to a " Consent Order " was an order previously made by a Federal Magistrate quashing a previous decision of the Refugee Review Tribunal. Its relevance to the subsequent decision of a different Federal Magistrate is elusive. And the decision previously under appeal addressed and resolved the question as to whether an opportunity had been extended to the Applicant to present his case. The Notice of Appeal does not expose any self-evident error on the part of the Federal Magistrate. There was, moreover, no acceptable explanation as to why the Order as made in July 2007 was only sought to be impugned by a Notice of Motion filed in February 2009. The only explanation advanced was that there had been a change in government. There must be finality in litigation: Burrell v The Queen [2008] HCA 34 , 248 ALR 428. For better or for ill, the present Applicant had his opportunity to pursue his Appeal in this Court had he so wished and he decided not to proceed. The Order made in July 2007 gave effect to his decision. That Order is final. The Notice of Motion is without merit. It is to be dismissed with costs. The Respondent Minister seeks an order pursuant to Order 62 r 4(2)(c) of the Federal Court Rules for costs in a sum of $2,000. An affidavit has been filed in support of that sum. There is no reason why such an order should not be made. The Applicant on the Motion is to pay the costs of the First Respondent fixed in the sum of $2,000. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

consent orders made in 2007 application by motion to have orders set aside no express power no incidental power discretion to refuse relief power to set aside orders made by consent orders entered migration practice and procedure

He applied for a protection visa alleging a well-founded fear of persecution on the ground that the Indian authorities would be unable to provide him with effective protection against Hindu extremists. His application was refused by a delegate of the Minister and on review by the Refugee Review Tribunal. An application for review to the Federal Magistrates Court was dismissed by Hartnett FM: VWBF v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FMCA 1334. He had been involved in evangelical work since an early age. He married in 1982 and he and his wife have three children. Since 1984 he and his family have become active members of the Church of God. 5 He started preaching the Gospel in and around his villages. Government officers told him that a lot of people living in the area were unhappy about his activities and that in the event of any problem the police and government officers would not protect him but he would be held responsible for starting the trouble. 6 On 7 June 1999 he organised a Gospel meeting in a village called Athanoor. A group of Hindus attacked the appellant and his family with "very dangerous and sharp weapons". His fifteen year old son was injured. The group destroyed a stage that had been erected. They said that if they found him in these type of activities again they would definitely kill him. 7 On 19 December 1999 he was returning home from preaching the Gospel. Some strangers followed him, forced him into a car, took him to an old house and kept him the whole night and threatened to kill him if he continued with his preaching. He was released the next morning. When he appeared before the Tribunal he also said that when he was detained at this time he was beaten, his penis was pulled and his testicles squeezed, he thought in an attempt to make him sterile. 8 In February 2000 he went to England and spent six months Gospel training. On his return to India in July he continued with his missionary work. On 2 July 2001 a group of five Hindus came to his house and accused him of obtaining money from Christian countries to convert Hindu people. He denied this but they did not believe him. They demanded 10,000 rupees to guarantee his protection. He said he had no money to give them. They became upset and left, promising to set fire to his house and destroy his family. 9 Two days later his house caught fire. He and his family fled. He informed the police and government officials about the burning down of his house, but they did not record his complaint nor take any action. 10 He left for Australia where he arrived on a visitor visa on 5 September 2001. He applied for a protection visa on 25 September 2001. No evidence for critical finding? I am unable to accept that on each occasion the police response to the applicant's complaint was determined by the RSS [Rashtriya Swayamsewak Sangh] on account of the applicant's involvement in Christianity and the concern that some Hindus have with such activity. Independent information indicates that those Hindus who have attacked Christians are extremists and that most Hindus are not affiliated with the RSS or other extremist groups; it also indicates that the police across India have taken action to respond to attacks against members of religious minorities , that there is a large number of Christians in Tamil Nadu and that the government of Tamil Nadu has a history of support for religious minorities. The evidence before the Tribunal indicated significant attacks upon Christians and other religious minorities. The authorities were unable to prevent all attacks and equally on the evidence accepted by the Tribunal the police did not respond to all attacks. ...there was not evidence which indicated the global, unqualified proposition which the Tribunal based upon that evidence. For example in a United States State Department report dated 4 March 2002 it was said that the Indian Constitution provides for freedom of religion and the government generally respects this right in practice, however the government "sometimes does not act effectively to counter societal attacks against religious minorities and attempts by state and local governments to limit religious freedom". In particular, some Hindu extremist groups continued to attack Christians during the year. In many cases, the government response was inadequate, consisting largely of statements criticising the violence against Christians, with few efforts to hold accountable those persons responsible or to prevent such incidents from occurring. The US report also states that the four southern states (including Tamil Nadu) are ruled by political parties with strong secular and pro-minority views which have a history of support for religious minorities and "which have attempted to assuage religious minority fears about religious tensions in the rest of the country". 16 A United Kingdom Immigration and Nationality Directorate's assessment of India (April 2003) stated in relation to violence against Christians in the Dang District of Gujarat Province that the Prime Minister of India had stated that the "government would not tolerate any further attacks on the Christian minority". The government had sent a team of officials to investigate the attacks, and security forces were deployed in the affected areas to guard missionaries and churches. 17 To succeed on the "no evidence" ground the appellant would have to show that there was no evidence at all upon which the finding could have been based: Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 at 356. Thus the question is not whether the court on judicial review would have reached the same finding on conflicting evidence. There was in the present case some evidence to support the finding, as properly understood. 18 The finding complained of must be identified accurately. In the present case the appellant's argument rests upon a misreading of the finding in question. India is a vast country. The Tribunal could not be reasonably taken as saying that it was satisfied that literally in every instance of attacks against religious minorities police across India have always taken action to respond. Viewed in context, the point the Tribunal is making is that while there is some protection generally in India against attacks against religious minorities, the position in Tamil Nadu, where the appellant comes from, is more favourable. 19 Further, to succeed on the "no evidence" ground, the fact of which there is said to be no evidence would need to be a jurisdictional fact, that is to say "an essential preliminary to the decision-making process" as distinct from "a fact to be adjudicated upon in the course of the inquiry": Colonial Bank of Australasia v Willan (1874) LR 5 PC 417 at 442-443, VXDC [2005] FCA 1388 ; (2005) 146 FCR 562 at [13] (hereafter, unless otherwise indicated, all citations are to be taken as including the responsible Minister as a party). The fact in question would fall within the second Willan category. The "What if I am wrong? 21 In any event, the Tribunal had an alternative basis for its ultimate non-satisfaction as to the protection visa criteria. The Tribunal did not rely only on its findings as to the appellant's lack of credibility on his account of alleged past events. The Tribunal said that, notwithstanding the rejection of most of his evidence about the adverse consequences of his involvement in Christian evangelism in the past, its focus must be on what would follow his return to India in the reasonably foreseeable future. This was correct. The fundamental task of the Tribunal was to form an opinion as to what was likely to happen to the appellant if he returned to India: Guo [1997] HCA 22 ; (1997) 191 CLR 559 at 574. What had happened to him in the past in that country was a relevant, but not essential step: Abebe v Commonwealth [1999] HCA 14 ; (1999) 197 CLR 510 at [192] . 22 The Tribunal accepted that the appellant might try to continue Christian evangelical work, but its consideration of all the evidence led it to conclude that the chance that he would face serious harm because of his religious practice was remote. In particular, the Tribunal noted that his home state of Tamil Nadu, including its capital Chennai, has a strong Christian community and a large proportion of all of India's missions. Some 12 per cent of its population are Christian. In the Tribunal's view, it was possible that the appellant might experience some harassment because of his religious activities, as he probably had in the past, and as independent information indicates can occur, but there was not more than a remote chance of such harassment being of a kind which could amount to persecution, that is to say the serious harm envisaged by s 91R of the Act. For the reasons given in SZCJD [2006] FCA 609 at [19] , I think the appellant should have leave. The operation of s 424A has been the subject of a recent Full Court decision handed down on 24 February 2006, SZEEU [2006] FCAFC 2. In that case there crystallised for the first time at Full Court level what Weinberg J at [121] described as the "unanticipated but potent combination" of the Full Court's decision in Al Shamry [2001] FCA 919 ; (2001) 110 FCR 27 and the High Court's decision in SAAP [2005] HCA 24 ; (2005) 215 ALR 162. It may be true, as counsel for the Minister in the present case pointed out, that there were single judge decisions in June and July 2005 which considered this point, and the hearing before the Magistrate took place on 7 September 2005. Nevertheless some reasonable allowance should be made for the blizzard of cases concerning the Act that descend upon the profession and some time allowed before they can be taken as absorbed into the general understanding, even of those specialising in this area. 24 Section 424A(1) provides that the Tribunal must give to applicant particulars of "any information" that the Tribunal considers would be "the reason or a part of the reason for affirming the decision that is under review", ensure that "the applicant understands why it is relevant to the review" and "invite the applicant to comment on it". The information and invitation must be given in writing. 25 However, subs (3) provides that the section does not apply to certain sorts of information, including information "(b) that the applicant gave for the purpose of the application". In Al Shamry the Full Court held that "the application" means the application for review by the Tribunal and does not include the information given by the applicant for the purposes of the initial visa application to the Department. In SAAP a majority of the High Court held that if s 424A(1) applies, the obligation is not satisfied by putting the information orally to the applicant in the course of the Tribunal hearing. 26 The s 424A argument in the present case was founded on the Tribunal's use of something said by the appellant in an interview with the delegate. In the interview the appellant said that after his house was burnt down his family moved into a hut built on the same site. He told the delegate that he and his family had moved after the fire. He said that about a month after he came to Australia a hut was constructed on the land and his family went to live there. He told the delegate at the interview on 13 March 2002 that his family had been threatened and asked about the applicant's whereabouts and that they were living in constant fear. The evidence about the circumstances of his wife and children added to my doubt that the applicant was providing an accurate account of what occurred. His evidence that his family were harassed and living in fear and that his son was twice attacked --- in June 1999 and while the applicant was away in England in 2000 --- appeared to indicate that this was a consequence of the applicant's religious activity yet he said that they were not targeted and that it was he who was sought appeared to me to be contradictory. 28 Under cover of a letter of 9 December 2002 a migration agent acting for the appellant sent to the Tribunal a further statement by the appellant of the same date which was said to be "in support of his refugee application". I am presenting the INDIAN situation in general with special emphasis to my situation as an average Indian Citizen, attempting to lead a truthful and Christian way of life as an Evangelist. INDIA --- Country Reports on Human Rights dated 4th March 2002 US State Department ... Document marked No. 29 It was not in dispute that the facts about the appellant's family moving back to the home site was "information" for the purposes of s 424A(1) or that such information, and the use the Tribunal made of it, was part of its reason for affirming the decision to refuse to grant the visa. The Tribunal did not give the appellant written particulars of, or explain the relevance of, this information. Nor did the Tribunal do so orally at the hearing. 30 I therefore accept that the Tribunal failed to comply with s 424A(1). The critical question then becomes whether the information in question fell within the exception created by s 424A(3)(b). If it did not, jurisdictional error will have been established: SAAP . It will be necessary to look at some of the recent authorities dealing with subs (3). 31 In M55 [2005] FCA 131 Gray J had to deal, amongst other things, with an argument that the Tribunal had wrongly relied on the use by the applicant of his Sri Lankan passport on several occasions in leaving that country, the inference being that because the Sri Lankan authorities had not confiscated it they had no interest in him. His Honour held (at [24]) that the Magistrate was wrong in finding that the provision of the passport as part of the original application for a protection visa was sufficient to exclude the operation of s 424A(1). However, in his Honour's view that was not the end of the matter. He held (at [25]) that because, by means of the written submission of his counsel to the Tribunal, the appellant replied expressly on the terms of his protection visa application he thereby invited reference to the copy passport which was attached to his application form. There could be little doubt that the appellant intended that the Tribunal should look at this material. This was sufficient for the appellant to have been taken to give the information contained in the copy passport to the Tribunal for the purpose of his application for review, and therefore for that information to fall within s 424A(3)(b) of the Migration Act . The Tribunal in the course of the hearing referred to an inconsistency between the answer to that question and the appellant's oral evidence before the Tribunal as one of the reasons for rejecting his claim. The inconsistency was put orally to the appellant in the course of the hearing. Jacobson J held that s 424A(1) was not complied with. It was put to his Honour that Al Shamry was distinguishable because the appellant had referred to the protection visa application form when asked about it by the Tribunal and said that the information in it was true and correct. Counsel for the Minister relied on Gray J's decision in M55. The passage set out at [11] indicates that the (Tribunal) raised the issue of the protection visa application form and the answers contained in it during questions asked in the course of the hearing. Rather, that case was to be distinguished on the basis that there the appellant had expressly adopted and put forward as part of his application to the Tribunal the earlier information whereas in NAZY the appellant had adopted the earlier information in answer to a question from the Tribunal. 35 In SZEEU [2006] FCAFC 2 a Full Court dealt with five cases raising s 424A points. In one of these cases, the appeal in SZBMI , the appellant had said in his protection visa application that he had fled from Bangladesh (referred to in the case as "the flight information"). This was drawn to the appellant's attention by the Tribunal but no particulars in writing were given. The Tribunal recorded that the appellant had confirmed at the hearing that he had read his protection visa application statement before signing it and that it was true and correct. 36 Moore J (at [20]) did not accept that "by adopting the statement at the hearing before the Tribunal the flight information was transformed into information provided by the appellant in his application review". Different considerations could arise if it was clear the Tribunal treated only the adoption of the earlier statement as the fact relevant to its consideration of the application in the review. In those circumstances the fact of adoption would almost certainly constitute information provided by the applicant in the application on which the exclusion would operate. However, it cannot be said, in this case, that the Tribunal acted in such a way. His Honour did not further explain the distinction between mere adoption and the fact of the adoption. I am not sure that I understand it. His Honour did not deal expressly with the subs (3) point. 39 M55 was not mentioned in SZEEU . Implicitly the members of the Full Court accepted that Jacobson J was correct in treating M55 rightly decided, but distinguishable. 40 In another of the cases dealt with in SZEEU , the case of SZDXA , the relevant information was that the appellant had entered Australia on a business visa. Thus it was information comprehended by s 424A(3)(b) even though it was information also derived from an alternative source. If, however, the applicant repeats the earlier statement at some stage during the course of the hearing, and adopts it as true, and then subsequently resiles from that statement, the Tribunal is not obliged to afford the applicant an opportunity to comment upon the discrepancy: see generally SZEFM [2006] FCA 78 per Bennett J. This is because the adoption of the earlier statement brings it within the scope of the s 424A(3)(b) exception. If, however, the Tribunal proposes to use the earlier statement as the reason or part of the reason for affirming the decision under review rather than the later adoption, it must comply with s 424A(1). Graham J noted that the appellant's migration agent sent to the Tribunal a 31 page fax which included a statutory declaration made by him in the course of his application for a protection visa. His Honour said at [34] that the "inescapable conclusion" was that all of the information contained in the fax, which constituted the application for review as submitted to the Tribunal by the appellant's agent, constituted information that the appellant gave for the purpose of the application within the meaning of s 424A(3)(b). In this instance the information to which the Tribunal referred in its reasons was information derived from the documents which the appellant gave to the Tribunal for the purpose of the review application. In his letter in support of the application for review to the Tribunal the appellant, dealing with the reasons he had left China, said "As I explained before" and "I gave full explanations in my previous statement". Rares J rejected the Minister's argument that the incorporation by this reference was of everything which the appellant had put before the delegate, and not just so much of the material as related to the events surrounding his leaving China. His Honour said (at [36]) that when it is sought to say that a person "republished" something which had been provided at a different time, an objective assessment is called for. After reference to the concept of objective assessment in the law of defamation, contract, trade practices and passing off, his Honour concluded that a subjective criterion could not have been intended by Parliament in the case of s 424A. His Honour noted the earlier decision of SZDMJ [2005] FCA 1034 where Gyles J held that there was a "clear republication of original claims made in a declaration by the applicant as part of his application for review". 45 In SZCJD [2006] FCA 609 I rejected a s 424A argument primarily because the protection visa application and its characterisation as vague and general were not the Tribunal's reason or part of its reason for its decision. I held (at [42]) that in any event s 424A(3)(b) applied as the applicant had given the information in the course of answering the question put by the Tribunal. 46 In SZDPY [2006] FCA 627 the Tribunal had relied on the appellant's educational history in India and in Australia as a basis for its finding as to the reasonableness of relocation within India. The appellant conceded that at the hearing before the Tribunal he had done more than simply adopt information concerning his education in Australia; in response to the Tribunal's questioning he had actively given details of his education in this country. However, he argued that answers regarding his education in India were in response to leading questions from the Tribunal where in effect he was asked to do no more than confirm the details in his original visa application. 47 Kenny J found that the appellant specifically provided the Tribunal with his Indian education details. Her Honour (at [35]) rejected the submission that the information did not fall within s 424A(3)(b) because it was given in response to questions in the nature of cross-examination. The Tribunal's questions "were specific and arose, naturally enough, from the appellant's visa application". Her Honour considered that SZEEU supported the proposition that where an applicant affirms a specific fact before the Tribunal that information will be covered by s 424A(3)(b) , even if it came from another source. Her Honour found (at [36]) that the appellant did not "merely adopt" the education information in his visa application. At the Tribunal hearing he "separately and specifically" gave detailed information about his Indian education. 48 For no apparent reason, almost all the discussion of s 424A(3)(b) in the cases proceeds on the basis that the provision uses the word "provide". The subsection in fact uses the verb "to give", which simply conveys the notion of delivering or handing over (Shorter Oxford English Dictionary). If this matter were free from authority, there would be much to be said for the view that an applicant "gave" information for the purpose of the Tribunal review application if the information was delivered to the Tribunal by the applicant, whether in answer to a question asked by the Tribunal or whether volunteered. Either way, the information is conveyed from applicant to Tribunal. If we were to read or hear "At the trial, A gave information about fact X to the court", we would take that as equally comprehending the possibility of A giving evidence about X in chief, or in cross-examination, or in answer to a question from the judge. 49 Likewise, if an applicant says to the Tribunal "What I said in my visa application is true" and that application contains fact X, the normal meaning conveyed would be that the applicant is giving the information constituted by fact X to the Tribunal, as well as the further fact that fact X had been asserted by the applicant when he made the visa application. 50 Such a reading of s 424A(1) and (3)(b) would be consistent with common law concepts of natural justice which require the decision-maker to give the person affected notice of relevant information obtained from another source but not, generally speaking, to invite comment on the evaluation of material submitted by the person himself: see Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 591-592 and the cases there cited. 51 In any event, in the present case, the information in question was positively advanced on behalf of the appellant in the letter of 9 December 2002. The reasoning in M55, SZCKD, SZCJD and SZDPY applies. There is no explanation for it not being raised before the Magistrate. In any event, it has no reasonable prospects of success. The Act imposes no obligation to make positive findings in accepting or rejecting claims: VSAF [2005] FCAFC 73 at [16] - [17] . In a situation like the present one where the Tribunal expresses doubts about the appellant's account of specific events, it is unreal to expect the Tribunal to go on and make positive findings as to what in fact did happen. I certify that the preceding fifty four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.

appeal from federal magistrates court rejection of application for review of refugee review tribunal decision indian christian evangelist claim for refugee status based on fear of lack of effective protection against hindu extremists argued before fmc (i) no evidence to support finding of fact as to action by indian police in response to attacks against members of religious minorities (ii) tribunal did not ask "what if i am wrong?" leave sought to raise further arguments (iii) failure to comply with s 424a migration act 1958 (cth) in respect of information concerning appellant's failings to return to site of home allegedly burned down by extremists and (iv) failure to deal with essential integers of appellant's claim migration

The Tribunal had affirmed a decision of a delegate of the first respondent to refuse to grant the appellant a protection visa. He arrived in Australia on 22 April 2004, and applied for a protection visa on 3 June 2004, which was refused by the delegate. 3 The appellant claimed to fear persecution in Bangladesh on account of his religious beliefs and his status as a social activist. The appellant claimed to be a Buddhist and a founding member of a Buddhist Co-operative and feared persecution from Muslims in Bangladesh. He also claimed to be involved with the Awami League ('AL'), and feared members of the rival Bangladesh National Party ('BNP'). He claimed to have been assaulted by BNP members, and that the Government tried to ban the operation of the Buddhist Co-operative. He also claimed he was threatened by Muslims and, after his wife was attacked in March 2004, they fled to Australia, arriving on 22 April 2004. The appellant's fear of persecution was said to arise in two categories: one category was fear as a result of events personal to the appellant; the other category was said to arise from general discrimination against Buddhists in Bangladesh. 4 The appellant applied to the Tribunal (differently constituted) for review of the delegate's decision. On 20 October 2004, the Tribunal (differently constituted) held a hearing, after which it wrote to the appellant pursuant to ss 424 and 424A of the Migration Act 1958 (Cth) ('the Act'). The Tribunal made a decision on 31 December 2004 affirming the delegate's decision to refuse to grant the appellant a protection visa. That decision was set aside by the Federal Magistrates Court, by consent, on 7 June 2006 and the matter was remitted to the Tribunal to be determined according to law. 5 On 28 July 2006, the Tribunal sent a further s 424A letter to the appellant, to which the appellant responded, but it did not invite the appellant to attend a hearing. Instead, the Tribunal listened to a recording of the hearing on 20 October 2004 before the Tribunal (as previously constituted). On 14 September 2006, the Tribunal made a decision affirming the delegate's decision. 6 In its decision, the Tribunal found that the appellant was not convincing, noting that he was vague on many matters and inconsistent with his stories. The Tribunal found the appellant generally incredible. 7 The Tribunal accepted that the appellant was a Buddhist and AL supporter, but did not accept that he had ever been threatened or harmed for either reason. The Tribunal rejected the appellant's claims of past harm. The appellant was represented by counsel at the hearing, and only one ground of appeal was pressed, namely: that the Tribunal failed to make a finding in relation to the claim that Buddhists in Bangladesh were subject to general persecution. 9 His Honour noted that the appellant's case was limited to whether the Tribunal fell into jurisdictional error in failing to deal with the appellant's claim of general discrimination against Buddhists in Bangladesh. 10 His Honour found that the Tribunal had noted the appellant's claim of general discrimination against Buddhists in Bangladesh, including discrimination in employment and in obtaining police protection from violence. It is apparent, on my reading of the Tribunal decision, that the Tribunal was aware of the claim that Buddhists were subject to general discrimination amounting to persecution in Bangladesh, and was not only aware that the applicant was a Buddhist but was prepared to make that finding. The Tribunal referred to the applicant having been questioned at the hearing about this claim and how general country information was put to him, which referred to particular problems for Bangladeshi Buddhists from the Chittagong Hill Tracts and discrimination against minority groups generally but did not refer to any persecution of Bengali Buddhists. The applicant was asked about that and replied to it, saying that his village, in particular, was not a good place for Buddhists; there are Muslims and Buddhists living there but Buddhist religious programs have been threatened. The applicant went on to refer, in vague terms, as the Tribunal said, to the killing of a local Buddhist leader in his area some two years earlier, and the Tribunal noted that that murder had been widely reported, and referred to independent country information. This may lead the Tribunal to conclude that you do not have a level of commitment to Buddhism or to your community which would attract hostile attention to you. In your primary application, you claimed to have had a leadership profile within your community, yet your description of your role at the mediation centre --- organising of functions and managing funds --- the lack of any reference to you in public sources, whereas the names of other prominent persons associated with the monastery, including the current secretary-general, are readily available, and your vague and incomplete answers concerning the current personnel at the monastery and associated institutions call into question your claimed prominence. In my view, the question of the applicant's membership of the Buddhist religion is squarely on the agenda, and, in my view, the Tribunal's findings deal with both issues. I am satisfied that no jurisdictional error has been made out. However, in his submission filed with the Court on 1 August 2007, the appellant did not press all grounds apart from one, namely: that the federal magistrate failed to consider whether the Tribunal failed to consider the appellant's claim that Buddhists are subject to general discrimination in Bangladesh amounting to persecution. In both the appellant's and the first respondent's written submissions, reference was made to the decision of the Full Court in WAEE v Minister for Immigration and Multicultural Affairs (2003) 75 ALD 630, which provides that an inference may be drawn that the Tribunal did not consider a particular issue if it fails to deal directly with that issue in its reasons: at [47]. It may be that it is unnecessary to make a finding on a particular matter because it is subsumed in findings of greater generality or because there is a factual premise upon which a contention rests which has been rejected. Where however there is an issue raised by the evidence advanced on behalf of an applicant and contentions made by the applicant and that issue, if resolved one way, would be dispositive of the Tribunal's review of the delegate's decision, a failure to deal with it in the published reasons may raise a strong inference that it has been overlooked. I do not characterise, unlike the federal magistrate, the matter of discrimination as a claim which necessarily required the detailed treatment as sought by the appellant. The main focus of the claim was the real chance of persecution and fear of physical harm. The general discrimination complained of by the appellant was to lead to such physical harm. My life will be under threat. There is no safety and security of life in Bangladesh for an activist like me. I shall be arrested and put into jail in relation to the false cases. I have no future in Bangladesh. I shall be discriminated in every walks of my life. My life will be in jeopardy. Under these circumstances I firmly believe that my case has merit to be considered. The Tribunal confirmed that the Applicant was an ethnic Bengali, and alerted him to independent information from sources such as the United States, United Kingdom, Amnesty International and Human Rights Watch which described particular problems for Bangladeshi Buddhists from the Chittagong Hill Tracks ('tribals'). These sources referred to discrimination against minority groups generally, but did not refer to any persecution of Bengali Buddhists. The Applicant said his village in particular was not a good place for Buddhists. There were Muslims and Buddhists living there, but Buddhist religious programs had been threatened. The Tribunal confirmed that the person question was Monk Ganojyoti Mohashthobir, whose murder was widely reported in the Bangladeshi press (eg. The Daily Star, 24 April 2002, http://www.thedailystar.net/dailystarnews/200204/24/n204210.htm, accessed on 20 October 2004). The Applicant described the circumstances of this killing in terms consistent with the press reports. He attributed the killing to attempts to prevent the monk from fulfilling his religious duties. The Tribunal noted that press reports suggested instead extortion or attempts to seize his temple's land, and that these seemed to point to general law and order problems in Bangladesh rather than targeted actions against Buddhists. The Applicant said that the monk was killed in a sizeable village (Raozan) next to the Applicant's village. This incident was relevant because it showed that all Buddhists faced danger. I think where the appellant only stated his belief that Buddhists were subject to general discrimination amounting to persecution in Bangladesh, the Tribunal was entitled to reject that as a statement of existing fact, on the basis of the independent information. 20 It seems, therefore, clear to me that the Tribunal did advert to the general question of discrimination against Buddhists in Bangladesh and its finding that the appellant did not have a well-founded fear of harm in Bangladesh for reason of his religious beliefs must be taken as being made in view of the matter of general discrimination being raised in the way I have characterised. It does not matter that the Tribunal did not at the end of its reasons specifically deal with general discrimination --- it had already been dealt with by the Tribunal and effectively discounted. 21 Even if one treated the question of general discrimination as being a substantial, clearly articulated argument, as the Full Court cautioned in WAEE 75 ALD at [47], an inference that the Tribunal did not consider such a particular claim is "not too readily to be drawn where the reasons are otherwise comprehensive and the issue has at least been identified at some point". 22 This is not the situation that confronted Spender J in SZGOP v Minister for Immigration and Citizenship [2007] FCA 836 or Tamberlin J in Applicant NAKB of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 534 , where their Honours were dealing with a clearly articulated claim, and where their Honours could not find that the issues sought to be agitated were either dealt with generally or specifically in any part of the Tribunal's findings. 23 However, I do agree with the appellant's contention that the "Findings and Reasons" of the Tribunal do not specifically deal with the general discrimination point. His evidence has been vague and contradictory and, at times, not believable. His delay in leaving Bangladesh further undermines his credibility. Nor do I accept that there is a real chance of such things occurring to him in Bangladesh should he return there in the foreseeable future. However, as I have said, the question of general discrimination was effectively dealt with in the earlier passages of the Tribunal's reasons to the extent that that question needed to be addressed in the circumstances of the claim made by the appellant. In light of the reasons above, I will order that the appeal be dismissed with costs. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton.

judicial review whether refugee review tribunal ('the tribunal') considered appellant's claim of general discrimination against buddhists in bangladesh whether claim was a "substantial, clearly articulated argument relying upon established facts" where tribunal's treatment of the claim was sufficient migration

She says that she suffered persecution in India both because she is Hindu and also because she was an advocate for women's rights. As a young woman, she lived in a part of India dominated by Muslim people. She was an active student leader at the University in Hubli. She advocated liberation for women and their greater involvement in public life. Because of this she was regarded as having western values. She was criticised by conservative elements, especially from the Muslim community. The applicant said that on Independence Day, 15 August 1994, she had been invited to hoist the national flag at the Idagh Maidan at Hubli. There were objections from the Muslim community because a mosque was located on the same ground. The applicant claimed that she was kidnapped and kept under house arrest so the flag raising ceremony could not take place. She also claimed that her parents were threatened and her house ransacked. When she reported this to police she said that they abused all of her group. The applicant said that when she was being held by those who kidnapped her, she was tortured and abused. She claimed that she was released only after she promised to leave the place within 24 hours. She and her family were threatened with elimination. They moved to Bangalore the next day. The applicant claimed that she had narrowly escaped a massacre in Hindu dominated areas by Muslims supported by the police. She also said that with the support of her husband, whom she married in Bangalore, she began to speak publicly in support of Hindu people. She said she spoke against those who tried to instigate hatred between Muslims and Hindus. She was regarded by some as a person opposed to the Muslim minority. On one occasion she had made a speech in favour of better community relations following the destruction of the Babri Mosque. The applicant said that whenever a Muslim festival was held in her area she was taken into protective custody. Other Hindu activists were taken into custody and sometimes were killed. She feared for her life and ultimately left India for Australia. The applicant arrived in Australia in July 2005. Shortly after her arrival she applied for a protection visa. This was refused by a delegate of the Minister for Immigration and Multicultural Affairs on 11 August 2005. The applicant applied to the Refugee Review Tribunal (the Tribunal) on 30 August 2005 for review of that refusal, however the Tribunal affirmed the decision of the delegate on 24 November 2005. In its reasons for decision the Tribunal did not consider her to be a credible witness. It found that she was not connected with the controversial event of the flag raising at Idagh Maidan. It is not necessary for present purposes to go into the factual matters that the Tribunal relied upon in reaching that finding. They included inconsistencies with the historical record and in the applicant's own evidence. The Tribunal also found that she did not provide the correct date at which the Babri Mosque was destroyed nor explain the contradiction between her evidence about that and independent country information. The Tribunal was not satisfied that the applicant had come to public attention as either a student leader or an advocate for women's rights. It found there was nothing to support her claims that she was adversely regarded by Muslims. Nor was there anything to support her claims that she had been kidnapped or taken into police custody to silence her. The Tribunal was not prepared to accept the applicant's other unsupported assertions. It found that the applicant did not have a well-founded fear of persecution in India based on the matters that she had put forward. When her judicial review application came before the learned Federal Magistrate it took the form of an application for an order to show cause why relief should not be granted against the decision of the Tribunal. The learned Federal Magistrate listed the matter for hearing under r 44.12 of the Federal Magistrates Courts Rules. It was not apparent to him then that the application disclosed an arguable case. An amended application was filed on 20 March 2006. The applicant did not make any submissions but relied upon her amended application. In that amended application she claimed that the Tribunal made a mistake about the question of effective State protection under the Refugees Convention. The learned Magistrate pointed out that the Tribunal did not find it necessary to decide whether effective State protection from Indian authorities would have been available to the applicant. This was because the Tribunal had found her claims of a well-founded fear of persecution were not made out. The applicant claimed that procedures required by the Migration Act 1958 (Cth) had not been observed in the Tribunal. However the application did not show what procedures she said had not been observed. Other general grounds were relied upon without any support. The learned Magistrate found that there was nothing in the amended application which showed an arguable case. He therefore dismissed the application under r 44 of the Federal Magistrates Court Rules. The applicant seeks leave to appeal against the decision of the Magistrate. The proposed notice of appeal sets out a number of grounds. These are expressed in very general terms and they are not particularised so as to identify any error on the part of the Magistrate or the Tribunal. There is, in my opinion, no prospect of success on the appeal. The Tribunal's decision turned upon its view of the facts of the case. There was no jurisdictional error exposed in the application to the learned Magistrate, nor was there to this Court. The application for leave to appeal will be dismissed with costs fixed at $1,200.

judicial review protection visa application for judicial review of refugee review tribunal order nisi application dismissed by federal magistrates court application for leave to appeal application for leave dismissed with costs indian national hindu and human rights activist apprehended fear of persecution by muslims claims disbelieved by tribunal no jurisdictional error migration

In these proceedings, ASIC seeks winding up orders against the 13 respondents which are part of the Westpoint Property and Finance Group. The originating application is based upon non-compliance with statutory demands for repayment of debts shown as owing according to the books and records of the Westpoint Corporation. I have already set out in the reasons I gave earlier dealing with the validity of the originating process, the nature of the statutory demands, the fact that there was evidence of their service, supported by verifying affidavits, and subsequently evidence that the demands were not met, and that no application was made to set them aside. I referred also, in my earlier reasons, to the requirements for an affidavit verifying continuing debt in support of both a statutory demand and an application for a winding up for non-compliance with a demand where something other than a judgment debt is being relied upon. That much having been established, that is to say that the originating process is valid, the respondents, through their director, Mr Carey, now seek leave to issue subpoenas to ASIC in respect of documents which it has seized or otherwise acquired in connection with its ongoing investigation into the Westpoint Property Group. The applications for leave to issue subpoenas to ASIC appear to rest on two bases set out in Mr Carey's affidavit of 15 August 2006. One of those bases raises a question about the nature of the debts relied upon to ground the statutory demands. He said that those accrued debts and credits were recorded pursuant to an arrangement for the Westpoint Group, under which Westpoint Corporation acted in effect as the Group treasurer. These were reconciled in the accounts of the group's central treasury, namely Westpoint Corporation, where they were recorded as non-current related party loans, as an accounting device to reflect the accruals made by the subsidiaries in the group in respect of each other. They did not reflect any formal loan arrangements whereby amounts were made payable by one entity to another in accordance with strict terms. The balances were simply adjusted as the accruals flowed between one entity and another. This, he believed, referred to the accruals between member companies of the Westpoint Group as described above. The consolidated figure for 2004 was $99,767,901. I have already referred to the note that was recorded below that entry. Mr Carey's explanation of the entries verged on the unintelligible in a legal sense, and did not appear to disclose any proper basis upon which the statutory demands could have been challenged. But assuming in favour of the respondents that it did, the fact is that the statutory demands were served on the registered offices of each of the respondents, which were at 160 St Georges Terrace. Each of the notices was served with a supporting affidavit and a covering letter to Mr Carey. Service is not in dispute, and indeed, Mr Nixon on behalf of the respondents expressly disclaimed any dispute about service. Mr Carey, in his affidavit, described a system which he had for the receipt of correspondence coming in. If I was present in my office, the document would be handed to me. If I was not present in my office, the document would be left in a tray which I kept for incoming correspondence, which I inspected whenever I returned to my office. Nor did I receive any notification that they had been served until I received the originating process herein, accompanied by Mr McLean's affidavit, in July 2006. In my opinion, however, whatever circumstances may mitigate the failure to apply to set aside a statutory demand regularly served on a company's office, those circumstances do not exist here. The position, seems to me, to be governed by s 459S of the Act. So far as the respondent's application for leave to issue subpoenas to ASIC is based upon an intention to raise a question as to whether the debts relied upon were due and payable, that is a matter which could have been raised in a challenge to the statutory demands. In my opinion, it is precluded by operation of s 459S and I would not grant leave to issue any subpoena for that purpose. The question of the solvency of the companies remains. The range of the documents sought under the subpoenas, on the assumption that they are directed to that end, which is in part addressed in a rather general way in Mr Carey's affidavit is very large. It covers all financial books and records of the company in each case, 'including but not limited to', and then follows a list of 13 categories of documents with extensive definitions. I am not prepared to grant leave to the respondents to issue subpoenas to ASIC covering the range and volume of documents which they seek. The width of the proposed subpoenas suggests that the respondents are looking, in the material, for some basis for establishing their own solvency. I bear in mind that there is evidence that, for a number of the respondents, financial records remain in their own possession in computerised form. I do not know what the position is with the other respondents not covered by the affidavit material in relation to that. It seems to me that Mr Carey, being a director of all these respondents, in association with other officers of those companies, should be able to identify in a relatively focused way the basis upon which he would assert that they are solvent, notwithstanding the presumption, and the material that would be necessary to make-out that proposition, contrary to the presumption. ASIC has made an offer to identify relevant files with a view to providing to the respondents an opportunity to narrow the range of documents that they would seek under subpoena. In my opinion I should refuse leave to issue the subpoenas in their present form but make directions with a view to allowing ASIC and the respondents to see whether they can reach agreement on the terms of the subpoenas or the classes of documents which might be produced consensually for the purpose of these proceedings. The orders I propose to make are as follows: Leave to the respondents to issue the subpoenas, drafts of which were filed in Court, is refused. The Australian Securities and Investments Commission is to provide the respondents with a list of files in its possession which are, in its opinion, relevant to the question of solvency of the respondents by 30 August 2006. The question of the class of documents which might properly be produced on the question of solvency is referred to a Registrar for mediation at one conference only to be held on or before 6 September 2006. Any application for leave to issue any further subpoena is to be brought on 13 September 2006 at 9am at which time further direction will be given for the conduct and trial of the application. Any application for leave under s 459S(1) of the Corporations Act 2001 (Cth) is to be made on 13 September 2006. The respondents are to pay the applicant's costs of the application to issue the subpoenas.

insolvency winding up application failure to comply with statutory demand challenging basis of insolvency nature of debts relied upon to ground statutory demands service of statutory demands not in dispute statutory demands not received failure to apply to set aside statutory demand regularly served leave to issue subpoenas to challenge whether debts due and payable demonstration of solvency in opposition to winding up application width of proposed subpoenas leave to issue subpoenas refused conferral between parties for agreement on terms of subpoenas and documents to be produced corporations

2 Mr Amin's bankruptcy has its origins in a judgment debt of 14 March 2007 which resulted from his failure to pay strata levies to the owners of Strata Plan No 71569, commencing in February 2007. The amount of the judgment debt was $2501.09. A bankruptcy notice was served upon Mr Amin on 5 June 2007. It was not satisfied. A creditor's petition was filed in this Court on 5 September 2007 and served on Mr Amin on 12 September 2007. It identified debts in the amount of $5475.01 which included the amount of the judgment debt together with interest and expenses and further contributions due by Mr Amin to The Owners of Strata Plan No. 71569. 3 The creditor's petition was listed for hearing on 12 October 2007. Mr Amin did not pay the debt prior to 12 October 2007 and he did not appear at the hearing on that day. In his absence, a sequestration order was made against his estate. The date of bankruptcy was noted as being 26 June 2007. 4 Mr Amin has given evidence by affidavit in the present proceedings attempting to provide explanations for why the various debts were not paid. I must say that I find the explanations to be not very satisfactory. He also gave evidence as to why, for reasons connected with the practice of his religion, he did not attend court on 12 October 2007. That explanation, however, does not assist to understand why it was that the debt was not paid before that date nor any indication given to the creditor or the court that there was any difficulty concerning Mr Amin's attendance at court on the day fixed for the hearing of the creditor's petition. 5 Be all that as it may, the evidence before the Court is that following the making of the sequestration order, the debt was paid. The creditor does not oppose relief being granted to Mr Amin in one of the forms sought by the application. The creditor concedes that if the matter were to be heard by way of review, then it would not be in the position to establish under section 52 of the Bankruptcy Act that any debt remained outstanding. 6 There is also evidence before the Court in the form of a letter from the trustee of Mr Amin's estate confirming that the trustee's costs have been paid and that the trustee did not propose to appear at the hearing of the present application. I infer that the application is not opposed by the trustee. 7 I confess I have little sympathy for the position in which Mr Amin finds himself, which appears to me to be due entirely to his own inattention to his obligations. However, not without some reservations, I have decided that there is no apparent purpose to be served, in the public interest, by prolonging his bankruptcy in the circumstances which the evidence before me discloses. That, in essence, is that the outstanding debt has been paid, there is no opposition to the bankruptcy being brought to an end in an appropriate manner, and on his unchallenged evidence before the court he is in a position to pay his debts as and when they fall due and is, and was on 12 October 2007, solvent. 8 I do not think it would be appropriate to annul the bankruptcy under section 153B of the Bankruptcy Act . I am not able to conclude that the registrar was bound not to make the sequestration order even if further facts concerning the position as at 12 October 2007 were before him. As at that date, it appears to me that the conditions established by s 52(1) for the exercise of power had been met. In the circumstances, I will not annul the bankruptcy (see also Boles v Official Trustee in Bankruptcy (2001) 183 ALR 239 at [16]). 9 It is accepted by the creditor that I could review the registrar's decision under s 35A of the FCA Act. 11 That appears to be one available course, but I think the preferable course is to use the power under O 35 r 7(2)(a). That power was exercised by Edmonds J in Owners of Strata Plan No 23007 v Cross [2006] FCA 900 ; (2006) 153 FCR 398, although in factual circumstances which were quite different from the present ones. I am influenced in my choice of that source of power for use in the present case by the fact that the costs of the trustee have been met and that orders for costs are not otherwise sought. The order for sequestration of the estate of Mohammad Sharif Amin made by Registrar Tesoriero on 12 October 2007 is set aside. 2. By consent, the proceedings initiated by the filing of the creditor's petition on 5 September 2007 are dismissed. 3. There will be no order for costs in those proceedings or in respect of the present application. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.

application to set aside or annul sequestration order relief not opposed by creditor no appearance by trustee to oppose annulment inappropriate no debt outstanding no public interest in prolonging the bankruptcy sequestration order set aside creditor's petition dismissed bankruptcy

2 Prior to that date Toll had retained Citigroup to provide corporate advisory services to Toll including advice in relation to a proposed takeover by Toll of Patrick. 3 An essential issue in relation to the three breach of fiduciary duty counts brought under section 912A(1) of the Corporations Act 2001 (Cth) by ASIC is whether Citigroup revealed to Toll that despite the retainer, Citigroup reserved to itself the right to engage in trading on its own account in Patrick shares. 4 Another essential issue is whether Citigroup had in place adequate arrangements for the management of conflicts of interest that may arise once Citigroup had been retained by Toll to act as its adviser on the proposed takeover of Patrick. 5 Similarly, an issue will arise as to whether Citigroup had in operation arrangements that could reasonably be expected to ensure that inside information about the Patrick's takeover was not communicated to the person or persons at Citigroup who decided to deal in Patrick shares on 19 August 2005. That is to say, did Citigroup have in place adequate "Chinese Wall" arrangements in accordance with section 1043F of the Corporations Act in answer to the claim of insider trading under section 1043A(1). 7 By notice of motion filed on 26 June 2006, Citigroup seeks an order under section 12HB(2) of the ASIC Act directing ASIC to comply with requests made by Citigroup for the production of certain documents referred to in section 12HB(1) of that Act. 8 It appears that the only document which falls within the request is the transcript of Mr Chatfield's examination. 9 Two issues arise on the motion. First, whether the transcript was "prepared by an officer" of ASIC. Second, whether the transcript "tends to establish the case" of Citigroup in defence of these proceedings. 14 The analogy which Bowen CJ drew with a prosecutor's obligations was doubted by Selway J in Australian Competition and Consumer Commission v McMahon Service Pty Limited [2004] FCA 353 at [21] . Nevertheless, TNT has been followed by a Full Court in Arnotts Limited v Trade Practice Commission (No 1) (1989) 21 FCR 297 at 302. 15 In TNT Bowen CJ said at 670 that the words "prepared by an officer of the Commission" refer to a document drawn up by the officer whether or not any particular contribution of ideas is evident in the contents of it. 16 His Honour said that "this appears to be the ordinary meaning of the word 'prepare' in relation to writings or documents. His Honour went on to say that: "if something more than physical authorship is required it is difficult to define where the line should be drawn". He observed that "[w]hatever test would have to be applied it would seem to lead to an awkward inquiry of the intellectual contribution of the officer". 17 His Honour then turned to the question of whether a document tends to establish the case. He said at 671 that in his opinion these words do not mean that the document must tend to place the case of the corporation beyond dispute. It is sufficient if the document supports the case of the corporation and so tends to establish the case. 18 However, a document which might suggest a line of inquiry which would be of assistance to a corporation in conducting its case did not, in his Honour's view, answer the necessary statutory description. If a document tends to impeach the plaintiff's case it tends to establish the defendant's case within the meaning of the section. 20 Selway J followed the decision of Mansfield J in Australian Competition & Consumer Commission v Rural Press Ltd [1999] FCA 1847 ; (1999) 96 FCR 141, where the question of whether a document has been prepared was determined by inquiring whether it had been physically prepared by an officer of the Commission. Selway J followed this approach as one which was not a plainly wrong interpretation notwithstanding the fact that this approach can on occasions produce unusual results; see at [17]. 21 The transcript of examination of Mr Chatfield was produced to me for inspection in accordance with section 12HB(4) of the ASIC Act. The transcript records that it was produced by "ComputerReporters". It was signed by Mr Chatfield as an accurate record of the examination. 22 In my view the transcript was not prepared by an officer of ASIC. First, it was not physically prepared by ASIC. Thus, in accordance with the approach taken by Mansfield J and Selway J, it was not prepared in the sense required by the statute. Second, it cannot be said to have been drawn up by the officer in accordance with the approach to construction taken by Bowen CJ in TNT . 23 In my view it is unnecessary to decide where the line ought to be drawn if something more than physical authorship is required, because whatever approach is taken within the authorities to which I have referred the transcript was not prepared by an officer of ASIC. This approach also seems to be in accordance with the approach taken by Wilcox J in Australian Competition & Consumer Commission v FFE (2003) ATPR 41-967 at [60] --- [61]. 24 Mr Stevenson SC, for ASIC, submitted that the words "prepared by" in section 12HB mean or include a document which the officer has caused to be prepared. I reject this approach to construction as inconsistent with the authorities to which I have referred. 25 I turn then to the question of whether the transcript "tends to establish" Citigroup's case. I have read the whole of the transcript in order to determine this question. In my opinion there is nothing in the document which can be said to support Citigroup's case, nor can it be said that there is anything in the statement that tends to impeach ASICs case. The most that can be said is that the transcript suggests lines of inquiry which may be of assistance to Citigroup in conducting its case. That does not answer the statutory test. 26 Nevertheless it does not follow that Citigroup will be deprived of assess to the transcript in due course. ASIC has conceded that the document will be discoverable, but the effect of my decision will be that production will be delayed till the date by which ASIC is required to give discovery.

(no. 1) [2006] fca 845

In this proceeding, the applicants challenge a decision of the first respondent ("Mr O'Neill") to "approve access" to certain accounting documents discovered by the applicants in those other proceedings. The decision to approve access derives its meaning from certain guidelines issued by the Commissioner referred to below. The applicants rely on s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the AD(JR) Act") and ss 39B(1) and (1A) of the Judiciary Act 1903 (Cth) ("the Judiciary Act "). These reasons relate to the respondents' motion for an order that the proceeding be dismissed pursuant to O 20 r 2(1)(a) of the Federal Court Rules ("FCRs") (see [46] below) or, alternatively, for judgment for the respondents pursuant to s 31A(2) of the FCA Act (see [49] below). The motion is largely based upon an objection to competency, notice of which was filed on 30 August 2006. Order 20 r 1A, which commenced on 22 December 2006, provides that O 20 applies only to proceedings commenced before 1 December 2005, the date on which s 31A of the FCA Act commenced. Section 31A applies to proceedings that were commenced on and after that date. The present proceeding was commenced on 31 July 2006; the notice of motion for summary dismissal was filed on 31 October 2006; the motion was heard on 6 November 2006; and the last written submission was received on 7 December 2006. All of these dates occurred in the period when both s 31A and O 20 operated, and before rule 1A of O 20 commenced. Has the introduction of r 1A on 22 December 2006, after judgement was reserved, altered the position? It has. On and from 22 December 2006, r 1A has instructed me that O 20 applies only to proceedings commenced before 1 December 2005. Therefore, I am required to disregard O 20. I will, however, refer to both s 31A and O 20 below (see [45] ff) in order to make it clear that there would be no difference in the result even if O 20 governed the position. They were commenced in this Court on 14 February 2003. They relate to appealable objection decisions dated 20 December 2002, on objections dated 13 April 2002 against amended assessments dated 30 November 2001 in respect of the year ended 30 June 1997. On 3 August 2004 the applicants gave discovery in their respective appeals by the filing of a single list of documents. They claimed that the documents referred to in Pts 2(a) and (b) of Schedule 1 to the list were privileged from production. As to the documents listed in Part 2(a), being documents numbered 202 to 225, legal advice privilege was claimed. I am not concerned with them. As to the documents listed in Part 2(b), being documents numbered 226 to 238, the claim was that they were advice from accountants privileged pursuant to guidelines issued by the Commissioner. Entitled "Guidelines to Accessing Professional Accounting Advisers' Papers" ("the Guidelines"), the Guidelines formed part of the Australian Taxation Office's Access Manual referred to in the passage quoted above. I will digress from this chronological account of the facts of the present case to refer to the Guidelines now. Chapter 7 of the Access Manual is headed "Access to Professional Accounting Advisors' Papers". While recognising that the Commissioner has the legislative power to request access to most documents, it is accepted that there is a class of documents which should, in all but exceptional circumstances, remain within the confidence of taxpayers and their professional accounting advisors. In respect of such documents the ATO acknowledges that taxpayers should be able to consult with their professional accounting advisors on a confidential basis to enable full and frank discussion in respect of their rights and obligations under taxation laws to take place and for advice to be communicated on that basis. This approach is formally described as access to professional accounting advisors' papers, but is also known as the accountants' concession. The ATO's official statement of this administrative concession is set out in Guidelines which appear at the end of this chapter. They are also referred to in Booklet 9 of the Taxpayers' Charter entitled 'Fair use of our access and information gathering powers'. The guidelines deal with issues of access to differing types of documents, variously classified as: source documents (records of transactions) restricted source documents (advice documents shedding light on transactions) and non-source documents. The guidelines apply only to documents prepared by external professional accounting advisors who are independent of the taxpayer. Paragraph 7.1.8 of Chapter 7 states that the Guidelines provide that in "exceptional circumstances" an officer may seek written approval to access restricted source documents and non-source documents (see [15] below), and that this is known as removing or lifting the concession. The Guidelines are addressed to officers of the Australian Taxation Office ("ATO") but have been well publicised. "Source documents" are defined in the Guidelines as "all documents which record a transaction or arrangement entered into by a taxpayer", to which full and free access by ATO officers is essential in order for the Commissioner to carry out his responsibilities under the tax laws. Source documents include "papers prepared in connection with the conception, implementation and formal recording of a transaction or arrangement" and which explain its setting, context and purpose. They are called "source documents" because, "in effect, they explain the basis and form part of the fabric of the transaction or arrangement". The Guidelines state that during the course of an audit, ATO officers will seek full and free access to source documents other than "restricted source documents". "Restricted source documents" are defined as advisings and advice papers prepared by an external accounting advisor solely for the purpose of advising a client on taxation matters, which have been completed in connection with the conception, implementation and completion of the transaction. "Non-source documents" are defined as all other advice and advice papers. Importantly, s 5 of the Guidelines states that access to restricted source documents and non-source documents may be sought only in "exceptional circumstances" with the (personal) written approval of a Deputy Commissioner or another appropriate ATO Senior Executive Service ("SES") officer. In such cases, ATO officers will specify, to the extent practicable, the relevant documents applicable to the issue under review. However, the ATO will not seek to inspect or obtain documents listed in litigation procedures except with the (personal) written approval of a Deputy Commissioner or another appropriate ATO SES officer. His only involvement has been that of deciding, pursuant to s 5 of the Guidelines, to lift the concession in respect of Documents 226 to 238. It is Mr O'Neill's decision that the applicants attack in this proceeding. On 18 April 2006, Mr O'Neill wrote to Maddocks, the solicitors for the applicants in the appeal proceedings (and in the present proceeding) advising that his approval had been sought by officers of the Commissioner under s 5 of the Guidelines to allow access to, inter alia, Documents 226 to 238. Mr O'Neill stated that they appeared to be "restricted source documents" and "non-source documents", and that approval would be granted to access such documents only in exceptional circumstances. He invited the applicants to make any submission they wished to make on the question of approval of access to the documents. There followed a course of correspondence extending down to 3 July 2006 when Mr O'Neill recorded his decision to approve access. The next day, 4 July 2006, the Australian Government Solicitor ("AGS") wrote to Maddocks enclosing a document recording Mr O'Neill's decision to "approve access" to Documents 226 to 238 "pursuant to the Guidelines", and stating his reasons for his decision. The AGS's letter also enclosed two notices to produce dated and filed 4 July 2006, one in each appeal proceeding, requiring production of Documents 226 to 238 on 19 July 2006. These were both signed by Matthew Walsh, a solicitor employed by the AGS. No particulars of the error or errors of law are given. On 30 August 2006 the respondents filed a notice of objection to competency. In relation to the AD(JR) Act, the grounds stated were that the decision under review is not a decision of an administrative character within the meaning of s 3(1) of that Act, and was not made under an enactment. In respect of the claim for relief under the Judiciary Act , the grounds stated in relation to s 39B(1) of that Act were that neither mandamus, prohibition nor an injunction is sought against any officer of the Commonwealth, and, in any event, that Mr O'Neill's decision was not an exercise of any public power and therefore is not amenable to such relief. I note that I have some difficulty in appreciating why the former ground under the Judiciary Act is raised: from the outset the applicants have in fact sought an order quashing or setting aside Mr O'Neill's decision and from the time of the filing of the amended application for an order of review on 6 September 2006, they have also sought an injunction restraining the Commissioner and Mr O'Neill from seeking access to Documents 226 to 238. The ground stated in relation to s 39B(1A) of the Judiciary Act was that the application does not involve a matter arising under any law made by the Parliament within the meaning of s 39B(1A)(c). In their written submissions the applicants also raised issues of estoppel and substantive unfairness. This led to the filing on 15 November 2006, with leave and subject to conditions, of a further amended application. Unlike the original and amended applications, the further amended application did not separately identify the grounds relied on under the AD(JR) Act and those relied on under the Judiciary Act . Rather, it gathered together all existing grounds and the new grounds under a single heading of grounds available under both Acts. The further amended application introduced the following new grounds: I have not given a full and detailed account above of the further amended application. While the Guidelines may be a source of "legitimate expectations" or "relevant considerations" that could have a bearing in judicial review of the purported exercise of a statutory power, they are not themselves a source of, or an enforceable limit on, any power of the Commissioner to require documents to be produced. The Guidelines are "merely an aspect of the procedures which have been put in place within the ATO" and are not "a prerequisite, in any legal sense, to the issue of the notice to produce by the solicitors acting for the Commissioner. " Nor is the notice to produce an exercise of any statutory power conferred on the Commissioner. Rather, every litigant has the right to issue a notice to produce subject to the FCRs. Thus, the issue of access arises, not in connection with the exercise of statutory or public powers of the Commissioner, but in connection with the exercise of rights enjoyed by all litigants pursuant to O 33 r 12 of the FCRs. The legal consequences that attach to the service of a notice to produce are an incident of the operation of the FCRs, and are subject to the Court's control of its own processes. The antecedent internal deliberations within the ATO are therefore not susceptible to collateral challenge in judicial review proceedings. Furthermore, Mr O'Neill's decision was not within the expression "decision to which this Act applies" in s 3(1) of the AD(JR) Act because it was not "a decision of an administrative character made ... under an enactment ..." because: it was not a final, ultimate or operative determination, and was therefore not a "decision" for the purposes of the AD(JR) Act ( Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 (" ABT v Bond ") at 338); and it was not required or authorised by any enactment, and legal rights or duties do not owe in an immediate sense their existence to the decision, or depend upon the presence of the decision for their enforcement ( Griffith University v Tang [2005] HCA 7 ; (2005) 221 CLR 99 (" Tang ") at [78]---[80]). In relation to s 39B(1) of the Judiciary Act , the respondents submit that there is no basis for the grant of an injunction and no decision amenable to a writ of certiorari. An injunction will lie only to restrain conduct that is in some relevant sense unlawful. Unlawfulness cannot be demonstrated where, as here, the steps proposed to be taken by the Commissioner in seeking access to Documents 226 to 238 do not owe their efficacy to Mr O'Neill's decision. Similarly, certiorari has no utility where the decision impugned does not have legal force. For this reason, certiorari does not lie, even if some flaw in Mr O'Neill's decision is shown. Even if Mr O'Neill's decision is understood as affecting rights, it does not do so as an exercise of any public power or legal authority, but as a prelude to a decision taken by the Commissioner in his capacity as a litigant before the Court. In relation to s 39B(1A) of the Judiciary Act , the Court has jurisdiction if, relevantly, there is a "matter" "arising under" a law made by the Parliament: s 39B(1A)(c). This test is satisfied only if "the right or duty in question in the matter owes its existence to federal law or depends on federal law for its enforcement": R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett v Optiz (1945) 70 CLR 141 at 154 (Latham CJ), and Felton v Mulligan (1971) 124 CLR 367 at 388 (Windeyer J). The Guidelines' lack of statutory status means that a dispute as to whether Mr O'Neill applied them correctly, or accorded procedural fairness before making his decision, does not give rise to any such matter. The Guidelines are intended to create legally enforceable rights and obligations and to be an enforceable fetter upon the Commissioner's powers. This is evident from the language of the Guidelines. For example, the Guidelines state: "They [the Guidelines] are an administrative concession and will be adhered to by ATO officers ...". This is known as removing or 'lifting' the concession. Only certain SES officers are authorised to provide this approval. It is essential to ensure that the SES officer consulted is independent of the operational/audit team seeking the access. A Deputy Commissioner of Taxation gave approval under the Guidelines to the seeking of access. Burchett J held, at [42], that the Guidelines gave rise to a legitimate expectation that the Commissioner would act in conformity with them. He held that the Commissioner was not at liberty to depart from them (except in such an urgent case as might arise if there were grounds for fearing destruction of the documents), without giving the person concerned an opportunity to make out a case why the Commissioner should not do so. For the proposition that the Commissioner is entitled to adopt a policy consistent with the statute to provide guidance as to the exercise of a statutory discretionary power, the applicants cite Elias v Commissioner of Taxation (2002) 123 FCR 499 at [34]. Hely J there held that while there must not be an inflexible policy that limits a statutory discretion, a policy as to how the discretion will "normally" be exercised can be adopted. The case concerned the power given to the Commissioner by s 255- 10 (1) of Sch 1 of the TAA to defer the time at which the amount of a tax-related liability was, or was to become, due and payable. With respect to the competency of the AD(JR) application, the applicants submit that: With respect to whether the decision was made under an "instrument", the applicants submit that Tang establishes that the Guidelines are an instrument for the purposes of the AD(JR) Act. The High Court's decision in that case departed from previous authority to the effect that documents issued under a general power of administration could not constitute an instrument under the AD(JR) Act (as an illustration of that previous course of authority they refer to Australian National University v Lewins (1996) 68 FCR 87 (" ANU v Lewins") ). In relation to respondents' submission that the present claim cannot be brought under s 39B of the Judiciary Act , the applicants submit: In relation to the respondents' submission that the present claim cannot be brought under s 39B(1A) , the applicants submit that for the reasons set out above Mr O'Neill's decision was made pursuant s 8 of the Act, and that therefore the matter arises under a law of the Parliament. In relation to the estoppel argument, the representations contained in the Guidelines and the Commissioner's conduct in the tax appeals, including his acceptance of the applicants' claim for "accountant's privilege under the Guidelines", entitle the applicants to an injunction against the Commissioner as an officer of the Commonwealth on the basis of estoppel and/or by reference to the doctrines of waiver and election: Commonwealth v Verwayen [1990] HCA 39 ; (1990) 170 CLR 394 (" Verwayen "). This Court's jurisdiction under s 39B of the Judiciary Act is therefore properly enlivened. I need not recount in further detail the claims of estoppel, unfairness and waiver. In relation to "substantive unfairness", the applicants cite R v Inland Revenue Commissioner; Ex parte Preston [1984] UKHL 5 ; [1985] AC 835 at 866---7 (Templeman LJ) (for the principle that judicial review may be warranted where a commissioner's decision is unfair and amounting to a breach of contract or breach of representation, and therefore within the ambit of an abuse of power). They acknowledge the note of caution in relation to this principle that was sounded by Lehane J in Daihatsu Australia Pty Ltd v Deputy Commissioner of Taxation (2001) 182 ALR 239 (" Daihatsu ") at [51] (that note of caution being that such a principle has not been the subject of extended consideration by Australian courts), but say that at the trial, they will submit that the principles of administrative law in Australia are developing to take account of a form of doctrine of substantive unfairness of the kind described by Lord Templeman. I referred to the question of the applicability of O 20 r 2(1)(a) or s 31A of the FCA Act at [2]---[5]. I decided there that the governing provision in the circumstances is s 31A but indicated that I would also discuss O 20 r 2(1)(a) in order to show that the result on the motion would be the same if that provision applied. The central concern of both O 20 r 2(1)(a) and s 31A is different from that of O 11 r 16, which empowers the Court to strike out pleadings. For example, evidence may disclose that a person has or may have a "reasonable cause of action" or "reasonable prospects of success", yet the person's pleading does not disclose this. In such a case O 11 r 16 empowers the Court to strike out the pleading but O 20 r 2(1)(a) would not empower the Court to order a stay or dismissal, and s 31A(2) would not empower the Court to give judgment for the respondent against the applicant. A failure after ample opportunity to plead a reasonable cause of action may suggest that none exists and therefore that the applicant has no reasonable prospects of success, but the existence of a reasonable cause of action and the pleading of a reasonable cause of action remain distinct concepts. Finally, it should be noted that "pleading" is defined in O 1 r 4 of the FCRs as not including an application, notice of motion or affidavit. Thus, O 11 r 16 does not permit the striking out of an application. Indeed, the striking out, as distinct from the dismissal, of an application, would be misconceived, as the continuation of a proceeding depends upon the existence of an application. Section 31A(1) is comparable to O 20 r 1 in that they are both concerned with summary judgment for the party who is prosecuting the proceeding. Section 31A(2) is comparable to O 20 r 2 in that they are both concerned with dismissals of proceedings. The word "judgment" in s 31A(2) is defined in s 4 of the FCA Act to mean "a judgment, decree or order, whether final or interlocutory, or a sentence". It is convenient in the context of the present case to think of the judgment to which s 31A(2) refers as an order of dismissal of a proceeding. Is there a difference between the concept of no reasonable cause of action being disclosed (O 20 r 2(1)(a)) and no reasonable prospect of successfully prosecuting a proceeding (s 31A(2))? The only difference that suggests itself to me is that the latter makes plain that there may be taken into account the unavailability of evidence necessary to bring success at trial, whereas it is arguable that the former does not permit the unavailability of such evidence to be taken into account. In the present case, the unavailability of evidence is not an issue. The respondents' motion for summary dismissal is founded on their notice of objection to competency and on facts that are not in dispute: the existence of the Guidelines, Mr O'Neill's making of his decision under them to allow access to Documents 226 to 238, and the giving of the notices to produce in the appeal proceedings. The "no reasonable prospects of success" formula of s 31A is that which was adopted in r 24.2 of the United Kingdom's Civil Procedure Rules ("CPRs") following the recommendation of Lord Woolf, Master of the Rolls, in his Access to Justice: Final Report to the Lord Chancellor on the Civil Justice System in England and Wales (HMSO, 1996), ch 12, ss 31---36. The same test has been adopted in rr 292(2) and 293(2) of Queensland's Uniform Civil Procedure Rules 1999 . Under s 31A I must be satisfied that the applicants have no reasonable prospect of success, but as s 31A(3) makes clear, this does not mean that I must be satisfied that the proceeding is hopeless or bound to fail. I suggest that the legislature's intention in enacting s 31A was to lower the bar for obtaining summary judgment (including summary dismissal) below the level that had been fixed by such authorities as Dey v Victorian Railway Commissioners (1949) 78 CLR 62 at 91-92, and General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129-130: see Lawrenson Light Metal Die Casting Pty Ltd (in liq) v Cosmick Pty Ltd [2006] FCA 753 at [15]. Section 31A and the identically worded s 17A of the Federal Magistrates Act 1999 (Cth) ("the FM Act") were introduced by the Migration Litigation Reform Act 2005 (Cth) (No 137 2005) which commenced on 1 December 2005. On the Second Reading Speech on the Bill for that Act, the Attorney-General said that the new provision would strengthen "the power of the courts to deal with unmeritorious matters, by broadening the grounds on which federal courts can summarily dispose of unsustainable cases". By "broadening the grounds" the Attorney-General was referring to the formula "no reasonable prospects of success" as contrasted with a "hopeless" or "bound to fail" test. It is reasonable to think that the Attorney-General may have had in mind migration cases in particular. If the Government's chief purpose was to facilitate expeditious disposal of legally unmeritorious migration cases, in my respectful view the measure was misconceived. First, I suggest that any assumption that there were migration cases that were not summarily dismissed because they were found not to be "hopeless" or "bound to fail", but that would have been summarily dismissed because they were without any reasonable prospect of success, is without foundation. Second, it is no secret that although migration cases at first instance in the Federal Magistrates Court of Australia and on appeal to this Court are numerous, most of them occupy little hearing time. Not infrequently, the applicant or appellant does not appear. More often, he or she appears unrepresented and either makes no submissions or makes a short submission that fails to address the issue before the Court. The time taken in migration cases for a Federal Magistrate or Judge to read the papers in readiness for a final hearing is no greater, I suggest, than the time required to read the same papers in readiness for the hearing of a motion for summary dismissal. Third, while s 31A of the FCA Act (mutatis mutandis, s 17A of the FM Act) achieves nothing of significance in relation to migration cases, it is of general application and therefore affects all proceedings brought in the Court. The question of the precise meaning of s 31A of the FCA Act and s 17A of the FM Act and of any change they have made has already been the subject of numerous decisions in this Court and the Federal Magistrates Court. The most recent review of them of which I am aware is that of Driver FM on 19 March 2007 in Vivid Entertainment LLC v Digital Sinema Australia Pty Ltd [2007] FMCA 157 at [18] - [28] . The authorities to which his Honour referred are: Howard v Australian Fisheries Management Authority [2006] FMCA 975 ; MG Distribution Pty Ltd v Khan [2006] FMCA 666 ; Cate v International Flavours and Fragrances (Aust) Pty Ltd [2007] FMCA 36 ; Vans Inc v Offprice.Com.Au Pty Ltd [2006] FCA 137 ; Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 701 IPR 146; Jewiss v Deputy Commissioner of Taxation [2006] FCA 1688 ; Alphapharm Pty Ltd v Merck & Co Inc [2006] FCA 1227 ; Duncan v Lipscombe Child Care Services Inc [2006] FCA 458 ; (2006) 150 IR 471 ; Australian and International Pilots Association v Qantas Airways Ltd [2006] FCA 1441 ; Commonwealth Bank of Australia v ACN 000 247 601 Pty Ltd (in liq) (formerly Stanley Thompson Valuers Pty Ltd) [2006] FCA 1416 ; Fortron Automotive Treatments Pty Ltd v Jones (No 2) [2006] FCA 1401 ; Hicks v Ruddock [2007] FCA 299. Not one of these cases was a migration case. In other words, the task of exploring the meaning of s 31A has arisen in a wide range of the cases in the Federal Magistrates Court and this Court, with the striking exception of migration cases, no doubt for the reason that I mentioned earlier: the provision is of no practical importance in them. I do not propose to add greatly to the discussion of the meaning and effect of s 31A. In the United Kingdom it has been held in the context of the similar rule 24.2 of the CPRs noted at [53] above, that the expressions "no real prospect of succeeding" and "no real prospect of successfully defending" require attention to be given to real, as opposed to "fanciful" or "merely arguable" prospects: Swain v Hillman [2001] 1 All ER 91 at 92; Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1 at [90], [95], [133]---[134], [158]---[162]; ED & F Man Products Ltd v Patel [2003] EWCA Civ 472 at [8] . The Queensland Court of Appeal has similarly held, following Swain v Hillman and Three Rivers District Council v Governor and Company of the Bank of England , that the "no reasonable prospects of success" test requires the court to determine whether there are "real" as opposed to "fanciful" prospects of success: Deputy Commissioner of Taxation v Salcedo [2005] QCA 227 ; [2005] 2 Qd R 232 at 235. The New South Wales Court of Appeal had to consider the expression "reasonable prospects of success" as it occurred in s 198J of the Legal Profession Act 1987 (NSW) in Lemoto v Able Technical Pty Ltd [2005] NSWCA 153 ; (2005) 63 NSWLR 300. That section prohibited a solicitor or barrister from providing legal services on a claim or defence of a claim for damages unless the solicitor or barrister reasonably believed on the basis of provable facts and a reasonably arguable view of the law that the claim or the defence had reasonable prospects of success. Later subsections elaborated on the meaning of the prohibition. This fact, coupled with the fact that the prohibition was directed to the reasonable belief of the solicitor or barrister, renders the discussion not directly relevant to the summary dismissal context in which the court is required to determine if there are reasonable prospects of success following an inter partes hearing. The respondents' motion is based on an objection to competency and upon undisputed facts. If it succeeds, it will be because the applicants have no reasonable prospects of success on the final hearing due to the fact that they lack a reasonable cause of action under the AD(JR) Act and the Judiciary Act . In these circumstances, no different result would have ensued on the former "hopeless or bound to fail for lack of a reasonable cause of action" test under O 20 r 2(a) of the FCRs. The Guidelines plainly provide for the making of decisions of the kind made by Mr O'Neill. ABT v Bond establishes that for a decision to be reviewable under the AD(JR) Act it will, generally speaking, be a decision that is required or authorised by a statute and will be final or operative. Ordinarily, conclusions reached on the way to such a decision will not themselves be reviewable. However, they will be if the statute provides for the making of them. In that case, they can still be described as decisions made under an enactment. The Guidelines did provide for the making of decisions of the kind made by Mr O'Neill lifting the concession. However, such a decision would be made under an "enactment" only if the Guidelines were themselves an instrument made under, relevantly, the ITAA. In my opinion they were not for the reasons given below. All earlier decisions on the matter must now be understood in light of the High Court's consideration in Tang of the expression "a decision of an administrative character made ... under an enactment". That case concerned a decision of Griffith University, through its relevant committee, to exclude a postgraduate student, Ms Tang, from a program leading to the award of the degree of Doctor of Philosophy. The decision was based on a finding that Ms Tang had engaged in academic misconduct. The relevant admission/exclusion, academic misconduct and appeal processes were the subject of policies adopted by the University Council. The policy documents were similar to the Guidelines in the sense that although the making of them was within the power and mandate of the Council as the University's governing body under the Griffith University Act 1998 (Qld), that Act did not refer, expressly or by implication, to the laying down of the policies. Rather, to do so was in the general power of the University Council as the body having the general functions and powers of management given it by the Act. Ms Tang applied for review of the University's decision under the Judicial Review Act 1991 (Qld). The issue was whether that decision was "a decision of an administrative character made ... under an enactment" --- a formula borrowed from the AD(JR) Act. The University sought summary dismissal. It failed at first instance in the Supreme Court of Queensland and then before the Queensland Court of Appeal. The High Court, however, by a 4:1 majority, allowed the University's appeal. Two judgments were delivered by the Judges constituting the majority, one by Gleeson CJ and the other by Gummow, Callinan and Heydon JJ ("joint judgment"). Gleeson CJ referred (at [10]) to the University's reliance on judgments in Australian National University v Burns [1982] FCA 191 ; (1982) 43 ALR 25 and ANU v Lewins in this Court to the effect that in order to satisfy the description of a decision of an administrative character made under an enactment, a decision must be authorised or required by a statute and must be given legal force or effect by the statute. The Chief Justice observed that it is not enough that the decision be within power, and that the AD(JR) Act does not provide for review of all decisions of an administrative character made in pursuance of any power or authority that has its foundation in a statute. Gleeson CJ approved of a statement by Lehane J in ANU v Lewins (at 101) that a decision meets the test "only if it is one for the making of which the relevant statute either expressly or impliedly provides and one to which the statute gives legal force or effect". The ITAA does not expressly or impliedly provide for the making of guidelines or the making of a decision excluding particular documents from their scope. Moreover, the ITAA does not give legal force or effect to the Guidelines or to Mr O'Neill's decision. The proper analysis is that the Guidelines have been made by the Commissioner pursuant to his general power of administration under s 8 of the ITAA; the granting of the concession and the discretion to exclude particular documents from it are attributable only to that general power of administration; and it is O 33 r 12 of the FCRs that imposes a procedural obligation on the applicants as an adjunct to the appeal proceedings. A grant of authority to do that which under the general law a person has authority to do is not regarded as sufficient. The same can be said of other procedural rights given by the FCRs directly, or of the right given by them to apply for a procedural benefit of one kind or another, such as the right to apply for leave to issue a subpoena or the right to apply for an order for discovery. Mr O'Neill's decision to exclude Documents 226 to 238 from the scope of the concession can be usefully compared to a decision provided for by the Griffith University's policy that a candidate had been guilty of academic misconduct. Such a decision would have gained nothing in terms of susceptibility to judicial review by reason of its being distinct from the decision to exclude a student; likewise, Mr O'Neill's decision to allow access to Documents 226 to 238 vis-a-vis the decision to give the notice to produce them in the appeal proceedings. In their joint judgment in Tang , Gummow, Callinan and Heydon JJ pointed (at [60]) to dangers in looking at the expression "a decision of an administrative character made ... under an enactment" otherwise than as a whole. (Original emphasis. The further stipulation that the decision must be "of an administrative character" meant that there must be an affecting of legal rights and obligations. To adapt what was said by Lehane J in Lewins [ ANU v Lewins at 103], does the decision in question derive from the enactment the capacity to affect legal rights and obligations? Are legal rights and obligations affected not under the general law but by virtue of the statute? [ General Newspapers Pty Ltd v Telstra Corporation [1993] FCA 473 ; (1993) 45 FCR 164 at 169]. Nor do legal rights (of the Commissioner) or duties (of the applicants) in relation to the production of Documents 226 to 238 "owe in an immediate sense their existence to the decision, or depend upon the presence of the decision for their enforcement": Tang at [80]. It is O 33 r 12 and the general law that give the Commissioner procedural rights and impose on the applicants procedural obligations. At [84] of the joint judgment, their Honours referred to Hutchins v Deputy Commissioner of Taxation (1996) 65 FCR 269 (" Hutchins "). They referred with approval (at [84]) to a statement by Lockhart J in Hutchins (at 277) that the decision to vote at the meeting of creditors could not itself have conferred any benefit or imposed any disadvantage when it was made, and that any affecting of legal rights arose from the cumulative effect of the votes later cast at the meeting. The respondents submit that Mr O'Neill's decision should similarly be distinguished from the decision of a different officer of the ATO to issue the notice to produce. I do not accept this particular submission. Mr O'Neill's decision was in a different position from that with which Hutchins was concerned. Lockhart J was emphasising that the Commissioner's decision to vote against the motion could not advance matters until the motion was voted upon at the meeting of creditors. In the present case, a decision to lift the concession was provided for in the Guidelines and it was within the power of the Commissioner alone to access Documents 226 to 238. In substance, it was the Commissioner who decided both to lift the concession and to enforce his right, as a litigant, of access to Documents 226 to 238. If the Guidelines had been an Act, the provision for the decision to lift the concession would have been comparable to the provision of the making of a finding that a licensee was no longer a fit and proper person to hold a commercial licence, for which the Broadcasting Act 1942 (Cth) s 88(2) provided as the foundation of a decision to suspend or revoke such a licence, that was one of the decisions considered in ABT v Bond . What is important, however, is that the Guidelines are not an "enactment", and the decision does not, by reason of them or of any enactment, immediately affect legal rights and obligations. Gummow, Callinan and Heydon JJ did not see it as an obstacle to their view the fact that the terms of the policy and other circumstances may well have created an expectation in Ms Tang that any withdrawal from her PhD candidature would only follow upon the fair treatment of complaints against her. Their Honours said (at [92]) that such an expectation would not create in Ms Tang any substantive rights under the general law, which would render the decision she challenged a decision made under the University's Act. A similar observation is to be made in relation to the Guidelines. They are calculated to create an expectation that they will be adhered to by the Commissioner. However, that expectation does not convert a non-reviewable decision into a reviewable one. The Committees involved depended for their existence and powers upon the delegation by the Council of the University under ss 6 and 11 of the University Act. But that does not mean that the decisions of which the respondent complains were "made under" the University Act in the sense required to make them reviewable under the Review Act. The decisions did not affect legal rights and obligations. They had no impact upon matters to which the University Act gave legal force and effect. The respondent enjoyed no relevant legal rights and the University had no obligations under the University Act with respect to the course of action the latter adopted towards the former. I turn now to consider other authorities to which I was referred. The applicants rely heavily on the decision of Burchett J in ONE.TEL . That case concerned an application to set aside notices issued under s 108 of the STAA. The Commissioner had issued "Guidelines for the Exercise of Access Powers in Relation to Accountants' Papers" ("the guidelines"). The title and the content were not identical with those of the Guidelines, but the substance of them was similar. Under the guidelines, a decision was made approving of access to certain documents of external accountants on the basis that exceptional circumstances existed. Burchett J stated (at [42]) that the formality and detail of the guidelines and the nature of their subject matter strongly suggested that the guidelines created a legitimate expectation that the Commissioner would not depart from them without giving the person affected an opportunity to make out a case as to why he should not do so. In the event, however, his Honour stated that there had been no breach of natural justice in the circumstances. His Honour also rejected (at [45]) a submission that the decision granting access was so unreasonable that no reasonable person could have made it. His Honour's reference to natural justice and to unreasonableness suggest that he may have been thinking in terms of s 5(1)(a) and s 5(1)(e) and (2)(g) of the AD(JR) Act, although he did not refer to that Act. The report of ONE.TEL is in fact a report of his Honour's reasons for judgment in three proceedings brought by ONE.TEL Ltd against the Deputy Commissioner of Taxation --- NG 120 of 1998, NG 449 of 1998 and NG 33 of 1999. In that case, so it was said, the antecedent decision to lift the concession was conduct that led to the making of that decision. In the present case the decision to allow access is attacked as a "decision" alone. ONE.TEL Ltd asserted that it was aggrieved by the decision because it purported to give approval to officers of the Commissioner to have access under s 109 of the STAA to "restricted source" and "non-source" documents in breach of the guidelines. The application also referred to a breach of the rules of natural justice or procedural fairness, and to other grounds mentioned in s 5 of the AD(JR) Act. The Deputy Commissioner filed a notice of objection to competency on the grounds that the decision to give approval for access was not a decision made "under an enactment" and was also not "conduct", within the meaning of the AD(JR) Act. However, his Honour's reasons do not expressly refer to the objection to competency. In particular, they do not address the contention that the decision was not "made under an enactment". It is difficult to know what to make of his Honour's reasons because they do not, with respect, expose clearly what the field of contest was in relation to the guidelines and the decision to lift the concession made under them, that his Honour was addressing. The respondents submit that ONE.TEL is distinguishable because the decision to approve access was connected with the exercise of a statutory power, namely, the power given to the Commissioner by s 108 of the STAA to direct a person to produce documents to the Commissioner. I agree. In the present case, the decision to approve of access is a precursor of the exercise of a power that O 33 r 14 of the FCRs confers, not only on the Commissioner, but on all litigants before this Court. As the issue as to competency was not addressed in Burchett J's reasons, I do not regard his Honour's decision as standing in the way of my giving effect to the view that I have formed. Deloitte and Daihatsu concerned notices issued by the Commissioner under s 264 of the ITAA. In Deloitte , Goldberg J (at 451) expressed the opinion, and the Commissioner did not dispute, that the Commissioner's delegate was bound to have regard to the Guidelines when deciding to issue a notice under s 264. His Honour said that for this reason it was not necessary for him to deal with the Commissioner's submission that the Guidelines were not a source of rights. In Daihatsu , the taxpayer sought relief under s 16 of the AD(JR) Act and s 39B of the Judiciary Act in respect of notices issued under s 264 of the ITAA. Lehane J (at [68]) refused relief on the merits. Clearly, a decision to issue a notice under s 264 is an administrative decision made under an enactment because (a) the ITAA is an "enactment"; (b) that enactment provides for the making of the decision; and (c) the decision (or the giving of the notice pursuant to it) enlivens statutory provisions that affect the legal rights and obligations of the recipient. Bellinz v Commissioner of Taxation (1998) 84 FCR 154 is also distinguishable. A Full Court of this Court held that where the question was one as to the inclusion of an amount as assessable income, or the allowance of an amount as a deduction, and no question of discretion or of administrative procedure arose, the Commissioner cannot be said to have acted unfairly where he has acted in accordance with the law. This is true even if there is an element of discrimination as between his decision in the case at hand and his decision in other cases. Such a holding, therefore, does not cover the present case because the Guidelines lay down administrative procedures and provide for a discretionary decision to exempt certain documents from the concession granted in them. Hutchins , referred to at [73], has much in common with the present case. The decision impugned was a decision of the Deputy Commissioner of Taxation to vote against a motion put at a meeting of creditors convened under Pt X of the Bankruptcy Act 1966 (Cth). The application was made under the AD(JR) Act. At first instance, Jenkinson J had upheld an objection to competency. The applicant contended that the decision was made under one or more of ss 8, 208 and 209 of the ITAA. Black CJ said (at 273) that where the sole source of authority for a decision is a general power of administration conferred by an enactment, the decision will be "unlikely to be one that is given force or effect by an enactment or by a principle of law applicable to the enactment". For the reasons given above, the application is incompetent in so far as it relies on the AD(JR) Act. It is not suggested that the Commissioner and Mr O'Neill (an Assistant Commissioner of Taxation) are not such officers. The applicants seek an order quashing or setting aside Mr O'Neill's decision and an injunction restraining the respondents "from seeking access to" Documents 226 to 238. The Court therefore has jurisdiction under s 39B(1) of the Judiciary Act . The question that remains in relation to s 39B(1) is whether the applicants have no reasonable prospect of successfully prosecuting the proceeding (ie gaining the order and injunction they seek). In the present state of the evidence and exploration of the legal issues involved, I am not persuaded that they have no reasonable prospects of success of doing so. Evidence has not been filed. I do not think that, for the purposes of s 31A of the FCA Act, the applicants are necessarily to be confined to the exact terms of the injunction formulated by them ("from seeking access" to Documents 226 to 238). There are several issues that were not explored in submissions. In particular, the question of the relationship between the newly introduced issues of unfairness, estoppel and waiver, on the one hand, and the established grounds of judicial review, on the other, was not explored. Again, as noted earlier, the error or errors of law relied on have not been particularised. On a broad view, the Commissioner is exercising public power in relation to the assessment and recovery of tax, although the right to issue a notice to produce under the FCRs is not itself such a power. The assessment and recovery of tax is radically different from, for example, conduct leading to the making of contracts and the making of them: see General Newspapers Pty Ltd v Telstra Corporation . I am not satisfied that the broad view referred to has no reasonable prospects of prevailing. There should be a final hearing, as soon as practicable, of the claim under s 39B(1) of the Judiciary Act . Unlike the debate relating to s 39B(1) , that relating to s 39B(1A)(c) was confined to the question of jurisdiction. The respondents submit that for the same reasons that Mr O'Neill's decision was not one made under an enactment for AD(JR) purposes, the "matter" was not one "arising under any laws made by the Parliament" for the purposes of s 39B(1A)(c). There is a considerable body of case law on the scope of s 39B(1A)(c) (and s 76(ii) of the Constitution ), and on the relationship between that provision and review under the AD(JR) Act. It seems excessive for me to refer to the cases, which were not, in any event, addressed in the submissions of either party. I note, however, that the authorities have been discussed in two important articles: Allsop, "Federal Jurisdiction and the Jurisdiction of the Federal Court of Australia in 2002" (2002) 23 Aust Bar Rev 29; Robertson, "The Administrative Law Jurisdiction of the Federal Court: Is the AD(JR) Act Still Important? " (2003) 24 Aust Bar Rev 89. In some respects, the availability of review under s 39B(1A)(c) of the Judiciary Act is wider, and in some respects narrower, than that available under the AD(JR) Act. What is important for present purposes is that the notion of a "matter ... arising under any laws made by the Parliament" in s 39B(1)(c) of the Judiciary Act is wider than that of a "decision ... made under an enactment" of s 5 of the AD(JR) Act. Reference may be made to such cases as LNC Industries Ltd v BMW (Aust) Ltd [1983] HCA 31 ; (1983) 151 CLR 575 , Australian Solar Mesh Sales Pty Ltd v Anderson [2000] FCA 864 ; (2000) 101 FCR 1 , and ACTEW Corporation Ltd v Pangallo [2002] FCAFC 325 ; (2002) 127 FCR 1 , for an indication of the breadth of the concept of a matter arising under any laws made by the Parliament. The Commissioner derives his power relevant to this case from s 8 of the ITAA. The only power that he exercises, and is said by the applicants to have limited by the Guidelines, is a power conferred by a law of the Parliament. As noted above, the assessment and recovery of tax is the exercise of a public power as distinct from, for example, the exercise of a contractual right. It seems to me that the question whether, in all the circumstances, the Guidelines are binding on the Commissioner, at least vis-a-vis the applicants, is a matter arising under the ITAA. The cases cited above show that it is not a disqualification that general law doctrines are involved. The Court has jurisdiction under s 39B(1A)(c). It is not shown that the applicants' claims, in so far as they are based on s 39B(1) and (1A) of the Judiciary Act , do not have reasonable prospects of success. Both parties have had a measure of success and my present view is that there be no order as to costs, to the intent that each party bear its own costs. I will list the proceeding for directions with a view to progressing the matter for hearing of the claim under the Judiciary Act . On that occasion, a party wishing to seek an order for costs will have the opportunity of making submissions to that end. I certify that the preceding one hundred and sixteen (116) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

commissioner published guidelines to effect that he would concede confidentiality in respect of, and deny himself access to, certain advising papers of external accountants, unless he or an officer of a certain rank of the australian taxation office ("ato") should decide that there were "exceptional circumstances" in proceedings before the court, being appeals under part ivc of the taxation administration act 1953 (cth), taxpayers gave discovery, and claimed that certain documents discovered were covered by the "accountants' concession" within the guidelines officer of appropriate rank within the ato decided that there were exceptional circumstances, and approved of access to the documents different ato officer caused a notice to produce the documents to issue to taxpayers taxpayers issued this present proceeding challenging the senior officer's decision allowing access, under s 5 of the administrative decisions (judicial review) act 1977 (cth) ("ad(jr) act") and under s 39b(1) and (1a) of the judiciary act 1903 (cth) (" judiciary act ") application for summary dismissal of proceeding based on suggested incompetency of present application whether decision to allow access was a "decision of an administrative character made ... under an enactment" whether guidelines were "an enactment" scope of "matter ... arising under any laws made by the parliament" within s 39b(1a)(c) of judiciary act test for summary dismissal under s 31a of the federal court of australia act 1976 (cth) meaning of "no reasonable prospect of success" held : application summarily dismissed in relation to claim based on ad(jr) act, but not in relation to claim based on judiciary act . commissioner published guidelines to effect that he would concede confidentiality in respect of, and deny himself access to, certain advising papers of external accountants, unless he or an officer of a certain rank of the australian taxation office ("ato") should decide that there were "exceptional circumstances" in proceedings before the court, being appeals under part ivc of the taxation administration act 1953 (cth), taxpayers gave discovery, and claimed that certain documents discovered were covered by the "accountants' concession" within the guidelines officer of appropriate rank within the ato decided that there were exceptional circumstances, and approved of access to the documents different ato officer caused a notice to produce the documents to issue to taxpayers taxpayers issued this present proceeding challenging the senior officer's decision allowing access, under s 5 of the administrative decisions (judicial review) act 1977 (cth) ("ad(jr) act") and under s 39b(1) and (1a) of the judiciary act 1903 (cth) (" judiciary act ") application for summary dismissal of proceeding based on suggested incompetency of present application whether decision to allow access was a "decision of an administrative character made ... under an enactment" whether guidelines were "an enactment" scope of "matter ... arising under any laws made by the parliament" within s 39b(1a)(c) of judiciary act test for summary dismissal under s 31a of the federal court of australia act 1976 (cth) meaning of "no reasonable prospect of success" held : application summarily dismissed in relation to claim based on ad(jr) act, but not in relation to claim based on judiciary act . "no reasonable prospects of success" income tax administrative law words and phrases

I have indicated that although the substance of the visa application was by the husband of the party who is in Court, she was an applicant for a visa, and was a party before the Refugee Review Tribunal and below. It seems to me that for relevant purposes, she can put what she wishes to put in support of the application, having been at least a signatory to the application for leave. The affidavit in support of the application for leave to appeal has two paragraphs. The draft notice of appeal attached to the affidavit repeats the substance of those two grounds. I was denied natural justice at the Federal Magistrates Court. My wife was listed as the secondary applicant and should also be given an opportunity to present our case at the hearing. The Tribunal only sent letter to me but not to my wife. Applicant 1 must inform each applicant of the contents of any communication from the Tribunal and reply to the Tribunal for them. 8 The party before the Court has said that her relationship with her husband was in difficulty at the time of the Tribunal proceedings and that she does not think that he told her about the matter until after the event. 9 It seems to me that, without any question, the procedure laid down by the Tribunal has the result that this party authorised the Tribunal to communicate with her through her husband in this case. If he failed to communicate with her, that is not something which can be sheeted home to the Tribunal and would not amount to any defect in the procedure. 10 The solicitor for the Minister submitted that this point was not raised in this form before the learned Federal Magistrate. However, as it has no substance, that has no consequences in the present case. 11 In order for leave to appeal to be granted, there needs to be an arguable prospect of success. There is none in the present case. The application for leave is dismissed. I order that the applicant pay the costs of the respondent assessed at $600. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. The Applicant's wife appeared in person.

application for leave to appeal dismissed migration

2 The 2006 Regulations prescribe a table of diagnostic imaging services and rules for interpretation of the table. Such rules state the criteria to be fulfilled to entitle a provider of medical services to fees payable by the respondent ('Medicare') for each item of service. 3 The first named applicant is the owner of magnetic resonance imaging equipment located at 341-349 Crown Street, Wollongong ('the MRI equipment'), which is used in its radiology practice known as South Coast X-Ray Radiology Practice. The second named applicant is the principal of such practice. For convenience, the applicants are collectively referred to hereunder as 'the applicant'. 4 The applicant has made an Application for an Order of Review pursuant to ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('the ADJR Act') and s 39B of the Judiciary Act 1903 (Cth) ('the Application') challenging the decision of Medicare made on or about 20 September 1999 to refuse the status of the MRI equipment as 'eligible equipment' within the meaning of Rule 20(3) of the Health Insurance (1998-1999 Diagnostic Imaging Services Table) Regulations 1998 (Cth) ('the 1998 Regulations'). As a consequence of the decision, diagnostic imaging services performed using the applicant's MRI equipment do not qualify for payment of Medicare benefits. 5 The 2006 Regulations supersede the 1988 Regulations. The parties agree that if Rule 31 of the 2006 Regulations is valid, it requires, by virtue of the incorporation of Rule 35, the MRI equipment to have been in use on or before 18 October 1999. The applicant acknowledges that the equipment was not operative by that date. Accordingly, if Rule 31 of the 2006 Regulations is valid, the proceedings are futile, and the application would be dismissed. As a consequence of the incorporation of the definition of 'eligible equipment' in Rule 31 of Part 2 of Schedule 1 to the 2000 Regulations, the relevant date by which the applicant's MRI equipment was required to be in use was 18 October 1999. It submits that Rule 31 of the 2006 Regulations operates to restrict access to Medicare fees by reference to matters extrinsic to the regulation making power contained in s 4AA(1) of the Act. Accordingly the applicant submits that s 4AA(1) does not authorise such rule. 13 The applicant submits the fact that s 4BAA was ' enacted for the avoidance of doubt ' shows that s 4BAA was intended to explain s 4AA but not to augment or expand its operation. It submits the 'conditions, restrictions or limitations' referred to in s 4BAA of the Act refers only to limitations on the type of equipment used, the situations in which clinical services might be rendered, or qualifications required of practitioners administering the services. The applicant submits that as s 4BAA of the Act can be read consistently with such an intention, it should be so read, and the words used by the legislature given effect: see NAQF v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 781 per Lindgren J at [53]. Accordingly the applicant submits that s 4BAA of the Act does not authorise regulations which have an operation extending beyond the regulations authorised by s 4AA of the Act. The applicant submits that the 2006 Regulations 'go outside the field of operation which the Act marks out for itself' see: Morton v The Union Steamship Company of New Zealand Limited [1951] HCA 42 ; (1951) 83 CLR 402 at 410. That section was repealed by the Human Service and Health Legislation Amendment Act (No. 2) 1994 (Cth) (Act No. 116 of 1994). The amendment substituted a new section which authorised the making of regulations prescribing a table of medical services other than diagnostic imaging services and pathology services. Section 4(2) provides that such regulations would cease to be in force after 12 months. Such Act also introduced s 4A which authorised regulations prescribing a table of pathology services, and provided for such regulations to expire annually. 16 Amendments were made to s 4A of the Act by the Health Insurance Amendment Act 1977 (Cth) (Act No. 75 of 1977). Such amendments are not significant for present purposes. 17 Section 4AA of the Act was inserted by the Community Services and Health Legislation Amendment Act (No. 2) 1990 (Act No. 141 of 1990) and authorised regulations prescribing a table specifying diagnostic imaging services and the fee payable for such services. This section is in virtually the same terms as ss 4 and 4A except that it relates to different types of services. The Explanatory Memorandum to this Act refers to Parliament's decision to place restrictions upon eligibility for payment of Medicare benefits in respect of diagnostic imagining services. 18 The Health Legislation Amendment Act 2005 (Cth) (Act No. 155, 2005) came into operation on 19 December 2005 and introduced s 4BAA into the Act. Part 2 of Schedule 1 defines the type of services and specifies the criteria necessary to be fulfilled in order to qualify as 'eligible services'. Rule 31 identifies the MRI and MRA (Magnetic Resonance Angiography) services which are eligible for the payment of Medicare benefits. The eligibility of the equipment for the purposes of Rule 31 is defined by Rule 35 which incorporates the definition contained in Rule 31 of Part 2 of Schedule 1 to the 2000 Regulations. Such rule requires, inter alia, the equipment to be installed and operative by 18 October 1999. Does Rule 31 interpret the table? It will authorise the provision of subsidiary means of carrying into effect what is enacted in the statute itself and will cover what is incidental to the execution of its specific provisions. But such a power will not support attempts to widen the purposes of the Act, to add new and different means of carrying them out or to depart from or vary the plan which the legislature has adopted to attain its ends. 22 To determine whether Rule 31 interprets the table as authorised by the Act or exceeds the regulation making power, it is necessary to consider the meaning of the word 'interpretation' in s 4AA(1)(d) of the Act. This subsection authorises regulations to provide ' rules for interpretation of the table ' referred to in s 4AA(1) of the Act. 23 Two approaches have often been adopted to statutory interpretation, namely the literal approach and the purposive approach. The question is, what does the language mean; and when we find what the language means, in its ordinary and natural sense, it is our duty to obey that meaning, even if we think the result to be inconvenient or impolitic or improbable. The application of the purposive approach to statutory interpretation was referred to in Mills v Meeking and Another [1990] HCA 6 ; (1990) 169 CLR 214 by Dawson J wherein his Honour considered a provision contained in a Victorian statute equivalent to s 15AA of the Acts Interpretation Act . His Honour observed (at 235) that a purposive approach is to be preferred over a literal approach. A legislative instrument is defined in ss 4 and 5 of such Act and includes, inter alia, an instrument in writing ' that is or was made in the exercise of a power delegated by the Parliament ' (see s 5(1)(b)). The provisions of Part 2 of Schedule 1 to the 2006 Regulations have adopted the nomenclature 'Rules of Interpretation'. Since such rules were made prima facie in the exercise of the power delegated by Parliament under the Act, they constitute 'legislative instruments' for the purposes of the Legislative Instruments Act . 26 Whether a word contained in a statute is to be given its ordinary meaning is a question of law: see Collector of Customs v Pozzolanic Enterprises Pty Ltd; Collector of Customs v Pressure Tankers Pty Ltd (1993) 43 FCR 280 at 287, as is the meaning of a statutory expression which has several ordinary interpretations: see Baxter Healthcare Pty Limited v Comptroller-General of Customs (1997) 72 FCR 467 at 473-4. However, the meaning of the ordinary word is a question of fact (see Pozzolanic (1993) 43 FCR at 287). Courts have often referred to dictionary definitions in the course of statutory interpretation: see State Chamber of Commerce and Industry and Others v The Commonwealth of Australia, Attorney-General for the State of Queensland (at the relation of the Brisbane Chamber of Commerce) v The Commonwealth of Australia [1987] HCA 38 ; (1987) 163 CLR 329. 27 'Rule' is defined in the Macquarie Dictionary Third Edition as a ' principle or regulation governing conduct, action, procedure, arrangement, etc '. The Macquarie Dictionary Third Edition defines 'interpretation' as inter alia ' an explanation given... a construction placed upon something... a way of interpreting '. The verb 'interpret' is defined as inter alia, ' to set forth the meaning of; explain or elucidate... to explain, construe or understand in a particular way '. The definition contained in the New Edition of the Oxford English Dictionary defines 'interpret' as ' the way in which a thing ought to be interpreted, proper explanation; hence, signification, meaning '. The definition of 'interpretation' was considered by Issacs J in The Life Insurance Company of Australia Limited v Phillips [1925] HCA 18 ; (1925) 36 CLR 60 at [78] . Issacs J distinguished between 'construction' and 'interpretation' with the latter referring to the 'meaning of the words' as opposed to their legal effect. 28 Applying the purposive principle to the interpretation of s 4AA(1) of the Act and assisted by the dictionary definitions of 'interpretation', it is apparent that Parliament intended that the eligibility for payment of fees in respect, inter alia, of diagnostic imaging services, is to be determined by rules of the type envisaged in Part 2 of Schedule 1 to the Act. 29 Rule 31 of the 2006 Regulations refers to items 63001 to 63482 of the table prescribed by Rule 5 of such Regulations. The table identifies the service by reference number, but contains no explanation of the requirements to be satisfied to entitle the provider of the services to the prescribed fee. Those requirements are contained wholly within Rule 31 and only by reference to Rule 31 can eligibility be determined. In this way, Rule 31 explains or elucidates the table. The applicant's alternative submission suggested that s 4BAA of the Act could not be relied upon in determining the validity of Rule 31 for two reasons. Firstly it was submitted that s 4BAA was solely declaratory and did not supplement the effect of s 4AA. Secondly, it was submitted that s 4BAA did not have retrospective effect so as to render previous invalid regulations valid. The latter submission is not relevant in view of the parties seeking the Court's determination of the separate question, since s 4BAA was enacted prior to the making of the 2006 Regulations. 32 In support of its first submission, the applicant submitted that s 4BAA was solely for the purpose of ' the avoidance of doubt ', was only declaratory and did not expand the operation of s 4AA. The applicant referred the Court to a decision of the Office of the Information Commissioner (Qld) in the matter of Anthony Hamilton Woodyatt v Minister for Corrective Services [1995] QICmr 1 ; (1995) 2 QAR 383, in which the Commissioner considered the words ' to remove any doubt ' and observed that such phrases ' sometimes appear in true declaratory Acts, generally in conjunction with words which make it clear that the legislature intends to declare the law (on a specific topic) as it is and has always been '. However, in determining the question of whether s 4BAA is merely declaratory the Court must look to the substance of the provisions of the Act and not merely their form: see Harding and Another v The Commissioners of Stamps for Queensland [1898] AC 769 at 775. 33 Section 4BAA of the Act clarifies the power to make regulations provided by s 4AA of the Act by expressly providing that 'conditions, limitations or restrictions' may be imposed by rules for interpretation of the table. It does not follow that absent s 4BAA, s 4AA did not authorise the making of rules for interpretation containing 'conditions, limitations or restrictions'. Section 4BAA places that question beyond doubt. 34 In view of these findings, Rule 31 is intra vires the power provided by s 4AA and s 4BAA of the Act. It follows that the question of law asked of the Court is to be answered in the affirmative. 35 Since it is common ground that the MRI equipment was not operative by 18 October 1999, it does not comply with the requirements of Rule 31. Accordingly this application cannot succeed, and will be dismissed, together with the application for an extension of time to institute such proceedings. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy.

separate question of law scope of regulation making power validity of regulations meaning of words 'rules for interpretation' statutory interpretation. administrative law

On 2 November 2009 the proceeding first came before the Court. Directions were then made for the filing and service of an Amended Application and an Amended Statement of Claim . An Amended Statement of Claim was filed on 6 November 2009. No Amended Application has as yet been filed. The proceeding came back before the Court on 30 November 2009 when a Notice of Motion was then filed seeking leave " to serve the Application and Statement of Claim " on the Second, Third and Fourth Respondents overseas. No Defences have as yet been filed. The Applicant essentially seeks relief in respect to the termination of " Dealership Agreements " whereby an exclusive dealership was said to have been conferred for the sale of Caterpillar machines in New South Wales and the Australian Capital Territory. There was apparently an agreement executed in 1989 as between a wholly owned subsidiary of the Applicant, Gough & Gilmour Pty Ltd, and the First Respondent. A second agreement is also relied upon, being one executed on 1 July 1991 between the Applicant and the First Respondent. This second agreement is said to have " replaced the earlier such agreements executed in 1989 ...". A further agreement is said to have been executed as between the Applicant and the First Respondent on 12 November 1997. The 1991 and 1997 agreements are defined in the Amended Statement of Claim as being the " Dealership Agreements ". Notice of termination is said to have been given on 7 October 2003 and the Dealership Agreements are said to have been terminated " on [or] around 6 April 2004 ". The Applicant contends in its Amended Statement of Claim that the Dealership Agreements contain a term implied as a matter of law that in respect to the agreements " the parties ... would exercise their rights ... reasonably and in good faith ". The manner in which it is said that the First, Third and/or Fourth Respondents " failed to act reasonably and in good faith, with due regard to the objects of the Dealership Agreements, and thereby breached this term of the Dealership Agreements " is said to be particularised in Schedule A to the Amended Statement of Claim . That Schedule provides in relevant part as follows: Acting to terminate the Dealership without regard to the possibility of permitting the Dealership to remain on foot on terms which would have allowed G&G to enjoy the trust and confidence of COA, CAT, COCC and CSARL. Failing to engage in good faith negotiations with G&G for the Dealership to remain on foot on terms which would have preserved to both G&G and COA, CAT, COCC and CSARL the commercial benefits of the Dealership. It is further alleged that the First and Second Respondents engaged in conduct which is said to be the making of representations as to future matters within the meaning of s 51A of the Trade Practices Act 1974 (Cth) (the " Trade Practices Act "). Reliance is also placed upon s 52 of that Act. Equitable estoppel and unconscionable conduct are also alleged in the Amended Statement of Claim . The First Respondent is Caterpillar of Australia Pty Ltd. The First Respondent has been served and a Notice of Appearance was filed on its behalf on 9 November 2009. The Second Respondent, Caterpillar Inc, is said to be " one of the world's largest manufacturers of engines, tractors, trucks, bulldozers and similar earth-moving and materials handling equipment ". The Third Respondent is Caterpillar Overseas Credit Corporation S.A. The Fourth Respondent is Caterpillar S.A.R.L. Now before the Court is the Notice of Motion filed on 30 November 2009 seeking orders pursuant to O 8 r 3(2) of the Federal Court Rules to serve " the Application and the Statement of Claim ": on the Second Respondent in the United States of America; on the Third Respondent in Switzerland; and on the Fourth Respondent in Switzerland. The Motion is supported by two Affidavits of Mr Michael Harmer --- one affirmed on 30 November 2009 and the other on 2 December 2009. A number of the Exhibits to the former Affidavit of Mr Harmer have also been tendered. Notwithstanding service on the First Respondent, that Respondent did not seek to appear on the hearing of the present Motion and the application thus proceeded ex parte . Order 4 r 1 provides that proceedings are to be commenced " by filing an application " and O 4 r 6 provides that an application is to be filed and served together with " either an affidavit ... or a statement of claim ... ". Notwithstanding compliance with O 8 r 3(2) the Court retains a discretion as to whether leave should be granted to serve a respondent outside Australia. So much follows from the use of the term " may ". It has thus been observed that "... the power given by O 8 r 3(2) is clearly a discretionary power ": West v TWG Services Ltd [2009] FCA 1052 at [10] . To serve those documents in their present form would be to visit upon the respondent a proceeding in Australia involving a significant number of claims, with only a small number of those claims justifying the grant of leave for such service. Although technically the proceeding as a whole might fall within O 8 r 2 of the Federal Court Rules , because of the presence of the small number of claims, this is not enough to persuade me to exercise the discretion to permit service out of the jurisdiction in respect of the whole proceeding. To do so would be to allow the tail to wag the dog. The ambit of those considerations relevant to the exercise of the discretion may, however, be open to some debate and differences of opinion: e.g. Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2006] FCAFC 116 , 154 FCR 425. And, when considering whether an Applicant has made out a " prima facie case ", the kind of evidence adduced need only be " in proportion to the nature of such an interlocutory issue ": WSGAL Pty Ltd v Trade Practices Commission [1992] FCA 510 ; (1992) 39 FCR 472 at 476 per Beaumont J. As the requirement is imposed at the outset of proceedings, it does not require the kind of scrutiny that would occur (for example) in a submission of " no case to answer " following the closure of an applicant's case at trial: Merpro Montassa Ltd v Conoco Speciality Productions Inc [1991] FCA 70 ; (1991) 28 FCR 387 (" Merpro ") at 390. It may be appropriate to draw inferences more readily in favour of an applicant, bearing in mind that the applicant will not have had the advantage of discovery, subpoena and other procedural aids to the making out of a " prima facie case ": Western Australia v Vetter Trittler Pty Ltd (In liq) (Receiver and Manager Appointed) (1991) 30 FCR 102 (" Vetter Trittler ") at 110 per French J, citing Merpro . This " threshold requirement " of a " prima facie case ... is met where material is placed before the Court from which inferences are open which, if translated into findings of fact, would support the relief claimed ": Australian Competition and Consumer Commission v European City Guide SL [2009] FCA 1206 at [4] per Moore J, applying Vetter Trittler. But " [a]ctual evidence rather than mere allegations are required ": Applecross Pte Ltd v Lim [2009] FCA 1102 at [6] per McKerracher J. It should also be noted that if a " prima facie case " for relief has been made out in respect to one cause of action, it is immaterial that a " prima facie case " for relief has not been made out in respect to another cause of action: Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Ltd (1995) 58 FCR 365 at 373 per Lindgren J. See also: Trade Practices Commission v The Gillette Company (No 1) [1993] FCA 496 ; (1993) 45 FCR 366 at 371 per Burchett J. This was, of course, the issue that divided the Full Court in Bray v F Hoffman-La Roche Ltd [2003] FCAFC 153, 130 FCR 317. But relief is claimed against that Respondent by reason of: Insofar as the Third and Fourth Respondents are concerned, the Applicant does not seek to rely upon any conduct or representation being misleading or deceptive but relief is claimed by reason of: For the purposes of considering the present application, it is not necessary to consider the manner in which the Applicant seeks to make out its case of equitable estoppel or what it phrases as " unconscionable conduct ". On 7 October 2003, notice was given to terminate the Dealership Agreements (the Notice of Termination ). On around 6 April 2004, the Dealership Agreements were terminated and the Dealership came to an end. Loss of monies invested in the Dealership unable to be recouped from profits of the Dealership after April 2004. Losses incurred in connection with closing down the Dealership. No novation agreement of the Dealership Agreements to which the Applicant is a party is apparently relied upon. Reservation may also be expressed as to whether the Applicant is correct in its allegations as to the manner in which the " deeds of assignment " operated. That which may be exposed in due course remains the commercial objective sought to be achieved by the two " deeds " being executed on apparently one and the same day " assigning " and thereafter " reassigning " the same " rights, interests and obligations ". But that is not a matter which need be further addressed at this stage. Nor need attention presently be given to whether it is possible to unilaterally assign the " obligations " or burden of an agreement in a manner which binds the other contracting party without its consent: Carter J, Peden E and Tolhurst G, Contract Law in Australia (5 th ed, LexisNexis Butterworths, 2007) at [17-37]. It is, however, properly characterised as an interpretation provision and does not of itself create a cause of action: Ting v Blanche [1993] FCA 524 ; (1993) 118 ALR 543 at 552. The relevant cause of action is to be found in s 82(1) of the Act by reference to the norm of conduct laid down in s 52 of the Act. What s 51A does, in a practical sense, in cases where it applies, is to cast the burden of proof upon the respondent corporation who has made a representation about a future matter to show that in making that representation it had reasonable grounds for so doing. In the language of Sheppard and Neaves JJ in Cummings v Lewis (1993) 113 ALR 285 ; ATPR (Digest) 46-103, s 51A is "designed to facilitate proof" (at ALR 294; ATPR 53 ,450). Whether it was necessary to pursue such a course may be left to one side. That which may also be presently left to one side is whether each of the representations which the Applicant presently maintains are representations in respect " to any future matter " truly falls within that description. Of present relevance is the importance assumed by s 51A in casting the " burden of proof " upon the Respondents. Different views have also been expressed as to the manner of operation of s 51A and the nature of the evidence to be adduced by a respondent before the " deeming " effect of s 51A ceases to operate: McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2 , 165 FCR 230 ; Skiwing Pty Ltd t/as Café Tiffany's v Trust Co of Australia Ltd (Stockland Property Management Ltd) [2009] FCA 347 at [21] to [24] [2009] FCA 347 ; , 255 ALR 339 at 343 to 344 per Buchanan J. But all of these matters may be left to be resolved at a later date. Before leave is granted to serve an originating process outside the jurisdiction, it nevertheless remains desirable that there be an appropriate degree of certainty as to the burden sought to be imposed upon a respondent and an appropriate degree of certainty as to those representations in respect to which s 51A is sought to be invoked. In the present proceeding a number of difficulties, it is considered, arise in relation to those parts of the Amended Statement of Claim that expressly seek to invoke s 51A and also those parts which seek to simply place reliance upon alleged misleading and deceptive conduct. The existing pleading, it is considered, remains fundamentally deficient --- even when recognition is given to the fact that it has been drafted in advance of (for example) discovery. If the Amended Statement of Claim remains in its present form, it would be open to one or other of the Respondents to (for example) deny or not admit a material fact. The purpose to be served by the provision of " Particulars ", it is to be recalled, is fundamentally different to the requirement to plead " material facts ": H 1976 Nominees Pty Ltd v Galli [1979] FCA 74 ; (1979) 30 ALR 181 at 186 to 187; Sides Engineering Pty Ltd v Energetech Australia Pty Ltd [2005] FCA 1672 at [6] to [7]. There is no requirement that a Respondent plead to a matter set forth in " Particulars ". To endorse at the outset a course whereby the issues are not clearly joined as between the protagonists is not a course which should be encouraged. But, in seeking leave, Counsel on behalf of the Applicant expressly disclaimed reliance upon such allegations as have presently been made in this respect as against those Respondents. But reliance is sought to be placed upon the estoppel and unconscionable conduct allegations made against those Respondents. Although it may be appreciated that an applicant for leave need not establish a " prima facie case " in respect to each of the causes of action relied upon, in the present case it is considered that the preferable exercise of discretion is to refuse to presently grant leave to serve the Third and Fourth Respondents abroad. If the Applicant wishes to pursue its claims as against these Respondents for any claim in respect to the alleged wrongful termination of the Dealership Agreements , further amendment is considered necessary. Nor has any attempt been made to otherwise set forth all of the other perceived deficiencies in the existing Amended Statement of Claim . No criticism is necessarily made of the drafting course whereby some matters may conveniently be included in a Schedule. But the present pleading, it is respectfully considered, suffers from such a number of deficiencies that it should be further amended before any further application is made for the grant of leave pursuant to O 8 r 3. Some of the perceived deficiencies which have been identified may well be regarded as more important than others. Some may be accepted --- and others rejected --- by the draftsman who undertakes any future redrafting exercise. It remains a matter for the draftsman to make such further amendments as is seen fit. In so concluding it must be recognised that a point may be reached where a pleading may not be in as precise a form as may be desirable but where the discretion conferred by O 8 r 3(2) is to be exercised in favour of granting the leave sought. Even if there are outstanding potential deficiencies in a statement of claim, a point may be reached where an applicant has made out a " prima facie case " for the purposes of r 3(2)(c) and where it can thereafter properly be left to a respondent to file such a defence as is considered appropriate. A further reason for refusing, at least at this stage, the grant of leave to serve the Third and/or Fourth Respondents overseas is that reservation is expressed as to the jurisdiction of this Court to entertain and resolve any breach of contract case that may ultimately be pleaded as against those Respondents. Given the reliance placed upon s 51A as against the First and Second Respondents, it may be that the First and Second Respondents' involvement in any breach of any implied term may form part of the same " matter " such that this Court has jurisdiction in respect to all causes of actions. But the same conclusion may not be open in respect to the Third and Fourth Respondents. Moreover, in circumstances where it is apparent that a Statement of Claim seeks to make out a cause of action or a number of causes of action against a number of respondents which are in some way related, the preferable course may be to await the filing of a Further Amended Statement of Claim which makes the corporate interrelationship clear and the involvement of each respondent in the alleged wrongdoing equally clear. Related corporate respondents may then be better placed to determine whether there will be common legal representation and possibly agreement as to method of service. Such a course is considered the preferable course in the present proceeding. The manner in which an originating process is expressed, whether this Court has jurisdiction and how a case is to proceed to hearing are matters relevant to the exercise of the discretion now to be exercised. The Applicant may make any such further application for leave pursuant to O 8 r 3, albeit not in relation to the existing Amended Statement of Claim , as and when it sees fit. Any Amended Application and any Further Amended Statement of Claim is to be filed and served on or before midday on 11 December 2009. Any further Notice of Motion seeking leave pursuant to O 8 r 3 of the Federal Court Rules in respect to any such Amended Application and any Further Amended Statement of Claim is to be filed on or before midday on 11 December 2009. The proceeding is stood over to 9.30 am on 15 December 2009 for further mention or the hearing of any such further Notice of Motion seeking the grant of leave pursuant to O 8 r 3. Costs reserved. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

leave to serve originating process overseas need for pleadings to be further amended question as to jurisdiction of court to entertain all claims discretion to refuse leave implied term of good faith practice and procedure contract

The application brought before the Federal Magistrate sought judicial review of the decision of the Refugee Review Tribunal ('Tribunal') made on 30 September 2004 adversely to the applicant's claim for refugee status advanced pursuant to the Migration Act 1958 (Cth) ('the Act'). 2 The applicant is a citizen of India. The essence of his claim before the Tribunal was that he was not protected in India after he was attacked 'many times' by his paternal uncle. He claimed that his uncle, who belonged to the Telugu Desam Party (TDP), killed his father, a political leader of the Congress Party, and forced the applicant to transfer the family property to his uncle. 3 The Tribunal did not accept at least the essence of that claim to refugee status, and in so doing, made credibility findings to the applicant's case. In particular the Tribunal found that the applicant's testimony tendered at the Tribunal was inconsistent in material aspects, and that medical documents provided by him were unrelated to the applicant's protection visa claim. Moreover the Tribunal found that the applicant's claims made in response to issues that arose concerning relocation were fabricated. The Tribunal hence concluded that an essential and significant reason for the applicant's alleged difficulties encountered in his country of origin were not founded upon or referrable to any Convention reason, and that he had not been targeted for political reasons. The Tribunal further found in any event that State protection would be available to him on his return in the future to his country of origin, and that he could reasonably relocate within India to escape any harm of the nature which he had postulated to the Tribunal. 4 In the presentation of his case to the Federal Magistrate below, the applicant claimed that the Tribunal did not properly consider evidence which he had tendered to the Tribunal, and that the Tribunal's decision had no rational basis. He further claimed unspecifically that the Tribunal did not observe the relevant requirements of the Act, and failed in any event to provide him with particulars of country information said to have been relied upon, and otherwise to give him an adequate opportunity to respond to the evidence adduced and submissions made by the Minister. He asserted moreover that the Tribunal made credibility findings that were 'objectionable'. 5 In the course of its consideration of the reasons for the Tribunal's decision in light of the applicant's submissions, Lloyd-Jones FM found that the grounds of appeal raised by the applicant could not be sustained. The Federal Magistrate found that the Tribunal had made findings that were open on the evidence placed before it, and moreover that no jurisdictional error was identifiable in relation to the Tribunal's conduct of its procedures or in its reasons for decision. 6 In support of the application for an extension of time generally, the applicant provided an affidavit stating that he thought he was allowed a period of 28 days to file an appeal. The applicant also produced a draft notice of appeal upon grounds to the effect that the Federal Magistrate below erred in not holding that the Tribunal failed to take into account a relevant consideration, being the fact that his father was killed by his uncle for a political reason, and in considering whether the applicant was a member of a particular social group comprising his family members. The applicant asserted a fear for his own life at the instance of his uncle. Any way after 11 months I have to leave the country. The only observation that I can make in relation to that subject is that which the applicant presented to the Court. The applicant filed an application for an extension of time on the 21 February 2006, some six days after the allowable time period to file a notice of appeal. However, by Order 52 rule 15(2) of the FCR, the time limit of 21 days may be extended where a 'special reason' exists. 9 The respondent submitted that even if a 'special reason' existed in this case, 'an extension [of time] should not be granted because the proposed appeal has insufficient prospects of success; the respondent citing WAAD v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 399 at [9] per Lee, Nicholson and Finkelstein JJ, in support of that contention. 10 In my opinion no error has been identified in the reasons for judgment of the Federal Magistrate below. Consequently, I can find no conceivable basis propounded by the applicant for the grant of the extension of time to appeal which he seeks. Whether the Minister is prepared to accede to the request for a moratorium upon the time for his return to India is of course a matter for the Minister's decision-making.

application for extension of time within which to file and serve a notice of appeal migration

The decision under challenge was the decision of the Administrative Appeals Tribunal ("Tribunal") given on 24 April 2006 affirming a decision of a delegate of the respondent to cancel the applicant's visa pursuant to s 501(2) of the Migration Act 1958 (Cth) ("the Act "). For the reasons that follow, I would dismiss the appeal. 2 It is common ground that the applicant, Mr Boyes, is a citizen of New Zealand. He completed his secondary education and substantially completed a degree in agricultural commerce in that country. He was married and divorced in New Zealand, and has two adult daughters living there. Mr Boyes has resided in Australia since 27 January 1996. He is now in his early fifties. He has a son, who was born in Australia in March 1999. Mr Boyes has spent most of the time since his son's birth serving custodial sentences for a number of separate offences. The applicant was invited to respond to that notice and comment upon documents attached to it. He wrote letters to the Respondent department on 17 June 2005, 13 July 2005 and completed a questionnaire entitled "Personal Details" which was received on 18 July 2005. Some medical certificates and reports were also forwarded including correspondence to the applicant from QBE Mercantile Mutual Workers' Compensation Insurance Limited. An officer of the respondent interviewed the applicant and other relevant persons. In issuing the notice of intention to consider the cancellation of the visa held by the applicant, consideration was given to him having previously been convicted and imprisoned for a number of offences. That report was completed on 2 December 2005 and was made available to Mr John Williams the State Director of the Respondent department who, on 3 January 2006, decided to exercise his discretion under s 501(2) of the Act to cancel the applicant's visa. Mr Williams published written reasons for that decision on 11 January 2006 which was served on the applicant together with other documents on 18 January 2006 by registered mail at the Ararat Prison where he then was a resident. The jury at the trial found the applicant not guilty on some charges. He was found guilty to a number of the charges and was convicted and sentenced to three and a half years imprisonment on each charge, to be served concurrently and was ordered to pay reparation of $25,000. An appeal was lodged against conviction and sentence. The Court of Appeal in New Zealand dismissed the appeals save for the reparation order of $25,000. Those convictions were not disclosed by the applicant on the incoming passenger card when he first arrived in Australia in December 1995. He ultimately pleaded guilty before the District Court of New South Wales sitting at Goulburn on 2 October 2001 and was sentenced to a period of detention of two years and two months. On 28 August 2000, the applicant was convicted in the Picton Local Court in New South Wales and fined the sum of $500 on a charge of possession of stolen goods. He was sentenced to a total period of five years and three months imprisonment with a minimum non-parole period of three years and nine months. Judge Woods, in the Victorian County Court (apparently having been given information by the prosecutor) noted that the offences committed in New Zealand were similar to the offences committed in Victoria. It was also noted that the applicant was an undischarged bankrupt during the time that the offences were committed in New Zealand. A number of medical reports have been filed in these proceedings from a number of doctors, including specialist neurologists, neurosurgeons and hospitals. Mr Boyes applied to the AAT for a review of this decision. The AAT held a hearing on 20 April 2006, at which Mr Boyes appeared and gave evidence, and affirmed the delegate's decision on 24 April 2006. Mr Boyes challenged the decision in this Court. These grounds are referred to below. 7 When these grounds are considered, it is apparent that pro bono counsel for Mr Boyes framed them as if this were an application for judicial review, doubtless because he was aware that an appeal under s 44 of the AAT Act was incompetent: see ss 474 and 483 of the Act . On judicial review, the Court cannot set aside the decision of the Tribunal except for jurisdictional error: see Plaintiff S157/2002 v Commonwealth of Australia [2003] HCA 2 ; (2003) 211 CLR 476 at 506-508 and 511 per Gaudron, McHugh, Gummow, Kirby and Hayne JJ; and Epenisa v Minister for Immigration and Multicultural Affairs [2007] FCA 80 at [4] - [12] per Besanko J. Section 501(7)(c) provides that a person has a substantial criminal record if "the person has been sentenced to a term of imprisonment of 12 months or more". 9 It is common ground that Mr Boyes does not pass the character test because, for the purposes of s 501(6)(a) , he has a substantial criminal record, having been sentenced to imprisonment for more than twelve months. In this circumstance, Mr Boyes' complaint concerns the way in which the delegate exercised the discretion under s 501(2) as to whether or not his visa would be cancelled. 10 Additionally, s 499(1) empowers the Minister to "give written directions to a person or body having functions or powers under [the Act ]" about "the performance of those functions ... or the exercise of those powers". Such a person or body must comply with these directions: see s 499(2A). On 23 August 2001, the Minister gave a written direction under s 499(1) , which was entitled "Visa Refusal and Cancellation under Section 501 of the Migration Act 1958 " ("Direction 21"). 11 Direction 21 relates to the application of the character test and the exercise of discretion in determining whether or not to cancel a visa. Direction 21 provides that a decision-maker should have regard to three "primary considerations". They are: (1) the protection of the Australian community, and members of the community; (2) the expectations of the Australian community; and (3) in all cases involving a parental or other close relationship between a child or children and the person under consideration, the best interests of the child or children. Direction 21 referred to various factors as being relevant to these primary considerations. Direction 21 also referred to other considerations, which though not regarded as primary, might also be considered relevant including evidence of rehabilitation and any recent good conduct, and the fact that a visa holder has been formally advised in the past by an officer of the Minister's Department about conduct which brought him within ss 200 , 201 or 501 . The delegate determined that Mr Boyes had demonstrated a continuing history of committing crimes of deception and that the Australian community should be afforded protection against such conduct. The delegate concluded that "great weight" should be given to "the serious and continuing nature of Mr Boyes's criminal record and its effect on the community". The delegate "found that he could not ignore Mr Boyes's consistent pattern of criminal conduct over several years" and "assessed that there is a medium risk that Mr Boyes might re-offend and placed medium weight on his risk of recidivism". The delegate considered that deterrence was "of moderate importance and overall ... placed moderate weight on this consideration". The delegate gave great weight to the expectations of the Australian community, which he considered favoured cancellation of Mr Boyes' visa. The delegate also gave substantial weight to the fact that this cancellation and Mr Boyes' removal from Australia "may cause hardship on the children" to whom Mr Boyes had declared an on-going commitment. After referring to certain other considerations, the delegate said that he "recognised Mr Boyes's child in Australia, but concluded that the serious and continuing nature of Mr Boyes's criminal conduct, the disruption his crimes have caused others and the expectations of the Australian community outweighed all other considerations". I make that finding as fact and adopt it when exercising the discretion which I am obliged to do under Direction 21. I am also satisfied, and there was no dispute, that the applicant was sentenced to a period of three and a half years to be served concurrently in relation to all of those offences. He served the minimum non-parole period of 15 and a half months. The first offence resulted in a $500.00 fine, the second offence resulted in compensation of $4040.00 being ordered and the third offence resulted in a sentence of two years and two months with a non-parole period of 10 months. The total sentence on those offences was five years and three months with a non-parole period which, but for this decision, will permit the applicant to become eligible for parole in June this year. Some of those records refer to appearances to either extend bail or to adjourn the hearing of proceedings. There was some confusion in the interpretation of those records because it was thought that the number of offences could be calculated by regard to the number of court appearances. To follow that path would of course be an error because regard is only to be had to the total number of convictions and the sentences in examining this part of Direction 21 namely, the seriousness and nature of the appellant's conduct. A number of vulnerable persons fell victim to his conduct most notably farmers who do not enjoy regularity of income and who, in New Zealand were subject to an economic crisis and in Australia were affected by drought. The explanations for the offences in New South Wales were, in my view, unbelievable and I do not believe the explanations given. I place considerable weight when assessing the character of the applicant upon these offences and am very concerned that the offences in New Zealand were virtually repeated in Victoria. As Direction 21 records, the crimes of serious theft " are of concern because of the amounts of money involved and or the disruption caused to individuals, business and government ". Additionally, it is the view of the Minister (paragraph 2.7) " that the sentence imposed for a crime is an indication also of the seriousness of the offenders conduct against the community ". Consideration also must be given to the extent of the person's criminal record, the number and nature of the offences, the time between offences and the time that has elapsed since the most recent offence. Consideration should also be given to the repugnance of the crime, particularly crimes involving fraud. The applicant arrived in Australia in January 1996 and commenced to offend in Victoria in 1998. Despite being charged with offences in Victoria and being released on bail, he travelled to New South Wales and committed offences in 2000 and 2001 which gave rise to being charged and sentenced. He returned to Victoria, changed his plea from not guilty to guilty, and was sentenced to a period of five years and three months imprisonment. He has not offended since February 2003 but since that date he has been in gaol. He has obtained certificates in relation to aspects of hospitality, qualification in the operation and use of tractors and other earthmoving equipment, communication strategies, infectious disease, hepatitis C and infection control, forklift licences, occupational health and safety qualifications in relation to building sites and a B double road train licence. In evidence the applicant said that he sought guidance from the Victorian Parole Board of courses that he should undertake in relation to correction and awareness of his previous behaviour. The course facilitator completed a certificate on 21 May 2004 recording that the applicant had demonstrated insight into his own behaviour and the importance of self awareness, he had commenced a program of " self reflection ", he had expressed interest in prisoner peer education programs and the possibility existed that upon release from prison, the cognitive skills learnt could assist him in positions of advocacy. The certificate issued to the applicant acknowledging completion by him of that program records that it had components of problem solving, thinking skills, self-management, social interaction skills, negotiation and conflict resolution and development of personal goals. There are many references made by him throughout his Statement of Facts and Contentions to regret that he now felt. However, despite these expressions of regret, put forward as an indication also of remorse, I remain unsatisfied. I would have been more confident that the expressions of regret were truthfully made, if the applicant had not said, as he did, in cross-examination that he remained of the opinion that he was " misled " and " cheated " by Mr and Mrs White. To emphasise this lingering belief, the applicant said " their conduct was not tested in any Court ". There is a good reason for that. They were never charged with any offences. He was, he pleaded guilty and he was sentenced. I am also prepared to view favourably, and therefore give some, but less weight, to the positive undertakings by him to achieve, by way of rehabilitation, qualifications and acquisition of personal skills which upon eventual release from prison could assist him to positively contribute to the community. I would also give some weight to the favourable comments about the applicant made by other persons. I note that the Minister regards deterrent, whilst not being conclusive, as an important factor in determining whether to cancel a visa. It would be desirable of course that persons in a similar position to the applicant be deterred from committing offences if they comprehend that their visa may be cancelled by them committing and being convicted of similar offences. Failure to cancel the visa may also send an undesirable message to other non-citizens (refer Re Pizlea and Minister for Immigration and Multicultural and Indigenous Affairs [2000] AATA 49 at paragraph 58). The Tribunal said that it attached "considerable weight to the expectation that ... the applicant, by reason of his prior offences, should have his visa cancelled and therefore be removed from the Australian community". 19 The Tribunal also gave attention to the position of Mr Boyes' young son. [His son's] mother is...presently aged 32 years. He said that he also lived with [his son] from March 1999 until 2001 when he was convicted and sentenced in New South Wales but when pressed on this issue it appears that the applicant did not live with [his son's mother] on a full time basis. Accordingly he did not live with [his son] on a full time basis...The applicant said that he was an interstate truck driver. He said he rented a flat in New South Wales, was minding a property at Clarkefield on the outskirts of Melbourne and kept items of personal property at those locations as well as truck yards where his trucks were kept. Other items of personal property were also kept in his truck. He estimated that in the period March 1999 when [his son] was born until 2001 when he was sentenced in New South Wales, he lived with [his son's mother] for a period of 16 or 17 months yet it was also acknowledged that in that time he was frequently driving at night. It therefore follows that he would have been away from those premises and would therefore have also been away from [his son]. The address recorded on his driver's licences (car and truck) was not the address of [his son's mother]. [Mr Boyes's son] would have been very young when the applicant commenced his sentence in New South Wales and would not have been much older when he commenced his sentence in Victoria. Indeed at February 2003 when the Victorian sentence commenced, [his son] was one month short of four years of age. Since that sentence commenced, the applicant has not seen [his son]. [His son's mother] has not ever visited the applicant in any of the gaols where he has resided and it follows that she has not taken [the child] to gaol to visit him. The applicant said that he speaks with [his son] on the telephone on approximately two occasions per week. However, since February 2003, the applicant has been in gaol and [his son] has not seen him or communicated with him except by telephone. When the applicant entered prison, [his son] was barely four years of age and is now seven years of age. Before the Victorian sentence commenced, the applicant was not in gaol but had previously spent a period of time in gaol in New South Wales after [his son] had been born. In [his son's] lifetime he has spent a relatively short period of time in total with the applicant. It must be noted that during the occasions when he has not been incarcerated, the applicant has been engaged in interstate truck driving which is notoriously known for working long hours and being away from home. There would be no language and few, if any, cultural barriers by him living in New Zealand but for reasons recorded later I am not satisfied that [the child's mother], being the custodial parent, would be prepared to travel to New Zealand. Whilst of course it would be desirable for a relationship to be established between the applicant and [his son's mother] in which [his son] could enjoy and be reassured by a stable, caring and loving environment, that objective in my view will not ever be achieved. Accordingly, [his son's] best interests would be achieved if he remained in Australia with [his mother ]. I do not believe that his interests would necessarily be affected if the applicant had his visa cancelled thereby causing him to return to New Zealand. The note recorded by Ms Doyle, apparently reciting a comment made by [the mother], was " someone can stay five nights per fortnight without it affecting the pension ". The relationship was described as " on and off for a period of years " after [the child's mother], and the applicant met in 1997 or 1998. Contact between them occurred on three or four days per week by telephone. [The mother] said that she would not accompany the applicant to New Zealand if his visa was cancelled. I indicated to him that Direction 21 was in part concerned with the affect upon relationships, no less a relationship between parents of an infant child. The hearing was adjourned to permit the applicant to communicate with [the mother] either directly or through his solicitors to have her lodge a statement with respect to their relationship and hopefully have her give evidence at the hearing. By way of assistance to the applicant, I arranged for the District Registrar of this Tribunal to contact a solicitor who had been assisting the applicant to advise him that he would be approached and asked to obtain a statement from [the mother]. A short time later a written communication was received from that solicitor that he was no longer assisting the applicant. A statement was not ever lodged by [the mother]. At the hearing, the applicant said that on the last day permitted under the Act for the lodging of statements, [the mother] in fact did fax a statement to Mr Wee the solicitor for the respondent and to the Administrative Appeals Tribunal. He said that [the mother] had a copy of a facsimile receipt. He did not have a copy of that receipt, he did not have a copy of her statement and he did not know its contents. I am disappointed that the hearing of this application was adjourned in large part to permit the applicant to obtain evidence in support from [the mother] which was not forthcoming. A more than reasonable inference is entitled to be drawn that [the mother] is not prepared to support the applicant. Indeed since May 2005 when the applicant was notified of the Minister's intention to consider cancellation of visa, there has not been one single document initiated or generated by [the mother] in support of the applicant. In all of those circumstances I conclude that in the event that the visa of the applicant was cancelled, [the mother] would not be prepared to travel to New Zealand. The relationship of course is not "romantic" presently as the applicant would assert and subsequent to his incarceration the relationship has not been exclusive between [the mother] and him. They have not communicated for the last three years except by telephone and I do not accept that she has been prohibited from visiting him in gaol because she does not have a driver's licence. Arrangements could have been made for other persons to temporarily look after the children and for her to either obtain transportation from another person or travel herself by public transport. [The mother] is not dependant on the applicant for financial support and emotional support, if any, is secured through telephone communication only. It is my view that in the event that his visa is cancelled there would be little, if any, hardship caused to her. In the exercise of the discretion required under Direction 21 it is my view that the weight that should be attached to the applicant's prior criminal conduct, the protection of the Australian community (being the risk of recidivism) and the expectation of members of the Australian community overwhelms, by a considerable margin, the weight that should be given to him by way of credit for the initiatives that he has undertaken with respect to rehabilitation and the favourable comments made by others. These submissions will appear sufficiently in the following discussion. It suffices to say that essentially Mr Boyes' case was that the Tribunal had no regard to relevant considerations, relied on irrelevant considerations, and asked itself the wrong question. Referring to Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 per McHugh, Gummow and Hayne JJ at 351, and Lu v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 340 ; (2004) 141 FCR 346 per Black CJ at 360, counsel for Mr Boyes submitted that the Tribunal's decision was vitiated by jurisdictional error and that the applicant was entitled to relief. In the alternative, counsel contended that there had been a failure on the Tribunal's part to comply with s 499(2A) of the Act . Referring to Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1998) 194 CLR 355 at 376-377 and 388-390 per McHugh, Gummow, Kirby and Hayne JJ, counsel argued that failure to do what is compelled to be done by s 499(2A) invalidates anything done or purporting to be done under Direction 21. 24 For reasons that appear below, I would reject Mr Boyes' submission that the Tribunal's decision was vitiated by jurisdictional error, as well as his alternative submission that there was a failure on the Tribunal's part to comply with s 499(2A) of the Act . I set out each of Mr Boyes' grounds of appeal and consider them in turn. Further, according to counsel, a "complete examination of the seriousness of the Applicant's conduct should also involve considering the possible maximum sentence available to the sentencing judge". The applicant also challenged the Tribunal's finding concerning the repugnance of the crime, on the basis that the fraud involved in Mr Boyes' offending was not the same kind of fraud as that referred to in par 2.7(b) of Direction 21. Additionally, so counsel submitted, the Tribunal misapplied certain observation of the Full Court of this Court in Minister for Immigration and Multicultural Affairs v SRT [1999] FCA 1197 ; (1999) 91 FCR 234 (" SRT "). The Tribunal failed to place the remarks of the sentencing judge in proper context and treat them as the law required. 27 In SRT , a Full Court held that it was not open to the Tribunal, in such a case as this, to impugn either the sentence or the essential facts found by the sentencing judge in sentencing: see SRT at 244 per Branson, Lindgren and Emmett JJ; also Minister for Immigration and Ethnic Affairs v Daniele (1981) 61 FLR 354 at 358 per Fisher and Lockhart JJ. It was to be borne in mind, however, that the Tribunal considered matters at a time different from the sentencing judge and that the Tribunal may be required to give consideration to the fact that some relevant circumstances had changed between the sentencing and the Tribunal's consideration of the matter. Moreover, so the Court said in SRT at 243, "accepting the findings of the sentencing judge does not prevent the Tribunal from distinguishing between those findings in terms of weight". 28 The Tribunal was entitled to consider the sentencing remarks of Judge Wood of the County Court and the other curial material to which it referred. Paragraph 2.7 of Direction 21 directed attention to such factors as criminal record and the repugnance of the crime. The sentencing remarks provided evidence relevant to these factors and also bore on Mr Boyes' testimony about the circumstances of his offending. The Tribunal's finding that the level of Mr Boyes' dishonesty was "very serious" flowed out of its proper consideration of the material before it, as the Tribunal's subsequent explanation of its finding emphasizes. The Tribunal was entitled to make the finding that it did as to the repugnance of the crimes of which Mr Boyes had been convicted. 29 Moreover, there is nothing in the complaint the applicant makes about the Tribunal's finding about the repugnance of Mr Boyes' crimes. Paragraph 2.7(b) requires the decision-maker to consider "the repugnance of the crime", as the Tribunal did. The Tribunal did not fall into error when it made its own assessment of the crimes that had been committed by Mr Boyes. 30 The Tribunal specifically considered the training and skills acquisition programs that Mr Boyes had undertaken whilst in prison and the letters of support that it had before it. Its determination to place considerable weight on the risk of recidivism flowed out of its consideration of Mr Boyes' past behaviour and convictions, but, at the same time, the Tribunal gave weight to Mr Boyes' involvement in these programs and the favourable comments concerning him that were in evidence before it. 31 There is nothing in the Tribunal's reasons to support the submission that it misapplied SRT , and misused the sentencing judges' findings and observations in reaching its decision. Further, I would not infer from the Tribunal's reasons that the Tribunal did not take into account the fact that Mr Boyes had entered a guilty plea in the County Court. Certainly, the fact was specifically referred to in the Tribunal's reasons for decision. In this circumstance, it is unnecessary to decide whether the Tribunal was bound to consider the fact that Mr Boyes had pleaded guilty in the earlier criminal proceeding, although I doubt that it was. The consideration of this factor is not mandated by the Act alone and not mandated, directly at least, by the combination of s 499(2A) and Direction 21. There is, moreover, no basis in the Act , even when read with Direction 21, to support the proposition that, in considering the seriousness of Mr Boyes' conduct for the purpose of determining whether to cancel his visa, the Tribunal was bound to consider the maximum sentence that Mr Boyes' offences might have attracted under the criminal law. 32 There is no jurisdictional error shown in grounds (a), (b) or (c). (d) The decision of the Tribunal should be set aside as it misapplied paragraph 2.7(b) of Direction No 21 when it referred to but apparently failed to give due regard to "the repugnance of the crime", thereby failing to consider relevant material or considering irrelevant material. I reject this submission for the reasons set out at [28]-[29] above. (e) The decision of the Tribunal should be set aside as it failed to exercise its discretion or failed to consider relevant material when it purported to consider the likelihood that the applicant's conduct may be repeated by merely repeating the words contained in part of paragraph 2.10 of Direction No 21 without apparently making its own findings. This was, so counsel said, an irrelevant consideration in the context of par 2.10 of Direction 21. I reject this submission for the reasons stated at [43]. Additionally, I note that par 2.8 directed attention, amongst other things, to "any relevant factors provided by the non-citizen as mitigating factors". Mr Boyes gave evidence at the hearing about his attitude to his offending conduct and the Tribunal was entitled to consider the effect of this evidence on its assessment, as it did. 35 I would reject ground (e) as not disclosing error. (f) The decision of the Tribunal should be set aside as it erred when it failed to consider a relevant fact, namely whether the applicant received a warning about the risk of visa cancellation as contemplated by paragraph 2.10(a) of Direction No 21. Amongst the factors that Direction 21 lists as relevant to this assessment is the non-citizen's commission of a further offence after having been previously warned about the risk of visa refusal or cancellation. 37 Counsel for Mr Boyes submitted that the reference in par 2.10(a) of Direction 21 to the commission by a non-citizen of a further offence after having been warned previously about the risk of visa refusal or cancellation was a reference to "a complete concept". The applicant had not received a previous warning. In the context of considering the protection of the Australian community, this factor was, so counsel for Mr Boyes said, a crucial consideration. In failing to address this consideration, the Tribunal failed to apply Direction 21 as required by the Act . 38 I accept the respondent's submission that, under Direction 21, if a person committed further crimes after being warned of the risk of deportation, then this would be a separate factor weighing against that person. Since Mr Boyes had not been previously warned, this aggravating factor did not apply. It did not weigh against Mr Boyes and there was no occasion for the Tribunal to refer to it. There was no need for the Tribunal to list every factor referred to in Direction 21, including those factors which plainly did not apply. This ground does not disclose error. (g) The decision of the Tribunal should be set aside as it erred when it failed to take into account a relevant consideration namely the prospect of further rehabilitation and the positive contribution to the community the applicant may reasonably be expected to make as contemplated by paragraph 2.10(c) of Direction No 21. Under this ground, the applicant contended that the Tribunal failed to consider the prospects of further rehabilitation and the positive contribution that Mr Boyes may reasonably be expected to make, as par 2.10 of Direction 21 required. Had the Tribunal done so, it would have acknowledged the effect of the passage of time. The applicant argued that the Tribunal misapplied SRT when it did not refer to the passage of time. 40 Counsel for Mr Boyes also submitted that the Tribunal erred when it combined consideration of rehabilitation with consideration of remorse, which were two different things. Counsel added that "the Tribunal went too far when it allowed those explanations by the self-represented represented applicant to colour its consideration of these requirements under the direction". 41 As already noted, in SRT , the Full Court noted that the Tribunal considered matters at a time different from the sentencing judge and that the Tribunal may be required to give consideration to the fact that some relevant circumstances had changed between the sentencing and the Tribunal's consideration of the matter. 42 In the present case, the Tribunal did not limit its consideration of rehabilitation prospects and risk of recidivism to the sentencing remarks of Judge Wood in the County Court. On the contrary, the Tribunal made a comprehensive review of the curial material in its possession and the evidence of Mr Boyes' rehabilitation. It referred to this latter evidence in some detail and noted that it was to Mr Boyes' credit. The Tribunal plainly took account of the matters relevant to the passage of time between sentencing and its decision-making, when it said that it was prepared to view favourably his undertakings to achieve qualifications and personal skills and that it gave some weight to the favourable comments of others about him. 43 Clearly enough, the Tribunal considered the prospects of rehabilitation and the risk of recidivism. In considering the broad question of whether the offending conduct might be repeated, it was open to the Tribunal to consider Mr Boyes' evidence about his attitude to his offending and his understanding of why it was wrong, more particularly as Mr Boyes had apparently made an assertion to the Tribunal in this regard. 44 Ground 4(g) discloses no error. (h) The decision of the Tribunal should be set aside as it erred when it took account of an irrelevant consideration when purporting to apply paragraph 2.11 of Direction No 21 by hypothesising on the effect on non-citizens of not cancelling the applicant's visa. It also states that the "general deterrence factor" may be relevant in a number of ways, indicating what these ways may be. 46 After referring to par 2.11 of Direction 21, counsel for Mr Boyes submitted that the Tribunal considered an irrelevant matter when it observed that failure to cancel Mr Boyes visa might "send an undesirable message to other non-citizens". This, so counsel said, was to approach "the issue of general deterrence from a negative perspective rather than the positively worded perspective contained in paragraph 2.11 of Direction 21". He added that paragraph 2.11 deals with visa cancellation as a tool to discourage criminality in others, which is the reverse of what the Tribunal has considered". 47 I reject this submission. When the relevant paragraph in the Tribunal's reasons is read as a whole, the paragraph discloses not error. The Tribunal specifically stated that "cancellation of the applicant's visa may prevent or discourage similar conduct by other persons in an equivalent position". This finding was plainly made in conformity with Direction 21. On one view, as the respondent said, the Tribunal's observation that a failure to cancel may send an "undesirable message" is a natural corollary of this primary finding. In any event, as the respondent noted, under par 2.2 of Direction 21, a decision-maker is to "adopt a balancing process which takes into account all relevant considerations". This would extend to the contested observation. 48 Ground (h) discloses no error. (i) The decision of the Tribunal should be set aside as it erred when it failed to consider relevant matters concerning the reasons for the limited contact between the applicant and his son ... such as the difficulty of travel by [his son] and his mother to the prison where the applicant was detained and the significance of recent contact between the applicant and [his son]. 49 Under this ground, counsel for Mr Boyes submitted that the Tribunal had failed to identify what the best interests of Mr Boyes' son involved and thus to consider the child's best interests in the requisite manner. Counsel submitted that the Tribunal was "distracted by considering how the child's interest would be affected by a decision to cancel the visa", and that this "was a different question". Counsel added that the Tribunal focused unduly on the relationship between Mr Boyes and the mother of his son, and failed to consider the best interests of the child as a separate issue. Counsel contended that the Tribunal gave no "sensible consideration to the reasons" why Mr Boyes was separated from his son and gave no consideration to the prospect of Mr Boyes developing a relationship with him in the future. Counsel argued that the Tribunal did not consider the likely effect that separation from Mr Boyes would have on his son. 50 Direction 21 required the Tribunal in the circumstances of this case to make the best interests of Mr Boyes' son a primary consideration in its decision-making. In its reasons, the Tribunal specifically referred to par 2.15 and noted that it stated that "[i]n general terms, the child's best interests will be served if the child remains with its parents". 51 Paragraph 2.16 also directed the decision-maker to have regard to various factors "when considering the best interests of the child", including "the nature of the relationship between the child and the non-citizen", its duration, "the hypothetical prospect for developing a better/stronger relationship in future", the child's age and Australian citizenship, the likely effect that any separation from the non-citizen would have on the child, and the circumstances of the child in any probable receiving country. 52 Examination of the Tribunal's reasons shows that it was mindful of the matters set out in par 2.16. The likely impact on the child of the visa cancellation was relevant to consideration of the effect of separation from Mr Boyes, which the Tribunal was directed to consider. The Tribunal specifically referred to the child's age and citizenship. It plainly considered the nature of the relevant relationship and the prospect for developing a stronger relationship in the future as best it could on the evidence before it. 53 As the respondent noted, the evidence as to the best interests of the child was very limited. The statements by Mr Boyes concerning his son before the Tribunal were generally tied to statements about his desire to re-establish a relationship with the child's mother. There was, however, no evidence from the mother corroborating Mr Boyes' statements in this regard. Since no such statement was forthcoming, the Tribunal inferred, as it might, that the mother was not prepared to support Mr Boyes and there was no relevant "romantic" relationship, as Mr Boyes had alleged, and that the mother would be unlikely to take the child to live with Mr Boyes in New Zealand. The Tribunal was, in effect, rejecting the case put by Mr Boyes when it found that it was unlikely that the child would ever be cared for by his mother and Mr Boyes in "a stable, caring and loving environment". This finding necessarily involved consideration of the future prospects of the relationship between father and son. 54 A significant part of the case that Mr Boyes put to the Tribunal turned on his assertion that he wanted to re-establish his relationship with the mother of his son. It was in this context that the absence of evidence from the mother concerned the Tribunal and led it to adjourn the hearing in order that she might make a statement. When no statement from her was forthcoming, the Tribunal did not have an obligation to make further inquiries concerning the child. There was nothing to create such an obligation: compare Djalic v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 151 ; (2004) 139 FCR 292 at 314 per Tamberlin, Sackville and Stone JJ; and Taylor v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 208 at [19] per Marshall, Mansfield and Siopis JJ. Instead it was bound to decide the case on the evidence and other material before it. Upon this basis, it made the specific findings that the child's best interests would be achieved if he remained in Australia with his mother and that his interests would not necessarily be affected if Mr Boyes' visa were cancelled. The applicant has not made out jurisdictional error under ground (i). 55 This case is distinguishable from Wan v Minister for Immigration and Multicultural Affairs [2001] FCA 568 ; (2001) 107 FCR 133, which was relied on by the applicant. In Mr Boyes' case, in contrast to Wan , the Tribunal clearly stated what the best interests of the child indicated that it should decide. The Tribunal in Wan limited its consideration to how the children's interests would be affected by a decision to refuse to grant their father a visa. That is not this case. Further, in Wan , in contrast to this case, the Tribunal did not treat the best interests of the children as a primary consideration. 56 Ground (i) discloses no error. 57 Counsel for Mr Boyes did not address the other grounds stated in the initiating documents and it is unnecessary to refer to them here. None of them disclosed a tenable ground upon which a finding of jurisdictional error might be made. Nor could they disclose contravention of s 499(2A). The assessment of evidence, facts and weight were essentially for the Tribunal. Mr Boyes has failed to make out his case that the Tribunal had no regard to relevant considerations, relied on irrelevant considerations and asked itself the wrong question. I would therefore dismiss the application, with costs. 59 Mr Boyes was ably assisted by pro bono counsel. The Court acknowledges the very great service rendered to the Court and to litigants in person by members of the profession who agree to act without fee as counsel (or solicitor) in the presentation of argument and preparation of a case. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.

review of decision of aat cancelling applicant's visa applicant does not pass character test due to substantial criminal record whether aat had no regard to relevant considerations, relied on irrelevant consideration and asked itself wrong question no error found immigration

The question is whether the credit scheme found in s 53 of the Energy Grants (Credits) Scheme Act 2003 (Cth) ("the Act ") extends to cover diesel fuel purchases for off-rail uses incidental to use in rail transport (e.g. use in operating a crane adjacent to a rail line for loading goods from a truck onto a train), as the applicant Asciano Services Pty Ltd ("Asciano") contends, or to such incidental uses only if they take place "in or on a rail vehicle", as the Commissioner of Taxation ("the Commissioner") contends. 2 For the reasons that follow, s 53 energy grant credits are limited to purchases for on-rail uses only. Accordingly, Asciano's appeal from the Commissioner's objection decision denying Asciano's claim for diesel fuel credits under the Act must be dismissed with costs. Grammatically speaking, the question raised is, to what does the phrase "in or on a rail vehicle" attach? Asciano accepts that it modifies "use in equipment" with respect to use "for air-conditioning, heating, lighting," but submits that it does not limit the phrase "for any purpose incidental to using the rail vehicle". The Commissioner submits that the phrase "in or on a rail vehicle" attaches to both subclauses. Counsel for Asciano properly conceded that if the Commissioner's construction is accepted, then Asciano loses this appeal. 7 In favour of the Commissioner's construction there are two points. First, there is the parallelism of the two "for" subclauses. The most natural reading of a series of subclauses each beginning with the same word is that each is co-equal and each attaches to the full predicate preceding the first item in the list. An alternative way of putting the point (and this is the second point on the Commissioner's side) is to realise that the subsequent repetition or omission, as the case may be, of the preposition "for" is a matter of style and emphasis that does not change the meaning. 8 This is the case with s 38(5). The second use of "for" in the opening words of the provision was not intended to set up an independent subclause not limited or modified by "in or on a rail vehicle". That is made clear by the absence of the conjunction "or" between heating and lighting and the presence instead of a comma. If the "for air-conditioning, heating, lighting" subclause was really independent of the "for any purpose" subclause, it would read: "Use in equipment in or on a rail vehicle for air-conditioning, heating [ or ] lighting or for any purpose incidental to using the rail vehicle. " To put it another way, the sentence would stand on its own even if everything from "or for any purpose" through to the end of sub-clause (c) were deleted. Here, however, the lack of the additional "or" demonstrates that "any purpose," rather than being the first item in a new list untethered to the "air-conditioning, heating, lighting" list, is in fact item number four in a list of objects of the first "for" and the repetition of "for" is for rhetorical purposes only. Moreover, in modern legislative drafting, a comma is generally not used to separate the penultimate and ultimate items in a list: see e.g. s 33 of the Act (containing no commas between the penultimate and ultimate items in any of the three lists). Thus, the presence of the comma between heating and lighting indicates that heating is not the penultimate item and that in fact lighting, which is not followed by a comma, is the penultimate item and "any purpose" is the ultimate item. 9 In other words, the language of s 38(5) is to be read as follows: "Use in equipment in or on a rail vehicle for [(1)] air-conditioning, [(2)] heating, [(3)] lighting or for [(4)] any purpose incidental to using the rail vehicle[. ]" The contrary reading advanced by Asciano - "Use in equipment [A] in or on a rail vehicle for [(1)] air-conditioning, [(2)] heating, [(3)] lighting or [B] for any purpose incidental to using the rail vehicle" - must be rejected. Once it is accepted that there is really only one preposition "for" - the first one - followed by a list of four objects, the whole of Asciano's argument falls away. As noted earlier, Asciano accepts that the first three items - air-conditioning, heating and lighting - are constrained by the phrase "in or on a rail vehicle"; if "any purpose" is merely the fourth item in that same list, it follows that it must also be so constrained. 10 For those reasons, I do not consider the language of s 38(5) to be ambiguous when considered on its own. " Indeed, it is now well established that there is no need for ambiguity in the statutory text before resort is had to purpose, context, and the legislative history: White v Designated Manager of IP Australia (No. 2) [2008] FCA 816 at [18] - [20] . 12 As will be seen, however, regard to those materials does not alter the conclusion that Parliament in s 53 did not intend to include in its credit scheme purchases of diesel fuel for off-rail activity, regardless of how integral, incidental or adjacent to rail transport. 13 Asciano relies on both the broader context of s 38 as well as that of s 53 itself in support of its construction. As to s 38, Asciano submits that if the Commissioner's reading of s 38(5) is adopted, then s 38(3)(g) will become superfluous, contrary to the well-known maxim of statutory construction that every effort should be made to give all the words of a statute some work to do: Project Blue Sky , 194 CLR at 382. This argument depends on the premise that "in connection with" in s 38(3)(g) and "incidental to" in s 38(5) have the effectively the same meaning. When pressed, the Commissioner was not able to identify any relevant difference in meaning; however, as will be seen below, I do not consider it necessary to make a definitive finding in that regard. 14 With respect to s 53, Asciano focuses on the parenthetical clause "(otherwise than for the purpose of propelling a road vehicle on a public road)," arguing that if all purchases for off-rail activities were already excluded by the s 38 definitions, there would be no need for the exclusion in the substantive provision. Asciano reinforces the point by noting that there is no equivalent parenthetical exception for "use in marine transport" (see s 53(3)), while the parenthetical exceptions for use in mining operations and use in primary production carve out "any vehicle" in the former but only "road vehicles" in the latter. These contrasts are emphasised to make the point that Parliament must have carefully considered and tailored the exceptions in each case. 15 The Commissioner attempts to meet this concern by speculating that the legislature may have been concerned in the rail context with hybrid vehicles such as "hi-rails," which are capable of travelling both on roads and on rail: see Queensland Rail v Commissioner of Taxation [2006] FCA 816 ; (2006) 153 FCR 524 at [19] , [23]-[24] for a description of these vehicles. Quite correctly, counsel for Asciano noted in oral argument that this speculation, even if correct, did not meet the point, because s 38 would already cover purchases for hi-rail use - when the fuel is purchased for on-rail use, it would be eligible for credit, but when the fuel is purchased for use in off-rail activities, whether on public roads or otherwise, it would be ineligible. Moreover, as Asciano submitted, the argument that the parenthetical language was included by inadvertence or out of an abundance of caution in the predecessor to s 53, (s 164(1)(ab) of the Customs Act 1901 (Cth) and s 78A(1)(ab) of the Excise Act 1901 (Cth)), was rejected by Dowsett J in Queensland Rail [2006] FCA 816 ; 153 FCR 524 at [40] for the reasons identified by Asciano above. 16 In short, the submissions of Asciano on ss 38(3)(g) and 53 (3) are not without force. However, that force, along with the vitality of Dowsett J's reasons in Queensland Rail , is diminished for at least two reasons. First, Dowsett J reached his view based in part on the premise that the rebate scheme found in s 164(1)(ab) of the Customs Act and s 78A(1)(ab) of the Excise Act was beneficial legislation and should be given a broad construction: Queensland Rail at [39]. Asciano argues that the same premise should be adopted in this case - the Court should take a commonsense and commercial approach in order to encourage the activities to which the Act applies. However, the Full Court of this Court recently rejected that premise in Commissioner of Taxation v Ostwald Bros Civil Pty Ltd (2008) 167 FCR 588 , relying on the legislative history for the proposition that the Act is to be construed narrowly in order to balance the beneficial purpose of encouraging the use of cleaner fuels with the important government interest of protecting the revenue: at [33]-[37]. 17 Secondly, at the time of the decision in Queensland Rail , the relevant language in the substantive provision, "use in rail transport," was not defined in the Customs Act . Such a system must inevitably involve loading and unloading activities and maintenance activities. The use of diesel fuel in the course of such activities is necessarily "in" that system, regardless of whether such use occurs on- or off-rail. However, the Court now has the benefit of s 38 of the Act in which it is made clear that, however plausible Dowsett J's judicial definition of "in rail transport" as a "system" might be in the abstract, the legislature has chosen to define the term more narrowly as a subset of that whole system. As can be seen, the common thread in each of the s 38 subparagraphs is the limitation or linking of "in or on a rail vehicle" to "in rail transport". 19 It may well be that the introduction of s 38 has in fact made the parenthetical language in s 53(3) superfluous. Asciano submits that to the extent that there is any conflict between the operative s 53 and the definitional s 38 , the substantive provision must prevail: Project Blue Sky , 194 CLR at 382. That proposition is of course true, but it does not assist in resolving the present case because there is no conflict. Section 53(3) says only that fuel purchases for use in propelling a road vehicle along a public road are not eligible for credits. As to whether any other purchases for off-rail use are or are not eligible, s 53 is simply silent. In other words, this is not a situation where the substantive provision says X and the definition says "not X"; rather, this is a case where the substantive provision says "not X" (i.e. propelling a road vehicle along a public road) and the definition says "not X" and "not Y" (i.e. other off-rail activities). 20 Asciano then contends that even if there is no direct conflict and the substantive provision is silent, the silence should be construed in Asciano's favour because, had Parliament intended to confine off-road credits to purchases for on-rail use only, it could and would have done so clearly. As an example of clear Parliamentary language to that effect, it points to s 36(6) of the Act which defines "use in equipment" in marine transport and is the parallel provision to s 38(5). 21 Unsurprisingly, however, there is an equally plausible alternative construction open. "Parliament knew how to draft, and could have drafted, the provision differently if it wished to clearly include (or exclude) something"), regardless of which side advances it, is of little assistance on its own. The problem is that there is almost always a way, when considered in hindsight, that a statute could have been drafted to more clearly address a point in issue. 23 Thus an argument about ambiguity has force only when backed by a presumption of construction that such ambiguity should be resolved in a particular way. For example, if the Act were considered beneficial legislation to be broadly construed, as the pre-2003 legislation was when Dowsett J handed down Queensland Rail , I might be inclined to favour Asciano's view. However, I am now bound to follow the Full Court's decision in Ostwald that the Act is to be construed narrowly, which creates a presumption in favour of the Commissioner. 24 That is to say, if it be "the intent of the diesel fuel rebate scheme to pay rebate only on those activities that are explicitly mentioned in the legislation and not to activities that are said to be integral to, associated with or connected with these activities," ( Ostwald at [34] quoting the legislative history) then I consider it is for Parliament, not this Court, to broaden the scope of the scheme. To the extent there is any doubt as to whether off-rail activities are covered, that doubt must be judicially resolved in the Commissioner's favour because on any view it cannot be said that off-rail activities are explicitly included by ss 38 and 53 of the Act . 25 Asciano also raises a policy argument that the result (that whether a purchase for a particular use is credit-eligible turns on whether the use occurs on or off-rail) is anomalous. For example, the evidence disclosed that a train's brakes may be safety-tested by using special on-rail equipment or by using off-rail equipment (in the form of a compressor) next to the track. Asciano submits that to say that diesel fuel purchases in the first case, but not the second, would be credit-eligible is bizarre because the same activity in both cases is integral and incidental to the carrying on of Asciano's rail transport business. 26 The Commissioner's response to this argument was to acknowledge the differing result in each case but note that the legislature had to draw a line somewhere and the line might as well be based on location, which creates a bright-line rule that is easy to administer. In effect, the parties entered into the age-old debate of flexible standards versus bright-line rules. I recently dealt with this debate in White v Designated Manager of IP Australia (No. 2) [2008] FCA 816 at [44] . I do not propose to repeat the discussion in White as to the virtues and vices of each. Instead, I note two points particularly relevant to the choice in this case. 27 First, the imposition of bright-line rules is particularly apt and commonplace in the realm of taxation. Just as it would impose a crushing administrative burden to vet every 17 to 19 year old to see if they were mature enough to vote, the Commissioner would not be able to function effectively if faced with requests for rebates and credits that required application of fuzzy standards. 28 Secondly, the result in this case is not so anomalous or absurd as to require or invite judicial redrafting of the legislation: White at [18]. In fact, the legislature was well aware of the anomalies created by the imposition of such a rule but accepted them nevertheless. In the March 2003 Senate Economics Legislation Committee's report on the provisions of the Energy Grants (Credits) Scheme Bill 2003 (Cth), a submission made by Brambles Industrial Services was addressed. Brambles raised the same point now made by Asciano (at (3.27]) that "the Bill would introduced [sic] an anomalous situation [that] 'an activity is eligible or ineligible for an off-road credit based on the location of the equipment performing the function as well as the actual function itself'. " The Committee's response (at [3.29]) was that "in any legislation under which eligibility to entitlement depends upon classification, there will inevitably be definitional issues at the borderline. " In effect, the Committee's view was that a line must be drawn somewhere and it might as well be the location of the equipment, which creates a simple and easily administrable rule. 29 Finally, much was made by both sides of the Explanatory Memorandum to the Energy Grants (Credits) Scheme Bill 2003 (Cth). At times, the parties made efforts to parse the language of the Explanatory Memorandum as if it were itself a statutory instrument. It suffices to say for present purposes that I do not think so much can be made of the Explanatory Memorandum. At a broader level, the point made by Asciano was that the Explanatory Memorandum demonstrated Parliament's intent to maintain the same level of benefits in the Act as in the pre-2003 credit scheme. I accept that premise. However, the argument then proceeded that because Dowsett J found in Queensland Rail that purchases for off-rail use were credit-eligible prior to 2003, it must be the case that Parliament intended for those benefits to be preserved in the Act . 30 The flaw in this argument is that Queensland Rail was not handed down until 2006. The relevant pre-2003 provisions themselves make no explicit mention of whether purchases for certain off-rail uses are eligible for credit. Thus the knowledge that such benefits were deemed to be available under the old scheme cannot be imputed to Parliament in 2003. (The situation might of course be different had the decision in Queensland Rail been issued prior to passage of the Act , in which case it would be presumed that Parliament had taken that decision into account when passing the new legislation: Pearce DC and Geddes RS, Statutory Interpretation in Australia (5 th ed 2001) at para [3.39] and [3.40]. ) Thus it is perfectly consistent, notwithstanding Queensland Rail , to impute to Parliament the view that purchases for off-rail use were not eligible for credit prior to 2003 and that the Act would indeed maintain the same level of benefits in that purchases for off-rail use would continue to be ineligible. 31 The Commissioner adopted this latter view, submitting that Parliament was likely to be aware that such credits for off-rail activities were not available when drafting the Act . In June 2000, the Commissioner issued Excise Bulletin EB 2000/3, which stated that benefits were not available for off-rail uses of the kind now claimed by Asciano: Queensland Rail at [14]. The Explanatory Memorandum to the Act states that "[t]he [Commissioner] has released administrative guidelines on which activities are eligible for a rebate" under the marine and rail categories, but that there is no further clarification in the Customs Act and continued "uncertainty surrounding which activities are actually eligible": Explanatory Memorandum at [1.39]-[1.40]. It seems tolerably clear that the Explanatory Memorandum was referring to Excise Bulletin EB 2000/3. Two points do, however, emerge from these paragraphs. The first is that Parliament intended to align the regimes for marine and rail transport. It was conceded by Asciano that, with respect to marine transport, the location of the equipment is relevant in all cases - if the equipment is not located on a vessel, purchases for use in that equipment are not credit-eligible. In other words, para [1.41] supports the contention that given that Parliament intended to harmonise the marine and rail transport credit regimes and given that credits are not available under the marine transport regime for off-vessel activities, the better view is that credits are not (unless explicitly stated otherwise) available under the rail transport regime for off-rail activities. 34 The second point is that para [1.41] is consistent with the broader statement in the Explanatory Memorandum (at 3) that the Act was designed to make minor amendments to the existing schemes "to clarify the Government's position on certain activities. " It is also consistent with the view, now endorsed by the Full Court in Ostwald , that the benefits conferred by the Act should be construed narrowly. 35 The definitions now found in s 38 of the Act must be given effect according to their terms. Those definitions were not in the rebate scheme legislation under consideration in Queensland Rail and it follows that the decision in Queensland Rail does not govern the present case. The purchase of off-road diesel fuel for use in equipment not located in or on a rail vehicle is not entitled to a credit under s 53 of the Act even if it is used for a purpose incidental to the use of a vehicle in rail transport. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon.

whether ambiguity required in order to consult statutory purpose, context, and legislative history relationship between substantive and definitional provisions presumption that beneficial legislation be construed broadly whether legislation is beneficial presumption that, where possible, all words of a statutory provision be given some work to do rules versus standards relevance of anomalous results presumption that legislature takes judicial decisions into account when drafting statutes whether explanatory memorandum to be construed as a statutory instrument. whether purchase of off-road diesel fuel for use in equipment not located in or on a rail vehicle is entitled to a credit under s 53 of the energy grants (credits) scheme act 2003 (cth) if used for a purpose incidental to the use of a vehicle in rail transport definition of "use in rail transport". "use in rail transport". statutory interpretation taxation words and phrases

He also seeks leave to appeal from a Federal Magistrate's refusal to grant a similar injunction earlier this week. Before addressing the substantive considerations, there are two preliminary applications to consider. The first is an application for assistance as amicus curiae and the second, an application for an adjournment of his application. These reasons collect and revise three oral rulings given at the hearing. The matter that is before me today is not strictly competent. What has been filed is an appeal from a decision of a Federal Magistrate, whereas what was advised to the applicant, Mr Gamage, two days ago by the Registry of the Court was that it was necessary to file an application for leave to appeal from the decision under consideration. Nevertheless, as I have indicated to counsel for the first respondent, Mr Macliver, I propose treating the substantive application as being competent in the sense that I will treat it as an application for leave to appeal from an order refusing to grant an injunction. As will become evident in this particular case, it would follow that if such leave were granted, the injunction would also be granted. In the Federal Magistrates Court, Lucev FM delivered oral reasons for judgment on 16 November 2009, making orders including, relevantly, an order that the applicant's application for injunctive relief be dismissed. On that day, the applicant filed a notice of appeal in this Court, appealing the dismissal of the application for an injunction and seeking an urgent injunction restraining the first respondent from removing the applicant at 3.50 pm that day. In fact, the applicant was not removed from Australia on 16 November 2009 and, but for his appearance today, he remains in immigration detention at the Perth Immigration Detention Centre. Further arrangements have been made for him to be removed from Australia at 7.40 am tomorrow, 20 November 2009. In the documents filed by Mr De Alwis, to whom I will refer shortly, he has lodged a Notice of Amended Appeal with extensive grounds of appeal. (As indicated, this substantive proceeding will be treated as an application for leave to appeal from a judgment of the Federal Magistrates Court). This Court has power pursuant to s 24(1)(d) of the Federal Court of Australia Act 1976 (Cth) to hear and determine appeals from judgments of the Federal Magistrates Court, exercising original jurisdiction under a law of the Commonwealth, other than various exceptions which are not presently relevant. Such an appeal, however, against an interlocutory judgment, such as that under consideration, cannot proceed unless leave to appeal is granted. The judgment of the learned Federal Magistrate, refusing the application for an interim injunction being interlocutory, it is necessary for two tests to be satisfied, to grant leave to appeal from that decision in accordance with the principles of the Full Court of this Court in Decor Corp Pty Ltd v Dart Industries Inc [1991] FCA 655 ; (1991) 33 FCR 397. The requirements are, first, that the decision be attended with sufficient doubt to warrant its being reconsidered by the Full Court, or in this case, by a single judge, and secondly, that substantial injustice would result if leave were refused, supposing the decision to be wrong. As its written outline foreshadows, the first respondent will submit neither test is satisfied. The question is whether Mr De Alwis, formerly a legal practitioner in Western Australia, can appear as a 'McKenzie Friend' ( McKenzie v McKenzie [1971] P 33) or as amicus curiae, due to the fact that the applicant is not skilled in matters of law, nor particularly conversant with the English language. So far as language is concerned, I also record that the applicant is accompanied in today's hearing by an interpreter in the applicant's native language, and of course, it is the case in many migration matters that this procedure is followed so that applicants involved in proceedings can follow and participate in proceedings with the assistance of an interpreter, although I do note that the applicant does speak some English. As I will explain, the applicant has served a term of imprisonment for conviction on State charges relating to sexual offences. His appeal was dismissed by the Court of Appeal. In the course of submissions by Mr De Alwis, a very passing reference was made by Mr De Alwis to my previous involvement, having prosecuted on behalf of the Commonwealth. I took him to mean in relation to migration matters and I clarified with him that I could not recall having done so and I am sure that is the case. I do recall on reflection, though, having prosecuted on behalf of, as distinct from defending against, the Commonwealth Director of Public Prosecutions in relation to a company law matter in a criminal prosecution, quite some years ago. I did not take him to be referring to such matters, but that is the only matter in which I can recall having prosecuted on behalf of the Commonwealth. As indicated during the hearing, prior to appointment to the bench, over two years ago, I appeared for and against Commonwealth instrumentalities on quite a number of occasions. But the topic was not raised with me in terms of any suggestion of bias but rather on the suggested basis that I would 'understand the Commonwealth's' approach to matters. In relation to an application for leave to appear as a McKenzie Friend or an amicus curiae, the cases disclose a number of relevant principles. The principles and authorities are collected and considered extensively in a decision of the New South Wales Court of Appeal in Damjanovic v Maley [2002] NSWCA 230 ; (2002) 55 NSWLR 149. Amongst the principles which have been considered by the courts and given a variety of weight are: In relation to all those matters, quite clearly the guiding principle is the public interest in the attainment of justice and the ends of justice. As observed by the Court of Appeal of New South Wales, the public has an interest in the effective, efficient and expeditious disposal of litigation in the courts. As a general rule, this can best be achieved by the parties employing qualified lawyers, and as Gleeson CJ observed in a speech delivered to the Supreme Court of Japan in January 2000, which is also cited by the Court of Appeal, the adversary system assumes in the interests of both justice and efficiency that cases will be presented to courts by skilled professionals and to the extent to which that assumption breaks down so does the system. Another presently important consideration, in my view, amongst the many which might arise on such application, may be that in an appropriate case a legal practitioner may be ordered to pay costs. The position is far less clear in relation to a non-party advocate. There may be extreme circumstances where the conduct of a lay advocate could attract an adverse costs order, but the overall duty of a barrister or a solicitor to the court is an important consideration and the court is entitled to place reliance on that duty and expect it to be met. These points are emphasised by the Court of Appeal in the decision to which I have referred. I invited Mr De Alwis to address me on the basis on which he should be entitled to be granted leave to appear as amicus curiae in relation to this matter. In the course of that address, which lasted over an hour, he made it clear that he had not seen or read the reasons for decision of the Court below. Notwithstanding that, he had filed extremely extensive grounds of appeal (30) against the decision and that (together with their content) weigh heavily against, in my view, the desirability of his being permitted to appear as an amicus curiae. But he did address me for over half an hour in a tone which was dramatic, emotional and generalised. He spoke first as to the reasons why the criminal proceedings determined against the applicant were unfair and unjust, notwithstanding that they have proceeded to the Court of Appeal and an appeal has been rejected about 20 months ago ( Gamage v The State of Western Australia [2008] WASCA 49) and notwithstanding that an application for leave to the High Court of Australia was lodged recently, but not pursued. Although the relevance of this topic was not immediately apparent from the 30 grounds of appeal, it became evident on the substantive argument, as well as in the application for the adjournment, that the applicant seeks to restrain his deportation so that he may pursue, belatedly, an application for special leave to appeal to the High Court of Australia from the Court of Appeal's decision refusing his appeal from conviction. Mr De Alwis then addressed me at some length as to why he should not have been struck off the Roll of Practitioners, as he was over three years ago. He has indicated that he now also proposes to seek special leave to appeal to the High Court against that decision. As I say, the decision to strike him off was given over three years ago ( The Legal Practitioners Complaints Committee v De Alwis [2006] WASCA 198). Similarly he addressed me on why other decisions to suspend him from practising as a lawyer in other proceedings were unfair. I also now note and disclose on editing and revising the oral reasons that it appears from The Legal Practitioners Complaints Committee v De Alwis [2006] WASCA 198 that I sat as one of the members of the then Legal Practitioners Disciplinary Tribunal which referred the complaint against Mr De Alwis to the 'Full Bench' for its consideration in that decision, following, apparently his non-appearances before the Tribunal (in R11 of 2003). This was not raised in argument by Mr De Alwis. Mr De Alwis also addressed me for 15 or so minutes on other grounds in support of the reasons why an injunction should be granted to restrain the process which the first respondent wishes to adopt. Taking all those matters into consideration I have, at least to some extent (for about 50 minutes), had the opportunity of hearing him develop the submissions which would be advanced by him in support of the injunction application. It is quite clear that in substantial measure the submissions turn on why it is that the applicant should have his day in a personal sense to give instructions to counsel on a proposed application to the High Court for special leave to appeal from the Court of Appeal decision of March 2008. I turn now to aspects of the decision below in which a similar application by Mr De Alwis was considered by the learned Federal Magistrate. His Honour noted that the decision in which Mr De Alwis was struck off the Roll, pertained to an allegation that he had misappropriated funds from a client who was being deported. Although Mr De Alwis says that the decision was completely unfair, his Honour noted that on review of that judgment, which I have also read, it is clear that the proceedings issued by the Legal Practitioners Complaints Committee were protracted; they were adjourned a number of times over a fairly lengthy period of time, in circumstances where the practitioner sought adjournments for a variety of reasons, but ultimately he did not attend the final disciplinary hearing. When the matter came on before the Court of Appeal there were, evidently from the record of judgment, as his Honour noted, a myriad of submissions made, and when the matter came on before that court the practitioner collapsed. At the next hearing he claimed ill health and again collapsed. At the next hearing an adjournment was sought, but the court indicated that it could proceed by way of written submissions if the practitioner was unwell. The submissions were not filed but Mr De Alwis sought to have Roberts-Smith and Pullin JJA voluntarily disqualify themselves. A further hearing in a partly re-constituted court was held at which he once again collapsed. A further hearing was scheduled and he did not attend but communication was made to the court that he was in hospital. Clearly Mr De Alwis contends he has a serious health issue. The Court of Appeal, however, came to the view that as a matter of merit the breach was so serious as to demonstrate unfitness for further practice which was also demonstrated by the manner in which he had participated in the disciplinary proceedings themselves. Section 203(1)(b) of the Legal Practice Act 2003 (WA) provides that a legal practitioner who has been struck off the role or suspended from practice is prohibited from representing a person, in amongst other places, a court. Although, as Mr De Alwis correctly stresses, this does not automatically preclude his proposed role as amicus curiae or a McKenzie Friend). The question for consideration and before the learned Federal Magistrate was whether representation should be permitted, pursuant to the Court's discretion, in circumstances where assistance is provided as amicus curiae or a McKenzie Friend. It was noted below, and it is the case, as I have also read the decisions, that there have been a number of Western Australian cases (including one in the Supreme Court and one in the District Court) in which Mr De Alwis' application to appear in a similar capacity has been refused. In argument before me Mr De Alwis spoke on cases in which leave had been granted. Mr De Alwis also focussed on cases in which he had enjoyed success, particularly in the area of migration matters and invited me to infer from that (and the unfairness of his striking off) that I would be assisted by his involvement in this matter. But I am inclined to the conclusion, as his Honour in the Court below was, that it is inappropriate to have a person appear as a friend of the Court in a matter of this type, which is a migration deportation matter when the person was struck off the Roll of Practitioners for his conduct (misappropriation of funds) in a similar type of matter. To do so would be contrary to the statutory purpose evident from the Legal Practice Act . I also take into account the 30 grounds of appeal in the Amended Notice of Appeal. They were drawn by the applicant's brothers, lawyers in Sri Lanka, but Mr De Alwis filed them and seeks to become a party to the 'Appeal' himself. I address the content of those grounds later in my reasons. They were filed before Mr De Alwis had seen his Honour's draft reasons. This case does not fall within the exceptional class of case in which such leave may be permitted. The Court has a wide discretion in such applications. I do not consider that the involvement of Mr De Alwis will be of assistance or in the interests of justice. For those reasons I do not propose to grant Mr De Alwis leave to appear in the capacity sought in this matter and accordingly I will now continue with the substantive application. I am now worried that I will be deported before I can prove my innocence. I have spent my full term of imprisonment. I am in detention for over three months now. This case involves so much of complex legal issues. I cannot handle them. It raises many complex questions of law. I can't understand any of them at all. Its only then that this court can deliver Justice in this case. This case involves a very unique question about my being defended by a lawyer who I had asked not to defend me. Mr. Vickridge forced himself and he sent me to jail as he said would happen. I must prove that. I must get an opportunity to do that. They were taking drugs-Cannabis, Speed, Ice and various other things. I told them that they must not visit others after coming to my place. I was shocked when they made several telephone calls and two men came and gave them prohibited drugs. They gave evidence and said that what they smoked was Cannabis. But Jeff and Clint who supplied them never came to court! They may have given anything. Police never investigated that aspect at all despite my asking them to do. Mr. Vickridge-my lawyer refused to ask any questions about that at all. I have a lot of things to say, Your Honour. If I get a lawyer I will say all that through him. I was acquitted of the charge about sexually penetrating Y I never touched any of these two complainants at anytime at all. (The names of the complainants --- which in any event had apparently been reversed --- have been replaced with X and Y in these reasons). My case against the cancellation of my student visa is to be heard on the 4 th December 2009 by the Federal Magistrate's Court. The Federal Magistrate refused only the Injunction. The main case is still pending. AGS has taken a Criminal Justice Visa for me when my application to the High Court was filed earlier . It had been cancelled after it was deemed abandoned-a few days earlier than it should have been done. P 41/09 was accepted for filing? I am unable to understand, Your Honour. I am waiting to get a date for the Hearing. I cannot give instructions to my lawyers or appear from Sri Lanka. The focus is on the proposed special leave application to the High Court on the criminal convictions. The suggestion appears to be that if an injunction is not granted to restrain the deportation, neither the Federal Magistrates Court appeal nor the High Court special leave to appeal can be pursued. (The considerations for today's application are neutral to the claimed innocence). The first respondent opposes the application for an adjournment on a number of grounds. The first ground raised by the first respondent was that arrangements are already in hand, having been deferred once for the transportation of the applicant back to Sri Lanka tomorrow morning. I do not regard that ground as being highly relevant or persuasive because clearly the interests of justice are the most important consideration. If that were the only consideration, I have no doubt that the first respondent would accede to the Court's suggestion or requirement that arrangements might be made to defer the departure. It is then pointed out that, of course, the applicant does not hold a visa and that the Migration Act 1958 (Cth) (the Migration Act ) actually requires his removal if he does not hold a visa, that being a statutory requirement of the Parliament of Australia. The applicant's last visa expired some months ago. But this also would not prevent a short adjournment. Next and perhaps more importantly, to the extent the applicant relies on the argument that he needs assistance to run the substantive hearing appealing from the decision of the Migration Review Tribunal (the Tribunal), the first respondent argues that any outcome of that decision will not change the visa position because the visa would have expired at the same time as the decision to cancel it was made in any event. From this it also follows, it is argued, that there is no balance of convenience issue or interest of justice issue requiring a further adjournment of this proceeding, if the adjournment application were granted, to enable, in turn, a lawyer to be provided to assist in running the substantive matter before the Federal Magistrate. The first respondent also points to the fact that the applicant must have known that he would need a lawyer today, if that is indeed his position. It is, after all, his application. He must have known that Mr De Alwis was not a lawyer and he knew from events earlier in the week that the representation by Mr De Alwis was rejected by the Federal Magistrate. In broad terms he would have known why that was so because of the exchanges which occurred in the hearing. Yet no, or no effective steps to procure legal representation are in evidence. It was said by Mr De Alwis in his submissions that extensive steps have been taken to try to get a lawyer. But that does not really support an adjournment for further attempts to be made. Rather, it is consistent with lack of enthusiasm for providing representation. On this aspect I do not have the power to order legal aid funding or to issue a visa. As to the latter, it would seem doubtful a criminal justice certificate (State) would issue. Further, the precious resources available for an Order 80 certificate for a pro bono practitioner should be reserved, in my view, for arguable cases. In any event a certificate under O 80 does not guarantee that a practitioner will be willing let alone be obliged, to take the brief. In that regard, the applicant's primary reason is connected with the argument which has been advanced strenuously in the course of the proceedings today in relation to the alleged injustice concerning his conviction in the District Court and on appeal. In particular, he argues that he needs a lawyer to assist him with advancing the special leave application against the Court of Appeal decision and, of course, to argue the appeal before the High Court if special leave is granted. The applicant stresses the point that his particular application is not only one driven by complete innocence of all charges but also involves 'a very unique question' about his being defended by a lawyer who he had asked not to defend him and one who 'forced himself' on him. I must say that complaints about defending legal aid and other counsel after convictions are not, as suggested, novel let alone 'very unique'. Regrettably those forms of arguments appear only too often but do not usually enjoy great success. As to this the Court of Appeal has canvassed in some detail the points which were previously raised on this topic and delivered extensive reasons in relation to the rejection of the appeal. I note in particular, the President's reasons at [3], [11] and at [50] where his Honour said: The trial before a jury was listed to commence on 27 November 2006. The trial was to be presided over by Martino DCJ. At the time the appellant was represented by Mr Geoffrey Vickridge. He was the fourth lawyer to have represented the appellant in respect of the charges against him. The appellant had dismissed each of the other three lawyers. However, Kennedy CJDC ordered that the appellant should appear before the court on 6 February 2007 in order to provide further medical evidence concerning his condition. There had been no adequate explanation for his attempt to dismiss his counsel and adjourn the second trial only days before it was due to commence. Mr Vickridge (who, as I have said, was the fourth counsel retained by the appellant) had represented the appellant at the hearing of the pre-recorded evidence, as the trial judge mentioned. No complaint was then made concerning his conduct. Nor was any complaint made until the appellant's trial was imminent. Next, it seems that, when the appellant's application for an adjournment was refused by the trial judge on the first day of the second trial, he injected himself with an opiate substance on the following day, so as to make it impossible for him to follow the proceedings. (emphasis added) It was almost 20 months between the judgment of the Court of Appeal on 4 March 2008 and the filing of the latest application for special leave to appeal, the first one, shortly after the applicant's release from prison having lapsed. During the same time the criminal justice visa also lapsed in August and, although I am told steps have been taken by the applicant to request it to be extended in conjunction with the current or prepared application for special leave to appeal to the High Court, there is no cogent or admissible evidence on that point and no assurance at all that any such certificate or visa would be granted, simply because there has been a very belated special leave application. I note also from review of the materials that there were many delays in the prosecution of the proceedings before the Tribunal and, in particular, there are comments in the judgment of the Tribunal at [21] and [54] in relation to an extension of time sought before the Tribunal and the submissions provided by Mr De Alwis. The Tribunal observed the document included a verbose and detailed affidavit by Mr De Alwis describing and complaining about the circumstances of his being stuck off but the document did not purport to be a response required by a Tribunal to the s 359A and s 359(2) letter of invitation sent by the Tribunal. Then a month later almost, the Tribunal noted at [54] that it had finally received a batch of documents from Mr De Alwis accompanied by another request for an extension of time. The Tribunal concluded, and the learned Federal Magistrate was also of the view, that none of the documents was relevant to either of the matters raised in invitations from the Tribunal of 25 August 2009 or 9 September 2009. The tribunal's offer to provide a document which it was not obliged to supply or its preparedness to grant repeated extensions of time in which to respond to formal invitations from the tribunal. (sic) The court observes that there were at least four extensions of time at the request of the applicant or his authorised representative often in the face of failure to meet pre-existing deadlines. The applicant's allegation of bias has not been made out. The court turns now to grounds 3 and 4 and 13 and 14, which go to issues of fairness of the hearing and procedural fairness. These dates are well outside the period in which the non-compliance occurred. The applicant has provided no evidence despite given ample opportunity to do so that supports his claim that he was charged with a number of serious criminal matters in mid 2005. The central issue before the tribunal was the question of fact as to whether or not the applicant was enrolled in the relevant studies in the relevant course in the second semester of 2005. The tribunal found that on the evidence, he was not so enrolled. The central question then became whether there were exceptional circumstances justifying the non-enrolment. In essence, the applicant argued that he was unable to enrol because of various medical problems and serious criminal charges. It is unnecessary to repeat the facts which are set out in the tribunal's judgment at paragraphs 40 through to 55. It is sufficient to note that there were at least four extensions of time over a period of about a month on the basis of the alleged inability of the applicant's authorised representative to appear because of ill health and default in respect of earlier extensions of time granted by the tribunal. It is clear that the applicant was extended the relevant invitations to provide information under sections 359 and 359A of the Migration Act . That he was granted multiple extensions of time and that he failed to provide any relevant documents and any documents at all in relation to the criminal charges, and the court refers to paragraphs 55 and 60 of the tribunal's decision. That led the tribunal to find that there was no evidence produced by the applicant of exceptional circumstances at the relevant times. Those circumstances led the tribunal to make the observations it did at paragraphs 60 and 61, which have already been set out. There were factual findings made by the tribunal after due and proper inquiry and process afforded to the applicant. Whether cases are adjourned or witnesses summoned were matters for the tribunal. If indeed the tribunal did refuse to adjourn as asserted and refused to summon a witness, that is hardly surprising given the lack of evidence after numerous extensions of time in relation to the relevant dates. The court therefore does not consider that there is a serious issue to be tried in relation to grounds 3, 4, 13 and 14. So also, with the proposed and considerably delayed challenge to his criminal convictions which would coincide with his changed visa status. The Court of Appeal (at [53]) found assertions by him as to his unfitness to be 'untrue'. The applicant adopted the grounds of appeal prepared by his brothers who are lawyers in Sri Lanka and filed by Mr De Alwis and having done so, his application for an injunction is supported at least by way of argument in those grounds and his affidavit. Further, I have had the opportunity of hearing Mr De Alwis address issues which would go to the granting of an injunction. I have taken into account those arguments. Declining this adjournment would not, in any event, preclude the applicant seeking an adjournment of the substantive application in the Federal Magistrates Court to obtain legal representation or for other reasons. Declining this adjournment application has the result only that the urgent application he has brought should indeed be dealt with urgently as requested. Many applicants in this Court appear without legal representation but at least this applicant has had some assistance, both from his brother and Mr De Alwis and there has been a very considerable delay not only in his criminal hearing but more specifically in the finalisation of all of the matters connected with his visa status. I am unpersuaded that additional time and expense is in the interests of justice. In the circumstances, I do not propose to allow the application for an adjournment and I will hear now any argument in relation to the relief which is presently sought. An URGENT order releasing the Applicant from detention with immediate effect. Order to set aside the Orders made by the honourable Federal Magistrate Ludev (sic-Lucev) on 126 th (sic-16 th ) November 2009. Order setting aside the orders that Mr. De Alwis pay the costs of the Respondents; Order setting aside the order that the Applicant pay the costs of the First Respondent. Order to expunge from the record/file all the unfair and unwarranted comments that are unfounded, derogatory, libellous, slanderous, and extremely unfair allegations against Mr. Vijitha (Viji) De Alwis made by his honour Federal Magistrate Ludev (sic-Lucev). ' The proceeding was brought by a document entitled 'Notice of Appeal'. It has been replaced by an Amended Notice of Appeal and the urgent orders that I have referred to accompany the Amended Notice of Appeal. I have indicated earlier that the proper course is to proceed with an application for leave to appeal, because the decision of the learned Federal Magistrate was an interlocutory decision. I only propose dealing, at this stage, with the urgent application for an injunction restraining the first respondent from removing the applicant from Australia and the application for leave to appeal from the Federal Magistrate's decision refusing to grant such an injunction. I will deal with the application for leave to appeal because the outcome of that will be relevant to the outcome of any application for an injunction. The relief which is sought urgently is supported by an affidavit of the applicant sworn on 17 November 2009 which I will not read out in open court in full but essentially deals, for the first 20 paragraphs, with the problems surrounding the criminal convictions and the proposed application for special leave to appeal to the High Court in relation to them. It also speaks of the appeal from the Tribunal decision pending in the Federal Magistrates Court, the prejudice to him if he cannot pursue it and the lack of prejudice to the respondents if the Court restrains the first respondent from removing him from Australia. He describes the circumstances in which he was taken to the airport while the oral reasons of his Honour's judgment were being given by his Honour. I note that those circumstances are recorded by the Federal Magistrate in his reasons for decision where his Honour was rightly very critical of the process by which the applicant was being removed in the course of the reasons being delivered. The learned Federal Magistrate was correct to raise that criticism of the officers representing the first respondent in the circumstances. I note that today the applicant remained in the Court throughout the proceeding, including oral delivery of reasons at three points. But it is necessary to go beyond the applicant's affidavit to complete the picture and to trace the history of this matter with more precision. For about the last ten years the applicant has lived in Australia. He is a citizen of Sri Lanka and arrived in this country on 28 January 1999. He first held a student visa which was valid until 17 January 2001. He lawfully remained in Australia until 8 March 2006 and this was because he had been granted a Bridging visa and further student visas. The final visa was granted to him on 6 October 2004. The validity of that visa continued until 8 March 2006. That is a key date because on that date his student visa was also cancelled by a delegate of the first respondent under s 116(1)(b) of the Migration Act . The reason for the cancellation was that it was alleged that the applicant had failed to comply with a condition of the Regulations which requires the visa holder to remain enrolled in a registered course of study during the currency of the visa. At that stage, the delegate had reached the conclusion that the applicant was not enrolled in any course of study during the second semester of 2005 and for that reason was not complying with the terms of the student visa. A few days later, on 14 March 2006, the Director of Public Prosecutions for the State of Western Australia (DPP) issued a criminal justice stay certificate pursuant to s 148 of the Migration Act in respect of the applicant as a result of his being charged with two counts of indecent dealing with a child between the ages of 13 and 16 years and two counts of aggravated sexual penetration without consent. The day after that, the applicant was granted a criminal justice stay visa (s 157 of the Migration Act ) to permit him to remain in this country for the purpose of the criminal proceedings being prosecuted and to serve any period of imprisonment, if he was convicted. On 4 March 2008, the Court of Criminal Appeal in Western Australia dismissed the applicant's appeal against his conviction in the reserved decision to which I have referred. On 31 July 2009, that is about fifteen months after the criminal appeal had been dismissed, the DPP cancelled the criminal justice stay certificate in respect of the applicant in conjunction with his release from prison. Under s 164 of the Migration Act , it followed that the cancellation had the effect of cancelling his criminal justice stay visa. After that visa had been cancelled, it also followed automatically that the applicant became an unlawful non-citizen as defined in the Migration Act and he was, as s 198 of the Migration Act requires, to be removed from Australia. He was taken into immigration detention for the purpose of that removal from Australia. The applicant's affidavit suggests he has been in immigration detention for three months. During this time, amongst other things, the Tribunal application was being pursued and determined. On 7 August 2009 the applicant lodged the application with the Tribunal in respect of the decision which had been made much earlier, on 8 March 2006, to cancel his student visa. The Tribunal made a decision in relation to that application on 19 October 2009. It affirmed the decision to cancel the student visa. In the meantime, on 17 August 2009 the applicant finally lodged an application with the High Court for special leave to appeal from the dismissal of his appeal from his criminal conviction ( Gamage v The State of Western Australia [2008] WASCA 49). The High Court Registry wrote to the applicant on 14 September 2009, advising him his application for special leave had been deemed abandoned because it failed to comply with the necessary requirements. The applicant says that he has now lodged a further application for special leave to appeal, together with an application for an extension of time in which to make such application. On 12 November 2009, he filed an application in the Federal Magistrates Court seeking review of the Tribunal's decision on 19 October 2009. On 13 November 2009, officers of the Department of Immigration and Citizenship made arrangements for and notified the applicant of his intended removal from Australia as an unlawful non-citizen on 16 November 2009 at 3.50 pm. Last Saturday, 14 November 2009, the applicant made an application to the Federal Magistrates Court seeking an order restraining the first respondent from deporting him until further orders of the Court. That injunction application was heard three days ago by Lucev FM. His Honour delivered oral reasons in the afternoon of the same day, making orders including, relevantly to this proceeding, an order that the applicant's application for injunctive relief be dismissed. A notice of appeal was filed by the applicant in this Court on the same day, appealing the Federal Magistrate's order and seeking this urgent injunction restraining the first respondent from removing the applicant that day. Pending hearing of this application, the applicant was not removed from Australia on 16 November 2009 and has remained for the last three days in immigration detention at the Perth Immigration Detention Centre. I am informed that further arrangements have been made for the applicant to be removed from Australia tomorrow, early in the morning, unless this application is granted. There are very extensive grounds lodged in support of the Amended Notice of Appeal. I am told by Mr De Alwis - and the applicant agrees with him - that the grounds were drafted by the applicant's brothers, lawyers from Sri Lanka. Mr De Alwis has filed the Amended Notice of Appeal setting out those grounds. In the published version of these oral reasons, I will repeat the 30 grounds in full. Court unfairly held that the Applicant could prosecute his Application and appear in Person at the Hearing of the Application for an Urgent Application for an Urgent Injunction to prevent his removal from Australia Court unfairly held that no prejudice was caused to the Applicant by the refusal of his application that leave be granted for Mr. De Alwis to assist him as amicus curiae or as McKenzie Friend Court unfairly held that because Mr. De Alwis had been refused leave to assist other litigants, the court must not grant leave for this Applicant. Court unfairly and without basis held that granting Mr. De Alwis leave to assist the Applicant as amicus curiae in this case will cause hindrance Court unfairly and without sufficient basis held that refusing to grant Mr. De Alwis leave to assist the Applicant as amicus curiae or as McKenzie Friend will not cause any disadvantage to the court in disposing justice Court erroneously and unfairly held that Mr. De Alwis' does not have the necessary knowledge, experience and skill to assist the Applicant Mr. Gamage. Court unfairly. Applicant was entitled to an adjournment an application by the applicant for an adjournment Court unfairly and erroneously held that the Applicant had no substantial visa even if the court sets aside the decision of the Migration Review Tribunal Court erroneously held that the First respondent Minister is able to deport the Applicant even whilst his Application for Special Leave to appeal to the High Co0urt (sic-Court) is pending. Court erroneously held that the First respondent Minister is able to deport and remove the Applicant and that there is nothing to prevent the First Respondent from removing the Applicant from Australia even whilst his Appeal ag89nst (sic-against) the Decision of the Migration Review Tribunal is pending. Court erroneously held that Australia was not violating its International Obligations by a friendly country that is also a signatory to the Universal Declaration of Human Rights and the International Convention on Civil and Political rights and its Protocol that guarantee the members of the signatory countries to observe the provisions of the Articles in those International Conventions. Australia and Sri Lanka are both signatory countries and both countries have ratified and passed legislation incorporating the provisions of both International Conventions accordingly and relevantly. Court unfairly and in violation of International law denied the Right the Applicant has to interpretation. Court unfairly and in violation of International law denied the Right the Applicant has to a Fair Hearing. Refusal to grant an adjournment caused grave prejudice to the applicant and gave an unfair advantage to the Respondents Hearing was only for an Order for an Injunction but the court unfairly and unwarrantedly advanced the Hearing of the Applicant's Appeal against the Decision of the Se4cond (sic-second) Respondent that affirmed the Decision of the First Respondent's Delegate to cancel the Student Visa of the Applicant on the 2 nd March 2006/ (sic-. ) Court erroneously held that the applicant can appear from Sri Lanka to prosecute his Application for Special Leave to Appeal to the High Court Court erroneously held that the applicant can appear from Sri Lanka to prosecute his Appeal ag8isnst (sic-against) the Decision of the Migration Review Tribunal to the Fedfe5ral (sic-Federal) Magistrate's Court the same court) Court erroneously held that no prejudi9ce (sic-prejudice) will be caused to the Appellant by being deported Court erroneously held that no denial of Right the Applicant has to prosecute his Appeal to the court and to ---prosecute his Application For Special Leave to Appeal will be caused if the court refuses the Application of the Applicant for an URGENT Injunction to prevent his Removal/Deportation Court erroneously held that on a Balance of Convenience the Application for an urgent injunction must be refused. Court conducted the proceedings in the absence of the Honourable Magistrate in court. It caused a grave miscarriage of Justice and a denial of the Applicant's Right Court conducted the proceedings in the absence of the Applicant in court. It caused a grave miscarriage of Justice and a denial of the Applicant's Right Court had the Interpreter participating via telephone link only. It caused a denial of the full and the complete Right that the Applicant has to Interpretation and caused a disadvantage to the Applicant. It caused and resulted in a grave miscarriage of Justice. Court conducted the proceedings whilst the Applicant was at the Perth International Airport. It was a denial of his Right to be present in court Court conducted proceedings whilst the Applicant was in a Room at the Perth International Airport. It breached his Right to be heard in a court room away from a Public place. Court delivered judgment whilst the Applicant was at the Perth International Airport. It caused extreme stress to the Applicant and caused a miscarriage of Justice. Applicant did not have access to the Interpreter directly as he was interpreting from an unknown palace (sic-place) unseen by the Applicant. It was an unfair use of Modern Technology to defeat the Right of the Applicant. Court unfairly allowed the Department of Immigration Security Guards to remove the Applicant from court before the court delivered the Judgment and the orders on his application for an urgent injunction against his removal from Australia. Court was biased against the Applicant and Mr De Alwis. Hearing was attended by perceived bias and probably by Actual bias. ' It may be said that the grounds fall within certain brackets. Those brackets are first (1-8), essentially, dealing with the complaints that Mr De Alwis was not permitted to appear to assist as amicus curiae, or as a McKenzie Friend. I have dealt today with a similar application and have rejected that application on similar grounds. It follows that I am not satisfied that there was, in relation to those grounds, sufficient error or sufficient doubt to warrant the matter being reconsidered. I treat ground 1 as falling within that bracket as the only material that might be considered 'extrinsic' is the judgment of the Full Court of the Supreme Court of Western Australia concerning Mr De Alwis. That 'material' is not 'privately acquired'. It is a matter of public record and directly pertinent to the discretion of the Federal Magistrate. It is 'material' which has (until now) remained unchallenged by Mr De Alwis. There is, then, a grouping of grounds challenging the power of the Minister, principally the power of the Minister to exercise the requirements under the Migration Act in circumstances where court proceedings are being pursued within Australia (11 and 12) Again, I am not satisfied that those grounds have merit or that there is sufficient doubt to warrant them being reconsidered. There is no principle of law requiring the Minister or the Department to refrain from, or excusing the Minister from exercising powers, or discharging obligations under the Migration Act simply because proceedings have been issued. Were that otherwise, the ongoing repeated institution of proceedings would be a convenient device to defeat the prescriptive requirement of the Migration Act . There is a grouping of grounds dealing with Australia's obligations under international law (13, 14 and 15) (to which Mr De Alwis also spoke) but they are advanced at such a level of generality, it is impossible to identify any basis on which such grounds could fall within the category of warranting being reconsidered by the Court or demonstrating any error. Nor is it clear to me that they were grounds advanced below or considered in any detail in the decision which is being challenged. There are grounds challenging the refusal of the learned Federal Magistrate to grant an adjournment (9 and 16). I have also refused such an application and given grounds. It follows that I cannot be satisfied that the Federal Magistrate was in error in refusing to grant an adjournment. Another grouping of grounds deals with what might broadly be said, balance of convenience issues and prejudice issues (10, 18, 19, 20, 21 and 22). I will consider the question of balance of convenience generally at the end of these reasons, as the second limb of the injunctive test. There are grounds dealing with procedural fairness (17, 23, 24, 25, 26 and 27), which appear to contend that the proceedings in the Federal Magistrates Court were conducted with the absence of the applicant in Court. The true position was that the applicant was present during argument (see his Honour's reasons at [18]) and that it was only in the course of the subsequent delivery of reasons that the applicant was present in a room at the Perth International Airport. It is true and it is raised in grounds 28 and 29) that to the extent that the applicant was removed, listening to the delivery of reasons by mobile phone, this was unsatisfactory. The learned Federal Magistrate has expressed his concern about that process and the steps that he proposes taking in relation to it. I need say no more. Those shortcomings do not fall within the category of raising sufficient doubt as to the judgment itself to warrant its reconsideration. They were not circumstances within the control of the Court and when the Court became aware of what was happening, expressed its considerable concern. To demonstrate bias involving pre-judgment, the applicant would need to show that Court had a closed mind to the issues raised and was not open to persuasion by the case advanced for the applicant. The Court is entitled to form a strong adverse view and no inference of bias can be drawn from the mere adverse findings reached by the Court: VFAB v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 872 ; (2003) 131 FCR 102. The question to ask in relation to bias is whether by its mental state the decision-maker has disabled itself or become unwilling to have regard to other relevant considerations. The onus in order to establish bias lies on the applicant and it is a heavy onus: Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17 ; (2001) 205 CLR 507. It is well established that such allegations must be distinctly made and clearly proven. It is not easy to prove actual bias and it is a rare case in which it will be established on the basis of the reasons alone: SCAA v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 668. As to apprehended bias, which is also included in ground 30 with the handwritten notes of the appeal, the test is whether a hypothetical fair minded lay observer who is properly informed as to the true nature of the proceedings and the matters in issue and the conduct of the Court or Tribunal may, apprehend that the Court or Tribunal might not bring an impartial mind to the resolution of the question to be decided: Re Refugee Review Tribunal; Ex parte H [2001] HCA 28 ; (2001) 75 ALJR 982. In this case there is no evidence, no particulars and no proper indication on which any fair minded lay observer properly informed as to the nature of the proceedings, the matters in issue and the conduct of the Court might reasonably apprehend that the Court would not have brought an impartial mind in determining resolution of the application for an injunction. Nor does any fair reading of the decision disclose a lack of honest or genuine attempt by the Court to make an objective decision in relation to the matter which was before it. In relation to those grounds, I do not consider that there is sufficient doubt to warrant the decision being reconsidered by this Court. The question of costs has also been raised as a ground of appeal. Insofar as the costs of the proceeding before the learned Federal Magistrate, the applicant has orally raised the point before me in relation to costs of this application, that having been in prison he does not have the capacity to meet an order for costs. That may well be so and the fact that he may be leaving Australia in the near future may certainly bear on the practical capacity for a costs order to be met. That does not, as a matter of principle, mean that the ordinary principle of costs following the event should be departed from in the circumstances of the hearing below. They do not satisfy the first limb of the Decor Corp test. Nor do they disclose a seriously arguable case to warrant granting the injunction sought. In particular, the Tribunal's decision to affirm the decision made on 8 March 2006, even if set aside, would not revitalise the visa of the applicant. It cannot be said that the balance of convenience favoured an injunction being granted as the student visa was to otherwise expire on that date in any event. Even if the cancellation decision were set aside, that would have no effect on the applicant's current status as an unlawful non-citizen who is required to be removed from Australia pursuant to s 198 of the Migration Act . That latter consideration also bears strongly on the secondary test in Décor Corp , as to whether the refusal of leave would result in substantial injustice if the decision were wrong. In relation to the listed Tribunal hearing, and in relation to the High Court proceedings, an unlawful non-citizen has no legal right to be present in Australia, merely because he or she has or has (belatedly) chose to initiate legal proceedings. Further, as his Honour correctly observed in his judgment, (at [35]-[37]) the applicant's presence is not required either for the application in the Federal Magistrates Court or for the application for special leave, or were special leave granted (should it proceed) for the appeal in the High Court. I am told by the first respondent, however, that it is not, in any event, inconceivable that viable arrangements might be negotiated in relation to that final leg, if that leg is ever reached. If an appeal to the High Court were to proceed, it would be at a substantial point in time from the present. For all those reasons, I am not satisfied that an interlocutory injunction should be granted. The urgent application for an urgent injunction and the urgent application for leave to appeal from the decision of the learned Federal Magistrate will each be refused. Therefore, the orders will be: The application for an injunction to restrain the first respondent from removing the applicant from Australia be dismissed. The application for leave to appeal from the refusal by Federal Magistrate Lucev to grant an injunction to restrain the first respondent from removing the applicant from Australia be dismissed. The applicant is to pay the costs of the first respondent, to be taxed if not agreed. I certify that the preceding one hundred-one (101) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

urgent injunction application to restrain imminent deportation application for leave to appeal from refusal to grant similar injunction 3 days before in federal magistrates court injunction

Those reasons dealt with relief in relation to liability found earlier ( A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2007] FCA 1047 ; (2007) 165 IR 94). The question of costs was reserved. The orders were varied by consent on 29 May 2008. Written submissions have been received as to costs. These reasons deal with that issue and assume familiarity with the previous judgments and orders. 2 The first applicant seeks an order for costs of the claims for damages upon which it succeeded pursuant to s 82 of the Trade Practices Act 1974 (Cth) against the third to fifth respondents for acting in contravention of s 45D of the Trade Practices Act and the first and second respondents for being knowingly concerned in the contravention of s 45D. The respondents submit that such an order would be inconsistent with the decision of the Full Court in Goldman Sachs JBWere Services Pty Ltd v Nikolich [2007] FCAFC 120 ; (2007) 163 FCR 62 because of the effect of s 347 of the Workplace Relations Act 1996 (Cth) as it was applicable to this case (now s 824) or at least that there is a necessity to "enter the murky waters" of an inconsistency between that decision and Bahonko v Sterjov [2008] FCAFC 30. I do not agree. Bahonko [2008] FCAFC 30 establishes that a discrete federal claim is not affected by the restrictions on the award of costs in the Workplace Relations Act . This was a discrete federal claim (cf Thompson v Big Bert Pty Ltd [2008] FCA 792). However, full operation must be given to the effect of s 347 by ensuring that costs in relation to the discrete federal claim would only be awarded where those costs do not overlap with costs incurred in relation to the Workplace Relations Act claim. 3 There is another complication. The s 45D claim also overlapped with a claim in tort for inducing breach of contract. However, that claim is properly seen as associated with, or accrued in relation to, the Trade Practices Act claim rather than the Workplace Relations Act claim. Thus, Goldman Sachs JBWere Services Pty Ltd v Nikolich [2007] FCAFC 120 ; 163 FCR 62 is not applicable to it. 4 There is another complication. Each applicant had discrete claims for relief. The claims by the first applicant were claims for damages. The second applicant brought claims for penalties for breach of the Workplace Relations Act . Neither applicant had any concrete interest in the claims of the other. The respondents objected to joinder. Joinder was permitted ( A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2005] FCA 1658 ; (2005) 226 ALR 247 at [6] ---[12]). It was noted that the joinder of the causes of action complicated the long standing costs regime reflected in s 347 of the Workplace Relations Act . The joinder is convenient for the applicants and liability for costs is one of the prices to be paid for that. 5 However, the respondents submit that, as the one set of solicitors and counsel was retained for the several applicants (as had to be the case), it cannot be said that the first applicant incurred any liability for costs in relation to the proceeding. I do not draw that conclusion. I do not know what arrangements existed between the applicants. Even if there were a private arrangement by which one applicant rather than another agreed to bear costs, that would not have any significance ( Inglis v Moore (No 2) (1979) 25 ALR 453). The fact that a third party is involved in funding the costs of a party would not normally have any significance in relation to an entitlement to an order for costs by the party. The fact that one applicant is publicly funded does not alter the situation in principle. 6 Another matter raised by the respondents is the effect of s 45DC and s 84(2) of the Trade Practices Act . The effect of these provisions was raised late against the first and second respondents. It is submitted that there would need to be an adjustment of costs against the first and second respondents on that account. It was also submitted that the third, fourth and fifth respondents should have the benefit of an order for costs as they are protected by s 45DC(4) from payment of damages for breach of s 45D. I do not accept the effect of those arguments. The substance of the case had to be defended. There was only one set of costs involved in doing so. The provisions in question were only relevant to which of the respondents would be liable if the substance of the case was established, as it was. The protection afforded by s 45DC(4) is from the payment of damages only. The finding of breach remains. In my view, the appropriate result is that there be no order either way as to the costs relating to the third, fourth and fifth respondents. I can see no proper basis for relieving the first and second respondents of payment of the costs of the first applicant in relation to the s 45D claim. 7 Thus, in my opinion, the first applicant is entitled to an order against the first and second respondents for those costs attributable to the s 45D claim, which would not have been incurred in pursuing the Workplace Relations Act claim. In practical terms, these can be identified as being the costs associated with proof of damages. In my opinion, the other elements of the cause of action were inextricably entwined with the Workplace Relations Act substratum of facts. That overlap, after all, was the basis for permitting joinder in the first place. The first applicant should have the costs of the argument as to costs. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

where workplace relations claim and discrete federal claim where joinder of two applicants with separate claims costs

The application is brought pursuant to ss 588G and 588M (2) of the Corporations Act 2001 (Cth) ("the Act"). The effect of ss 588G and 588M(2) is that a company's liquidator can recover from a director of the company loss and damage suffered by creditors of the company where: the director failed to prevent the company from incurring debts due to those creditors of the company; at the time the company incurred the debts the company was insolvent or became insolvent by incurring the debts; at that time there were reasonable grounds for suspecting that the company was insolvent or would so become solvent; the director was aware at that time that there were such grounds for suspecting that the company was insolvent or a reasonable person in a like position in a company in the company's circumstances would have been so aware. Alternatively, the Company became insolvent during the relevant period by incurring the debts. (This allegation was not developed at the trial. Mr Carroll has been a director of the Company since its incorporation. Until 2004 the Company was a successful, profitable company which operated a business of processing and wholesaling raw timber. It operated a sawmill at Mansfield and had an office in Richmond. Its business consisted of purchasing green timber saw logs which it milled at Mansfield to make unseasoned timber, stakes and flooring materials. It sold the stakes directly to wholesalers and end-users of stakes. Its principal customers included Bunnings, Neville Smith Timber Industries, Tait Timber, Sevron Environmental Contractors, Melbourne Water, local councils and contractors. The Company sold its rough sawn timber to other mills which had the capacity to dry and machine the timber prior to usage. Green timber is milled from timber which has been freshly cut and partly or wholly air dried. It has more limited uses than timber which has been kiln dried. Until 2004, the Company had no kilns and no capacity to dry timber other than by air drying. Stakes did not need kiln drying so the Company could sell them directly to wholesalers and end-users. By the late 1990s the Company had leased an established mill site in Mansfield. The mill site had a large log yard which allowed the Company to cut green timber which could then be racked out and hessian wrapped for air drying, awaiting sale. In 2001 the Company varied its lease of the mill site to increase the size of the site and in April 2004 the Company obtained a further increase in the size of the leased premises. During this period the Company also expanded its capacity to cut saw logs. Towards the end of 2003 Mr Carroll saw that the opportunity would soon arise to expand his production of sawn logs through the State Government's proposal to auction future log licences over the internet which would enable him to obtain more logs and of a better grade. Mr Carroll conceived a plan to capitalise on the expanded production capacity of the Company's Mansfield mill, and the opportunity to obtain a much larger and better log quota. The plan was that the Company would purchase plant and equipment to enable it to kiln dry and machine its own timber rather than be limited to on-selling green rough cut boards. This involved the Company obtaining an injection of capital in order to be able to afford an expansion into kiln drying. Around October 2003 Mr Carroll was introduced to Mr Tom Cameron who was looking for an interest in which to invest. In November 2003 an agreement was reached between Mr Carroll and Mr Cameron whereby Mr Cameron's trust, The Cameron Family Trust, acquired a 45 percent interest in the Company by way of an issue of shares for $1 million and made a three year loan of $250,000 to the Company at 7.5 percent per annum repayable in January 2007. According to Australian Securities and Investments Commission records, shares were not issued to Mr Cameron as trustee of The Cameron Family Trust until 21 July 2004. Between July 2004 and January 2005 Mr Cameron made further advances to the Company totalling $437,000. The Cameron Family Trust also made further advances to the Company totalling $693,000 between January 2004 and February 2005 and it made a further advance of $675,000 on 5 July 2005. Kiln drying timber involves two drying stages: pre-drying, that is reducing the timber moisture content to a level enabling kiln drying to occur; the drying of timber using the kiln and machining the kiln dried timber. In order to dry large quantities of rough sawn timber, the Company needed to purchase and install pre-dryers and a kiln, which involved the laying down of a concrete slab and the installation of extensive infrastructure and pipe work. Mr Carroll and Mr Cameron began investigating the kiln drying supplier market around November 2003 and after extensive enquiries and discussions with a number of persons, they made contact with Shepherd Systems Pty Ltd who, in the course of discussions, drew their attention to "high vac" kilns manufactured by Brunner-Hildebrand a German corporation for whom Shepherd Systems Pty Ltd had the agency in Australia. After further research and comparisons with other products, Mr Carroll and Mr Cameron decided to purchase through Shepherd Systems Pty Ltd two Brunner-Hildebrand pre-drying kilns and a high vac kiln to undertake the initial drying to finish the process. After comparisons with other kilns, Mr Carroll and Mr Cameron planned a timber production budget for 2004-2006. They took into account the specifications of the Brunner-Hildebrand kilns and the costing involved and believed that they had sufficient capital to fund the venture safely. Their analysis was based upon an investment of $1.1 million in kilns and related infrastructure which would result in an increase of around $900,000 in annual pre-tax profit. Shepherd Systems Pty Ltd told them that they would need to place their order for the kilns before the end of 2003 to ensure that the kilns would be working by May 2004. Just before Christmas 2003, the Company placed the order with Shepherd Systems Pty Ltd, and paid a deposit in January 2004 of $120,000 plus GST for the supply and installation of the Brunner-Hildebrand vacuum dry kiln. The agreed price was $471,900 (excluding GST). On or about 5 February 2004 the Company entered into an agreement with Shepherd Systems Pty Ltd for the supply and installation of two pre-drying kilns for $299,000 (excluding GST). Throughout 2004 normal production and sales of cut green timber by the Company continued. From the outset of the process of installing the kilns, the Company incurred cost blow outs and had problems with Shepherd Systems Pty Ltd in relation to the installation and operation of the two pre-drying kilns and the high vac kiln. The first cost blow out related to the construction of the concrete slab and footings necessary for the kiln. Shepherd Systems Pty Ltd had said that the cost would be around $25,000 whereas the actual cost was just over $80,000. The Company's budget had assumed that the kilns would be operational by May 2004 but this did not occur due to a number of delays and problems with their installation. Commencing in early 2004 Mr Carroll was engaged in securing log supplies for the Company so that it would have timber ready when the kilns became operational. He also made numerous contacts to ensure future sales for the kiln dried products when the kilns came on line in the expectation that the kiln would be ready to use by that time. By 30 June 2004, the Company's balance sheet recorded timber stock on hand of $808,573. By the middle of 2004, the delay in having the kilns operational had started to affect the Company's cashflow. In June 2004 the Company obtained a loan of $700,000 and an overdraft facility from the Bendigo Bank which was secured by a charge over the Company's assets and Mr Carroll's home as a collateral security. In August 2004 an engineer from Brunner-Hildebrand came to Australia to commission the high vac kiln at Mansfield. The first batch of timber was loaded into the kiln and according to Brunner-Hildebrand's drying schedules was expected to take five days to dry but in fact took around three weeks. Brunner-Hildebrand representatives told Mr Carroll that teething difficulties were not uncommon but thereafter timber which had been dried in the high vac kiln dried unevenly and was unsaleable. From September 2004 until 2006 the Company continued to use the pre-dryers and the kiln and used trial and error to try to work out why the finished product was not as it had been led to believe it would be by Brunner-Hildebrand and Shepherd Systems Pty Ltd. Brunner-Hildebrand and Shepherd Systems Pty Ltd blamed each other for the problems and Shepherd Systems Pty Ltd failed to provide the support it had promised the Company. On 12 January 2005 Mr Carroll sent an email to Mr Ingo Wallocha of Brunner-Hildebrand in which he complained about the delays in the commissioning and the late commissioning of the pre-dryers and the high vac kiln. In the email Mr Carroll said that "As previously discussed our cashflow has been affected enormously" and that as a result of particular delays in commissioning "by now we were alarmed by our lack of cashflow". We do intend to pay your bill, however you must be patient. The problems we have incurred have been significant. Our cash flow is very sick. We will survive, but it will take some time. It is not beneficial to either of us if we closed. Giving our file to your lawyers will not speed up our repayment plan to you. Only the success of our business will sell more of your high-vacs in Australia. Ingo we have suffered a lot, we need your help and time to turn this business into a strong and leading lumber company. It was put to Mr Carroll that in January 2005 the Company had a lack of cashflow and his response was that in January 2005 "we were trading okay". He said that his statement in the email that "By now we were alarmed by our lack of cashflow "was extremely exaggerated ... a great exaggeration". .. it was affecting our cashflow". His answer was "At that time, no, I wasn't". He also said that his statement in the email that "our cashflow is very sick" was an exaggeration and that the whole letter was exaggerated. By March 2005 it was apparent that the Company had significant problems with its kiln drying operations. The problems with the kilns needed to be resolved before regular production and sale of kiln dried timber could commence. On 29 June 2005 Mr Carroll sent an email to Mr Wallocha in which he referred to previous complaints relating to damage to timber which had been dried in the kiln. This damage is really killing us. Please Ingo, do what ever you can to get Frank here to solve this problem. Between late 2004 and May 2006 Mr Carroll obtained expert advice from Mr Robert Rule of Timber Training, Creswick and Mr Graeme Dimmack as to possible solutions which the Company put into operation. Mr Rule visited the mill on a number of occasions and spoke on the telephone on a number of occasions with Mr Carroll and the Company's employees to help Mr Carroll resolve the problems with the pre-drying and the final drying kiln. However, this involved a trouble shooting process which took a long time to implement because of the time involved in the drying cycle. Mr Dimmack had twenty years experience in the timber industry and was employed as the Company's Assistant Manager from 2003 until May 2005. By the middle of 2005 it was clear to Mr Carroll that the kiln problems might take months or even years to resolve while stocks remained or built up in the yard waiting for the time when the kilns were properly operating. The continuing kiln problems were having an effect on the Company's cashflow as were the significant losses it was suffering because of the large amount of timber which was unsaleable through damage in the kiln. During this period Mr Carroll said that it was also apparent to him that if the kiln drying problems could be solved the Company would be able to generate positive cashflow and significant profits almost immediately from the sale of the kiln dried timber. On 5 July 2005 Mr Carroll sent an email to Mr Wallocha (drafted by Mr Cameron) in which he informed Mr Wallocha that getting the two pre-drying kilns operating correctly was now "an urgent matter of our business survival". The email referred to the difficulties and problems the Company had experienced in getting the kilns to function properly. This would be very bad for both of us. Mr Carroll was asked whether he had a view on 5 July 2005 that if the problem with the kiln was not fixed soon the Company would be out of business. His answer was that "No, I didn't believe that", and that the statement to that effect in the email was false. I accept this evidence. In or about March 2005 the Company changed its accountant to Mr Paul Bright from WHK Armitage Downie Pty Ltd Accountants. Mr Carroll chose Mr Bright as he knew that he had a significant interest in a similar sized sawmill at Powelltown and he knew the timber mill industry well. Mr Bright had been practising as an accountant in Gippsland since 1989 and had specialised in accounting and business advisory services for participants in the timber industry. He had acted for numerous sawmills. Mr Bright recommended, and introduced, new accounting systems to the Company, prepared new valuations of stock on hand and prepared cashflow projections for the Company both as to the original green timber business on a stand-alone basis and as to the business as a whole including kiln drying. Mr Bright did not carry out a stocktake as such. He used the quantities supplied by Mr Carroll and applied the average sales price that his sawmill obtained for green timber. The projections prepared by Mr Bright were based on assumptions that the kiln problems could be solved and the "cash burn" which the Company was suffering could be arrested. Mr Carroll told Mr Bright that he required business advice regarding the Company's cashflows, costs and expenses and an analysis of the business model and its profits and losses. In early May 2005 Mr Bright prepared interim financial statements for the Company which disclosed that it had significant negative cashflows and was making significant losses. Part of the work carried out by Mr Bright involved allocating a value to the existing rough sawn green timber stock on hand. He inspected the timber and accepted Mr Carroll's value of $550/m 3 . Mr Bright considered that that value was a fair value based on his experience in the timber industry and that it reflected what he considered to be the fair value of the rough sawn green timber on a going concern basis. Mr Bright told Mr Carroll that he considered that the cause of the losses was almost exclusively due to the operations of the drying process which the Company had acquired in 2004. Mr Bright considered that the losses were occurring due to the volume of timber being damaged during the drying cycles in the kilns and the labour cost involved in attempting to get the kilns to work properly. Mr Bright considered that if the kilns could be made to work the Company should be able to operate the kiln drying timber business profitably. During this same period (May/June 2005), Mr Bright prepared a costing analysis (cashflows and projected profit and loss) for the green timber milling business which the Company had historically operated and was continuing to operate at the same time as it was trying to run the new kiln drying business. Mr Bright told Mr Carroll that while there appeared to be a weakening in the profitability of this part of the business he considered that it was well configured and operated and that it was still profitable as a stand-alone business. Mr Bright's opinion was that the green timber business was profitable on its own and that remained his opinion until May 2006. In or about June 2005 Mr Bright told Mr Carroll that based on his analysis of the business and the rate of cash burn that the business was undergoing at the time, he considered that the business was close to insolvency. He told Mr Carroll that the business needed a significant capital injection until such time as the kilns could be made to work or a decision was made not to proceed any further with the kilns. By June 2005 it was apparent to Mr Carroll that the Company needed more capital to address the problems which had arisen with the kilns. Although ongoing sales were good, the problems with the kilns were damaging the Company's business. In or about June 2005, Mr Carroll personally borrowed $1 million from Bluestone Finance using his wife's and his house as security. This money was paid to the Company in July 2005, $675,000 being new capital and the balance being used to discharge the Company's debt to the Bendigo Bank. Around the same time Mr Cameron, through The Cameron Family Trust, advanced a further $675,000 to the Company to assist the Company in the repayment of all its debts to the Bendigo Bank. On 6 July 2005 Mr Carroll, also advanced $675,308 to the Company. At that time Mr Cameron and Mr Carroll agreed that neither of them would seek repayment of any of the moneys they had advanced to the Company until such time as the business became cashflow positive again and then, any loan would only be repayable out of the profits of the business. After it became apparent that the capital cost and working capital requirements of the kiln drying and machined timber expansion proved to be much greater than had been anticipated, Mr Cameron agreed his Trust would fund the cost overruns until the new expansion was complete. Between June 2004 and July 2005 the Trust made a series of loans totalling $1,555,000 to assist the financing and completion of the expansion. Mr Cameron and Mr Carroll had an understanding that the Company would pay the Trust accumulated interest and repay capital when the cashflow from the expansion permitted. Notwithstanding the statements made in the emails dated 29 June 2005 and 5 July 2005, I am satisfied that as at 5 July 2005 the Company was not in a precarious financial position nor was it in a near-insolvency situation. Although its cashflow was suffering its inventory of stock was increasing due to its kiln drying problems. I am satisfied that the Company was not insolvent as at 5 July 2005. In mid 2005, Mr Carroll asked Mr Bright to draw up a business plan with the aim of encouraging Brunner-Hildebrand to invest in the Company's business as a joint venturer or partner of some kind. Mr Carroll believed that this was preferable to taking legal action against Brunner-Hildebrand. In early July Mr Bright prepared a draft report to the Company's solicitors in which he identified the financial consequences that had arisen from the decision of the Company to pursue the kiln drying of timber utilising the equipment purchased from Brunner-Hildebrand. Mr Bright said in the draft report that he had practised in Gippsland for the last 16 years and had a speciality in the timber industry representing businesses at all stages of the production cycle. I have an intimate understanding of what makes sawmills produce profits and alternatively what makes them produce losses. Mr Bright investigated the cause of this loss and found it to be almost exclusively due to the volume of sawn product that was damaged in the drying process and the labour costs associated with attempting to get the equipment to operate effectively. I have advised the Directors of the Company that unless further capital is injected that they are effectively trading while insolvent, and the ramifications of this. They are in no position to take full benefit of the largest and most beneficial change to the resource allocation system that I have seen. Mr Bright said the statements in the draft report were correct at the time he made them but that they were made before he was aware of the capital injection of $1.35 million or thereabouts made by Mr Carroll and Mr Cameron in July 2005. He considered that these capital contributions should have enabled the Company to keep trading until either the problems with the high vac kiln were fixed or a decision was made not to continue to try and make it work. It is relevant to note that from July 2005 until May 2006, Mr Bright continued to be involved in giving advice to Mr Carroll regarding the Company and its business. Mr Bright was engaged by the Company during the second half of 2005 and the first half of 2006 to provide various business advisory services and to prepare financial statements. Mr Bright's firm prepared the Company's financial statements for the year ending 30 June 2005. On 20 July 2005 the Company's solicitors sent a letter to Brunner-Hildebrand in which they complained about the failure of the kilns to perform in the manner represented due to technical defects in their operation. The letter noted that as a result of the failure of the kilns the Company's business had incurred extreme financial losses. It concludes that our client had a successful and growing business before the kiln failures, but this is now 'close to insolvency' as a result of the kiln failures. Also that, had the kilns worked as represented by HH, then our client's business would have continued to grow with strong profitability. It has no further financial resources to put in to the business. It is now concerned that, without some form of financial support, the business of our client will not survive. Without additional financial assistance there may be no option but to place our client into liquidation. Should that occur, HH faces the prospect that the creditors and any liquidator of our client would look to it for compensation for our clients losses. Our client now looks to HH for some form of financial support. Any such arrangement could involve a broader settlement of our client's claims, and a release from liability in favour of HH. On 8 August 2005 Hildebrand Holztechnik GMBH responded to the Company's solicitor's letter stating that it was not the appropriate organisation to which the Company should be making a complaint about the kilns. That letter enclosed a letter also dated 8 August 2005 from Hildebrand Holztechnik GMBH to Shepherd Systems Pty Ltd. In that letter it stated that the kilns had been ordered and purchased from Shepherd Systems Pty Ltd and not from Hildebrand Holztechnik GMBH. It denied any responsibility for the difficulties which the Company had confronted in the installation and commissioning of the kilns. On 30 August 2005 Mr Carroll wrote a letter to Brunner-Hildebrand in which he set out the history of the delays in getting the kilns to produce quality dried timber, the losses the Company had suffered and the capital resources that had been put into the Company. Mr Carroll noted that "we do not have any further resources left after putting in this total of $A3,000,000". In the letter he provided the financial forecasts for the purpose of Brunner-Hildebrand considering whether it was prepared to put capital into the business. Nothing came of that proposal. It appears that at or about the time Mr Carroll sent the letter of 30 August 2005 he prepared a business proposal for consideration by Brunner-Hildebrand. Mr Bright participated in the preparation of this proposal and prepared a cashflow analysis to accompany it. The proposal contemplated an overall investment by Brunner-Hildebrand of $3 million in return for which the Company offered it 35 percent of what it called "the newly formed Company". On 7 February 2006 Hildebrand Holztechnik GMBH wrote a letter to Mr Carroll stating that it could not provide any further service until the Company paid a minimum of $20,000 to Shepherd Systems Pty Ltd by 21 February 2006. Throughout 2005 the business of the Company was continuing to grow and the valuation of its stock was increasing. For example, sales figures for the period 1 July 2004 to 11 November 2004 were $627,802 whereas sales for the corresponding period in 2005 were $879,217. On or about 2 February 2006 Mr Gavin Low, an accountant and friend of Mr Carroll referred Mr Carroll to Mr Brendan Marchesi who practised as an insolvency practitioner. Mr Carroll went to Mr Marchesi's office on 9 February 2006 and explained the history of the Company to him. He told him about the difficulties of getting the kilns to work properly and that the problems had now been remedied. Mr Carroll said that the Company was experiencing cashflow problems. Mr Marchesi recalled telling Mr Carroll that if he believed that the business was viable it would be necessary to find an investor or further capital to enable the Company to continue to trade. According to Mr Marchesi, Mr Carroll also told him that he had been trying to sell the business but had not been able to find a buyer. Mr Carroll denied telling Mr Marchesi that he had been trying to sell the business but had not been able to find a buyer. He said that he was trying to get someone to invest in the business and that he certainly did not want to sell the business which he had built up over 20 years. Mr Marchesi said that he did not have an independent recollection of the meeting although he believed that was what Mr Carroll had told him. He made notes at the time of the meeting with Mr Carroll but those notes did not record any statement by Mr Carroll that he had been trying to sell the business but had not been able to find a buyer. Apart from this conversation there was no other evidence that Mr Carroll had been trying to sell the business during the relevant period or that he had been unable to find a buyer during the relevant period or, indeed, before it. Having regard to this conflict in the evidence I am not satisfied that Mr Carroll told Mr Marchesi that he had been trying to sell the business but had not been able to find a buyer. Such a statement was inconsistent with his conduct and what he was trying to achieve in early 2006. I am also not satisfied that Mr Carroll told Mr Marchesi that the problems with the kilns had now been remedied. This was not the fact in February 2006. Mr Marchesi's evidence in this respect was not challenged in cross-examination nor was it raised with Mr Carroll. If Mr Carroll made the statement it was contrary to other evidence of Mr Carroll and also contrary to the evidence of Mr Rule and Mr Dimmack. On 6 February 2006 a stock take as at 31 January 2006 was calculated which gave timber on hand a value of $1,041,534.37. From the time when Mr Bright was engaged by the Company in or about April 2005 the Company's stock on hand was valued in accordance with figures provided by Mr Bright as representing appropriate values. Mr Carroll considered Mr Bright's figures to be appropriate based on the costs of acquisition of the timber and the historical costs of sale by the Company. The problems which the Company was encountering with the operation of the kilns continued into 2006. Throughout this period the Company was taking advice from Mr Rule and Mr Dimmack regarding the state of the kilns and the time it might take to get them to work properly. In early 2006 Mr Carroll told Mr Bright that the pre-dryers were still not working. In March 2006 Mr Bright inspected the timber in the Mansfield yard and he observed that it generally appeared to be well stored and maintained, was in an undeteriorated condition and so was suitable for air drying. He examined a recent stock take for the timber, by comparison with the stock he saw in the yard, which appeared to him to be accurate although he only undertook what he called "a cursory look". Mr Bright then prepared a fresh cashflow analysis for the Company. He took into account the holding costs of the timber on site, the variation in stock volume which would occur as a result of air drying the timber on hand. He retained the values which he had previously been given for the Company's stock on site. At this time the stock had a value recorded in the Company's books of account in excess of $1 million. Mr Bright prepared a green mill only cashflow budget which, subject to certain achievable criteria, showed significant positive cashflows. Mr Bright gave these analyses to Mr Carroll to discuss with potential investors in the Company's business. On 23 March 2006 Shepherd Systems Pty Ltd's solicitors served a creditor's statutory demand on the Company claiming $147,274.81. The Company made an application to the Court to set aside the demand on the basis that the debt was disputed because the Company had an offsetting claim against Shepherd Systems Pty Ltd, relating to the defects in the pre-dryers supplied by it, amongst other matters. The Company had quantified that claim at an amount in excess of $2 million. The statutory demand was withdrawn on 5 May 2006. In March 2006 Mr Carroll engaged a consultant to help him find an investor in the Company potentially to provide further capital. During April and into May, Mr Carroll was also seeking further avenues of finance for all the Company's business. By March 2006 Mr Bright was aware that the Company's cashflow situation was poor and that the funds provided by Mr Carroll and Mr Cameron in July 2005 had been exhausted in February 2006. Mr Bright was aware that Mr Carroll was looking for potential investors which he discussed with Mr Bright. Between January and April 2006 based upon the value of its stock on hand, which Mr Bright considered was saleable and able to be realised within a short period of time, namely "a couple of months", he did not consider that the Company was insolvent at that time. He told this to Mr Carroll on a number of occasions. During this period Mr Carroll told Mr Bright that he was advancing small amounts of money to the Company to meet smaller creditors' debts and that he was arranging for a further capital injection of $250,000 to be made to the Company. On 3 May 2006 an officer from the Australian Taxation Office telephoned Mr Carroll and told him that the Company owed the Australian Taxation Office $110,000 and that Mr Carroll had until 17 May 2006 to review how he was going to reduce the debt over the next eighteen months. On the following day Mr Carroll spoke to Mr Bright about this conversation and said that the Company did not have $110,000 on hand to pay the tax bill. Mr Bright told him that he had to do something and that he had met a business restructure specialist, Mr Andrew McLellan, who had impressed him and who might be able to assist Mr Carroll to deal with the matter. On 5 May 2006 Mr Bright telephoned Mr Carroll and gave him contact details for Mr McLellan. Mr Carroll telephoned Mr McLellan and they had a meeting on 8 May 2006 at which Mr Carroll discussed the Company's business with Mr McLellan and told him about the kiln problems. Mr McLellan told him words to the effect that the problems of the business were quite fixable. He recommended that the Company should go into voluntary administration. On 6 June 2006 creditors of the Company resolved that the Company be wound-up and Mr McLellan became the liquidator of the Company. After his appointment as administrator, Mr McLellan took steps to sell the business and assets of the Company as a going concern. Mr McLellan placed advertisements in newspapers and sent copies of the advertisements to prospective purchasers and to companies and entities listed on his company's sale of business data base. Between 18 May 2006 and 13 June 2006 he received about sixteen expressions of interest none of which resulted in an offer to purchase or the sale of the assets or any portion of them. In or about mid July 2006 a consortium of former employees of the Company agreed to purchase the Company's business plant and equipment and remaining stock for $220,000. A critical issue in this proceeding is the financial state of the Company as at 31 December 2005 and thereafter until 10 May 2006, that is during the relevant period. The plaintiffs contend that the Company was insolvent at all times during this period and that during this period, it incurred debts of $426,469.37. On the day of his appointment as administrator of the Company, Mr McLellan became aware that the Company maintained its accounts electronically by way of an MYOB accounting software program. Mr McLellan and his staff obtained copies of the Company's MYOB accounts which included balance sheets as at 31 December 2005 and 9 May 2006, and aged payables records as at 10 May 2006 which disclosed that as at 31 December 2005 there were outstanding debts due and payable and overdue totalling approximately $191,810 (without taking into account the debt claimed by Shepherd Systems Pty Ltd). As a result of investigations by Mr McLellan and his staff, Mr McLellan considered that a number of the figures in the balance sheets were not accurate and needed to be adjusted to reflect the Company's true position as at 31 December 2005 and 9 May 2006. The following items were considered by Mr McLellan. Mr McLellan believed that the true value of the stock as at 10 May 2006 was not more than $220,000 and that the stock value in the balance sheet as at 31 December 2005 was greatly overstated. He considered it had a realisable value more in line with the value he achieved over the period that he traded the business of the Company between 10 May 2006 and 12 July 2006 when he achieved sales totalling $209,904. Mr McLellan said that according to its management accounts the Company's inventory as at 31 December 2005 was valued at $1,041,000 and $1,042,000 as at 10 May 2006, which values would, according to Australian Accounting Standards, be the lower of the cost price or net realisable value. Mr McLellan said further that the stock on the ground when he was appointed on 10 May 2006 was largely exposed, in a deteriorated condition and appeared to have been sitting on the ground for a long time. This observation was disputed by Mr Carroll. Mr Carroll said that he was fully aware of the state of the stock on hand at Mansfield and that on 10 May 2006 a stocktake was undertaken. He produced a copy of that stocktake which showed that the total value of unfinished timber on hand, valued in accordance with the figures recommended to him by Mr Bright as appropriate stock values, was $1,063,712.26 and that the total value of kiln dried timber was $367,058.58. Mr Carroll said that the stock was not exposed but was wrapped in hessian and was not in a deteriorated condition; some of it had been on hand for a considerable period of time, waiting to be kiln dried but its condition had not been affected. Mr Carroll said that the closing down of the mill and the liquidation of the Company had an immediate negative impact on the value of the stock and prevented the orderly sale of the timber by the Company. Mr Carroll explained this statement by saying that he carried out nearly all the sales for the business and once the fact of the administration occurred he felt that a number of customers closed the door on him. I am not disposed to accept Mr McLellan's evidence as to the value of stock on hand as at 31 December 2005 and as at 9 May 2006 where it conflicts with the evidence of Mr Carroll. Mr Carroll had twenty years experience in the timber industry whereas Mr McLellan had no experience with timber mill businesses prior to his appointment as administrator of the Company and this administration was his first timber mill business. He had no experience with timber as a stock item in relation to the assets of the Company. Further, Mr McLellan's evidence that the stock on the ground when he was appointed was in a deteriorated condition was not based on any experience and he formed his view just by looking at the age of the timber. He did not personally undertake a stocktake. In the Lockwood valuation which had been obtained in April 2006, the valuer stated that if he was asked to value the timber he believed the Company would receive between 5 percent and 25 percent of the wholesale cost if the stock was sold by way of auction, depending on the various stages of the machined timbers. On 15 May 2006 Mr McLellan telephoned Fowles Auctions who declined to value the stock and said they were not interested in attending to give a valuation. On his appointment as administrator Mr McLellan engaged Mr Carroll to be the person responsible for the sale of timber and between 10 May 2006 and 12 July 2006 sales totalling $209,904 were achieved and expenses totalling $10,000 were incurred each week to achieve these sales. Mr Carroll said that these sales represented less than a quarter of the stock on hand. The balance of the stock remaining after 12 July 2006 was sold for $10,000 to the purchaser of the business. In short, the Company's stock on hand on 10 May 2006 and timber processed during the administration was sold for a total of $219,904. This amount included $505,052 worth of capital improvements to the Company's premises in Mansfield which was not a realisable asset. Mr McLellan was unable to obtain any offers to purchase the plant and equipment and ultimately sold it to Aussie Hardwood Pty Ltd for $180,000 plus GST, which amount was consistent with the auction realisable value attributed to the Company's owned plant and equipment in the Lockwood valuation of $181,000 before auction realisation costs. Shepherd Systems Pty Ltd maintained that it retained title to the kiln equipment until the balance of the debt of approximately $147,000 due to it was paid. Mr Carroll contended in his evidence that part of that amount reflected the costs involved in preparing the drying schedules which he maintained could be used as a future asset. Mr McLellan concluded that the amount shown in the balance sheet was not an asset which could be realised by the Company but was rather an expense and should have been treated as such in the Company's accounts. I accept Mr McLellan's evidence in this respect. Mr McLellan considered that this was not a realisable asset of any value to the Company although he allocated $10,000 plus GST of the purchase price of the Company's business to goodwill as under the Sale of Assets Agreement the purchaser required goodwill items. In particular the Cameron Family Trust had advanced $675,000 to the Company on 5 July 2005. This long term liability was not shown on the Company's balance sheets as at 31 December 2005 and 9 May 2006. In his adjusted balance sheet Mr McLellan included the total amount of the loans by Mr Cameron and the Cameron Family Trust. The result of the adjustments which Mr McLellan made to the Company's balance sheet was that the Company had a net deficiency of $3,319,000 as at 31 December 2005 and a net asset deficiency of $4,041,000 as at 9 May 2006. A more relevant financial analysis for the purposes of the issues in the proceeding is an analysis of the Company's cashflow and, in particular, the cash available to satisfy the Company's current liabilities as at 31 December 2005 and during the relevant period up to 10 May 2006. According to Mr McLellan's analysis the Company had a cash deficiency as at 31 December 2005 of $232,945 and as at 10 May 2006 a cash deficiency of $639,868. Mr McLellan said that the amounts for "Total Cash Available" did not take into account whether the Company could have raised cash resources against the Company's assets. Mr McLellan also considered that the Company had a deficiency of working capital of $55,000 as at 31 December 2005 and of $804,000 as at 10 May 2006. That is to say, the Company's current assets were insufficient to meet the Company's current liabilities to this extent. Mr McLellan was cross-examined. He was challenged on some of his conclusions in relation to the financial state of the Company at the two relevant dates. He said he had read the affidavits of Mr Carroll and Mr Bright and that there were no specific matters to which he wished to respond in relation to the contents of those affidavits. There are a number of matters that emerged in Mr McLellan's cross-examination which have significance and relevance for the purposes of the issues to be resolved. I have summarised these matters in point form: He had not asked for proofs of debt or received any proofs of debt in respect of the debts incurred by the Company after 31 December 2005 other than from the State Revenue Office and the Australian Taxation Office. Neither he nor his staff had investigated the invoices and debts which Mr Carroll had challenged as not being due or payable by the Company. He had adjusted the figure for plant and equipment shown in the balance sheets from $1.4 million or thereabouts down to $725,000. He had excluded the leasehold improvements at the Mansfield property as he had not received any offer to purchase them. His figure of $725,000 was arrived at by reference to hindsight. The lease was for a period to 2026 and he disclaimed the lease and closed the business after nine weeks. He wrote down the value of the lease to zero. He accepted that on the assumption that the Company had a 20 year security of tenure lease then on a going concern basis its balance sheet should reflect the capital improvements made to the site in the balance sheet as an asset. He did not doubt the Lockwood valuation of the plant and equipment on a market value existing use basis as being an appropriate valuation on a going concern basis for the assets of the Company. He did not seek to negotiate the resolution of the retention of title claims made in respect of the kilns and the pre-dryers. He did not make any allowance in the balance sheet for the claim against Shepherd Systems Pty Ltd or Brunner-Hildebrand to have any value. Further, he did not discount Shepherd Systems Pty Ltd's claimed debt of $147,274.81. He agreed that if that company was not a creditor that had an effect upon his analysis as to the solvency of the Company. The figure in the adjusted balance sheets for plant and equipment comprised the amount shown in the management accounts less the Lockwood kiln valuation. The kilns were valued on a going concern basis that is, market value for use. The schedule of fresh debts said by Mr McLellan to be incurred during the relevant period was prepared by or under the supervision of Mr McLellan's manager, Ms Peta Carroll. She had no personal knowledge of the manner in which any of those debts were incurred prior to 10 May 2006 and her knowledge of them came from her review of the books of account of the Company. The Company's current assets were insufficient to meet the Company's current liabilities as at 31 December 2005 and as at 10 May 2006. The Company had deficiencies of working capital of $55,000 and $804,000 as at 31 December 2005 and 10 May 2006 respectively. Mr McLellan also demonstrated that the Company had insufficient current assets to meet short-term debts by reference to a "quick asset ratio" which is a measure of a company's liability both as at 31 December 2005 when the Company's quick asset ratio was 0.41 and as at 10 May 2006 when the Company's quick asset ratio was 0.16. The Company incurred a total trading loss for the period 1 July 2004 to 30 June 2005 of $2,569,000 and for the period 1 July 2005 to 10 May 2006 of $2,030,000. These figures were derived by Mr McLellan after making adjustments to the stock figures. On 24 October 2006 the Australian Taxation Office submitted a proof of debt in the liquidation of the Company claiming $205,856.32. The claim consisted of a running balance account deficit debt in the amount of $109,853.47, a superannuation guarantee charge for the period 1 January 2005 to 10 May 2006 in the amount of $95,973.09 and a general interest charge of $29.76. As at 30 March 2005 the Company was liable for unpaid superannuation contributions totalling $2,491.98 which amount had increased as at 31 December 2005 to $53,100 and had further increased as at 10 May 2006 to $84,161. Fresh debts incurred by the company after 31 December 2005 totalled $426,469.37. This was not in issue. (b) Whether all the debts relied upon by the plaintiffs were incurred by the Company during the "relevant period" that is between 31 December 2005 and 9 May 2006. Mr Carroll contended that the plaintiffs had not proved that all of these debts were incurred during the relevant period. The plaintiffs' list of debts totalled $426,469.37. (c) Whether the Company was insolvent at the time of incurring each of the debts or became insolvent by incurring each of the debts: s 588G(1)(b). Having regard to the time at which all the relevant debts were said to be incurred the plaintiffs had to establish that the Company was insolvent at all times during the relevant period. Mr Carroll contended that the plaintiffs had not established this fact. (d) If the Company was insolvent, that is to say it was not able to pay all its debts as and when they became due and payable (s 95A of the Act), were there reasonable grounds for suspecting that the Company was insolvent, or would become insolvent, during the relevant period: s 588G(1)(c). (e) Whether Mr Carroll was aware at the time when the debts were incurred during the relevant period that there were grounds for suspecting that the Company was insolvent or would become so insolvent: s 588G(2)(a). (f) Whether a reasonable person in a like position in a company in the Company's circumstances would have been so aware: s 588G(2). (g) Whether Mr Carroll failed to prevent the Company from incurring the debts: s 588G(2). This was not in issue. (h) Whether the creditors in relation to those debts suffered loss and damage because of the Company's insolvency: s 588M(1)(b). This was not in issue. These matters need to be established affirmatively by the plaintiffs in order to make out their cause of action. In determining whether the plaintiffs have proven each element of their cause of action I have applied the civil standard of proof, namely the balance of probabilities but I have done so consistently with, and bearing in mind, the "Briginshaw" approach. This was the standard of proof applied by Mandie J in Australian Securities and Investments Commission v Plymin [2003] VSC 123 ; (2003) 46 ACSR 126 at 208, after his Honour exhaustively considered and analysed relevant and applicable statutes and authorities. In determining whether Mr Carroll has made out these defences, I have applied the civil standard of proof, the balance of probabilities without any Briginshaw gloss on it. WAS THE COMPANY INSOLVENT AS AT 31 DECEMBER 2005 AND THROUGHOUT THE RELEVANT PERIOD UP TO 10 MAY 2006? Mr Carroll was asked in the course of cross-examination whether, when he appointed Mr McLellan as voluntary administrator of the Company on 10 May 2006 he understood the Company to be solvent or insolvent. He was then asked "Does it not follow that that's what you believed on that day? " and he answered "No, I don't believe so". Mr Carroll was challenged on this answer. He was asked whether he read the minute before he signed it and he said "I don't believe that I read it properly or absorbed it. I was in shock". He said that on 10 May 2006 he was not expecting to lose the Company and he was not expecting to be shut right out of the business. He was asked whether he had that understanding in the period between 31 December 2005 and 10 May 2006 and whether he turned his mind to the question of insolvency during that period. He answered "I asked that question regularly". He was then asked "You asked what question? " and he answered "whether or not we were insolvent or whether or not we were close to the line of being insolvent". Mr Carroll may not have made up his mind 100 percent that the Company was insolvent prior to 10 May 2006 but I am satisfied that on 10 May 2006 he was 100 percent satisfied that the Company was insolvent. He said so in the minute of the meeting at which he appointed the administrator of the Company. He may have been in shock and he may not have read it properly, but he did not say he did not know what he was signing. Further, the meeting with Mr McLellan was precipitated by the telephone call from the Australian Taxation Office on 3 May 2006 when he was confronted with a tax bill of $110,000 which the Company could not pay. There was no issue between the parties as to the definition of "insolvency" or the relevant test to determine whether the Company was insolvent throughout the relevant period. The learning in relation to the determination of insolvency of a corporation is well established. A company is insolvent if, and only if, it is not able to pay all its debts as and when they become due and payable: ss 9 and 95A of the Act. A seminal authority in relation to the meaning of "insolvency" is Sandell v Porter [1966] HCA 28 ; (1966) 115 CLR 666 in which the High Court considered the meaning of insolvency under s 95 of the Bankruptcy Act 1966 (Cth). Insolvency is expressed in s. 95 as an inability to pay debts as they fall due out of the debtor's own money. But the debtor's own moneys are not limited to his cash resources immediately available. They extend to moneys which he can procure by realization by sale or by mortgage or pledge of his assets within a relatively short time --- relative to the nature and amount of the debts and to the circumstances, including the nature of the business, of the debtor. The conclusion of insolvency ought to be clear from a consideration of the debtor's financial position in its entirety and generally speaking ought not to be drawn simply from evidence of a temporary lack of liquidity. It is the debtor's inability, utilizing such cash resources as he has or can command through the use of his assets, to meet his debts as they fall due which indicates insolvency. Whether that state of his affairs has arrived is a question for the Court and not one as to which expert evidence may be given in terms though no doubt experts may speak as to the likelihood of any of the debtor's assets or capacities yielding ready cash in sufficient time to meet the debts as they fall due. It is of no consequence, under this test, that assets exceed liability. The important point is: can the company pay its way in carrying on its business? The court, in examining whether a company is suffering cashflow insolvency, will consider whether the Company is actually paying its debtors". However, there is a temporal limit upon this recourse. It is no indication of solvency --- indeed, it is the opposite --- to point to property as available to meet debts falling due next month when, even with the utmost expedition, that property cannot be turned into cash for 6 months. Realisable property can only be taken into account in assessing solvency "if that property is in such a position as to title and otherwise that it could be realised in time to meet the indebtedness as the claims mature": Bank of Australasia v Hall [1907] HCA 78 ; (1907) 4 CLR 1514 at [1907] HCA 78 ; 1543; 14 ALR 51 at 80; see, for example, Crema (Vic) Pty Ltd v Land Mark Property Developments (Vic) Pty Ltd (2006) 58 ACSR 631 ; [2006] VSC 338 at [141] - [144] per Dodds-Streeton J and Noxequin Pty Ltd v DCT [2007] NSWSC 87 at [14] and [15] per Barrett J. In order for the defence to succeed, there must be an expectation, held on reasonable grounds, that recourse to assets will enable debts to be paid, not at some indefinite time in the future, but so as to keep the companies solvent according to the definition in s 95A of the CA, namely, as the debts fall due to payment. There is a difference between temporary illiquidity and "an endemic shortage of working capital whereby liquidity can only restored [sic] by a successful outcome of business ventures in which the existing working capital has been deployed": Hymix Concrete Pty Ltd v Garritty (1977) 13 ALR 321 at 328; 2 ACLR 559 at 566; Re Newark Pty Ltd (in liq); Taylor v Carroll [1993] 1 Qd R 409 ; (1991) 6 ACSR 255. The first is an embarrassment, the second is a disaster. It is easy enough to tell the difference in hindsight, when the company has either weathered the storm or foundered with all hands; sometimes it is not so easy when the company is still contending with the waves. Lack of liquidity is not conclusive of insolvency, neither is availability of assets conclusive of solvency: Expo International Pty Ltd (in liq) v Chant [1979] 2 NSWLR 820 at 837; 4 ACLR 679 at 718. Bearing in mind the commercial reality that creditors will usually prefer to wait a reasonable time to have their debts paid in full rather than insist on putting the company into insolvency if it fails to pay strictly on time, I think it can be said, as a very broad general rule, that a director would be justified in "expecting solvency" if an asset could be realised to pay accrued and future creditors in full within about 90 days. I have reached this conclusion by approaching the matter from a number of different directions. Mr Carroll acknowledged that he knew that he had a cashflow shortage after 31 December 2005. He also acknowledged that during the period from 31 December 2005 to 10 May 2006 the cashflow was tight in some months. He said that "some months the cashflow was very tight". In answer to the question whether the cashflow did not permit payment of superannuation contributions, he answered "yes". Mr Carroll conceded that from at least January 2006 the Company was not paying its debts as and when they became due and payable. This concession was also repeated in his final written submissions. I am satisfied that this inability of the Company to pay its debts out of cashflow as and when they fell due continued throughout the relevant period. Cash flow was not sufficient to pay these amounts and others we'll go to. I see you shrugging your shoulders, but you'll have to voice your answer. I'm not sure, your Honour. Even if these liabilities are regarded as hire purchase liabilities payable over 12 months the result still remains that there were current liabilities as at 31 December 2005 of $695,287.92. According to the balance sheet as at 31 December 2005 there was total cash available of $167,619 and trade debtors of $238,524.94, a total of $406,143. It should also be noted that at this point of time, 31 December 2005, there were outstanding debts which had not been paid: see par [70] above. As Mandie J pointed out in Australian Securities and Investments Commission v Plymin (supra) at 370 the mere fact of non-payment of debts is a relevant factor to be taken into account in determining whether a company is insolvent. As I pointed out earlier, and as the authorities confirm, the determination of solvency is not done on a balance sheet basis but rather on a cashflow basis. This gives rise to the question --- what other sources of cash were available to the Company as at 31 December 2005 and thereafter to enable it to pay debts then due and payable? Mr Carroll and Mr Cameron had ceased to advance money to the Company and the moneys which they had earlier advanced had been exhausted and used up. Mr Carroll submitted that the reason why the Company was not paying its debts as and when they became due and payable on and after 31 December 2005 was not an inability to raise cash with which to pay its debtors, but "an apparent unwillingness (not inability)" on his part to raise cash to pay the debts. It was submitted that Mr Carroll was unwilling to borrow money against the security of the Company's assets, was unwilling to inject fresh capital into the Company and was unwilling to sell down its timber stock on hand for anything less than its full perceived value. There is no evidence to support this submission. There were no assets of the Company which could be provided as security to support the borrowing of sufficient money to provide sufficient cash to discharge all the Company's debts then due and payable. None were identified. Nor was there identified any source to which Mr Carroll could have had recourse to obtain fresh capital to inject fresh capital into the Company. According to the Company's solicitors and Mr Carroll, he had no further avenues open to him to provide such capital. It has no further financial resources to put in to the business". There is no evidence to support this presupposition or premise. Mr Carroll relied on a passage in the course of his cross-examination to show that this presupposition or premise was justified. The cash flow from sales of timber wasn't sufficient to pay all the debts of the company as they fell due?---I wouldn't --- could I see the value of the sales on a monthly basis, just to have a look at it, because that would give me a better feel for the figures. You have said that?---I agree. I think you said you were using --- you were selling as much as possible for the best price possible. Is that not the case?---I was trying to maximise the sale of the price that I was getting. I could have got my prices and got better sales. I could have sold the timber, like, the timber that was being air dried, wrapped, I could have sold that to other companies that had kilns but that would only be a short term fix. I was hanging on to get the better dollar. What occurred when the administrator came on board on 10 May 2009 and sold stock through the efforts of Mr Carroll, albeit with hindsight, supports this conclusion. I do not consider that there was any other source available to the Company as at 31 December 2005 and during the subsequent relevant period, which could have contributed to, and enhanced, the cashflow and cash position of the Company. Putting the matter another way, there were no sources other than immediately available cash and money available from timber sales and debtors which were available to enable the Company to pay all its debts as and when they fell due. Mr Carroll relied upon a number of matters in support of his submission that the Company was not insolvent as at 31 December 2005 or thereafter during the relevant period. However, when considering these matters it is important to bear in mind, as referred to earlier in par [106], that the issue of solvency is a question of fact to be determined from an analysis of the Company's financial position taken as a whole, having regard to "commercial realities". A particular "commercial reality" is the extent to which a company's assets can be realised or made available as a security to raise money and the time it would take to do so. Commercial realities will be relevant in considering what resources are available to the company to meet its liabilities as they fall due, whether resources other than cash are realisable by sale or borrowing upon security, and when such realisations are achievable. The existence or availability of assets is not an answer to a claim of insolvency in the absence of any indication as to when, and to what extent, those assets can be pledged or realised. In order to have assets taken into account in determining the issue of solvency on a cashflow basis, it is necessary to establish that those assets are readily realisable in a short space of time: Hall v Poolman (supra) at par [267]. In the passage extracted at par [107] above, it is important to note that Palmer J referred to the realisation of an asset in "about 90 days" in order to pay not only accrued but also future creditors in full. Mr Carroll relied principally on the Company's inventory of stock to demonstrate the availability of a source from which cash could be obtained to pay existing debts. He submitted that in determining whether the Company was solvent at relevant times it was appropriate to take into account, and the Court was entitled to take into account, that at all relevant times it had timber stock on hand in excess in value of $1 million. Mr Carroll submitted that immediately prior to the commencement of the administration on 10 May 2006 the value of the stock had increased to in excess of $1.4 million. Mr Carroll relied upon Mr Bright's evidence, which he submitted was uncontested, that the timber stock could be realised by the Company as a going concern within two months. He submitted this was within the three month period referred to in Hall v Poolman (supra) at par [267] as the broadly acceptable timeframe for realisation of assets to meet debts. The value of the stock was contentious between the parties and Mr Bright's evidence must be treated with caution. Mr Bright did not undertake a stocktake valuation of the stock himself. He said that he was required "to allocate a value" to the existing stock on hand and he did so on the basis of an inspection. He did not attempt to confirm or ascertain the value of the stock otherwise than by what he called "a cursory look". I do not consider that I should take into account the total "value" of the stock as set out in either of the balance sheets or the stocktake figures referred to by Mr Carroll in determining whether on the dates of the balance sheets and stocktakes the Company was able to pay all its debts as and when they fell due. There was no evidence of the value of the stock as at 31 December 2005. Mr Carroll said that he did not enter the amount of $1,041,000 shown in the accounts of the Company as the value of the stock as at 31 December 2005 personally. He said there would have been a stocktake done at the end of December which was valued and that that would be what the figure represented. He accepted that a stocktake was not a valuation as such and he implicitly accepted that the monthly stocktakes to which he had referred were not valuations of stock. Mr Bright said that during the period from January to April 2006 he considered that the stock on hand was "saleable and able to be realised within a short period of time, that is a couple of months". However, he did not say whether he was referring to sale in the ordinary course of business or some form of forced sale such as by way of auction or a fire sale. He said that based on the value of the stock on hand he did not consider that the Company was insolvent during that period because of his view that the stock was saleable and able to be realised within a short period of time, that is a couple of months. Mr Carroll's evidence was that because of the Company's tight cashflow it was unable to pay all its creditors their entitlements as they accrued in the relevant period and that the sale of the stock of timber did not overcome that problem during that period. I therefore assume that Mr Bright was not saying that the stock on hand was saleable and able to be realised in the ordinary course of business within a short period of time to which he referred but rather, that he meant in some form of forced sale. What was not made clear was the amount which might have been realised if stock were to be sold over that two month period. In the events which occurred, timber stock could not be realised within two months in the ordinary course of business or on a going concern basis. Fowles Auctions were not interested in valuing the stock. In the nine weeks of trading after the appointment of the administrator only $210,000 or thereabouts was realised from trading although I accept that the amount received was substantially impacted upon by the fact that the Company was under administration which had a negative effect on its ability to achieve sales at ordinary prices. It is significant to note that Mr Carroll was in charge of selling the stock during the nine week period after the administrator was appointed. And I am not successful when I am on the back foot. I wasn't going to give it away. That submission does not mean that the Court should disregard what in fact occurred in relation to the sales of the timber stock. I consider that what happened with hindsight is relevant to the question of solvency. One can see the whole picture, both before, as at and after the alleged date of insolvency. The court will be able to see whether as at the alleged date of insolvency the company was, or was not actually paying all of its debts as they fell due and whether it did, or did not, actually pay all those debts which, although not due as at the alleged date of insolvency, nevertheless became due at a time which, as a matter of commercial reality and common sense, had to be considered as at the date of insolvency. By reference to what actually happened, rather than to conflicting experts' opinions as to the implications of balance sheets, the court's task in assessing insolvency as at the alleged date should not be very difficult. Plant and equipment as at 31 December 2005 had a value in the balance sheet of $1,447,972.76 and that value as at 9 May 2006 was not much different. Mr Carroll said that the value of the plant and equipment in the Company's accounts was arrived at by Mr Bright but Mr Bright did not give any evidence to that effect. Mr Carroll gave evidence that around April 2006 he had discussions regarding the obtaining of finance over equipment but these discussions did not proceed anywhere. There was no evidence before the Court that finance on the security of any of the plant and equipment of the Company was available. The values in the balance sheets in respect of research and development and goodwill had no realisable value to assist the Company in its cashflow situation. Nor did the capital improvements on the property at Mansfield. No further funds were available for advance to the Company by Mr Carroll or Mr Cameron after 31 December 2005. Mr Carroll said that at all relevant times until he appointed the administrator he had the capacity to inject further funds into the Company but there was no evidence as to that capacity or whether it would have been of a sufficient amount to enable the Company to pay all its debts as and when they fell due. I do not accept that Mr Carroll had that capacity or that he was willing to inject any further substantial funds into the Company after 31 December 2005 sufficient to pay all outstanding creditors during the relevant period. He said that he did not have that capacity in the letter he wrote to Brunner-Hildebrand on 30 August 2005 (par [51] above). The Company's solicitors had made the same statement in their letter to Brunner-Hildebrand on 20 July 2005 (par [48] above). I am also satisfied that at all relevant times between 31 December and 9 May 2006 the Company was insolvent, that is to say it was unable to pay all its debts out of its cashflow from whatever sources were available to it as and when they fell due. Although Mr Carroll submitted that Mr McLellan had only addressed the Company's solvency as at two dates namely, 31 December 2005 and 10 May 2006 and that insolvency could not be made out at any other date in the relevant period, there was sufficient evidence to satisfy me that during the whole of the relevant period the Company was insolvent. Between 31 December 2005 and 9 May 2006 the Company's tax office running balance account increased. Further, the bank statements during the relevant period showed a deterioration in the Company's cashflow position. The aged payables listing as at 10 May 2006 show that the Company's debts were not being paid over longer and longer periods. Also, the invoices from suppliers and statements from creditors during the relevant period cannot be ignored. As the plaintiffs submitted, the only significant change in the Company's financial position from 31 December 2005 to 10 May 2006 was that the financial position deteriorated rather than improved; it did not remain stable. During this period according to the balance sheets as at 31 December 2005 and 9 May 2006 cash on hand declined from $164,000 to $64,000 although on the date of the appointment of the administrator it appears that there was only $432.89 cash on hand. Also, at the end of the relevant period, according to the Company's records the Company's GST liability had increased from $21,000 to $119,000 and the Company's trade creditors had increased from $550,000 to $705,000. My conclusion is therefore, that on 31 December 2005 and 10 May 2006 and on all the dates between the Company was insolvent. WERE THERE REASONABLE GROUNDS FOR SUSPECTING INSOLVENCY? The test prescribed by s 588G(1)(c) is an objective test: Powell v Fryer [2001] SASC 59 ; (2001) 159 FLR 433 , Hall v Poolman (supra) at 174. The concept of "suspecting" or "suspicion" involves having a state of mind which falls between having a firm belief or a significant degree of satisfaction that insolvency exists on the one hand and wondering whether it exists on the other. The concept of having a "suspicion" requires an affirmative feeling: Hall v Poolman (supra) at 174. I am satisfied that on 31 December 2005 and throughout the relevant period up to 10 May 2006 there were reasonable grounds for suspecting that the Company was insolvent or would so become insolvent. My reasons for reaching this conclusion are predicated upon the following facts and circumstances: At the time Mr Bright was appointed accountant for the Company in or about March 2005 the Company was suffering from "cash burn" which needed to be arrested. That cash burn was arrested temporarily in July 2005 with the injections of funds by Mr Carroll and Mr Cameron but was resurrected at the end of December 2005 when those funds were used up and exhausted. It was apparent to Mr Carroll by March 2005 that the Company had a significant problem with its kiln drying operations which might take many months or years to resolve. The kilns did not work properly after their installation and commissioning and had not worked properly since April 2005, which situation was continuing as at 31 December 2005 and throughout the relevant period. Prior to 31 December 2005 and throughout the relevant period the Company had experienced, and continued to experience, serious cashflow problems which were caused by the problems with the kilns and it had complained on a number of occasions to the manufacturer without satisfaction. In July 2005 Mr Bright had told Mr Carroll that the Company was "very close to being insolvent". Mr Bright acknowledged that this observation was made before Mr Carroll and Mr Cameron through the Cameron Family Trust had invested $1.675 million or thereabouts in the Company in July 2005. However, those funds had been used up by December 2005. As at 31 December 2005 the Company's cashflow problems were continuing and had not eased. The Company had not been able to attract further investment in it notwithstanding Mr Carroll's efforts to obtain such investment in order to overcome the Company's cashflow problems. Throughout the relevant period the Company was not able to pay its debts out of its cashflow and trade debts increased. The Company's indebtedness to the Australian Tax Office increased to around $80,000 (including superannuation guarantee charges) by the end of the relevant period. Further, I am satisfied that a reasonable person in a like position in a company in the Company's circumstances would also have been so aware. Mr Carroll was well aware of the problems which existed with the kilns and the impact that was having on the Company's cashflow and ability to prepare timber stock for sale. For example, on 12 January 2005 he told Mr Wallocha that the Company's cashflow had been "affected enormously". He said that he was exaggerating the situation to get the matter moving but I am satisfied that he was well aware of the significant impact the problems with the kilns were having on the Company's cashflow. In the same email he said that they were "alarmed by our lack of cashflow". Six months later his language had not changed. On 29 June 2005 he wrote to Mr Wallocha and said that the damaged wood which was coming out of the kilns was "really killing us". Again, Mr Carroll said that he exaggerated the situation to get Brunner-Hildebrand to fix the problems. Nevertheless there is no doubt that he regarded these matters, as he said in the email, as "very urgent issues". It was seven days later on 5 July 2005 that he told Mr Wallocha in an email that getting the kilns operating correctly was now "an urgent matter of our business survival". Again, he said he exaggerated the situation to motivate the company but he was well aware of the difficulties the kilns were causing. The problems with the kilns and their deleterious effect on the Company's cashflow continued throughout the relevant period. Mr Carroll throughout the relevant period had the issue of the Company's insolvency firmly in his mind. Mr Carroll said that at the time he appointed Mr McLellan administrator he did not believe that he was 100 percent made up in his mind either way whether the Company was solvent or insolvent. The minute of appointment which he signed as director of the Company on 10 May 2006 stated that the Company was insolvent. When he was asked whether that statement in the minute was not true, he answered "I believed that I hadn't stopped and read and considered what I was signing properly". However, he did not say that he did not know what he was signing. I also note that on the previous day 9 May 2006 he withdrew most of the balance of the money standing in the Company's bank account to reimburse himself for debts he had paid on behalf of the Company. I am satisfied that throughout the relevant period and particularly on 9 May 2006 Mr Carroll was aware that there were grounds for suspecting that the Company was insolvent. If I am wrong in this respect I am satisfied that a reasonable person in Mr Carroll's position in a company in the Company's circumstances would have been aware that there were grounds for suspecting that the Company was insolvent. Mr Carroll submitted that the fact that the Company was a fully operating, going concern until 10 May 2006 was a factor which had to be taken into account in considering whether there were reasonable grounds at any time during the relevant period for suspecting that the Company was insolvent. Taking that factor into account does not advance the inquiry any distance because it is necessary to analyse and understand the manner in which the Company was operating, its financial structure and, in particular, the extent to which it was able to pay, and was paying, all its debts as and when they fell due. Mr Carroll relied upon a number of matters which he said, when taken into account with the fact that the Company was a fully operating going concern, demonstrated that there were not reasonable grounds for suspecting that the Company was insolvent. However, on closer analysis these matters do not support the proposition that on 31 December 2005 and during the relevant period there were not reasonable grounds for suspecting that the Company was insolvent. Mr Carroll submitted that the following facts and circumstances demonstrated, and justified, the view that as at 31 December 2005 and throughout the relevant period there were not reasonable grounds for suspecting that the Company was insolvent: The apparent value of the assets of the Company as a going concern as at 31 December 2005 and thereafter. This could be ascertained from the balance sheets and other financial records. It was reasonable to believe that it was possible for the Company to raise cash with which to satisfy the Company's debts as and when they fell due by borrowing against a security over the Company's assets or selling the timber stock on hand. It was reasonable at that time to believe that it was possible for the Company to raise cash by the making of unsecured loans by Mr Carroll with which to satisfy the Company's debts as and when they fell due. Mr Carroll had no reason to believe at any time that the Company's business could not be sold as a going concern. Mr Bright's concerns about the Company's solvency in early July 2005 preceded the capital injection by Mr Carroll and Mr Cameron. It was reasonable at that time to believe that the problems with the kilns could be fixed. Mr Rule told Mr Carroll that he believed they could be but there was no firm evidence as to how long it would take. As at 31 December 2005 the Company had unencumbered assets including cash of $166,000, trade debtors of $238,000, timber stock worth in excess of $1 million, plant and equipment worth $1,447,000, capital improvements to the leased premises worth $505,051.77, motor vehicles valued at $45,868 and office equipment valued at $9,000. Regardless of the values assigned in the balance sheets to research and development and goodwill there were still unencumbered tangible assets in the books of the Company worth $3.45 million as at December 2005. It was not reasonable at that time to believe that it was possible for the Company to raise cash, by the making of unsecured loans by Mr Carroll with which to satisfy all the Company's debts as and when they fell due. Mr Carroll did not have the funds to do so. There was no evidence which bore upon the issue whether Mr Carroll had any reason to believe, at any given time, that the Company's business could not be sold as a going concern. Having regard to the problems which continued in relation to the commissioning and operation of the kilns the sale of the business as a going concern was problematic. I do not take into account Mr Bright's expressed concerns about the Company's solvency in early July 2005 having regard to the capital injection by Mr Carroll and Mr Cameron which occurred in that month. Having regard to the history of the installation and commissioning of the kilns, their operation and the damage to timber that was produced from them, there was no basis throughout the relevant period to believe that the problems with the kilns could be fixed during such a period so as to enable the cashflow of the Company to improve to the extent of enabling the Company to pay all its debts as and when they fell due. Mr Carroll relied on Mr Rule's evidence but that did not demonstrate that the problems with the kilns could be fixed at any time during the relevant period: see par [179]. Mr Carroll submitted that it would have appeared to a hypothetical reasonable person that an analysis of the balance sheets of the Company as at 31 December 2005 and 9 May 2006 disclosed that the Company had a number of unencumbered assets including cash of $166,000, trade debtors of $238,000, timber stock worth in excess of $1 million, plant and equipment worth $1,447,000, capital improvements to its leased premises worth $505,051.77, motor vehicles valued at $45,868 and office equipment valued at $9,000. According to Mr Carroll, that analysis shows that there were still unencumbered tangible assets in the books of the Company of $3.45 million as at 31 December 2005. It followed, Mr Carroll submitted, that all the assets were available as security against which cash might have been borrowed to satisfy short term liabilities of the Company. I reject that submission. For the reasons to which I have already referred, I am satisfied that there were not, and that a reasonable person would not have considered that there were, sufficient unencumbered tangible assets in the books of the Company available either to pay and discharge all the debts of the Company as and when they fell due during the relevant period or to provide security for the payment of them. Mr Carroll submitted that his acceptance that the Company was not in fact paying its debts as and when they fell due was not an admission that he was aware or suspected that the Company was insolvent. The basis for this submission was that that was only one of the factors to be taken into account in determining solvency. I have already found that the factors upon which Mr Carroll relied did not, taken together, demonstrate solvency. Mr Carroll submitted that "one unusual feature of this case" was that while the Company was not paying its debts as and when they became due and payable, the reason for that state of affairs was not an inability to raise cash with which to pay off its debtors but "an apparent unwillingness (not inability)" on the part of Mr Carroll to raise cash to pay them. I have rejected that submission: see par [123] above. Mr Carroll's acceptance that the Company was not in fact paying its debts as and when they fell due may not be an admission, strictly so called, that he was aware or suspected that the Company was insolvent but I consider that it is a significant factor to take into account in determining whether he was so aware or whether he suspected that the Company was insolvent. Further, I consider that a reasonable person in a like position to Mr Carroll in a company in the Company's circumstances would have been aware at the time the debts were incurred during the relevant period that there were grounds for suspecting that the Company was insolvent or would become so insolvent if that person was aware that the Company was not in fact paying its debts as and when they fell due. DID MR CARROLL FAIL TO PREVENT THE COMPANY FROM INCURRING THE DEBTS? This was not a contentious issue and I am satisfied that Mr Carroll failed to prevent the Company from incurring the debts. DID THE CREDITORS SUFFER LOSS AND DAMAGE BECAUSE OF THE COMPANY'S DEBTS? The plaintiffs initially claimed $459,119.02 but at trial, in the light of calculations made by Mr Carroll, reduced this amount by $32,649.65 to $426,469.37. Mr Carroll challenged a number of these debts and initially contended in his Amended Defence that a number of the debts were disputed, the quantum of those debts being $135,146.45. He further alleged that a part of the taxation liabilities ($123,080.22) was incurred prior to the relevant period. At the trial the plaintiffs conceded that certain debts were not properly claimable. These amounted to $32,649.65. The plaintiffs' claim as finally formulated (less interest and costs) totalled $426,469.37. Mr Carroll's response to the quantum of debts claimed by the plaintiffs was to say that the fresh debts after 31 December 2005 totalled $342,903.29. The difference between this figure and the plaintiffs' claim is represented by debts disputed by Mr Carroll and a number of debts in respect of which he claimed that he had made the payments himself. Mr Carroll claimed to have paid debts of the Company in the total sum of $38,581.82. He initially claimed in his affidavit that he made these payments "via my personal credit cards (American Express and Visa cards). " However, in the course of cross-examination he said that all but one of those debts had been paid by him by personal cheque. He said he had not been reimbursed for those amounts. The plaintiffs criticised this evidence and submitted that there was no documentary evidence of the payments. I accept Mr Carroll's evidence in this respect. The plaintiffs submitted that to the extent that Mr Carroll had paid debts of the Company, he was entitled to be indemnified by the Company and that accordingly he was the person who suffered loss and damage because of the Company's insolvency. The plaintiffs submitted that payments made by Mr Carroll in discharge of debts due by the Company did not reduce the amount which the plaintiffs were entitled to recover under s 588M of the Act. There was no evidence that Mr Carroll had made a claim upon the Company in respect of any of the amounts which he had paid personally to discharge debts of the Company. It follows, therefore, that the amount of $38,581.82 should be deducted from the amount of the claim by the plaintiffs. The result is that the plaintiffs' claim, on this basis, is reduced from $426,469.37 to $387,887.55. Mr Carroll challenged a number of other debts claimed by the plaintiffs. The plaintiffs submitted that they were entitled to rely on the books and records of the Company as prima facie evidence of the Company's liabilities. That may be so, but it is necessary to look at the challenge made by Mr Carroll to each of the disputed debts to determine whether that prima facie evidence either has been, or can be, displaced. Some of the debts were of relatively small amounts and I propose simply to summarise my conclusion in relation to each of those debts. Accordingly, I am not satisfied that the plaintiffs have established that the amount of $3,550.69 was due and owing. That is the amount claimed in the proof of debt lodged by Allianz Australia Workers Compensation (Vic) Limited with the plaintiffs on 11 July 2006. Mr Carroll submitted that these amounts were payable by Workcover. I accept the submission of the plaintiffs that Workcover only covers costs if the initial $546 of an injured worker's medical expenses in each instance is paid by the Company. Mr Carroll submitted that this amount was payable by Workcover. I accept the submission of the plaintiffs that Workcover only covers costs if the initial $546 of an injured worker's medical expenses in each instance is paid by the Company. As the invoice is dated 31 May 2006 I am not satisfied that the rental had accrued as at 10 May 2006. Mr Carroll submitted that these amounts were payable by Workcover. I accept the submission of the plaintiffs that Workcover only covers costs if the initial $546 of an injured worker's medical expenses in each instance is paid by the Company. Mr Carroll submitted that these amounts were payable by Workcover. I accept the submission of the plaintiffs that Workcover only covers costs if the initial $546 of an injured worker's medical expenses in each instance is paid by the Company. I have considered the invoices and am not satisfied that the balance of the debt was incurred subsequent to 31 December 2005. I reject Mr Carroll's submission that as it is interest on the pre-existing debt there is no evidence as to when the interest was incurred. Mr Carroll submitted that the plaintiffs had not proved that the Company had incurred an actual debt to the Commissioner of State Revenue during the relevant period. Having regard to the provisions of the Payroll Tax Act 1971 (Vic) relating to the liability of a person to pay payroll tax, I reject Mr Carroll's submission. I accept the plaintiffs' submission that each of the Telstra invoices relates to services rendered during the relevant period. Mr Carroll gave evidence that he paid personally $9,682.44 which evidence I accept. These debts related to licence fees. The statement in evidence shows that the fees were incurred in the months of January, February, March and April 2006, within the relevant period. I reject that submission. The invoices in evidence show that the debts were incurred within the relevant period. The plaintiffs submitted that only two attendances from the accountants fell outside the relevant period. Based upon the invoices in evidence the debt claimed by the plaintiffs should be reduced to $5,020.13. The amount submitted by Mr Carroll was verified in cross-examination by Ms Peta Carroll, a manager who assisted Mr McLellan in the performance of his duties as liquidator. In final submissions the plaintiffs explained that Mr Carroll had misconstrued the record prepared by Ms Carroll. The plaintiffs' submission was not founded upon any evidence before the Court. I accept Mr Carroll's submission. The end result of this analysis of the fresh debts claimed by the plaintiffs to be due and payable in the relevant period is that the plaintiffs' claim as finally formulated is reduced from $426,469.37 to $356,952.02. I turn to the defences raised by Mr Carroll under ss 588H(2), 588H(3), 1317S and 1318 of the Act. AT THE TIME THAT THE DEBTS WERE INCURRED DID MR CARROLL HAVE REASONABLE GROUNDS TO EXPECT, AND DID EXPECT, THAT THE COMPANY WAS SOLVENT AT THAT TIME AND WOULD REMAIN SOLVENT EVEN IF IT INCURRED THOSE DEBTS AND ANY OTHER DEBTS THAT IT INCURRED AT THAT TIME? I have already found that Mr Carroll was aware throughout the relevant period that there were reasonable grounds for suspecting that the Company was insolvent and that a reasonable person in a like position in a company in the Company's circumstances would be so aware. However, the fact that Mr Carroll may have had a "suspicion" of insolvency does not answer the question whether he had an "expectation" that the Company was solvent throughout the relevant period. It is apparent from the statutory scheme, and in particular, ss 588G and 588H of the Act, that a director can, at one and the same time, have a "suspicion" of insolvency and also an "expectation" of solvency. Reasonable grounds for "suspecting" that a company is insolvent does not require the same degree of satisfaction as is required to determine if a director has reasonable grounds "to expect" solvency. The defence requires an actual expectation that the company was and would continue to be solvent, and that the grounds for so expecting are reasonable. A director cannot rely on a complete ignorance of or neglect of duty ( Metal Manufacturers Ltd v Lewis (1986) 11 ACLR 122 at 129) and cannot hide behind ignorance of the company's affairs which is of their own making or, if not entirely of their own making, has been contributed to by their own failure to make further necessary inquiries: Statewide Tobacco Services Ltd v Morley (1990) 2 ACSR 405 ; Morley v Statewide Tobacco Services Ltd [1993] 1 VR 423 ; (1992) 8 ACSR 305. Mr Carroll submitted that his expectation of solvency relied upon a number of matters. In particular, he relied upon the inventory of the stock of timber held by the Company during the relevant period, what he said was its value and the Company's ability to realise and sell that stock. However, as I have noted earlier (par [107] above), whether a realisation of the stock or other assets can be taken into account has a temporal aspect or limitation to it. I adopt the observation of Palmer J in Hall v Poolman (supra) at par [187] (see par [107] above). Whether Mr Carroll had the relevant expectation depends upon the facts and circumstances known to him at the time, or throughout the period, he had that expectation. Whether Mr Carroll had reasonable grounds to expect, and did expect, that the Company was solvent throughout the relevant period and would remain solvent even if it incurred the debts during that period requires a staged inquiry. Is that outcome certain, probable, more likely than not, possible, possible with a bit of luck, possible with a lot of luck, remote, or is there is no real way of knowing? Call the administrators". By this series of questions and answers I do not mean to lay down some pro forma test of directors' liability for insolvent trading. Each case depends on its particular facts. These questions and answers merely serve to illustrate that when a company is struggling to pay its debts, the directors must face up to the issue of insolvent trading directly and with brutal honesty: they must not shirk from asking themselves the hard questions and from acting resolutely in accordance with the honest answers to those questions. Those grounds must be considered against the background that Mr Carroll knew throughout the relevant period that the Company was not in fact paying its debts as and when they fell due. I consider that whether Mr Carroll had reasonable grounds to expect that the Company was solvent during the relevant period depends substantially upon his reliance on the Company's inventory of stock and his reliance on communications with Mr Bright. Mr Carroll had grounds for believing that the value of the stock was quite substantial and he turned his mind to the value of the stock on numerous occasions throughout the relevant period. The Company undertook monthly stocktakes from at least 2003 until the date on which the administrator was appointed namely, 10 May 2006. When Mr Bright was appointed as the Company's accountant he prepared new valuations of stock on hand as well as cashflow projections both in relation to the original green timber business on a stand-alone basis and in relation to the business as a whole including the kiln drying process. Thereafter the Company constantly monitored its stock levels. It should also be noted that sales continued to increase in early 2006. By mid April 2006, the Company had won significant log licences from the silent auction conducted by VicForests. Mr Carroll considered this to be a very positive development as the logs were of better quality and value than those the Company had previously been able to acquire. Although Mr Carroll was paying particular attention to the stock position and had grounds for believing that the Company had a substantial amount of stock on hand which was saleable, the extent of the outstanding and unpaid debts of the Company and the extent to which future debts would be incurred were such that it was not reasonable, in my opinion, to expect that the stock could be sold within a sufficiently short timeframe to enable all the Company's debts to be discharged as and when they fell due. Mr Carroll also submitted that he had reasonable grounds to expect that the Company was solvent during the relevant period because of Mr Rule's advice to him that the problems with the kilns were solvable. However, that advice was not such as to give Mr Carroll a ground, let alone a reasonable ground, to expect that the Company was solvent throughout the relevant period at the time that Mr Rule gave him that advice. Mr Rule's evidence was that he believed that eventually the kilns could be made to work and that it was just a matter of working out what the problem was. Mr Rule also said that eventually he reached a conclusion that the most immediate problems lay with the pre-drying kilns and that these needed to be resolved so that the effectiveness of the final drying kiln could be properly analysed. This evidence provided no ground to enable Mr Carroll to form any view as to the solvency of the Company during the relevant period. I therefore conclude, and am satisfied, that the defence available to Mr Carroll under s 588H(2) of the Act is not made out. Mr Carroll did not have reasonable grounds to expect, nor did he expect, that the Company was solvent throughout the relevant period, and would remain solvent even if it incurred the debts it did incur during the relevant period. The staged enquiry to which I have referred in par [174] above did not enable Mr Carroll to have an expectation of solvency during the relevant period. Mr Carroll placed particular reliance on Mr Bright's advice. That gives rise to the question whether his reliance on that advice falls within s 588H(3) of the Act. An analysis of the defence available under s 588H(3)(a), which is helpful in the present context, was undertaken by Young CJ in Manpac Industries Pty Ltd v Ceccattini (2002) 20 ACLC 1304 , [2002] NSWSC 330. Additionally, a defence of this nature may encourage a proper system of financial management. The prime thrust of the exception is not to deal with the situation where a small company with directors who have little idea of accountancy, bring in a trouble shooter, supply the trouble shooter with information which may not be complete, receive reports back from the trouble shooter and then intend to rely on a report which is incomplete because they have provided incomplete information. Mr Bright prepared financial statements which included requiring him to allocate a value to the timber stock inventory. Further, in the middle of 2005 he prepared financial analyses relating to the green timber milling business which he considered to be still profitable. However, I do not consider that Mr Bright was given the role of "the other person" for the purposes of s 588H(3)(a)(i) of the Act. That is to say, I do not consider that Mr Bright was required to fulfil the role or did fulfil the role of a competent and reliable person who was responsible for providing to Mr Carroll adequate information about whether the Company was solvent. Certainly Mr Bright was a competent and reliable person but I do not consider that it can be said that he was "responsible" for providing to Mr Carroll adequate information about whether the Company was solvent. True it is that on occasions he gave Mr Carroll advice about whether the Company was solvent. He gave such advice in or about June 2005 and later during the relevant period, although his evidence as to what he told Mr Carroll in relation to the solvency of the Company during the relevant period was limited. At this time, Tony was looking for potential investors, which he discussed with me. At no time during January to April 2006 did I formally tell Tony that I believed TSM was insolvent. Based on the value of its stock at hand, which I considered was saleable and able to be realised within a short period of time (i.e. a couple of months) I did not consider that TSM was insolvent at that time, and I told Tony this on a number of occasions. Although Mr Bright told Mr Carroll on a number of occasions that he did not consider that the Company was insolvent, that information was given as part of the general accountancy and advisory work which Mr Bright was undertaking for the Company. It was not given in discharge of a responsibility for providing to Mr Carroll adequate information whether the Company was solvent. Mr Bright was not providing to Mr Carroll adequate information about whether the Company was solvent. Rather, he was expressing an opinion based upon information provided by Mr Carroll himself. Having regard to Mr Bright's retainer and the work he carried out for the Company I am not satisfied that Mr Carroll had reasonable grounds to believe that Mr Bright had the role, or was fulfilling the role required by subpar (a) of s 588H(3). Mr Carroll did not say that Mr Bright had been retained by him or the Company to provide, or was responsible to provide to him or to the Company, adequate information about whether the Company was solvent throughout the relevant period. Any expectation of solvency Mr Carroll might have had during the relevant period was not predicated upon information provided by a person who satisfied the requirements of subpar (a) of s 588H(3). It follows that the defence available to Mr Carroll under s 588H(3) of the Act is not made out. HAS MR CARROLL ACTED HONESTLY AND HAVING REGARD TO ALL THE CIRCUMSTANCES OF THE CASE OUGHT HE FAIRLY TO BE EXCUSED FOR THE CONTRAVENTION OF S 588M OF THE ACT PURSUANT TO S 1317 OR S 1318 OF THE ACT? Although there has been a debate as to whether s 1318 applies to an insolvent trading case in addition to s 1317S, it does not matter whether one or other or both sections apply as the Court is required to have regard to the same considerations in each section. I am satisfied that throughout the whole of the relevant period and, indeed, at all material times prior to 31 December 2005 Mr Carroll acted honestly. The plaintiffs did not submit to the contrary. A failure to consider the interests of the company as a whole, or more particularly the interests of creditors, may be of such a high degree as to demonstrate failure to act honestly in this sense. Mr Carroll submitted that he should be excused in circumstances where he continued to take advice from Mr Bright and acted upon it. It was submitted that his approach to the Company's problems up to 10 May 2006 was that to be expected of a reasonable, commercially experienced director dealing with ongoing issues in a company which was suffering cashflow problems by reason of one of the Company's two businesses experiencing "cash burn". It was submitted that he sought and obtained advice from Mr Bright, an expert accountant experienced in the timber industry and that he did not ignore or downplay that advice, but acted upon it appropriately. The difficulty with this submission is that from September 2004 until 10 May 2006 the Company continued to have problems with the drying of the timber and the use of the kilns which it could not resolve. This had the consequence of creating what Mr Carroll called the "cash burn", which continued until 10 May 2006. Nevertheless, although Mr Bright did not formally satisfy the description of a person "responsible for providing ..." for the purposes of the defence available in s 588H(3)(a)(i) of the Act, I am satisfied that Mr Bright was providing advice to Mr Carroll throughout the relevant period upon which it was reasonable for Mr Carroll to rely. I was engaged by TSM during the second half of 2005 and the first half of 2006 to provide various business advisory services, and to prepare financial statements". For example, in early 2006 he discussed with Mr Carroll whether it might be possible to air dry green timber in preparation for drying in high vac kiln as the pre-dryers were not working. He also attended the site in March 2006 and inspected the timber. After he did this, he prepared a fresh cashflow analysis for the Company which he provided to Mr Carroll for him to discuss with potential investors in the Company's business. What is more important is that, as noted in par [63] above, between January and April 2006 Mr Carroll was told by Mr Bright on a number of occasions that Mr Bright did not believe that the Company was insolvent. Having regard to Mr Bright's qualifications, (par [34] above) experience and particular experience in the timber industry, which Mr Carroll knew, it was reasonable for Mr Carroll to rely on what Mr Bright told him. Mr Bright's judgment in this respect, in retrospect, may not have been accurate but it was advice given to Mr Carroll and it was not unreasonable for Mr Carroll to rely on that advice notwithstanding the suspicions and knowledge he had to which I have already referred. During the relevant period stock sales were increasing and Mr Carroll was monitoring stock levels and the amount of daily production. During the relevant period the position was not one where Mr Carroll stood still and did nothing while the cash burned. He was taking active steps to expand sales and he kept on trying to get the kilns to work properly. Mr Carroll also sought advice from Mr Marchesi (par [56] above) an insolvency practitioner and told him of his cashflow problems. Mr Marchesi told him that if he believed the Company's business was viable it would be necessary to find an investor or further capital. This, Mr Carroll attempted to do, par [62] above. Further, although Shepherd Systems Pty Ltd claimed a debt from the Company of $147,274.81 the service of a statutory demand was set aside because the debt was disputed. The Company's challenge to the statutory demand removed for the time being from the equation of whether the Company was insolvent a substantial debt which relieved some of the pressure on the Company's cashflow. In March 2006 he took active steps to seek out investors who could provide further capital for the Company and in April 2006 he took steps, ultimately not proceeded with, to factor book debts. It is not in doubt that throughout the relevant period Mr Carroll was faced with difficult decisions. To adopt and adapt the words of Hamlet "to trade or not to trade, that is the question". As I noted in par [148] above, Mr Carroll regularly during the relevant period asked the question whether the Company was insolvent or close to the line of being insolvent and on a number of occasions Mr Bright answered the question in the negative. There are often pressing interests involved in the decision: the jobs of employees will be lost, the investment of shareholders will evaporate, and a promising venture in which a great deal of personal effort may have been expended will end in failure. On the other hand, the livelihood of creditors whose businesses depend on reasonably prompt payment may also be ruined if a company continues to trade while insolvent. When confronted with the necessity of making a decision involving these factors, a director cannot afford to procrastinate or to avoid confronting realities. He or she must ask and honestly answer the hard questions: see [269] and following above". On the next day he spoke to Mr Bright who put him in contact with Mr McLellan and Mr Carroll met Mr McLellan three days later. The plaintiffs submitted that the fact that Mr Carroll persisted with the kiln drying business which involved cash burn and thereby permitted the Company to incur debts knowing that it could not meet those debts out of cashflow ought to preclude relief under ss 1317S or 1318 as he had been aware, for no less than eighteen months previously, of compelling factors pointing to the Company's insolvency. I have taken that submission into account and weighed it in the balance in having regard to all the circumstances of the case. However it is an exaggeration to say that there were compelling factors pointing to the Company's insolvency for no less than eighteen months prior to 10 May 2006. The potential insolvency facing the Company in June 2005 had been arrested in July 2005 by the capital contributions made by Mr Carroll and Mr Cameron. The spectre of insolvency did not re-emerge until the end of 2005, less than five months before 10 May 2006. There is no doubt that Mr Carroll permitted the Company to incur debts in circumstances giving rise to a contravention of s 588G of the Act. However, he did so against the background of all the circumstances to which I have referred in pars [193]---[200] above. Mr Carroll did not profit personally from permitting the Company to trade in this way throughout the relevant period. He was not disregarding advice and, indeed, obtained advice from Mr Bright and others throughout the relevant period. In reaching the conclusion that in all the circumstances of the case Mr Carroll ought to be excused from his contravention of ss 588G of the Act, I have placed particular emphasis and considerable weight upon Mr Carroll's retainer of Mr Bright, the work carried out by Mr Bright and the statements and advice he gave to Mr Carroll from the time of his original retainer in March 2005 up to 10 May 2006. I do not consider that there is any inconsistency or lack of logic in concluding that a significant and substantial reason for excusing Mr Carroll is his resort to Mr Bright and his reliance on what Mr Bright told him when at the same time I have concluded that the defence available to Mr Carroll pursuant to s 588H(3) of the Act did not apply to Mr Carroll because Mr Bright was not a person who "was responsible for providing to [Mr Carroll] adequate information about whether the Company was solvent" nor was Mr Bright fulfilling the responsibility of providing adequate information about whether the Company was solvent to Mr Carroll. Section 1317S of the Act is applicable as a defence in proceedings brought, inter alia, under s 588M of the Act. The Court's power under s 1317S arises where "eligible proceedings" are brought against a person. The expression "eligible proceedings" is defined in s 1317S as including proceedings under s 588M. The power of the Court to relieve a person either wholly or partly from liability to which the person would otherwise be subject or that might otherwise be imposed on the person because of proceedings under s 588M arises where the person "has or may have" contravened s 588G(2). In the present circumstances I have found that Mr Carroll has contravened s 588G(2) in proceedings brought under s 588M. I have found that contravention because the elements of the contravention required by s 588G(2) have been made out. It is implicit in that finding of a contravention of s 588G(2) that Mr Carroll has been unable to avail himself of any of the defences in s 588H. It follows that although I am not satisfied that Mr Bright qualified to be the "other person" as defined in s 588H(3) I am still entitled, in having regard to "all the circumstances of the case" to take into account, for the purposes of exercising jurisdiction under s 1317S, the role Mr Bright played in all the circumstances of the case and, the communications he had with Mr Carroll and what he told Mr Carroll in proceedings brought under s 588M. In all these circumstances I consider that Mr Carroll should be excused for his contravention of s 588G(2) and that he should be relieved from a liability to pay to the plaintiffs the amount of the loss suffered by creditors of the Company throughout the relevant period whether it be the sum of $356,952.02 to which I have already referred or any other sum. (b) A declaration that pursuant to s 1317S(2) of the Act that having regard to all the circumstances of the case Mr Carroll ought fairly to be excused for that contravention. (c) A declaration pursuant to s 1317S(2) of the Act that Mr Carroll be relieved wholly from any liability to pay to the plaintiffs pursuant to s 588M of the Act any amount in respect of the loss and damage suffered by creditors of the Company referred to in the schedule to the amended Statement of Claim. I will hear the parties as to the form of order which should be made including any orders as to costs. I certify that the preceding two hundred and eight (208) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg.

whether debts incurred in relevant period whether company insolvent at time debts incurred or became insolvent by incurring debts whether director aware of grounds for suspecting insolvency whether reasonable grounds to suspect insolvency whether a reasonable person in the position of director of a company in the circumstances would have been aware of insolvency failure of director to prevent company incurring debts creditors suffered loss and damage whether reasonable grounds to expect solvency whether reasonable grounds to believe a competent and reliable person was responsible for providing adequate information about company's solvency whether director ought fairly to be excused for contravention trading while insolvent whether director aware of grounds for suspecting insolvency whether reasonable grounds to suspect insolvency whether a reasonable person in the position of director of a company in the circumstances would have been aware of insolvency failure of director to prevent company incurring debts creditors suffered loss and damage whether reasonable grounds to expect solvency whether reasonable grounds to believe a competent and reliable person was responsible for providing adequate information about company's solvency whether director ought fairly to be excused for contravention bankruptcy and insolvency corporations

I dismissed the application. I did not then deal with the costs of the proceeding. I had also previously, on 13 May 2008, declined to make any order on the applicants' motion of 29 April 2008 for an interlocutory order restraining the second respondent from further evacuating the upstream and downstream ends of the McArthur River diversion channel and associated orders (the applicants' motion): Lansen v Commonwealth Minister for Environment and Heritage (No 2) [2008] FCA 909. I reserved the costs of the applicants' motion. 2 As the applicants wished to consider the reasons for judgment published on 13 June 2008, I set a timetable for the exchange of submissions as to the costs of the proceeding. The applicants (the Lansen applicants) contend that there should be no order for costs of the proceeding, including the costs of the applicants' motion. 2. The first respondent (the Minister) seeks an order for costs of the proceeding against the applicants, save for the costs of the applicants' motion which did not directly concern the second respondent. (The Minister was represented by counsel at the hearing of the applicants' motion but does not seek costs for that attendance. The NLC is obviously aware of the claim for costs made against it by MRM. It has addressed that claim, and does not assert that it should be refused by reason of any procedural flaw in the way that costs claim has been made, nor seek to make oral submissions. It opposes the claim of MRM for costs of the proceeding to be ordered against it. 4 In the circumstances, I do not need to address the costs of the applicants' motion. There will be no order as to the costs of and incidental to it. 6 In Knight , Mason CJ and Deane J (with whom Gaudron J agreed) said at 188-189 that the cases awarding costs against a non-party may be explained on the basis that the power to award costs could be exercised against a non-party who was the "real party" to the litigation. That category of case consists of circumstances where the party to the litigation is an insolvent person or man of straw, where the non-party has played an active part in the conduct of the litigation and where the non-party, or some person on whose behalf he or she is acting or by whom he or she has been appointed, has an interest in the subject of the litigation. Where the circumstances of a case fall within that category, an order for costs should be made against the non-party if the interests of justice require that it be made. That case in the High Court decided that the Supreme Court of Queensland had jurisdiction to make an order for costs against the receivers of companies which were the unsuccessful parties in proceedings, the receivers themselves not being parties to those proceedings (see per Mason CJ and Deane J at 181). 7 Dawson J concurred in the result in that case. Even if the cases were confined to ejectment proceedings (and clearly they are not), the principle lying behind the ejectment cases is that the real litigant rather than the nominal party may be made liable for costs. 8 It was recognised by the Full Court of this Court (O'Loughlin, Whitlam and Marshall JJ) in Gore at 437, [23] that, in applying the principles discussed in Knight , the circumstances in which costs might be awarded against a non-party have not been exhaustively defined. Given the discretionary nature of the power to award costs, that is necessarily so. See also FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340 ( FPM Constructions ); Applicant NAGM of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 396 ; (2002) 125 FCR 488 ( Applicant NAGM ). 9 MRM contends that any costs order should be jointly against the applicants and the non-party NLC. It says that the NLC has funded the applicants' costs of the proceeding, and has directed its conduct. It also says that the NLC could have, but chose not to, bring the proceeding in its own name, or jointly with the other applicants. It also says that the applicants are impecunious and that the NLC is publicly funded. Finally, it says that its own costs are substantial. On that combination of matters, MRM contends that, in the interests of justice, the costs order should be made against the NLC jointly with the applicants. 10 It is clear from its own submissions that MRM recognises that, if the costs order is made jointly against the applicants and the NLC, the NLC will in fact bear the responsibility of paying those costs. 11 The NLC is apparently the Aboriginal Land Council established under s 21 of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (the ALR Act) relevant to the area of the McArthur River Mine. Under s 23(1)(a) and (c) of that Act, its functions include ascertaining and expressing the wishes and the opinion of Aboriginals living in its designated area as to the management of Aboriginal land in that area, and consulting with traditional Aboriginal owners of, and other Aboriginals interested in, Aboriginal land in that area with respect to any proposal relating to the use of that land. The McArthur River Mine is not Aboriginal land as defined in s 3, but as I noted in the primary reasons for judgment at [3], there is proximate Aboriginal land. The NLC is also the relevant representative body for the area under s 203AD of the Native Title Act 1993 (Cth). Section 203BB(1) and (2) require the NLC upon request to facilitate and assist persons who may hold native title. That assistance may, I assume, include the provision of legal assistance; see also ss 34, 39, 63 and 64 of the ALR Act. The applicants are variously members of seven native title claim groups seeking the determination of native title rights and interests over land in the vicinity of the McArthur River Mine and land which may have been affected by the proposed McArthur River diversion: see the primary reasons for judgment at [3]. There is nothing to indicate that the NLC was doing other than performing its functions in support of the Lansen applicants in the role it took in the overall conduct of the proceeding. 12 In my view, that role of the NLC does not amount to it being the real party conducting the proceeding. 13 There is no evidence that the applicants simply lent their names to the proceeding, and were uninterested in its result. Their interests or potential interests in the land upstream and downstream of the McArthur River Mine were real in a practical sense, as well as in a theoretical sense. As any land owner or occupier (or putative land owner or occupier), they were entitled to be concerned about the potential environmental impacts of the proposed development of the mine. There is no reason to think they did not care about those impacts, or to think they did not wish to do something about them. The nature of the case was not such as to infer to the contrary because none of them gave evidence. (I use the terms land owner or occupier in a loose way to include rights and interests which may exist under the ALR Act or the Native Title Act 1993 . The standing of the applicants was a significant issue, until ultimately acknowledged. MRM has not pointed to any clear basis for the NLC to have had standing to have brought the proceedings. Nor, indeed, has it pointed to any power in any enactment or in the NLC constitution which would have enabled it to do so irrespective of the wishes of Aboriginal persons or groups claiming interests in the land potentially affected by the proposed mine development. 15 The NLC did not contest that it funded the proceedings through engaging solicitors and counsel. That was one of its functions. It is funded under a statutory scheme, and as discussed in Northern Land Council v Commissioner of Taxes (2002) 171 FLR 255 by Mildren J (with whom Martin CJ agreed) at 262 [28], 264 [34] and by Thomas J at 277 [84], it performs its functions to ameliorate the disadvantage which some Aboriginal persons or communities may experience in asserting their rights and interests. I do not regard the fact that the NLC engaged and funded solicitors and counsel for the Lansen applicants, in the circumstances, as of much weight. The NLC did not itself stand to gain directly from a successful outcome of the proceedings; cf Gore at 452 [64]. 16 In FPM Constructions in the New South Wales Court of Appeal at [210], and in Applicant NAGM in the Full Court of this Court at 500-501, [66]-[68], some circumstances were identified in which a non-party order for costs may be made. Contrary to MRM's submission, for the reasons given, I do not consider the NLC position falls within the circumstances identified in FPM Constructions in which a third party order for costs might be made. In that case, a third party costs order was ultimately refused: see per Basten JA (with whom Beasley and Giles JJA agreed) at [198]-[215]. As I have found in this matter, Basten JA said that the third party concerned was not the "real party" and that the plaintiff had a real interest in the outcome of that proceeding. The third party in that case was the plaintiff's sole director, and was its guiding force including by instructing its counsel. As with the NLC in this matter, the third party's role was a legitimate one. Basten JA at [214] pointed out the need to make an overall evaluative assessment of the factors which may be relevant, so that the role of a third party in the conduct of a proceeding including the provision of funding for its conduct is properly assessed. That, of course, does not preclude the exercise of the power in other appropriate circumstances. In Applicant NAGM , the Court (Sackville, Allsop and Jacobson JJ) at 501, [68] emphasised that an order for the payment of costs by a non-party is exceptional and any application for such an order "should be treated with considerable caution". 17 I have carefully considered the matters put by MRM. I assume that MRM's costs are substantial and that the applicants are unlikely to be able to satisfy any order for costs against them. However, I have come to the firm view, for the reasons I have given, that it is not appropriate to order the NLC to pay costs of the proceedings to MRM, assuming I make an order for costs of the proceedings in its favour against the Lansen applicants. Sometimes, where a party has succeeded on some issues and failed on others, the costs order reflects those successes and failures rather than simply the final outcome. As was emphasised in Ruddock at 236 [13], the power to award costs is a discretionary one, to be exercised in the interests of justice in all the circumstances. 20 I will address those issues in turn. 22 The latter case concerned the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the EPBC Act), the same Act which the present proceeding concerned. The Full Court (Branson, Tamberlin and Finn JJ) made costs orders in that case to reflect the fact that the principal issues determined on the appeal concerned the proper construction of the Act, and were issues of critical importance to the Minister in performing responsibilities for the administration of the Act. Hence, their Honours found, it was of general importance to the Minister and to the public that the law concerning the proper construction of the provisions of the EPBC Act should be clarified. The Full Court also had regard to the fact that the appellant's concern was shared with a large section of the Australian community, and that the appellant was seeking to avoid harm to the Australian environment, and so was not motivated by self-interest. Upon that basis, the Full Court directed the appellant to pay 70 per cent of the Minister's costs of the appeal and to pay 40 per cent of the costs of the entity in whose favour the decision under the Act had been made. The costs of that entity were reduced to 40 per cent because it had played a larger part in the appeal than was necessary. 23 The costs order at first instance was that the appellant (the then applicant) should pay the costs of both the Minister and the putative developer (see The Wilderness Society Inc v Turnbull, Minister for the Environment and Water Resources [2007] FCA 1863 (2007) 98 ALD 651). That order was not challenged on the appeal. The primary judge, after referring to Australian Conservation Foundation v Forestry Commission (1988) 81 ALR 166 ; and Friends of Hinchinbrook Society Inc v Minister for the Environment (No 5) [1998] FCA 432 ; (1998) 84 FCR 186 , considered whether there were sufficient public interest considerations connected with or leading up to the litigation that warranted a departure from or outweighed the consideration that a wholly successful respondent would ordinarily be awarded costs, but was not persuaded that that was the case: see at [30], 657. His Honour said the decision on that question was "finely balanced" at [31], 657. 24 It is clear that there is no general rule that costs will not be awarded in a case that raises matters of public interest, or that cases which raise matters of public interest give rise to a special costs regime: see Oshlack v Richmond River Council [1998] HCA 11 ; (1998) 193 CLR 72 at [30] - [31] and [49] per Gaudron and Gummow JJ ( Oshlack ); Ruddock at [18] and [21] per Black CJ and French J. 25 The majority of the High Court (Gaudron, Gummow and Kirby JJ, Brennan CJ and McHugh J dissenting) in Oshlack upheld a decision of the primary judge in Oshlack v Richmond River Shire Council (1994) 82 LGERA 236 that there were sufficient special circumstances to justify departure from the ordinary rule as to costs, and that there should be no costs payable by the unsuccessful applicant. The applicant had challenged the validity of a development consent for the subdivision of environmentally sensitive land, where there was a significant public interest. Both the Council granting the consent and the developer were parties. Only the Council appealed from that decision: see Richmond River Council v Oshlack (1996) 39 NSWLR 622. 26 In Oshlack , Gaudron and Gummow JJ discussed s 69 of the Land and Environment Court Act 1979 (NSW) under which the primary judge had exercised his discretion not to order costs. Their Honours at [21]-[45] came to the view that the costs discretion under s 69 was a general discretion, akin to that available under e.g. s 76 of the Supreme Court Act 1970 (NSW). For the same reasons, I think it is akin to the costs discretion available under s 43 of the Federal Court of Australia Act 1976 (Cth). 27 The plurality judgment then, at [46]-[49] considered that the primary judge had correctly identified that the litigation was concerned more with public than with private rights, and that it was appropriate for the primary judge to have taken into account that the appellant's pursuit of the litigation was motivated only by the desire to uphold environmental law and the preservation of endangered fauna, that there was a "public interest" in the outcome of the litigation because significant numbers of the public shared the appellant's stance, and that the basis of the challenge was arguable and had resolved significant issues about the proper interpretation of the legislation and its application to future development approval applications. 28 The Lansen applicants correctly contend that Oshlack recognises that the nature of the case, namely that it concerned the proper application of a law requiring the balancing of the protection of environmental interests in relation to proposed development, is not extraneous to the exercise of the costs discretion. This case did concern public interests, that is it concerned whether the Minister's decision was made in accordance with the EPBC Act so that the environmental interests which the Act recognised were properly considered. 29 In this matter, the Lansen applicants had no financial motive. They claimed (albeit unsuccessfully) that the environmental interests which the EPBC Act recognised were not properly considered by the Minister because the Minister had not made the decision in accordance with the EPBC Act. They were appropriate persons to have raised those issues. Ultimately, there was no issue as to their standing to do so. Indeed, ss 487 and 488 of the EPBC Act broaden the rules as to standing, so that the interests which the Act establishes in environmental matters may be sought to be protected without the fiat of the Attorney-General. 30 The concerns of the Lansen applicants were real ones. The applicable decision-making procedures under the Act were not clear. There was a real issue as to whether Pt 8 of Ch 4 of the Act should apply, or whether by reason of s 83 the processes under the Bilateral Agreement should apply. There was a real issue as to whether Assessment Report 51, which itself said that there was insufficient information to adequately assess the potential impacts of the proposed mine development on the freshwater sawfish, was an assessment report under the Bilateral Agreement so that s 132 entitled the Minister to seek further information. There was a real issue as to whether the process by which the Territory Minister then came to provide information generally of the character sought by the Minister by the provision of Assessment Report 54, which itself was developed from a Public Environment Report under the Environment Assessment Act 1982 (NT) in the course of which MRM provided further information generally on the matters raised by the Minister, was a process authorised by the Act under the Bilateral Agreement. Each of those matters, whilst fact-specific in one sense, raised issues as to the proper construction of the EPBC Act. I do not think that the issue whether the Minister failed to take into account relevant conditions imposed under a law of the Northern Territory (on which the Lansen applicants succeeded in part) was of the same character. It was very case specific, although the consequential question whether the failure of the Minister to have done so necessarily invalidated the decision had a wider significance. That is not a full statement of the issues raised by the Lansen applicants to challenge the validity of the Minister's decision, but it is sufficient to identify that at least those issues were of general public significance in the sense that they will inform processes for future decision making under the EPBC Act. Hence, I think the decision on those issues will have a wider public significance than to the particular parties in the litigation. 31 In my judgment, those considerations are sufficient to remove the present case from the routine application of the general rule that costs should follow the event. 32 The balancing of the factors I have referred to against the general position that costs should be awarded to a successful respondent party on a compensatory basis for having been required to be involved in the litigation is a difficult one. The fact that the Lansen applicants were not motivated by financial gain is, I think of relatively minor significance. But, their close relationship to the land upstream and downstream of the proposed river diversion of the McArthur River means that they were in a special position to endeavour to safeguard the environmental interests in the way the EPBC Act prescribed, if they considered that its processes were not being followed: see eg s 3(1)(d) and s 3(2)(g)(iii). It is fair to recognise that the applicants, as representatives of the entities the subject of a grant under the ALR Act and as putative native title claimants in a remote region of Australia, have and (at least for present purposes) legitimately assert a special relationship with the country and special responsibilities to look after country and its spiritual and physical elements. 33 I accept that, as the Minister submitted, the potential impact of the mine development and the river diversion was not of notorious public interest (as in some other instances). However, the degree of public debate is but one indication of the public interest which the Act itself recognises. And, as the Minister submitted, care must be taken to ensure that so-called public interest litigation does not become "an umbrella for the exercise of discretion with respect to costs in an unprincipled, haphazard and unjudicial manner": Buddhist Society of Western Australia (Inc) v Shire of Serpentine-Jarrahdale [1999] WASCA 55 at [11] . 34 In my judgment, the principal issues raised by the Lansen applicants as identified above were of such significance, together with the other factors I have discussed, as to result in the costs discretion being exercised largely in favour of the Lansen applicants' contention. Put another way, I consider the scales have shifted from a starting point in favour of a costs order to the Minister and MRM to a point where there should be no or a relatively small order as to costs of the proceeding. I have therefore rejected the Minister's submission that the issues which I have specifically identified raised "no novel or difficult question of general importance". Each of these issues was complex. The issue as to the intersection of the operation of Pt 8 and the Bilateral Agreement (enlivened by s 83) is unlikely to re-occur, but the other issues as to the requirements for a valid assessment report for the purposes of the EPBC Act, as to the proper means of responding to a request for information under s 132, and as to the consequences of failing to have regard to a relevant consideration have the wider character of exposing the proper construction and application of the Act in the future, in the interests of the public. 35 I will defer reaching a concluded view as to any appropriate costs order against the Lansen applicants until I have considered the other matters they have raised. On 13 March 2007 directions were made for affidavit evidence and written submissions, and the application was listed for trial for 3-4 May 2007. On 30 April 2007, Angel J published reasons for judgment in the related Supreme Court proceedings, concluding that the proposed open cut mining operation was prohibited by the Mining Management Act 2001 (NT). On 2 May 2007, the McArthur River Project Amendment (Ratification of Mining Authorities) Bill 2007 (NT) was introduced into the Legislative Assembly of the Northern Territory. On 3 May 2007, Angel J declared that the Territory mining approval, constituted by the grant of a mining authorisation and acceptance of a mining management plan under the Mining Management Act , was invalid and quashed that approval. However, on 4 May 2007, the Territory Ratification Act commenced. 37 The Lansen applicants contend that, if the Ratification Act had not been enacted, the immediacy of the proceeding may have been diminished. It is correct that the initial hearing on 3 and 4 May 2007 proceeded on a somewhat constricted basis. However, the orders of Angel J were, on 18 July 2007, set aside by the Northern Territory Court of Appeal: McArthur River Mining Pty Ltd v Lansen [2007] NTCA 5 by reason of the Ratification Act : see at [12]. To the extent that the Lansen applicants had earlier placed reliance on the orders of Angel J, they were no longer able to do so. 38 I am not satisfied that those events so altered the overall course of the hearing, or the work involved by any party in the course of the hearing, as to warrant any particular order for costs other than that which I am disposed to make. There is insufficient material, in my view, for the events to which I have just referred to lead to any other conclusion. 41 The Lansen applicants have correctly described two issues, and their outcomes, in (b) and (c) above. I consider that those matters should be taken into account on the issue of costs. I do not take into account the matters in (a). It is common that issues are hard fought and often resolved only on fine balance. However, if that particular submission be correct, it would follow that in each case the judge may be called upon to indicate how close was the balance between the competing contentions, or (it might be said) the degree of confidence of the judge in reaching the conclusions. It would also follow that, in a "one issue" case which was finely balanced, there should or might be no order for costs or a marginal order for costs as a matter of routine. In my view, even if it be accepted that the contentions were "close" (to use the word in the submission), that is not a reason why costs should not follow the event unless there were other relevant circumstances. 42 Within the general discretion to award costs, a successful party who has failed on certain issues may be deprived of the costs of those issues, and be ordered to pay the costs of the other party in relation to them: Ruddock at [11]; Cretazzo v Lombardi (1975) 13 SASR 4 at 16. It should be noted that Jacobs J in that case, also at 16, said that ordering costs on the basis of the resolution of particular issues should be undertaken only with caution. It is clear that it does not routinely follow from the resolution of an issue in a proceeding adversely to the successful party that the general rule as to costs should not apply. That is a matter to be determined in all the circumstances. 43 I accept that both the Minister and MRM conducted the proceeding in a reasonable and efficient manner. It was not unreasonable for them to have resisted the claim that the Minister had failed to comply with s 134(4)(a) of the EPBC Act and so failed to have regard to a relevant consideration in reaching the decision. The reasonableness of a party in the general conduct of a proceeding, and in disputing particular issues, is a relevant factor in resolving issues as to costs: Keddie v Foxall [1955] VR 320 at 324, although the need for demonstrated unreasonableness by a party is not a necessary criterion for awarding costs to be reduced for that party failing on a particular issue or issues: Verna Trading Pty ltd v New India Assurance Co Ltd [1999] 1 VR 129 at 154. The discretion is not fettered by particular rules. Hence, reasonableness overall or in relation to a particular issue does not of itself protect a party, unsuccessful on an issue, from the outcome on that issue somehow being reflected in the costs order. The Lansen applicants have elsewhere made, and I have rejected, what would otherwise be the corollary of that proposition, because they say that they acted reasonably in raising the issues on which they ultimately did not succeed. 44 Although the standing of the Lansen applicants was acknowledged shortly before the hearing, in my view the position of those applicants as native title claimants under the Native Title Act 1993 (Cth) and/or as representatives of groups who had a real interest in the proposed mine development and its potential upstream and downstream consequences by reason of grants under the ALR Act in respect of areas through which the McArthur River ran was readily apparent. They nevertheless prepared substantial material to demonstrate their standing. Neither the Minister nor MRM was likely to have been unable to ascertain readily their status in relation to lands adjacent to the mine or to the McArthur River, at least soon after the proceeding was begun. In my view, it is appropriate to reflect that ultimately acknowledged outcome on that contested issue (to the commencement of the trial, or just before it) in the costs order. 45 If it were standing alone, I would not reduce the costs of the Minister or of MRM by reason of the Lansen applicants having succeeded on the issue concerning the Minister's contravention of s 134(4)(a). It absorbed only a small part of the hearing and the evidence was in short compass. Having taken the step of planning to adjust the allowed costs for one issue, however, I propose to make a minor reduction in the costs to be allowed to the Minister and MRM to recognise that they did not succeed on that issue. 46 In my judgment, an appropriate reduction of the costs of each of the Minister and of MRM is a more sensible and practical outcome than awarding the Lansen applicants costs of those issues. There is no science to the amount of the appropriate reduction. I think that the costs of each which I would otherwise order should be reduced by 10 per cent. They were right to do so. They were joined as respondents. The decision of the Minister was under attack. The decision was one favourable to MRM, and it had obvious and good reasons to defend it; its part in the provision of information upon which the Minister's decision was made was a very significant one, and the attack upon the decision included criticism of the adequacy of the information provided by MRM as well as the correctness of the procedures by which it was gathered. 48 However, the Lansen applicants say that MRM overstepped its proper role and so it incurred costs on work which duplicated the work of the Minister, rather than simply adopting and supplementing the work of the Minister. As the Minister's decision was the target of their attack, they contend that the Minister was the appropriate principal contradictor. They add, as was clearly the case, that the Minister took an active and extensive role in defending the proceedings. 49 As noted, the approval process involved MRM's actions as well as those of the Minister. Moreover, as the economic interests of MRM very obviously potentially very significantly exposed by the claim, if successful, MRM had good reason to ensure those interests were properly protected. 50 The Lansen applicants have identified, by reference to a table annexed to their written submissions, many issues upon which the Minister made careful and thorough submissions and upon which then MRM also made submissions beyond adopting, as relevant, those of the Minister. The response of MRM is that it adopted the Minister's submissions where appropriate, and only supplemented those submissions or made submissions on additional matters as it considered necessary. 51 Having considered all that material, I am not critical of the role played by MRM in this proceeding. I do not think that, in protecting its own interests, it over-stepped the line of adopting as appropriate the Minister's position and then advancing additional material where that was appropriate. 53 I have endeavoured to reflect my general assessment of the extent to which the proceeding concerned "public interest" issues as I have discussed them above and the extent to which it concerned other issues arising under the EPBC Act. My view is that, in the circumstances, it would be appropriate to order the Lansen applicants to pay 35 per cent of the taxed costs of the Minister and of MRM of the proceeding. I also allow a further reduction from the full costs of 10 per cent to reflect the outcome or particular issues, in particular that concerning the Lansen Applicants standing. 54 Accordingly, I order that the Lansen applicants pay to the Minister and to MRM 25 per cent of each of their costs of the proceeding to be taxed. As I earlier indicated, those taxed costs should exclude the costs of and incidental to the Lansen applicants' notice of motion of 29 April 2008. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

whether costs should be awarded against a non-party role of northern land council costs order sought against non-party refused public interest whether costs order should be made in favour of successful respondents applicants claim to have pursued litigation in public interest costs of issues costs costs costs

The conduct of the respondents was of the most appalling nature. It involved exploiting the families of persons suffering from terminal cancer and defrauding them of substantial amounts of money. 2 Since Ryan J's order the respondents have persistently harassed the witnesses by sending them strange documents couched in pseudo-legal medieval language, including demands for some $294 million. Understandably, this has caused great distress to the witnesses and has revived their tragic memories. 3 The Australian Competition and Consumer Commission now seeks injunctions against those of the respondents who are individuals, that is, Paul John Rana, Christopher James Rana and Michael Lee Rana, to restrain them from communicating in any form whatsoever with the witnesses in relation to the subject matter of the proceeding or any other legal proceeding, from sending them documents of the kind mentioned and from demanding any payment of money from the witnesses. 4 The jurisdiction to make such an order is undoubted. The Court will protect witnesses who have given evidence from subsequent victimisation or harassment: see Attorney-General v Butterworth [1963] 1 QB 696. This position has been followed in many jurisdictions including Victoria: see R v Wright (No1) [1968] VR 164. 5 Only the sixth and respondents, Paul and Christopher Rana, have been served so the injunctions sought will be granted against those respondents. It must be clearly understood --- and I direct that a copy of these reasons be served with the order --- that any breach of this injunction will be treated as a most serious contempt of this court and will be likely to result in a substantial term of imprisonment. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.

injunction harassment of witnesses after findings of contravention of trade practices act held: court will protect witnesses from harassment by parties to a proceeding. contempt of court

In the 2001 income year, Clark Enterprises Pty Ltd ("CEPL") as trustee of a trust called the Carringbush Unit Trust (the "CU Trust") sold two properties in Gladstone to Queensland Alumina Limited realising a net capital gain of $1,932,006. By sections 6(1) and 95 of the Income Tax Assessment Act 1936 (Cth) (the "1936 Act") the net income of the trust estate for the purposes of both the 1936 Act and the Income Tax Assessment Act 1997 (Cth) (the "1997 Act") means the total assessable income of the trust estate calculated as if the trustee were a resident taxpayer in respect of that income, less all allowable deductions. By s 102-5(1) of the 1997 Act, the assessable income of the trust estate includes a net capital gain made in the income year. A net capital gain is determined by reducing the capital gain made in the income year by the capital losses made in that income year (s 102-5(1); step 1, 1997 Act) and by applying any previously unapplied net capital losses from earlier income years (s 102-5(1); step 2; s 102-15, 1997 Act) to reduce the amount remaining (if any) after step 1. Mr and Mrs Clark contend that three previously unapplied net capital losses from earlier income years were properly applied to reduce to nil the net capital gain arising out of the disposal of the Gladstone properties. The primary capital loss was said to arise on the disposal of two parcels of shares in Rothwells Limited ("Rothwells"). By 30 June 1988, the value of the Rothwells shares was treated by Carringbush's tax advisers, BDO Nelson Parkhill, in the 1988 financial statements for the CU Trust as having diminished by $1,242,655.00 to $1,250,000.00. By 30 June 1989, the value of the Rothwells shares was treated by BDO Nelson Parkhill in the 1989 financial statements for the CU Trust as having diminished to nil. On 22 September 1989, Rothwells was placed in official liquidation. The financial statements for the CU Trust for those years were adopted by the directors of Carringbush. The Rothwells shares were sold by the trustee for $1.00 on 26 May 1993 to Carringbush Corporation Pty Ltd ("Carringbush Corporation") effecting a disposal for capital gains tax purposes. The applicants contend that the trust estate suffered a capital loss of $2,492,653.50 in the 1993 income year. The applicants also contend that the trust estate suffered a capital loss of $375,995.00 in the 1991 income year as a result of the trustee writing off a loan to a company called Relsun Pty Ltd ("Relsun"). A further capital loss of $72,000.00 was said to have been made in the 1992 income year as a result of the trustee writing down the CU Trust estate's investment in shares in a company called Carringbush Kumagai Limited ("CKL"). As to the last two contended capital losses, the Commissioner says that there is no evidence to support either transaction and thus the taxpayers have failed to discharge the onus of proof required by s 14ZZO of the Administration Act. As to the Rothwells transaction, the Commissioner puts the taxpayers to proof and contends that the taxpayers have not been able to identify the date of the acquisition, the entity that acquired the shares or the method by which Carringbush as trustee of the CU Trust financed the acquisition if it acquired the shares, and nor have the taxpayers been able to produce any of the primary documents evidencing the transaction. The Commissioner accepts that if the Court is satisfied that the taxpayers have discharged the onus of proving, on the balance of probabilities, that Carringbush as the trustee of the CU Trust acquired the Rothwells shares as contended, the disposal on 26 May 1993 gives rise to a net capital loss in the 1993 income year of $2,492,653.50. No question arises under s 468(1) of the Corporations Act 2001 (Cth): Carringbush Corporation Pty Ltd v ASIC [2008] FCA 474; (2008) 26 ACLC 506. Put in simple terms, the following distributions occurred in the 2001 income year. CEPL as trustee of the CU Trust distributed the entire income of the trust to or for the benefit of a discretionary unit holder, DCE Holdings Pty Ltd ("Clark Holdings") as trustee of the David Clark Family Trust (the "Clark Family Trust"). Clark Holdings distributed the income so received to David Clark Enterprises Pty Ltd ("Clark Enterprises") as trustee of the David Clark Enterprises Trust (the "Enterprises Trust") and Clark Enterprises distributed the income of the trust to David Clark and Helen Clark in equal shares as beneficiaries of that trust. By s 97 of the 1936 Act, the assessable income of David Clark and Helen Clark includes a 50% share of the net income of the Enterprises Trust and in the event that the taxpayers are not able to establish that the CU Trust estate suffered previously unapplied net capital losses extinguishing the net capital gain arising out of the disposal of the Gladstone properties in the 2001 income year, the net income of the Enterprises Trust will also include a significant part of the net capital gain (discounted by 50%) made by the CU Trust in the 2001 income year. Accordingly, the first question to be determined in these proceedings is whether the applicants have discharged the onus of establishing that in the 1988 income year, the trustee of the CU Trust acquired the Rothwells shares. The second question to be determined is whether, assuming the trustee of the CU Trust acquired the Rothwells shares in the 1988 income year and incurred a net capital loss in the 1993 income year of $2,492,653.50, the unapplied net capital loss can be applied so as to reduce the capital gain made in the 2001 income year. The Commissioner says that a series of events occurred in June 1993 that had the effect of changing the trustee of the CU Trust, altering the ownership of the units of that trust, extinguishing liabilities of the trust, extinguishing the former trustee's right of indemnity out of trust assets, altering the corpus of the trust, and changing the activity of the trust from a dormant trust to a vehicle used by Mr David Clark to take advantage of accumulated losses in the CU Trust to offset profit in the Enterprises Trust by causing Clark Enterprises as the trustee of the Enterprises Trust to distribute $1,965,000.00 to CEPL as trustee of the CU Trust as a beneficiary of the Enterprises Trust. All of these events are said by the Commissioner to establish a lack of continuity required by the 1936 Act and the 1997 Act in the trust estate that made the capital gain in the 2001 income year and the trust estate that incurred the unapplied net capital loss in the 1993 income year and the Relsun and CKL net capital losses in the 1991 and 1992 income years respectively: and thus the net capital losses can not be applied, it is said, so as to reduce the net capital gain made in the 2001 income year and, in consequence, reduce the net income of the trust estate of the CU Trust, as configured in the 2001 income year. The four volumes contain the affidavits of the applicants' witnesses all of whom other than Mrs Clark were cross-examined. The core volumes marked "Exhibit 2" contain the final Amended Statements of Facts Issues and Contentions of each party, notices to admit facts and documents, responses to those notices and some other documents not exhibited to affidavits but included in the volumes by agreement (T, p 5; l, 5) and admitted into evidence. The settlement sum was $10.00 to be held upon the trusts and subject to the terms contained in the Deed. The trust comprises a fund made up of, among other things, the settlement sum and all further sums paid to the trustee for the creation and issue of units; all assets, investments and property paid or transferred to the trustee as additions to the fund; and the proceeds of sale of assets, investments and property. A "unit" is defined to mean an undivided part or share in the fund and the initial fund of $10.00 was divided into 10 $1.00 units issued on 2 July 1984. Three units were issued to Mr John Michael Denoon. Three units were issued to his wife, Helen Margaret Denoon, and four units were issued to Mr William Ross Scott as trustee for Ilegry Pty Ltd. Those units were redeemed on 18 March 1987. Gemridge Pty Ltd ("Gemridge") as trustee for the Carringbush Group Discretionary Trust (the "CGD Trust") applied for and was issued with nine units in the CU Trust on 18 March 1987 and Mr Denoon applied for and was issued with one unit in the trust as nominee for Gemridge as trustee of the Carringbush Discretionary Trust, on 18 March 1987. Gemridge is a company controlled by Mr Denoon. Mr Denoon has been a director of Carringbush continuously since 6 February 1984. He says that he controls Carringbush and Carringbush Corporation. He has been a director of Carringbush Corporation continuously since 1 May 1987. The financial statements for the CU Trust prepared by BDO Nelson Parkhill show that the trust generated a net profit at 30 June 1987 of $2,921,804.00. Note 5 to the financial statements for the 1988 financial year demonstrates that the CU Trust was involved in extensive land development activities. The non-current assets of the CU Trust at 30 June 1988 included debts owed to the trust of $59,931,121.00 and non-current liabilities of $56,469,575.00. The detailed profit and loss statement for the year ending 30 June 1988 demonstrates a trading profit of $3,954,719.00. Plainly, Carringbush as trustee of the CU Trust was engaged in a wide range of commercial development activities. Mr John Denoon in his affidavit sworn 21 August 2008 gave the following evidence. He says that in or about 1987/1988 he was contacted by friends associated with a merchant bank called Wardleys Australia Limited ("Wardleys"). He was told that Wardleys was seeking investments in Rothwells which was part of a rescue package to save what was described as the "banking system in Western Australia". He says he was asked to invest $5,000,000.00 in Rothwells shares consisting of the issue of one ordinary share and two cumulative redeemable convertible preference shares for every new issued ordinary share. He says that he was given some assurances about the security of the investment. He says he was initially contacted by Mr James Yonge although most of the detail of the package was negotiated by Mr Denoon with Mr Kerry Roxburgh who Mr Denoon understood was the managing director of Wardleys. The shares were to be a new allotment issued to the incoming investors supporting the rescue package. Mr Denoon says that he agreed to invest $2.5m in the rescue package. He says that in 1987/1988 he caused Carringbush to pay $2.5m to acquire the Rothwells shares although the ultimate amount paid by Carringbush was $2,492,655.00. He annexes to his affidavit pages from the share register of Rothwells. The annexure contains a page from the register printed on 29 September 1988 which contains a reference to "CRCP shares" and records Carringbush Pty Ltd of Level 22, 56 Pitt Street, Sydney NSW 2000 as the owner of 949,583 CRCP shares. The register also shows as printed on 1 November 1988 Carringbush recorded as the owner of 474,791 ordinary shares. The financial statements for the CU Trust for the year ending 30 June 1988 prepared by BDO Nelson Parkhill record balance sheet non-current assets described as "investments - at cost --- $1,322,830". He says that it has been over 20 years since the transaction occurred and he has no records of any of his companies for such a period. He says that at the time of the acquisition, Carringbush was acting in its capacity as trustee of the CU Trust. He says that the funds were provided by way of a loan from Carringbush Corporation. He says that the true financial position of Rothwells was not clear to him. He says that he does not recall the write-down in the value of the investment in the Rothwells shares reflected in the financial statements for the CU Trust of 30 June 1988. However, the financial statements prepared by Carringbush's accountants were tabled and approved at the Annual General Meeting on 31 December 1988. Mr Denoon says that he relied upon the advice of the accountants in preparing the accounts and the accounts are based upon material provided to the accountants at the time. He says that his practice has been to review the accounts and then, once assurances have been received from the accountants as to relevant matters, to adopt the accounts as a "true and correct set of accounts". He says in his affidavit that he believes the accounts recording the purchase of the Rothwells shares were reviewed by him shortly after their preparation and he believes now, consistent with his usual practice, that the accounts prepared at the time reflect a true and fair view of the transaction and the matters the accounts address. In cross-examination, Mr Denoon explained the contextual background to the acquisition of the Rothwells shares. He said that in May or June of 1987, he had concluded a joint venture project with a large Japanese company called Kumagai Gumi. Upon the completion of the joint venture, an amount of approximately $11,000,000 became payable to Mr Denoon's joint venture entity. Mr Denoon caused $10,000,000 to be placed on deposit with the Hong Kong Bank. Wardleys was the merchant banking arm of the Hong Kong Bank. Although the deposit with the Hong Kong Bank was supposed to be a confidential matter between the bank and its customer, Mr Yonge from Wardleys approached Mr Denoon and told him that he knew that an amount of $10,000,000 was on deposit with the bank. Mr Denoon was annoyed that Wardleys knew that information. Mr Yonge asked Mr Denoon to invest $5,000,000 in the Rothwells rescue. Mr Denoon had reservations because of the low opinion he held of Mr Connell, who was the primary guiding mind of Rothwells. Mr Denoon says that he was "badgered" to provide the funds. He thought he had conversations with Kerry Roxburgh about it. Mr Denoon agreed to invest $2.5m in the rescue and subscribe for the shares. The attempt to assemble a rescue package occurred consequent upon the stock market crash in October 1987. Mr Denoon said that he was not sure how the purchase of the shares was financed. He thinks that Carringbush Corporation provided loan monies to Carringbush as trustee of the CU Trust to enable it to purchase the shares. There may have been a direct transfer of money from the monies held by the Hong Kong Bank. Alternatively, Mr Denoon may have signed a cheque drawn on an account of one of the companies in the Carringbush group of companies. He can not recall whether the money on deposit with the Hong Kong Bank was held in the name of Carringbush Corporation or a special purpose vehicle established for the joint venture. Mr Denoon is clear that the deposit at the Hong Kong Bank was not in the name of the CU Trust. Mr Denoon accepts that he has no loan documentation in relation to the transaction nor any minutes of a meeting recording a loan from Carringbush Corporation or any other company to Carringbush as trustee of the CU Trust to finance the acquisition of the Rothwells shares. Mr Denoon accepts that he is not able to produce a copy of the application form for the shares which was completed and lodged with Wardleys. He also accepts that he is not able to now recall the precise number of ordinary shares or cumulative redeemable convertible preference shares taken up. He relies on the accounts and the Rothwells share register. He accepts that he has no present knowledge of the entity specified in the application form submitted to Wardleys. Mr Denoon however recalls the discussions with James Yonge and believes he discussed the transaction with Mr Roxburgh. Mr Denoon was cross-examined about three matters which are relied upon as calling into question the accuracy or reliability of the financial statements. The first of those matters concerned the share price. Mr Denoon caused an application to be made to take up the shares at a price of $1.75. However, the relevant market price of the shares in the period in question fluctuated between approximately $0.65 and $0.80 and it was put to Mr Denoon that it thus seemed improbable that he would cause an entity under his control to subscribe for Rothwells shares at such a premium. Mr Denoon accepted that the difference between the market price and the subscription price seemed anomalous and he could only speculate that the people from Wardleys must have encouraged him to believe that they could turn the company around in some fashion. It was put to Mr Denoon that if he had thought about such an investment for a moment, he would not have made the investment. Mr Denoon said that he did think about it and, in fact, he did make the investment. He says he well remembers the discussions with Wardleys. He regarded an investment of $2.5m as a significant amount and he well remembers losing the entirety of the investment. The second matter put to Mr Denoon was that there were no minutes or records of a loan transaction between any Carringbush entity and Carringbush as trustee of the unit trust and moreover the financial statements for the year ending 30 June 1988 did not reflect a loan from Carringbush Corporation or any other Carringbush entity in an amount of $2.5 million. In the course of Mr Denoon's oral evidence he thought that the joint venture entity may have been a Victorian Carringbush company. The balance sheet for the CU Trust at 30 June 1988 shows non-current liabilities in the form of unsecured loans as $56,469,575.00 and Note 6 to the accounts identifies those loans. A substantial amount is a loan from Carringbush Kumagai Limited ($50,313,868.00). Mr Denoon accepts that no part of that loan is a loan for the acquisition of the Rothwells shares. There is also a loan from Carringbush (Vic) Pty Ltd of $5,645,717.00. Mr Denoon, when asked about that loan, paused for some time but ultimately thought that the loan for the acquisition of the Rothwells shares was not reflected in the loan from Carringbush (Vic) Pty Ltd. Mr Denoon accepts that the financial accounts for the year ending 30 June 1988 do not reflect a loan for the acquisition of the Rothwells shares. The third matter put extensively to Mr Denoon was that the records relating to Carringbush maintained by the Australian Securities and Investments Commission suggest a sequence in the evolution of Carringbush Corporation which shows that Carringbush Corporation was not operating by that name until 1 July 1989. Carringbush Corporation was a corporation that changed its name a number of times in quick succession. Mr Denoon accepted that there was no other corporation called Carringbush Corporation other than the entity which ultimately came to be called Carringbush Corporation, apparently on 1 July 1989. Ultimately, the Commissioner contends that since there seems to be an anomaly in the references to Carringbush Corporation; an anomaly in the subscription price and the prevailing market price; a failure to record in the financial statements of the CU Trust any reference to a loan transaction between a lender and the CU Trust in respect of the funds used to acquire the Rothwells shares; and no primary documents, the financial accounts ought not to be treated as a true and fair reflection of the transactions and the matters they purport to address. However, there are a number of things that seem to me to be persuasive. Mr Denoon has a clear recollection of the transaction in the sense that he recalls the approach from Wardleys based on what he regarded as a quite unprincipled access to information about a deposit with the Hong Kong Bank. He recalls the request for the subscription for shares reflecting an investment of $5m as part of a rescue package for Rothwells and he recalls being pressed or badgered about the matter. He recalls committing $2,500,000.00 to the transaction and he well recalls losing all the money which must have been an experience imprinted upon Mr Denoon's mind. I have no doubt that Mr Denoon, who I regard as a witness who was telling the truth and honestly trying to recall the elements of the transaction and answer questions about it, responded to the Wardleys' request and elected to apply for the Rothwells shares and cause $2,500,000.00 to be paid for them. The transaction occurred 21 years ago. The financial accounts for the CU Trust for the year ending 30 June 1988 were prepared by BDO Nelson Parkhill on 5 December 1988. The evidence is that the external accountants were provided with all of the primary documents relating to the financial affairs for the CU Trust including expenditure vouchers, cheque requisitions, bank statements, cheque books and other primary documents. The accountants prepared the financial statements of the trust in such a way as to reflect the acquisition of the Rothwells shares by Carringbush as trustee of the CU Trust because, I infer, the primary documents caused the accountants to believe that the trustee of the CU Trust had made an investment in the Rothwells shares in the amount reflected in the accounts. By the time the accounts were prepared on 5 December 1988, the true and fair view at 30 June 1988 of the value of the investment in the Rothwells shares was diminished by $1,242,655.00. The accounts reflect an investment in the Rothwells shares in the full amount of the acquisition price subject to diminution in value. Similarly, the financial accounts for the year ending 30 June 1989 reflect a provision for diminution in the value of the Rothwells shares by a further $1,250,000.00 reducing the value of the investment to nil at 30 June 1989. The financial accounts for the year ending 30 June 1988 also show non-current assets in the form of debts owed to the CU Trust of $59,931,251.00 including an amount of $1,000.00 as a non-current debt owed by Carringbush Corporation Limited. The accounts also show, by comparison with the position at 30 June 1987, current debts due to the CU Trust from Carringbush Corporation of $1,000.00. Although there may be some unexplained confusion in the evolution of the use of the name Carringbush Corporation, the plain inference is that the accountants took the view that Carringbush as trustee of the CU Trust had engaged in relevant commercial transactions with Carringbush Corporation in the 1987 and 1988 financial years. It is clear that Mr Denoon can not recall with precision which entity was a lender of funds to the CU Trust to enable the acquisition of the Rothwells shares to occur. He accepts that the acquisition was not funded out of the cash flows available to Carringbush as trustee of the CU Trust. Nevertheless, the financial accounts for the 1988 and 1989 financial years have been prepared by the accountants with access to the primary documents. Those accounts have been prepared on the footing that the Rothwells shares were acquired by the CU Trust. The annexures to Mr Denoon's affidavit of the pages from the Rothwells share register as printed on 29 September 1988 and 1 November 1988 record the ownership of those shares in the name of Carringbush. Mr Kerry Roxburgh, the former deputy managing director of Wardleys, also gave evidence about the rescue package. Mr Roxburgh knew Mr Denoon from previous commercial transactions. Mr Roxburgh however thought that he had no discussions with Mr Denoon about the transaction to subscribe for Rothwells shares. Rather, Mr Roxburgh thought that Mr Yonge conducted the relevant discussions with Mr Denoon. In his affidavit evidence, Mr Roxburgh described the applicants for shares as sub-underwriters of the proposed Rothwells issue. In cross-examination, Mr Roxburgh explained that Wardleys had underwritten the issue and that a project team had been established to secure applications for shares so as to, in effect, lay off the risk of the underwriting. A list of targets was prepared and each person on the list was systematically approached including Mr Denoon. Once Wardleys had secured a commitment from a particular person, the project team pursued the completion of the subscription process which involved an applicant for shares filling out and lodging an application form and making arrangement for payment of the subscription price. These steps took place in January 1988. The completed applications had to be returned to the project team in January 1988 and those applications were passed on to Rothwells for the issue of the shares. The shares were not issued by Wardleys. The original application document was held in the records of Rothwells. Mr Roxburgh was asked about the anomaly concerning the fluctuations in the share price between $0.65 and $0.80 at the relevant time and the subscription price of $1.75 for shares. Mr Roxburgh seemed to acknowledge that such a differential existed and this simply meant that "the follow up was a very difficult process, but I also recall that we were extremely pleased with the response and that we did not have a shortfall. But I do recall it was a very difficult process". Evidence was also given by Mr William Ross Scott. Mr Scott has been associated with Mr Denoon since 1962. He was at the relevant time a full-time director of all of the companies in the Carringbush group of companies including Carringbush as trustee of the CU Trust. Mr Scott was responsible for the "financial side of the businesses". He says that he was involved in the affairs of each of the companies and was aware of their activities. His association with Mr Denoon ended in March 1992 when Mr Scott pursued an independent business opportunity. He says that he can not now recall the acquisition of the Rothwells shares, specifically. He recalls that Wardleys approached Mr Denoon and pressed him to take up an investment in shares to be issued by Rothwells. Mr Scott says that he was concerned about it at the time because he thought it was taking investment away from the core activities of the Carringbush group of companies. He says that although he can not recall the payment for the shares he would have been instrumental in arranging for and processing the payment. He says that if the payment was made by cheque, he would have signed it. If the payment was made by other means, he would have made the arrangements. Mr Scott says that the companies in the group maintained a general ledger on computer and there was a general ledger for the CU Trust. He says the general ledger would have reflected the transactions of the trust and there would have been journal entries made, "from time to time". Mr Scott can not now recall the loan transaction by which the acquisition of the shares by the CU Trust was funded. He thinks that the funds would have been provided by one of the entities in the Carringbush group of companies. He thinks that the companies' documents would have reflected a record of the payment, either in bank statements or as a journal entry in a ledger. Mr Scott says that he remembers the transaction because of his discussions about it with Mr Denoon. He says that he relies upon the accounts of the CU Trust as evidencing the ownership of the Rothwells shares although he has no independent recollection of Carringbush as trustee of the CU Trust becoming the owner of the shares. Mr Scott says that he was responsible for arranging the mechanics of the transfer of funds as and when required for the many developments which the Carringbush group of companies were then undertaking. As to the preparation of the accounts, Mr Scott confirmed that the accounts were prepared by external accountants and that those accountants had access to all of the books and records of the Carringbush group of companies. He explained that the accountants would attend the premises for the group of companies and prepare the accounts from "chequebooks, bank reconciliations, whatever was --- whatever information was available, they had access to it". As to the accuracy of the accounts, Mr Scott said, "Well, I was involved from a director's point of view in going through the draft accounts with the accountants and auditors, and I would have been satisfied that they represented a true picture". Mr Scott was asked in cross-examination about the business method of recording a loan transaction in the order of $2.5 million. Mr Scott accepted that an inter-company loan transaction would, in the ordinary course, have been the subject of a minute at least, "on a fairly regular basis". Making a minute of such a loan transaction or a significant variation to such a loan would depend upon whether the transaction was truly a loan transaction or simply a current account transaction which would not necessarily have been minuted. Mr Scott said that an amount of $2.5m was not a major amount in the context of the development activities of the Carringbush group of companies at the time and would not necessarily have been minuted. Loan transactions with external lenders were in a different category and would have been minuted. I accept the evidence of Mr Denoon, Mr Roxburgh and Mr Scott. I am satisfied that the financial statements for the year ending 30 June 1988 and 1989 prepared by BDO Nelson Parkhill based upon access to all of the primary documents relating to the activities of the Carringbush group of companies and more particularly Carringbush and the CU Trust, evidence a transaction by which Carringbush as trustee of the CU Trust acquired the Rothwells shares. I am satisfied that the acquisition is consistent with the entries recorded in the Rothwells share register. I am satisfied that Carringbush as trustee of the CU Trust paid for those shares in an amount of $2,492,655.00 and that those funds were available to Carringbush as trustee of the CU Trust, on the balance of probabilities, by means of an inter-company loan. I accept that the financial statements for the 1988 and 1989 financial years do not expressly reflect such a loan. However, I do not regard that matter as a proper basis upon which the financial statements for those years ought to be called in question and displaced as evidence of the acquisition. The funds may have been available to Carringbush from companies within the group of companies on the basis, as Mr Scott thought possible, that loan funds were provided or drawn down from a company within the group and repaid within the financial year in which event the transaction would not be recorded as a loan transaction in the financial statements at 30 June 1988. In any event, the oral evidence of best recollection of a transaction that occurred 21 years ago, taken in conjunction with the entries in the financial statements and the entries in the share register, establish, on the balance of probabilities, that the Rothwells shares were acquired by Carringbush as trustee of the CU Trust in or about January or February 1988 or at least at a date within the second six months of the financial year ending 30 June 1988. The shares were sold in the 1993 income year giving rise to a net capital loss of $2,492,653.50. In the 1987 financial year the CU Trust achieved a trading profit from its land development operations of $2,771,629.00. In the 1988 financial year the trust achieved a net profit of $3,954,719.00 from land development operations. However, in the 1989 financial year the CU Trust suffered a loss of $2,881,749.00. The balance sheet for that year shows trust funds of $10.00 and accumulated trading losses of $2,881,747.00. Total assets were approximately $64m and total liabilities were in excess of $67m. In the 1990 financial year the CU Trust achieved an operating profit of $359,319.00. However, carried forward losses from the previous financial year resulted in accumulated losses at 30 June 1990 of $3,322,428.00. Those losses were overstated, by mistake, as the carried forward losses from the previous year were $2.8m and thus the accumulated losses in the 1990 financial year were $2,522,428.00. The error was corrected by a journal entry. In the 1991 financial year the CU Trust derived an operating profit of $376,296.00. However, accumulated losses at the end of the financial year were $2.9m. In the 1992 financial year the CU Trust suffered an operating loss of $964,738.00. The accumulated loss at 30 June 1992 was $3,910,870.00. The balance sheet for the 1992 financial year reflects a deficiency of liabilities over assets of $3.9m. Note 5 to the accounts for that year discloses a contingent liability on the footing that Carringbush as trustee of the CU Trust was a guarantor of the obligations owed by Carringbush Corporation to AGC (Advances) Limited. The total liability under the particular facilities at 30 June 1992 was $44,482,656.00. In the 1992 financial accounts, like the 1991 financial accounts, the directors noted that notwithstanding the deficiency in net assets, the financial statements had been prepared on a going-concern basis as the directors had received an assurance of continuing financial support for the CU Trust and the directors recorded in their accompanying statement that they believed such financial support would continue to be available. Mr Denoon gave this evidence-in-chief by his primary affidavit filed 29 August 2008. In the first half of 1993 Mr Denoon's accountant at BDO Nelson Parkhill, Mr James Kirby, put Mr Denoon in contact with a property developer from Queensland, Mr David Clark, and Mr Clark's accountant, Mr Tony Lovett. Mr Clark was introduced to Mr Denoon by Mr Kirby as someone who was said to have capital available to invest in particular projects notwithstanding the "downturn" in the property market. Mr Clark was anxious to become involved in larger property development projects. Mr Denoon and Mr Clark agreed to undertake property development projects and work in a "joint venture arrangement". Mr Denoon was aware of Mr Clark's financial position. He was a person who had access to funds "in a tight financial market". Mr Denoon had suffered heavy losses and was looking to "re-establish [himself] financially". He saw Mr Clark as someone who would be capable of assisting him in that objective. Mr Denoon agreed to assist Mr Clark in undertaking larger scale property development projects both as a "consultant" to Mr Clark and "as a future equity participant". Mr Denoon says that he and Mr Clark selected the CU Trust as the vehicle for implementing the proposed joint venture. He says that one important factor which each of them took into account in selecting the CU Trust was the potential that "the capital losses on the Rothwells shares could shelter any future capital gains". He says that Mr Clark agreed to pay $60,000.00 to "pay for his share of the losses". Mr Denoon considered that as Mr Clark was to introduce capital of $1.8m into the arrangements, it was reasonable that Mr Clark's interests also assume control of the CU Trust. He says that at the time of these discussions, he was only interested in selling "a one-half interest in the [CU Trust] --- in the hope and expectation that I would be able to reap some benefit from those losses once the projects which Mr Clark was undertaking were completed profitably". Mr Denoon agreed a consultancy fee with Mr Clark. Mr Denoon says the consultancy arrangement brought him "immediate cash flow from which I thought that I would be able to carry out the tasks and pursue the development opportunities through the [CU Trust]". Mr Denoon says that he was told that Mr Clark did not wish the assets of the CU Trust to be exposed to any liabilities that Carringbush had incurred. Accordingly, Mr Clark's solicitor and accountant undertook a due diligence process to isolate the scope of those actual and potential liabilities. Mr Denoon says that as the loans, made by entities controlled by him within the Carringbush group of companies, to Carringbush were "irrecoverable due to the minimal net value of the assets of the [CU Trust] following the property down turn I was prepared to write those loans off formally and provide formal indemnities by my entities that they would not seek recovery in the future from Carringbush or the trustee of the [CU Trust] for the time being". Mr Denoon said that he regarded the arrangements and the transaction just mentioned, to be of great benefit to him as it gave him the opportunity to "proceed with interesting projects" which he would not have been otherwise able to undertake. Mr Denoon says that he reached an agreement with Mr Clark for Mr Clark to "meet the initial ongoing capital requirements for the joint venture of $1.8 million and I would make a subsequent contribution that matched his contribution. If I could not, then I was obliged to sell my 50% interest to Mr Clark for $1 per unit". Mr Denoon says that the arrangements involved Mr Clark or his interests acquiring five of the 10 issued units in the CU Trust and assuming control of the trustee; $60,000.00 would be paid by Mr Clark's interests by way of $50,000.00 being paid to discharge a liability to the bank and $10,000.00 being paid to BDO Nelson Parkhill in respect of outstanding fees; CEPL would accept appointment as the new trustee of the CU Trust; Mr Clark would "inject $1.8 million of funding into the [CU Trust]"; Arthur G Leevers Pty Ltd, a company controlled by Mr Denoon, would be contracted to act as a consultant; and Gemridge would provide "a matching equity contribution of $1.8m by a certain date (7 days after request by Mr Clark or his Associated entities), with Mr Clark having an entitlement to buyout my 50% interest in the [CU Trust] for a nominal sum if I could not meet my commitments". Mr Denoon says that following the settlement he was keen to pursue as many projects as possible. Mr Denoon says he and Mr Clark travelled to Forest Lake to inspect a development opportunity at Ipswich. He says that aided by minutes of meetings from July 1993 onward, he can recall being involved in investigating the feasibility of projects described as the Cannon Hill Shopping Plaza Project; the Cannon Hill Industrial Property Project; the Forest Lake Residential Project; a project concerning a Cairns office building; a commercial building at the corner of Edward and Alice Streets, Brisbane; and the Norwich House Project at 300 Ann Street, Brisbane. Mr Denoon says that projects discussed at project meetings included these projects and others such as a Strathpine townhouse development, a Castledine townhouse development, a Birkdale residential site and a Murrarie industrial site formerly owned by Darling Downs Bacon Cooperative Association Limited. Mr Denoon says that in entering into these arrangements and undertaking the investigation work under the consultancy agreement, "there was never any agreement by me or any of my entities to end the [CU Trust] and commence operating through a new trust". He says that it was his "intention at all times that the [CU Trust] would continue operating and that it would simply make new investments in the same way as it had invested in the past". Mr Denoon says that in entering into the transactions he believed that he would be able to meet future funding commitments on his part and make his "matching contribution of $1.8 million in 1995". He says that he was ultimately unable to raise the funds, notwithstanding his efforts, and on 27 July 1994 Gemridge wrote to the CU Trust advising of that position. The letter was tabled at a meeting on 15 August 1994. At that time significant financial commitments had been undertaken by the CU Trust which, without Mr Denoon's contribution through Gemridge, could not proceed. Since those projects were subject to conditions, the trustee of the CU Trust was able to resile from them without detriment. On 27 June 1995, the trustee agreed to a transfer of the units to Mr Clark's entity. On 26 April 1996, the units of the Denoon interests were transferred to Mr Clark's entity. Mr Denoon annexes to his affidavit the documents brought into existence which are said to reflect those arrangements. The settlement sum was $10.00 paid to the trustee, Carringbush, by the settlor, Mr James Kirby, to be held upon the trusts and subject to the terms of the trust deed. The trust is a unit trust, the settlement sum being divided into 10 $1.00 units. By cl 3, the trust is created in these terms: The Founder hereby settles upon the Trustee the settled sum and the Trustee hereby declares that it will henceforth stand possessed of the settled sum and the fund and the income thereof for the unit holders specified in the Schedule hereto and subsequently the unit holders for the time being upon the trusts and powers and subject to the terms covenants and conditions herein contained. By cl 4, the trust shall be determined 99 years from the date of the trust deed unless determined earlier in accordance with cl 23. By cl 6, the beneficial interest in the fund is divided into units consisting initially of 10 units of $1.00 each. No unit confers any interest in any particular part of the fund nor in any particular asset of the trust: cl 6(b). By cl 7, the trustee may at any time and shall immediately prior to the creation of any units or the redemption of any units obtain from the auditor a valuation certifying, in the opinion of the auditor, the then net tangible asset value of the fund. By cl 8, the trustee may cause units to be created and may accept applications for units subject to conditions appearing in the trust deed, as the trustee may determine appropriate. By cl 9, the trustee may create and issue units and accept applications for units subject to the conditions set out at cl 9(a) to (e). By cl 9(a), the trustee before inviting a person to subscribe for units must obtain a certificate from the auditor of the net tangible asset value of the fund in accordance with cl 6. By cl 10, a unit holder may at any time by notice in writing to the trustee request the trustee to redeem the whole or any lesser number of the units then held by that person. In such a case the unit certificate shall be surrendered and the redemption price is to be calculated in accordance with a mechanism set out in the trust deed taking account of a net tangible asset valuation by the auditor. By cl 11, the distribution of the income of the CU Trust is to be made in accordance with these provisions: (a) The Trustee shall in or in respect of each Accounting Period until the Vesting Day pay apply or set aside the whole of the net income of the Trust Fund for such accounting period to or for the benefit of each class of unit holders in such proportions as the Trustee in its absolute discretion may determine. Clause 14 provides for the transfer of units in these terms: (a) Every unit holder shall be entitled to transfer to any other person the units or any of the units for the time being held by him by an instrument in writing in such form as the Trustee may from time to time approve. Such form shall contain a provision to the effect that the transferee shall agree to be bound by the provisions of this Deed. The Trustee may not refuse to register the transfer of any units unless the transferee is a person who is not, in the reasonable opinion of the Trustee, a respectable, responsible and solvent person. They include the power to lend and borrow monies on broad terms; to give a guarantee; to grant and take options or otherwise deal with any real or personal property of any kind; to sell or dispose of any property; to pay out of the trust fund or the income of the fund all costs, charges and expenses incurred in the management of the fund; and to incorporate any company or companies in any place at the expense of the fund or income derived from the fund for the purpose of acquiring the whole or any part of the trust fund; and to transfer any of the investments or property constituting the trust fund or any part of it to the trustee of any other trust for fair and reasonable value. As to the conduct of any undertaking, cl 16 provides: The Trustee shall, subject to any powers delegated to a manager of the fund at any time, have absolute and uncontrolled discretion as to the carrying on of any business undertaken by the Trustee hereunder and as to the investment in authorised investments of any asset forming part of the trust fund and as to the purchase, sale, transfer, exchange or alteration of any of the assets forming part of the fund from time to time. Clause 25 provides for alterations to the trust deed. By cl 33, any trustee may at any time resign the trusteeship on giving no less than two months notice addressed to all of the unitholders for the time being. The initial unitholders were Mr Denoon (3 units), Mrs Denoon (3 units) and Mr Scott (4 units). Those units were redeemed and Gemridge made application for the issue of 9 units and Mr Denoon applied for the issue of 1 unit. Those units were issued on 18 March 1987. The deed recites that the parties have agreed to enter into joint venture arrangements: Clark Holdings is to acquire four of the units in the CU Trust and Mr Clark is to acquire one of the units; Gemridge and Denoon are to retain four units and one unit respectively; the joint venture undertaking is to be conducted through the Carringbush Unit Trust by its new trustee, CEPL; the parties are to "finance the cash needs of the [CU Trust] to fund its joint venture activities by equal contributions from [Clark Holdings] and Gemridge"; and Clark Holdings "will inject ... $1,800,000.00 to meet the immediate projected needs of the Trust in respect of its contemplated undertaking and that Gemridge will when requested contribute an equal amount". Clause 1 of the operative provisions provides, that within seven days of the date of the deed, Clark Holdings will "fund the Trust by way of the contribution (other than by way of loan) of an amount equal to ... [$1.8m] which moneys will be paid to the Trustee and banked to the Trust bank account under the control of the Trustee". By cl 2(a), Gemridge agrees to make a contribution of $1.8m, other than by way of loan, within seven days of receipt of a written request from the trustee or Clark Holdings to make the contribution, so as "to fund the business activity of the [CU Trust]". Clause 2(a) also provides that in the event that Gemridge fails to make the payment within the time stipulated, Clark Holdings may at its option require a transfer to it of the unit holding of Gemridge and Denoon in consideration of the payment of $1.00 for each of the five units. By cl 4, the parties acknowledge that Gemridge will not be required "to make any contribution to [the] funding of the undertaking of the [CU Trust] unless and until [Clark Holdings] first makes contribution and in such an event Gemridge shall be required to make contribution of the amount equal to the contribution of [Clark Holdings] and no more". Clause 5 of the deed recites that nothing contained in the deed "shall be construed to constitute any of the parties hereto a general partner, agent or representative of any other party or to create any trust or partnership at law for any purpose whatsoever". On the same day, Gemridge entered into another deed in similar terms providing for the transfer of one further unit to Mr David Clark. Each unit was transferred at a value of $1.00. By those deeds, Gemridge (although mistakenly described as the transferee) warrants that the balance sheet annexed to the deed "accurately and properly reflects the financial status (including all contingent liabilities) as at [24 June 1993] ...": cl 3. Gemridge also warrants that it has no knowledge of any undisclosed liabilities of the CU Trust and that Carringbush has not given any guarantee that has not been satisfied as at the date of the deed. By cl 4, Gemridge indemnifies Clark Holdings and Mr David Clark against any claims or liabilities. By cl 5, Gemridge waives any entitlement it might have or might in the future have against the CU Trust. By cl 6, Clark Holdings and Mr Clark acknowledge that they have read the terms and conditions of the trust deed for the CU Trust and agree to hold the transferred units "upon the same terms and conditions as Gemridge". By cl 7, Gemridge indemnifies Clark Holdings and Mr Clark from any liabilities that might arise out of having taken a transfer of the Gemridge units and by cl 8, Gemridge warrants that the units are free of any charge or other security interest. Each deed is expressed to be subject to Gemridge obtaining the consent of the trustee to the transfer, in accordance with the terms of the trust deed. Each certificate records the consent of the trustee to the transfer and is executed by the trustee. The relevant trustee was then CEPL. CEPL had been appointed trustee of the CU Trust in accordance with Part XVIII of the trust deed on that day. On 9 June 1993, the unitholders in the trust had held a duly convened meeting and had resolved to accept an application by CEPL to be appointed trustee of the CU Trust upon the terms and conditions of the appointment deed. By cl 1, the settlor and Carringbush acknowledge the acceptance of the retirement of Carringbush as trustee by both the CU Trust and the unitholders. The resignation took effect on 24 June 1993. By cl 2, CEPL is appointed trustee. The appointment took effect immediately. CEPL agrees to pay an amount of $60,000.00 in respect of the appointment. By cl 3, CEPL acknowledges its understanding of the terms of the trust deed and agrees to be bound by those terms and conditions and exercise and discharge the duties of trustee of the CU Trust. By cl 7, Carringbush warrants that the balance sheet annexed to the deed accurately and properly reflects the financial position of the trust. By cl 8, Carringbush and Mr and Mrs Denoon provide this indemnity: The Retiring Trustee and Denoon (both jointly and severally) hereby [indemnify] and shall keep indemnified the [CU Trust] and [CEPL] against any claim, action, suit, demand, proceeding, [judgment], order or other liability whatsoever that might arise in the future from any act or omission (negligent or otherwise) undertaken by [Carringbush] during its term as Trustee of the Carringbush Unit Trust. By cl 9, Carringbush waives its right of indemnity out of the assets of the trust in respect of liabilities incurred by it in properly discharging its powers and duties as trustee. Clause 9 is in these terms: The Retiring Trustee [Carringbush] hereby waives forever any entitlement it might now or any future time have against the Trust arising from its capacity as Trustee of the Carringbush Unit Trust and agrees to indemnify and keep indemnified the Trust and its Trustees from time to time in respect of any claim that may be made arising from its capacity as Trustee of the Trust. By cl 10, CEPL acknowledges that the sum of $60,000.00 to be paid by it will be applied by making a payment of $50,000.00 to Westpac Banking Corporation and AGC (Advances) Limited and an amount of $10,000.00 to BDO Nelson Parkhill and that such monies will not be available to the trust. The Release Deed recites that the CU Trust is about to enter into a property development as the joint venture vehicle of "interested parties"; Carringbush is to resign and CEPL is to become the trustee; the Carringbush group and the CU Trust are all indebted to AGC (Advances) Limited and/or Westpac Banking Corporation for significant sums of money; and CEPL proposes to pay $60,000.00 in consideration of its appointment as new trustee. Clause 3 provides for the payment of $50,000.00 to AGC and Westpac and $10,000.00 to BDO Nelson Parkhill. By cl 4, Carringbush and all of the Carringbush group of companies identified in the Schedule warrant to CEPL that any charge or security held by AGC and/or Westpac over the CU Trust estate assets will be released and discharged in full upon payment of the sum of $60,000.00 provided for by cl 3 and CEPL as the incoming trustee is indemnified by the Carringbush group companies and trusts in respect of any claim that might be made by AGC and/or Westpac arising out of any matter that pre-dates the Deed of Discharge. By cl 5, the Carringbush group of companies warrant that there are no outstanding guarantees or pledges on behalf of the CU Trust. The annexure is not simply the balance sheet but a set of financial accounts for the CU Trust struck at 18 June 1993. The balance sheet shows, as at 30 June 1992, total liabilities exceeding total assets by $3,910,870.00. When the release and discharge is taken into account, those liabilities are extinguished leaving net balance sheet assets of $10.00 representing the settlement sum. The consultancy agreement provided for the payment of fees of $200,000.00. However, if the fees were paid by 24 June 1993 in full, the fees would be discounted to $165,000.00. The agreement was to terminate on 24 June 1995. The agreement recites that Mr Denoon has considerable skill, expertise and experience in the management, administration and marketing of development projects and by cl 2 of the agreement, CEPL acknowledged that it wished to take advantage of that skill and expertise by entering into the agreement for the acquisition of the services. He says that upon CEPL's appointment as trustee of the CU Trust, a number of documents were delivered into its possession as trustee including the trust deed; unit register; all minutes of meetings of the trustees; unit certificates; a Deed of Assignment of Debt from John Denoon & Associates Pty Ltd to Carringbush dated 25 May 1993; a Deed of Assignment of Debt from Carringbush Corporation to Carringbush as trustee of the CU Trust dated 26 May 1993; Notice of Resignation of Carringbush as Trustee dated 26 May 1993; Letter of Agreement between Carringbush and Carringbush Corporation for the sale of the Rothwells shares; and a Notice of Extraordinary General Meeting of the CU Trust unitholders dated 26 May 1993 to approve Carringbush's resignation as trustee and the appointment of CEPL. The applicants contend that CEPL's assumption of possession of these trust administration documents is consistent with the continuing operation of the CU Trust under the governance of CEPL. As to that, Mr Clark says that in entering into the arrangements of 24 June 1993, he "had no intention of ending the [CU Trust] or creating any new trust. To the contrary my intention was that the [CU Trust] would continue in existence". Mr Clark says that intention was consistent with his two motives in entering into the arrangements which were these. First, because Mr Denoon was a person with "a deal of knowledge in the property area" and a person "with capital resources able to be involved over a significant period as an equal joint venture partner", Mr Denoon and Mr Clark could "proceed with a significant property joint venture through the [CU Trust]". I intended that my initial funding obligation of $1.8 million would be met by a distribution of income from the Clark Family Trust. Mr Clark says that the opportunity to implement the joint venture arrangement through the CU Trust and take advantage of "the tax losses was worth those commercial risks". Mr Clark says that the Release and Discharge Agreement had the effect, as far as he knew, of extinguishing all claims against the trust estate by Carringbush group companies, including the former trustee's right of indemnity out of the trust assets. Moreover, the two external creditors, Westpac Bank/AGC and BDO Nelson Parkhill, were to be discharged out of the payment by Mr Clark's entity of $60,000.00. Mr Clark says that against that background, he entered into the agreement with Mr Denoon to acquire five of the issued 10 units in the CU Trust; contribute $1.8m to the CU Trust other than as a loan to be retained and used by the trust to fund a proposed project at Forest Lake and further projects; and engage Mr Denoon, through his company, as a consultant to progress the Forest Lake project and identify additional projects. Mr Clark says that in due course further funds would be required to progress projects. The arrangement Mr Clark struck with Mr Denoon was that Mr Denoon would cause a contribution to be made to the CU Trust of $1.8m, upon request by Mr Clark. Mr Clark says he understood that Mr Denoon would have the capacity to provide a matching contribution to the CU Trust in the short term. However, Mr Clark says that if Mr Denoon failed to make a matching contribution, the arrangements put in place in June 1993 would protect him "from claims Mr Denoon and Gemridge might make as unitholders", in relation to the existing contribution made by Mr Clark. The protective mechanism involved a right in Mr Clark's entity to acquire Mr Denoon and Gemridge's units for $5.00 in total. By 30 June 1993, Mr Clark had made a contribution to the CU Trust of $1,965,000.00 by a distribution from David Clark Enterprises Pty Ltd as trustee for the David Clark Enterprises Trust. $1.8m of that sum represented the contribution to the CU Trust and the remaining $165,000.00 represented the discounted consultancy fees payable to Mr Denoon's company. Mr Clark says CEPL placed $1.8m of that sum on term deposit "in readiness to proceed with acquisitions". The projects were to be debt-funded so as "to keep cash readily available to take advantage of opportunities to buy". Mr Clark says that the first project for CEPL was the Forest Lake project. It was unsuccessful. CEPL borrowed to acquire the sites. Ultimately, only five houses were constructed although more were contemplated. Mr Clark says that during the two year period of Mr Denoon's consultancy, he undertook "an enormous amount of work and research" for the CU Trust and assessed and reported on a number of project sites. Mr Clark worked closely with Mr Denoon and was in regular contact with him concerning the projects. Mr Clark says that Mr Denoon assured him a number of times that he was endeavouring to raise his $1.8m contribution. As CEPL had entered into contracts to the value of $8m to acquire a site at Bracken Ridge and a commercial site occupied by K R Darling Downs, the CU Trust required Mr Denoon to make his contribution. On 15 August 1994, Mr Denoon told Mr Clark he would not be able to raise $1.8m to make his contribution. The acquisition contracts were terminated. Mr Clark says that although he worked well with Mr Denoon and hoped to extend his consultancy role beyond June 1995, Mr Clark elected to acquire Mr Denoon's five controlled units. Mr Denoon confirmed his inability to raise funds to make the contribution on 27 June 1995. The acquisition by DCE Holdings Pty Ltd of the units of Mr Denoon and Gemridge took effect from 30 June 1995 although the transfer of the units did not occur until 26 April 1996. The unit certificates were cancelled and a new certificate issued to the transferee. During the course of cross-examination it was put to Mr Clark that he was not concerned whether Mr Denoon made a contribution or not and that the real focus of his interest in the CU Trust was the opportunity to distribute $1.8m in income derived by the David Clark Enterprises Trust to the CU Trust and take advantage of accumulated losses in that trust. The point sought to be established was that the due capitalisation of the CU Trust as a foundation for a continuous program of property development undertaken on behalf of the unitholders from time to time and thus within the framework of the CU Trust was illusory and the selection of the CU Trust was simply opportunistic so as to offset other distributed income. Mr Clark accepted that he had not asked his investigating accountant, Mr Lovett, to ascertain whether Mr Denoon had the capacity to contribute $1.8m at any time within the foreseeable future of the arrangements struck in June 1993. Mr Clark accepted that Mr Denoon had told him that he could not then (around June 1993) make a contribution of $1.8m and the highest it could be put was that Mr Denoon hoped that at some time in the future, he would have the money to make the contribution. Mr Clark said that he was willing to enter into a joint venture with Mr Denoon, assume the burden of the funding and rely on a promise of a future co-contribution at an indeterminate time because Mr Denoon was "a very reputable fellow" and "... had a great track record. He'd been just caught in one of the severest downturns we had had, and he seem[ed] to be confident that he could come up with the money over the next couple of years". As to future liabilities, Mr Clark said he had received advice from his accountant and his solicitor that the arrangements would not expose CEPL or the trust estate to any pre-June 1993 liabilities of Carringbush and thus Mr Clark was prepared to proceed with the arrangements and make his contribution. As to the interim protective arrangements pending Mr Denoon making his contribution, Mr Clark said this. He accepted that he wanted to put in place a mechanism to ensure that Mr Denoon and his interests had "no right to get their hands on any part of [Mr Clark's $1.8m contribution], unless and until he also put in $1.8 million". Mr Clark said he thought the arrangement to that effect "was certainly set out fairly clearly". Mr Clark accepted that Mr Denoon (and Gemridge) was intended to have "no right to any of the assets or income of the trust", unless and until he made his contribution of $1.8 m; Mr Denoon "would have understood that"; and Mr Clark was "prepared to use [the CU Trust] as [his] vehicle going forward, knowing Mr Denoon's interests would have no claim to any of the assets of the trust, unless and until he kicked in $1.8 million". Finally, Mr Clark accepted that "for all practical purposes" Mr Clark had "control" of the trust and the "right to the assets of the trust" both before and after the acquisition of the units held by the Denoon interests for $5.00 and nothing changed as a result of the acquisition. Mr Clark accepted that proposition as a correct statement of the effect of the arrangements, "subject to [Mr Denoon] putting his money in". Counsel for the Commissioner contends that these arrangements had the effect of implementing in June 1993 a suspension of the orthodox distribution of rights, interests and duties established by the CU Trust instrument and a fundamental change in the corpus of the trust thus placing, in effect, a fault line through the continuity of the CU Trust, and the assignment of the units of the Denoon interests on 26 April 1996 simply gave enduring effect to the changes implemented at the outset of the arrangements in June 1993. Mr Clark also gave evidence that Mr Lovett made recommendations to him as to the distribution of the income of the trust in the 1994 and 1995 tax years; Mr Clark did not discuss with Mr Denoon how that income ought to be distributed; Mr Denoon was not provided with the accounts for the CU Trust in the 1993, 1994 or 1995 tax years as "we didn't" think it was relevant until he put his money in". Counsel for the Commissioner put to Mr Clark that he had not given any consideration to the question of whether a new trust was being created arising out of the arrangements or whether the existing CU Trust was continuing. It was put to Mr Clark that he was not concerned about that question at all. Mr Clark gave evidence that he took advice expressly on that question from both his accountant and his solicitor who emphasised that the CU Trust would not be brought to an end by reason of the arrangements of June 1993. He said that it was his intention, based on advice, to continue to operate the CU Trust. Mr Clark said that he understood that the continuation of the CU Trust was essential to enable existing tax losses to be utilised. As to the control of the CU Trust, Mr Clark said that CEPL received a range of documentation necessary for the administration of the trust. Mr Lovett, CEPL's accountant, took and maintained possession of the trust documents and records. Mr Clark maintained his position that one of the motives for engaging commercially with Mr Denoon and the CU Trust was to take advantage of Mr Denoon's property project development experience and joint venture with him through the vehicle of the CU Trust to properly take advantage of the trust's accumulated trading losses and capital losses. Those documents speak for themselves. Mr Denoon and Mr Clark entered into the arrangements in June 1993 reflected in those documents in order to establish CEPL as trustee of the CU Trust so as to implement a joint venture arrangement to undertake property development projects through the CU Trust and to enable Mr Clark to take advantage of income and capital losses accumulated in the CU Trust. The utility of the accumulated income and capital losses in the CU Trust was sufficiently attractive to Mr Clark that Mr Clark was willing to embark on the joint venture arrangements notwithstanding that Mr Denoon was unable to provide a matching co-contribution to the CU Trust at the outset of the arrangements and simply hoped to be able to realise assets or otherwise raise $1.8m to make a co-contribution to the joint venture (and thus the CU Trust as the vehicle for the property development venture), by approximately 30 June 1995. In the absence of Mr Clark's contribution in June 1993 of $1.8m, the CU Trust could not have undertaken any property development projects having regard firstly to the accumulated losses in the CU Trust and the balance sheet asset of $10.00 representing the settlement sum; and secondly, Mr Denoon's difficulty in raising either capital or debt in June 1993 due to the financial hardship he and his entities had endured as a result of the downturn in the Australia property market. In that sense, the CU Trust was, as the notes to and forming part of the Financial Statements of the CU Trust to 18 June 1993 record, a "dormant" trust, in terms of its "principal activities". In order to ensure that Carringbush would not be able to make any claim upon the assets comprising the trust estate including contributions to the trust estate consequent upon the June 1993 arrangements, for indemnity in respect of liabilities incurred in performing trust obligations, Mr Clark and CEPL required Carringbush to waive and abandon by deed its right of indemnity out of the trust assets. Similarly, Mr Clark required the Carringbush group of companies and related trusts to discharge and abandon all claims against the trust estate and facilitate the release and discharge of third party claims by Westpac/AGC and BDO Nelson Parkhill. Unless and until Mr Denoon made, through Gemridge or otherwise, a contribution to the CU Trust matching the $1.8m contributed by Mr Clark's entity, neither Gemridge nor Mr Denoon were to enjoy any right (whether such a right in a unit holder subsisted under the trust instrument or not) to call for or "get their hands on any part" of Mr Clark's contribution to the CU Trust nor any right to the income of the trust. Mr Clark was prepared to use the CU Trust as the vehicle for property development projects going forward, on the footing that Mr Denoon's interests would have no claim to any of the assets of the CU Trust unless and until Mr Denoon made his contribution of $1.8m. Mr Clark, as the guiding mind of the trustee of the CU Trust (CEPL), did not provide Mr Denoon with the financial accounts for the CU Trust for the income years 1993, 1994 or 1995 as Mr Clark believed it was not relevant to do so "until [Mr Denoon] put his money in". Mr Clark put in place arrangements to discharge claims against the trust estate by Carringbush group companies, extinguish Carringbush's right of indemnity out of trust assets, compromise the claims of external creditors, retain Mr Denoon as a consultant and, in practical effect, secure the agreement of Mr Denoon not to assert any rights attaching to the units held by the Denoon interests, unless and until Mr Denoon made his contribution of $1.8m, as conditions of CEPL participating as trustee; Clark Holdings acquiring 50% of the units in the trust; and Mr Clark making a contribution of $1.8m by way of a distribution to the CU Trust by the Clark Enterprises Trust. Mr Clark and Mr Denoon had in mind undertaking a property development project at Forest Lake at or about the time of Mr Clark's investment of $1.8m and during the period between June 1993 and June 1995, a number of property projects were investigated by Mr Clark and Mr Denoon. Mr Clark entered into the arrangements of June 1993 on the basis of advice from his solicitor and his accountant that the opportunity to take advantage of accumulated income and capital losses in the CU Trust meant that CEPL must continue to preserve and operate the CU Trust. Neither Mr Clark nor Mr Denoon had an express intention in entering into the arrangements in June 1993 to bring the CU Trust to an end. CEPL assumed the administration of the trust on appointment and Mr Lovett received from the former trustee all relevant documents in its possession relating to the administration of the trust. A question arises as to whether the arrangements put in place in June 1993 have the effect of altering the structure and corpus of the CU Trust and the rights, duties and obligations characterising the CU Trust such that there is insufficient identity between the trust that incurred the capital loss in 1993 on the one hand and the trust that derived the capital gain in the 2001 income year, on the other hand. Section 95 defines "net income" by reference to a "trust estate". The assets comprising the trust estate may well be deployed by the trustee in a way that derives income or realises capital gains or gives rise to losses on revenue or capital accounts. References in Division 6 to the "trust estate" are references to the aggregation of assets by which or through which income or capital gains are made. The net income of a trust estate for the purposes of both the 1936 Act (ss 6(1) and 95 of the 1936 Act) and the 1997 Act means the total assessable income of the trust estate calculated under the 1936 and 1997 Acts as if the trustee were a taxpayer in respect of that income and were a resident, less all allowable deductions (subject to particular exceptions not relevant here): s 95(1), 1936 Act. A trust estate is taken to be a resident trust estate in relation to a year of income if the trustee of the trust estate was a resident at any time during the year of income. A trustee, however, is generally not liable as trustee to pay income tax upon the income of the trust estate: s 96, 1936 Act. The liability to tax is generally imposed on a beneficiary. A tax liability when imposed on a trustee is imposed only in a representative capacity. The net income of the trust estate is calculated on the hypothesis that the trustee is a taxpayer in respect of that income. The liability to pay tax on that income is allocated by the 1936 Act and the 1997 Act between the beneficiaries and the trustee. The trustee for the time being of the trust estate is taken hypothetically to derive income and incur allowable deductions in its capacity as trustee. By s 102-5(1) of the 1997 Act, the assessable income of the trustee of the trust estate includes a net capital gain made by the trustee in the income year. A net capital gain is determined by reducing the capital gain made in the income year by the capital losses made in that income year (s 102-5(1); Step 1, 1997 Act) and by applying any previously unapplied net capital losses from earlier income years (s 102-5(1); Step 2; s 102-15, 1997 Act) to reduce the amount remaining (if any) after Step 1. Section 102-5(1) adopts a style of drafting, thought to be helpful, that addresses the reader in direct explanatory speech. For example, "Your assessable income includes your net capital gain (if any)" and "You work out your net capital gain [by reducing] the capital gains you made during the income year by the capital losses (if any) you made during the income year". This approach to drafting is said to give emphasis to the importance of the precise identity of the taxpayer in the income year in which the gain is made although Step 2 in s 102-5(1) is not substantially framed in terms of you or your and does not direct the addressee to apply, as a matter of identicality or precise continuity, "your previously unapplied net capital losses from earlier income years" but rather "any previously unapplied net capital losses from earlier income years". There are no express provisions of the 1936 Act or the 1997 Act that require as a statutory integer of a right to apply any previously unapplied net capital losses incurred by the trustee of the trust estate from earlier income years (so as to reduce the amount remaining after calculating the net capital gain in the relevant income year), a continuity in the trust estate or continuity in the structure of the trust or continuity in the rights, duties and obligations arising under the trust instrument, in the year of the net capital gain and the income year of the net capital loss. There are no provisions as to continuity of ownership and business comparable with those governing the entitlement of companies to carry forward losses. However, the Commissioner says, in effect, that the limiting criterion to be applied is that the net capital loss from earlier income years sought to be applied to the net capital gain in the income year, must be a net capital loss attributed to the same taxpayer who seeks to apply it to the net capital gain in the income year, and thus the same taxpayer that derived the capital gain in the income year. The Commissioner says the scheme of the 1936 Act and the 1997 Act imports a requirement of continuity although the statutory scheme does not lend any precision to the criterion of continuity. Under the capital gains tax provisions of the 1997 Act, the taxpayer upon whom a tax liability is imposed is identified by the terms "you" and "your" which is defined to include a reference to entities generally and an entity includes a trust (although that term is undefined): s 4-5, 1997 Act; s 960-100(1)(f). The trustee of a trust is taken to be an entity: s 960-100(2). The statutory provisions of Division 6 of Part III of the 1936 Act and the provisions in the 1997 Act so far as they apply to the determination of a net capital gain in an income year by the application of previously unapplied net capital losses from previous years, contemplate a notional taxpayer as an entity who is the trustee of a trust estate which is made up of an aggregation of assets. The trust estate that suffered the capital loss in the earlier year must be the trust estate that made the capital gain in the relevant income year. In that sense, there must be continuity or sufficient identity between the trust that incurred the loss and the trust which generated the capital gain. The term "trust estate" is not defined in the 1936 Act or the 1997 Act. The term "trust estate" captures a calculus of inter-relationships between a trustee from time to time assuming an office to administer and discharge duties arising under the trust instrument and as a matter of law; trust property comprising the corpus from time to time; the class of beneficiaries on whose behalf the trust is administered; and, the bundle of rights and entitlements of the beneficiaries arising under the trust instrument and as a matter of law. In the case of a trading trust or a trust undertaking property development projects, it may well be that the portfolio of trust assets will change according to the need to adapt to changing market circumstances or the implementation or failure of particular projects. The trust instrument might require amendment and the cohort of individuals or entities comprising the beneficiaries from time to time may alter. The scope of borrowings or the use of particular financial instruments by the trustee may change according to the state of the financial environment. The trustee may be replaced. The trustee of a trading or property development trust exercising powers of management may need to be astute to the dynamic nature of a particular trust enterprise in deploying trust assets rather than simply the static nature of other activities. The trustee will always be ascertainable. However, the class of beneficiaries, while identifiable, will not necessarily be closed and all beneficiaries may, of course, not be ascertainable. Similarly, the property that is the subject of such obligations and rights will not be static. Parts of the property might be distributed so as to cease to be subject to trust obligations. Further property may accrue as income or by further settlement so as to become subject to obligations where previously that additional property was not. It is the income which accrues from that property, less outgoings from that property, that go to make up the taxable income of the trust estate or fund. "Superannuation fund", as that term is defined in the SIS Act and the [ITAA 1936], contemplates a continuing regime regulating the manner in which a fund may be added to and the manner in which payments may be made from it. So long as one can identify a continuity of that regime, that will be sufficient. It will also be necessary to establish continuity of the regime of trust obligations affecting the property in the sense that, while amendment of those obligations might occur, any amendment must be in accordance with the terms of the original trust. Secondly, there must be continuity of the regime of trust obligations affecting the trust property and while those obligations might change, continuity remains if the amendments are made in accordance with the terms of the trust instrument, in the proper exercise of the powers so conferred. It follows that if some degree of continuity of trust property is made out and continuity in the regime of trust obligations is established, there will be sufficient identity of taxpayer in the sense that the hypothetical representative trustee taxpayer on behalf of the trust estate that incurred the loss is the hypothetical taxpayer of the trust estate that made the net capital gain. In Commercial Nominees , the Full Court and the High Court considered questions of continuity in the context of amendments made to the governing deed of a superannuation fund that was conceded by the parties to be a complying fund for the purposes of the 1936 Act and the Superannuation Industry (Supervision) Act 1993 (Cth). The Commissioner contended that the amendments changing participation entitlements and the nature of the defined benefits conferred by participation caused a break in continuity disentitling the taxpayer to an allowable deduction from assessable income in the relevant year, for earlier losses suffered by the pre-amendment fund. Although the High Court in Federal Commissioner of Taxation v Commercial Nominees of Australia Ltd (2001) 75 ALJR 1172 considered the re-settlement analysis undertaken by the Full Court, Gleeson CJ, Gaudron, McHugh, Kirby and Callinan JJ, observed at [36] that, as the Full Court and the Administrative Appeals Tribunal had held, the question of the availability of the deduction was one of continuity to be considered, in that case, in the context of a superannuation fund which, of its nature, may be expected to undergo change. If, as the appellant contends, it is a different entity, there is a question as to what happened to the original entity. The three main indicia of continuity for the purposes of Part IX are the constitution of the trusts under which the fund (if a trust fund) operated, the trust property , and membership . Changes in one or more of those matters must be such as to terminate the existence of the eligible entity, or to produce the result that it does not derive the income in question, to destroy the necessary continuity. The trusts under which the fund operated in 1994-95 were constituted by the original trust deed in 1988 as varied by the exercise, in 1993, of a power of amendment. The property the subject of the trusts did not alter at the time the amendments took effect. Persons who were members of the fund before the amendments remained members of the fund after the amendments. The fund, both before and after the amendments, was administered as a single fund, and treated in that way by the regulatory authority. There is no reason to believe that these three indicia of continuity do not equally apply to trust estates for the purposes of Division 6 of Part III of the 1936 Act and the 1997 Act. The Commissioner contends that the arrangements of June 1993 brought about a break in continuity firstly in the trust fund; secondly, in the trustee's interest in the trust estate; and thirdly, in the interests of the beneficiaries in the trust fund. The accumulated losses consisted of an excess of liabilities owed to Carringbush group companies over loan account balances payable by those companies to the CU Trust. Immediately prior to the June 1993 arrangements, Carringbush had a right of indemnity in respect of those liabilities. The Commissioner contends that the right of indemnity meant that the trust property was of no value to the unitholders and the trust was, in terms of its principal activities, dormant. The Commissioner says that moreover, there was no prospect of the CU Trust, having regard to its dormancy and excess liabilities, undertaking new investments whether property related or otherwise. The Commissioner contends that the arrangements of June 1993 brought about a fundamental change to the state of the trust fund effecting a restructure of the trust fund. The arrangements are said to have done so in this way. First, the deed of removal of Carringbush and the appointment of CEPL released the trustee's vested entitlement to a right of indemnity out of the trust assets comprising the trust fund in respect of all liabilities incurred by Carringbush in performing the trust. The trust fund however at the date of release consisted of a settlement contribution of $10.00 and accumulated excess liabilities of $3.9m. The release meant that any contribution to the trust fund and, in particular, Mr Clark's $1.8m contribution to the trust fund, would not be exposed to a liability to the former trustee arising out of any claim to indemnity in respect of prior liabilities. Therefore, the liabilities of the original trust estate were, it is said, fundamentally altered. The right of indemnity Carringbush enjoyed out of trust assets in respect of liabilities incurred in performing the trust confers upon the trustee a "beneficial interest" in the trust assets: Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 at 367 per Stephen, Mason, Aickin and Wilson JJ. However, the right of indemnity Carringbush enjoyed was in any meaningful sense, illusory as the trust fund consisted of significant accumulated losses ultimately rendering the trust in terms of any activities, dormant. Mr Clark was not prepared to make a contribution to the trust fund that would be immediately susceptible to the former trustee's indemnity claim and thus there would not have been any future contribution in respect of which the liability of the original trust estate to the former trustee became altered. Whilst the deed purported to extinguish the beneficial interest of the trustee by discharging or extinguishing the underlying right of indemnity and thus alter an aspect of the beneficial interests in the trust assets, the measure of that right was, in all practical senses, valueless having regard to the state of the trust fund. The Commissioner contends that the right of indemnity as it subsisted in the trustee prior to extinguishment meant that the trust property was valueless to the unitholders and the extinguishment changed that "state of affairs" by enhancing the value of the assets from the perspective of the unitholders and freeing the trust estate (including future contributions) from any claim. Thus, the trust property was fundamentally altered. The trustee of the trust may be replaced. An incoming trustee examining the question of whether it might be willing to assume the rights, duties and obligations cast upon it by the trust instrument in respect of a trading trust or a trust which had historically undertaken property development projects, might seek to impose conditions, consistent with the discharge of its duties according to law, upon its acceptance of the office of trustee. An outgoing trustee, having incurred liabilities in performing the trust, might be willing to extinguish or abandon a right of indemnity out of trust assets in circumstances where the exercise of the right might be perceived to be valueless or alternatively in circumstances where the outgoing trustee was in a position to control the entities to whom the liabilities might be owed. In this case, Mr Denoon as the person in control of Carringbush and the Carringbush group of companies was in a position to discharge the claims of those companies, procure the release of claims by external creditors and cause Carringbush to abandon its right of indemnity on the footing that the right of indemnity had no value, and CEPL was not willing to accept appointment as trustee in the absence of those releases. These conditions, properly viewed, were matters influencing the exercise of the power to replace the trustee. In the circumstances, the extinguishment of the right of indemnity did not fundamentally alter the trust property. The second fundamental change to the trust property is said by the Commissioner to arise in this way. The Carringbush group of companies by deed waived and released forever the CU Trust from all liabilities and loans owing to or by the CU Trust and agreed to secure the release and discharge of any securities held by AGC or Westpac over the trust property with the result that there would be no outstanding liabilities of the CU Trust to external creditors or any company within the Carringbush group of companies and each company in that group agreed to indemnify the incoming trustee, CEPL, in respect of any liabilities that might arise from any guarantee, pledge or other liability entered into by the former trustee on behalf of the CU Trust estate. Reciprocally, the trustee of the CU Trust by deed waived and released forever all companies and trusts within the Carringbush group from any liability any of them may have had to the CU Trust with the result that the CU Trust, by 18 June 1993, according to the financial statements for the trust, had no assets other than the settlement sum of $10.00 which were capable of sourcing the derivation of future income or the acquisition of assets which might be productive of a capital gain. The Commissioner contends that the effect of the 1993 arrangements was to clear the slate with the result that Mr Clark took control of the CU Trust knowing that the trust fund consisted simply of the $10.00 settlement capital. The trust fund upon the assumption of control by Mr Clark of the CU Trust, consisted of a capital sum representing the initial settlement sum of $10.00 and accumulated losses, especially the loss on the disposal of the Rothwells shares on 26 May 1993. The Commissioner says that the trust fund, comprising the $10.00 settlement capital, represented the corpus, upon the assumption of control by Mr Clark. In 1997, the Gladstone properties were purchased being the assets which resulted in the capital gain upon disposal in 2001. The Commissioner contends that the corpus of the trust upon assumption of control by Mr Clark was not the corpus which was productive of the acquisition of the Gladstone properties. They could not have been acquired out of a trust consisting of an asset confined to settlement capital of $10.00. However, the arrangements put in place in June 1993, although they provided for releases and discharges as described, also provided for a contribution of capital to the CU Trust fund of $1.8m by Mr Clark through his relevant entity, and a prospective contribution put no higher than a "hope", by Mr Denoon through Gemridge, of a matching contribution to the trust fund. Mr Clark's contribution and the proposed contribution by Mr Denoon (when and if made by 30 June 1995), fell within the definition of "the fund" for the purposes of clause 1(e) of the CU Trust Deed. By 30 June 1993, Mr Clark had caused Clark Enterprises as trustee of the Enterprises Trust to make a contribution of $1.8m to the CU Trust. Clark Enterprises also contributed the prepaid consulting fees payable to Arthur G. Leevers Pty Ltd for the provision of services by Mr Denoon. At the time that contribution was made, Mr Clark and Mr Denoon contemplated that future property development projects would take place within the two-year period of Mr Denoon's consultancy. At the outset of the arrangements, Mr Denoon and Mr Clark were examining a project at Forest Lake. The Trust Deed conferred upon CEPL extensive powers of management of the trust estate which enabled the trustee to place contributions to the trust fund upon deposit, raise loans, apply all monies forming part of the trust fund in any investment the trustee thought appropriate in its absolute discretion, carry on by itself or in partnership with any other person or corporation any business activity and, make such investments on such terms and conditions as the trustee thought appropriate: cl 15(a), (b) and (c) of the Trust Deed. Mr Clark, as the guiding mind of CEPL, placed $1.8m of the trust fund (representing his entity's contribution to the trust fund), upon term deposit and, according to his evidence, elected to conduct the affairs of the trustee on the footing that that "cash" would be preserved and acquisitions would be made through debt facilities available to the trust. Accordingly, the source of the funds used to acquire the Gladstone properties was the trust fund of the CU Trust as administered by CEPL having regard to its contribution to the fund, and the powers of management conferred upon it under the Trust Deed. It follows that although the arrangements of 1993 put in place releases and discharges relied upon by the Commissioner, those arrangements also took account of a mechanism for the provision of contributions to the CU Trust which became part of the trust fund which, consistently with the powers of management, was deployed in the acquisition of the Gladstone properties. Accordingly, I am not satisfied that the arrangements of June 1993 brought about a break in the continuity of the trust fund either by reason of the extinguishment of the right of indemnity or by reason of the releases and discharges which were said to result in a trust fund consisting of simply a capital asset of $10.00. The waiver of the right of indemnity was a condition of the appointment of a new trustee, and the releases and discharges did not foreclose, but rather facilitated, the contribution of capital to the trust fund in association or joint venture with another company as contemplated by the Trust Deed, which provided the foundation for the acquisition by the trustee of the trust of the Gladstone properties in accordance with the powers of management of the trust estate conferred upon it by the Trust Deed. The trustee's right of indemnity constitutes a beneficial interest in the trust assets: Octavo Investments Pty Ltd v Knight (supra at [107] of these reasons). The right of indemnity continues notwithstanding the trustee's retirement from office and creditors of the trustee are entitled to be subrogated to the trustee's right of indemnity. The new trustee takes the trust property subject to the right of indemnity of its predecessor in office. The right of indemnity is consistent with the right of reimbursement conferred by s 59(4) of the Trustees Act 1925 (NSW) which applied to the CU Trust. The Commissioner says that the right of indemnity conferred as a matter of law is not capable of being excluded from the trust instrument: Kemtron Industries Pty Ltd v Commissioner of Stamp Duties (Qld) [1984] 1 QdR 576 at p 585. The Commissioner contends that the waiver of the right of indemnity was not brought about by any authorised amendment of the Trust Deed. Two things are said to flow from this. Firstly, the waiver of the former trustee's right of indemnity brought about a material change in the rights and obligations attaching to the trust property which was inconsistent with the continuity of the trust estate for tax purposes. Secondly, the release of the former trustee's right of indemnity is properly understood as an agreement which gave rise to a new trust in the same terms as the CU Trust absent the term as to indemnity and thus a new trust was brought into existence for the purposes of the general law. The deed by which the former trustee abandoned or waived a right conferred upon it by the Trust Deed and by operation of law was not an impermissible exclusion of a right of indemnity from the trust instrument nor was it an impermissible amendment to the Trust Deed. The deed by which the right of indemnity was extinguished provided for a waiver of a vested right in the former trustee. The trust instrument conferred a right of indemnity reflecting the position at law. Like many rights enjoyed by a party at law, the right was capable of waiver, abandonment or discharge whatever the source of the right may have been. The election on the part of the former trustee not to assert a right of indemnity conferred upon it and give substance to that election by covenanting by deed to waive the right of indemnity did not amount to a variation or amendment to the Trust Deed or the resettlement of the trust property upon a new trust in the same terms as the CU Trust Deed absent a right of indemnity. The incoming trustee assumed the office of trustee on the terms of the Trust Deed which included a right of indemnity out of the trust assets in respect of liabilities incurred in performing the powers, obligations and duties of trustee. The election to discharge the right of indemnity brought to an end the former trustee's beneficial interest in the trust assets comprising the trust fund. I am not satisfied that the extinguishment of the right of indemnity brought about a material change to the trust property inconsistent with the continuity of the trust estate having regard to the totality of the 1993 arrangements which imposed extinguishment as a condition of appointment of a new trustee and made provision for further contributions to the trust fund to enable the trust to undertake the proposed property development projects. The extinguishment of the right of indemnity was an element of enabling further contributions to be made to the trust fund to enable it to continue to embark upon property development projects as it had historically done up to the moment in time when Mr Denoon, due to the downturn in the Australian property market, was unable to continue to undertake projects by reason of the accumulated losses and an inability to raise capital or debt. By cl 3 of the Trust Deed, the trustee stands possessed of the settlement sum, the fund and the income of the fund for the unitholders specified in the schedule and subsequent unitholders for the time being, upon the trusts and powers and subject to the terms, covenants and conditions contained in the deed. By cl 6, the CU Trust is a trust in which the beneficial interest in the fund is divided into units, consisting initially of 10 units of $1.00 each. By cl 6(b), no unit confers any interest in any particular part of the fund nor in any particular asset of the trust. By cl 6(c), at any given date all units shall be of equal value. The trustee may cause units to be created and issued: cls 8 and 9. Separate classes of units might be created by the trustee. However, at the relevant dates no separate classes of units had been established. All issued units were of the same class. By cl 14, units may be transferred by a unitholder in writing to any person and the trustee shall not refuse to register the transfer of any unit unless the trustee reasonably forms an opinion that the transferee is not a respectable, responsible and solvent person. By cl 11(a), an "absolute discretion" is conferred on the trustee to set aside the whole of the net income of the trust fund in the relevant accounting period "to and for the benefit of each class of unit holders" in such proportion as the trustee may determine. Clause 11(a) suggests that the discretion involves the application of the net income of the trust fund to the benefit of each class of unitholder rather than to the benefit of unitholders within a class. By cl 11(b), the net income of the trust fund is to be distributed to the unitholders in proportion to the number of units so held, in the absence of the exercise of the discretion conferred by cl 11(a). At the relevant time, there was only one class of unitholder and since cl 11(a) conferred a discretion to apply the whole of the net income of the trust fund for the benefit of each class, the discretion must be construed as a discretion to apply the whole of the net income to the sole existing class and members within the class, in the absolute discretion of the trustee. The parties have made submissions that the trustee enjoys a discretion to apply the net income of the trust fund to unitholders within the existing class. In the absence of the exercise of the discretion, cl 11(b) effected a distribution of the whole of the net income to the unitholders in proportion to the number of units so held. The unitholders by unanimous resolution may direct the trustee to determine the trust. The directors of the trustee may orally resolve to determine the trust. Upon determination of the trust, the trust is to be wound up in accordance with cl 24 of the Trust Deed. In that event, the trust fund is to be called in and converted into money and the net proceeds of that process are to be distributed amongst the unitholders in accordance with their proportionate entitlements under the deed. No unitholder during the subsistence of the trust has a right to call for a proportionate distribution of the trust fund or a proportionate distribution in any accounting period of any part of the net income of the trust fund, subject to the performance of the obligation under cl 11(b) in the absence of the exercise of the discretion under cl 11(a). The unitholders are the objects of the trust. They are therefore the objects of the cl 11(a) discretionary power in relation to any distributions of the net income of the trust fund and enjoy the right in equity to the due administration of the trust coupled with the fiduciary duty in the trustee to consider whether and in what way the trustee should exercise the power conferred on it under the Trust Deed. The rights of due administration are protected by a court of equity. Under the arrangements struck in June 1993 the Denoon interests transferred five of the 10 issued units to the Clark interests. They did so in accordance with cl 14 of the Trust Deed. The Commissioner says that in form the Clark and Denoon entities were to hold their units in the trust in accordance with the terms of the Trust Deed but in substance the entitlements attaching to the interests of Gemridge and Mr Denoon as unitholders were fundamentally altered in the following manner. First, the Commissioner says that the appointment of CEPL effected a change in the individuals who controlled the discretionary power of application of the net income of the trust fund. The Commissioner says this represented a material change in the administration of the trust that adversely affected the prospect of the Denoon unitholders sharing in the enjoyment of any future income of the CU Trust. A trustee may resign or be replaced. A new trustee exercising the rights, obligations and duties cast upon it by reason of assuming the office of trustee, will do so according to the guiding minds of those in control of the new trustee and not those in control of the former trustee unless the same individuals control each entity. Thus, the exercise of the discretion contemplated by cl 11 will fall under the influence of those in control of the new trustee. That is an inevitable incident of the resignation of a trustee and the appointment of the new trustee. A change in control in the exercise of the powers conferred on the trustee by the Trust Deed logically flows from a change of trustee. Accordingly, a change in control in the exercise of relevant trust powers, is not inconsistent with the continuity of the trust or trust estate. The more difficult matter is the effect upon the continuity of the trust of the arrangements put in place by Mr Denoon and Mr Clark arising out of the Joint Venture Deed. By that deed, Mr Clark and Mr Denoon elected to implement a joint venture for the development of property projects through the vehicle of the CU Trust which involved a contribution by Mr Clark of $1.8m and a prospective contribution by 30 June 1995 from Mr Denoon of $1.8m. Consistent with the notion that each joint venturer would contribute a matching contribution to the trust fund, 50% of the units in the CU Trust were transferred by the Denoon interests to the Clark interests. Mr Denoon and Mr Clark agreed that in the event of Mr Denoon failing to make a matching contribution, the Denoon interests would transfer their five units in the trust to the Clark interests for the nominal value of $5.00. They also agreed that unless and until Mr Denoon through Gemridge made a matching contribution, the Denoon interests would enjoy no rights in relation to the assets of the CU Trust or the income of the trust fund. By operation of the Trust Deed, no unitholder enjoyed, in any event, any interest in any asset comprising the trust fund. However, an essential element of the joint venture was that unless and until the Denoon interests made a matching contribution, the rights and entitlements of the Denoon interests would be, in effect, placed in suspension. The arrangements struck between Mr Denoon and Mr Clark provided for remuneration payable to Mr Denoon through his consulting entity for the provision of services to the CU Trust. By agreement, the Denoon interests enjoyed no right to receive any part of the net income of the trust fund unless and until a matching contribution was made. The exercise of the power conferred by cl 11(a) of the Trust Deed thus occurred without regard to the Denoon interests as unitholders, in the 1993, 1994 and 1995 income years. No part of the undistributed income of the trust for those income years was paid to the Denoon entities. The trustee did not take the Denoon interests into account for the commercial reasons reflected in Mr Denoon's inability to make a matching contribution to the CU Trust, in the exercise of the discretion. Ultimately, Gemridge advised the trustee on 27 July 1994 that it could not make its contribution and on 27 June 1995 the trustee agreed to a transfer of the units to Clark Holdings for the nominal value of $5.00. The certificates of transfer were signed on 26 April 1996. The Commissioner says that the effect of the suspension arrangement was that from 24 June 1993, CEPL as trustee of the CU Trust, stood possessed of the settlement sum, the fund and the income from the fund not for the unitholders for the time being as contemplated by cl 3 of the Trust Deed but rather for the unitholders represented by the Clark interests unless and until the Denoon interests made a contribution to the CU Trust matching the contribution made by Mr Clark. Ultimately, Gemridge was not able to make its contribution and the units were transferred to the Clark interests. The Denoon interests transferred their units to Clark Holdings for a nominal value notwithstanding whatever the actual value of those interests may have been (which might otherwise have been the subject of a valuation in accordance with the Trust Deed having regard to contributions to the trust fund and income of the trust fund) as in the absence of a matching contribution, Mr Clark and Mr Denoon had agreed that the Denoon interests had no more than a nominal interest in the CU Trust as none of the increase in the value of the units was attributed to any contribution to the trust fund by the Denoon interests. Mr Denoon and Mr Clark intended however that the CU Trust continue in operation. It was necessary for Mr Clark's purposes that it do so. Both men proceeded on the footing that Mr Denoon "hoped" to be able to make a matching contribution to the CU Trust by 30 June 1995. In the period between 24 June 1993 and 30 June 1995, they investigated potential property development projects to be undertaken by the CU Trust for the long term, during the period of Mr Denoon's consultancy. The question that arises is whether the suspension arrangements and the effect upon the administration of the trust by CEPL from 24 June 1993 brought about changes in the interests of the unitholders, that is, the rights attaching to membership of the trust, so as to destroy the necessary continuity in the trust fund that made the capital gain in the 2001 income year and that which suffered the capital loss in the 1993 income year. Did the changes terminate the existence of the CU Trust or produce the result that it did not make the capital gain in question? Federal Commissioner of Taxation v Commercial Nominees of Australia Ltd (2001) 75 ALJR 1172 at [36]. The points along the continuum were these. The Rothwells shares were acquired in the 1988 financial year. They rapidly lost value. They were sold by the trustee on 26 May 1993 giving rise to a CGT disposal and a capital loss. On 24 June 1993 the suspension arrangements were put in place pending the realisation of either an expectation or a hope of Mr Denoon's matching contribution. By 27 July 1994, Gemridge had made it plain to the trustee that it could not make a matching contribution and on 27 June 1995 the trustee agreed to the transfer of the Denoon units to Clark Holdings. The transfers were signed on 26 April 1996. In 1997, the Gladstone properties were acquired and in the 2001 income year the CU Trust realised a capital gain upon the disposal of those properties. All of the units in the CU Trust on 26 May 1993 were held by the Denoon interests. By the arrangements of 24 June 1993, 50% of those units were transferred to the Clark interests. The Denoon interests retained 50% of the issued units although the joint venture arrangements placed the rights attaching to those units, in practical terms, in suspension. In effect, the Denoon interests agreed by deed that they would not require, for a period, the new trustee to take their interests into account in exercising the power of allocation of the net income of the trust and they accepted that they could not, whatever might have been the source of any right to do so, assert any right in relation to any part of the trust fund during the period of suspension. Nevertheless, they retained their standing as unitholders during the suspension period on the footing that Mr Denoon's interests might ultimately be able to make a matching contribution, and when the call for a matching contribution could not be satisfied, the units of the Denoon interests were transferred in accordance with the terms of the Trust Deed to Clark Holdings in 1996. In the 1993 income year, the year of the capital loss, all the units were held by the Denoon interests until 24 June 1993. By the 2001 income year, the year of the capital gain, all of the units had been transferred: the first 50% in 1993 under the provisions of the deed; and the second 50% in 1996, also under the deed. Although the rights attaching to the retained Denoon interests were suspended for two years between 1993 and 1995 pending Mr Denoon's efforts to raise monies to make a matching contribution to the trust fund, the suspension of those rights was a condition accepted by the Denoon interests of preserving the integrity of the trust fund until a matching contribution might be made. The suspension arrangement was not a mechanism by which the "interests" of the unitholders were amended thus destroying the continuity of the trust estate but rather a mechanism for preserving the operation of the CU Trust by the protection of the assets and income of the trust estate, in the hope that Mr Denoon would be able to make a matching contribution and avoid making an out-and-out transfer under the Trust Deed of his remaining units in the trust. When he was unable to make that contribution, the remaining units were transferred at a nominal value to Mr Clark's entity as no part of the increase in the value of the units was attributable to any contribution by Mr Denoon to the trust fund. However, the "interests" attaching to the units in the CU Trust remained throughout as determined by the Trust Deed. Mr Denoon simply agreed with Mr Clark and through him, the trustee, that pending the making of a matching contribution to the trust fund, the rights attaching to the units held by his interests would not be asserted by the unitholder and if no matching contribution was made, Mr Denoon's remaining units, which would have represented his continuing interest in the trust estate and thus the joint venture, would be transferred under the Trust Deed to Mr Clark's entity. By 1996, the Denoon interests had transferred their remaining units to Clark Holdings and enjoyed no unit entitlements in the CU Trust. CEPL stood possessed under the Trust Deed of the settlement sum, the fund and the income of the trust fund for the unitholders for the time being upon the trusts and powers and subject to the terms, covenants and conditions of the Trust Deed, and continued to do so in the 2001 income year of the capital gain, as the former trustee had in the 1993 income year (the year of the capital loss), notwithstanding that the units were differently owned and, for a two-year period beginning on 24 June 1993 and ending on 27 June 1995, the rights attaching to 50% of the units were suspended by agreement with the unitholder. When comparing the trust estate in the income year of the capital loss with the trust estate in the income year of the capital gain, ownership of the units in the trust had changed by transfer under the Trust Deed but the interests of the holders of the issued units in the 1993 income year were the same (subject to amendments to the Trust Deed not relied upon by the Commissioner as indicia of a changing continuity) as the interests of the holders of the issued units in the 2001 income year. It therefore follows that the two-year suspension period did not destroy the continuity of interests at the relevant dates attaching to the units in the CU Trust such that the suspension period brought about a termination of the existence of the CU Trust or that the CU Trust that made the capital gain at the relevant date in 2001 was not the CU Trust that suffered the capital loss at the relevant date in 1993. The financial accounts for the trust estate for the income year ending 30 June 1989 show an investment by the trust estate in Relsun of $2.00. It seems that the trust estate owned the whole of the issued shares in Relsun. The financial accounts for the year ending 30 June 1990 show a loan by the trust to Relsun of $375,995.00. The financial accounts of the trust for the year ending 30 June 1991 show as a reconciling item the write-off of the loan treated as a capital loss in an amount of $375,995.00. The 1992 income tax return completed by the trustee of the trust shows a carry-forward loss from 1991 of $375,995.00. The evidence as to the date of acquisition of the shares is unclear. Mr Denoon relies upon the entries in the financial accounts. In the absence of any evidence in contradiction, I accept that the financial accounts reflect an acquisition of the shares in Relsun, the making of the loan and the writing off of that loan. The Commissioner does not contest that the write-off of the loan constitutes a capital loss. The contest is as to whether the taxpayer is in a position to prove on the balance of probabilities the acquisition of the shares by the trustee in its trust capacity. Since the financial accounts have been prepared by BDO Nelson Parkhill on the basis of access to the underlying documents, I accept that the entries in the financial accounts reflect an acquisition of the Relsun shares and a write-off of a loan to Relsun. Mr Denoon had no recollection of the investment. The company CKL was incorporated on 16 August 1985. In the financial accounts for the trust for the year ending 30 June 1998, note 4 to the accounts describes an investment in CKL of $72,000.00 and describes that investment as having had a market value at 30 June 1987 of $144,000.00. Note 6 to the accounts shows an unsecured loan to CKL of $50.3m. The financial accounts for the trust for the year ending 30 June 1989 also show the trust estate's investment in shares in CKL at a cost of $72,000.00. Note 4 records the market value of the investment at 30 June 1988 as $144,000.00. CKL was placed in liquidation on 2 October 1991 and deregistered in 1994. The asset thus ceased to exist. In the 1992 income year the trust estate's investment in the CKL shares was treated as irrecoverable giving rise to the claim for a carry-forward capital loss. In the absence of any evidence in contradiction, I accept that the entries in the financial accounts prepared by BDO Nelson Parkhill on the basis of access to the primary documents, reflect a true and fair view of the trust estate's investment in the CKL shares and that the investment became irrecoverable by reason of the liquidation of CKL on 2 October 1991. The resolution of the issues in the proceedings on behalf of Mr David Clark also resolve the issues in the proceeding by Mrs Helen Clark. I will reserve the question of costs and also direct the parties to make any submissions on the question of costs within 7 days. I certify that the preceding one hundred and forty-five (145) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

consideration of whether the taxpayer has established on the balance of probabilities that the trustee of the trust estate acquired shares in rothwells limited in 1988 consideration of an event of disposal of the shares in the 1993 income year consideration of whether the trust estate that made a capital gain in the 2001 income year was, as a question of continuity, the trust estate that suffered the capital loss in the 1993 income year consideration of whether contended changes in the trust fund; the trustee's interest in the trust estate; and the interests of beneficiaries under the trust deed, brought about a break in continuity between the trust estate that made the capital gain in the 2001 income year and that which suffered the capital loss in the 1993 income year taxation

By those orders I approved the entry by the second applicant (Mr Hamilton) in his capacity as Official Liquidator of the first applicant (Newpage) into a Deed of Settlement and Release (the Deed) between them on the one hand and the first respondent, Casino Busters International Pty Ltd (CBI), and the second respondent (Mr Parsons), the sole director of CBI, on the other hand, and approving Mr Hamilton's compromising a debt of CBI and Mr Parsons to Newpage accordingly. There were other parties to the Deed with whom I am not presently concerned. 2 Mr Hamilton applied for the approval by an interlocutory process that was filed in Court on 8 June 2007, the date of the making of the orders. Consequential upon the approval, I discharged a freezing order that had been made against CBI. As well, I made a "confidentiality" order under s 50 of the Federal Court of Australia Act 1976 (Cth), to which I will refer below. I refer to the accounts of the background facts given in all of those judgments, in particular, the one just mentioned. 4 Section 477(2A) of the Corporations Act 2001 (Cth) (the Act) provides, relevantly, that except with the approval of the Court, a liquidator of a company must not compromise "a debt to the company" if the amount claimed by the company is more than, relevantly, $20,000. 5 As recounted in earlier reasons for judgment, on 1 June 2006 Newpage paid $610,000 to CBI. On 22 September 2006 Newpage made a second payment of $1,527,000 to CBI. The payments were made to CBI for itself or on behalf of Mr Parsons. The amounts were deposited into CBI's bank account. The third respondent (Mr Yii), the sole director of Newpage, caused the payments to be made. 6 The conflicting accounts given by Mr Parsons and Mr Yii of the circumstances surrounding the making of the two payments and subsequent events were outlined in my reasons for judgment of 4 April 2007 referred to above. The uncertainty as to what the true facts were has been a problem for Mr Hamilton in the discharge of his duties as liquidator of Newpage. 7 Mr Hamilton has been pursuing Mr Parsons, CBI and Mr Yii for recovery of the total sum of $2,137,000. 8 The Deed recited that Mr Hamilton and Newpage had filed draft Points of Claim against CBI, Mr Parsons and Mr Yii in this proceeding. In fact, a copy of that document (Points of Claim) had been handed up in Court on 26 March 2007. A copy of the Points of Claim was annexed to the Deed. The Deed also recited that Mr Hamilton desired to make further claims against Mr Parsons in the proceeding, including but not limited to claims for "involvement and/or assistance in breach of fiduciary duty and claims for misleading and deceptive conduct". 9 The Points of Claim asserted (in paras 8 and 11) that there was "no consideration, or no proper consideration," for the making of the payments of $610,000 and $1,527,000. According to para 17 of the Points of Claim, the payments were voidable under s 588FE of the Act by reason of the fact that each was an "unreasonable director-related transaction" of Newpage. An "unreasonable director-related transaction" is defined in s 588FDA of the Act. During the course of hearings of other applications in this proceeding, counsel for Mr Hamilton and Newpage had also referred to the payments as having been uncommercial transactions within s 588FB of the Act. 10 Whichever class or classes of voidable transactions the payments were said to have constituted, Mr Hamilton intended to seek an order under s 588FF of the Act that CBI and Mr Parsons pay the sum of $2,137,000 to Newpage. It appeared from the Points of Claim that the basis on which the two payments were said to be voidable transactions is that they were made with "no consideration, or no proper consideration". 11 The Deed was expressed in wide terms. It provided that Mr Parsons would pay a certain amount to the applicants, would make himself available to give evidence for Mr Hamilton and Newpage on the hearing of the proceeding, swear affidavits, and generally assist Mr Hamilton in connection with the examinable affairs of Newpage and with the claims being made against Mr Yii. For their part, Mr Hamilton and Newpage released Mr Parsons, CBI and another company associated with Mr Parsons, in wide ranging terms, from all claims of any kind arising out of or in connection with the proceeding. 12 The Deed stated that it was to be of no force or effect until approval of Mr Hamilton's entry into the Deed was obtained pursuant to s 477(2A) of the Act. 13 Mr Hamilton's affidavit in support of his application under s 477(2A) stated that having regard to the nature of the claims against CBI and Mr Parsons, their limited financial capacity and the assistance that Mr Parsons was likely to be able to give him, the settlement "[was] beneficial and [was] in the interests of the creditors of [Newpage] to accept". In addition, Mr Hamilton had obtained advice from Mr J T Johnson of counsel, a barrister of not less than seven years' standing, recommending the compromise. 14 Mr Hamilton gave oral evidence elaborating on these reasons. He referred to the high cost of litigating the claim against Mr Parsons and CBI and to the searches he had conducted as to their assets. He said that Newpage's major creditor is the present first plaintiff, Elderslie Finance Corporation Limited (Elderslie), to which $3 million plus interest is owed. Elderslie supports the compromise. Mr Hamilton is aware of two other persons who apparently claim to be creditors of Newpage, at least one of whom is associated with Mr Yii. Perhaps both of them are. Mr Hamilton has not yet been in a position to assess those claims. The amounts of them, in aggregate, appear to be of the order of one half of the debt owed to Elderslie. 15 I was of the view that the Court should approve of Mr Hamilton's entering into the Deed if the Court had power to grant that approval. The first was whether the claim that Mr Hamilton was pursuing against CBI and Mr Parsons was one of a "debt" to Newpage for the purposes of s 477(2A). The Court's power under that subsection to approve Mr Hamilton's compromising the claim depended upon a positive answer being given to this question. The second issue related to a "confidentiality order" sought by Mr Hamilton. 1. Was the claim one of a debt to Newpage? It relates to many classes of liability and potential liability. Subject to two exceptions, a liquidator is not required to obtain the approval of anyone before compromising claims of the many classes referred to in s 477(1)(d). One exception is the case of "a debt to the company" of more than a certain monetary amount: subs (2A). The other exception may be described as a compromise the agreement for which may end, or provides for obligations that may be performed, more than three months after the agreement is entered into: subs (2B). The Court lacks power to grant "approval" except in those two cases. 18 Mr Hamilton and Mr Parsons and CBI (Mr Parsons and CBI appeared with leave on the hearing of Mr Hamilton's application) argued for an expansive construction of the expression "a debt to the company". Various submissions were made. It was suggested that a claim based on any of the voidable transaction provisions was a claim of "a debt to the company". It was put that any claim that, if successful, would result in a judgment debt in favour of the company was a claim of "a debt to the company". It was also contended that the legal nature of the claim that had in fact been made was irrelevant, and that all that mattered was the terms of the compromise. It seems that, according to this contention, it would suffice that a proposed compromise referred to a release of "all debts to the company" without any consideration of the question whether any claim that had in fact been made could possibly be classified as "a debt to the company". 19 I did not accept these submissions. The terms of ss 477(1)(d) and 477 (2A) plainly indicate that, generally speaking, a liquidator's power of comprise is not to be constrained by the necessity of obtaining approval from the Court, a committee of inspection (if any), or the creditors. If the expression "a debt to the company" in subs (2A) is construed in such a manner that it covers most of the ground of para (d) of subs (1), the Parliament's intention is frustrated. The issue assumes particular importance because the construction of the expression goes not only to the necessity for the liquidator to obtain approval, but also to the power of the Court to grant it. 20 As Barrett J observed in HIH Insurance Ltd and Related Matters [2004] NSWSC 5 ( HIH ) at [12], it appears that in some cases a strict approach has not been taken to the jurisdictional question posed by the expression "a debt to the company". In some cases, Judges have granted approval under s 477(2A) without discussion of the jurisdictional question. It can be just as important to decide that a compromised claim is not one of a debt to the company as to decide that it is. In Spalla v St George Motor Finance Ltd (No 7) [2006] FCA 1177 , for example, a challenge was made to a compromise entered into by a liquidator on the ground that approval under s 477(2A) had not been obtained, and Kenny J had no hesitation in holding that the submission failed because it was "based on a misunderstanding as to what constitutes a 'debt' under the relevant section" (at [143]). 21 The history of the requirement that certain compromises by liquidators be approved by the Court, by the committee of inspection or by a resolution of the creditors was referred to by Moynihan J in Re Luxtrend Pty Ltd (in liq) [1997] 2 Qd R 86 ( Luxtrend ) at 87. The position under the 1961-62 cooperative régime and under the 1981 cooperative "Code" scheme, as well as under the Corporations Law in its original form in 1991, made the liquidator's power of compromise generally subject to a requirement of the approval of creditors or of the court, subject to an exception in the case of a debt of not more than a certain monetary limit: see ss 236(1)(d) and 236(2)(i) of the Companies Act 1961 (NSW) (in which the monetary figure was ₤300), ss 377(1)(d) and 377(2)(j) of the Companies Code (in which the monetary limit was $20,000), and ss 477(1)(d) and 477(2)(j) of the Corporations Law in their original form (where, again, the monetary limit was $20,000, and compromises of debts to the company being calls and liabilities for calls also required approval regardless of the amount). That is to say, the position was structurally the converse of the present one. 22 It was s 73 of the Corporate Law Reform Act 1992 (Cth) (No 210, 1992) that amended s 477 of the Corporations Law by omitting the general requirement of approval. An exposure draft of the Bill for that Act and an Explanatory Paper were released early in 1992. The Explanatory Paper stated (at [931]) that the proposed amendments implemented a recommendation of the Harmer Report (Australian Law Reform Commission Report 45: General Insolvency Inquiry (1988)). The Harmer Report had recommended (at [608]---[610]) that the powers of a liquidator generally be exercisable without the need for approval of creditors or the court, subject to exceptions in the cases of the power to compromise debts above a prescribed amount, and the power to enter into long term commitments. The expansion of the liquidator's powers to act without approval was recommended on the basis of the competence and qualifications of persons who act in the capacity of liquidator. 23 The Harmer Report's recommendations were reflected in the omission of the general requirement of approval from subs (1) and the insertion of a requirement of approval in new subss (2A) (debts to the company of more than any prescribed amount exceeding $20,000, and if none was prescribed, $20,000), and (2B) (agreements that may end or be performed beyond three months after they are entered into). 24 The meaning of the word "debt" can be affected by its context. There is a line of authority to the effect that the expression "a debt to the company" in s 477(2A) bears its familiar meaning of a sum of money that is either immediately payable, or that, by reason of an existing obligation, will become payable in the future ( debitum in praesenti , solvendum in futuro ): Luxtrend [1997] 2 Qd R 86 ; Re Tietyens Investments Pty Ltd (in liq) (Receiver and Manager appointed) (1999) 31 ACSR 1 ( Tietyens ) at [92]---[94]; and see Austin R P and Ramsay I M, Ford's Principles of Corporations Law (13 th ed, LexisNexis Butterworths, 2007) at [28-260] p1412. Accordingly, claims by liquidators to recover amounts paid away by the company under voidable transactions have been held to lie outside the predecessor provision of s 477(2A), namely, s 477(2A) of the Corporations Law : Luxtrend [1997] 2 Qd R 86 ; Nambucca Investments Pty Ltd v Snoco Ltd [1999] NSWSC 211 at [2] . In Tietyens 31 ACSR 1 a claim of equitable damages based on accessorial liability for breaches of trust, the primary cause of action being a claim based on Barnes v Addy (1874) 9 Ch App 244, was similarly held not to be a claim of a debt to the company. 25 The voidable transactions claim pleaded in the Points of Claim is not a claim of a debt to Newpage. There is no present liability under such a claim --- a liability would come into existence only if and when the Court made an order under s 588FF if Mr Hamilton applied for the order and proved that the payments constituted a voidable transaction. 26 In HIH [2004] NSWSC 5 at [12] and QBE Workers Compensation (NSW) Ltd v GJ Formwork Pty Ltd (2006) 56 ACSR 687 ( QBE ) at [4]-[5], Barrett J said that where there is room for argument about whether a claim is one of a debt to the company, the court should err on the side of treating the claim as a debt rather than decline to grant approval under s 477(2A). His Honour pointed out that the opening words of s 477(1) have the effect of making the power to compromise contained in para (d) of that subsection subject to subss (2A) and (2B). It follows that if it transpired that a claim was, indeed, one of "a debt to the company" within subs (2A), a compromise of it without approval of the Court, of the committee of inspection or of a resolution of the creditors, would lie outside the power of the liquidator. 27 With respect, I agree with the approach suggested by his Honour, and would add that in my view s 477(2A) applies where the claimed debt to the company of more than $20,000 is one of several, perhaps many, claims that are all the subject of a single comprehensive compromise. A Judge is rightly reluctant to turn away, on the ground of lack of jurisdiction, a liquidator who comes to the Court seeking approval under s 477(2A), if there is a possibility that in consequence the proposed compromise will be entered into in contravention of the prohibition contained in that subsection. A particular difficulty is that a liquidator and the Court are called upon to classify a claim as being of a debt or non-debt kind in unfavourable circumstances. It is in the interests of creditors that the liquidator compromise a claim early and without the expensive factual and legal investigation that resolution of the debt/non-debt question may demand. This dictates the position in which the Court is also placed when dealing with the liquidator's ex parte application. 28 Be all this as it may, as Barrett J acknowledged in HIH [2004] NSWSC 5 , if the claim is "unquestionably" not a debt, the correct approach is to dismiss any application under s 477(2A) as unnecessary (at [12]). 29 According to the Points of Claim, the present claim is based exclusively on the voidable transaction provisions of the Act, as those provisions apply to two specific payments made by Newpage. The facts of the present case are very different from those that were before Barrett J in HIH and QBE . 30 In HIH and QBE , the liquidator also sought and obtained a direction under s 479(3) of the Act that he was justified in entering into the compromise (in HIH the approval sought and obtained was founded on s 477(2B), as well as on s 477(2A)). Section 379 of the Companies Code which the Report cited, like s 479 of the Act, also provided in subs (3) for a liquidator to apply to the Court for directions. 33 It must be remembered that there is a distinction between s 477(2A) and s 479(3): where the claim is of a debt to the company of more than $20,000, the liquidator lacks power to compromise the debt in the absence of "approval", and s 479(3) does not empower the court to grant powers to a liquidator. The different role of directions under s 479(3) of providing guidance and protection to the liquidator appears from the judgments in Re GB Nathan and Co Pty Ltd (in liq) (1991) 24 NSWLR 674, 679-680; Re Spedley Securities Ltd (in liq) (1992) 9 ACSR 83 at 85 ( Spedley ); State Bank of New South Wales v Turner Corporation Ltd (1994) 14 ACSR 480 at 483. 34 In a doubtful case, the Court can "to the extent that approval may be required" grant approval under s 477(2A), and otherwise direct under s 479(3) that the liquidator is justified in entering into the compromise in question. If it were ever established that the claim was not a debt to the company, the direction under s 479(3) would still be protective of the liquidator. 35 Whether under s 477(2A) or s 479(3), the Court does not enter upon the commercial merits of the compromise. Rather, its concern is with such matters as "lack of good faith, some error in law or principle, or real and substantial ground for doubting the prudence of the liquidator's conduct" ( Spedley 9 ACSR 83 at 85-6 (a s 479(3) directions case)). 36 Cases in which a liquidator has applied under both s 477(2A) and s 479(3) include HIH [2004] NSWSC 5 , QBE 56 ACSR 687, Re Gate Gourmet Australia Pty Ltd (in liq) (2005) 23 ACLC 834; Foyster v Foyster Holdings Pty Ltd (in liq) [2003] NSWSC 925 , and Re United Medical Protection; Application of Lombe Ltd (as prov liq) ( 2003) 46 ACSR 98. 37 In Dean-Willcocks v ATTT Investments Pty Ltd (1999) 17 ACLC 1310, an application was made under s 477(2A) for the Court's approval of an arrangement by which a secured creditor of the company would inject funds in exchange for a particular asset. There was no dispute about the monies owing. Young J held that the Court had no jurisdiction to grant approval under s 477(2A) because what was proposed was not a compromise of a debt, and that the proper course, if the liquidator wanted to pursue the matter, would be for him to seek directions under s 479(3). In Tietyens 31 ACSR 1, Weinberg J held that he lacked jurisdiction under s 477(2A) but gave directions under s 479(3). 38 For reasons that appear below, it is not necessary (and it is not desirable) that I attempt to define the concept of "a debt to the company" as that expression appears in s 477(2A). As indicated above, however, I respectfully agree with the line of authority to which I have referred to the effect that the expression does not embrace a liability that arises only after the liquidator has chosen to apply for an order under s 588FF of the Act and satisfied the court of the existence of the various elements of one or other of the classes of voidable transaction provided for in the Act, and the court has made an order under that section. 39 Notwithstanding the terms of the Points of Claim, counsel who appeared from time to time for Mr Hamilton and Newpage had in fact referred to the claim against Mr Parsons and CBI on several occasions as one of "debt". He did so, for example, at an earlier hearing on 25 January 2007 of an application for a freezing order. I accept that the allegation of a loan is made in good faith and represents one construction that might be placed on the dealings between Mr Parsons and Mr Yii referred to in my judgment of 4 April 2007 (see [3] above). 41 It was appropriate that the compromise expressed in the proposed Deed be approved, notwithstanding that it was expressed as an "all claims" compromise rather than as a compromise of only the claims that have been made in respect of the two payments of $610,000 and $1,527,000. 2. Section 50 of the Federal Court of Australia Act 1976 (Cth) provides that the Court may make an order forbidding or restricting the publication of particular evidence, as appears to the Court to be necessary in order to prevent prejudice to the administration of justice. 43 Applications by liquidators for confidentiality orders in respect of compromises for which they have sought Court approval have been considered in McGrath re HIH Insurance Ltd [2005] NSWSC 731 and Re JN Taylor Holdings Ltd (in liq) [2007] SASC 193. The administration of justice, including the just and efficient winding up of a company, requires that proper compromises be facilitated rather than obstructed. Apart from the requirement of leave, Mr Hamilton would have been entitled to bargain for and reach agreement upon a confidentiality régime in respect of the compromise that he has reached with Mr Parsons and CBI. He and they would have been entitled, in particular, to preserve their negotiations and agreement against disclosure to Mr Yii. 44 The evidence shows that without prejudice meetings have been held between the legal representatives of the parties. It would discourage the negotiation of compromises if liquidators knew that all their negotiations and compromise agreements were to be made public, a fortiori in a case such as the present one in which there is an ongoing claim by the liquidator and the company in liquidation to recover from another party. 45 While I was of the view that an order preserving the confidentiality of the Deed should be made, this says nothing as to whether Mr Yii will or will not be entitled to gain access to the Deed later, for example, in relation to the quantification of the amount of any recovery from him. Mr Yii may raise other issues which will require disclosure of the Deed or of parts of it, whether generally or on a restricted basis. 46 For the above reasons I ordered that the transcript of the hearing and the Deed not be published without leave of the Court, and that that Deed be placed in an envelope that was to be sealed and not opened without leave of the Court.

approval of compromise on application by liquidator under s 477(2a) of the corporations act 2001 (cth) necessity of liquidator's obtaining court's approval and jurisdiction of court to grant approval meaning of expression " a debt to the company" in s 477(2a) whether order should be made that compromise remain confidential. held: (1) claim based on voidable transaction was not "a debt to the company" but claim of a loan by the company was; (2) a suppression order in relation to terms of compromise should be made. " debt ", " a debt to the company ". corporations words and phrases

At the first hearing of the motion there was only one notice of industrial action in question. However, for reasons which I will explain later, during a subsequent hearing a further notice of industrial action became relevant. These affidavits were read without objection and there was no cross-examination. No affidavits were filed by the respondent. Accordingly the matter proceeded upon the basis of uncontested fact. The Plant is the production facility from which it manufactures and produces its chemical and fertiliser products. It is also a part owner of another company known as QNP which operates in Queensland. QNP supplies ammonium nitrate to industry in Queensland. QNP sells all of its product in other markets from the WA (and other) markets serviced by the applicant. It produces, distributes and sells fertilisers primarily to the agriculture industry. However the applicant also supplies some product to the domestic market. It also produces various chemicals for the industrial, mining and resources industries. 4 The main products made by the applicant at Kwinana (which products it does not make anywhere else) include Ammonia, Ammonium Nitrate (AN), Sodium Cyanide, Carbon Dioxide (CO 2 ), Sodium Hypochlorite, Fertilisers and Fluorosilicic Acid. These products are sold variously to mining and industrial companies, the Water Corporation and farmers. Approximately 30 of the applicant's employees are based at its country facilities. The remainder (approximately 530 or so employees) are based at Kwinana. At its Kwinana facilities, excluding staff, the applicant employs approximately 120 operators/technicians (the Process Technicians); 64 despatch employees; and 50 trades persons (including both mechanical and electrical trades). 7 The Process Technicians are permanent employees employed under contracts of employment which require them to give 4 weeks notice of termination. 8 In addition to the contract of employment which the applicant has with each of them, the Process Technicians, amongst other employees, the applicant is bound by a certified agreement which was certified by the Australian Industrial Relations Commission ("the Commission") on 15 April 2004 ("the CSBP Agreement"). Under their contractual and industrial arrangements, the Process Technicians are required to work shift work. All bar two Process Technicians are employed on a rotating 24 hour shift roster. 9 The Process Technicians work a "four on (2 day shifts then 2 night shifts) --- four off" 12 hour shift roster pattern (including day shifts and night shifts). The day shift starts at 6am and the night shift starts at 6pm. There are 4 "panels" of shifts. That is, on any one day, two panels will be working and two panels will be rostered off. There are additional Process Technicians in each area who also work shift work which includes annual leave relief and training relief. According to the Australian Electoral Commission's declaration of a result for a postal ballot resulting from a Commission ballot order sought by the respondent and made by Commissioner Smith of the Commission on 2 March 2007 in matter BP 2007/244, the respondent has 152 members among the 214 despatch and Process Technicians employed in its Kwinana and country operations. 12 As at 12 February 2007 the respondent had one member in each of the applicant's Albany and Geraldton facilities, and none in Esperance and Bunbury. According to the estimate of Mr Matthew Riordan, the applicant's Human Resource Manager, given that the respondent had only 2 members at the applicant's country operations at the time of the Protected Action Ballot, conducted in March 2007, the respondent had 150 members among the 184 despatch employees and Process Technicians at Kwinana. 16 The applicant has reached agreement on the terms of a new collective workplace agreement with each of the CEPU and AMWU. The notice was assigned the number BP 2007/8 by the registry of the Commission. It recorded the intent of the respondent to make a collective agreement to which s 423 of the Act applies with "the other negotiating parties" stated to be the applicant and two other unions namely the AMWU and the CEPU. 19 The applicant contended in the Commission before Lawler VP that it was not open under the Act for a union to initiate a bargaining period naming other unions as negotiating parties and accordingly it was submitted that the Initiating Notice was invalid and did not initiate a bargaining period. The Commission upheld the validity of the Initiating Notice: Liquor, Hospitality and Miscellaneous Union --- Western Australian Branch v CSBP Ltd [2007] AIRC 112 ("the first Commission case"). If s 423 has the effect for which CSBP contends then those other unions do not in fact become "negotiating parties" (in the particular bargaining period initiated by the giving of the notice) notwithstanding that they are named as "negotiating parties" in the notice. However, it does not automatically follow that the notice thereby becomes invalid or otherwise ineffective in initiating a bargaining period to which the employer and notifying union are negotiating parties. Even if CSBP, as employer, is the only other person who can be a "negotiating party" to a bargaining period initiated by the LHMU in relation to CSBP employees in this case the LHMU gave "written notice ... to each other negotiating party and to the Commission stating that the initiating party intends to try to make a collective agreement to which this section applies ... with the other negotiating parties under ... 328" as required by s 423(3). The fact that the notice was also given to other persons as "negotiating parties" does not detract from the fact that the requirements of s 423(3) have been satisfied. That case was an appeal from a decision of Polites SDP and concerned the validity of a notice of initiation of bargaining periods and, in particular, whether, by including an additional employee organisation in the notice, the notice thereby was invalid. Polites SDP had held that the inclusion of another organisation of employees in the notice did not serve to invalidate the notice as between the initiating party and the negotiating party. He also held, assuming that he was wrong concerning the validity of the notice, on that ground, that the inclusion of the other organisation of employees could be severed from the other provisions of the notice and for that additional reason ought not to be regarded as invalidating the notice between the initiating party and negotiating party at [32]. 23 The Full Bench, without more, merely adopted the reasons of Polites SDP in these respects: APRA v CPSU (Print S7131) at [22]. 24 The protected action ballot order made by Lawler VP was, according to counsel for the respondent, revoked upon the application of the respondent. A further application for a protected action ballot order was then made relying upon the Initiating Notice and came on for hearing before Commissioner Smith of the Commission on 2 March of this year. The Commissioner in an ex tempore decision made a protection action ballot order. The Commissioner's edited reasons were published on 8 March 2007: Liquor, Hospitality and Miscellaneous Union v CSBP Limited (PR976337) ("the second Commission case"). The points taken by the applicant before Lawler VP as to the invalidity of the Initiating Notice were re-argued before Commissioner Smith. In his reasons the Commissioner adopted, without more, the reasoning of Lawler VP, in the first Commission case, in finding that there was a valid bargaining period and in effect a valid initiating notice. 25 As of 23 March 2007, the applicant had reached agreement on all terms of a new workplace agreement with the respondent except in respect of "backpayment of allowances". As at 26 March those issues were resolved save for issues said to have been specific to chemicals. 26 As at 30 March 2007 the remaining issues concerned shift cover and chemical operator levels. Those members to whom the Protected Action Notice referred were expressed, in a formulative way, to be "... those employees of CSBP Limited who are members of the LHMU who would be subject to the proposed collective agreement dealt with in bargaining period BP 2007/8 and work as process technicians". As at the commencement of the hearing before me there were potential safety consequences for the applicant and the public and economic consequences for the applicant, its customers and third parties. At the commencement of the hearing, I invited the parties to reach agreement on the safety matters. During a short adjournment, this was achieved. This broadly involved agreement to overcome safety issues at the Plant in "shut-down" mode in the event that the 7 day stoppage ("the Stoppage") proceeded. Accordingly, other than going to the efficacy of the respondent's Protected Action Notice, the safety concerns are no longer relevant to this application. It is therefore, in that limited context, that I now set out a relevant summary of the safety issues. The Plant is a Major Hazard Facility and is subject to rigorous safety and environmental regulations. At all times, the applicant is required to safely operate and maintain the Plant. Without due care, the Plant conditions may be compromised resulting in possible release of hazardous chemicals into the atmosphere or onto the land thus impacting on the safety of the public. 30 If the Process Technicians stop work for 7 days, there are a number of immediate safety and economic consequences for the applicant. Firstly, it cannot operate most of its chemical facilities and its fertiliser plant without the Process Technicians. 31 When the Process Technicians all stop work, the applicant must cease operations of most of its chemical facilities. This cannot be achieved in any immediate way. The applicant must undertake a controlled shut-down of its various operations, in order to prevent significant damage occurring to its facilities and also to comply with its safety obligations. The length of time required to shut down the different chemical facilities at the Kwinana Plant varies from a number of hours (i.e. approximately 6---12 hours) in some cases, to 3 or 4 days in the case of the ammonia plant. It is stored at the Plant in refrigerated tanks. The applicant's current storage levels are approximately 24,200 tonnes. 33 Approximately 165,000 tonnes per annum of ammonia produced by the applicant is consumed on site. Of this amount approximately 115,000 tonnes is used to make nitric acid and subsequently AN solution; approximately 30,000 tonnes is used to make cyanide products and approximately 20,000 tonnes is used by the applicant to make fertiliser products. It also sells approximately 85,000 tonnes of ammonia externally. It cannot run the ammonia plant without the Process Technicians during the Stoppage. It will therefore have to shut the ammonia facility down. Additionally, if there is a shutdown of the Plant, or most of it (as will be required if the Process Technicians stop work), it will not be able to despatch ammonia held in storage to some of its other facilities at the Plant. This is because the applicant's AN facility and the fertilisers area will also have to be shut down. 35 Currently, there is a high level of demand for the applicant's chemical products, including its ammonia based products. For an extended period now the applicant has been operating its ammonia facility at maximum capacity. Indeed it is currently building a second AN facility because demand for its product is high. In order to have enough ammonia to "feed" that facility when it is commissioned (expected to be November 2007), the applicant will be importing ammonia. It will not have enough of its own product to feed that facility. Once the new facility is fully commissioned it is expected to operate at full capacity and sell all of the product that it can produce. 36 There is therefore a significant economic impact for the applicant from not producing and using ammonia during any period of stoppage. Notwithstanding current storage levels of ammonia at Kwinana, it is able to sell all of the ammonia that it can produce. When its stocks increase, it is able to enter into contracts to sell the additional stock or alternatively use the product itself to make other chemicals. 37 If the applicant's production is reduced by a 14-15 day stoppage (which is the likely consequence of the proposed Stoppage by Process Technicians), then over the course of the coming year or so, it will have reduced sales of product proportionate to the short fall in ammonia production. Alternatively, were the applicant forced to import ammonia to meet its contractual obligations, the prevailing market price of ammonia currently exceeds its contracted sale price to external customers. That is, it would cost the applicant more to import than the revenue it would obtain from selling the ammonia. 38 Mr Martelli estimated the financial cost to the applicant from lost ammonia production from the Stoppage notified by the respondent to commence on 6 April 2007 will be in the order of $2.6 million to $3.2 million. In his affidavit, sworn 2 April 2007 as amended, in part, by his further affidavit sworn 3 April 2007, Mr Martelli demonstrated in considerable detail how he arrived at this estimate. There was no challenge to those estimates and for present purposes I will treat them as reliable. These losses will not be immediate but will be incurred over time. 39 Viewed alternatively, a stoppage of production at the ammonia plant over 14 to 15 days would result in fixed cost losses to the applicant. That is, it will incur costs even though it is not producing. Those costs include the fixed proportion of gas transmission which it must pay for, whether or not it is using gas during a period of the shutdown, depreciation of the facility and various other costs associated with the production side of the ammonia facility. According to Mr Martelli the fixed cost component of the loss would exceed $1.5 million over the 14 day period. It operates its AN solution and prilling facilities at maximum capacity and can sell all the product that it makes. It sells about 250,000 tonnes of AN per annum. Of some approximately 285,000 tonnes of AN sold each year in WA, the applicant supplies 250,000 tonnes. However it could sell more AN if it had the capacity to produce it. For this reason it is currently in the process of building a second AN facility at Kwinana. It sells all of its AN to Dyno Nobel Asia Pacific Pty Limited (Dyno Nobel). Dyno Nobel receives AN from the applicant and then further processes the AN to make explosives for its various mining customers including BHP Billiton and Pilbara Iron Ore (i.e. Rio Tinto) and other mining companies in WA. There is a main contract to supply to a base volume of AN. In addition to the "base supply", Dyno Nobel buys all additional AN that the applicant can produce under supplementary contracts. This allows Dyno Nobel to work out how much AN it will source from the applicant during the relevant contractual period. Product that cannot be supplied by the applicant will then be sourced from elsewhere by Dyno Nobel. However Dyno Nobel will buy all the AN that the applicant can sell to it. 42 When the applicant assesses its capacity to supply Dyno Nobel, it does so taking into account all relevant factors e.g. planned shut downs and current stocks. If stocks are depleted by a shutdown of the facility, the applicant must build that into its planning. In short, it will mean that the applicant will sell less AN to Dyno Nobel because it will produce less overall in the relevant period. That is, the applicant is able to enter into contracts to sell all stocks of AN that it produces. Dyno Nobel and its customers (i.e. the mining companies) do not store large quantities of stock. It needs to be responsive to their stock delivery requirements. The storage capacity provides flexibility around any break down or trip at the Plant. That is, as is the case with ammonia, the applicant stores AN product as part of its overall supply chain efficiency. Its stores of AN on site are a "timing issue" only. As a matter of product management, there needs to be stocks of AN available on site at any time. 45 The applicant currently has 8,200 tonnes of AN granules in stock. This is standard. This represents less than 2 weeks supply of AN granules to Dyno Nobel. It currently has 460 tonnes of AN solution in stock which is also standard. This represents about 2 to 3 days supply to Dyno Nobel. If the Stoppage occurs, the applicant, for safety reasons will dilute the AN solution to make the product safe in storage. The AN solution will not be able to be despatched to Dyno Nobel in that form. After the Stoppage the diluted AN solution will have to be concentrated before it can be sold to Dyno Nobel. Therefore, if the Stoppage occurs, immediately it will not be able to supply AN solution to Dyno Nobel. In turn, Dyno Nobel may not be able to supply explosives to those mines that require an explosive derived from AN solution. 46 It is possible to produce AN solution from a particular grade of AN granules by melting the AN granules into AN solution. However, the applicant does not produce the particular grade of granules to enable this to occur. Nor does Dyno Nobel itself have the capacity to make AN Solution from the granules. Further there is a long lead time to get the required grade of AN granules even if Dyno Nobel could make AN solution from the granules. There are also substantial costs in the melting process and not all sites have such facilities. There is therefore a real prospect of slowing or halting production at those mines that rely on AN solution for their explosives, at least for a period of time until alternative arrangements can be made by Dyno Nobel. It will therefore have to shut the AN facilities down. Consequently it will not produce any AN during the Stoppage. Nor will it produce AN for a period of some additional 2 days to allow for shutdown/start-up of the AN facilities, i.e. a half a day to 1 day either side of the Stoppage (averaging about 1.5 days additional lost production in total). There is therefore a significant economic impact for the applicant from not producing AN during any period of stoppage. Since the applicant is able to sell all of the AN that it can produce, if its AN production is reduced by an 8 to 9 day shutdown of the AN facilities, then over the course of the coming year or so, it will have to reduce sales of product proportionate to the short fall in AN production. 48 Mr Martelli estimated that the financial loss to the applicant from lost AN production from the Stoppage will be in the order of $750,000 to $900,000. Again detailed calculations were deposed to by him to which there was no challenge. I do not need to recite these here. The applicant currently has 460 tonnes of AN solution, and 8,200 tonnes of bulk/bagged AN. If it was not able to continue producing AN then, based on its current stocks, stocks of AN granules would run out in less than 14 days. 50 As I have indicated, for safety reasons AN solution will be diluted. Therefore immediately upon this occurring during the shutdown and Stoppage, the applicant will cease supplying AN solution to Dyno Nobel notwithstanding the fact that Dyno Nobel will wish to be supplied by it. Dyno Nobel does not store large quantities of AN Solution but relies on the applicant to provide very regular supplies of the product. Similarly, the mines who are supplied with AN solution (converted into emulsion) do not hold large quantities of AN solution on site (the product is a classified explosive and only small quantities are held on mine sites). 51 If the applicant can no longer provide Dyno Nobel with AN granules, there are some other plants interstate which may have some capacity to divert to Dyno Nobel although Mr Martelli believed that such capacity would be minimal. The lead time for obtaining suppliers interstate is 10 to 25 days. However, this is an estimate only. Interstate lead time could be even longer given the fact that AN is classed as a dangerous good under relevant dangerous goods legislation and is therefore subject to strict regulatory control. 52 In order to obtain overseas shipments of AN granules, the applicant would need to divert ships that have already been ordered by other suppliers. It could not just ring up a supplier and secure a shipment. The process is likely to take 2 to 3 months as many ships are booked out months in advance. 53 Another issue in relation to importing AN granules is port limits. It is not possible to have an unlimited supply of AN at the port because the port at Kwinana has a limit of 4,000 tonnes of AN per ship and the port at Dampier has a limit of 5,000 tonnes of AN per ship. Those shipment amounts of AN would only be enough for one week's supply of AN to Dyno Nobel. 54 The fastest way to transport AN is by road and or rail, however, the costs of transport by road and rail are very high relative to the price of the product. It is very difficult to transport AN solution because it needs to be kept at a certain temperature in heated containers which are difficult to obtain. Based on the alternative sources of AN available and the delays involved in transport, it would not possible to supply Dyno Nobel with AN from alternative sources, particularly given that other AN plants in Australia have minimal product to divert. 55 If the applicant was not able to supply Dyno Nobel with AN, it is likely that Dyno Nobel will not be able to source AN from other sources within the time frames required to supply some of its customers. It is therefore likely that production at affected mines will be reduced as a consequence. Therefore, if it cannot supply AN to Dyno Nobel there will be a flow on effect of reduced production in gold, nickel and iron ore. Even if it can supply all of its customers from alternate sources, or Dyno Nobel obtains the product itself, it will lose the benefit of those sales. The applicant's fertiliser business relies on ammonia produced by itself to maintain production. At this time of year fertiliser usage by farmers begins to peak. Demand for the applicant's fertiliser product is high. In addition, farmers who cannot obtain fertiliser from the applicant will immediately source product from other suppliers. This is because each farmer has a small window during which the farmer desires to apply fertiliser to his/her land. Delays of 1 to 2 days on fertiliser supply can affect a farmer's economic returns. With Fertiliser Process Technicians and Process Technicians in the ammonia plant engaging in the Stoppage this will significantly impact the applicant's ability to service customers. After July, the fertilising season is over. Therefore any lost production prior to July 2007 cannot be "caught up" during the fertiliser season and represents lost sales. 58 In other words, the Stoppage will mean that the applicant loses the ability to manufacture product to meet customer demand. According to the estimate of Mr Martelli the impact of lost production over 7 days (i.e. 8,400 tonnes lost production) will result in lost sales in the order of $3.8 million and lost profits in the order of $550,000. A company called Air Liquide has a small compressor and refrigeration plant at the Plant. Air Liquide buys CO 2 from the applicant and on-sells CO 2 to industrial users. The applicant sells approximately 20,000 tonnes of CO 2 to Air Liquide. It has recently commissioned its own CO 2 plant. It is contracted to sell CO 2 to BOC Ltd. In turn BOC Ltd will on-sell the CO 2 to Alcoa and other users of the product. CO 2 is used by Alcoa to treat residual waste from the alumina process. It expects to sell 70,000 tonnes of CO 2 to BOC/Alcoa. Any impact on ammonia production at the Plant will have an immediate impact on supply of CO 2 as there is no intermediate storage of CO 2 . The gas goes straight from the Plant to the customer. The period of lost production will vary, but in each case will be greater than 7 days because of the time required to shut down and start up plant. For example, the threatened 7 day strike will result in the ammonia plant ceasing production for up to 15 days. The applicant will incur substantial current and future losses, including lost production, estimated at over $4 million. This figure was not disputed by the respondent. 61 The applicant submits that there is a serious question to be tried that the threatened industrial action will not be protected, within the meaning of s 435 of the Act because the Initiating Notice and the Protected Action Notice are each invalid. I will deal with each of these in turn. The Protected Action Notice indicates that employees will take industrial action "in respect of the notice of bargaining period BP 2007/8". The Initiating Notice was directed to 3 "other negotiating parties" (the applicant, the AMWU and CEPU) and stated that the respondent intended to try to make a collective agreement with the other negotiating parties. Where a union initiates a bargaining period the only other negotiating party is the employer: s 423(3) and (4). The ability to initiate a bargaining period with more than one union is confined to employers: s 423(4)(c). A defect of this kind is no mere technicality. The effect of a bargaining period is to modify existing legal rights. A union that is a negotiating party may take protected action: s 435(2). Severance is not possible because it will substantially alter the nature of the proposed collective agreement sought in the bargaining period (as confirmed by the particulars). The inclusion of the CEPU and AMWU as "Other Negotiating Parties" was not a "slip". Both the particulars and the factual matrix in which the notice was served confirm that the respondent intended to negotiate an agreement with the applicant and the other 2 unions. The expired CSBP Agreement was an agreement between the applicant and the 3 unions and, since April 2006, the applicant and the 3 unions had been negotiating a new agreement to replace the expired agreement. The point which arises in this case, and which was not addressed in those decisions, is not merely that the CEPU and AMWU have been erroneously named as negotiating parties in the respondent's notice. The "proposed collective agreement" is that to which the bargaining period is directed [s 423(3)]: Trinity Garden Aged Care & Anor v ANF , 21 August 2006, PR973718, at [43]. Accordingly, if the Initiating Notice is held to be valid, the result will be that the respondent will seemingly be entitled to take protected industrial action to cause the respondent to make an agreement with the respondent, the CEPU and the AMWU. This is not a curious result. It is quite easy to envisage why Parliament would not have wished to give unions the ability to take industrial action to cause an employer to enter into a multi-union agreement, irrespective of the wishes of the employer. It is quite possible that Parliament considered the employer was best placed to determine whether a multi-union agreement was suited to the needs of the particular business and therefore that the employer should not be pressured into making a multi-union agreement if it did not wish to. The fact that, in the present case, the applicant is prepared to negotiate a multi-union agreement is not to the point. This gives rise to important considerations. No authority was cited by the respondent at the hearing in support of this submission. I invited counsel for the respondent and the applicant to provide at the earliest any authority and any additional submissions in relation to this point. Relevant to this question, the respondent provided to me during the course of the hearing, copies of the applicant's submissions made, as respondent, in the proceedings in the Commission before both Lawler VP and Commissioner Smith. 64 In further written submissions provided during the morning of 4 April 2007 the respondent contended that issue estoppel is not limited in its operation to issues decided by a court exercising judicial power but extends to other tribunals. It relied upon The Administration of the Territory of Papua and New Guinea v Daera Guba [1973] HCA 59 ; (1972-3) 130 CLR 353 at 452 per Gibbs J where his Honour considered the case of Stiftung v. Rayner & Keeler Ltd (No. 2) 1967) 1 AC 853 and also Stephen J at 460; Barwick CJ at 402, McTiernan and Menziess JJ agreeing. It referred also to the discussion by Pincus J in Bogaards v McMahon (1988) 80 ALR 342 at 350 et seq. 65 The respondent, without any additional submissions, later, by email, referred the Court to the following further decisions: Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union v Ardmona Foods Limited [2006] FCA 1039 ; Blagojevch v Australian Industrial Relations Commission [2000] FCA 483 at [13] et seq; Miller v University of New South Wales [2002] FCA 882 [68] et seq especially [74], [79]. 66 It followed, in the respondent's submission that the decisions of Lawler VP and Commissioner Smith in the first Commission case and the second Commission case, respectively, that the Initiating Notice is valid, now estop the applicant from raising that issue in the present proceedings. 67 Alternatively, so the respondent submitted, as a matter of discretion, the applicant should not be permitted to dispute the validity of the notice initiating the bargaining period because that issue has already been decided twice, even if, on a strict application of the doctrine of issue estoppel, it does not apply. It cited in support Spalla v St George Motor Finance Ltd (No 6) [2004] FCA 1699 , at [66]-[67], per French J; Walton v Gardiner [1992] HCA 12 ; (1993) 177 CLR 378 per Mason CJ, Deane and Dawson JJ at 393; Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 at 279 per French J. 68 The respondent contended that it has now been put to arguing the validity of the Initiating Notice on three occasions and that if the injunction is granted and the case proceeds to hearing it will have to argue it for a fourth time and potentially a fifth time if there is an appeal. 69 In this further submission, the respondent, without reference to authority concluded by stating that this proceeding was an abuse of process, unjustifiably vexatious, oppressive, a waste of judicial resources and the resources of the respondent which, relative to the applicant, are scant. 70 For its part the applicant in the afternoon of 4 April 2007 filed responsive written submissions on the question of issue estoppel containing a further 43 paragraphs. These submissions together with those of the respondent on this question raise complex issues of law including significant constitutional questions, including the proposition that whether issue estoppel applies, at all, to findings by the Commission, is an open question. 71 The question as to whether there is an issue estoppel in relation to the findings, twice, of the Commission that, in effect, the Initiating Notice is valid cannot, in my opinion, in the time available, and without full argument and appropriate consideration, be resolved in this application. It is enough for present purposes for me to find, as I do, that there is a serious issue to be tried, whether, from the applicant's standpoint, there is no such issue estoppel. It is relevant to note that other considerations apart, the question posed by the applicant before me as to the validity of the Initiating Notice, whatever may have been argued before the Commission, was not the same question which was exposed in the reasoning of Lawler VP (in the first Commission case) and adopted by Commissioner Smith in the second Commission case. 72 The respondent additionally contended that ss 487 - 9 establish limitations on challenges to protected ballot orders. 73 The applicant submitted that the scheme of the Act is that once a ballot order has been issued it is not open to collaterally attack the decision: the purpose of the scheme is to establish a transparent, fair and democratic process for decision making in relation to industrial action: s 449 ; and for that process to occur quickly (s 457) ; and for legal challenges to be very limited (s 487 - 9 ) and accordingly the applicant's attack on the validity of the bargaining period is excluded by the legislative scheme. 74 The applicant further submitted that s 487 gives immunity from suit to the respondent and its members where the industrial action is not authorised by the ballot. It contended that if the ballot was invalid the action is nevertheless protected because the respondent is acting in good faith on the outcome of the ballot, which underlines the fact that the validity of the bargaining period can only be attacked at the time of the application for the ballot order. 75 These additional submissions have simply added to the mix of difficult legal questions attaching to the issue whether the Initiating Notice is invalid or not. I am not immediately persuaded, although I make no decision in this regard, that the reasoning of Lawler VP to which I have referred is correct. In any event, as I earlier foreshadowed, his reasons do not deal with the point which has been raised by the applicant here, namely, whether the addition of the CEPU and the AMWU as negotiating parties were included advisedly in the Initiating Notice (not "incorrectly" as Lawler VP assumed) to the end that the proposed collective agreement referred to in the Initiating Notice was intended to be an agreement between the applicant, the respondent and each of the CEPU and the AMWU. This question in turn raises associated questions not dealt with in either the first Commission case or the second Commission case in any determinative way. These are firstly whether upon the proper construction of s 423(4)(b) of the Act a union can initiate a bargaining period under the Act which would entitle it to take industrial action in support of a multi-union agreement. Secondly there is the effect upon the validity of the Initiating Notice having regard to the provisions of s 435(2) of the Act which provides relevantly that during a bargaining period an organisation of employees that is a negotiating party is entitled, for the purpose of supporting or advancing claims made in respect of the proposed collective agreement to organise or engage in industrial action against the employer. For the purposes of s 423(3) of the Act the "proposed collective agreement" is that to which the bargaining period is directed: Trinity Garden Aged Care v ANF, 21 August 2006, PR973718 at [43]. On one view, as the applicant submits, this would produce the result that the respondent would similarly be entitled to take protected industrial action to cause the applicant to make an agreement not merely with the respondent but with the respondent and each of the CEPU and AMWU. 77 In any event, whatever the position in relation to the question of issue estoppel as it may concern that particular challenge to the Initiating Notice, there was no issue at any time in the Commission concerning the validity of the Protected Action Notice nor could there have been for the obvious reason that this notice was not given until after the protected ballot order had been made by Commissioner Smith. I will now consider that question. 79 This, the applicant said, was because in order to comply with s 441(6) of the Act a notice must describe the nature of the industrial action with sufficient particularity to enable an employer to take appropriate defensive action: Davids Distribution Pty Ltd v NUW [1999] FCA 1108 ; (1999) 91 FCR 463 at 494-5. 80 There are, according to the applicant, two difficulties with the Protected Action Notice. 83 For example, as the applicant submitted, even after the ammonia manufacturing plant is shut down, if the ammonia storage tanks are not monitored, or ammonia gas pressure within the ammonia refrigeration systems is not monitored, and the plant's flare system fails, there is a risk that liquid ammonia will heat up and escape into the atmosphere as ammonia vapour causing a public health risk. If the nitrogen pressure within the ammonia plant's pyrophonic systems is not monitored and nitrogen pressure drops, there is a risk of ingress of oxygen into those systems leading to a fire. If power to the site is not monitored and maintained at 50 hertz there is a risk the plant will lose power from the grid with numerous safety issues arising. 84 The applicant relied upon Woodside Petroleum (WA Oil) Pty Ltd v AIMPE [2005] FCA 403 where a similar issue arose. The notice of intended industrial action served by the union in that case did not make clear whether employees would perform critical safety functions including monitoring of the power supply. The seriousness of the safety issues raised weighed heavily in the balance of convenience: [2005] FCA 403 at [16] - [17] . The applicant also referred the Court to Burswood Resort (Management) Ltd v ALHMWU [1999] FCA 1443 (Carr J) at [13]-[14] (serious question to be tried as to whether "stoppages of work" refers to some or all employees); Burswood Resort (Management) Ltd v CEPU [2004] FCA 909 (Nicholson J) at [12]-[14]. His Honour found there was a serious question to be tried that the notice of industrial action failed to meet the requirements of s 170MO(5) (now 441 (6) of the Act ). 88 It is no answer, in the applicant's submission, to say simply that the only express temporal requirement in s 441(6) is that the notice specify the day when the action will begin. The authorities indicate that the purpose of the sub-section will not be met unless the action is described with sufficient specificity to enable the recipient of the notice (usually but not always the employer) to take appropriate defensive measures --- and the degree of specificity required will vary according to the nature of the employer's undertaking and the way it operates. It referred to AFMEPKIU v ACI Mould Manufacturing [1999] FCA 1859 (Goldberg J) at [25]-[28] (serious question that notice was invalid because it failed to state the end date of proposed action). 90 The respondent then contended that the Protected Action Notice specifies that industrial action in the form of the Stoppage will commence on 6 April and that whilst it does not specify the time it will commence, the Act does not require this to be done. Section 444(6) merely requires written notice of "the day" when the intended action will begin. 91 The respondent contended further it has been held that the purpose of the notice provisions is to give the employer an opportunity to take defensive action and that the applicant's complaint about the notice is not that it has had insufficient time to take defensive action, but rather, it is that the failure to specify the time means it is not able to precisely ascertain the latest possible time to commence shutdown of the plant. It followed, so the respondent submitted, that the applicant's complaint is not valid when measured against the legislative purpose. . . Parliament did not indicate what degree of specificity it intended by the term "nature of the intended action". To interpret this term, on the one extreme, as requiring no more than an indication of industrial action, as argued by NUW, would be significantly to devalue s 170MO(5); the notice would provide little information. To interpret it, on the other extreme, as requiring precise details of every future act or omission would be to impose on the giver of a notice an obligation almost impossible to fulfil. Industrial disputes are dynamic affairs. Decisions as to future steps often need to be made at short notice, sometimes in response to actions of the opposing party or other people, including governments, and changing circumstances. It would be a major, and unrealistic, constraint on industrial action to require a party to specify, three clear working days in advance, exactly what steps it would take. An unduly demanding interpretation of s 170MO(5) would seriously compromise the scheme of Div 8 of Pt VIB of the Act ; it would be difficult for a party to an industrial dispute to obtain the protection contemplated by the Division . We think s 170MO(5) was designed to ensure that industrial disputants who are to become affected by protected action, in relation to which their usual legal rights are significantly diminished, are at least able to take appropriate defensive action. For example, an employer may operate a sophisticated item of equipment that will be damaged if precipitately shut down. If warned in advance of a ban that might affect the continued operation of that plant, the employer might choose a controlled shut down during the period of the notice. More commonly, perhaps, an employer might use the notice time to communicate with suppliers and customers, and thereby reduce the consequences for them of the notified industrial action. Very often, the recipient of the notice will respond in a way that has a legal dimension. For example, a union might react to a notice by an employer of intent to lockout some employees by giving notice that all employees will strike indefinitely as from the commencement of the lockout. Similarly, an employer might respond to an employees' notice of bans by giving notice of a lockout of some or all employees. In this case, whatever be the consideration concerning damage to the plant, there are very substantial safety issues concerned both with the shutting down of the plant safely but also in monitoring the plant whilst it is shut down: see the Woodside Petroleum and Burswood Resort cases referred to above. Arguably the Protected Action Notice should have specified the Process Technicians, if any, who would be available for safety duties during the proposed period of the industrial action. Whilst, at the hearing, this safety issue was resolved, by agreement, that fact does not assist the respondent in relation to the question of the efficacy of the Protected Action Notice: a question which falls to be considered in light of the content of the Notice, unaffected by the agreement reached at the hearing before me. 94 Additionally the Protected Action Notice is arguably defective in failing to identify the start and finish times of the industrial action with greater precision, in the context of the particular circumstances which govern the operation of the Plant by the applicant. In my opinion the expression "the nature of the intended action" is wide enough, arguably, in an appropriate case, and arguably this case is one, as to when on the specified day in the notice the intended action is to commence as well as the time on the last day when the intended action is to cease. If it were otherwise, in the circumstances of this case, the applicant would be required to take defensive steps for the period commencing immediately after midnight on the day before the intended action and in respect of the period up until midnight on the last day of the intended action. It may be however, as a matter of fact, that such was not the intention of the respondent. It may have intended to commence the intended action at some time during the first day, perhaps the commencement of one of the shifts either 6am or 6pm and likewise in relation to cessation of the intended action on the last day. In those circumstances the applicant, particularly in relation to the serious safety issues which would otherwise arise, might well "over-compensate" because of the lack of specificity as to these matters in the notice. It would not be onerous for the respondent to have provided this information and it would relevantly have informed the applicant upon a very significant matter, namely what defensive steps were reasonably necessary without over-compensation, to meet the proposed industrial action. IS ANY UNPROTECTED INDUSTRIAL ACTION ALSO UNLAWFUL? It is also contended that serious questions to be tried arise in this respect in that the same conduct is tortious in that it is intended to cause the applicant's employees to breach their contract of employment and further whether by the same conduct the respondent will commit the tort of unlawful interference with trade or business. I did not take that to mean any acceptance on the part of the respondent as to the correctness of the submissions made by the applicant. Rather the opposition to the orders sought focused upon questions going to the existence, or not, of serious questions to be tried as to the validity of the two notices. In my opinion they raise serious questions to be tried. I consider the issues raised by the applicant to be of reasonable substance. Furthermore the issues are attended by significant legal complexity beyond the means of the Court to formulate, in the time available, any reasoned analysis informing the merits of these one way or another. 98 On the one hand, the applicant faces the certainty of very significant financial loss of a kind difficult to establish with any precision at trial. There is also the very real prospect of damage to third parties. On the other hand, the respondent, if enjoined, cannot exercise what it contends to be an immediate legal right. It could however start again by registering a new bargaining period by a further initiating notice under s 423(3) of the Act in terms devoid of the reference to unions other than itself as well as in due course giving a further notice of industrial action under s 441 of the Act with the kind of detail to which I have referred. This could be achieved in a period of somewhere between one month, on the applicant's estimate and three months on that of the respondent. On balance therefore I consider that the applicant should have the benefit of injunctive relief. I advised the parties that I would publish my written reasons later. 100 During the course of hearing those further submissions the Court was informed of a further development. It was described by counsel for the respondent as forming part of the "industrial arm wrestle" between the parties. What had occurred was that during the first urgent hearing of this motion on Tuesday 3 April 2007 a further notice of industrial action purportedly under s 441 of the Act and dated that very day was served by the respondent on the applicant at approximately 4.56 pm. The hearing, on that day, did not conclude until about 6.00 pm. Whilst counsel for the respondent was unaware of this fact, I am informed that the Industrial Officer for the respondent, who was then in Court, did know that this further notice was to be served that afternoon. The Court however was not informed of this fact. 101 Counsel for the respondent invited me to refrain from making injunctive orders as to the further notice. He submitted on behalf of the respondent that I had no evidence before me going to the question of the balance of convenience in so far as it concerned a 2 day strike of dispatch operators, this being the proposed industrial action under the further notice as opposed to a 7 day strike of process technicians under the Protected Action Notice. As it is, the further notice was only brought to the Court's attention in the afternoon on the eve of the Easter holiday period. The proposed industrial action under the second notice was due to commence on the following Wednesday. 104 I have considered the question whether the Court has power to make orders of the kind sought by the applicant in its minute of proposed orders which go beyond the immediate reach of the industrial action set out under the Protected Action Notice, such as to embrace the proposed industrial action under the further notice. 105 I am satisfied that I have such power: DG Whelan Rentals Pty Ltd v Australian Building Construction Employees' and Builders Labourers' Federation (1982-83) 46 ALR 339 at 346-347 and 349; Amcor Packaging (Australia) Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2001] FCA 874 at [14] . 106 In circumstances where I have concluded that there are serious questions to be tried involving matters of some complexity I do not consider it appropriate for the respondent to test the boundaries of the injunctive relief which the Court is prepared to order other than upon proper notice to the applicant and subject to a timetable which enables appropriate consideration of such matters by the Court. I do not consider that the respondent will suffer any substantial injustice as the result of a broader form of injunction and in any event I propose to give the parties liberty to apply which would enable the respondent to come back seeking a variation of injunctive relief, upon appropriate notice. Accordingly I propose to make orders in terms of the applicant's amended minute of proposed orders dated 5 April 2007, under paragraphs 1, 2, 3, 4, 7, 9, 10 (subject to deleting the word "applicant" and substituting the word "parties") and 11. There is no present warrant, in my opinion, on the evidence before me, for making orders in terms of paragraphs 5 and 6. Until further determination of the application or further order, the respondent be restrained, whether by itself, its officers, delegates, agents, employees or howsoever otherwise from issuing any further notice of initiation of bargaining period which names any other union as a negotiating party or which seeks to negotiate a workplace agreement which includes any other union parties. 7. The directions hearing in the proceedings be otherwise adjourned to a date to be fixed.

workplace relations act 1996 (cth), ss 400 (1), 423 , 427 , 435 (2), 441 , 449 , 451 , 488 (2) validity of initiating notice (s 423(3)) validity of protected action notice (s 441). interlocutory injunction workplace relations act 1996 (cth) validity of initiating notice validity of protected action notice whether serious questions to be tried. interlocutory injunction form of orders whether confined by immediate issue before the court whether power to make orders in wider terms. industrial law injunction injunction

2 Alexandra Goulimis, the respondent to this appeal but the applicant for the purposes of the Act, applied for registration of the trade mark "HUGGIE" MUMMY in respect of services described as "Direct selling of baby-toddler's toys, videos, CD's, books, games and accessories". Kimberly-Clark Worldwide, Inc (the opponent), the registered owner of various trade marks involving the word HUGGIES with earlier priority dates, opposed the application. On 17 January 2008 a delegate of the Registrar of Trade Marks decided to register the respondent's trade mark (s 55 of the Act). Section 56 permits the opponent to appeal against the Registrar's decision. 3 The respondent has not entered any appearance in the proceedings and did not appear at the hearing. The opponent read affidavits demonstrating service of the notice of appeal and affidavits on which it proposed to rely, as well as notice to the respondent of the hearing date. The Court's file discloses that the respondent filed a document on 11 August 2008. This document states that the respondent cannot attend the hearing for medical reasons and asks that the written submissions and documents attached be taken into account. Amongst other things, the submissions contain evidence from the respondent, being a person who has not taken an oath or affirmation (s 21 of the Evidence Act 1995 (Cth)). Moreover, the respondent's absence from the hearing meant that the opponent could not test this evidence. In these circumstances I ordered that the hearing should proceed without the respondent. I also decided that the document filed by the respondent should not be taken into account. Because the trade mark application has a priority date of 15 November 2005 (ss 6(1) and 12 of the Act) the statutory provisions as in force at that date are relevant ( Health World Ltd v Shin-Sun Australia Pty Ltd (2008) 75 IPR 478 ; [2008] FCA 100 at [31] )). 7 Numerous decisions identify the principles relevant to the application of these provisions in an appeal under s 56 of the Act. The Court must determine for itself, on the evidence available to it, whether the trade mark may be registered ( Blount Inc v Registrar of Trade Marks [1998] FCA 440 ; (1998) 83 FCR 50 at 59; [1998] FCA 440). (2) The opponent bears the onus in the appeal. Whether the onus is the ordinary civil standard of the balance of probabilities or (given the presumption that trade marks are registrable) a clear state of satisfaction has generated debate ( Lomas v Winton Shire Council (2003) AIPC 91-839 ; [2002] FCAFC 413 at [36] , Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd (2003) 132 FCR 326 ; [2003] FCA 901 at [16] --- [22], and Pfizer Products Inc v Karam (2006) 237 ALR 787 ; [2006] FCA 1663 at [21] --- [26]). The opponent submitted that the ordinary civil standard of proof should be applied and, absent argument to the contrary, I accede to that submission. (3) The grounds of opposition are assessed at the priority date ( Southern Cross Refrigerating Company v Toowoomba Foundry Pty Limited (1954) 91 CLR 592 at 595). The idea or impression of the mark that a person would carry away is important. Similarities of impression, sound and meaning all play their part. Buyers are not credited with either high perception or habitual caution but nor are they attributed either exceptional carelessness or stupidity. Allowance must be made for imperfect recollection, careless pronunciation and speech. Ultimately, this issue of fact "depends on a combination of visual impression and judicial estimation of the effect likely to be produced in the course of the ordinary conduct of affairs" ( Australian Woollen Mills Ltd v FS Walton & Co Ltd [1937] HCA 51 ; (1937) 58 CLR 641 at 658-9 and Crazy Ron's Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 209 ALR 1 ; [2004] FCAFC 196 at [73] --- [79]). (2) Matters which can be regarded as an "essential feature" of a mark are relevant. Identifying such a feature depends on the judgment of the Court on the basis of the evidence ( Crazy Ron's Communications (2004) 209 ALR 1 ; [2004] FCAFC 196 at [79] --- [90] and the cases cited therein). (3) The question of deceptive similarity is to be assessed in the "surrounding circumstances" including the "circumstances in which the marks will be used, the circumstances in which the goods or services will be bought and sold and the character of the probable acquirers of the goods and services". Further, all goods and services within the specification in the application must be considered as the "question is not limited to whether a particular use will give rise to deception or confusion. It must be based upon what the applicant can do if registration is obtained" ( Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 ; [1999] FCA 1020 at [50] ). Putting it another way "a normal and fair use for all goods covered by the marks under consideration" is required ( Pierre Fabre Dermo-Cosmetique v Senator Automation Pty Ltd (2007) AIPC 92-256 ; [2007] FCA 1391 at [6] ). (4) To establish deceptive similarity a mere possibility is insufficient. It is "necessary to show a real tangible danger of deception or confusion occurring". This will be so if there is a "real likelihood that some people will wonder or be left in doubt about whether the two sets of products or the products and services in question come from the same source" ( Woolworths (1999) 93 FCR 365 ; [1999] FCAFC 1020 at [50] ). The required intention has been described as "a resolve or settled purpose" to use the mark ( In Re Ducker's Trade Mark [1929] 1 Ch 113 at 121) as distinct from "a mere general intention of extending ... [a] business at some future time to anything...desirable" ( In Re the Registered Trade-Marks of John Batt & Co [1898] 2 Ch 432 at 439 --- 440). (2) The ground of lack of intention is difficult to establish because it depends on proof of the state of mind of the person seeking registration and the act of applying is itself evidence of the requisite intention. However, if an opponent makes a prima facie case of lack of intention to use the trade mark, failure to rebut that evidence may be relevant to establishing this ground ( Health World Ltd v Shin-Sun Australia Pty Ltd (2008) 75 IPR 478 ; [2008] FCA 100 at [160] --- [174]). The priority date for the purposes of the Act is thus 15 November 2005. The following discussion relates to the facts and circumstances at that date except where the contrary is noted. 12 The specification in the application was amended on 24 February 2006 to "Direct selling of baby-toddler's toys, videos, CD's, books, games and accessories". The application is in Class 35, a service class (Advertising; business management; business administration; office functions). The opponent filed a notice of opposition on 14 June 2006. On 17 January 2008 a delegate of the Registrar decided the application may proceed to registration. The evidence before the Registrar did not include material on which the opponent relied in the appeal. This must be taken into account when applying to the present case the principle that "weight will be given to the registrar's opinion as that of a skilled and experienced person" ( Jafferjee v Scarlett [1937] HCA 36 ; (1937) 57 CLR 115 at 126). Before that the opponent's parent company owned the marks. Use of the trade mark HUGGIES started in Australia in 1987 in relation to disposable nappies. The product range has expanded to include varieties of absorbent underpants, toilet training pants, pyjamas and swimwear for babies and toddlers, as well as changing pads, baby wipes, wash cloths, bath washes, powders and lotions. The HUGGIES mark appears prominently on these products. 15 Since 1998 a number of the opponent's products have included a redemption scheme under which consumers can redeem barcodes from product packaging for children's toys, games, CD's, videos, and other items such as play tents, fun cars, musical mats and art desks. These items are manufactured for the opponent. The opponent distributes the items through its redemption program. Since 2002 these items distributed by the opponent also all bear the HUGGIES trade mark. In addition to this scheme the opponent, since 2000, has included special features as part of the packaging of its bulk nappy products. These features include cut-out colour mobiles, character and learning cards, and door plaques. 16 The opponent distributes its goods throughout Australia using many channels. Distribution channels include major supermarkets, pharmacies and chemists, variety and discount stores, convenience stores, service stations, baby speciality stores, and other specialty stores such as Toys R Us. Although the opponent does not directly sell its products over the internet, the opponent's website contains links to a number of on-line retail outlets permitting purchase over the internet. 17 The opponent advertises its goods extensively across Australia through the print media, television and radio, posters in places frequented by those responsible for caring for babies and toddlers (such as shopping centres, swimming pools, and baby change rooms), electronic media, sponsorship and support of maternity hospitals, and distribution of "bounty bags" containing HUGGIES products to new mothers and mothers to be through pharmacies and hospitals. It also launched the HUGGIES Baby Club and HUGGIES Mother-to-be Club in 2002 (with the HUGGIES Book Club following after the priority date in 2007). 18 According to market research the HUGGIES mark or brand has an extraordinarily high spontaneous brand awareness and market penetration amongst mothers (that is, the percentage of mothers who can recall the brand without prompting and who have bought products from the brand). 19 Paul Blanket holds a Bachelor of Commerce (Marketing) and Master of Commerce (Marketing). He lectures in advertising and marketing at the Macquarie Graduate School of Management and is the Director of First Impressions Pty Ltd, a company that provides marketing, advertising and promotional consulting services. Mr Blanket concluded that: - (i) the opponent had significantly increased its product range and distribution channels over the years to the point where HUGGIES products were both ubiquitous and pre-eminent in the baby and toddler market by November 2005, (ii) HUGGIES products are fast moving consumer goods, which are typically low value and high turnover, meeting daily convenience needs, and (iii) the tendency for consumers to have imperfect recollection and alter a trade mark to a singular or plural form is accentuated for fast moving consumer goods, particularly in the baby-toddler market. 20 Mr Blanket also said that the term "direct selling" used to mean door-to-door selling but its meaning has become uncertain over time. In particular, website links permitting sales at a business-consumer and business-business level, the operations of direct marketing organisations, and a dramatic change in marketing given electronic media over the last 10 years, have broadened the concept of direct selling. 21 In Mr Blanket's opinion, parents of babies and toddlers would be likely to associate "direct selling of baby-toddler's toys, videos, CD's, books, games and accessories" under the "HUGGIE" MUMMY trade mark with the goods and services provided by the opponent. 22 It will be apparent from this summary of Mr Blanket's evidence that part related to matters relating to ordinary human nature, part to the meaning of a term (direct selling) that may not be a term of art, and part to the ultimate issue in the appeal. According to Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2006) 228 ALR 719 ; [2006] FCA 363 opinion evidence about matters within ordinary human experience is inadmissible. Opinion evidence about the meaning of general terms is also usually inadmissible. Evidence about the ultimate issue is admissible under s 80 of the Evidence Act . I have taken into account these considerations when assessing the weight to be given to Mr Blanket's evidence. 23 Ms Sonia Stackhouse is the Business Development Manager of Kimberly-Clark Australia (a wholly owned subsidiary of the opponent). Ms Stackhouse is responsible for identifying and developing new market opportunities. Since 2004 Ms Stackhouse has monitored the Australian on-line market for baby and toddler related goods and services. Ms Stackhouse is not aware of any use of the opposed trade mark by any person or any use by a third party of any trade mark HUGGIE, HUGGIES or HUGGY relating to baby and toddler related goods and services. 24 Ms Roslyn Russell is the senior trade marks and packaging co-ordinator of Kimberly-Clark Australia. In this role she is familiar with and has experience of the Australian market for baby and toddler related goods. Ms Russell is also not aware of any use of the opposed trade mark by any person or any use by a third party of any trade mark HUGGIE, HUGGIES or HUGGY relating to baby and toddler related goods and services. 25 Mr Simon Williams is a solicitor. He searched the Australian Trade Marks Register. Other than the opponent's HUGGIES trade marks and the opponent's application Mr Williams found two trade marks in class 28 (toys and games), being composite word and device marks (Huggy Sport and Huggy Buggy). 26 Mr Williams also served a subpoena on the respondent requiring production of documents relating to any use of the "HUGGIE" MUMMY trade mark in Australia or intention to use or authorise the use of the mark. The respondent produced one document, being a certificate of registration of business name dated 14 November 2005 for the business name "HUGGIE" MUMMY with the trading status identified on the certificate as trading. Mr Williams wrote to the respondent on 19 August 2008 advising that the opponent would rely on the fact that no documents had been produced showing any use of the trade mark as evidence of a lack of intention to use the trade mark. 27 Mr Michael Rumore is a private investigator. On or about 8 December 2005 he searched the on-line white pages for the name "Goulimis" and found one listing at Belmore (being the same address as recorded on the respondent's trade mark application). He called the number and a female answered who identified herself as Alexandra Goulimis. I don't have any cards printed and I haven't started any business under that name yet. Mr Rumore: Is it going to be a shop? Ms Goulimis: Well, yes it could be a shop but I'm more interested in other services for children like counselling. Mr Rumore: How are your plans going? Ms Goulimis: I'm still a long way off from doing anything. Accordingly, the first question is whether the respondent's services and opponent's goods satisfy the test of close relationship in s 44(2)(a)(i). French J described this question as "logically antecedent to the determination whether the trade mark in respect of the services is deceptively similar to that in respect of the goods" ( Woolworths (1999) 93 FCR 365 ; [1999] FCAFC 1020 at [39] ). 29 The Registrar's delegate found against the opponent on this issue on the basis that the respondent's services and opponent's goods have little in common but for the ultimate consumer (parents of babies and toddlers). I must decide the issue of the closeness (or otherwise) of the relationship between the respondent's services and the opponent's goods on the basis of the more extensive evidence before me. In so doing I also need to consider the statutory rights of use rather than any particular use. 30 The respondent's mark "HUGGIE" MUMMY is for direct selling of baby-toddler toys, videos, CD's, books, games and accessories. The relevant services thus constitute the direct selling of the nominated goods. The ordinary meaning of direct selling would fairly and reasonably cover any mode of retailing direct from the respondent to the end consumer without an intermediary being responsible for the sale. If direct selling is a technical term then this meaning is consistent with Mr Blanket's conclusions. In other words, I do not construe the activity of direct selling as limited to door-to-door sales. That is one method of direct selling but there are others (many of which Mr Blanket identified) including, for example, internet sales (whether from a website maintained by the respondent or via links from other websites to the respondent's website), sales from market stalls, sales from a "HUGGIE" MUMMY branded shop, as well as sales to end consumers under arrangements with other retailers (for example, by lease or licence of part of the space or a counter within a shop or through factory outlet centres or, as the opponent submitted, by canvassing at places frequented by those responsible for caring for babies and toddlers). 31 The methods of sale within the scope of "direct selling" are more restrictive than the retail channels used by the opponent. Nevertheless, normal and fair use of the respondent's mark in accordance with the rights to use conferred by registration (in contrast to any particular use) involves substantial overlap with the opponent's trade channels, particularly in terms of the locations within which sales may occur and marketing of the products. For example: - (i) links to methods of purchase to the products of both the respondent and the opponent may appear on common websites (such as those used by the opponent to sell its goods, particularly those with a focus on babies and toddlers), and (ii) the products may appear for sale close to each other in stores and outlets (even if the selling arrangement is direct by the respondent from her own counter or area and through an intermediary by the opponent). 32 Further, and as the opponent submitted, there appears to have been no use of the respondent's trade mark to date, but it would be open to the respondent to offer and promote her services alongside and in the same publications and forums as the extensive distribution channels used by the opponent for its HUGGIES branded goods. 33 In Woolworths (1999) 93 FCR 365 ; [1999] FCAFC 1020 at [40] French J described the ultimate task under s 44 as involving "one practical judgment" depending on the nature and degree of resemblance and the closeness of the relationship between the services and goods in question. His Honour observed (also at [40]) that it "will not always be necessary to dissect that judgment into discrete and independent conclusions about the resemblance of marks and the relationship of goods and services". This observation invites consideration of the nature of the goods which the respondent will sell under the trade mark and the opponent's goods when assessing the nature of the relationship between the respondent's services and the opponent's goods. 34 A number of factors are relevant to this assessment. 35 First, I see no reason to attempt to limit the meaning of "accessories" in the application to accessories in some way related to the items preceding that word (that is, toys, videos, CD's, books, and games). The ordinary meaning of "baby-toddler accessories" is broad enough to encompass subsidiary or ancillary items of the same kind as those sold by the opponent including nappies, training pants, underpants, liners, bibs, wipes and cloths, swimwear, and personal care products. In fact, I consider that the reference to "accessories" in the specification would include the right for the respondent to engage in direct selling of the whole of the opponent's product range, in addition to baby-toddler toys, videos, CD's, books, and games. 36 Secondly, some of the opponent's goods include HUGGIES branded toys and games as part of the packaging. 37 Thirdly, the opponent also distributes baby-toddler related toys, games, CD's and videos as part of its redemption scheme, all of which also bear the HUGGIES trade mark. 38 Fourthly, the consumers of the goods are identical, being parents of or carers for babies and toddlers. 39 Fifthly, the uses to which the goods will be put are the same (caring for, entertaining, and educating babies and toddlers). 40 In these circumstances I am satisfied that the respondent's services and the opponent's goods are closely related within the meaning of s 44(2)(a)(i). 41 The same considerations are relevant to the question of deceptive similarity. The Registrar's delegate described the "HUGGIE" component of the respondent's trade mark as adjectival leading to the conclusion that it would be artificial to consider the "HUGGIE" component alone with the opponent's trade marks. This conclusion was reinforced by the delegate's conclusion that the word MUMMY did not involve a description of the respondent's goods (in contrast to such descriptors as PULL-UPS, PULL-UPS DRY NITES and LITTLE SWIMMERS that form part of the opponent's marks). 42 I agree that the respondent's trade mark must be considered as a whole. Nevertheless, I also accept the opponent's submissions that the essential feature of the respondent's trade mark is "HUGGIE". "Huggie" is a made up word. The inverted commas around the word in the respondent's mark give it emphasis, as does the artificial "IE" ending. As Mr Blanket said, baby-toddler accessories of the kind sold by the opponent and within the scope of the respondent's trade mark are consumer goods sold on a low value high volume basis. These products are likely to be bought quickly, on a recurrent basis, without much thought (at least after the first occasion for purchase) and, in the case of sales of the opponent's goods, by reference to the essential brand identifier HUGGIES (whether appearing alone or as part of a composite mark). But for the plural form in the opponent's marks the essential feature of the respondent's mark "HUGGIE" MUMMY is the same. The singular form in the respondent's mark is a weak point of distinction when the nature of the services and goods in question is considered. 43 The opponent supported its submissions on this issue by market research showing the notoriety of the opponent's marks (each of which includes the word HUGGIES) in respect of baby-toddler personal care items. The relevance of reputation to deceptive similarity has been described as relating only to the assessment of the "nature of a consumer's imperfect recollection of a mark" but no more ( Crazy Ron's Communications (2004) 209 ALR 1 ; [2004] FCAFC 196 at [90] citing CA Henschke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42 ; [2000] FCA 1539 at [52] ). The dominant reputation of the HUGGIES marks in the market for baby-toddler products (particularly personal care products) supports the conclusion that the opponent has made out the ground of deceptive similarity under s 44(2). 44 I am aware that there is no evidence of actual confusion. This is of limited weight because on the facts of this case there is no evidence of the respondent's use of the trade mark in question. 45 For the reasons above I am satisfied that the effect or impression left by the respondent's trade mark will involve a real likelihood that some people will wonder whether the respondent's direct selling of the nominated goods has, as its source, the opponent. The ground of opposition under s 44(2) is therefore upheld. 46 Section 60 involves deceptive similarity by reason of reputation. The evidence establishes that the opponent's trade mark HUGGIES has acquired a reputation in Australia. The opponent's trade marks (registered and unregistered) involve both the word HUGGIES alone and the word HUGGIES with other words. HUGGIES is the dominant brand in the market for baby-toddler personal care items in the form of disposable nappies, liners, and ancillary items (such as wipes, cloths, and lotions). I accept the opponent's submission that HUGGIES is a household name with a substantial degree of notoriety or familiarity in Australia; HUGGIES automatically brings to mind baby-toddler personal care items, particularly nappies. 47 I have found that the respondent's trade mark has as its essential feature the word "HUGGIE" and will operate in respect of the service of direct selling of, amongst other things, baby-toddler accessories. Further, that the whole of the opponent's product range would fall within the reference to baby-toddler accessories. I have also found that the opponent's products include HUGGIES branded toys and games as part of the packaging and rights to redeem barcodes for other HUGGIES branded toys and games, as well as CD's and videos. These circumstances satisfy me that the rights to use the respondent's trade mark would be likely to cause consumers in the relevant market to wonder whether the opponent is the source of the services. The ground under s 60 of the Act is also upheld. 48 These conclusions with respect to ss 44 and 60 of the Act mean that I also accept the opponent's objection based on s 42(b) (use of the trade mark would be contrary to law). I accept that use of the respondent's trade mark would be likely to mislead and deceive consumers in relation to the supply of the nominated goods; the circumstances described above mean that some consumers confronted by the "HUGGIE" MUMMY mark in the course of the respondent's authorised use will be likely to identify the opponent as the source of the goods or think that there is an affiliation between the opponent and the respondent's services. By reason of s 42 of the Fair Trading Act 1987 (NSW) and s 52 of the Trade Practices Act 1974 (Cth) this is sufficient to satisfy the requirements of s 42(b) of the Act ( Health World (2008) 75 IPR 478 ; [2008] FCA 100 at [156] ). 49 In its opposition based on s 42(b) the opponent relied also on ss 120(2) or (3) of the Act. These provisions relate to infringement, with s 120(2) dealing with services that are closely related to registered goods and s 120(3) dealing with services that are not closely related to registered goods. Given my findings above I am satisfied that the opponent's reliance on s 120(2) is made out. Otherwise the respondent had not put forward any evidence before the Court or the Trade Marks Office. The subpoena required production of all documents relating to any use of the "HUGGIE" MUMMY trade mark in Australia or intention to use or authorise the use of the mark. The certificate of registration of a business name was the only document produced in response. On or about 8 December 2005 the respondent admitted to Mr Rumore that she had registered the "HUGGIE" MUMMY trade mark "only ... as a business idea at this stage" and was "still a long way off from doing anything". This was consistent with the searches carried out by the opponent's employees showing no evidence of use of the "HUGGIE" MUMMY trade mark. The opponent said these circumstances demonstrated a prima facie case of the respondent's lack of the requisite intention to use the trade mark (that is, a real and definite intention even if not immediate or within a limited time and not a mere general intention of expanding a business at some future time). 51 I accept these submissions. The evidence leads to the inference that the respondent did not have any real and definite intention to use the "HUGGIE" MUMMY trade mark at the priority date. I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

trade marks whether services and goods closely related deceptive similarity reputation intention to use trade mark. intellectual property

That provision allows summary judgment to be entered where a party " has no reasonable prospects " of success. The hearing of both interlocutory applications commenced on 27 April and was adjourned part-heard until today, 29 April 2009. At the outset it should be recognised that s 31A has been said to be a provision which " lowers the bar for obtaining summary judgment ": Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955 at [5] per Gilmour J. A " reasonable prospect of success " for the purposes of the section is one which is real and not fanciful or merely arguable: White Industries Australia Ltd v Commissioner of Taxation [2007] FCA 511 at [59] , [2007] FCA 511 ; 160 FCR 298 at 312 per Lindgren J; Rogers v Asset Loan Co Pty Ltd [2008] FCA 1305 at [41] , [2008] FCA 1305 ; 250 ALR 82 at 92. And, unlike an application pursuant to O 11 r 16 of the Federal Court Rules 1979 (Cth) that a matter be struck out, where it is the adequacy of the pleadings which is in issue, an action pursuant to s 31A " not only permits, but requires, a consideration of matters outside the pleadings ": Imobilari Pty Ltd v Opes Prime Stockbroking Ltd (in liq) [2008] FCA 1920 at [3] to [8] [2008] FCA 1920 ; , 252 ALR 41 at 43 to 45 per Finkelstein J. Both interlocutory applications were heard concurrently --- it being recognised that if the Applicant's application for interlocutory relief were granted, the Respondent's application thereby would be resolved; but if the application for interlocutory injunctive relief were refused, the application for summary judgment would remain a live issue in need of resolution. Necessarily involved in either application is thus a brief understanding of the allegations set forth in the Statement of Claim and a brief understanding of those facts which are now available. " SMS " apparently is an abbreviation for " short message service ". The business of the Applicant is to aggregate a number of services provided by third party " content service providers " and to make the aggregation of all those services available to " end user customers ". The Premium SMS services vary considerably in form and content as between providers. Those people wishing to avail themselves of SMS services need to subscribe. The Respondent's role in the provision of these services is to provide access to Telstra's customers via the Telstra mobile network and by further providing Telstra customers with credit and payment services. Telstra has no role in respect to the content of the SMS services provided by companies such as the Applicant or the prices charged for the provision of those services. Nor does Telstra deal directly with those who provide the content of the SMS services. The relationship between the parties is primarily governed by a contract entered into on 1 December 2006 known as the " Premium SMS Service Provider Agreement ". That Agreement contains provisions dealing with ( inter alia ) the manner in which customer complaints as to the provision of SMS services are to be resolved. Provision is also made for the suspension of Telstra's obligations and for termination of the Agreement. The Applicant provides a platform for approximately 250 Premium SMS services on the Telstra network. About 80% of those services are interactive services such as quiz competitions, ring tones, wallpapers and music services. The remainder of the services offered by the Applicant are described as " voting services " where a customer may, for example, respond to contests or polls relating to television shows. The content of the SMS services provided by the Applicant is supplied by others. It has a significant business. The number of text messages going through the services offered by the Applicant has increased from just less than 140,000 per month in October 2007 to over 420,000 messages in January 2009. Its gross profit has increased from approximately $1.3 million in the year to May 2006 to $2.4 million in the year to May 2008. Complaints as to the Applicant emerged in 2007. A review undertaken by Telstra in early 2008 revealed that a high level of complaints was being made against the Applicant. Complaints generally are directed to either disputes as to charges imposed by those providing SMS services or the manner in which complaints are handled or resolved. The results of the complaints received were forwarded by Telstra to the Applicant. A significant source of complaints about the Applicant's services were complaints relating to its scratch card promotions. The level of complaints continued, culminating in Telstra terminating the 2006 Agreement by a letter dated 12 February 2009. The termination of the Agreement was to be effective as from 14 April 2009. The Application filed in this Court on 7 April 2009 seeks declaratory and injunctive relief together with an order pursuant to s 87 of the Trade Practices Act 1974 (Cth). Damages or compensation are not sought. The Statement of Claim as filed alleges breach of contract and a contravention of s 52 of the 1974 Act. Reliance is also placed upon s 51A and its provision as to the making of a representation " with respect to any future matter ". Some of the allegations set forth in the Statement of Claim are accordingly founded exclusively upon contractual obligations. The Statement of Claim thus alleges in part that the letter of termination was issued in breach of the terms of the Agreement. Reliance is also placed upon implied terms. Separate allegations are advanced in reliance upon s 51A and s 52 of the 1974 Act. Particular reliance is also placed by the Applicant in the Statement of Claim upon a letter forwarded on 24 December 2007 by Telstra to all of the Premium SMS providers. That letter was headed as an " Important Notice ". It sought to address a " growing number of complaints Telstra is receiving from customers in relation to Premium SMS services ...". It further stated that an analysis of complaints received from the Telecommunications Industry Ombudsman showed that: 61% of complainants did not request the content of a service provided; and 11% of customers were unable to contact the relevant Premium SMS provider. Reliance is placed by the Applicant upon what are said to be " representations " set forth in this letter and costs thereafter incurred by the Applicant in seeking to address the concerns raised by Telstra. The December 2007 letter has been characterised by the Applicant, at least in correspondence with the Respondent dated 18 July 2008, as a " [p]urported variation of the Agreement " and an attempt " to embark upon a strategy and regime to remedy the vagueness and unenforceability of the Agreement with respect to two undefined terms " --- namely a " disproportionate number " of complaints and an " unacceptable level of complaints ". The Applicant also alleges that the l8 July 2008 letter sought " information " from Telstra but that " [i]n breach of its obligation under the Agreement and in breach of the Determination " that information has not been provided. An Affidavit prepared by a director of the Applicant also puts in issue the number of complaints made concerning the Applicant --- Telstra maintains that there were 139 " escalated complaints " in December 2008 and 123 in January 2009; the Applicant calculates that number at three. The Applicant also maintains that problems have arisen because it has not been informed of more than 50% of the complaints which became " escalated complaints ". An interlocutory order pursuant to s 87(1A) of the 1974 Act is also there sought --- but that provision received no attention in either the written submissions as filed by the Applicant or in its oral submissions. The principles governing the grant or refusal of interlocutory injunctions in both private and public law litigation are well known. Kirby J there further observed that " no narrow view has been adopted as to the meaning of the expression 'a serious question to be tried' ": [2001] HCA 63 at [167] , 208 CLR at 270. The use of the phrase " a prima facie case " does not require that an applicant must show that it is more probable than not that at a final hearing he will succeed; it is sufficient that the applicant show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending a final hearing: Australian Broadcasting Corporation v O'Neill [2006] HCA 46 at [65] , [2006] HCA 46 ; 227 CLR 57 at 82. As Gummow and Hayne JJ there observed, " ... 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 ": [2006] HCA 46 at [71] , 227 CLR at 84. Notwithstanding the fact that the termination of the Agreement was said to take effect as from 14 April 2009, on 9 April 2009 an undertaking was given by the Respondent not to act upon its decision until the hearing of the interlocutory application on 27 April 2009. That undertaking was then continued until 4.00 pm today. A DUTY OF GOOD FAITH --- AN IMPLIED TERM OR A REPRESENTATION? The unqualified contractual right to terminate the Agreement " without cause " upon giving 60 days notice in writing, the Applicant contends, was not a right available to be exercised by the Respondent. On a proper construction of the Agreement, the Applicant contends that the Respondent was confined to the exercise of the power conferred by clause 16.4. Alternatively, the Applicant contends that the otherwise unqualified power conferred by clause 16.7 was constrained by either: implied terms; or representations as to the manner in which the rights conferred by the Agreement were to be exercised. Whether or not such representations were made is a question of fact. Separate from that question is whether the commercial arrangement between the Applicant and the Respondent is susceptible to a term being implied, summarised in oral submissions as a term of " good faith ". For the purposes of the present interlocutory application, it is accepted that such a term may arguably be implied: cf Renard Constructions (ME) Pty Ltd v Minister for Pubic Works [1992] 26 NSWLR 234 ; Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151; Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [61] to [65] per Finkelstein J. It is not at all self-evident, as is presently contended by the Respondent, that the implication of a term as to " good faith " would be inconsistent with the express terms of the Agreement. But the implication of such a term says little as to the content of any such obligation. This is a question which has helpfully been addressed by Barrett J in Overlook Management BV v Foxtel Management Pty Ltd [2002] NSWSC 17. This question was the subject of discussion by the Court of Appeal in [ Burger King Corp v Hungry Jack's Pty Ltd [2001] NSWCA 187]. The exclusion of capriciousness as an acceptable form of behaviour in the performance of the contract will prohibit conduct which has no rational basis or objective explanation. A prohibitory or negative spirit precluding purely selfish behaviour calculated to destroy the position of the other party will also readily be accepted. It is more difficult to identify the point at which the prohibitory or negative spirit intervenes to preclude conduct which reduces immediate enjoyment (or the quantum thereof) which is undertaken with a view also to enhanced future enjoyment. A PRIMA FACIE CASE OR A SERIOUS QUESTION TO BE TRIED? But such relief should only be granted for as short a period of time as is consistent with properly preparing the proceeding for an early final hearing. It follows that the Respondent's Notice of Motion seeking judgment pursuant to s 31A of the 1976 Act is dismissed. Notwithstanding the fact that it is considered, on balance, that interlocutory relief should be granted, considerable reservation is nevertheless presently expressed as to whether or not such conduct as is sought to be relied upon by the Applicant is capable of falling within s 51A or s 52. Paragraph [13] of the Statement of Claim identifies the representations as those made when the draft Agreement was being presented. No draft Agreement was tendered during the interlocutory hearing --- but it was accepted that an earlier version of the Agreement as executed was presented to the Applicant in substantially the same terms as was finally executed. In resisting the claim for interlocutory relief the course pursued by Senior Counsel for the Respondent was directed to an attack upon the very foundations upon which the Applicant's case was being erected. The Respondent, accordingly, pursued a course of contending that the Agreement as executed was not susceptible of either the construction relied upon by the Applicant or susceptible to any term such as that sought to be relied upon being implied. There is considerable force in these submissions --- but they should be resolved at a final hearing. It is accepted that "[ w ] here parties enter into a written agreement, the Court will generally hold them to the obligations which they have assumed by that agreement ": Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 at [35] , [2004] HCA 55 ; 218 CLR 471 at 483 per Gleeson CJ, McHugh, Kirby, Hayne and Callinan JJ. The case as now advanced in support of interlocutory relief necessarily involves a review of both the conduct of the parties prior to the execution of the Agreement and a review of the terms of the Agreement itself. The latter may well be a task that could be undertaken on an application for interlocutory relief; but it is not considered in the present proceeding that that task should be undertaken as an exercise divorced from the factual context in which the Agreement came to be executed. Adding to the prudence of that course is the fact that the " draft " agreement is not the sole source of representations relied upon by the Applicant. A subsequent source of representations, being representations separate from those made in the " draft Premium SMS Service Provider Agreement " set forth in paragraph [13] of the Statement of Claim , are representations said to be contained within the 24 December 2007 letter. Again, a review of the terms of that letter is susceptible of being undertaken on an application for interlocutory relief --- or on an application made pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth). It is intended that this scorecard includes data on all complaint types received. The Acceptable Complaint Level will be determined by Telstra having regard to what would be considered a reasonable number of complaints in the ordinary course of business, taking into account the nature of the Mobile Premium Services industry and the volume of traffic the Service Provider generates. This Acceptable Complaint Level will give Telstra a guide for calculating what is a disproportionate or unacceptable number of complaints for the purposes of clauses 7.10 and 16.4(f) of your Premium SMS Service Provider Agreement. But the Applicant seeks to maintain that the December 2007 letter does not stand alone. Other correspondence in which it is said that relevant representations were made is identified in the Statement of Claim as having been made in letters in March and August 2008. The March 2008 letter does not contain any reference to clause 16.7. The absence in the March 2008 letter to any reference to terminate without cause pursuant to clause 16.7 is said by the Applicant to be of significance. A draft agreement, or statements made in correspondence, in some cases may be ultimately characterised as representations. In other cases they may not: eg, Seven Network Limited v News Limited [2007] FCA 1062 at [3211]. For the purposes of the present application, it is accepted that the provision of a draft agreement and statements made in letters forwarded from the Respondent to the Applicant may be characterised as the making of a representation. An application for interlocutory relief, or an application under s 31A , may in an appropriate case require a review of detailed factual material. In the present proceeding, however, it is considered that that review should be undertaken at a final hearing. It is only at a final hearing that the conduct of the parties, both prior to and during the course of the Agreement, can be fully understood. Notwithstanding the conclusion that it is appropriate to grant interlocutory relief, it should further be recognised even at this stage that it may be questioned whether: the representations were relied upon by the Applicant; any of the conduct of the Respondent was " misleading or deceptive "; and the Respondent acted in any manner contrary to any term which may be implied constraining it to act in good faith. Reliance may in some cases be inferred: Gould v Vaggelas (1984) 157 CLR 215 at 250 per Brennan J. And " [i]t may well be appropriate to infer reliance where the representation in question is of a kind obviously calculated to induce action ": Australian Competition and Consumer Commission v Internic Technology Pty Ltd (1998) 42 IPR 225 at 241 per Lindgren J. A representation of good faith, if made, may provide a case where it is appropriate at an interlocutory hearing to draw such an inference. In the present case such an inference is presently drawn. What further evidence as to reliance may ultimately be adduced by the Applicant at the final hearing remains a matter for it to determine. The basis, for example, upon which any conclusion that the Respondent may have engaged in " misleading or deceptive conduct " for the purposes of s 52 , or engaged in conduct that is a breach of any implied term as to good faith, is presently considered to be slight. On one view, the Respondent was merely pursuing what it perceived to be its commercial interests in a manner expressly contemplated by the terms of its Agreement with the Applicant. But the Applicant contends that there remains a factual basis upon which a conclusion may be reached. Some support may be found in the Respondent's very reliance upon clause 16.7 of the Agreement rather than clause 16.4(f). The ongoing conflict between the parties arises as a consequence of the complaints received in respect to the services provided by the Applicant. Although it may well ultimately be concluded that there is no operative constraint upon the Respondent's reliance upon clause 16.7, reliance upon that provision as opposed to clause 16.4(f), presently gives rise at least to an argument as to a lack of good faith which cannot be summarily rejected. To proceed under clause 16.4(f) may, of course, prove more difficult for Telstra. To proceed under that provision, Telstra would have to establish that it " reasonably believes " the matters thereafter set forth are established. Clause 16.7, which may ultimately be concluded to be a provision open to Telstra, certainly provides a course free of that constraint. It remains an argument which gives rise to a serious question to be tried. Further limited support may be gleaned from the Applicant's letter dated 18 July 2008 and possibly the failure to provide such " information " as was there requested. The entitlement of the Applicant to the further " information " it sought may be open to question. I consider that Telstra has already provided you with sufficient information about the relative levels of enquiries and complaints made in relation to the service numbers, and other similar services, respectively. For present purposes it is sufficient to note that some " information " has been sought and not provided. Questions arise as to why it has not been provided. A serious question or a prima facie case is, however, considered on balance to arise as to whether or not representations have been made which may constitute conduct falling within s 52 and as to whether that provision has been contravened. A serious question or a prima face case, it is further considered, has also been made out on balance in respect to the claim founded upon an implied term of the December 2006 Agreement. Such reservations as have presently been expressed may well be answered when a more detailed analysis of the facts has been undertaken. A final view could only be reached, obviously enough, upon all of the evidence having been considered and witnesses cross-examined. Indeed, Senior Counsel on behalf of the Respondent sought to cross-examine a witness in the present interlocutory hearing. That cross-examination, which may well be of significance during the final hearing, was not presently pursued. What may now appear to be potential difficulties confronting the Applicant may well be explained when all of the evidence has been considered and any cross-examination concluded. BALANCE OF CONVENIENCE AND DISCRETION? Telstra will continue to incur costs in addressing complaints received. In addition, Telstra continues to incur complaints handling and administrative costs in dealing with these complaints. Damages to Telstra's reputation cannot be addressed by such an undertaking --- but that concern can be mitigated by granting an expedited hearing. There is also the need to take into account the disruption to the services provided by the Applicant to its own customers if interlocutory relief is refused. The disruption of services to the not inconsiderable number of persons who subscribe to Premium SMS services by a dispute between the Applicant and the Respondent is a matter of some concern. If interlocutory relief were to be refused, the services offered to those subscribers would be disrupted, albeit perhaps to a minimal extent. Those subscribers could potentially seek the same or like services from other providers. But there would be some disruption. The significance to be given to this consideration may be diminished by the fact that a very significant part of the business of the Applicant is its provision of " scratch cards " and the fact that it is this aspect of the Applicant's business which has apparently attracted a large number of complaints. " Scratch cards " are apparently " the latest phenomenon " and " millions of scratch cards are being distributed to homes in Australia and also as inserts in well-known magazines ". An inability on the part of the Applicant to continue to provide this particular service may, on one view, thus serve to protect some subscribers from a service that they do not want and a service for which they do not want to be charged. But it is a service provided by the Applicant which was not suspended by Telstra, as was its entitlement. Whether this is in fact the case remains to be seen. The Applicant also puts in issue the number of complaints received. Whatever that number may be, there remains the prospect that there is some disruption to the services of some subscribers. The interests of other subscribers will also be addressed by an early final hearing. The refusal of interlocutory relief would also put at risk the employment of the Applicant's employees. In the present economic environment, that is not a step to be undertaken lightly. DAMAGES AS AN ADEQUATE REMEDY? Interlocutory relief may be refused where damages are an adequate remedy: e.g. Dickson Property Management Services Pty Ltd v Centro Property Management (Vic) Pty Ltd [2000] FCA 1742 , 180 ALR 485. Ryan J there concluded on the facts of that case that " a related consideration " was that the grant of interlocutory relief would " involve the court, to an unacceptable extent, in supervising the performance of a detailed contract equivalent to a contract for personal services by a party, in whom the other asserts, not totally unbelievably, that it has lost confidence ": [2000] FCA 1742 at [15] , 180 ALR at 487 to 488. Clearly enough, Telstra no longer wishes to have any contractual relationship with the Applicant. Its position is that it has brought what it perceives to be the Applicant's short-comings to its attention and that the Applicant has taken insufficient or inadequate steps to address or resolve the continuing flow of complaints being made. If the Respondent has contravened s 52 or breached a term of the Agreement (express or implied), the position of the Applicant --- so Telstra contends --- could be addressed by an award of damages. The measure of those damages would be susceptible of easy calculation. If there be an entitlement to damages, those damages would most likely be the remuneration which the Applicant would have received under the Agreement had it not been terminated. No question arises as to the ability of the Respondent to meet any award of damages. But the relief to which the Applicant may be entitled, if any, is a matter which should be addressed when all of those facts relevant to the deterioration of the relationship between the parties are exposed at a final hearing. The failure of an applicant to claim damages does not preclude consideration of whether damages may be an adequate remedy. Any period of time during which the Respondent may be compelled to continue dealing with the Applicant may well be viewed by it as too long; but that period of time can be kept to a minimum. Such delay as has occurred between 12 February 2009 (that being the date of the letter of termination) and 7 April 2009 (when the present proceeding was commenced) has not been completely answered by the Applicant. Whether or not the Applicant is correct in its submission that delay is only a relevant discretionary factor when the other party demonstrates prejudice, prejudice to the Respondent possibly emerges from what it maintains is damage to its reputation and may also emerge from its failure to have its entitlement to rely upon clause 16.7 resolved within the 60 day period contemplated by that clause --- or relatively shortly thereafter. Attempts to explain the delay are less than satisfactory. The letter communicating the decision to terminate the Agreement may have been communicated together with (and even subsumed) with requests for further information and may have been but one further letter in a series of letters communicating an intention to invoke provisions of the Agreement. But the 12 February 2009 letter remains a letter communicating an unequivocal decision to terminate. The SPA will be terminated on 14 April 2009. This letter serves as notice of termination, as required under clause 16.7. But attempts were being made to resolve the dispute short of litigation. Such an approach is not immediately attractive. The time taken for the Applicant to commence the present proceeding, however, should not deny it its entitlement to interlocutory relief. Such delay as has occurred, when taken into account with all other factors, is not considered to be a decisive reason for refusing interlocutory relief in the present case. Such further time as will be involved in a final resolution of all issues between the parties is relatively short compared to the period of time over which the Applicant's conduct has been the subject of complaint or criticism by the Respondent. A QUESTION AS TO JURISDICTION? At present, reason to question whether the jurisdiction of this Court has only been colourably invoked is provided by the absence of any unequivocal representation in the 24 December 2007 letter as to whether or not clause 16.7 may also be relied upon. In the absence of further explanation, the March and August 2008 letters perhaps provide even less support for a claim under the Trade Practices Act . Where a question as to jurisdiction arises, a " court is not obliged immediately to refrain from proceeding further ": The Queen v The Judges of the Federal Court of Australia; Ex parte The Western Australian National Football League Incorporated [1979] HCA 6 ; (1979) 143 CLR 190 at 215 per Gibbs J. For present purposes, it is not considered appropriate to resolve any such question in the present proceeding on an interlocutory basis. Whether or not the claims founded upon s 52 may ultimately prevail will be resolved at a final hearing. One of the issues to be then resolved may well include submissions as to jurisdiction. Each case must obviously depend upon its own facts and circumstances. And cases unquestionably arise where this Court entertains applications, including interlocutory applications, to restrain what is otherwise a contractual relationship between the parties: eg, Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd [1999] FCA 903 ; Luce Optical v Budget Specs (Franchising) Pty Ltd [2005] FCA 1486. The prospect of such cases arising is not in issue; the question is whether the present proceeding is a case in which the jurisdiction has been properly invoked. But it is not considered that such matters should be resolved in advance of a final hearing. As a matter of " impression " the best judgment that can presently be made is that there is a sufficient jurisdictional basis upon which this Court should presently proceed: Re Wakim; Ex parte McNally [1999] HCA 27 at [140] , [1999] HCA 27 ; 198 CLR 511 at 585 per Gummow and Hayne JJ. For present purposes, it is considered that a serious question arises as to whether or not there has been a breach of s 52 of the 1974 Act. A date can hopefully then be set which accommodates the convenience of both existing Counsel and the parties. The parties are to bring in short minutes of order which formulate the interlocutory orders to be made and a timetable to ensure that a final hearing can then take place. That timetable should obviously accommodate (if necessary) any request for particulars, the provision of such particulars and the filing of a defence, the filing of evidence, including an agreed bundle of documents, and discovery limited only to that material necessary for a resolution of the issues. On such materials as are presently before the Court, there is no reason to question the fact that the period between now and a final hearing, a period of about eight weeks, is more than adequate to prepare this case for final hearing. The costs of both interlocutory applications are to be reserved, including the costs of the Respondent's Notice of Motion seeking an order under s 31A of the 1976 Act. The Respondent's Motion is certainly not a Motion without merit. A staged exchange of submissions should also be addressed in the short minutes of order, with all steps concluding no less than one week prior to hearing. Given an assessment, however, that the Applicant's entitlement to interlocutory relief is certainly not an entitlement free from legitimate and substantive argument, liberty to apply should be expressly reserved to the Respondent to apply to have the interlocutory orders varied (or discharged) should events subsequently emerge warranting the making of any such further order in advance of a final hearing. Any further delay on the part of the Applicant may, for instance, warrant the discharge of interlocutory relief. I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

termination of agreement interlocutory relief duty of good faith delay expedited hearing for final hearing trade practices

He then appealed to the Federal Court to have set aside the decision of the magistrate. That appeal was heard by me on 16 November 2007. I dismissed the appeal but directed that the order not be entered for one month to enable the appellant to get legal advice and, if appropriate, to apply to vacate the dismissal order for the purpose of having the appeal reheard. That application was made by the appellant, who is now represented by counsel. 2 To understand what has taken place, I need to recount, albeit briefly, some of the background. The appellant is from India. He claims to have a well founded fear of persecution if required to return to India on account of his political activities. His claim is that he joined the MDMK in 2000. The MDMK is a breakaway party of the DMK. The appellant's family have been supporters of the DMK since the early 1990s. The DMK came into power in 1996. The appellant's claim is that he fears persecution at the hands of the DMK as well as from extremist organisations. 3 The appellant gave evidence at a hearing before the tribunal on 6 December 2006. His evidence dealt with his claimed membership of the MDMK. He was asked a number of questions about his membership. The appellant also gave evidence that he had been a member of another organisation, Tauhid Jamaad, a Muslim society of sorts. The tribunal member also questioned the appellant about his membership of that organisation. During the course of those questions the tribunal member said, "I haven't seen very much reported about Tauhid Jamaad, which surprises me". He asked the appellant whether the organisation had "membership cards or anything like that". The appellant replied that he had a membership card "back home, but I haven't got it with me, I could send for it if it's required". The tribunal member informed the appellant that it was up to him what information he wished to submit in support of his application. The appellant said that he would happily provide additional information "if you have doubts in any area, then you will allow me to bring evidence, I'll try and get it". 4 There was then an exchange concerning the time within which the appellant should produce the additional information. The tribunal member said he would be "happy to wait two weeks for any further information". The appellant said "Two weeks is not enough". The appellant went on to say "it would be easier for me if I was granted a month or so. Because parents are not at home, it's only the younger people who are at home now, I don't think they're capable of getting the right materials, searching. My father has more experience. " The tribunal member repeated that he would allow only "a two week period if there's anything that you think would assist your case that you want to submit". Again the appellant asked for one month. The tribunal member responded: "No, I'll give you --- as I've said, I'll give you a two week period". Yet again the appellant asked to be given one month within which to get the information. The tribunal member denied this request saying "I've made it very clear to you that what I'm giving you, I think, is a reasonable period to provide any information after the hearing. If the information was accessible, for example, if it were in Australia, then a two week period would have been more than adequate. But the same is not true where the documents are in another country and some searching is required to locate them. I can think of no reason why the tribunal should have refused the appellant's request. It was a very reasonable request and if it had been allowed it would not cause any delay in the tribunal's deliberative process. For these reasons I am convinced the tribunal's refusal to allow the appellant four weeks within which to get his hands on the documents was so unreasonable as to amount to a denial of procedural fairness. 6 That, however, is not the end of the matter. Some five days after the hearing, the tribunal wrote to the appellant informing him that the tribunal had information that might, subject to any comments the appellant might make, be reason for deciding that he was not entitled to a protection visa. What the tribunal had in mind was then set out under various topic headings. Two are relevant. The first heading was "Inconsistencies". You have given inconsistent evidence as to when you joined Tauhid Jamaad. In your written statement of 20 June 2006, you stated that you joined in 2000. At the Tribunal hearing of 6 December [2006], you suggested initially that you joined in 2004 and then that it might have been 2002 or 2001. You also said that you might have been a member for 3 or 4 years. That you could not provide clear and consistent evidence about when you joined Tauhid Jamaad leads the Tribunal to doubt that you ever became a member of the organisation. 7 The other heading was "Knowledge of Political Matters". In that connection the letter stated: "The information you gave in relation to a number of matters relating to Tamil Nadu politics suggested that you might not have been involved with the MDMK in the way that you have claimed". The letter then referred to evidence and other information provided by the appellant that was relevant to his credibility on his claim concerning his involvement with MDMK. Your comments are to be in writing and in English. They are to be received at the Tribunal by 3 January 2007. IF YOU DO NOT GIVE COMMENTS BY 3 JANUARY 2007 THE TRIBUNAL MAY MAKE A DECISION ON THE REVIEW OF YOUR CASE WITHOUT FURTHER NOTICE. 9 While the tribunal was in error in refusing the appellant time within which to provide details of his membership of Tauhid Jamaad that error was cured by the letter of 11 December 2006. I say the error was cured because, in my view, the letter invited the appellant to provide the tribunal with information of a kind and character that would include the membership card he had earlier said he wished to produce relating to his membership of Tauhid Jamaad. He also had the opportunity to provide evidence of his membership of MDMK. 10 In the event, the appellant did not take up the invitation. That is, he failed to provide any information to the tribunal regarding his membership of either organisation. 11 In the result therefore the tribunal, albeit belatedly, did provide the appellant with an opportunity to provide the information he had wanted to submit. That the appellant failed to take advantage of that opportunity is not the fault of the tribunal. Accordingly, the tribunal has not fallen into any error. 12 For these reasons, I decline to vacate the order made on 16 November 2007. The respondents should have their costs of this application. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.

refugee review tribunal judicial review protection visa application applicant requesting more time at tribunal hearing to obtain evidence tribunal required to provide reasonable time failure to do so later corrected migration

Though the subject matter is prosaic, the litigation raises several novel issues. The first concerns a matter of pleading. It alleged that a Deed Poll of Restraint entered into by the first to fourth applicants in favour of the first to seventh respondents contained clauses (i) that were exclusionary provisions for the purposes of s 4D of the Trade Practices Act 1974 (Cth); (ii) which, if given effect to, would contravene s 45(2)(b)(i) of the TP Act and would in the circumstances not be saved by s 51(2)(e) of that Act; (iii) that were void and unenforceable as a matter of public policy at general law; and (iv) which were the subject of a false representation as to rights and remedies in contravention of s 53(g) of the TP Act. Declaratory and injunctive relief was sought. 3 In a Statement of Facts, Issues and Contentions filed prior to the hearing, the first, fourth, seventh and eighth respondents indicated they did not contest that the relevant restraints constituted exclusionary provisions for the purpose of s 4D of the TP Act. They nonetheless indicated they relied by way of defence on s 51(2)(e) of the Act (this had been pleaded) and, in the alternative should a contravention of s 45(2) be found, they would seek orders pursuant to any or all of s 87(2)(b), s 87(3) and s 4L varying the terms of the objectionable clauses so as to prevent any further contravention (this had not been pleaded). 4 At the commencement of the hearing counsel for the applicant sought and was granted leave to discontinue against the second, third, fifth and sixth respondents. Leave was then sought to amend the application to delete all of the TP Act claims, leaving the applicants' case simply as one founded on the common law. The first, fourth, seventh and eighth respondents (to whom I will refer hereafter as "the respondents") neither consented to, nor opposed the amendment sought. Leave was granted. 5 The respondents in turn sought leave to amend their defence to raise the TP Act issues to which it had pleaded in its defence (i.e. s 51(2)(e)) or which it had foreshadowed (i.e. s 87(2)(b), s 87(3) and s 4L). This was opposed by the applicants on the basis that, with their TP Act claims now excised, there was no controversy between the parties concerning any contravention to s 45. The respondents, it is contended, were seeking to self-generate a controversy to enliven the provisions of the Act upon which they wish to rely. In consequence, it is said, a hypothetical question was being raised and advisory opinions were being sought. 6 While I do not in any way impugn the propriety of the forensic decisions taken by the applicants in amending their application and then in opposing the respondents' amendment, their tactical character is transparent. They wish both to avail of the inflexibility of the consequences at common law of the deed being found to contain clauses contrary to public policy and to avoid those that may ensue under the TP Act (if a s 45 contravention is found), by virtue of the obligation imposed on the Court by s 4L and the discretions given by s 87(2)(b) and s 87(3). 8 For reasons I later give, I do not consider that s 87(2)(b) affords an appropriate avenue of relief to the respondents in this matter. 9 The hearing was conducted on the basis that the parties would address both the common law claim and the respondents' TP Act defences and cross-claim, with my ruling on the application to amend being given with my judgment in the matter. 10 I am satisfied now, as I was at the time of the hearing, that leave to amend ought be granted and that the proposed defence and cross-claim do not raise hypothetical questions or solicit advisory opinions. 11 I would preface my reasons by noting, first the provisions of s 4L, s 4M, s 51(2)(e) and s 87(3) of the TP Act. The subpara also gives rise to the question whether, if the deed contained restraints that did not offend the common law of restraint of trade, it would for that reason fall within s 51(2)(e) (assuming the transaction was of the relevant type and the restraints related to the protection of goodwill): cf IRAF Pty Ltd v Graham (1982) 41 ALR 209 at 216. It is not limited to a party burdened by a provision that contravenes s 45 , let alone a party who has suffered, or is likely to suffer, loss or damage by the contravening conduct. In this last respect the subsection appears to be quite unlike s 87(1), (1A), (1B) and (2), each of which conditions the making of their respective orders "upon the court finding that a party to the proceeding has suffered, or is likely to suffer, loss or damage" (emphasis in original): I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41 ; (2002) 210 CLR 109 at [46] . The manifest object of s 87(3) is to permit the "restructuring on a just and equitable basis the rights and obligations of parties to contracts which have contravened certain sections [i.e. s 45 , s 45B and s 47] of the Act": Heydon, Trade Practices Law , [18.1830]. The utility of a power so to do is obvious enough. Section 87(3)'s object contrasts with the object of s 87(1), (1A), (1B) and (2) which confer powers to make orders compensating, preventing or reducing loss or damage arising from breaches of the Act: ibid. I would note in passing that s 87(2)(b) would thus envisage that that object may in fact be furthered by an order varying a contract made between the person who suffered, or is likely to suffer, the loss or damage and the person who engaged in the contravening conduct. 15 I should also note that the Deed Poll of Restraint is, as its name signifies, a deed poll. The covenant of restraint is made in favour of, and for the benefit of, the first seven respondents who are named in the deed. As such, the covenant is enforceable by those respondents: see Re A & K Holdings Pty Ltd [1964] VR 257 at 261-262; Sunderland Marine Insurance Co v Kearney (1851) 16 QB 925 at 938. It is unnecessary for present purposes to enter upon the questions (a) whether a deed poll is properly to be called a "contract" at law at all: cf Chitty on Contracts , Vol 1 at 2-003 (29 th ed, 2004); Furmston (ed), The Law of Contract , 2.135 (2 nd ed, 2003); or (b) whether this deed poll in fact embodies a contract supported by consideration: cf cl 3 of the Deed (not reproduced here); or else is properly to be regarded as a part of the performance of the Heads of Agreement or as part of an entire transaction: cf Norton on Deeds 86-88 (2 nd ed, 1928). Given that the restraints are contained in an enforceable instrument that reflect what has been agreed by all relevant parties, if they are found to be unenforceable because they are exclusionary provisions that contravene s 45(2)(a) , I can see no reason consistent with the purpose and policy of s 87(3) for not treating them as provisions in a "contract" to which the covenantees are parties. To interpret s 87(3) in this way is to do no more than to give it a purposive and contextual interpretation: see CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2 ; (1997) 187 CLR 384 at 408; Acts Interpretation Act 1901 (Cth), s 15AB. 16 In the above legislative context, s 4M, in my view, is of pivotal importance in determining when leave to amend should be granted. While the section saves the common law relating to restraint of trade, it does so qualifiedly. The operation of the common law is not affected insofar as that law is "capable of operating concurrently with [the] Act". That qualification is presently important. Common law and severance --- To the extent that the common law doctrine of restraint of trade and the principles relating to the severance of restrictive provisions from such contracts are not displaced by the prohibitions and remedies in the Trade Practices Act , it is intended that they should continue in operation ... New Sections 4L and 4M (clause 6 ) deal with these matters. As I earlier noted, the severance provisions of s 4L are subject to any order made under s 87 and, in particular for present purposes, s 87(3). 17 It may be accepted that where a common law claim alone is made (usually, but not necessarily, not in federal jurisdiction: cf O'Neil v Mann [2000] FCA 1180 ; (2000) 175 ALR 742 at [29] ), a respondent would not characteristically put in issue the possible incapability of the common law operating concurrently with the Act. Often the Act would be of no conceivable relevance in a simple common law claim. But when incapability is properly put in issue, the common law (including its remedies) will be displaced by the operation of the Act (including its remedies and relief) to the extent of that incapability. 18 In this matter the respondents seek to do no more than to put that matter in issue, albeit contingently because their primary position is that the restraints are inoffensive at common law in any event. But if they are incorrect in that, and if the restraints are exclusionary provisions --- the applicants frankly concede they are --- and contravene s 45(2)(a) , the respondents, as of course, are entitled to apply for an order under s 87(3) to have the restraints varied. They equally are entitled, subject to any order made under s 87 , to have the issue of severance under s 4L determined: see SST Consulting Services Pty Ltd v Rieson . 19 By relying simply upon a common law claim in the present factual setting, the applicants have perforce exposed themselves to the defensive use the respondents seek to make of the TP Act. 20 I grant the leave to amend that has been sought. To avoid as best I can at least the last of these complications, I will refer to the principal members of the Nemer family by the first names they appear to have used. I mean no disrespect in so doing. 22 In the 1950's the Nemer brothers, Les (the sixth respondent) and Antoine (the second applicant) started a dry cleaning business. Since the 1970's they conducted as well a linen hire and laundry business. These businesses were, until 2005, owned by the first respondent, International Linen Service Pty Ltd, as trustee of the International Linen Service Unit Trust ("the ILS unit trust"). In these proceedings the trustee company has been referred to as "Old Co". On about 8 December 2005, Old Co ceased to own and operate the business. From that date, the business the eighth respondent, a new entity given the name International Linen Service Pty Ltd, has been the operator of the business. It has been referred to as "New Co" in these proceedings. 25 In early 2005, Old Co engaged Equity and Advisory Ltd to value the trust's business and to advise on its potential sale. The impetus for a sale was a falling out between Les and Antoine Nemer. According to Mr James this was a "time of great dispute" between the two brothers. Antoine indicated to Les that he understood that Spotless Services Australia Ltd, Old Co's principal competitor, had made an unsolicited expression of interest possibly to acquire the business and the lands it occupied (all held by the second respondent Minoris Pty Ltd as a trustee on trust for the unit holders of the ILS unit trust). The price, he understood, was $22 million. 26 On 29 June 2005, Antoine met with Les and following a discussion about the future of the business, he both offered to sell to Les all of his interests in Old Co, Minoris and the lands held by Minoris and to accept a watering down to a nominal value of Fadu's rights in the ILS unit trust for a total of $8 million. Antoine did not wish to wait for the uncertain outcome of a business sale process. That offer was later confirmed by George Anthony, Antoine's son. 27 Les advised Antoine that he wished to accept the offer on the understanding that "it was his intention either to sell some of the interest acquired to senior management of [Old Co] or alternatively to sell the entire business at a premium to the value implied by Antoine's offer of $8M": recital 13 to the Heads of Agreement of 5 August 2005. 29 The recitals also noted that (a) Peter James and PJMS Co were entitled to acquire a further 8.2 per cent interest in Old Co, the ILS unit trust, Minoris and the land, under pre-emptive rights they held; and (b) Equity & Advisory had advised Mr James and his company that, after taking into account minority and marketability discounts, the consideration sought by Fadu was fair. 30 The manner in which the watering down of Fadu's interest in the ILS unit trust to a nominal value was to be, and was achieved, first, through an amendment to the ILS unit trust deed to enable the issue of "Uplift Units" which would then be issued with differential entitlements (see below) and, secondly, through the issue of those units to Fadu, Tiger and Peter James. I should add that a suite of "Completion Documents" associated with the effectuation of the 5 August agreement has been tendered. 35 The Deed expressly preserved the continuing operations of the Heads of Agreement. On 29 November 2005 Old Co sold the business (excluding the land held by Minoris) for $22.3 million, a deed to that effect being executed by both parties on that day. Both Les and his son, Anthony, were required to, and did, execute a Deed Poll of Restraint. These deeds embodied "ladder" (or "cascading") clauses under which (a) the area of the restraint was first "South Australia" and then "the Adelaide metropolitan area, as that term is currently understood" and (b) the duration of the restraints descended annually from 5 to 2 years. 38 Mr James was prepared to accept in cross-examination that there was an increase in the imputed value of the business between the two sale transactions; it was in the order of millions; but he would not put a figure on the difference as "these were not simple transactions ... Probably ... you'd need an expert far greater than me to - to be able to impute this sort of value. The latter will be referred to separately below. 40 It is common ground that a business supplying laundry hire services, would purchase linen to suit the requirements of its customers (e.g. hotels, restaurants, hospitals, nursing homes, entertainment centres etc) and then hire that linen to a customer under a contract with that customer which, as a matter of industry practice was for a fixed term of 3 to 5 years. The service provided would involve the cyclical delivery, collection and laundering by the service provider of each linen item for which a "one off" hiring fee was paid for each such cycle. When the linen of one customer was returned for washing it was "pooled" with other linen. As Mr James indicated, a particular tablecloth may be delivered to a hotel one week, then returned into the pooled stock and delivered to the Casino the next week. In his view, "[t]he pooling system makes hiring the linen cost effective". As customers are charged each time they hire an item of laundry, the faster the turnaround, the greater the profits generated. As Mr James put it, "our profit is derived by turning our linen over quickly". When this consideration is tied as well to transport costs, the evidence indicates that the further from a laundry hire business a customer is located both the greater the transport costs in delivering and collecting linen, and the slower the turn around of such linen. Does it take a week to come back from Roxby Downs because of the tyranny of distance?---Yes, we deliver every Thursday and it comes back the next week. Yes, so your business depends upon your customers being quite close to the source of your laundering?---Yes, the volume customers, yes. Paul Hill, the owner of such a business in Berri who has had over thirty years experience in the industry gave affidavit evidence on these matters particularly in relation to the rural South Australian market. He produced a map (which is Appendix A to these reasons) which indicated the parts of the State that are currently being serviced by commercial launderers. He also indicated who were the operators in those areas who processed 10 tonnes or more per week. It is unnecessary to recount the detail of this evidence other than to note that his own business processed an average of 16 tonnes of laundry per week and that its geographical radius is approximately 200 kilometres. Only one rural business (in Mount Gambier) had a greater weekly tonnage and only two others reached approximately 10 tonnes. There are very few commercial laundry operations that operate outside the greater metropolitan area. It is not commercially viable to operate a commercial laundry outside the areas identified on [the map] as A to G because of the transport costs associated with covering the vast distances between the few small customers. 26. The vast majority of the State is not serviced at all by commercial laundry businesses. Within the area serviced by Werners [his business] in some instances there are over 150 kilometres between our customers (without any customer in between). At one stage we serviced customers located in the mid north of South Australia. We stopped servicing those customers because the transport associated with servicing those areas was too costly. It is not financially viable for Werners to operate beyond the area which it now services. One is Alsco which specialises in laundering for hospitality and industrial clients. Mr Hill had been employed by Alsco and it was his opinion that it processed less than 20 tonnes per week of linen sourced from beyond the greater metropolitan area. The other is Spotless, which had a significant business servicing public hospitals and it processed about 25 tonnes per week from beyond Adelaide. I would add Mr James' evidence is that Spotless has almost exclusively health care clientele which provides very little by way of requirements on a relative tonnage basis outside of the metropolitan area. He also indicated that Alsco have national and State wide obligations to customers and that they sub-contract work to smaller operators in regions more remote from Adelaide because it is not commercially worthwhile there going there. 43 The significance of the tonnage processed related to the type of laundry equipment a business would use. As Mr James accepted, there was a relation between the size, nature and numbers of the washing equipment and the tonnage processed per week. Mr Hill made the same point that many businesses operating on a larger scale than his have a "Continuous Batch Washer" (CBW) which is a commercial scale "tunnel" washing machine which washes washable items in 90 second cycles. To justify the purchase of such a machine (costing new in the order of $1 million), a business would need to wash upwards of about 28 tonnes per week. 44 It was accepted by Mr James that the laundry hire market servicing volume customers had considerable barriers to entry. One was the cost of equipment for high volume output such as a CBW. Another was the capital outlay necessary to purchase stock. These expenditures in turn informed the industry practice of fixed 3 or 5 year contracts. Those long-term contracts are derived and obtained by the investment of working capital and stock and I will give you an example. In 1995 when we started in Wakefield Hospital, we had to invest a half million dollars in stock which we borrowed from Fadu for the purposes of starting that business. In return we had a five-year contract. Now, say, a new supplier to take on the Wakefield Hospital --- we took that from the government laundry at the time --- would have to not only invest in equipment to be able to wash that fast enough to be able to get it back to them, that sort of volume, which is in the order of 10 tonnes a week, 8 at the time, 8 tonne, but also had to find a half a million dollars to bankroll the stock, and you have to --- you get that money back over some years, so in answer to your question, the working capital is a large barrier to entry for large customers. And could I take it that a very significant part of the work in the industry is derived from government and private hospitals and from hotels?---On a tonnage basis, yes. Yes?---Certainly. And do I understand you to say if an operator wants to win that work, first they have to make the investment in the circulating stock, that is, in the items?---Yes. And that can be quite expensive. That's the first point you made, I think? --- Yes. And secondly, if you expect to win it, you have to be able to turn the stock over quickly and that requires a large investment in plant and equipment?---Washing capacity, washing and drying, yes. They are the two major barriers to entry. And in addition, you say that - - - ?---And the fact that the contracts don't come up straightaway, so you could go and build yourself a beautiful plant, buy a lot of stock, but unless a contract becomes available, at that time you still have to wait on that capital until it becomes available. And when you are speaking of contract periods, I take it you are speaking of the experience across the industry?---Yes. Yes, and?---Because we have invested stock, we induce and expect a minimum three-year, maximum five-year contract in order for us to --- they can't change their mind the minute after we have bought half a million dollars worth of stock and say, 'We are going to go somewhere else. And that's the industry standard practice?---For large customers, certainly, yes. He indicated that contracts for three years were the industry standard for medium to large customers. Old Co had two contracts for five years. It was equally the common practice in the industry for contracts to have, in effect, self-executing rollover provisions unless notice to the contrary was given by the customer within a specified time of the expiry of the existing term. Old Co's standard form of contract at the relevant time had such a provision and Mr James' evidence is that 90 per cent of its customers rolled over their contract without renegotiation and that some had been with the company for over 20 years. Mr James accepted that a consequence of these practices was that significant contracts did not come into play very often. His description of Old Co's business reflected a likely bye product of these practices: "[it] depended upon loyal customers who were prepared to enter into long term contracts and to renew them". His affidavit in turn (at para 11 referring to a 2005 memorandum) was to like effect in emphasising customer loyalty which, in turn, he attributed to Old Co's ability to deliver quality and value to the client. As at May 2005, the company generated approximately 150 tonnes of laundry per week which, in Mr James' opinion, represented about 33 per cent of the South Australian laundering market. At the time of the Heads of Agreement, it had four CBWs and employed about 180 employees. 47 In terms of market share in 2005, Old Co was the second biggest supplier of laundry services in South Australia behind Spotless which along with Alsco were Old Co's principal competitors. [Old Co] serviced the greater metropolitan area of South Australia and into country areas of the State. [Old Co] serviced the area extending north to the Barossa Valley, south to Victor Harbor, and in the Adelaide Hills. It had customers in each of Whyalla and Roxby Downs. 23. Most of [Old Co's] customers were within the metropolitan area of Adelaide. In order for a linen hire business to be profitable the necessary ingredients are multiple customers and regular turnover of hire. For that reason, the nature of a linen supply and laundry hire service business is such that it is more profitable when conducted in the metropolitan areas rather than rural areas or smaller towns. The two significant competitors of [Old Co], Spotless and Alsco Linen, were also based in metropolitan Adelaide and sourced most, although not all, of their clients from the metropolitan area. I have appended a copy of the map (slightly cropped) to these reasons as Appendix B. 49 In relation to the area included in the lined service area on the map --- it encompasses an area that stretches from Aldinga in the south, through Macclesfield to Mount Barker in the Adelaide Hills, to Gumeracha and then to Tanunda in the Barossa Valley, west to Gawler and south-west to Barker Inlet on Gulf St Vincent --- I accept, subject to one qualification, that this is the area normally serviced by Old Co in the ordinary course of its business. The qualification relates to the inclusion within it of the Barossa Valley for reasons which emerged in Mr James' cross-examination. I would also note that unlike what is suggested by his affidavit, this area does not extend south to Victor Harbour. 50 In relation to the services Old Co actually provided in what I will call rural South Australia --- Whyalla, Roxby Downs, Victor Harbour and the Barossa Valley --- there were idiosyncratic reasons which explained these. In relation to Whyalla, there was one customer (a hotel) which was a subsidiary of a group of hotels in Adelaide with which Old Co had a contract. Those hotels expected that the linen hire service would be supplied as well to the Whyalla hotel. 51 As to Roxby Downs, Mr James was apparently importuned to provide the service by way of a favour to "an old employee of mine" who was prepared to pay "way over the odds to deliver there". The service to Roxby Downs, as also to Whyalla, was provided using the delivery and pick up services of a contract freight yard. Old Co's own trucks "didn't go there". 52 As to Victor Harbour, the service was to an aged person home and it was provided because Old Co had a contract with a customer to do all of its aged care services in the Adelaide metropolitan area. It was a requirement of the customer that Victor Harbour be serviced. Mr James conceded that providing that service was a loss making part of the contract. 53 While there was "plenty" of work in Gawler, Mr James accepted that the additional distance into the Barossa Valley made business quite marginal. Old Co's service to the Barossa resulted from a request from a resort that hitherto had run an in-house laundry and wished to outsource. I have emphasised those parts of the evidence that having focussed on medium to large customers. Their significance becomes the more apparent in the above evidence which indicates that 10 per cent of the customers in that year generated approximately 75 per cent of sales value, 33 per cent was responsible for about 93 per cent of total sales value and 90 per cent of customers produced over 99.7 per cent of sales value. This service was carried out in a separate part of Old Co's Torrensville factory. It is Mr James' evidence that the term "dry cleaning services" was a term used by the company's management and staff to refer to dry cleaning (in the sense of the process which involves the use of solvents rather than water) and to laundering of customer owned goods ("COGs"). It was said that the dry cleaning section of the business did more laundering than dry cleaning, which was common with dry cleaning businesses generally. 56 Mr James indicted that a dry cleaning service was only provided to customers of Old Co's laundry hire service. As such, it was incidental to the laundry hire service (summary financial information supported this characterisation of the relationship of the two services). Dry cleaning services were only provided to the company's large customers and, in particular, large hotels, hospitals and two other significant clients. There were less than 20 such customers. The reason Old Co offered this service was to provide hospitals and large hotels with a "one-stop" service. In respect of large hotels the items dry cleaned were hotel uniforms, hotel guests' clothing, curtains, special bed covers and miscellaneous items. In respect of hospitals, Old Co offered dry cleaning services for curtains, customer owned bedcovers, some individual uniforms and other miscellaneous items. Les and his family conducted Old Co's laundry hire business with its dry cleaning appendage and, through Snowtex, had a small retail dry cleaning company. Antoine and his family conducted a dry cleaning business and engaged in contract laundering. 58 Fadu was incorporated in 1976. For present purposes it is sufficient to note it is an Antoine family company, it indirectly owns almost the entirety of the shares in Tip Top (with whom it shares common directors), and is majority owner of a factory and office premises in Richmond from which most of Tip Top's business is conducted. Tip Top provides both laundry and dry cleaning services from four types of premises. These are (i) the Richmond premises which has laundry and dry cleaning plant but no customer service to members of the public; (ii) premises (some owned by Fadu) at which Tip Top has dry cleaning and laundry plant and which operate a retail outlet; (iii) premises without plant but which operate as retail outlet; and (iv) other business, such as newsagencies, which receive retail dry cleaning on an agency basis for Tip Top. Virtually all of its laundry and about 60% of its dry cleaning are done at the Richmond premises. 59 At the time of Heads of Agreement and the Deed Poll of Restraint, Tip Top provided dry cleaning to retail customers and laundry services, both retail and wholesale. As a result of the execution of these instruments, Tip Top's contract laundry work was reduced significantly with consequence that its large tunnel washer and most of its other washers and its driers are unused. 60 It is the evidence on Paul Richard Nemer, a director of both Fadu and Tip Top that at the time of the two deeds none of the applicants competed directly with Old Co in the business of laundry hire, and that save for one exception none of Tip Top's contract laundering related to the business of laundry hire. The exception related to contract laundry it did for Spotless which it believed it did since the Deed Poll with the consent of Old Co. Additionally, Tip Top (and related entities) carry on as part of its business, hotel guest laundry and dry cleaning services. This represents less than 1 per cent of its business and it had such a business at the time of the Deed Poll. 61 In his affidavits Paul Nemer outlined opportunities it was pursuing or which it was unable to pursue because of the restraints. Examples given included not pursuing sub-contracting proposal from companies that themselves provided laundry hire services. 62 The evidence indicates that Tip Top positively solicits work for its business and that this has led to an alleged breach of the restraints by it. The following letter, written to a private hospital, was one of a number written to hospitals and aged care facilities in July 2000 advising, as Paul Nemer put it in his affidavit, that it could carry out dry cleaning of their "curtains". Founded more than 50 years ago Tip Top Dry Cleaners are Adelaide's largest privately owned dry cleaners. We can offer a comprehensive pick up and delivery service encompassing all facts of dry cleaning, repairs and alterations for blankets, quilts, curtains and uniforms at very competitive prices. A representative of our company would be happy to meet with you at your convenience to discuss cost effective proposal for your dry cleaning requirements. This week, one of our Hospital customers showed us a letter from Tip Top approaching them. I remind you that you were paid to forgo such work when Fadu sold out of International Linen Service last year. I do not wish to confuse our customers now and ask that you stop approaching our existing customers for any work, dry-cleaning or not. If you are 'blanket' canvassing for such business let me know so I can advise who our existing customers are. " (Emphasis in original. The evidence clearly establishes a twenty-five year involvement of Les and Antoine in the linen hire and laundry business in South Australia. Les Nemer, whose affidavit was relied upon by the respondents, expressed the view that, because of their long involvement in the industry, the Nemer family became well established and well known throughout both the public arena and the industry itself as being involved in linen supply and laundry hire services. 65 Mr James' evidence was that in his time as an owner of Old Co (since 1995), the company never advertised the Nemer name as a brand. He went on to suggest, though, that the Nemer name was promoted in word of mouth dealings. In his first affidavit he expressed the opinion that the Nemer name is synonymous with laundry and laundering in South Australia. He indicated he had been familiar with Old Co's business since the early 1980's. 66 Finally, I would note that none of the restraints agreed to in the Heads of Agreement or in the Deed Poll related to the use of the Nemer name in association with laundry hire or dry cleaning businesses. Mr James' evidence is that while these two were frequent visitors to the business premises they had limited involvement in the day-to-day running of the business. Paul Nemer was an even more regular visitor but for essentially social purposes and he had no direct dealings with Old Co's customers. Put shortly, his starting point was the $22 million the figure Antoine understood to be the amount of the possible Spotless offer. It was taken to be the value of the business on the asset side at the time of Antoine's offer to Les. From this was deducted a debt of $4 million owed to a bank to produce a total net assets figure of $18 million. This was the only debt deducted, Mr James being of the view that other creditors were cancelled out by other debtors. There was $9.31 million of inventory and $3.5 million of plant and equipment at that time giving tangible net assets of $12.664 million (Mr James did not explain how this precise figure was reached). This sum in turn was deducted from the total net assets figure of $18 million to leave a figure for the goodwill component of approximately $5.336 million or 29 per cent of the Old Co business. 69 I earlier referred to the Heads of Agreement, to the provisions relating to the "Watering Down of Units and Sale of Shares and Equitable Interest in Land", and to the manner in which the $8 million was apportioned between shares, land, etc in the sales. Those figures are important in that some significant part of almost $2 million was allocated to matters of which account was not taken (e.g. land held by Minoris) in the figure imputed to be the gross asset value of the business. Mr James acknowledged he had not taken account of these figures. It was not meant to cover all the assets that were jointly owned otherwise, but as an example, ILS had on its payroll the farm manager, and the farm was jointly owned by Les and Antoine, under other entities. So that was just an example of the sorts of things that money was going in both directions, but mostly from ILS to the other farms. This $8 million was meant to be a walk in walk out on the basis of a quick clear severance so they didn't have to look at each other much longer. He would not accept that increase was about $8 million and it was in this context he observed that "you'd need to be an expert far greater than me to --- to be able to impute this sort of value". Mr James, I would note in passing, was a Certified Practising Accountant by training. I should add that Mr James expressed the view that the on-sale was "a complicated transaction" that brought in adjustments "that aren't simple to put into a piece of paper". 72 In their final written submissions, the respondents appear to have taken a new tack in relation to goodwill. Relying upon Old Co's 30 June 2005 balance sheet --- it was annexed to a 29 November 2005 side agreement between Tiger, Mr James and PJMJ --- they now advance the following figures for (a) current assets of $12.47 million; (b) fixed assets of $6.53 million including $1.73 million for goodwill; and net equity of $3.74 million. It has not been explained what I am to make of these figures or what the $1.73 million figure should be taken actually to signify by reference to then contemporary accounting standards: cf Federal Commissioner of Taxation v Murry [1998] HCA 42 ; (1998) 193 CLR 605 at [13] - [14] . There are, predictably, differences in matters of emphases and in the alleged utility of analogies selected from the rich bazaar of decided case law. 75 For present purposes I need only refer to the following matters. 76 (i) Public policy lies at the root of the rule that contracts in restraint of trade are, prima facie, unenforceable: see Amoco Australia Pty Ltd v Rocca Brothers Motor Engineering Co Pty Ltd [1973] HCA 40 ; (1973) 133 CLR 288 at 307; Peters (WA) Ltd v Petersville Ltd [2001] HCA 45 ; (2001) 205 CLR 126 at [27] . The only justification for a restraint is if it is reasonable in reference to the interests of the parties and reasonable in the interests of the public: Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535 at 565; Buckley v Tutty [1971] HCA 71 ; (1971) 125 CLR 353 at 376. The two requirements merge to some extent. I acknowledge that the consequence of what I have just stated is that there is to some extent a merging of the second branch of the Nordenfelt formulation of the applicable principle with its first branch. But this does not mean that the distinction between them is wholly obliterated. In order to justify a restraint of trade both tests must be satisfied. The restraint must be reasonable in the interests of the parties in that it affords no more than adequate protection to the covenantee 'while at the same time it is in no way injurious to the public' (see the Nordenfelt Case ). It may be that although a restraint satisfies the first requirement it is injurious to the public for some reason other than being in excess of what is reasonable in the interests of the parties. Whether or not the observations of Menzies J accurately reflects Australian law is not a matter that I need consider as I do not consider that the Heads of Agreement represented "an ordinary transaction between a willing vendor and a willing purchaser": Brown v Brown [1980] 1 NZLR 484 at 489 per Cooke J. I will later return to this matter. 78 (iv) The question of reasonableness is a question of law for the Court which ultimately depends upon "a judgment the reasons for which do not admit of great elaboration": Amoco , at 308. The validity of the restraint is to be determined as at the date of the agreement, though facts occurring after that date may be relevant if they throw light on the circumstances existing at the date of the restraint: Amoco , at 318. 79 (v) The seller of the goodwill of a business or a person who relinquishes his or her interest in the goodwill of a business by retirement or sale to the continuing owners: cf Geraghty v Minter [1979] HCA 42 ; (1979) 142 CLR 177 at 193-194; is nonetheless entitled to set up a competing business: see generally Heydon, The Restraint of Trade Doctrine , Ch 8 (2 nd ed, 1999); unless a valid restraint protecting the goodwill of the business has been agreed. Without, therefore, a covenant on the part of the vendor against competition, a purchaser would not get what he is contracting to buy, nor could the vendor give what he is intending to sell. The covenant against competition is therefore reasonable if confined to the area within which it would in all probability enure to the injury of the purchaser. It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start. The goodwill of a business must emanate from a particular centre or source. However widely extended or diffused its influence may be, goodwill is worth nothing unless it has power of attraction sufficient to bring customers home to the source from which it emanates. Goodwill is composed of a variety of elements. It differs in its composition in different trades and in different businesses in the same trade. Is the area or scope of the restraint unduly wide? Is the duration of the restraint unduly long? : see Heydon, The Restraint of Trade Doctrine at 157 ff. The applicants raise all three of these in their attack on the Deed Poll of Restraint. 82 (viii) The principal interest protected by restraints on competition on the sale of goodwill is customer connection, the customers being existing or potential customers. The protection of that interest in a given case can contrive what is the acceptable area or scope of a restraint: cf Whitehall v Bradford [1952] 1 Ch 236 esp at 249-250 where a ten mile radius restraint on a retiring partner of a medical practice was unsuccessfully challenged, the evidence establishing that, though the patients on the periphery of that area were small in number they contributed about one-third of the total partnership income; see also Kennett v Crawford [1940] SASR 199; C & S Constructions Pty Ltd v Dawson (1991) 13 ATPR 41-148 and Lloyd's Ships Holdings Pty Ltd v Davros Pty Ltd (1987) 17 FCR 505 at 524. In the cases in which the area has been the whole of England, or a substantial part of it, such as 100 miles or 150 miles from a named town, it has never been held that the covenantee was under an obligation to prove that the business has been carried on in all the towns and villages within the area. In the Nordenfelt case, no attempt was made to prove that all the governments of the world, or even of the civilised world, had ordered goods from the company, though the greater number no doubt had done so. A great deal no doubt depends on the nature of the business and the area in question. In a country of vast spaces, like the Dominion of Canada, it will always be possible, until the population of the country reaches a point now scarcely contemplated, to point to areas where there are only few settlers or inhabitants, and where, accordingly, few, if any, of the goods sold by the manufacturer have penetrated. If, for example, a restrictive covenant were limited to the province of Quebec, it would seldom be possible to prove that the goods were used in every part of that province. However, the goodwill of a business such as is now under consideration could not adequately be protected if the restrictive covenant had to be limited to the towns and villages where actual sales could be proved, whilst leaving the vendor free to establish a business, which would almost certainly be competitive , in all the adjoining places. Footnotes omitted. Before doing so I should deal with the issue of "goodwill". Given they were pioneers in linen hire and laundering generally since 1953, it is said they brought to Old Co from its establishment their own reputation in the industry; that reputation assisted Old Co in developing and securing the fixed term customer contracts necessary to the capital investment required. The Nemer name was associated with Old Co, and Les' family and Antoine's family shared in the benefit and advantage of the good name, reputation and connection of the business. It is then said that the goodwill of Old Co is derived from its reputation built up around its name and the Nemer family name. Equally, it is said, it is Old Co's and the Nemer's reputation within the industry which attracts repeat custom; the assurance of quality and speedy service was provided by that reputation. Reliance is placed on the evidence both of Mr James and of Les Nemer as to the standing and repute of the Nemer name in the fabric cleaning industry. I would note in passing that the respondents have also attempted to derive support from evidence given by Paul Nemer in cross-examination which is said to link his father's involvement with Old Co to the reputation it developed as an industry leader. I simply note that read in context, Paul Nemer's evidence cannot properly be taken to do more than confirm the historical association of his father and Les in the industry dated back to 1953. 86 I am satisfied that at the time of Antoine's offer in 2005, Old Co's business did have significant goodwill evidenced, most notably, in its level of customer loyalty. I also am satisfied that that goodwill at that time was to some extent at least referable to Nemer family involvement in the business. Though disinterested evidence on this is slight, and notwithstanding that since at least 1995 the Nemer name was not advertised with the business, it is reasonable to infer that some such nexus was there. Les and his family managed the business; both he and Antoine had a long presence in the fabric cleaning industry, the board of the company was constituted from 1986 by Les and his wife, Antoine and his wife and to this was added a member of each family in 1992 and Mr James in 1996. Far more significant to Old Co's goodwill in my view was the participation of Les and his family and, from 1995, Mr James in the day-to-day management of the company and to the levels of customer service they apparently supplied. I simply note of this that Mr James in his evidence embraced the observation that "[Old Co] attributes [its level of] customer loyalty to their ability to deliver quality and value to the clients". 87 In reaching these conclusions, I have considered, but do not accept, the centrality of the Nemer name as such to Old Co's reputation that has been propounded by the respondents. 88 Fadu's sale of its various interests under the Heads of Agreement was, and was intended to be, a relinquishment of such interest as it had indirectly in the assets of the business including its goodwill. Though the consideration indirectly referable to the business as such was in the order of about $6 million (see [32] above), I am satisfied that it encompassed some amount that acknowledged the goodwill of the business. I would have to say that I do not find the evidence on what proportion of that consideration might be referable to goodwill to be particularly enlightening, although I do consider that in the distinctive circumstances of the sales and the watering down, it was probably a relatively modest amount. 89 The 5 August 2005 agreement cannot on the evidence meaningfully be characterised as embodying an ordinary transaction between a willing vendor and a willing purchaser. 90 I equally should add that the character I have ascribed the transaction is probably reflected as well in the difference between the consideration for it and that given in the November 2005 on-sale, the latter reflecting a bargain struck from positions of equality. Nonetheless, it obliges the parties to "procure that their related entities do not" act inconsistently with the restraints. The applicants have, in a fashion, called into question the meaning of "related entities" suggesting --- surprisingly given this formula applies to the related entities of natural persons as well as of Fadu --- that the terms have the same meaning as related bodies corporate in s 50 of the Corporations Act 2001 . This clearly is not the case. In its context, as the respondents submit, related entities seem clearly to have been intended to signify corporate bodies over which the covenantors jointly or severally have control such that they have the capacity to procure the required result. Tip Top, manifestly, is a related entity subject to the control of at least Fadu, Antoine and George Anthony as is evidenced in the ASIC extracts for Tip Top, RMN Corp Pty Ltd and Fadu. I need only consider the first of these. It is said, that the restraint means that the covenantors (or their related entities) can neither sub-contract to provide laundry services to a laundry hire service business or hire their facilities to such a business. This, it is said, has precluded Tip Top from subcontracting laundry work from Spotless in the conduct of its laundry hire business because by so doing Tip Top would be "involved directly or indirectly with the operation of" Spotless' business. The respondents contend that the restraint does extend to the Spotless example. 93 If the covenant had a meaning which produced the above consequences, it would be unreasonable. However, as I am satisfied that when the words "operate" and "operation" are properly construed, the activity restrained does not have the reach the applicants allege. The usual dictionary meaning of "operate" (and relatedly with the "operation" of) when used in relation to a "business" means to direct, manage, conduct or carry on a business: see e.g. Vol 10 Oxford English Dictionary (2 nd ed), "operate" 7. In the context of the Heads of Agreement and of the Deed Poll, this plainly is its meaning. For Tip Top to do sub-contracted laundry as such for Spotless, for example, does not involve it in the management, direction, the carrying on or the conduct of Spotless' business. It is Spotless that manages, directs, etc that business. Tip Top is not involved in that process. It is a stranger to it, though as a sub-contractor it may be availed of for the purposes of Spotless' business. However, if Spotless' and Tip Top's relationship was such as to constitute a joint business enterprise in the management of which they cooperated, the restraint would be engaged. If I am incorrect in this, then as I foreshadowed, I would conclude that the indirect application of the restraint to catch contract laundering with a laundry hire business without more, was unreasonable. It would be an undue curtailment of business that was not itself offering laundry hire services. I earlier indicated that that boundary was set for reasons relating to cost of transport, the need to have customers close to laundry and to the relationship of profit to quick turn over of linen. 95 I am satisfied that the State-wide restraint is unreasonable given the nature and the manner of conduct of laundry hire businesses. While it is not necessary to show that a covenantee actually has carried on, or proposes to carry on, the business in every part of the area specified in the covenant, it nonetheless must be shown that the covenant against competition is confined to the area within which it would in all probability enure to the injury of the purchaser: Butt v Long at 486; Kennett v Crawford , at 203. In ascertaining that area regard may be had to such expansion of the business as might reasonably be contemplated: Lloyd's Ships , at 524. 96 It is misleading to suggest that the evidence establishes that Old Co "serviced" Whyalla, Roxby Downs, the Barossa Valley and Victor Harbour. It did nothing of the sort. It did not make its services available in those towns to businesses that wished to avail of them. Rather, for distinctive reasons, Old Co was obliged to or else was willing to make distinct arrangements for a single business in each of those places except the Barossa Valley where it dealt with two businesses. There was no evidence led to suggest that Old Co at the relevant time was proposing or reasonably contemplating an expansion of their ordinary business activities into any of those areas: cf Lloyd's Ships , at 524. Neither was it suggested that, though remotely located, these customers contributed a significant proportion of Old Co's sales revenue: cf Whitehall v Bradford , at 249-250. 97 I accept the burden of Mr Hill's evidence that outside of the greater metropolitan area, there is a number of discrete areas in South Australia in which it is commercially viable to operate a commercial laundry business, so constituting several regional markets in the State. It is quite inappropriate, in my view, for Old Co to sterilize these areas which do not fall within its ordinary sphere of operations, from the possible market entry of the applicants. The restraint to that extent was not designed to protect Old Co's goodwill or the business' customer connection (actual and prospective). 98 I am in consequence satisfied that the scope of the laundry hire restraint is unreasonable. First, Fadu's disposal of its interests in Old Co's business, did not result in an immediate change in the day-to-day management of the business although Les foreshadowed a possible sale of his interest in the business at the time of Antoine's offer. Moreover, after the on-sale there was continuity in the management of the business to the extent that Mr James continued to be engaged on a full-time basis in its day-to-day activities --- a role he commenced in 1995. Secondly, the industry practice of three, occasionally to five, year contracts with "roll-over" renewal provisions combined with the nature of the laundry hire business itself (with quick turn around between customers), provides protracted opportunities for customers to develop an appreciation of, and a business relationship with, a service supplier. In Old Co's case this probably was reflected in the 90 per cent rollover of customer contracts. Thirdly, given the usual three year contractual term, the period of the restraint in practice could vary in relation to Old Co's customers from 5 years to 8 years. 100 The respondents submit that 5 years is a reasonable period in which to enable New Co to derive full value from the adherence of retained goodwill without interference from the applicants. They rely upon (i) Antoine's family's capital, know-how and consequent ability to compete; (ii) their ability to attract customers from the business; (iii) George Anthony's alleged breach of the covenant by sending the letter to which I earlier referred to a private hospital [see [62]-[63]]; and (iv) notwithstanding the apparent affect of the three year term on Old Co customers becoming available each year, across the industry this would also be the case, but there would nonetheless be an adequate pool for which to compete on a yearly basis. 101 Put shortly, the respondents' contention is that in an industry where the goodwill is identified and preserved by the fixed term contract, it seems quite reasonable to require the vendor to vacate the field until most of the existing Old Co contracts are rolled over at a time when the customers are responding to the efforts of the new regime, and not to the adhered goodwill left over from the old regime. While I agree with this submission, I do not accept the time the respondents assert is reasonable within which this transition ought be permitted to transpire. 102 In my view, whatever expectation an existing or new customer may have of the business if it renews or contracts for the first time shortly after the Fadu sale, that customer will thereafter have three years of regular dealing with New Co's management (especially if the customer is a medium to large one). In that time it would be reasonable to expect that both supplier and customer alike would as of course develop an informed understanding of the other and of the prospects for, and value of, continuing their relationship. I do not consider that when, towards the end of that three years, the question of contract renewal arises, that customer's decision to renew would be likely to be affected by the prospect of Tip Top, or an Antoine family entity, entering the laundry hire service market. This suggests that a restraint of three years is reasonable in the interests of the parties. 103 In respect of a customer who enters into, or renews at any time in the three years before the date of the Heads of Agreement or Deed poll, somewhat different considerations obtain. If a reasonable period of restraint is 3 years, then, in the case of this class of customer, the de facto period in which they will be contracted to New Co and immune from competition from the covenantors (assuming a further renewal in the restraint period) will be between 3 and 6 years. I consider this to be reasonable given that the restraint, which could not reasonably be expected to operate on a customer by customer basis, necessarily will operate differently from customer to customer. 104 Little attention has been given in the evidence to the contractual arrangements with small customers --- a very considerable number made very minor contributions to Old Co's sales returns (see [54] above) --- although it would seem these, in the main, have fixed term contracts with roll-over clauses. The evidence of Mr James is that 90 per cent of Old Co's customers rolled over their contracts. Insofar as this class of customer would be added to by those who would deal with New Co for the first time after the date of the restraint, New Co was entitled to the reasonable opportunity to profit from Old Co's established reputation and to attract these prospective customers without fear of competition from the applicants. Three years is, in my view, an appropriate period to allow for this. For those who contracted before the date of the restraint, assuming their contracts to be three year renewable, they were de facto in the same position as their medium and large customer counterparts as to their prospective future tie to New Co to which I referred above. 105 For the reasons I gave earlier in relation to the scope of the restraint, I do not regard the fact that the 5 year period of restraint was agreed by Les and Antoine provides compelling reason for characterising it as reasonable. 106 The question of reasonableness has to be determined, as I earlier indicated, in the context of this particular industry and its contracting practices. The latter, as I earlier indicated, were utilised (in the contract system) by Old Co to generate goodwill. They and their effects are equally of considerable significance in determining what is a reasonable period of restraint. I am not satisfied on the material before me that it has been established that a 5 year restraint is reasonable in the circumstances. It is for that reason injurious to the public. The respondents sought to tender a letter from George Anthony's solicitor which commented (inter alia) upon an earlier draft of the dry cleaning restraint. This letter, it is contended, disclosed the common understanding which informed the intended meaning of cl 2.2. I am asked to infer that it so did because of the amendment made to the earlier draft. To that end the respondents rely upon observations of Mason J in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24 ; (1982) 149 CLR 337 at 352-353 where his Honour accepted the possibility of receiving evidence of mutual intention amounting to concurrence as to the meaning to be given to a contractual provision. Here there is no such evidence of concurrence. I am asked to infer that such was the case. At the time, I indicated the difficulty involved in this and the respondents indicated they would supplement the record. This did not happen. Accordingly, I am not prepared to rely on the letter when construing the clause. 110 The clause on its face prohibits the provision of dry cleaning services "in competition with [Old Co]" subject to one limitation which requires the satisfaction of both of two conditions. It was in relation to the provision of those services that the general prohibition on competition (subject to the limitation) was, seemingly, intended to operate. 112 I would emphasise at the outset, first, that the prohibition was in respect of Old Co's services alone and, secondly, while it related to "dry cleaning services", this was not a defined formula in the Deed Poll. The evidence of Mr James is that that formula had a dictionary meaning within Old Co and it encompassed both dry cleaning and laundry of customer own goods (COGs). It is, in my view, unnecessary to determine whether that was a meaning known to, and accepted by, the applicants. What is clear on the evidence is that Old Co's dry cleaning services were only provided to its existing large laundry hire customers in relation to their COGs and that supply was incidental to Old Co's laundry hire service. In other words this was the extent to which Old Co provided dry cleaning services and in turn contrived what would be the limits of any lawful restraint on competition with Old Co, there being no evidence of any contemplated enlargement of the dry cleaning services to be provided. In my view cl 2.2 borders on the unintelligible. If it be said that the general prohibition related only to competition with Old Co in respect of Old Co's provision of dry cleaning services for the COGs of large customers --- and this seems to be the respondents' ultimate position --- this permits an intelligible contextual reading of the clause but without regard to the limitation in parenthesis. That limitation thus would have to be regarded as otiose at best, and utterly abstruse at worst. This rather suggests, as the applicants appear to contend, that the proper construction of the clause is that it imposes a blanket prohibition on the applicants providing dry cleaning services at all, or else to any of Old Co's customers, unless their provision falls within the limitation which qualifies the extent of the prohibition. The first such possibility seems highly unlikely because, to take an example, with both George Anthony and Les Nemer each carrying on --- and being known to carry on --- retail dry cleaning businesses at the time of the Heads of Agreement, George Anthony's continuing to so do would be precluded by the restraint as the dual requirements of the limitation could not be satisfied (because Les was, rather than "was not", carrying out dry cleaning services). Such a consequence, moreover, would serve no intelligible purpose at all in protecting Old Co's legitimate interests and would spell invalidity for the restraint if this was its proper construction. As to the second possibility (i.e. all of Old Co's customers), the restraint is demonstrably too wide because Old Co's services were only being rendered to 20 or so of its large customers and there seems to be no obvious work for the limitation to do by way of amelioration of that width. 116 While I consider each possible construction to be problematic, I do not in any event consider that a five year restraint on competition in relation to dry cleaning services on any possible construction to be at all reasonable in the circumstances. 117 The service provided by Old Co to a very limited range of customers may have added to the attraction it could offer to such customers but that service, as the respondents acknowledge, was simply incidental to their laundry hire service. Even if I were to accept that it was a service which added to the goodwill of the business, I do not accept that the restraint itself is reasonable given its duration, for like reasons to those I have given in relation to the laundry hire service. Moreover, I consider this particular restraint to amount to no more than an attempt to contrive a continuing, incidental advantage in the provision of laundry hire services by excluding others already operating in the dry cleaning services market. It is not protecting goodwill. It is stifling competition. 120 The respondents have not made submissions to the effect that the offensive parts of the restraints could be severed: cf SST Consulting Services Pty Ltd v Rieson [2006] HCA 31 ; (2006) 225 CLR 516 at [46] ; or that the "reading down" provision of the deed poll would permit the court to make an inoffensive agreement for the parties which they did not make themselves. The obvious reason for their not taking either of these course lies in their TP Act claims to which I now turn. The first is whether as exclusionary provisions, the Deed Poll restraints contravene s 45(2)(a) of the TP Act. The second is whether, on the application of the respondents, the Court should grant relief under s 87(3) of the Act so as to vary the contract in a manner it considers just and equitable. The third is whether, again on the respondents' application, the Court should grant relief under s 87(1) favourable to the applicants by way of varying the Deed Poll's restraints so as to prevent or reduce loss or damage to the applicants. The fourth is whether the offending restraints ought be severed under s 4L of the TP Act. 122 For reasons I later give it is only necessary to deal with the second of these in any detail. A Contravention of s 45(2)(a)? The respondents in their cross-claim contend that because of s 51(2)(e) of the Act, the restraints, nonetheless, do not contravene s 45(2)(a). However, in their defence to the common law claim, it is conceded that if the restraints "offend against public policy" (as I have found), they also contravene s 45(2)(a). It is, in consequence, unnecessary for me to consider s 51(2)(e) and the questions to which it may have given rise in the circumstances of this matter. I have earlier referred to these: see [13]. A s 87(3) Order? As I have earlier indicated, the respondents, as parties to the "contract" imposing them: see [14]; were entitled to apply to the Court to have it varied in such manner "as the court considers just and equitable". I am satisfied that this is an appropriate matter in which to make an order under the subsection. 125 It may not be particularly helpful to indicate that, while the discretion given is not one constrained by enumerated considerations to which regard must be had, it must be exercised judicially. What is clear in my view is that it should be exercised consistently with policies and purposes manifest in the TP Act in relation to exclusionary provisions: see s 4D, s 45 and s 51(2); and, in a case such as the present, to the Act's treatment of provisions in contracts that are for the protection of a purchaser of a business in respect of the goodwill of the business: cf s 51(2)(e). Equally, regard can properly be had to those considerations of public interest and public policy informing the law relating to restraint of trade, the Act itself acknowledging the continuing significance of that law, albeit to the extent that it is capable of operating concurrently with the Act: cf s 4M. 126 I would note that an exclusionary provision of a contract, for present purposes, is one having the purpose of preventing, restricting or limiting supply or acquisition of services to or from particular persons or classes of person and the contract itself is between bodies corporate which, but for that provision, would be or be likely to be in competition in relation to the supply or acquisition of the services or goods to which the provision relates: s 4D and see News Ltd v South Sydney District Rugby League Football Club Ltd [2003] HCA 45 ; (2003) 215 CLR 563. Unless other, not presently relevant, requirements are not complied with, or unless another provision of the Act (including a subsection of s 45 itself) makes s 45 inapplicable in the circumstances: see e.g. s 51(2) and s 88(1); s 45 declares such a provision to contravene the Act regardless of its actual effect on competition. That it so operates, notwithstanding the object of the TP Act is to enhance the welfare of Australians through (inter alia) the promotion of competition and fair trading: s 2; gives little guidance as to how, consistently with the Act's object, the s 87(3) discretion ought be informed. 127 In the present case, though, guidance is to be found in s 51(2)(e) in that, as I noted at the beginning of these reasons, it exempts from s 45's purview, any provision of a contract for the sale of a business or of shares in the capital of a body corporate carrying on a business, "that is solely for the protection of the purchaser in respect of the goodwill of the business". The burden of the subsection in the end is simply one of statutory interpretation. But what the s 51(2)(e) exception suggests for the purposes of the s 87(3) discretion is that there well could be circumstances in which it would be both appropriate and just and equitable to vary a restraint in a contract associated with the sale of an interest in a business so that it does no more than provide a level of protection that would be acceptable at common law for the policy reasons of the common law. Such an exercise of discretion would be permissible under s 87(3) in an appropriate case even if a provision valid at common law was not saved from contravening s 45 because of s 51(2)(e), i.e. because that provision did not operate in tandem with the common law: cf Peters (WA) Ltd v Petersville Ltd , at [46]-[50]. 129 I am satisfied that the present is a case in which a variation order should be made. I indicated in relation to the laundry hire restraint that I considered a three year period of restraint would appear to be reasonable as between the parties. I equally indicated that, save in relation to its extension into the Barossa Valley, the map tendered by the respondents (Appendix B to these reasons) delineates an area within which it would be reasonable to proscribe competition between the parties in relation to the applicants operating etc a laundry hire business. I also indicated what I consider to be the proper construction to be given the words "operate" and "operation" in the restraint but that, in any event, that meaning indicated what was a reasonable limit to the scope of the activities that could be the subject of an acceptable restraint. I will order its deletion. The respondents have had the advantage of it for over two years. I do not consider it to be just or equitable that such a contrived restraint on competition in so minor an aspect of the laundry hire business should be continued. A s 87(1) and (2)(b) Order? This is not a question which I need determine, though I would note the apparent curiosity in a party whose conduct occasions loss applying for an order to remedy that loss. 133 In circumstances in which s 87(3) makes express provision for variation of a contract containing an exclusionary provision at the suit of a party to it (irrespective of whether that party has suffered or is likely to suffer loss), it would be quite inappropriate to resort to a power of more general application to furnish the very remedy for which s 87(3) was designed. I propose to make such an order and that order will render severance under s 4L unnecessary. Additionally, I would note that while it is provided expressly in the Deed Poll of Restraint that it does not supersede the Heads of Agreement (see cl 7), no relief has been sought in this proceeding in relation to that agreement. 136 I will also direct the parties to file and serve written submissions on costs within seven days of the handing down of these reasons. I certify that the preceding one hundred and thirty-six (136) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.

disposal of interest in a linen hire service business restraint of trade clauses whether activity restrained too extensive in applying to ordinary laundry contracting services whether state wide restriction too large evidence of separate regional markets and of respondents not servicing those markets as of course whether time restraint too long 5 years relevance of industry practice of 3 year term contracts applicants amended statement of claim to remove all references to trade practices act 1974 (cth) claim respondents seek leave to amend defence to raise s 45 and s 87(3) of the tp act as alternative basis of relief whether leave ought be granted exclusionary provision contravention s 87(3) variation of contract containing an exclusionary provision in such manner as the court considers just and equitable relationship to powers under s 87(1), (1a) and (2) and s 4l whether variation should be ordered exclusionary provision also invalid at common law s 87(3) application to be made by party to a "contract" whether includes named party in a deed poll restraint of trade pleading trade practices trade practices

In its application Orrcon sought both interlocutory relief and final relief. The claim for interlocutory relief came on for hearing before me on 14, 15 and 16 August 2007. On 22 August 2007, I made an order that the application for interlocutory relief be dismissed. I delivered reasons: Orrcon Operations Pty Ltd v Capital Steel & Pipe Pty Ltd [2007] FCA 1319. I reserved the question of costs and these reasons deal with the question of costs. That such costs be taxed on an indemnity basis. Mr Dillon is a solicitor acting on behalf of Capital Steel. 4 Orrcon opposes the making of such orders. It submits that its costs and those of Capital Steel should be reserved, or, in the alternative, that the costs of the interlocutory application should be Capital Steel's costs of the cause. 5 The Commonwealth Bank of Australia ("Commonwealth Bank") is the fourth respondent to the proceeding. It opposed Orrcon's application for interlocutory relief and it seeks an order that Orrcon pay its costs of and incidental to the application for interlocutory relief. Orrcon opposes that order and submits that there should be no order as to the costs of the Commonwealth Bank. 6 Solicitors for the Westpac Banking Corporation appeared at the hearing to submit to any order of the Court, save as to costs. The Westpac Banking Corporation and the applicant have agreed that the appropriate order as between them would be that there be no order as to costs. The effect of such an order would be that if Capital Steel is successful, it will receive the costs of the interlocutory application. If Capital Steel is unsuccessful, it will not have to pay Orrcon's costs of the interlocutory application. 9 Orrcon referred to His Eminence Metropolitan Petar Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc (No 2) [2007] NSWCA 142 in support of its submission. However, the discussion in that case (at [16]-[32]) focused on the question of whether there was a general rule in circumstances where an applicant for an interlocutory injunction succeeds, and not where he or she fails. 10 In Australian Agricultural Co Ltd v AMP Life Ltd [2003] FCA 1134 Sackville J considered it appropriate to award costs against an unsuccessful applicant for an interlocutory injunction where the applicant had failed, not only on the balance of convenience ground, but also on the serious question to be tried ground. 11 Orrcon submits that it succeeded on a substantial matter involved in its interlocutory application in that it succeeded in establishing that there was a serious question to be tried in relation to the allegation that the pipe was defective. (See [42]-[49] of my previous reasons. ) However, the fact is that in terms of the interlocutory relief it sought, Orrcon failed to establish a serious question to be tried and, in any event, the balance of convenience favoured the refusal of relief. In addition, my decision means that Orrcon's claim for final relief in relation to the Westpac letter of credit is otiose. In those circumstances, I think it is appropriate to order that Orrcon pay Capital Steel's costs of the application for interlocutory relief. 12 Orrcon submits that if, contrary to its primary submission, I award costs in favour of Capital Steel, then I should reflect in any such order the fact that it succeeded in establishing a serious question to be tried in relation to the allegation that the pipe was defective. Three experts who gave evidence in support of that allegation were cross-examined by counsel for Capital Steel and the issue occupied some time. I could reflect Orrcon's success on that particular matter by making different costs orders with respect to different issues, or I could reduce the costs otherwise payable to Capital Steel by Orrcon. 13 There is no doubt that I have the power to proceed in one or other of the ways I have identified. The power is contained in s 43(2) of the Federal Court of Australia Act 1976 (Cth): Inn Leisure Industries Pty Ltd (Provisional Liquidator Appointed) v DF McCloy Pty Ltd (No 2) (1991) 28 FCR 172. Some caution is to be exercised before splitting costs in accordance with the success of the parties on various disputed questions of fact and law: Cretazzo v Lombardi (1975) 13 SASR 4 at 12 per Jacobs J; Trade Practices Commission v Nicholas Enterprises Pty Ltd (1979) 28 ALR 201 at 208 per Fisher J. 14 I do not think that this is a case calling for the making of different costs orders in relation to different issues, or for reducing Capital Steel's costs by reason of Orrcon's success on the particular matter. In my opinion, to do so would be to define or identify an issue too narrowly. At the very least, the issue is whether Orrcon had established a serious question to be tried that Capital Steel had engaged in unconscionable conduct, and the allegation that the pipe was defective was simply one element of that issue. Orrcon failed on the issue. 15 Before leaving this topic, it should be noted that the fact that Orrcon established a serious question to be tried in relation to the allegation that the pipe was defective is a matter I have taken into account in rejecting Capital Steel's submission that Orrcon should be ordered to pay costs on an indemnity basis. 16 I turn to consider whether an order should be made that the costs I have awarded in favour of Capital Steel be taxed and paid forthwith. The authorities suggest that a common example of a case in which a court will otherwise order is where there are multiple attempts to plead a case causing delay in the progress of the case to hearing and final orders. 19 Capital Steel submits that this is an appropriate case for an order that costs be taxed and paid forthwith. It submits that it has succeeded on a discrete issue, namely the question of whether any orders should be made in relation to the Westpac letter of credit, and that in those circumstances it should receive its costs forthwith. It also submits that Orrcon's conduct was unreasonable. 20 Capital Steel referred to the decision of Barrett J in Fiduciary Limited v Morning Star Research Pty Ltd [2002] NSWSC 432 ; (2002) 55 NSWLR 1. The failure of the application for an injunction effectively means that the claim for this form of relief has been finally disposed of. While it is open to AACo to pursue other relief against AMP, such as its claim for damages, the overwhelming likelihood is that the Stanbroke Shares have now been transferred to Nebo as the purchaser. Moreover, there is nothing in the proceedings to indicate that AACo intends to seek relief against Nebo in these proceedings. In addition, if AACo does pursue claims against AMP, it would seem that the litigation will take a considerable period of time to resolve. Unless an order is made for the payment of costs forthwith, AMP is unlikely, in the ordinary course of events, to recover its costs in respect of the interlocutory proceedings for a lengthy period. I think that each of these factors justifies making an order in terms of FCR, O 62 r 3(3). In my opinion, the demands of justice require that there be a departure from the general practice that an order for costs of an interlocutory proceeding should not entitle a party to have a bill of costs taxed until the principal proceedings have been concluded. Accordingly, I propose to order that AACo pay AMP's costs of the interlocutory proceedings forthwith and that AMP be entitled to have its bill of costs taxed forthwith. That is a significant factor in favour of the order sought by Capital Steel. The fact (so it is said by Capital Steel) that Orrcon has unlawfully refused to make payment of a separate amount due by it to Capital Steel (see [105] of my previous reasons). 24 Orrcon submits that should I make an order that the costs be taxed and paid forthwith, it may be deprived of a set-off if its claim ultimately succeeds. That result may occur (so Orrcon submits) in circumstances in which I found that Capital Steel would not have the financial resources to pay a substantial amount to Orrcon (see [101] of my earlier reasons). 25 Capital Steel submits that there is no case in which an order that costs be paid forthwith has been refused on the ground that the unsuccessful party may thereby lose a right of set off. Whether that be so or not, there is no doubt that the effect on a possible right of set off is a relevant matter, the precise weight to be placed on it is to be determined having regard to the circumstances of the case. We also think this an appropriate case for an order under O 62, r 3(2) that these costs be paid forthwith. The policy behind O 62, r 3 is that, in the ordinary course of litigation, costs awarded in interlocutory proceedings need not be paid until the conclusion of the proceedings when set-offs can be made in the light of the ultimate orders for costs. There is an access to justice aspect in this. Impecunious litigants who have a meritorious claim or defence should not be forced out of court because of inability to meet interlocutory costs orders. However, applications for leave to appeal in interlocutory matters of practice and procedure stand on a different footing. There is a strong public policy against the proliferation of such applications, for the reasons given by Jordan CJ and endorsed by the High Court in [ Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39 ; (1981) 148 CLR 170]. The applicants in the present case having failed in this application, the respondents should not have to wait for a year or more before being paid. 27 I turn now to consider Capital Steel's application that there be an order that the costs be taxed on an indemnity basis. 28 The principles by which a court proceeds in determining whether costs should be awarded on a basis other than a party and party basis are well known and I will not repeat them: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 232-234 per Sheppard J; Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151; NMFM Property Pty Ltd v Citibank Ltd (No 11) [2001] FCA 480 ; (2001) 109 FCR 77 (" NMFM "). Various circumstances have been identified in the cases as warranting a special order. It is trite to say that the discretion is a broad one, no two cases are alike, and the categories or circumstances in which a court will make a special order are not closed. 29 Capital Steel sought to support its application for a special order by reference to two of the well known categories or circumstances, namely, unsuccessful allegations of fraud and persistence in a hopeless case. 30 Capital Steel submits that the allegation of knowledge made against Mr Studdy is akin to an allegation of fraud and that it was unsuccessful. I accept that the allegation of knowledge was unsuccessful and that it was a relatively serious one, but I do not accept that it is akin to an allegation of fraud. To my mind, it was simply part of the plea of unconscionable conduct. 31 Capital Steel submits that Orrcon's case was hopeless and it should have known that. In this context, I am mindful of the following observations of Lindgren J in NMFM at [72]-[73]. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion. It might be suggested, with the benefit of hindsight, that in every case "proper advice" would be advice in accordance with the reasons for judgment delivered by the Court. Accordingly, it might be suggested in the present case that NM, properly advised, would have been advised in accordance with Reasons for Judgment (No 10). Clearly, this is not what Woodward J had in mind. On the other hand, his Honour's expression "properly advised" was intended to introduce an objective notion: it would "set the bar too high" to insist that the party have actually known that there was no chance of success. Of course, questions will arise in relation to sets of circumstances falling between the two extremes. What assumed knowledge of the facts is the party's litigious conduct to be measured against? What factual inquiries is the party "deemed" to have made? What level of legal advice is the party "assumed" to have had? I do not attempt to answer these general questions. The application came on quickly and it was complex, both legally and factually. It has to be said that views may reasonably differ as to the precise scope of the doctrine of unconscionable conduct. I realise there is an element of impression here, but I would not characterise Orrcon's case as a hopeless one for the purposes of a special order as to costs. 33 I refuse to order that Capital Steel's costs be taxed on an indemnity basis. This is to be contrasted with a judgment which will have an effect which is no more than indirect or inconsequential: News Limited v Australian Rugby Football League Limited (1996) 64 FCR 410 at 523-525. 36 I have no doubt that having regard to the reformulated orders and the matters referred to in my previous reasons, the Commonwealth Bank fell within the terms of this rule. I did not understand Orrcon to suggest the contrary. Orrcon's submission was that the Commonwealth Bank was not required to be present at the hearing and that all submissions which were properly made in opposition to its application for interlocutory relief either were or could have been made by Capital Steel. Orrcon submits that the Commonwealth Bank provided no assistance to the Court. 37 I reject this submission. The evidence filed by the Commonwealth Bank was of considerable assistance as my previous reasons indicate, and in my opinion, it would be a counsel of perfection to say that the Commonwealth should have provided this information to Capital Steel who could have presented it on its behalf. Furthermore, the Commonwealth Bank was entitled to be at the hearing to protect its interests, particularly as the orders sought by Orrcon were reformulated as the hearing proceeded. In my opinion, it cannot be said that it was not appropriate for the Commonwealth Bank to appear and to be heard. In my opinion, it follows that an order should be made that the applicant pay the fourth respondent's costs of and incidental to the application for interlocutory relief. In view of that conclusion, it is not necessary for me to address the rival submissions made by Capital Steel and the Commonwealth Bank regarding Capital Steel's application for a declaration as against the Commonwealth Bank in the event that I did not order that Orrcon pay the costs of the Commonwealth Bank. In that event, Capital Steel sought a declaration that the Commonwealth Bank was not entitled to recover the costs of the application for interlocutory relief under the securities it holds from Capital Steel. Orrcon should pay the Commonwealth Bank's costs of and incidental to its application for interlocutory relief to be taxed on a party and party basis in default of agreement. There should be no order as to the costs of the third respondent, Westpac Banking Corporation, in relation to Orrcon's application for interlocutory relief. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

costs where application for interlocutory relief dismissed where applicant failed to establish serious question to be tried where balance of convenience favoured refusal of relief where applicant succeeded on one allegation whether applicant should pay first and second respondent's costs of application for interlocutory relief whether costs order should reflect applicant's success on one allegation pursuant to s 43(2) federal court of australia act 1976 (cth) procedure

The Entrance and other locations were, and are, popular holiday destinations within a relatively short driving distance from Sydney. The promotional material which got them interested in purchasing promised them a guaranteed 7% p.a. net return "with the security of strata title and a ten year lease to Pacific International Hotels'. They were told this was a "five star investment". They borrowed most, if not all, of the purchase price. But, less than 2 years after completing their purchases, the lessee, Mustara Holdings Pty Limited a subsidiary of Pacific International Hotels Pty Limited, went into administration. Subsequent operators of the resort paid the applicants a return of far less than 7% p.a. before expenses. One or more companies in the group of companies controlled by the fifth respondent, Austcorp International Limited ( Austcorp ), was or were involved in developing the resort and promoting the sale of apartments in it. Senior Austcorp group executives wrote or approved the promotional material. A critical issue of causation involve the assessment of responsibility of Austcorp, as opposed to one of subsidiaries, in, and the impact of, the marketing of apartments in the resort to potential investors and the decision making process of each investor. The applicants claimed that Austcorp itself engaged in conduct that was misleading or deceptive and caused them to purchase their apartments and thus incur loss. Austcorp both denied that it, rather than a subsidiary, was liable and that the applicants were misled or deceived. It said that if the applicants were misled or deceived they should have sued one or more of its subsidiaries that actually carried out the development rather than Austcorp itself. The parties also are in dispute as to how any loss should be quantified. These reasons deal with three test cases. Originally I had made orders for a separate hearing of five claims which the parties had selected as raising questions representative of most issues common in a variety of situations involving the various other applicants and respondents. During the early part of the hearing those investors who had dealt with Landillo Pty Ltd, the first respondent, in its initial marketing and its real estate agent, D & B Project Marketing Pty Ltd, the second respondent, and those with claims against a real estate agent at The Entrance, Lamont Bros PRD Realty, resolved their disputes. PRD was operated by Xepa Pty Limited, the fourth respondent. I will refer to this agent as PRD . Warren Walker worked as a real estate agent at PRD. (In 2002 Pacific International Hotels, changed its name to Frisbo Holdings Pty Ltd. It was named in the application as the third respondent but was then in liquidation and the applicants never sought leave to proceed against it. ) This left as active parties in the overall proceedings only those investors who had claims against Austcorp. The three test cases are claims by: Brian Owers in respect of his purchase of a one bedroom loft style apartment for $330,000; Sear Tan-Bounkeua in respect of her purchase of a one bedroom studio apartment for $190,000; Joseph Luciani and Taldarmar Holdings Pty Ltd (the family company of his sister Marie Di Giulio and her husband, Dino) in respect of their purchase of a one bedroom loft style apartment for $340,000. For simplicity I will refer to these investors as "Luciani/Taldarmar". In addition to the issue of whether Austcorp itself, as opposed to one or more of its subsidiaries, engaged in the conduct complained of, this also involves assessing whether each investor was misled by that conduct into making the purchase. Both Mr Owers and Luciani/Taldarmar engaged solicitors to act for them on their purchases, while Ms Tan-Bounkeua did not. There is a dispute as to whether the solicitors explained, or could reasonably have been expected (by Austcorp) to have explained to their clients the true nature of the proposed investment, as disclosed by the contract for sale, so as to dispel any claimed deficiencies and alleged misrepresentations in the marketing material (including Mr Walker's and PRD's statements to like effect). And, in Ms Tan-Bounkeua's case, there is an issue as to whether her failure to retain a solicitor to advise her resulted in her not being able to claim that she was misled or deceived by the conduct complained of when she entered into the contract for sale. In addition, Austcorp claimed that it is likely that a disclosure statement was provided to Mr Owers, although there is no direct evidence that this occurred. The expert witnesses dealing with valuation and related issues had substantively different methodologies. Finally, there are questions whether Mr Owers is entitled to damages in respect of some cash savings he invested in his purchase and his net gain after taking into account the effect of the tax benefits he received. It also argued that in early 2000 Mr Owers and Luciani/Taldarmar had incurred liability for their respective solicitors' legal fees and that this was damage incurred more than six years before the expiry of the limitation period. I will outline first, the marketing activities (consisting of the promotional brochure, a similar leaflet and the confirmatory statements by the real estate agent, Mr Walker) and the representations complained of. Secondly, I will deal with the evolution of the project, Austcorp's involvement and the other circumstances leading up to when the applicants entered into their contracts to purchase their apartments and the related documentation. This will involve ascertaining whether Austcorp itself was a party to any conduct complained of. Thirdly, I will examine whether each applicant established that any of the representations was misleading or deceptive and if any relevant representation was in fact a cause of the applicant's decision to purchase. Fourthly, I will consider whether Austcorp had reasonable grounds for making any representations as to future matters. Fifthly, I will deal with Austcorp's limitation defence. Sixthly, I will examine each applicant's conduct after Mustara collapsed in respect of his, her or its failure to sell in 2002 or 2003 when sales of apartments in the resort were realising prices in excess of the earlier purchase price. Then I will consider the valuation issues to determine whether the apartments were worth less than the purchase price at the time of completion of the contracts. Last I will deal with damages. 1. Trevor Chappell was and remains the managing director of Austcorp. He was a certified practising accountant and an experienced company director. During the period between 1999 and 2001 the group's business was property development. As Mr Chappell described, by early 1999 the group had extensive experience in that field. Moreover, Mr Chappell, himself, by that time had over 25 years experience in property development and the investment industry. Mr Chappell worked closely with Edgar Hung , who was an executive director of Austcorp. He was an experienced and qualified engineer. Mr Hung had been involved in the property development and investment industry for about seven years. By late 1999, construction of the resort was underway. Signs were displayed on the building site, including a large and prominent one with "Austcorp" in black block letters against a white background with a small Austcorp logo at the top right and the words, in smaller block letters, "development by" at the top left. The logo had Austcorp's name in white against a dark brown background with a light golden kangaroo below the name. Each applicant (except Mrs Di Giulio) described how in late 1999 or early 2000 he or she was at The Entrance, noticed the development and then went to the PRD sales office adjacent to the building site. There he or she met with Mr Walker. He gave them a brochure and, in some cases, a leaflet, which I will describe shortly. He also gave them a price list with the apartments then on offer, their prices, size, entitlement to carspaces and, under the heading "Rent Guarantee", the amount of the yearly rent. Additionally, Mr Walker gave Ms Tan-Bounkeua two indicative depreciation schedules for a two bedroom apartment, one with and one without furniture and a pro forma negative gearing worksheet. These showed that if a large part of the purchase price were borrowed on an interest only loan, the tax deductions for interest and depreciation would result in a not insubstantial positive flow after tax. Generally, most applicants had two meetings with Mr Walker in which he, in substance, repeated what was in the written promotional material he had given them. While these discussions emphasised or reinforced that material, the applicants did not suggest that he added anything new of substance to the representations that they alleged were conveyed in writing. Usually after the second meeting the applicant paid a holding deposit of $1,000 for their chosen apartment and gave Mr Walker details of their solicitor, or person to whom the contract should be sent. The brochure was printed on glossy paper folded in three so that it appeared as the size of an A4 page turned on its side. On the front cover of the brochure there is a theme of star fish, with four displayed towards the bottom right and a fifth in the hands of a snorkeller who is surfacing in the water. When the reader opens the brochure, two pages initially appear. On the left page, forming the underside of the front cover, are pictures of The Entrance area, and some text. On the right page is an artist's impression of the resort building. Across the bottom of the two pages, written in sand, are the words "That's a 5 star investment" and next to that are five star fishes. Above the star fishes and the word "investment" is an artist's impression of the hotel showing it facing the waters at The Entrance with its well-known bridge in the background and some pelicans in the foreground. On the left hand page there is a logo of Pacific International Waterfront Resort (which uses the first two words and the logo of Pacific International Hotels). And right in the heart of the area at The Entrance, where several lakes meet the ocean, a new waterfront resort is being built in a prime position. Each comes with the security of strata title and a ten year lease to Pacific International Hotels, with options for renewal for two further ten year periods. In the centre there are four columns with a total of five star fish. From day one your return will be a guaranteed 7% p.a. Rents are subject to annual CPI linked reviews, with provision for market adjustments every five years. Many will feature a dual-key format providing many options for travellers. The operator, Pacific International Hotels, will fully maintain the apartments and the resort to a 4-star standard including redecorating and replacement of furnishings. They have advanced accounting and reporting systems in place enabling direct rental payment and owner reporting. Each year of the lease period, you or your friends can enjoy a FREE 7 day off-peak stay at the Pacific International Waterfront Resort. Thus, when the whole brochure is folded out, the words "That's a 5 star" and "investment" appear respectively on the left hand and right hand pages. Again, there are two pages with five star fish on each of them in this form of the brochure. On the right hand page on the right hand side there are more pictures of scenes from The Entrance. The text on that page is set out as follows: An experienced and successful operator Invest now --- 70% already sold Pacific International Hotels are leaders in resort apartment management. They are supported by a substantial international bookings network as well as being members of Flag Choice. Pacific International has been awarded "Best Property" and "Best Hotel" Australia-wide within the Flag Group. It has been designed from the outset to provide guests with the ultimate getaway and to become the Central Coast's premier conference destination. It offers guests the chance to do as little or as much as they like, enjoy facilities including: Pacific International Waterfront Resort is currently under construction and due for completion mid 2000. However, with 70% of the apartments already sold, your prompt action is recommended if you wish to take advantage of this prime investment opportunity. To the right of that is another map showing the F3 freeway as being 45 minutes drive from Hornsby, a northern suburb of Sydney. There are five starfish below that map. On the left of the band are the display's office hours of 9am to 5pm seven days a week and PRD Realty's address. To the right of that is the PRD Realty logo with its telephone number and the mobile telephone number of Warren Walker. To the right of this is a logo of Pacific International which has the words "Hotels-Inns-Resorts-Apartments" as part of it. To the right of that are the words "DEVELOPMENT BY" and underneath that Austcorp's logo. To the right of that is the logo of Great Pacific. Like its prime waterfront position at The Entrance, on the booming Central Coast, the security of a 10-year lease +2x10 year option, and a guaranteed 7% net return. First, the applicants pleaded that by providing the brochure which Mr Walker gave them at PRD, and causing it to be published to them, Austcorp engaged in conduct in contravention of s 52 of the Act. net return on the investment together with annual CPI reviews and five year market adjustments. Each representation in the brochure was alleged to be misleading or deceptive or likely to mislead or deceive because of the following factors: Mustara was not a leader in resort apartment management and had no involvement in hotel or apartment management, had not received any awards for hotels or properties that it managed and had no significant assets other than its proposed interest as manager of the resort and lessee of the apartments in it. There was a real risk that purchasers would not receive the promised rental return from their leases if Mustara did not make a sufficient net profit from its operation of the resort to meet the obligations under the leases. The receipt of the 7% net return would depend on occupancy levels being sufficient to generate enough profit for Mustara to meet its rental obligations and that there was a real risk that Mustara might not be able to meet all of the outgoings under the lease if it did not make a sufficient net profit. There was also a real risk that Mustara might not be able to maintain the apartments to a four star standard, replace carpets, furniture and the like if it did not make a sufficient net profit and that depended, again, on occupancy levels. There was a real risk that Pacific International might transfer its shares in Mustara to a company with little or no reputation, experience or success in the management of hotels or serviced apartments. Mustara was a company with $2 paid up capital first incorporated in May 1997 and Pacific's obligations to the applicants, as purchasers, were limited to those in cl 20.9 of the lease. Secondly, Ms Tan-Bounkeua and Luciani/Taldarmar also pleaded that by providing the leaflet which Mr Walker gave them at PRD and causing it to be published to them, Austcorp engaged in conduct in contravention of s 52 of the Act by representing to him, her or it as a potential purchaser of apartments in the resort that: Each representation in the leaflet was alleged to be misleading or deceptive because of factors 2 and 3 complained of in respect of the brochure and a (truncation of factor 1, namely) that Mustara had no significant assets other than its interest as manager of the resort and as lessee of the apartments in the resort. In addition, the applicants also pleaded that PRD, through Mr Walker, informed each of them that a return of 7% p.a. was guaranteed for 10 years. The evidence satisfies me that Mr Walker made such a statement to each applicant [see 3. below ] . That statement is no different in substance to representations (a) and (h) and I will not deal separately with it for that reason. Each of the applicants gave evidence to the effect that he or she understood that the 7% net guaranteed return was "guaranteed" because the lease provided for a fixed return, rather than a return ascertained from or dependent upon occupancy rates of the resort [see 3. below]. In other words, the lease itself guaranteed the return. Each also said that, taken in isolation, if Mustara were known to them to be a $2 company with no substantive assets, but was a subsidiary of Pacific International Hotels, that would not have troubled them. However, if it were not known to have been a subsidiary of Pacific International Hotels, they would not have gone ahead. Likewise, each of the applicants said that they would not have gone ahead if he or she had realised that Pacific International Hotels' guarantee was limited to a maximum of 12 months' rent under cl 20.9 of the lease to Mustara. That was, in effect, because they were intending to borrow 90% or 100% of the purchase price and then obtain the benefit of negative gearing under the income tax legislation using the "guaranteed" rent to finance most of their expenses it being (in the sense of it being fixed at 7% of their purchase price). There were also other taxation benefits such as depreciation and a small amount of amortisation. Austcorp argued, however, that each applicant received all contractual documents which, if properly read and understood, revealed the true position in respect of the limitation of Pacific International Hotel's preparedness to guarantee the venture. There are issues between the parties concerning the ongoing effect of the representations juxtaposed against the receipt of the whole of the contract, the use, by some of the applicants, of solicitors to give them legal advice, the provision to some of the applicants of disclosure statements and the capacity of the representations to continue to influence the applicants at the time they entered into the contract or completed it. 2. It prepared a strata plan for the development and in May 1997 obtained development consent from Wyong Shire Council for a building with over a hundred and forty apartments, a restaurant, hotel lobby and conference facilities. The effect of the development would nearly double the supply of rooms in The Entrance area: room supply would increase by about 10% in the Central Coast area generally. Importantly, the council imposed a condition on the consent that required the apartments to be used solely as serviced apartments, providing short term stay accommodation. Thus, a person considering the purchase of an apartment would be likely to consider it as an investment property with which to earn a return, rather than as a holiday home, except perhaps for intermittent short term breaks. Each apartment would be a separate strata title unit registered in the investor's name. On 9 June 1998 Landillo entered into a management agreement with Mustara Holdings and Nigel Corne , personally, for the operation of the resort. Mustara was to be the operator of the resort. It was then a wholly owned subsidiary of Pacific International Hotels. Mr Corne guaranteed Mustara's obligations under the management agreement. He was then the sole director of Mustara. He was also the chief executive and, at least, 50% beneficial owner of Pacific International Hotels. In broad terms, the management agreement contemplated that Mustara would enter into a number of leases in order to operate the resort. First, it would lease all the apartments from Landillo's purchasers. Secondly, Mustara would lease from Landillo, or the registered proprietor of each strata title unit, two areas on the ground floor of the building, known respectively as the manager's lot, and the restaurant lot. The manager's lot comprised the hotel reception desk and some office space. (Later in September 1999 it also came to include most of the common area on the ground floor). The restaurant lot included the restaurant and kitchen (which would enable the resort to provide room service food and beverages). The important features of these arrangements for present purposes are that first, Landillo could sell either or both of the management lot and restaurant lot to one or two, different purchasers, and, secondly, Mustara might not be in a position in the future to transfer or assign its interest as lessee in all its leases (i.e. of the apartments, management and restaurant lots) to any incoming operator, e.g. if Mustara were insolvent and its leases were terminated. In that latter case, any new operator would have to negotiate new leases with all the landlords in order to operate the resort, without any assurance that it could obtain similar or commercially acceptable terms from all or any of those landlords. Landillo engaged D & B to devise and conduct the initial marketing campaign for the sale of the apartments to investors. But Landillo never obtained finance. By April 1999 construction of the resort had not started, while Landillo had entered into many conditional contracts to sell apartments off the strata plan. Each purchaser had paid a deposit. Their contracts initially provided that the purchaser had a right of rescission if the strata plan was not registered in the Land Titles Office of New South Wales before 31 December 1999. And the contracts provided that once the strata plan was registered, completion had to occur within 14 days after that event. For a period preceding May 1999 Mr Corne had been dealing with Alfred Wong and the Great Pacific Finance group (which Mr Wong appears to have controlled) in pursuing the development of other hotel projects to be operated by Pacific International Hotels. They and their companies had been involved in developing a serviced apartment project in Kent Street, Sydney, for Pacific International Hotels to operate. The two had also continued to work on developing an apartment hotel in Parramatta which would also be operated by Pacific International Hotels. Neither Mr Corne nor Mr Wong gave evidence. I infer that they discussed the difficulties Landillo was experiencing but were unwilling to take on the burden of financing the development themselves. They decided to approach Austcorp. Sometime in 1998 Mr Wong had raised with Mr Hung the possibility of Austcorp being involved in the Parramatta project his group was developing for Pacific International Hotels. But that proposed co-operation did not go ahead. By then Mr Hung had known Mr Wong for over four years and considered Mr Wong to be a very capable businessman. Mr Wong's companies had assisted the Austcorp group with finance for its developments and Mr Hung and Mr Wong had met regularly since 1995 to discuss potential projects that one or the other had come across. Mr Wong told Mr Hung that Mr Corne had described the resort as being a project at a fantastic site that he really liked. He said that he had worked with Mr Corne for the previous two or three years. Mr Wong described the project to Mr Hung, telling him that Pacific International Hotels had been signed up to manage and operate the hotel. Mr Wong told him that the operator would lease the apartments from investors with the restaurant, office areas and conference areas on the ground floor. Mr Wong explained that originally it had been planned to open the resort before the Sydney Olympics in August 2000, but the current developer was unable to finish the project. He told Mr Hung that he wanted the resort to happen and sought Austcorp's help. Mr Wong outlined that Mr Corne had gained his experience in the hotel industry initially through working in his family's business, operating the Cosmopolitan Hotel in Double Bay, close to Sydney. He said that Mr Corne held a high position on the Australian Hotels Association and that he trusted Mr Corne's judgment because he was a very good and very conservative operator. Next, Mr Hung related to Mr Chappell his conversation with Mr Wong. Mr Chappell had met Mr Corne previously in connection with the Parramatta project. He was impressed by Mr Corne and considered him to be an experienced operator with a long track record of experience in the industry. Mr Chappell understood that Pacific International Hotels were then operating six or more hotels and proposed to operate up to twelve. In about late April or early May 1999 Mr Chappell and Mr Hung met with Mr Wong. Mr Wong told them that he was keen for Mr Corne to proceed with the venture at The Entrance. He encouraged Mr Chappell and Mr Hung to get Austcorp to enter into a joint venture with his group to develop the building so that Pacific International Hotels would be able to operate the completed resort as part of its hotel chain. Mr Wong told them that he had conducted his own investigations and was satisfied that the project was sound and viable. He provided then with a pamphlet which summarised various hotels that Pacific International Hotels then operated and those it was proposing to operate in Victoria and New South Wales. That pamphlet was a double side printed A 4 page headed "Flash Facts", with Pacific International Hotel's logo at the top. It described 12 hotel, apartment and resort projects. Only six of those projects were actually operating businesses. As the pamphlet described, the others were proposed to be opened, the first from about March 1999. Three of the operating businesses were in Sydney and Bankstown. Two more were proposed to be in Sydney, one in George Street, another in Kent Street and a third in Parramatta. Two properties were on the Central Coast, one being the resort which was described as being proposed to be opened in April 2000, the other was a resort at Toukley. The two other properties were operating in Central Melbourne with a further two proposed to open in Melbourne later. Thus, the pamphlet demonstrated that in mid 1999 Pacific International Hotels was engaged in a very considerable expansion of its business and operations. Mr Chappell said that the pamphlet was the only information concerning Pacific International Hotels which he received other than what he learnt at the meeting that he attended with Mr Hung and Mr Corne shortly afterwards. At this time the Austcorp Group, Mr Chappell and Mr Hung had no experience in the operation of hotels. An experienced businessperson in the position of Mr Chappell and Mr Hung would have appreciated immediately that Pacific International Hotel's financial position was critical for the purposes of it being able to undertake the development and operation of six new properties over the period of about one and a half years as described in the pamphlet. It would be obvious to such a person that the establishment costs of each business would be substantial and that each of the hotels, apartments or resorts would take some time to develop a goodwill or reputation from which any reliable return and occupancy rate would be achieved. New businesses need time and access to substantial working capital while they develop a reliable income stream. Experienced businesspersons like Mr Chappell and Mr Hung must have appreciated this, and I find they did. However, this issue was of no concern to them because Austcorp was examining the proposal as a developer that would earn its profit by selling all the units in the development. In early May 1999, probably at their meeting with Mr Corne, Mr Chappell and Mr Hung received a five year forecast for the operation of the resort prepared by Pacific International Hotels. In giving evidence, they identified a copy of a contemporaneous forecast as either the one, or similar to the one, they saw then. This forecast projected profits of about $1.4 million before interest, rent and taxes commencing in the year ending April 2000 and rising to about $3.9 million in 2004. Mr Chappell said that he understood that the first year's operations in the projected figures showed that the project was "marginal at best". The projection allowed $1,223,000 to be contributed to the operator by Landillo for half of the first year's rent together with a further sum of $500,000 for pre-opening expenses as provided in cl 22 of the management agreement, at cll 22.3 and 22.6. After the rent the operator paid to the owners of the apartments (the investors) to generate their returns, its net profit in the first year was $4,000. By the year 2004 in the projections, the hotel profit, after payment of rent to investors, was projected at being $877,000. Mr Chappell said that one of Pacific Hotel International's senior managers attended the meeting and they all spent about half an hour going through the projections. However, Austcorp did not make or obtain any independent analysis of Pacific International Hotels' overall financial position, or market analysis of the area in which the resort was to operate. Austcorp made no attempt then or later to obtain any updated projections for its own use. And, it was a five year, and not a ten year, projection. Mr Corne told them that the Crown Plaza Hotel at Terrigal (a beach resort not far from The Entrance) had been achieving better occupancy levels than were forecast in the projection for the resort. He also gave them an Australian Hotels Association set of confidential statistics showing that the Terrigal hotel's 196 rooms achieved an average occupancy of 71.45% with a gross revenue per room of $204.55 and a net revenue of $146.14. Austcorp argued that it could not be expected to examine projections of this kind with any particular expertise or knowledge of the hotel industry because it had no experience in that industry. I reject that argument and deal with it in more detail below [see 6. below]. Broadly, Austcorp simply accepted the projections at face value for the purposes of making representations relating to a projected return over a ten year period for an investment in a resort to be operated by Pacific International Hotels. Both Mr Chappell and Mr Hung knew that Pacific International Hotels was then undergoing the very considerable proposed expansion of its activities. While each said that he considered that the projections he had seen in May 1999 seemed to be reasonable or conservative, I do not accept that either of them gave any detailed attention to them. They took the view that Austcorp could rely on the projections as a sufficient analysis of the likely financial operation of the resort once the development had been built, and as a basis on which to proceed because of Mr Wong's and Mr Corne's assertions of comfort with them. This was despite them being aware that the projections were out of date, for the shorter period of five years, lacked independence and were put forward by Mr Wong and Mr Corne who were seeking to involve Austcorp in the project after others had failed to raise sufficient capital to enable it to proceed. In late May 1999, Mr Hung received legal advice from one of Austcorp's solicitors, Tzovaras Yandell, concerning the application of the Managed Investments Act 1998 (Cth) (which inserted Ch 5C into the Corporations Law ). Tzovaras Yandell discussed issues which are not of any present relevance but observed emphatically in their advice of 31 May 1999 that the guarantor (i.e. Pacific International Hotels) "... is not a public company of substance". The reason for Austcorp's casual approach to the accuracy and reliability of the projections was explained by each of Mr Chappell and Mr Hung in his evidence. Each said that Austcorp's involvement was to be relatively short-term. It would develop the building and then take its share of revenue from sales. After that point, he said that Austcorp would not be involved in the ongoing operation of the resort or derive any further revenue from it. Thus, the projections had no apparent bearing on Austcorp's decision to invest, because it would not be involved with the operation and financial performance of the completed development. Austcorp was not intending to expose itself to any risk from the actual operations of the resort once built. As Mr Chappell said, his overriding concern at the time of deciding on becoming involved in the development of the resort was whether or not it would be a profitable exercise for Austcorp. Austcorp did not confine its role in the development merely to building the resort project. It involved itself in selling apartments to investors including the applicants. To achieve those sales, from which its ultimate profit would derive, Austcorp put forward the marketing material in the brochure and leaflet stating that the financial return generated by an investment in the resort would be 7% p.a. net "guaranteed" over the period of ten years. For the reasons I will explain below it was not reasonable for Austcorp, without any independent analysis by it, to place any reliance on the projections [see 6. below]. --- Yes, correct. --- Yes. --- Yes . --- Yes, we did. We had a ... company policy, that general correspondence and communications were communicated on the holding company letterhead , and every project that we undertook there would be a separate company formed for that activity, either as an outright development on our own or in joint venture with other people. And in every case there would also be an appointment of an Austcorp development management as the developer manager of the respective development project. I can't recall the number of subsidiary companies we had at the time but I think currently we have got something 250 and 300 subsidiary companies. So from a practical standpoint it would be difficult to have a letterhead for every individual company when communicating, particularly under the signature of the managing director or chairman . So it has been my practise unless there involves some formal, covering some formal legal agreement or some contractual arrangement, to use the holding company letterhead. They were old friends and had worked together many years before, just after they both had qualified as accountants. Mr Chappell was aware that Mr Walker had a full real estate licence. Mr Walker took Mr Chappell for a tour of the site and they then visited other sites in the area which had recently been, either, developed, or were the subject of development applications or consents. Mr Chappell said that he then formed the view that the prices achieved by Landillo on its presales and those sought on the about 50 unsold apartments were within a range justified by what Mr Walker had shown him of the market. On 3 June 1999, Mr Walker wrote to Mr Chappell reporting on his review of the asking prices for the unsold apartments, suggesting increases resulting in about $1 million extra revenue if the proposed prices were achieved. He stated that "... the guaranteed return on investment is a prime consideration to prospective purchasers". Mr Walker made an extra allowance (or increment in price) for "perceived value" for apartments on the eastern wing. Mr Chappell gave this letter to Mr Hung. Both of them agreed with Mr Walker's conclusion as to the importance of the guaranteed return. On 30 July 1999 Mr Chappell discussed with Mr Walker terms of the appointment of PRD as exclusive selling agents. This led on 3 August 1999 to Mr Walker writing to Mr Chappell, as managing director of Austcorp, proposing a reduction in PRD's commission "... in recognition of the extensive marketing campaign to be undertaken by Austcorp and the support this will provide for our sales staff". Subsequently, in October 2000, when Mr Walker was about to cease his association with PRD, he resent the letter of 3 August 1999 to Anthony Zantiotis , a development manager at Austcorp, as the "listing agreement" for PRD. He used this to negotiate terms on which he was appointed as the selling agent by Austcorp. Ordinarily, a vendor of land will engage a real estate agent to market the land and, so, any commission would have been paid by Landillo, as vendor, out of the proceeds of sale. On 28 March 2000, Mr Hung on letterhead with both Landillo's and Austcorp's names on it wrote "for and on behalf of Landillo" to Mr Walker. The letter sought his confirmation that the maximum commission to which he and PRD were entitled was 2.25% of the purchase price of each apartment and that he would pay any forfeited deposits to the financier, Credit Agricole Indosuez Australia Limited. Mr Walker signed and returned the letter to Mr Hung. I accept the evidence of George Tan, Austcorp's finance director, that no Austcorp group company paid any money to PRD or Mr Walker. But here, Austcorp, through Mr Chappell, agreed the terms on which PRD would be retained to sell Landillo's land. Although he said that he could not recall seeing or signing a formal sales agency agreement with PRD or Mr Walker, I am satisfied that Austcorp, through Mr Chappell, appointed PRD as selling agent for apartments in the resort on the terms of Mr Walker's letter of 3 August 1999. Even though Austcorp itself did not pay any commission to PRD, the terms of its agreement to the 3 August 1999 letter reflect Austcorp's position of control over the marketing of the unsold apartments in the resort. And, later, when Mr Walker was engaged on 30 October 2000, Austcorp agreed that it and he would each pay $150 on settlement to any staff member of Pacific International Hotels who initiated a sale. Again, there is no evidence that any such payment was ever made. The trustee was Dalnick Pty Limited. It later changed its name to Austcorp Waterfront Resort Pty Limited. That company is now deregistered. The trustee issued 100 units in the unit trust. Austcorp Group Pty Limited acquired 50 units. The remaining 50 units were acquired by Richfield Developments Australia Pty Ltd, a company associated with Mr Wong. Also on 5 July 1999, Austcorp Group Pty Limited entered into a deed with Landillo, the unit holders of the Landillo unit trust, Richfield and Dalnick. That deed, in effect, gave Austcorp Waterfront (i.e. Dalnick) and its directors control over the beneficial interest in the site at The Entrance and the development of the resort including the proceeds of the contracts for the sale of apartments previously entered into by Landillo. Austcorp Waterfront agreed to meet some of Landillo's existing mortgages and debts and to pay Landillo a small fee as the price of that control and beneficial interest. Subsequently, on 8 September 1999 Austcorp Waterfront entered into a development management agreement under which it engaged Austcorp Development Management Pty Ltd to manage the project. That agreement had a recital that Austcorp Waterfront had agreed to provide consultancy services to, and financial accommodation in respect of, the project. Austcorp Waterfront agreed to pay Austcorp Development Management a fee of $300,000 and 20% of the net profits for the performance of services under the development management agreement. Austcorp Development Management agreed to be responsible for, among other matters: Austcorp relied on the provisions of the development management agreement to refute the applicants' allegation that Austcorp itself engaged in any conduct complained of that was alleged to contravene s 52 of the Act. In the context of the conduct complained of, it is not obvious what distinction the pleader sought to make between publishing, on the one hand, and distributing, on the other. That is because the pleading went on to assert that in the case of the leaflet the relevant applicants read it prior to entering into the contract, and in the case of the brochure he, she or it was "... provided with" it by PRD. There was no dispute that PRD engaged in the conduct which led to the leaflet, brochure and other promotional material being communicated to each applicant. The critical issue was whether Austcorp itself had engaged in the conduct of making the representations thus communicated so as to have contravened s 52 of the Act. Earlier this month Austcorp International Limited, as part of a consortium formalised an agreement with Landillo Pty. Ltd. (the owner of the land) for the delivery of your new serviced apartment together with a guaranteed net annual return on your investment (a rental guarantee). The portions of the letter I have quoted ascribed a role in the development to Austcorp itself which it vigorously denied at the hearing. The letter conveys a colloquial understanding of the role of the principal operating company in a group where many activities of the group are conducted by subsidiaries. But the brand or name of the operating principal or parent is usually used in publicity and identified by the public, as Mr Chappell's letter showed. Here, Austcorp Development Management, not Austcorp, entered into a design and contract agreement with the resort's builder, St Hilliers (NSW) Pty Ltd. In the witness box Mr Chappell read the whole letter and agreed that its contents were true and accurate. But, when taken specifically to his express identifications of Austcorp as the company undertaking the development, he claimed that he "... was referring to the Austcorp group as the proposed development manager of this joint venture" and to "the Austcorp brand". Mr Chappell did not suggest he made a mistake in his letter. On the other hand, Mr Hung did say that he made a mistake in the letter's first reference to Austcorp. Neither was a convincing witness. I am satisfied that they wrote their words to convey the commercial reality of Austcorp's position in a way which the investors would understand. Mr Chappell was responsible for the issue of press releases in late July 1999 concerning the project. Mr Hung and Mr Chappell at "Austcorp International" were named as two contacts for further information. It referred in extolling terms to the nature of the development and said that Austcorp had contracted a successful builder, St Hilliers, to construct the resort. Mr Chappell asserted in cross-examination that the description of Austcorp was inaccurate and "... should be interpreted as Austcorp International [Limited] acting on behalf of Austcorp Development Management". I reject that evidence. I reject this argument. In early 1998 Austcorp applied to register a trademark consisting of its whole corporate name with the words "Austcorp" and "International Limited" separated by a depiction of a leaping kangaroo figure similar to that used in the promotional material. That application was, however, for a mark distinctly different to the logo used on the promotional material. There was no evidence that any applicant was aware of any particular trademark --- rather, they were aware of the general existence of the Austcorp brand or name. That level of awareness of brand or name by members of the public is a common feature of modern life. Ordinarily, the precise name of the owner of the brand or name is not known to those in the public to whom it has been promoted, nor is it usually of any concern to them. Austcorp argued that, it as a distinct entity, would not be identified by the use of the logo in the promotional material, and thus an ordinary reasonable person would not consider that it was involved in the publication of the brochure. In my opinion Austcorp associated itself with development projects conducted by the group of companies which it controlled throughout Australia. A number of the applicants said that they recognised Austcorp as a developer or a name or large company with which they were familiar. Thus, Austcorp's name and logo appeared on the hoarding of the development site as well as on its own letterhead and in letters written by Mr Chappell and Mr Hung on behalf of Austcorp in connection with the resort project. Austcorp argued that the presence of its logo on the back of the brochure and on the leaflet could not be understood as indicating that it, rather than some other company within the group, had published the brochure. It argued that people would understand that the Austcorp group member company in fact responsible for developing the project was the publisher of the brochure, or authorised the Austcorp logo to be placed on it. Austcorp argued in that context that the publisher was Austcorp Development Management. In my opinion these arguments are untenable. Mr Chappell, as managing director, used Austcorp's letterhead and name to associate the company with the resort project. Moreover, the Austcorp logo and name were intended to be a brand which members of the public would identify as the generic developer. While Austcorp was happy to have references to "Pacific International Hotels" in the brochure read as being to an organisation, rather than to Pacific International Hotels Pty Limited, it contended that the ordinary reasonable reader of the brochure would not understand that Austcorp was associating itself with what was said in the brochure. In my opinion, the failure of the brochure to identify a particular Austcorp group member in express terms, demonstrated that Austcorp was content to have itself associated with the development by use of its logo and its encouragement of others to invest in the apartments. Indeed, that is how Mr Chappell and, through him, Austcorp behaved. Mr Chappell wrote much of the wording of the brochure. He wrote letters to the investors saying that Austcorp was the developer. While he may not have done this with any intention to mislead people, he did it to publicise the fact that Austcorp was the active parent company responsible for the Austcorp group's overall development activities throughout Australia, including that of the resort. Austcorp was prepared to allow a loose and ambiguous representation, connecting Austcorp with the development, to be made in the brochure. In my opinion, this is a case where it is clear that any Austcorp company which in fact had an association with the development could be taken to have published the brochure: Webb v Bloch (1928) 41 CLR 331 at 363-366 per Issacs J; see also Abigail v Lapin [1934] UKPCHCA 1 ; (1934) 51 CLR 58 at 70-71 per Lord Wright. Austcorp's accountant, George Tan , said that although work, including the design and production of the brochure, was invoiced to Austcorp and paid for by it, those payments were loans by Austcorp to Austcorp Development Management. In my opinion, the reality of how Austcorp presented itself to the outside world can be seen in its letters of 30 July and 6 August 1999 to the existing investors. Those letters demonstrated the way in which the logo was used by Austcorp as what they referred to as branding for "our projects". That is the "Austcorp" which the public would associate with the use of its name and logo in the brochure, leaflet and on the site. Austcorp's direct or indirect (through subsidiaries) involvement was a crucial reason that the development had begun to be built. No-one seeing the Austcorp signs on the building site, or its logo on the brochure or leaflet, would stop to ask or think about if these identified a special purpose subsidiary. Rather, the use of the Austcorp name on these branding symbols, created an association with the group and, importantly, with the common company involved in the group's projects ------ Austcorp itself. Mr Chappell and Mr Hung emphasised that associative use, namely that Austcorp was now behind the resort project, by their deliberate explanation of its role in their letters of 30 July and 6 August 1999. Now, Austcorp has been sued as responsible for the contents of the brochure and leaflet, as well as PRD's and Mr Walker's statements. It, through Mr Chappell and Mr Hung, sought to throw up a corporate veil to shield Austcorp from responsibility for the very project they, and the promotional material they crafted in 1999, said was its doing. I reject this attempt by Austcorp to evade recognition of the norm of conduct imposed by s 52 of the Act. In early September 1999 one of Austcorp's development managers, Nelson Rainey , placed a post-it note for Mr Hung next to the statement on a draft of the brochure that "From day one your return will be a guaranteed 7% p.a. " asking "Edgar is this correct?". Later in September 1999, Mobius , Austcorp's advertising and marketing agency, asked Messrs Hung, Walker and Corne to approve the final version of the brochure. It also sought Mr Hung's and Mr Walker's approval of the leaflet. These contained the Austcorp logo, as I have described. Next, on Austcorp letterhead, Mr Rainey asked architects to prepare amendments to the strata plan. In the meantime Mr Hung, who, had primary charge of this project as between himself and Mr Chappell, as well as Mr Zantiotis, corresponded on Austcorp letterhead, and received correspondence addressed to Austcorp from, Mr Walker and Mobius. It was headed "Pacific International Waterfront Resort CONTRACT" with a representation of the same snorkeler as on the brochure and leaflet. There were five starfish and the apartment number. At the foot of the cover page Pacific International Hotel's logo appeared with the words "Waterfront Resort". The contract offered investors a cognate structure for the operation of the hotel and their return on their investment. The contract used the template of the 1996 edition of the contract for the sale of land commonly used in New South Wales. The first page was in the usual form of that edition. PRD was named as the vendor's agent and deposit holder, Landillo as vendor, with Coudert Bros (for Ms Tan-Bounkeua and Luciani/Taldarmar) and Teys McMahon (for Mr Owers) as its solicitor. The purchasers' details and name of their solicitor were included as was the price, 10% deposit and balance due on completion. In addition, there was a figure for the yearly rent which worked out as 7% of the price. The contract had a considerable number of annexures, including many pages of special conditions, schedules of finishes, fixtures, fittings and equipment, draft by-laws, floor and strata plans. The final two annexures were a draft services agreement between the owners corporation (for the strata plan when registered) and Mustara, and a draft lease of the apartment to Mustara. The special conditions included cl 39. That provided first, that the contract contained the entire agreement between the parties "... notwithstanding any negotiations or discussions held or documents signed or brochures produced or statements made by the Vendor or any agent or person on behalf of the Vendor prior to the execution of this contract" (emphasis added). Mustara was permitted to assign its interest if its assignee was respectable and financially sound to meet is obligations under the services agreement with experience in, a good reputation for and had "... the capability of conducting the business of motel/serviced apartments (sic)" from the resort (cl 10.1). And, if Mustara underwent a change of control, its incoming controlling shareholder(s) would have to satisfy the criteria for an acceptable assignee (cl 10.2). The draft lease was relevantly in the same terms as the final one. The lease required Mustara to pay a net rent for the first year equivalent to 7% of the purchase price. The rent would be reviewed annually in later years to increase at least at the same rate as the consumer price index. The lease contained a guarantee given by Pacific International Hotels of the performance by Mustara of its obligations over the term of 10 years. However, cl 20.9 limited the maximum liability of Pacific International Hotels over the term of the lease to no more than the total sum of the first year's rent. Mustara was to be the operator of the resort and that business was to be its only relevant asset. It was also to be the lessee of those areas on the ground floor of the building which were required for the reception area, office and restaurant. The draft lease and the lease permitted the lessee to assign, provided that it simultaneously assigned the management services agreement with the lease of the manager's lot and gave 28 days notice to the lessor. The lessee had to give full details about the proposed assignee and any further information that the lessor might reasonably require (cl 14). Additionally, the lease provided that if the lessee was not a listed company, then a proposed change in its controlling shareholding or that of its holding company could only be made if the person acquiring control had taken an assignment of the management services agreement and the lease of the manager's lot (cl 14.5). Each of the applicants entered into a lease on these terms about the time of completion around August and September 2000. On 21 October 1999, Mr Smith of that firm sent him a summary of the contract as Mr Zantiotis had requested. Mr Smith said that the summary was meant to be a guide only and suggested that any purchaser should still see his firm in conference to go through the contract in full. Penrhyn Parker quoted a fee for acting on a purchase of $1,000 plus likely disbursements of $400. Mr Zantiotis responded the next day suggesting that some amendments needed to be made to the draft. He deleted reference to an explanation about a special condition relating to goods and services tax (which in late 1999, was foreshadowed to be introduced the next year). It is a reasonably concise summary of a somewhat large document that is easy to read. Therefore if the lessee was to default you have the comfort of a guarantor to pursue if you wish to do so for any damages you incurred because of the default. Of course, Austcorp and Mr Zantiotis knew of the existence of that limitation as did Mr Chappell and Mr Hung. However, Austcorp allowed this solicitor's summary to be given to prospective purchasers even though it omitted reference to the significant qualification in cl 20.9 of the "guaranteed return". None of the applicants received that summary. All of the investors in the current dispute entered into contracts for purchase that provided that the time before which the strata plan had to be registered was 30 August 2000. (As a result of agreed variations, the contracts made before Austcorp became involved also had the date for registration of the strata plan extended to that time. ) On 2 November 1999, Mr Zantiotis sent to Mr Walker indicative annual tax depreciation entitlement schedules for the various apartments on offer to be provided to prospective purchasers. In mid November 1999 Mr Chappell approved a draft press release in which he was described as "... managing director of Pacific Waterfront Resort's developer, Austcorp International Ltd, Mr Trevor Chappell". In the margins of the draft Mr Chappell wrote out some details of media publicity for the development which he was considering, including paid newspaper, an advertorial and the involvement of Alan Jones, a well-known radio personality. The second paragraph of that draft press release stated that there were "... over $200 million of accommodation developments, totalling 800 apartments, currently approved by Wyong City Council and under construction". One of the approved developments was for an apartment building with about 200 apartments located within a few hundred metres of the resort. Mr Chappell knew that if this development were constructed it would be in direct competition with the resort. Yet Austcorp did not undertake any study or analysis of how the overall increase in potential supply of accommodation at The Entrance would, if all the other 655 approved apartments were developed, affect the capacity of the operator of the resort to meet the guaranteed 7% net return over 10 years. There were in evidence a number of drafts created in late November 1999 for "live reads" by Alan Jones, a well-known radio personality. The "live reads" were advertisements to be read by Mr Jones live on air during his daily radio show. The scripts named "Austcorp's Pacific International Waterfront Resort" as offering a "guaranteed 7% net return" for a minimum of 10 years and emphasised that "your 7% net return is guaranteed ". Mr Jones was asked to emphasise the guaranteed return when he did the "live read" on air. Mr Chappell based the use of that emphasis on his long experience in marketing developments. Mr Chappell's reasons for emphasising the guaranteed return as part of Austcorp's general marketing strategy, were: Although only drafts of press releases and "live reads" were in evidence, I am satisfied that Austcorp used and published, or caused publication of, final versions of press releases and live reads in the same or substantially similar terms. These had been approved by Mr Chappell or Mr Hung and they were prepared with assistance on occasion from other employees, Mobius, and a media or public relations agency, City Public Relations. Mr Chappell accepted that final versions of these drafts were used by Austcorp itself to market the project. --- It did. --- As the manager of the project . --- Yes . Where I have expressed my findings to have been made in reliance on that evidence as in the passage above, I have acted on his oral evidence as probative of the facts I have found. It is not necessary to decide that he was authorised to make these statements as admissions by Austcorp. However, Mr Chappell's extra curial conduct is evidence in a different category. That conduct is capable of being found to be conduct by Austcorp through Mr Chappell as one of its officers. And he was also capable of verifying that he acted in that capacity when giving his evidence. Austcorp argued that in the above passage and similar evidence, Mr Chappell was "... giving evidence as a businessman and not a lawyer". I reject that submission. Mr Chappell was an astute and experienced businessman. When giving his evidence, he was fully aware of the significance of corporate personality, corporate names and the issue about whether Austcorp itself had engaged in the conduct complained of. I do not accept that he used that language loosely. Having seen and heard him over an extended period, I am satisfied that when Mr Chappell referred to Austcorp in the witness box such as in the above passage, he was doing so consciously and advisedly. Mr Chappell was fully capable of naming any other subsidiary which did some act if he considered that it were truly the actor. After all, Mr Chappell volunteered that Austcorp issued press releases "as the manager of the project" in the context that this was what the press releases expressly stated themselves. Austcorp cannot disavow the contemporaneous public admissions it had made, through Mr Chappell's conduct, of its role in 1999 in publicising the resort and generating sales. Later, on 29 November 1999, Mr Hung wrote on Austcorp letterhead to existing purchasers from Landillo advising them of the latest progress. He enclosed photographs which clearly depicted the large sign on the site saying "Development by AUSTCORP" and using its kangaroo logo in the same colours and scheme as on the brochure and leaflet. He noted that 20 apartments had been sold since the final stage had been released in October 1999 and enclosed the brochure and the article based on a press release approved by Mr Chappell published on 18 August 1999 in The Sydney Morning Herald which commenced: "Austcorp International is to open up the Central Coast with a $36 million serviced apartment and retail development, Pacific Waterfront Resort at The Entrance". The article referred to Mr Hung as an executive director at Austcorp and quoted some enthusiastic remarks he had made. Mr Hung's 29 November letter left no room to doubt that Austcorp was the developer of the resort. Of course, none of the present applicants received it, but it makes Austcorp's defence that it did not engage in the conduct complained of ring hollow. A similar line of defence seeking to exculpate a principal for the act of its agent was criticised by the Earl of Halsbury as being like the schoolboy's game of "I did not take it, I have not got it" in S. Pearson & Son, Ltd v Dublin Corporation [1907] AC 351 at 357. After all its activity in promoting the development and the sale of apartments in the resort, it would be extraordinary if Austcorp now could hide behind its previously hidden corporate veils. In early December 1999, he obtained a letter of advice from Chris Mitchell of Corrrs Chambers Westgarth, solicitors, about the application of Ch 5C of the Corporations Law to Austcorp in relation to its involvement with the development of the resort. Mr Zantiotis was then unaware that on 26 August 1999 the Australian Securities and Investments Commission ( ASIC ) had granted Landillo an exemption for offers made to investors before 1 January 2000. Coudert Bros had acted on Mr Hung's instructions to obtain this. Mr Mitchell recommended seeking an exemption from ASIC. Mr Mitchell reviewed a number of documents including the contract, the lease and the brochure. Corrs Chambers Westgarth's letter referred specifically to the statement in the brochure that "your return will be a guaranteed 7% per annum". Mr Mitchell advised that this "... seems inconsistent with the limitation of the guarantee under the Lease". Mr Zantiotis was not concerned by this inconsistency at the time. He took the view that when asked by potential investors about how the 7% return related to the lease and the guarantee for the 10 years that "... I was always responsible enough to refer the contract and all its contents to their solicitors". I formed the impression that Mr Zantiotis was a fairly straightforward witness and that he chose this response to investors' questions to enable him to avoid giving them the direct answer (exposed in Mr Mitchell's letter) while giving them access to the full contractual position through their own solicitors' advice. Mr Zantiotis reviewed the letter from Corrs Chambers Westgarth with Mr Hung who told him that it was not necessary to get an exemption. On 16 February 2000, Coudert Bros sought an exemption from ASIC from having to prepare a disclosure statement. However, ASIC granted limited relief on 18 February 2000 and required that a disclosure statement be provided to intending purchasers that provided specific information. ASIC required the statement to describe the main features and terms and conditions of the investment as well as to set a number of specific questions and to answer them. Austcorp engaged Coudert Bros to prepare a disclosure statement, purportedly by Landillo. It was signed on 6 March 2000 by Mr Hung as attorney of Landillo. Mr Hung was identified in par 8 of the statement as the person from Landillo to be contacted for more information that gave his address and contact phone number as care of Austcorp at its head office address. Although Landillo was notionally Coudert Bros' client, they reported directly to Austcorp, through among others, Mr Zantiotis. The statement appeared to have been printed on A4 paper with two columns on each of its pages of text. However, if anyone read the statement they would be struck by the fact that on page 3 the text in the columns dealing with "what is being offered" did not flow naturally from the base of one to the top of the next. This dysfunction of intelligibility continued on its later pages. This made the statement difficult to follow and in some parts it did not seem to make much sense. The problem was calculated to frustrate the very class of readers for whom the statement notionally was provided. It appears that the drafters of the statement, including their solicitors, had not bothered to read its final form to see if it was correct and made sense. The document should never have been sent out in its confusing and obviously unproofed state. And that was not the only confusing aspect of the statement. Its substantive text was also less than pellucid. In section 4 , headed "What are the risks and returns of the Investment? ", the statement set out the following (original emphasis and setout): (iii) Are Investors in the Scheme guaranteed or promised that they will receive a particular rate of return from the Scheme? (B) What (if any) are the circumstances in which the person providing the guarantee or promise may be unable to honour it? Austcorp argued that the information in (B)(b) and (c) above would disabuse anyone who read the statement about the effect of cl 20.9 and the nature of the guarantee involving Pacific Hotels International. I reject this argument. First, the unequivocal terms of (A) in the extract set out above emphasised that cl 20 did not contain any qualification of Pacific International Hotel's liability. "[U]nconditionally and irrevocably guarantees" were plain, clear words. They meant what they said. And, those words were used in answer to question (A) to explain that there were no conditions to prevent investors receiving the benefit of the plenary guarantee. The qualifications in (B)(b) and (c) did not identify conditions for receiving that benefit. Rather, question (B) was directed to providing an answer on a different subject, namely inability (not absence or limitation of liability) to honour the guarantee. However, if the reader went beyond the obvious instance in (B)(a), they would have seen in (B)(b) and (c) a formal explanation of the effect of cl 20.9. Next, the disclosure statement dealt with the question in par 4(c) "What is the financial position of the person giving the guarantee or promise" by saying merely that the guarantor was "... part of the Pacific International Hotel Group which currently manage the following ..." five named properties. The answer also noted that that group was affiliated with Flag International. Significantly, the statement did not give any information at all about Pacific International Hotel's financial position. Later, it also said that the only way that occupancy rates could affect the rate of return would be if they "... were so bad that the Lessee was unable to pay the rent. In that instance, the Investor has the protection of the Guarantee offered by the Guarantor" (emphasis added). Under the heading "6 Who is the Operator? Nonetheless, this further detracted from an ordinary person in the position of an investor thinking that this document was significant or required careful reading. 2.13 WAS MUSTARA A SUBSIDIARY OF PACIFIC INTERNATIONAL HOTELS? But on 14 January 2000 a deed of variation increased the rent to $335,000 p.a. in consequence of the variation of the strata plan and Mr Wong's company Richland Investment (Australia) Pty Ltd agreeing to acquire what became the three lots on the ground floor of the varied plan necessary to operate the hotel (the manager's, restaurant and the new hotel lots). The new lots comprised most of the lobby area, the back of house or office area for the operator and the restaurant. Richland agreed to buy these lots for $3,680,000 and contracts were exchanged on 29 December 1999. I infer that as part of the same overall transaction, Mr Wong's group acquired control and ownership of Mustara from Pacific International Hotels in the following way. On 13 June 2006, a notice of change in Mustara's members name or address was received by ASIC. That change recorded a transfer of the two issued shares in Mustara to Parkes Street Pty Limited, another company associated with Mr Wong. It noted that the shares were beneficially held by Mustara. Earlier on 28 November 2000, ASIC received a notification of change of office holders in Mustara. That gave an effective date of 23 December 1999 for the resignation of Mr Corne as Mustara's sole director and the appointment in his place of Mr Wong. Mustara was deregistered by ASIC on 10 July 2006. On 4 August 1999 Mr Corne completed Mustara's annual return for the year ended 30 June 1999. This recorded that the two issued shares in Mustara continued to be owned legally and beneficially by Pacific International Hotels. This was lodged with ASIC later in August 1999. He completed the 2000 annual return on 6 October 2000 and lodged it with ASIC in early November 2000 recording the same details of Mustara's shareholding. Next, on 9 November 2001, Mr Wong, as a director, completed Mustara's 2001 annual return and lodged it with ASIC on the same day. It continued to record that Pacific International Hotels was the legal and beneficial owner of the two issued shares in Mustara. Just before Mustara appointed administrators on 14 May 2002, Mr Wong lodged with ASIC three correcting documents on 1 May 2002 and a correction of one of those on 3 May 2002. Each of the three corrections lodged on 1 May 2002 dealt with the identity of Mustara's shareholders in the 1999, 2000 and 2001 annual returns. It should be as follows. In the further correction of 3 May 2002, Mr Wong changed the shareholding information in the 2001 annual return significantly by recording that both shares in Mustara were held by Parkes Street legally but not beneficially. Also on 2 May 2002 Mustara executed a fixed and floating charge in favour of Parkes Street which was registered with ASIC on 8 May 2002. The administrator was of the view that this charge would be void against a liquidator. On 11 June 2002 Mustara's creditors resolved that it be wound up under s 439C(c) of the Corporations Act 2001 (Cth) on the administrator's recommendation. In his second report to Mustara's creditors of 30 May 2002 the administrator said that he was in receipt of a share transfer form in which Pacific International Hotels transferred its shareholding to Parkes Street. I am advised that the reason for the transfer of the shares was due to a change in the overall structure of Pacific International Hotels Pty Ltd within the group. This restructure included Pacific International Hotels Pty Ltd divesting itself of all interests in leasehold properties and focusing on management agreements only on a national basis. The principal [sic] was to structure the company to allow it to expand nationally without having any contingent liability on its balance sheet, as this would have restricted development. Thus, in 1999 and 2000 no public record revealed that Mustara was legally or beneficially owned by Parkes Street. There was no evidence of any public revelation prior to May 2002 that Pacific International Hotels no longer owned or controlled Mustara. And until ASIC processed the notification of Mr Wong's appointment as the sole director of Mustara on 5 December 2000 (a week after it had been lodged), there was no public record that Mr Corne was not a director of Mustara or that any connection of Pacific International Hotels with the ownership and control of Mustara had then ceased. None of the applicants (including their solicitors) was aware of these changes in Mustara's ownership structure prior to completion. Indeed, the publicly available records did not reveal any change in the management of Mustara until early December 2000. I also am satisfied that Austcorp and its officers were not aware of these significant changes in Pacific International Hotels shareholding position prior to Mustara's collapse. There was no suggestion that Mr Chappell and Mr Hung had any contemporaneous knowledge of these matters. The branding of the resort as the "Pacific International Waterfront Resort" remained in place until after Mustara's collapse. There was also no evidence about the relationship between Parkes Street or Mr Wong's group and Pacific International Hotels or about how the latter was or was intended to be involved in the operations of the resort beyond the use of its name. I find that from 23 December 1999 Mustara was not a subsidiary of or controlled by Pacific International Hotels. There was no revelation of any of these significant changes in the disclosure statement signed on 6 March 2000. It contained the false statement that Mustara was a wholly owned subsidiary of Pacific International Hotels. Although the evidence is wholly documentary and somewhat scanty, it is likely that Mr Wong had sought to secure his group's investment in the manager's, restaurant and hotel lots. Mustara's 2000 annual return, the first which could have been filed after those dealings, recorded Mr Wong as Mustara's director although it continued the old recording of shareholding. But, it is unlikely that Mr Wong would have become a, or the, director of Mustara without his group acquiring a shareholding or that Mr Corne would have relinquished his directorship if he or his group still had an interest. The administrator's explanation makes commercial sense in the context of Richland's entry into the contracts to acquire the three lots in the resort in late December 1999. I infer that Mr Wong's corrections in May 2002 were genuine and resulted from earlier sloppiness. No reason was suggested why he would have made these corrections if they were not accurate. And, the administrator noted that he had a copy share transfer form with the same date, 23 December 1999, as the change of directors for Mustara recorded by ASIC, albeit on 28 November 2000. Most investors, including the applicants, completed their purchases and executed formal leases to Mustara in the following month. The whole development was completed and Mustara commenced operating the hotel as part of the Pacific International brand. In October 2000, again on Austcorp letterhead Mr Zantiotis wrote to the investors advising them of the grand opening on 9 December 2000 to which they would receive a formal invitation. The letter said that they would be welcomed by the "[d]irectors of Austcorp and Pacific International Hotels" and that those two named entities offered a 50% discount off the room rate for the weekend of the opening. The expert valuation evidence revealed that in the year ended 30 June 2001 the resort had a 29.2% occupancy rate which rose to 40.9% in the next year. For over one year rental returns to investors were paid at the promised level of 7% of the purchase price net of expenses. But, in May 2002 payment of rent ceased and an administrator was appointed to Mustara. The administrator observed in his report to creditors that his appointment followed a number of events which he had been told (presumably by Mr Corne or Mr Wong) adversely affected the tourism market in Australia generally, including the terrorist attacks in New York City on 11 September 2001, and the concurrent collapse of Ansett Airlines, a major airline company in Australia, together with the development of a large carpark opposite the hotel. The administrator said that he had been advised by the operators that the indirect effect of the events occurring on 11 September 2001 led to a downturn in overseas travellers to Australia with a consequent oversupply of holiday accommodation for the internal market in Sydney. That, in turn, "... led to a plunge in prices charged for rooms and increased market aggression". He said that the shareholder of Mustara, Parkes Street, had been injecting funds into Mustara to enable it to continue to trade but as soon as that financial support was withdrawn Mustara appointed an administrator. He also said that the development of the car park adjacent to the functions rooms at the resort had also resulted in the reduction of local guests attending the hotel due to there being no car parking facilities and that additionally, noise pollution and the presence of heavy equipment had affected the hotel's business. He concluded by saying that "the director [of Mustara] has indicated that these factors combined with the current rental obligations in the depressed hotel industry had led to the appointment of the administrator". The administrator reported that the company had made an average monthly loss of $161,483 in the nine month period from 1 July 2001 to 30 April 2002 totalling $1,614,826, compared to a net loss for the previous financial year of $420,678. He commented that although it appeared the revenue of the hotel increased marginally, the costs of operating it had increased "dramatically" and that the rent, management fees and property taxes had more than doubled in the last 12 month period ending 30 April 2002. He prepared a summary of the financial results, part of which is in the table below. It asserted that the hotel and tourism industry in general had been very volatile and difficult over the preceding 18 months particularly with the unexpected tragedy of September 11, the collapse of Ansett Airlines and financial strains for corporations due to the introduction of the Goods and Services Tax. Mustara asserted that the resort, like most hotels within the industry had been undergoing tremendous financial pressures which had been exacerbated principally by: Mustara said that it had responded by significantly lowering its room rates and increasing marketing activities and that over the preceding 18 months associated companies had provided it with funding of over $1.6 million. Mustara said that it had become abundantly clear that it was no longer commercially viable or in the best interests of its associated companies to continue that assistance. On 14 May 2002 Pacific International Hotels, through Mr Corne, told the investors that although no administrator had been appointed to it, it was still in financial difficulties. He said that, in essence, Pacific International Hotels had been supporting the return paid by Mustara until it had satisfied in full its maximum liability (of a total of the first year's rent) under the guarantee. The financial collapse of Mustara raised another unexpected problem. Because Mustara had leased the manager's, restaurant and hotel lots, its collapse meant that any new operator of the resort would need to negotiate a new lease with Richland for the lobby area, hotel administration offices and restaurant. And, on 14 May 2002 yet another company associated with Mr Wong, The Entrance Resort Pty Limited, wrote offering investors a new deal in which they would receive 40% of their present rent but without any guarantee. That would equate to a new return of just under 3% for those investors who had a guaranteed of 7% return. Soon, after conducting his preliminary enquiries, Mustara's administrator wrote to the investors informing them that Mustara had lost about $420,000 for the period ended 30 June 2001 and $1.6 million for the period to 30 April 2002. The owner's corporation (for the strata plan) retained Horwath Asia Pacific Pty Ltd, who were consultants to the tourism, hotel and leisure industries, to seek an alternate operator for the resort. Ultimately, Mirvac Hotels, a well known hotel operator, entered into an agreement with the owner's corporation to manage the hotel. Horwath reported that there was considerable difficulty in finding an operator to take on this burden because of the fact that Richfield owned the manager's and restaurant lots and was not under any obligation to agree terms with any operator. In late September 2002, Howarth reported that Pacific International Hotels, Mirvac and Accor had provided proposals which included trading forecasts, although Mirvac and Accor did so with a limited knowledge of the property and its trading history and reserved their right to change those forecasts if they became aware of more information. Then, Mirvac found it could not continue to operate the resort and the operations were taken over by The Oaks Group. It contended that he had sent facsimile transmissions to Mobius for the preparation and printing of the brochure and that Mr Walker and PRD probably distributed the brochure on Mr Hung's instructions. (I have also understood this submission to extend to conduct by Mr Chappell and, even if they were not directors of Austcorp Development Management, other Austcorp employees such as Mr Zantiotis and Mr Rainey. I consider that their position was indistinguishable from Mr Hung's for the purposes of this argument. ) When the Austcorp companies' internal accounting was done the payments made by Austcorp for the brochures and Mobius' involvement were posted to ledgers of Austcorp Development Management. In addition, Austcorp argued that the deed of 5 July 1999 (to which Austcorp itself was not a party) between Austcorp Group Pty Ltd, Landillo, Richfield, Austcorp Waterfront Resort and others provided that Austcorp Waterfront Resort had responsibility for marketing and sale of the lots. Austcorp contended that that responsibility was passed to Austcorp Development Management under the project management deed of 8 September 1999. Mr Hung was a director of the latter company. Austcorp argued that these facts required a finding that Austcorp Development Management and not Austcorp engaged in the conduct complained of relating to the use of the brochure, its publication and distribution. Mr Tan gave a number of examples of how payments for the development were made. Some supported Austcorp's contention that Austcorp Development Management was the usual contracting party in the Austcorp group. Mr Tan said that at the time of the development of the resort, Austcorp used its bank account as the main operating cash account. Payments were made from that account to suppliers of goods and services to the project. A number of those suppliers addressed their invoices to Austcorp, rather than Austcorp Waterfront or Austcorp Development Management. After Austcorp paid those invoices from its account, Mr Tan or his staff raised book entries internally allocating the payment to the company Austcorp regarded as the entity to which the supply had been made and debiting that entity's loan account in one of the Austcorp companies' debtors' ledgers. He said that Austcorp Waterfront had a bank account but, because Austcorp was financing the project, there were never sufficient funds in that account. Mr Tan said that since Austcorp Group was the holder of 50% of the units in the unit trust, it provided Austcorp Waterfront (the trustee) with funds and Austcorp itself, as the investor, provided funds to Austcorp Group to finance the project. He asserted that it was convenient for Austcorp to cause the third parties with whom the relevant Austcorp group company dealt to issue invoices to Austcorp. And secondly, is the person who deals with the suppliers usually will carry an Austcorp International business card and that is why on normal circumstances it is very easy for them to just render an invoice to which they can refer to very quickly which is Austcorp International Limited . There were invoices issued by Photobition to Austcorp in its name. Austcorp paid Photobition monthly with a cheque drawn by it for all printing work done in respect of Austcorp group projects for the previous month. There was nothing to indicate that Photobition had a contractual relationship with any member of the Austcorp group other than Austcorp itself. In late 1999 Mobius rendered invoices to Austcorp for designing and supplying the brochure, at a cost of about $17,000, the leaflet at a cost of about $3,000, letterhead, the covers for the contracts at a cost of about $1,600 and signage at a cost of about $14,000. Austcorp paid those invoices. Mr Tan identified internal accounting entries that posted these as expenses to a ledger code for promotional materials in Austcorp Development Management's accounts related to the resort project and debited them to the latter's loan account with Austcorp. Mobius was paid by a single Austcorp cheque each month in respect of all individual invoices it had rendered to Austcorp for work done on various Austcorp projects. Again, on their face these dealings appeared to be ones in which Mobius would regard Austcorp as its customer. The significance of this method of doing business, which had a number of practical attractions to Austcorp as Mr Tan explained, is that third parties with whom it dealt may not always have been aware of the underlying web of relationships. Austcorp was the apparent contracting and paying party. The invoices were addressed to and paid by it. But more significantly, the various individuals acting for Austcorp, were in fact its actual officers or employees and gave people with whom they dealt their personalised Austcorp business cards. Hence, Mr Walker wrote to Mr Chappell in the capacity that his business card identified, namely the managing director of Austcorp. Of course, the mere fact that Austcorp did not disclose to the third party the name of any subsidiary for which it was acting as an agent, did not mean that Austcorp necessarily became a party to the contract provided it disclosed that it was acting as an agent: Carminco Gold & Resources Ltd v Findlay & Co Stockbrokers (Underwriters) Pty Ltd [2007] FCAFC 194 ; (2007) 243 ALR 472 at 473 [1] , 479 [22]-[23] per Finn, Rares and Besanko JJ. If a person is to be found objectively to have no personal liability as a party under a contract he, she or it has made, it is because the person has disclosed at or before the time of contracting that they do so as an agent, even if the identity of the principal is not then disclosed. The general principle in contract is that " ... if a man signs a written contract, he is considered as the contracting party, unless it clearly appears that he executes it as agent only": Cooke v Wilson [1856] EngR 883 ; (1856) 1 CB (NS) 153 at 164 per Crowder J, see too at 162 per Cresswell J; Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch (1987) 10 NSWLR 543 at 558E-F per McHugh JA; H O Brandt & Co v H N Morris & Co Ltd [1917] 2 KB 784 at 793-794 per Viscount Reading CJ, 796-797 per Scrutton LJ. The same principle must apply where the contract is made orally. The question of whether a person so acts as to be a party is determined objectively: Carminco 243 ALR at 479 [23]. Thus, it appears on the objective material here, that Austcorp was not involved in its dealings with third parties as a mere agent or conduit for a separate and disclosed, or undisclosed, principal. Its chosen method of doing business is likely to have made Austcorp a principal in many transactions it effected for the purposes of the project because it does not appear to have disclosed any intention to contract as an agent. When Mr Chappell or Mr Hung made decisions, wearing their Austcorp hats, their position was distinguishable from that of acting as an agent for an Austcorp subsidiary. If the circumstances are such as to make it apparent that the corporation is not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity, merely passing it on for what it is worth, we very much doubt that the corporation can properly be said to be itself engaging in conduct that is misleading or deceptive. It argued that its conduct vis a vis its subsidiaries should be viewed as akin to a real estate agent who passes on the vendor's instructions. I reject that argument. Austcorp did not confine itself to communicating what its subsidiary said, did or represented, without adopting or endorsing it: cf: Butcher v Lachlan Elder Realty Pty Limited [2004] HCA 60 ; (2004) 218 CLR 592 at 605 [38] - [40] per Gleeson CJ, Hayne and Heydon JJ. To the contrary, the reality was that the subsidiaries were Austcorp's vehicle for realising its investment in the project. The subsidiaries acted as Austcorp caused them to act. While each of Austcorp and its subsidiaries was a separate legal person, acting through the individuals who were employees of Austcorp, all acted in dual capacities: cf: Hamilton v Whitehead [1988] HCA 65 ; (1988) 166 CLR 121 at 128 per Mason CJ, Wilson and Toohey JJ. The activities of each member of the Austcorp group involved in the development and marketing of the resort were interlocking and Austcorp controlled each of them: cf: NSW Mutual Real Estate Fund Ltd v Brookhouse [1979] FCA 7 ; (1978) 38 FLR 257 at 263 per Franki J, 264 per St John J, 266 per Deane J. Austcorp argued that the perception of its officers as to who was wearing what corporate hat at the time affected the objective relationship which was created with a person outside of the Austcorp group organisation. In my opinion, that subjective perception is not determinative in ascertaining whether Austcorp engaged in the conduct complained of by the use of the promotional material. The conduct of Austcorp created a situation in which people would associate it in trade or commerce as a promoter of the resort. Austcorp conducted itself in trade and commerce as a promoter of the resort. It did so in clear language using its exact name. It also associated itself by the use of the logo on the promotional material. The logo was not used in a legal document by lawyers. It was used in trade or commerce by Austcorp to convey its association with the project, whatever may have been the legal formalities and structures in which subsidiaries of Austcorp may have participated. The message which Austcorp wished to pass to the public was, that it, as the ultimate owner of the brand, was responsible for the development. It cannot accept the credit and refuse to take responsibility under the Trade Practices Act for its conduct: cf: see Gardam v George Wills & Co [1988] FCA 194 ; (1988) 82 ALR 415 at 427-428 per French J; Cassidy v Saatchi & Saatchi Australia Pty Ltd [2004] FCAFC 34 ; (2004) 134 FCR 585 at 593 [39] per Moore and Mansfield JJ, 599 [65] per Stone J; see too Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199 at [40] , [48] per Keane JA (Williams JA and Atkinson J agreeing at [1], [145]). As Keane JA observed the presence of a logo and name in a brochure or similar material can mean that a reader will be entitled to conclude that the contents of the brochure state the reasons for the involvement of the person whose logo and name were used. Mr Chappell gave evidence, which I accept, that the use of the logos of well established companies such as Pacific International Hotels and Austcorp on the brochure gave considerable weight to the representations made in it and real assurance to potential investors that the promised net 7% p.a. return for 10 years would be paid. --- Yes. --- Yes . Two entities can contravene s 52 of the Act simultaneously: Cassidy v Saatchi & Saatchi 134 FCR at 592 [31], [37] per Moore and Mansfield JJ, see too at 588 [13], 591 [28], 599 [65] per Stone J. After all, a fundamental purpose of the Parliament prescribing the norm of conduct enacted in s 52 of the Act is to ensure the protection of the public, particularly consumers. I reject Austcorp's argument that it did not engage in the conduct of providing to the applicants the brochure, leaflet and their repetitions by Mr Walker. Austcorp was the hands and brains of its subsidiaries' conduct and Austcorp cannot evade responsibility for any contravention of s 52 by seeking to draw down between itself and them a corporate veil for the contraventions it perpetrated: cf: Hamilton 166 CLR at 128; Campomar Sociedad Limitada v Nike International Limited [2000] HCA 12 ; (2000) 202 CLR 45 at 88 [108] . Austcorp argued that it could not be liable for Mr Walker's or PRD's conduct in distributing the brochure or leaflet or making the representations in the promotional material simply because of its involvement in their preparation or printing. It contended that Saatchi 134 FCR at 585 [32]-[39] supported this argument. Nothing that Moore and Mansfield JJ said there suggested that a promoter or principal (as opposed to an advertising agency that was an independent contractor) could not be liable in circumstances like the present. Nor does any delay between Austcorp's design of the brochure and leaflet, and their dissemination to the applicants prevent Austcorp being held to have made the representations complained of. Austcorp's conduct, when viewed as a whole, taking account of all the surrounding circumstances, brought about what it wanted; namely that the promotional material would be given to persons in the position of the applicants and that they would be induced to purchase an apartment: Barton v Croner Trading Pty Ltd [1984] FCA 195 ; (1984) 3 FCR 95 at 106-107 per Bowen CJ, Beaumont and Wilcox JJ. PRD and Mr Walker, as much as Austcorp's subsidiaries, were intermediaries in Austcorp's marketing plan: Barton 3 FCR at 107. So too does the leaflet. Because each of the applicants is an individual, who received and read the brochure and claimed to have been misled and deceived by it and Mr Walker's repetition or reinforcement of its contents, it is necessary to consider its effect on two levels. (The same considerations apply to the leaflet. ) I will consider later how each of Mr Owers, Ms Tan-Bounkeua, Mr Luciani and Mr and Mrs Di Giulio understood the material [3.1, 3.2 and 3.3]. The brochure was a document prepared for distribution to the public, but in circumstances where particular members of the public would read it and, as a consequence, be interested in pursuing the "prime investment opportunity" which it promoted. In Butcher 218 CLR at 604-605 [36]-[40], Gleeson CJ, Hayne and Heydon JJ discussed the principles to be applied where an alleged misrepresentation is made to a particular individual, even though the individual is one of a class of other persons to whom the same representation may have been made. They held that even though a representation may have been made to a class of persons, in a case like the present it is the individuals who claim to have been mislead and the person by whom they claim they were mislead whose relationship must be examined. The applicant for relief must establish a causal link between the impugned conduct and the loss that is claimed. Indeed, counsel for the purchasers conceded that the mere fact that a person had engaged in the conduct of supplying a document containing misleading information did not mean that that person had engaged in misleading conduct: it was crucial to examine the role of the person in question. Here, the claim against Austcorp was not alleged simply to be that it passed on to PRD and Mr Walker or through him to the applicants information from a vendor. Rather, the applicants alleged that Austcorp itself engaged in the conduct of making the representations to them through the promotional material (including what Mr Walker told them). In June 1999, Mr Walker had written to Mr Chappell saying that "the guaranteed return on investment is a prime consideration to prospective purchasers". And, Mr Chappell agreed with that assessment based on his then experience in selling property over nearly three decades. Mr Chappell considered a guaranteed return on an investment was obviously attractive to potential purchasers and sent a message to them that their investment was secure. He said that, based on his experience, he held the view in 1999 that marketing an investment as having a guaranteed return was a very powerful and forceful means of marketing. He acknowledged that one reason why it was attractive to investors to have a guaranteed return was because it told the investor that whatever happened in the market they would get the guaranteed return, even if there were some unforeseen circumstance. I accept that evidence. Before the brochure's wording was settled, Austcorp had used Coudert Bros, solicitors, to discuss with ASIC the use of the word "guarantee" and "net return 7%p.a. guaranteed ten years minimum lease" in an earlier form of marketing of the resort. With Mr Hung's approval, Coudert Bros had told the Commission, in August 1999 that the word "guarantee" was often used colloquially simply to mean '"assured" --- "a sure thing"'. They told the Commission that, in a strict sense, the return was guaranteed. That was because the lease which was accepted from each purchaser would provide the agreed percentage return in the amount of the rent identified by the contract (being 7% of the purchase price, payable each year). The Commission was told that "the rent (as with all lessee obligations) is guaranteed by Pacific International Hotels Pty Limited", although Coudert Bros did not mention that guarantee was limited to a maximum of 12 months of the initial rent. The rent payable is a predetermined amount in no way dependant on the serviced apartment business of others. It was essential that it have that skill, and exercise it, so as to ensure the commercial success of the significant projects it undertook. The significance of the resort to Austcorp can be seen from draft press releases Mr Chappell prepared in November 1999, describing the resort project as involving Austcorp constructing a $36 million development. That figure had been used, earlier, in an article publicising the project in the Sydney Morning Herald in August 1999. Mr Chappell and Mr Hung spent some time considering the form and wording of the brochure before it was printed. The marketing strategy, using the brochure, for the sale of the remaining 30% of the apartments in the resort was an integral component of the Austcorp group's involvement in the development. The statements made in the brochure (and the leaflet) were deliberately and carefully structured by the experienced hands and eyes of Mr Chappell and Mr Hung in such a way as to attract investors to the resort. In addition to their own skills they had expert assistance in that task from Mr Walker, solicitors and, Austcorp's advertising agency, Mobius. Mr Rainey also assisted in drafting the brochure and reviewing it with Mobius, Messrs Chappell and Hung. Mr Chappell understood that the statements in the brochure about the guaranteed return conveyed the meaning that the resort would be so successful that any investor would get 7%p.a. net of expenses. He thought that representation was lent considerable weight by the fact that well established companies like Pacific International Hotels and Austcorp were prepared to allow their logos be shown on the marketing material . He knew the imprimatur of those companies in the brochure, through the use of their logos, would give real assurance to potential investors that they would receive 7% net return on their investment every year for 10 years. Mr Chappell agreed that because those organisations were prepared to market the resort on that basis, investors would obtain comfort that those companies were absolutely confident that the guaranteed return would be achieved . And Mr Chappell also agreed that the statement in the brochure that "from day one your return will be a guaranteed 7%p.a. " was unequivocal and communicated to an investor that notwithstanding any vicissitudes in the market, they would receive that guaranteed return net of all expenses each year for 10 years. He considered that a guaranteed return on the investment was a prime consideration for a potential purchaser. As Mr Hung said, the use of the phrase "guaranteed return" in the promotional material was an important aspect of the marketing and enhanced Austcorp's ability to sell apartments in the resort. The impact of the brochure (and the repetition or emphasis of some or all of its messages by the leaflet and or Mr Walker) on each applicant was immediate and, I find, lasting. Its whole tenor was assurance, first of a 7% p.a. net return on the purchase price, secondly, of the good location of the resort, thirdly, of the good standing of the named operator, "Pacific International Hotels" and, last, of the absence of any thing which might go wrong with the earning of the 7% net return. The brochure presented, as it said, "a 5 star investment" and "an investment package without equal". The guaranteed return was, in Coudert Bros' phrase "a sure thing". Yet, despite the care and deliberation with which it was prepared, Austcorp submitted that the brochure was marketing material that contained a degree of puffery in the sense that Davies and Einfeld JJ had explained in General Newspapers Pty Limited v Telstra Corporation [1993] FCA 473 ; (1993) 45 FCR 164 at 178; Gummow J agreeing at 194. They said that in the ordinary course of commercial dealings, "... a certain degree of 'puffing' or exaggeration is to be expected. Indeed, puffery is part of the ordinary stuff of commerce". A puff is something that is not meant to be taken seriously or acted on: see also Downey [2005] QCA 199 at [92] per Keane JA. The Courts have long employed commonsense in determining whether or not a statement is a mere puff, as Lindley LJ explained in the great case of Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256 at 261 in relation to the defendant's assertion that its promise to pay a £100 reward to anyone who contracted influenza after having used its smoke ball was a mere puff which meant nothing. is deposited with the Alliance Bank, shewing our sincerity in the matter'. The deposit is called in aid by the advertiser as proof of his sincerity in the matter --- that is, the sincerity of his promise to pay this 100 l . in the event he has specified. I say this for the purpose of giving point to the observation that we are not inferring a promise; there is the promise, as plain as words can make it. And, as Black CJ, von Doussa and Cooper JJ said in Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 at 483E-G, the use of an expression such as "free" in connection with shares, depending on the context, can create a notion that the shares might be acquired without significant loss or outgoing, even though in other contexts in ordinary life people might understand similar usages differently. It depends on the context in which words are used as to whether or not their use is misleading or deceptive or likely to mislead or deceive. The overall impression created by the brochure in its ordinary and natural meaning is that of confidence. That is why the brochure recognised, and reassured a reader "its hard to imagine a real estate investment offering so much. From day one your return will be a guaranteed 7% p.a.". This reinforced the message of assurance. The reader was not to imagine that the promises in the brochure were a mere puff or simply an expression of confidence in the likely result of an investment. I reject Austcorp's submission that the brochure and the representations it conveyed were puffery which investors would recognise as such. Rather, the reader was being reassured that they were not imagining a real estate investment which offered so much --- instead the reader was told it was true; "a sure thing". The brochure stated in terms that there would be "... the security of strata title and a ten year lease to Pacific International Hotels". This conveyed that the entity named in the brochure as "Pacific International" or "Pacific International Hotels" would provide the assurance of accepting liability to the purchaser for the promises in a ten year lease, the most important of which was the rent generating the guaranteed return. The powerful marketing tool of a guaranteed return was an assurance of solidity of the investment. The repetitions of the theme of a 5 star investment throughout the brochure both in words and illustrations, again, reinforced the assurance the reader would take from it. Having considered terms of each of the brochure, and the leaflet, I find that each was, both, capable of conveying each of the representations pleaded (reading representations (b) and (g) as referring to "Pacific International" in the generic sense in which the brochure refers to that organisation or entity) and in fact would convey them to an ordinary reasonable reader. The question, of course, is not merely whether the brochure or the leaflet is capable of conveying those representations, but whether it did in fact convey them, or any of them, to the applicants as individuals. Austcorp argued that the potential investor would realise that whatever was said in the promotional material (the brochure, leaflet and Mr Walker's explanations) as Mr Walker foreshadowed, a formal process would ensue. This would involve the potential investor receiving the contract, with all the rights and obligations offered by the promoters set out in detail. The contract was over 170 pages in length and nearly 2 cm thick. The serious act of an investor signing and exchanging such a document knowing that it related to an interest in property, in general, will operate to bind the purchaser to the terms of the contract: Toll (FGCT) Pty Ltd v Alphapharm [2004] HCA 52 ; (2004) 219 CLR 165 at 182 [47] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ. The act of signature ordinarily conveys a representation that the person signing either has read and approved the contents of the document or is willing to take the chance of being bound by the contents whatever they may be: Toll 219 CLR at 180-181 [45]. Where the person who signs a contract to purchase an interest in property has a solicitor acting for him or her on the transaction, this representation will ordinarily be enhanced by the addition of the fact that the solicitor will have considered and advised his or her client on the legal effect of the document. Of course, where fraud or misrepresentation has operated to affect the contracting party's decision to sign, the Court may find that he or she will not be bound by the contract or the effect of the signature: Toll 219 CLR at 181 [46]. One reason for this is that the effect of the misapprehension induced, or caused, by the fraud or misrepresentation may have caused the innocent party either not to advert to a subject matter in the contract, at all, or to understand it in a sense different to that induced by the misapprehension. In other words, the effect of the misapprehension may affect the context in which the contract or document is understood by the person who signs it. Just as the construction of a contract is affected by the objective matrix of facts known to both parties, so too, a misapprehension induced or caused by fraud or misrepresentation will affect the quality of the assent ordinarily evinced by a signature. It is important to assess whether a misrepresentation was an operative cause of the decision of a person to enter into a contract. Ordinarily, a person who has made a false representation is under a duty to correct it before the representee acts to his or her detriment in reliance upon it. This is so in cases of fraudulent misrepresentation as Lord Reid explained in Briess v Woolley [1954] AC 333 at 349. Equally, in cases of unintentional contraventions of s 52 of the Act, a representee who relies on an uncorrected misleading representation (even where the representor does not know of the facts which make the representation incorrect) is entitled to relief under Pt VI of the Act: Campomar 202 CLR at 85 [103]. Whether something is a cause of something else is ultimately a question of fact although it can involve considering and applying difficult value judgments. When a person claims to recover loss or damage under s 82(1) of the Act, the question of causation is whether he, she or it has suffered that loss or damage "... by conduct of another person that was done in contravention of ..." here, relevantly, s 52. In Wardley Australia Ltd v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 525 Mason CJ, Dawson, Gaudron and McHugh JJ said that the word "by" as used in s 82(1) clearly expressed the notion of causation without defining or elucidating it. They held that, in general, this required using the common law practical, or common-sense, concept of causation unless the provisions of the Act operated to modify or supplement that concept. They said that where the claim under s 82(1) was to recover for loss or damage by misleading conduct consisting of misrepresentations done in contravention of s 52(1) , as at common law, "... acts done by the representee in reliance on the misrepresentation constitute a sufficient connexion to satisfy the concept of causation": see too Travel Compensation Fund v Tambree [2005] HCA 69 ; (2005) 224 CLR 627 at 639 [30] per Gleeson CJ, 642-643 [44]-[49] per Gummow and Hayne JJ, 645-647 [53]-[60] per Kirby J, 653-654 [78]-[81] per Callinan J. Notwithstanding that a representation is both false and fraudulent, if the representee does not rely upon it he has no case. The inference may be rebutted, for example, by showing that the representee, before he entered into the contract, either was possessed of actual knowledge of the true facts and knew them to be true or alternatively made it plain that whether he knew the true facts or not he did not rely on the representation. The representation need not be the sole inducement. It is sufficient so long as it plays some part even if only a minor part in contributing to the formation of the contract. Rather, it said that the brochure was distributed to prospective purchasers in a context where they could be expected to receive a detailed contract and get legal advice from their solicitors. Moreover, in the case of the Luciani applicants and Mr Owers there was evidence that each had been sent a disclosure statement further explaining the nature of the transaction into which they were proposing to enter. Austcorp argued that whatever the brochure may have communicated, each of the applicants would have understood that it could not possibly have contained the full nature and extent of the contractual relationship which they were to effect. It said that each of them would have understood that the guaranteed return was the rent payable under the lease. They would not have understood, so it contended, that Austcorp was providing any guarantee of the commercial success of the hotelier, Pacific International Hotels, or the operator of the hotel. Austcorp argued that no-one would think that it, as a developer, had commissioned some independent feasibility study of the long-term viability or success of the resort. It argued that the applicants' case was built on an illusion created with the benefit of hindsight and self-serving assertions. The fact that the brochure conveyed confidence in the prospects of the development, Austcorp argued, did not mean that there was a high level of assurance that the project and the resort would succeed. I reject that argument. The words of the brochure were calculated to convey assurance. The admissions by Austcorp that that was the purpose of using the words of the brochure, of a 7% net guaranteed return for 10 years, namely that it was the "sure thing" referred to in Coudert Bros' letter to the Commission in August 1999 make it clear beyond doubt that the power of this message was realised and deliberate. Of course, liability under s 52 does not depend on the intention of the corporation which engages in the conduct: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 at 197. Correct? --- It was through the lease they were proposing to enter into with the investor for a 10 year period. [...] Which was the whole basis of the offer. --- Not at the moment. --- I have, yes. --- I have. --- It doesn't. There are certain obligations under the lease which they enter into, the lessee and the lessor, which you can rely on depending on the person. --- Well, no, it's not guaranteed. --- Correct. --- Yes, it could. --- It may. --- Correct. --- It's possible, yes. --- That's true. --- No. --- It wasn't guaranteeing it, no. --- No. --- I'm agreeing that it didn't. However, I am also satisfied that the applicants' were worldly enough to realise that no-one would be able to give them a guarantee against the vicissitudes of the marketplace. No-one for example could have predicted the shocking events of 11 September 2001, or other economic events which might affect the Australian or international economies generally. It would be quite unreasonable for anyone to believe that a promoter of a resort hotel project in the Central Coast of New South Wales would be able to predict the outcome of the world economy over the succeeding 10 years and given assurance that nothing could happen which might so impact on the operations of the hotel that rent would not in any circumstances cease to be paid at the guaranteed rate. What is reasonable will of course depend on all the circumstances. The applicants relied on the analysis by Keane JA in Downey [2005] QCA 199 at [107] - [108] where he found that a representation that an established hotel operator, Radisson, considered the project was a guaranteed success would have been easily seen as of importance to an investor. The role which a representation can play in the formation of a state of mind is critical. In Butcher 218 CLR at 606 [43] Gleeson CJ, Hayne and Heydon JJ observed that it was a matter of common experience that questions of title to land could be complex, both legally and factually. Dealing with legal complexity was the role of solicitors, acting, where appropriate, on the advice of other specialists, such as surveyors. The question in that case was whether purchasers were entitled to rely upon a diagrammatic plan of the land being sold in a brochure prepared by a real estate agent. The brochure contained an express disclaimer by the agent of any belief in, or guarantee of, the accuracy of the information in it. Their Honours held that the brochure, read as a whole, in effect told the purchasers to rely upon their own enquiries and that it would then be plain to a reasonable purchaser that the agent was not the source of the information alleged to be misleading. They said that the agent there did not purport to do anything more than pass on information supplied by another or others and expressly, as well as implicitly, disclaim any belief in the truth or falsity of that information: Butcher 218 CLR at 608-609 [50]-[51]. Their Honours also observed that in a situation where a purchaser was intending to make use of statements or representations made in a brochure before entering into an important transaction, it was not inappropriate to look closely at the contents of the brochure before deciding whether a particular representation was made and by whom: Butcher 218 CLR at 616 [76]. In his dissenting judgment, McHugh J also said that in determining whether a contravention of s 52 has occurred, the task of the Court is to examine the relevant course of conduct as a whole, by reference to the alleged conduct in the light of the relevant surrounding facts and circumstances. He observed that the Court was not confined to examining a document, relied on as being the conduct or conveying a representation amounting to the conduct alleged to have contravened s 52 , in isolation, saying that the Court "... must have regard to all of the conduct of the corporation in relation to the document including the preparation and distribution of the document and any statement, action, silence or inaction in connection with the document": Butcher 218 CLR at 625 [109]. Austcorp submitted that the effect of Butcher [2004] HCA 60 ; 218 CLR 592 was that whatever had been pleaded as the cause of action by an applicant or plaintiff, the Court nonetheless had to look outside that, at all of the conduct of the respondent or defendant corporation to determine whether or not a contravention of s 52 had occurred. However, here, this issue does not arise because Austcorp had pleaded expressly the need to do so. It pleaded, in its defence, that the consideration of what was represented or not disclosed to the applicants by the brochure needed to be considered in the context of the applicants' actual knowledge and the knowledge of those acting on their behalf as to the nature and character and investments proposed, including in the particular apartment in the resort, the nature and character of the brochure and the entire course of dealings between the applicants, and their advisors in relation to the nature and characteristics of an investment in an apartment in the resort including the contract of sale and, where relevant, a disclosure statement. Austcorp asserted that when viewed as a whole, assuming that it had been involved in the making of the representations alleged, its conduct could not be described as misleading or deceptive. This was because the applicants could be expected to have a solicitor act for them and advise them as to the terms of the contract for sale, including the lease and the disclosure statement, thus disabusing them of any misconception which may have been generated by reading the brochure by itself. I am of opinion that on the evidence here the mere fact that the contract may have set out the full terms and conditions of the relationship which was to exist between the purchaser and the various parties with whom it was proposed the purchaser would enter into a relationship (the vendor (Landillo), the lessee (Mustara) and guarantor (Pacific International Hotels)) cannot, of itself, be enough to break a chain of causation from representations or impressions made by the brochure. Obviously, context is critical. But where the method for inducing persons to enter into consideration of a business proposition is to make assertions and valuations of the proposition in the form in which the brochure was expressed, a person who promotes the sale through the brochure cannot complain if a purchaser takes the promoter at his word. The whole point of having the brochure was to make people interested in the commercial proposition of the purchase of an apartment in the resort. What was the commercial proposition if not a promise or assurance that that the investment would return 7%p.a. net for 10 years to the purchaser? And, lest the intending purchaser might think otherwise, he or she was assured by the statement that "its hard to imagine a real estate investment offering so much. From day one your return will be a guaranteed 7%p.a.". The purpose of telling a prospective purchaser that the return was hard to imagine was to assure him or her that they were not imagining it, that it would be assured to them by means of a lease that would be granted providing that return. And, they were assured that a reputable hotel operator, Pacific International Hotels, would be the organisation providing the lease. I am of opinion that there is a material difference between the unqualified assertion in the brochure that the operator of the resort and lessee of the apartments was Pacific International Hotels and the actual position where Mustara was to be the operator and its performance was guaranteed to the limited extent provided by cl 20.9. It would have made no material difference to a person proposing to enter into the transaction had the guarantee been unlimited and cl 20.9 not been present. But, the presence of the limitation in cl 20.9 changed the nature of the investment. That limitation conveyed a lack of complete confidence and commitment to the long term success of the resort on the part of Pacific International Hotels. No longer was there an unconditional guarantee or promise of Pacific International Hotels' continuing support of the payment of the rent. Rather, cl 20.9 conveyed the clear understanding that Pacific International Hotels did not stand fully behind the investment which it was promoting with Austcorp. In other words, cl 20.9 conveyed that Pacific International Hotels did not have the confidence portrayed in the brochure of the " security of a 10 year lease to Pacific International Hotels". There was no such lease at all. Instead there was a 10 year lease to a $2 company, Mustara, which Pacific International Hotels had guaranteed to the limited extent of cl 20.9. The brochure was designed by Austcorp, with the considerable expertise of Mr Chappell and Mr Hung with a view to attracting investors. Indeed, it was critical for Austcorp's purposes to obtain sales of the remaining 30% of the units referred to in the brochure to make their project a commercial success. The brochure was not a mere puff intended to be treated by purchasers or potential purchasers as something which could be put to one side when the contract for sale arrived. The brochure, rather, was expressed in unqualified, optimistic and prospective terms. It was intended to lead investors to make a decision to purchase based on the belief that the investment was a sound one. The concept of "guaranteeing a result" is not something that is usually associated with puffery but with the making of a firm commitment for which responsibility will be taken. The phrase 'guaranteed success' cannot be construed as a puff. These applicants were ordinary members of the public, not professional landlords or real estate investors or developers. They were the very class of persons who were intended to be attracted by the brochure viz: namely the kind of investor who would be looking for a return in something which it was hard to imagine could be offered at that level. One always gets back to the fundamental question: what is the meaning that the words convey to the ordinary man: you cannot make a rule about that . In Campomar 202 CLR at 83 [98], Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ emphasised the need to enquire why any misconception had arisen in the mind of the person claiming have been misled or deceived. A sufficient nexus must exist between the conduct complained of and the misconception or deception. Austcorp argued that the nexus was, in effect, broken because the contract was a legal document which set out with considerable precision and at length the actual relationship that would exist if a person entered into the contract and the lease. For example, it argued that it was not reasonable for a person in the position of Ms Tan-Bounkeua not to have had a solicitor advising her and that, had she done so, the solicitor would have broken the chain of causation, even if he or she negligently failed to advise the purchaser of the provisions of cl 20.9 or the existence of Mustara. I discuss this specific issue below [See 2.18]. Gibbs CJ observed in Puxu [1982] HCA 44 ; 149 CLR 191 at 199 that the Act did not impose burdens which operated for the benefit of persons who failed to take reasonable care of their own interests: see too Campomar 202 CLR at 85 [102]. Of course here, I must consider the impression that the words of the brochure made upon each of the applicants, in light of the context, including the fact that there would be a contract sent to them or their solicitor. And, in the ordinary course it could be expected that a solicitor would act, although in Ms Tan-Bounkeua's case that did not eventuate. But a solicitor is not a commercial advisor. Having set out to assure people that the guaranteed return would be earned, it ill lies in the mouth of Austcorp to say that they should not have believed that when they entered into the contract because their solicitors should have disabused them of those impressions. I reject that submission. You might have discovered that what we call 'interim investments' was really the abatement in price effected by purchasing charges on the property at a discount. " My Lords, I decline altogether to take any notice of such an argument. I think the statement in the prospectus as to the price of the property was deliberately intended to mislead the shareholders and to conceal the truth from them. Austcorp was prohibited from engaging in conduct which was misleading or deceptive or likely to mislead in this trade or commerce, namely the sale of apartments in the resort. The brochure was not a mere puff. The statements about the resort, the quality of the investment and the prospective earnings to be achieved from it were advanced as serious business propositions. Moreover, it is difficult to see how the brochure could have been read in any other way. If, on examination, the nature of the project or the returns promised in the brochure were overstated or not supported, the investor would not proceed. He or she would then mistrust the promoters. Had Austcorp wished to disclaim liability for what was said in the brochure or to have advised investors or members of the public who read it that they could not rely on it, it would have been easy to put a disclaimer on the document. But, there is not a word of caution in the brochure. It is full of optimistic predictions and assurances of a long term and significant return. And, of course, a disclaimer might undermine the message of a "sure thing". Austcorp or the other promoters did not exhort the applicants to make their own inquiries about the "guaranteed" return or the certainty of its receipt unlike in Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd [2005] FCAFC 131 ; (2005) 220 ALR 211 at 232 [104] per Branson, Nicholson and Jacobson JJ. While I am satisfied that it would be unreasonable to read the brochure as offering an assurance against anything that might happen in the market, the use of an apparently reputable hotel operator's name, Pacific International Hotels, in connection with the promise of a 7% p.a. return for 10 years from the investment was calculated to induce confidence that the promoters of the venture had a foundation for the confidence expressed concerning future matters. Those who were named in the brochure as organisations, rather than particular identified corporate identities, included the hotel operator, as "Pacific International", and a developer, "Austcorp". Ordinarily, a statement which involves the state of mind of the maker will convey the meaning expressly, or by implication, that the maker of the statement had a particular state of mind when it was made and, commonly, that there was a basis for that state of mind: Global Sportsman Pty Limited v Mirror Newspapers Limited [1984] FCA 180 ; (1984) 2 FCR 82 at 88 per Bowen CJ, Lockhart and Fitzgerald JJ; RAIA Insurance Brokers Limited v FAI General Insurance Co Limited [1993] FCA 92 ; (1993) 41 FCR 164 at 172-175 per Beaumont and Spender JJ, with whom Davies J generally agreed at 165-166. Significantly, the brochure did not contain any reference to cl 20.9 of the lease. There was no hint of a qualification that those backing or promoting the investment, the subject of the brochure, had any reservations about it. I am of opinion that the limitation in cl 20.9 was an important one. It indicated that Pacific International Hotels, as the parent company of Mustara, was not prepared to commit itself to supporting the resort and the "guaranteed return" in the sense of an assured return secured by the lease, beyond a maximum of the total of the first year's rent (unadjusted for CPI or market increases). In one sense, as Austcorp urged, the giving of that guarantee was a valuable promise, and overall committed Pacific International Hotels to an expenditure somewhere in the order of 7% of the total price which, in itself, was a substantial sum of money. But the existence of the qualification, that Pacific International Hotels was not prepared to go beyond such a guarantee, qualified the confidence with which the promotion was being made. As a matter of commonsense a reference to that qualification in the brochure would have substantially diluted its marketing impact. It was a qualification which the promoters of the venture, and in particular Austcorp, did not put into the brochure. In other words, Austcorp submitted, in effect, that it was free to make the unqualified and confident assertions of the success of the venture in the brochure in the hope that a solicitor would draw to the prospective purchasers' attention the nature of the limitation of the guarantee, which might otherwise diminish the confidence the brochure conveyed. The assertion by Austcorp, that it could expect a solicitor to advise about this matter so as to disabuse purchasers of the very impression which the brochure was calculated to convey, is unattractive. It suggests that it is possible for corporations to make misleading and deceptive statements in such brochures which, of themselves would contravene s 52 of the Act, but then rely upon the professional advisors of the person misled by the brochure to correct the wrong impressions. While I accept that a careful solicitor ought to have picked up the significance of cl 20.9 of the lease, the evidence before me indicates that solicitors did not always do so. Indeed, Austcorp recommended that Mr Walker distribute to purchasers the memorandum prepared by Penhryn Parker, solicitors, identifying the significant features of the transaction. That memorandum in itself did not pick up the limitation in cl 20.9. Nor did Mr Owers' solicitor pick it up. While Mr Fullerton, who advised the Luciani/Taldarmar applicants did pick it up, I am satisfied that by failing to advert in the brochure itself to any limitation of confidence by those promoting the venture such as is contained in cl 20.9, should sound against Austcorp where solicitors for purchasers or the purchasers themselves did not pick this up. After all, Austcorp set the misleading representations in motion. It cannot simply rely upon the overstatements in the brochure to be corrected where they were seriously made and used as powerful marketing tools by it in preparing the brochure with the knowledge that they had that affect. in a concealed label or the 'fine print' of a contract . No attempt was made by Austcorp to guard against any misunderstanding by persons who read the brochure or leaflet or saw the sign that some other Austcorp company might have been the developer or involved in the development and that Austcorp had no such involvement. The reality was the contrary. Austcorp was involved in many detailed ways, albeit for the group's internal purposes and for some important formal purposes, care was taken to ensure that when making contracts with third parties, one or other subsidiaries of that company was the contracting party. That does not deny that Austcorp itself engaged in the conduct in trade or commerce allowing itself to be associated as a promoter in the promotional material. The promoters' lack of commercial ethics of including such provisions as cl 39 is self-evident when the apartments were being marketed to potential purchasers in the way I have described. I reject this argument. First, Austcorp was not a party to the contract or disclosure statement even if it were the puppet master behind them. Secondly, a corporation cannot engage in a contravention of s 52 of the Act and then seek to excuse itself from liability to relief being granted against it under Part VI on the basis that it, or another person, has sought to negate the effect of the contravention by provisions like cl 39 or the disclosure statement without, at least, making full, intelligible, and frank disclosure of the true position so as to negate its earlier contravention. Thirdly, in honest trade and commerce contractual exclusions like cl 39 and documents like the disclosure statement may have some effect. The courts have recognised that they may be given effect, depending on all the circumstances, as evidentiary of the complaining party's state of mind having been disabused of any relevant misleading or deceptive conduct: cf: Warwick Entertainment Centre Pty Ltd v Alpine Holdings Pty Ltd [2005] WASCA 174 ; (2005) 224 ALR 134 at 147-148 [59] - [60] per Steytler P, 164 [133] per McLure JA and 164-165 [135]-[141] per Pullin JA. It is a question of fact whether a disclaimer or a contractual provision modified the antecedent or other conduct as Gleeson CJ, Hayne and Heydon JJ illustrated in Butcher 218 CLR at 613-614 [70]-[72] in discussing what Burchett J had said in Benlist Pty Ltd v Olivetti Australia Pty Limited [1990] ATPR p41-043 at 51,590. In both those cases there were disclaimers in marketing material. Of course, if the clause actually has the effect [of] erasing whatever is misleading in the conduct, the clause will be effective , not by any independent force of its own, but by actually modifying the conduct . However, I should think it would only be in rare cases that a formal disclaimer would have that effect. ... In the present case, the suggestion of the suitability of the building for strata title conversion might continue to influence the mind of a prospective purchaser notwithstanding his awareness of the existence of a disclaimer clause, which did not single out the particular representation, but purported to apply generally to every detail stated in the investment report. If it were permissible to avoid the operation of [the Act] by such a clause, it would be all too easy to make representations in the confidence that they would be acted upon, and then withdraw them in the confidence (equally important for the securing of the desired business) that the withdrawal would not be acted upon . Austcorp then changed its advertising material by removing all references to a "guarantee", "guaranteed return" and the claim of "lucrative minimum 7% net return guaranteed". The theme changed to "Top up your Super. Waterfront apartments with 7% return". Messrs Chappell, Hung and Zantiotis made annotations on drafts for the new material which was also discussed with Mobius. None of them had any recollection of why the change was made. Mr Chappell suggested that the change, removing all reference to "guarantee", may have been for stylistic reasons. At one point, while the annotations on the draft copy of the advertisement were being made, Mr Zantiotis was on leave. Austcorp suggested that this explained why Mobius sent a revision of the artwork with some of these changes to Mr Chappell. I reject that. Sales of the last seven apartments were important to Austcorp securing a profit from the development. Mr Hung observed that at this stage in developments, when construction of the building was close to completion, it is hard to sell apartments off the plan. He said that purchasers prefer to wait for the finished product. So, he said that the purpose of this particular advertising in May 2000 was to keep the public aware of the apartments' availability for purchase. But, as Mr Hung acknowledged, removing the expression "guaranteed return" made the marketing message less attractive and less persuasive. The applicants argued that this significant change in the marketing approach occurred because Austcorp was conscious of the misleading and deceptive nature of its use of "guarantee" in promoting the sales of apartments in the resort. Austcorp contended that the reason for the change was not related to that explanation. It relied on the fact that Mr Zantiotis, who was no longer employed by Austcorp, and was disinterested, had no recollection of any contemporaneous concern about the use of "guarantee" in promotional material. This debate is not as material as the parties made it. Liability under s 52 does not depend on the state of mind of the corporation whose conduct is impugned. Nonetheless, I consider that the likely reason for the change was to adjust the focus of the promotion to catch the eye of potential purchasers: that is to put a new emphasis, rather than being seen by readers as repetitious of what they had already seen that had not been sufficient to interest them. It is unlikely that after ignoring the earlier legal advice, to which I have referred, and approving the use of the disclosure statement that referred to the guaranteed return, Austcorp began to have second thoughts about the validity of the concept of its earlier marketing campaign. " The applicants argued that Austcorp was also liable for the conduct of its subsidiaries, PRD and Mr Walker by force of s 84(2)(b) of the Act. They contended that the conduct complained of was engaged in "on behalf of" Austcorp within the meaning of s 84(2)(b) by one or more of those other persons (each of subsidiaries, PRD and Mr Walker) who acted at the direction or with the consent or agreement of Austcorp (or its directors Messrs Chappell and Hung, or officers Messrs Zantiotis and Rainey). Thus, the applicants argued that s 84(2)(b) deemed the conduct of those other persons to have been engaged in by Austcorp. After extensively reviewing the authorities in NMFM Property Pty Ltd v Citibank Ltd [2000] FCA 1558 ; (2000) 107 FCR 270 at 550 [1244] Lindgren J concluded that an act is done "on behalf of" a corporation for the purpose of s 84(2) if either the actor engaged in the conduct intending to do so as representative of or for the corporation, or the actor did so in the course of the corporation's business, affairs or activities. He also concluded that it is not necessary to show that the actor engaged in the conduct for the benefit of the corporation: see too Walplan Pty Ltd v Wallace [1985] FCA 479 ; (1985) 8 FCR 27 at 37-38 per Lockhart J, (Sweeney and Neaves JJ agreeing); Downey [2005] QCA 199 at [56] - [60] per Keane JA. Austcorp's business, affairs and activities were centred on property development. Mr Chappell's managing director's review in Austcorp's 1999 annual report identified the resort as a joint venture project with Great Pacific being developed on prime Central Coast waterfront land. He noted (as at 17 September 1999) that 70% of the 145 apartments had been pre-sold. I am satisfied that the course of Austcorp's ordinary business, affairs and activities in relation to the development and marketing of apartments in the resort involved it in the range of activities in which, its officers, and any subsidiary, PRD and Mr Walker acted in its or his dealings with each applicant. The conduct complained of in making the representations was engaged in on behalf of Austcorp by those, officers, subsidiaries, PRD and Mr Walker. Thus s 84(2) has the consequence that it is deemed to have been engaged in by Austcorp. 3. Inevitably, each of the applicants who gave evidence and Messrs Chappell and Hung were giving an account of events that happened years before and about which they had not given much, if any, thought until recently for the purpose of this litigation. I agree with the caution expressed by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 319 concerning evidence of this kind. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. It claimed that the important nature of the transactions and the fact that a solicitor could be expected to explain the contractual documents accurately, so as to dispel any misapprehension or misrepresentation, weighed against a finding that the representations complained of were relied on at all by the time of execution or completion. And, Austcorp argued that the failure of the applicants, other than Ms Tan Bounkeua (who had no solicitor), to call the solicitor acting for them was a powerful factor undermining the reliability of their evidence. Here, however, there is the objective evidence of the contents of the brochure and other promotional material (including the unchallenged, and inherently likely evidence of Mr Walker's repetition and reinforcement of its messages in his discussions with each applicant). There is no doubt that these conveyed the powerful messages of assurance and success of the investment contained in the representations. In general, these factors lend force to the applicants' claims that the representations were relied on by them at the time they entered into their contracts, completed them and executed their leases. I will, of course, consider each applicant's individual circumstances separately below. But, as a matter of ordinary human experience, powerful marketing messages tend to have a sustained effect. I have had regard to Austcorp's arguments in assessing each applicant's evidence. Of course, each transaction was important to the individual applicants. But Austcorp was asserting that other people (solicitors) or other factors (the full contractual documentation and, where relevant, the disclosure statement when read and properly understood) would undo completely the very state of mind its marketing activities had induced by conveying the representations complained of so as to induce the applicants to proceed. It is not an attractive argument. Marketing messages are simple and powerful. While legal fine print may be contractually decisive, it is usually far less interesting to a lay person. The six lucid pages of the brochure (and the equally lucid other promotional material) had no fine print or qualifications. Austcorp was using the same forensic tactic as Mr Gluckstein did a century ago --- it was asking the applicants to read, in court in 2008, with distrust and cynicism what it wanted them to read, believe and act on in late 1999 and 2000. Lord Macnaghten's rejection of that approach remains entirely apposite: Gluckstein [1900] AC at 251-252. Austcorp submitted that an adverse inference should be drawn against the applicants for failing to call their solicitors: Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298 ; Blatch v Archer [1774] EngR 2 ; (1774) 1 Cowp 63. Austcorp argued that the applicants could and should have called the solicitors who acted for them on the transactions and that their failure to do so could be used, not only to support the proposition that the solicitors' evidence would not advance their cases but also to suggest that they had not discharged their onus of proof. First, the applicants had waived legal professional privilege on their solicitor's contemporaneous files. Indeed, Austcorp itself called one of those solicitors, Mr Fullerton, who acted for Luciani/Taldarmar. Secondly, the likelihood that any solicitor, eight years later, would retain any recollection of an unremarkable conveyancing transaction let alone the detail of any advice or conversation with his or her client is remote if not fanciful. Mr Fullerton and the firm he had worked for had detailed file notes. There were no comparable file notes tendered from Mr Joseph's file (who acted for Mr Owers). It is safe to infer that Mr Joseph, like Mr Fullerton, would have had no recollection independent of the material in his file. Solicitors who practise in conveyancing routinely carry out many transactions every year and could not be expected to retain some memory of these particular conveyances for the applicants so long after the event. Nor was there any inhibition in Austcorp calling Mr Joseph, had it wished. While no doubt it is fair to infer that his evidence would not have assisted Mr Owers' case, that inference is tempered by the concomitant inference that I would not expect him to have any recollection of what occurred in his advising Mr Owers without contemporaneous notes. I also infer that the absence of such notes from the evidence, suggests that Mr Joseph's evidence would not be likely to have had any real bearing on establishing what he and Mr Owers said to each other. Mr Owers instructed Mr Joseph to act for him again in 2006 on a conveyance, although he was disappointed with the job Mr Joseph had done in 2000 in explaining the lease to him. I do not consider that this affects my conclusion relating to Mr Owers not calling Mr Joseph and his likely inability to recall anything of substance from his acting in 2000. In effect, Austcorp suggested that Mr Owers should have called Mr Joseph to confirm that he had not informed his client of the limitation in cl 20.9 either when advising on the entry into, first, the contract, and later, the lease. In my opinion, if that argument were correct, Mr Joseph would have had a potential exposure to a claim for professional negligence by Mr Owers. That provides a reason why he would not be in the same interest as his former client and would be available to be called by either party. I do not see that Mr Joseph was in Mr Owers' camp. It was open to Austcorp to call him, and indeed it called Mr Fullerton who had acted for Luciani/Taldarmar. Even so, Austcorp wished to have the inference found in its favour that a solicitor would draw attention to a provision it had not included in the promotional material so as to undo the effect of the very representation its conduct conveyed. I am not satisfied that this would be appropriate or serve the purpose for which s 52 was enacted. A cause of Mr Owers' and Ms Tan-Bounkeua's loss was their reliance on the representations complained of. Those representations did not suggest the existence of the limitation in cl 20.9. Moreover, solicitors such as Penryhn Parker did not always draw cl 20.9 to potential clients' attention. The most that Austcorp can suggest here is that another cause of these applicants' losses may have been their failure to obtain legal advice that cl 20.9 had the effect of limiting Pacific International Hotels' liability under the guarantee. In Mr Owers' case, Austcorp contended that his failure to call oral evidence from Mr Joseph 8 years after the event compels an inference that, first, Mr Joseph's evidence would not have assisted Mr Owers' case (which I have drawn) and, secondly, that evidence would have told against Mr Owers or that I should not accept his evidence that he was unaware of the effect of cl 20.9 (which I decline to draw). Section 82(1) of the Act permits recovery by an applicant for loss or damage notwithstanding his, her or its failure to mitigate or contributory negligence unless the applicant's own carelessness or disregard of his, her or its interests is the cause of some or all of the loss or damage: Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274 at 286G-287C per Fisher, Gummow and Lee JJ applying what French J had said in Pavich v Boira Nominees Pty Ltd [1988] ANZ Conv R 556 at p 23; see too Sykes v Reserve Bank of Australia (1998) 88 FCR 511 at 517B-E per Heerey J, Sundberg J agreeing at 521F. The misrepresentations were a link in the causal chain between Mr Owers' entry into the transaction and his loss: cf: Henville v Walker [2001] HCA 52 ; (2001) 206 CLR 459 at 469 [14] per Gleeson CJ. At best, from Austcorp's perspective, there may have been two concurrent causes of the imprudent decisions of Mr Owers and Ms Tan-Bounkeua to buy their apartments and lease them to Mustara. Austcorp's conduct was one of the causes, the other being those applicants' failure to receive legal advice exposing to them the effect of cl 20.9. In late April 2000 he was about 38 years old, married with two young children. He has subsequently divorced. He and his family were on holiday at The Entrance. He and his wife owned their family home and he owned an investment property in Lithgow. At the time he was looking for another investment property and had engaged a local Lithgow estate agent to alert him to potential acquisitions. Mr Owers had some friends who had invested in Defence Force housing in Townsville which had a guaranteed return of about 5% to 6% for 3 to 9 years. Only after the proceedings had commenced in late 2006 did Mr Owers first have occasion to turn his mind to recalling the events of 2000, including any understanding he gained of his contractual rights from discussions with John Joseph, his solicitor. Mr Owers was an honest, careful, and generally reliable witness. Nonetheless, his memory of events in 2000 was affected to some degree by the lapse of time between then and when he gave evidence. During the holiday he was with his family in a row boat near the bridge at The Entrance and saw the development under construction. Later they walked past the site and he went to PRD's offices where they met Mr Walker. He gave Mr Owers a copy of the brochure and a schedule with details of units still available, their asking prices and the rent guaranteed. At first, Mr Owers was interested in two apartments, a one bedroom one offered at $330,000 and a two bedroom one that he was told, initially, was offered at $380,000. (On the next day Mr Walker corrected the latter price to $395,000. ) Mr Owers noticed the amount of the rents on the schedule and did some calculations on it. He worked on an assumed interest rate of 9% on the balance of the purchase prices for each of the units after an initial payment of $30,000 in cash. He calculated that he would be liable to the financier for a net sum of $80 per week for the one bedroom apartment and $100 per week for the two bedroom one. During the first meeting with Mr Walker, Mr Owers enquired about the aspects of each of the two apartments in which he was interested. Mr Walker told him that each had a north east aspect with water views and a car parking space. Mr Walker said that the resort was in a boom area and that The Entrance was going well. He said that the Council had done a lot of work to improve the area. Mr Walker told Mr Owers that there was a 7% net return guaranteed after all outgoings had been met by the operator, the guaranteed return was for 10 years and there were two options for further leases, each of 10 years. Mr Walker said that the operator would have to pay for refurbishing the unit and was responsible for maintaining it to a four star rating. He said that the operator was "Pacific International" which had a good reputation and it also operated other properties. Mr Owers thought that Pacific International appeared to be a professional organisation and was impressed that it would make direct deposits into his bank account. Mr Owers worked on the schedule and his calculations overnight. The brochure appealed to him and gave every indication to him that the development would be a success. It depicted The Entrance to him as a thriving environment which was going through good capital growth. The resort had conference facilities and would be the only development of its kind in The Entrance area. It appeared to him to be a very sound investment. He was impressed by the brochure's reference to the guaranteed rental. He used this to calculate the amount that he would be out of pocket if he made a long term investment. He understood that the guarantee was for a minimum 10 years, the rental was linked to the consumer price index and was re-valued to market from time to time. He also read in the brochure that the area was growing. This led Mr Owers to consider that an apartment in the resort was a solid investment because of the guarantee of a minimum return for 10 years. The next day Mr and Mrs Owers met again with Mr Walker who took them for a drive to look at other possible investment properties. He showed them one that was about 30 years old. Mr Walker told them it was worth between $250,000 and $280,000 and would provide a return of between 2% and 3% if let for the holiday market. Mr Owers thought that was a low return. They went back to Mr Walker's office where he outlined his career in real estate and discussed The Entrance and the Central Coast. He said that he was the sole selling agent for the resort, that the apartments were in pretty high demand and there were not many left unsold out of the 145. Mr Waker went through reinforcing aspects of the brochure with Mr and Mrs Owers. He confirmed that there was a 7% net return with a minimum lease of 10 years with two 10 year options and it was being run by "Pacific International". Mr Walker referred also to the CPI and market value adjustments for the rent. Mr Walker told them that it was a good opportunity. As a result of studying the brochure and his conversations with Mr Walker, Mr Owers saw no risk in proceeding with the investment. Mr Owers felt assured that the investment would be in a booming area and the return was guaranteed by a large professional hotel operator. Consequently, during the second meeting with Mr Walker on 28 April 2000, Mr Owers decided that he wished to make the investment. He left his wife with Mr Walker and went to his bank to withdraw $1,000, in cash, returning to pay this to Mr Walker as a deposit. The contract was exchanged in June 2000 but it had been sent to Mr Joseph by Teys McMahon in early May. Teys McMahon also sent Mr Joseph a copy of the disclosure statement on 2 May 2000. He did not give evidence, nor did anyone from Teys McMahon. No document is in evidence recording the giving or receipt of the confirmation sought in Teys McMahon's letter of 2 May to Mr Joseph. Mr Owers said that he did not see the statement. He said that he first saw the letter and disclosure statement in the year before he gave evidence and he was not challenged on this in cross examination. I accept Mr Owers' evidence. On 5 May Mr Joseph wrote to Mr Owers advising him that he had received the contract. Mr Joseph asked Mr Owers to contact his office "... to make an appointment to sign (sic) same [contract] as soon as convenient". The letter does not refer to the disclosure statement, though it may have been sent before Teys McMahon's letter had been received by Mr Joseph. Even if Mr Owers (and I) were mistaken about his not having seen the disclosure statement in 2000, all that Mr Joseph was asked to do by Teys McMahon was to give it to Mr Owers. The document was so unhelpful and difficult to read that it is unlikely that Mr Owers would have spent any time on it. For the reasons I have given I do not consider that the disclosure statement would have modified or extinguished the powerful, but misleading and deceptive representations in the brochure and other promotional material had Mr Owers seen it. Mr Owers had spoken to Mr Joseph once to inform him that he was in the process of making the purchase and saw him a second time to sign the contract. He spent about 15 to 20 minutes in a short meeting with Mr Joseph when he signed the contract. Mr Joseph went through the contract details with him concerning the unit number, the location and the price. The next time he just dropped in to give Mr Joseph a cheque to conduct searches in connection with the purchase. Mr Owers said that at the time he first saw Mr Joseph, he was not aware that Mustara would be the lessee and that "Pacific International" would be the guarantor. However, he said that he became aware of those matters later in 2000 when Mr Joseph explained the lease to him prior to him having to execute it. While I consider that Mr Owers was giving that evidence to the best of his recollection, I find that it is inherently likely that Mr Joseph did explain to Mr Owers that Mustara would be the lessee and that Pacific International Hotels would guarantee Mustara's performance of the lease. Those matters would have been obvious to any solicitor looking at the contract for the purpose of advising his or her client on it. Mr Owers said that when Mustara's role was first raised he suggested to Mr Joseph that it was a subsidiary of "Pacific International". I find that this discussion occurred prior to his entering into the contract. Mr Owers then "... believed [Mustara] were part of the Pacific International company or acted on behalf of the Pacific International company". His understanding of that being the relationship between Pacific International Hotels and Mustara was the natural result of what the brochure expressly said namely: that the unit came with "the security of strata title and a 10 year lease to Pacific International Hotels". I have rejected above [3. ] Austcorp's argument that Mr Owers should have called Mr Joseph to confirm that he had not told him about the limitation in cl 20.9 of the lease, either at the time of contract or later when the lease was executed. I accept Mr Owers' evidence that his understanding of the lack of risk in the investment did not change at any time before he completed the purchase and signed the lease to Mustara. I am satisfied that if Mr Owers had been told (by Mr Joseph or any one else) that "Pacific International" was only prepared to guarantee 12 months worth of rent he would not have proceeded because he would have regarded his potential exposure as unacceptable. Austcorp argued that there was no basis to find this because Mr Owers only expected to get a lease from Mustara which was a subsidiary of Pacific International Hotels. I reject that argument. Mr Owers also understood that companies in a group used their assets to support one another to meet their obligations. He worked for a company in a coal mining group. Mr Owers' understanding based on his own experience was that Mustara was part of the Pacific International Hotels' group and that, in effect, each group member would support one another financially. That understanding was consistent with the terms of the brochure and, reflected in a practical way a lay person's working out of the usual position of corporate groups. He understood that "... Pacific International ... was a big company that had multiple operations and they would act as a company ..." He also understood that Pacific International Hotels guaranteed Mustara's performance and that, therefore, for practical purposes it was not important that Mustara was the lessee. This understanding (which I accept) was unequivocally conveyed by the brochure. It would have been broken down had he appreciated that Pacific International Hotels had limited its guarantee by cl 20.9. Because I believe Mr Owers, I am satisfied that Mr Owers was not made aware of cl 20.9 or its effect by Mr Joseph or otherwise prior to his completion of the contract and entry into the lease. Mr Owers read the lease only after Mustara failed in May 2002 and then came to realise that Pacific International Hotels liability was limited by cl 20.9. He did not turn his mind to what level of occupancy his apartment might achieve because the guaranteed 7% net return had no provisos. Mr Owers understood that there was a risk that the hotel operator might be unable to pay the rent. But he thought that this was very unlikely to occur because the resort would be operated by a credible operator, Pacific International Hotels, a large company with several other hotels and resorts throughout Australia. Thus, Mr Owers understood that there was a risk, though (he thought) very remote, that Pacific International Hotels might not be able to ensure that the guaranteed 7% net return would be paid for the 10 years. Mr Owers did not spend time thinking about any relationship between the return he was promised and the profit being generated by the operator of the resort. This was because he understood that he would get his net return whether the operator made a profit or not. He assumed that in some months the operator would make a loss and, in others, a profit but that overall the resort would make money. Had he been made aware that the company which was to operate the resort was not part of the Pacific International Hotels' group, or was just a two dollar company incorporated in 1997, Mr Owers said that he would not have proceeded if the operator had no credibility. I infer that he would have weighed up what he knew of the operator to make an assessment of how that affected the risk of achieving the promised return and the other benefits of the investment. I find that Mr Owers went ahead with the purchase of his apartment because he considered it to be a good, solid, long-term investment in real estate that had a guaranteed return and little risk. I find that he relied on representations (a)-(g) as conveyed by the brochure and Mr Walker's reinforcement of them in coming to that assessment. Ms Tan-Bounkeua was a finance manager with the Commonwealth Bank at the time and had a bachelor of business degree. She was 34 years old and had just fallen pregnant with their first child. Mr Bounkeua also was 34 and worked in the finance industry. At the time of meeting Mr Walker he worked in the conveyancing section of the same bank as his wife, but he was not a qualified solicitor or conveyancer. He later worked for a finance broking business. The couple approached Mr Walker who handed them the brochure and the leaflet. They had a discussion with him in which, again, he, in effect, repeated the substance of what was in the brochure. He told them that Ms Tan-Bounkeua could get taxation advantages and gave her sample depreciation calculations. Ms Tan-Bounkeua said that the key matter for her was that Mr Walker explained that the investment was a guaranteed 7% net return for a 10 year lease and that the operator would be Pacific International who would guarantee the lease and offer two further 20 year options in a growth area. She understood that Pacific International was a chain of hotels but did not know whether the lessee would be a subsidiary or parent in that chain or the lessee's relationship with other companies in that group. However, she understood that her actual prospect of obtaining the guaranteed rent over the period of the lease depended upon the financial strength and wellbeing of the lessee. Ms Tan-Bounkeua understood at the time she was considering the purchase of her apartment that the lessee took the risk that it would have to pay the guaranteed rent of 7% net of the purchase price, whether or not it would trade well from its operations. In that way the rent was "guaranteed". She did not understand the "guarantee" to involve some other third party guaranteeing the lessee's obligations. However, she understood that the lessee would be "Pacific International" as the brochure stated. That understanding was reinforced by the get up of the cover sheet of the contract which Ms Tan-Bounkeua received from the solicitors for the vendor. After the first meeting with Mr Walker, Mr Bounkeua and Ms Tan-Bounkeua discussed going ahead and agreed that, because she was in a higher tax bracket on her salary than he, the purchase would be made in her name. She paid $1,000 as a holding deposit to PRD. Both Mr Walker and Coudert Bros, the solicitors acting for the vendor, sent letters to Ms Tan-Bounkeua and her husband indicating that they understood that Mr Bounkeua was a solicitor acting for her. Ms Tan-Bounkeua and her husband asserted that, in response, they informed Mr Walker and the solicitors that Mr Bounkeua was not a solicitor. I do not accept that evidence. Mr Bounkeua falsely completed and returned to Coudert Bros, as Landillo's solicitors, a certificate under s 66W of the Conveyancing Act 1919 (NSW) dated 14 December 1999. It certified that he was a solicitor/barrister currently admitted to practice in New South Wales and that he had given the certificate in accordance with that legislation, with reference to the contract for the purchase of the property. He certified having explained to the purchaser, his wife, the effect of the contract for sale, the nature of the certificate and that the effect of giving the certificate to the vendor meant that there would be no cooling off period provided for Ms Tan-Bounkeua to withdraw from the contract after exchange as provided in s 66W. I am satisfied that Mr Bounkeua knew that what he signed was false at the time he signed it. I do not accept that Mr Bounkeua's evidence that before he signed the s 66W certificate he spoke to someone from the offices of Coudert Bros and disclosed that he was not a solicitor but was told by that person that nonetheless he could sign the certificate. The certificate was signed by him in order to ensure that contracts would be exchanged in circumstances where he was well aware that he was certifying falsely that he was a solicitor and had given an explanation in that capacity to his wife of the terms of the contract. In addition, he wrote again to Coudert Bros as the solicitors acting for Landillo on 14 August 2000 in solicitor's language. His letter requested that Coudert Bros should telephone him to let him know when the lease had been prepared and was ready for execution "by my client". This correspondence satisfies me that Mr Bounkeua knew quite well that he was representing himself as a legal practitioner when he was not so qualified. They felt that had there been some legal or other problem with the contract, solicitors would have ascertained them and the problem would have been corrected. These pamphlet that was given to me, I assume that the company would have had it assessed for the accuracy. It needs to compliance for them to put the logo on to it to be offering me this investment deal, so why can't I rely on it? ... I didn't expect the contract to be any different to these information that was given to me. It asserted that because she and her husband had taken the risk that they would act for themselves and made the false representation that solicitors were acting for them, they had only themselves to blame for the contract not delivering the same bargain that they understood from the brochure and leaflet was being offered to them. I reject that argument. Austcorp itself was, by then, aware that solicitors might not notice or understand the limited nature of the guarantee which Pacific International Hotels offered of Mustara's performance under cl 20.9. That was patent from the failure, in late October 1999, of Penrhyn Parker to mention that limitation in the proposed legal explanation for purchasers. Mr Zantiotis sent that explanation to Mr Walker to give to potential purchasers. Although it assumed significance in the context of the proceedings, cl 20.9 was a minor clause contained within a vast array of documentation. While it may have been negligent for a solicitor not to have explained the effect of it, the limitation in cl 20.9 was a matter which Austcorp was conscious had not been any part of its marketing presentation. The unqualified terms in which the brochure stated that the guaranteed return was offered by the operator "Pacific International Hotels" would reasonably have been understood in the sense that Ms Tan-Bounkeua said she understood it. That is, whether or not some subsidiary would be the actual lessee, Pacific International Hotels as a group would stand fully behind the actual lessee. There was no qualification in any of the marketing material of the limited nature of Pacific International Hotels' guarantee. Such a limitation, had it been properly communicated, would have undermined the security which the investment itself offered. And, once Austcorp became aware that Penrhyn Parker had missed the critical limitation posed by cl 20.9 in their purported explanation, it took no steps to bring that matter to the attention of potential purchasers. Rather, Austcorp relied on its own silence and on the solicitor for the purchaser to draw the limitation to his or her client's attention when explaining the effect of the contract and draft lease. But the marketing material and Mr Walker's presentations had created an aura of confidence in the security of the investment. That material supported the view formed by Ms Tan-Bounkeua that the promoters, apparently large reputable concerns, would not say something significantly different in the contractual documents than they had represented in their marketing materials. In effect, Austcorp in its defence asserted that it should not have been taken at its word in the representations it made to sell the apartments to the applicants, including Ms Tan-Bounkeua. Austcorp's argument is no sounder than the unsuccessful promoter's in Gluckstein [1900] AC at 251-252. The argument must fail. A person in Ms Tan-Bounkeua's position was entitled to assume, as I find she was, that those who put forward the promotional material she received knew what they were saying in it and were telling her that an investment in an apartment in the resort was a sound one with the characteristics in the representations complained of. Of course, she would realise that the contract, when she received it, was a complex legal document. But there was nothing to alert her that the contract propounded a relationship with the significant differences between the representations complained of and her legal rights if she signed. Ordinarily a solicitor would explain the effect of the contract to his or her client. This might have led to Ms Tan-Bounkeua being informed of the true position before she entered into the contract and lease, although, on the evidence before me, some solicitors did not highlight or inform their clients of the existence or effect of cl 20.9. The question remains why that true position was not in any of the promotional material. The fact that a solicitor might have discovered this different position does not mean that the representations complained of were not a cause of Ms Tan-Bounkeua being misled into believing that if she signed the contract and lease she would get what had been represented to her. I have approached Ms Tan-Bounkeua's and Mr Bounkeua's evidence with some caution. Both she and her husband were intelligent. I formed the impression that each sought to give answers that suited their case. Assessing their evidence has been difficult. However, I am satisfied that I should accept her evidence as to the basis upon which she proceeded to enter into the contract and lease. This is because that evidence is consistent with how she in fact acted, namely, she did not engage a solicitor, saved money by doing so, and relied on what she had been told, there being no apparent reason why she should not have done so. She checked the details on the front page of the standard form section of the contract, looking at whether her name, the price and the rent were correctly recorded and flicked through it to see whether there had been any manual insertions into the typed provisions. She said that she did not notice that Mustara was the lessee, either when she signed the contract or, later when she signed the lease. In the course of discussing the contract with her before she signed it, Mr Bounkeua told his wife that the lease provided a 10 year term and a net rent of 7% of the purchase price. He told her at that time that the lessee was Mustara. They assumed it to be a Pacific International company, but made no enquiry to determine the precise relationship. I accept Mr Bounkeua's evidence that he did not read carefully the section of the draft lease as contained in the contract headed "Guarantee and Indemnity", being cl 20. Given his lack of legal training, desire to ensure that the contract was entered so as to secure the investment and failure to take care to make accurate statements about explanations (such as for s 66W) , I am satisfied that he either did not read or, if he did, he did not understand cl 20. I formed the clear impression that both he and his wife were shrewd enough that if they knew of the existence of the limitation in cl 20.9, they would not have gone ahead with the transaction because warning bells would have rung out to them. Hence, I am satisfied that it is inherently likely that they are telling the truth when they said that they were not aware of the limitation on the guarantee in cl 20.9. Mr Bounkeua told his wife that Mustara was the lessee prior to her signing the contract. I find they both understood that it was a Pacific International Hotels company and that there was no reason to think that this changed or qualified the representations complained of in the sense that Pacific International Hotels would be running the resort. I infer that they understood its relationship to Mustara as one in which it would stand behind the operator which was the source of the guaranteed rent. It is likely that Mr Bounkeua thought this difference (the lessee was Mustara but it was a Pacific International Hotels' company) did not detract from the force of the representations. I do not think that Ms Tan-Bounkeua was being untruthful in saying that in December 1999 she did not notice that Mustara was the lessee. She may have forgotten or not taken notice of what her husband told her, but it is likely that whatever he said (because of his own impression of its unimportance) did not convey to her that that fact had any significance. In addition, Pacific International Hotels Pty Limited who is leasing your apartment and managing the Resort has finalised the design of the internal fitout and this will commence soon. We would like to offer you, as an existing purchaser, a very special deal on the remaining apartments and ask that you call us to discuss this. The letter attached Austcorp's Autumn 2000 newsletter which had an article on the Pacific International Waterfront Resort. It reported that the resort construction was on time for completion in mid 2000 and made a prominent use of the Pacific International logo. I accept that later, in about August 2000, at the time that Ms Tan-Bounkeua signed the lease she had just given birth to her first child and was likely not to have paid any particular attention to the name of the lessee. Indeed, in a real sense at that time the lease was simply a formality which was required in order to finalise the contractual arrangement that there would be a tenant to "guarantee" payment of the net 7% p.a. over the 10 year term. Austcorp contended that Ms Tan-Bounkeua entered into the transaction without any understanding that the lessee company itself would be a leader in resort apartment management or had received awards for hotels and properties it managed. It based this on her evidence that she understood Pacific International Hotels might have different companies running different hotels within its group. I reject Austcorp's submission that she did not know whether her lessee was to be a subsidiary company and did not care as long as "Pacific International Hotels", as an "organisation" was going to be overseeing the management of the resort. In substance, the applicants' case was that Pacific International Hotels was far from having the full commitment and involvement conveyed by the representations complained of. They said that if a correct picture had been conveyed in the promotional material and representations they would not have gone ahead, and they were not disabused of their erroneous perception by anything in the contractual documents or, where relevant, the disclosure statement. The questions put to them in chief as to their reaction had they known various matters, such as Mustara being a $2 company which had no awards or other credentials to operate the resort in its own right, were directed to parts of the overall effect of the representations conveyed by the promotional material. The overall effect would have been different had the true position been painted. Ms Tan-Bounkeua was not concerned if Mustara, rather than Pacific International Hotels, was her lessee. This was because the representations conveyed that, in substance, Pacific International Hotels would be fully behind Mustara and the two were indistinguishable in the practical sense that the Pacific International Waterfront Resort would operate. Thus it did matter to her that they were separate legal persons as long as they were related. In fact, the promoters knew that this mattered because they had provided for that legal result in the contractual documents. Yet, Austcorp promoted a different proposal in the promotional material, without making any reference to the effect of cl 20.9. I am satisfied that Ms Tan-Bounkeua understood that, as a matter of substance, she was going to lease her apartment to Pacific International Hotels, which was to her a well-known operator. As I have found she was not concerned with the legal form of the transaction, including the interposition of Mustara, so long as Pacific International Hotels stood fully behind it. This was because the brochure unequivocally conveyed that the position was that Pacific International Hotels had the lessee's responsibilities to run the resort and ensure the rent was paid. Subsequently to entering into the contract to purchase her apartment in the resort, Ms Tan-Bounkeua embarked upon the gradual acquisition of another 19 investment properties which she negatively geared. Some had guaranteed returns and others did not. I formed the view that Ms Tan-Bounkeua was a shrewd and careful person. She planned her investment activities with considerable calculation. Although Ms Tan---Bounkeua appreciated that she was taking a risk not engaging a solicitor, I do not consider that the risk involved guarding against the falsity of the representations complained of contained in the promotional material. No doubt there were legal complexities inherent in any conveyancing transaction that would be lost on lay persons such as Ms Tan-Bounkeua and her husband. However, that was not the kind of risk to which she had been exposed by the substantive disconformity between the promotional material and the position in the contractual documents. It was not suggested to Ms Tan-Bounkeua, or any of the other applicants, that they should have given solicitors a copy of the promotional material to see whether it matched the offer in the contract. After all, this was a relatively straight forward conveyancing transaction involving the sale of the strata lot and the entry into a lease on standard terms for the future operation of the resort. As she observed, by the time she entered into the contract over 100 apartments had been sold and technical conveyancing details in the contract were likely to have been resolved by them. Austcorp attacked the claim by Ms Tan-Bounkeau. It contended that no-one would think that advertisements, brochures or the other promotional material would contain terms or representations that could be relied on as the basis of a serious investment in real property. It argued that she had failed to take reasonable care of her own interests relying on Puxu 149 CLR at 199 per Gibbs CJ and Poulet Frais 220 ALR at 233 [107] per Branson, Nicholson and Jacobson JJ. I reject that submission. Austcorp, the author of the false descriptions of the investment, should not be able to say that its representations could not be taken at face value. It had made misleading and deceptive representations of a guaranteed 7% p.a. return relying on the perception of the investors that "Pacific International Hotels" was the lessee. Yet, Austcorp was conscious that cl 20.9 of the lease made a fundamental qualification to this assertion and that its marketing message would have been far less compelling if accurate information had been conveyed about cl 20.9. The assurance of a return would have been undermined if Austcorp had complied with s 52. Potential investors, including Ms Tan-Bounkeua, would have been less enthusiastic had the promotional material revealed that the only promoter offering any long term financial commitment to an investor, Pacific International Hotels, was not prepared to back its judgment beyond the limited extent of cl 20.9. As Mr Hung acknowledged, the consequence of cl 20.9 meant that it was not a "sure thing" that the investors would receive their promised 7% p.a. net return for 10 years. While her own carelessness in not engaging a solicitor was a cause of Ms Tan-Bounkeua's loss, I am not satisfied that it was the only cause. As I have found, a solicitor might, but would not necessarily, have advised her about the existence and effect of cl 20.9. Although the representations were made in order to interest investors in purchasing apartments in the development, their message would be undone only if a solicitor in fact advised his or her client of the effect of cl 20.9. And the risk to Austcorp, if that happened, was that it might lose the benefit of the sale: Sydney Harbour Casino Properties Pty Ltd v Coluzzi [2002] NSWCA 74 at [43] , [57] per Mason P (with whom Giles and Heydon JJA agreed on this point at [92] and [93]). Moreover, had Ms Tan-Bounkeua been informed before completion that Mustara had ceased to be a subsidiary of Pacific International Hotels since she had entered into the contract, she would not have proceeded because that would have exposed her to risk of loss. In the context of the unqualified powerful assertions in the representations, the terms of cl 20.9 were inconspicuous and part of the "fine print" of the contract in the sense referred to by Mason J in Puxu 149 CLR at 210-211. As a matter of common sense they were the, or, at least a real, inducement for investment. Mr Di Giulio had qualified as an accountant in 1991, was a Bachelor of Economics and a member of the National Institute of Accountants, a fellow of the Taxation Institute of Australia and a fellow of the National Tax and Accountants Association. His wife was a part-time administrative assistant and homemaker. Mr Luciani was also an accountant. He obtained his certificate in 1987 and shortly afterwards became a member of the National Institute of Accountants. He then worked for two businesses in a costing and accounting role before going into public practice in September 2000. He already owned two rental properties at The Entrance. Around the New Year holiday in early 2000, Mr and Mrs Di Giulio, their children, and Mrs Di Giulio's brother, Mr Luciani and their parents were all holidaying at The Entrance. They had had family holidays there for many years. Mr Di Giulio and his brother-in-law went for a walk one morning to buy milk and noticed development work on the site of the resort. They saw scaffolding around the building, a demountable sales office, large billboards displaying an artist's impression of the development and others with company logos including those of "Pacific International", "Austcorp", "Great Pacific" and "PRD". They went into the sales office where they saw brochures and other literature lying around and a plan on the wall with dots indicating the units that had been sold and those on which there had been a deposit paid but contracts not yet exchanged. Mr Di Giulio had stayed in Pacific International Hotels' branded properties at Parramatta and in Sydney and was familiar with another of its operations on the Gold Coast. He was also familiar with Great Pacific Finance, through his work and was aware that Austcorp was a developer that had done a number of developments around Australia. Mr Luciani also knew Austcorp as a major builder or developer and considered that its participation in the project gave him confidence. He knew of PRD and Pacific International. The mention in the brochure of the awards that Pacific International had earned also gave Mr Luciani confidence. Mr Walker gave them the brochure and leaflet together with price lists. He outlined the project to them and, in substance, repeated the principal assertions in the brochure. Mr Di Giulio received the leaflet while he was there. Mr Walker told them that the resort would be managed by one of the premier hotel chains, "Pacific International", and because of that it would attract a lot of additional tourism, including conferences. Mr Di Giulio said that Mr Walker told them that it would be an investment that would have significant capital growth and that investors could not go wrong. Afterwards, the two men returned to the apartment where there families were staying. They read the material Mr Walker had given them. The family had a discussion in the apartment, but it was principally between Mr and Mrs Di Giulio and Mr Luciani. Each of them said that they felt that the entities whose logos appeared on the brochure must have "done their homework" on the investment and, in Mr Luciani's words, that gave them a "sense of security" since it would not be a "fly-by-night operation". Mr Di Giulio said that he looked at the fact that Pacific International Hotels were going to be the manager and that there would be a 10 year lease. He thought that if it would be involved for that period of time, "then obviously the viability must be there ... they must have done their own studies in order to make those decisions". Mrs Di Giulio said that she understood that Pacific International Hotels were going to manage the hotel and look after their apartment and that Austcorp and the others on the brochure would be "... behind them, knowing that these companies were big companies and having a solid investment for the future". Mrs Di Giulio said that she also obtained a sense of security from reading the brochure and seeing that Pacific International would be managing the hotel and Austcorp was participating in the development. They all liked the location, because of their long familiarity with The Entrance area, and thought that it would be a good investment with a 10 year lease and a guaranteed 7% net rental return. Just after the initial discussions with Mr Walker, Mr Di Giulio worked out that the hotel operator would be able to pay the guaranteed return if it traded successfully. From that he understood that the 7% return involved a risk that if interest rates increased on their borrowings made to purchase the apartment, they would be exposed for the difference between the 7% return and what they had to pay to the bank. Mr and Mrs Di Giulio and Mr Luciani went to see Mr Walker within the next day or so. In essence, Mr Walker confirmed the substance of the representations to them. Mrs Di Giulio said that she understood that the guaranteed rental in the brochure and leaflet meant that there was no doubt that they would receive the rental. They asked Mr Walker what happened if the apartment was not occupied and whether they would still receive the guaranteed 7% net rental over the period of 10 years. He told them that they would. So far as Mrs Di Giulio was concerned, Mr Walker's confirmation of the important points in the brochure, concerning the guaranteed return and Pacific International Hotels' management, led her to think that their investment had no risks at that time. She thought the resort would be successful. They did not have any spare cash and would be borrowing the whole of the purchase price to negatively gear their acquisition. They engaged Shephard & Shephard, solicitors, to act on the purchase. Initially, one of the partners, Chris Dunn, was advising them. However, in March 2000, Mr Dunn left the firm and Mr Fullerton took over the file and continued to advise them. Coudert Bros sent Shephard & Shephard the contract for sale on 14 January 2000, but contracts were not exchanged until 17 April 2000. On 19 January 2000, Mr Di Giulio and Mr Luciani sent Mr Dunn a list of 28 questions about the proposed investment. (i.e. in the changeover period who covers the insurance, also the guarantee net 7% return? He wrote to Coudert Bros on 4 February 2000 making requests for alterations to the draft contract. He did that on his client's instructions. At that stage the correspondence he referred to Taldarmar as Shephard & Shephard's client but I am satisfied that they were instructed by all of Mr and Mrs Di Giulio and Mr Luciani throughout the transactions. He indicated that he would be in contact again when he had a reply, set out an estimate of fees and then answered the 28 questions. Of course such a guarantee is as relevant as the liquidity of the guarantor. I am unable to make any finding whether he did so orally at any point. On 9 February 2000 Coudert Bros responded to the request for changes in the contract, agreeing to some but refusing to agree to any change to cl 39(2)(c). Mr Dunn had a conference with Mr and Mrs Di Giulio and Mr Luciani and advised on the contract which they went through together. Mr Di Giulio remembered discussing in a lengthy conference with Mr Dunn cl 39.2(c) of the draft contract and the fact that Mr Dunn thought the clause was inappropriate and should be deleted. He also recalled he had been informed that Coudert Bros had rejected a request to delete it. At that time Mr Di Giulio understood that cl 39.2(c) negated that a promise of a financial return had been made and that the clause was not correct because of the guaranteed 7% return. He had asked Mr Dunn to have the clause deleted because it was inconsistent with what they had been told. When Mr Fullerton took over the file in late February or early March 2000, Mr Dunn gave him a general briefing about the matter. Mr Dunn had prepared notes, some for his own use and others for the benefit of Mr Fullerton. Mr Fullerton's practice was to review the contract and prepare his notes as he thought necessary prior to seeing clients. He arranged a meeting with Mr and Mrs Di Giulio and Mr Luciani. Mr Di Giulio left a telephone message with Mr Fullerton's secretary on 7 March 2000 saying that Mr Dunn had already been through the contract with all three of them and Mr Di Giulio could not see why Mr Fullerton needed to see them again. However, a conference occurred on 17 March 2000. In the meantime, on 10 March Mr Fullerton sent a letter to Taldarmar and Mr Luciani enclosing three copies of the disclosure statement. He asked his clients to read it carefully and contact him if they had any questions. He asked for Taldarmar's seal to be placed on one copy, for that to be witnessed and for Mr Luciani to sign it, saying that the two other copies were for their records. Ultimately, on 7 April 2000 both Mr and Mrs Di Giulio witnessed the affixation of the common seal of Taldarmar and Mr Luciani signed the disclosure statement. Before the conference on 17 March 2000 Mr Fullerton prepared an agenda and a detailed file note of matters about the contractual documents which he saw as important to explain to his clients. He also used an earlier note in the file made by Mr Dunn setting out his detailed observations about the contract and lease. Mr Fullerton also made his own notes on that note to assist him when he saw his clients. He said that his practice was never to get clients to sign documents that he had not reviewed himself and therefore he believed that he would have reviewed the disclosure statement. His normal practice was to take clients through his pre-prepared notes point by point. I accept Mr Fullerton's evidence of his practice concerning his use of his notes and I find that he followed it on the occasion in the conference with Mr and Mrs Di Giulio and Mr Luciani. Mr Fullerton had no note of having summarised or explained or taken his clients through the disclosure statement. He thought it was a summary of the contractual terms. I accept that Mr Fullerton did not take his clients through the disclosure statement. There was no need because he explained to them fully the terms of the contractual documents. In the conference, Mr Fullerton went through the annexures to the contract and advised his clients, in accordance with the notes that he attached to his file note. One of those notes identified provisions in the lease and noted that the lease was "G'eed by Pacific Int'l Hotels Pty Limited --- limited to amount of 1st year's rent". Mrs Di Giulio said that Mr Fullerton had told them that the lessee's obligations were guaranteed by Pacific International Hotels Pty Limited limited to the amount of the first year's rent. Mr Luciani recalled having been told by Mr Fullerton that there was some limitation of liability to pay 12 months rent. However, he claimed to recall that this limitation was made with respect only to Mustara's obligations. Mr Luciani's evidence on this point made no commercial sense. --- My understanding was that Mustara Holdings, who was the hotel manager, if they were to go broke or their limitation is to 12 months, my understanding was always that that wouldn't apply to Pacific International . What did that mean? --- Well, in actually paying us the rent. --- This is why before I asked the question I knew of Mustara Holdings had come to my attention. That's why I asked that question before, but I was always satisfied in speaking to my solicitor, that Pacific International would be the guarantor . So if Mustara couldn't meet the repayments to me as an investor, Pacific International would guarantee the seven per cent net return. --- Well, Mustara was the ------ as far as I recall, was appointed as the hotel manager by Pacific International to manage the apartments but I was always under the understanding that Pacific International was the guarantor. I'm not following what you're telling me about that? --- Yes, my understanding was Pacific International would cover for Mustara. They were the guarantor. That was my understanding. What was this limitation? --- Well, your Honour, I don't know what that meant . I don't know. The fact was that I was comfortable when I went through this transaction that Pacific International was the guarantor . I'm not sure in regards to Mustara. Mr Luciani identified handwriting on a bank loan application form, initially as his own and then asserted that it was not his handwriting. Mr Luciani was not a reliable witness. I do not accept his evidence of being told by Mr Fullerton that the lessee, Mustara, was liable only for 12 months rent on the 10 year lease, while Pacific International Hotels was liable as guarantor for a larger liability than Mustara, namely the full 10 years. Mr Fullerton understood cl 20.9 and did not give any such inaccurate explanation of it. Mr Luciani's asserted recollection was commercial nonsense. But it demonstrates that he had an explanation of cl 20.9 on 17 March 2000. Where Mr Luciani's evidence conflicted with contemporaneous documents or the evidence of Mr Fullerton, I prefer the evidence in the contemporaneous documents and that of Mr Fullerton. I am satisfied that before signing the contract, the disclosure statement and the lease Mr Luciani was aware that Pacific International Hotels' guarantee of Mustara was limited to a maximum of 12 months rent and that Mr Fullerton had carefully and fully explained this to him and Mr and Mrs Di Giulio. Mr Fullerton was a careful and honest witness. While he did not have any independent recollection of the conference with Mr and Mrs Di Giulio and Mr Luciani, I am satisfied that he followed his usual practice of taking his clients through the notes which he made, and in particular the note concerning the explanation of cl 20.9. Mrs Di Giulio's evidence, Mr Fullerton's note and the confused evidence of Mr Luciani, that I have set out above, satisfy me that there was such an explanation. 3.3.3 DID LUCIANI/TALDARMAR RELY ON THE REPRESENTATIONS? net return for 10 years to finance their 100% borrowing. That was an important question for them to have asked Mr Dunn. His explanation, that if the operator went into liquidation there would be a guarantee, was equally important. Moreover, Mr Fullerton clarified that Pacific International Hotels' guarantee was limited to a maximum of 12 months rent. Thus, the worst case commercial result about which they asked, was explained by Mr Fullerton to them before they entered into the contract. They had also given their solicitors the brochure and sought to have the exclusion in cl 39 removed from the contract, only to be told that it would not be. I do not accept their evidence that they would not have gone ahead had they realised that the guarantee was limited to 12 months rent. I am satisfied that they did realise the guarantee was limited in that way before they entered into the contract and the lease and signed the disclosure statement. They also said that they would not have proceeded had they realised that Mustara was not a subsidiary of Pacific International Hotels. As I have found [see above 2.13] Mustara was not and there was no evidence of any publicly available information that disclosed its change of ownership and director that had occurred on 23 December 1999. Thus, Shephard & Shephard were not aware of this and could not have discovered it. Nor was this disclosed in the disclosure statement. Indeed, that document expressly stated that Mustara was a wholly owned subsidiary of Pacific International Hotels. The identity of the lessee was an important matter for Mr and Mrs Di Giulio and Mr Luciani and they assumed, reasonably, that Mustara was a subsidiary of Pacific International Hotels. While that assumption was incorrect, I am not satisfied that knowledge of Mustara's true position would have made any difference to their decision to enter into the contract and the lease. Mr Fullerton's notes record that he advised that the lease could be assigned by the lessee in certain circumstances. I infer that he informed his clients of this during the meeting of 17 March 2000. Mr Di Giulio accepted that he may have but could not recall. I am not satisfied that at the time Mr and Mrs Di Giulio caused Taldarmar to execute, and Mr Luciani executed, those documents they were under any misapprehension which led to them suffering any loss or damage for the purposes of s 82 of the Act. In my assessment, they made a considered decision conscious of the risk that Mustara might fail to pay the promised return of 7%p.a. net for the full 10 years and that if it did Pacific International Hotels had given them the limited guarantee in cl 20.9. They made an assessment that the risk was worth running and they would take it. Because I cannot rely on their evidence, I do not feel satisfied that they were induced to proceed by the misrepresentations in the promotional material which I have found. Although the representator did not remove the effect of the misrepresentations, I am satisfied that Mr and Mrs Di Giulio and Mr Luciani turned their mind to these questions and considered the advice from each of Mr Dunn and Mr Fullerton carefully before taking a considered but deliberate risk to proceed with the investment based on their own confidence in the outcome. This is a particularly apposite instance of the need for the exercise of caution, expressed by McLelland CJ in Eq in Watson v Foxman 49 NSWLR at 318-319, in accepting evidence of persons claiming many years later to have been misled by representations in entering into a contract. This was suppose to be a solid future investment, not something that was suppose to be for 12 months and we weren't told that at the time . It wasn't said here in the brochures or the leaflet, it wasn't told by Warren Walker and, you know, our solicitors reassured us everything would be okay . --- That it would be a solid future investment to, you know, to carry on with that . Again, it just wouldn't make sense. It wouldn't have been a secure investment anymore. I mean, this was wholly on a future investment for us, not a 12 month investment. It just wouldn't have made sense to go ahead with that. She admitted that Mr Walker did not say words to the effect: "There are no risks involved in this investment. " She asserted that they went ahead with the investment because they had been reassured that they had nothing to worry about by their solicitors. I do not accept that evidence. She understood that the word "guarantee" was used in the promotional material in the sense that if they went ahead with the purchase, the operator would promise to pay 7% net for 10 years irrespective of how well the hotel was doing, including whether it was at any particular level of occupancy. She read the disclosure statement briefly but claimed that she relied on her solicitors to tell her that everything was all right. Mrs Di Giulio also said that before she signed the contract she was not aware that the lessee was going to be Mustara. I do not accept that evidence. It is inconsistent with Mr Fullerton's evidence which I prefer. Mrs Di Giulio left it to her husband and brother to organise the technical side of the purchase including dealing with issues arising from the contract. In giving her evidence she sought to portray that she had been misled and never properly advised. I do not accept that evidence. I find that Mr Fullerton did give proper advice, but Mrs Di Giulio, her husband and brother ignored it. She did however, understand, as with any matter in ordinary life, there was an element of commercial risk in going into the proposed transaction. Her own experience has told her that even buying a house, could involve the price going up or down in the future. Mrs Di Giulio was not a reliable witness. While I do not consider her to have been deliberately untruthful, I think that she had difficulty in accepting her own role in entering into the transaction and sought to blame others, including her solicitors, for her decision to enter into the contract and lease. Taldarmar and Mr Luciani borrowed 100% of the purchase price from St George Bank. Mr Di Giulio said that had he known about a 12 month limitation on Pacific International Hotels' guarantee at the time he would "definitely ... not" have chosen to gone ahead with the investment. He asserted that was because he was conservative by nature and he would not have gone to the extent of borrowing 110% [sic] of the money needed to finance the purchase for a year's rent. He then asserted that if he had been told by Mr Dunn in answer to question 9 that the limitation of 12 months rent was contained in the lease "we would have definitely pulled out of the contract". He claimed not to have recalled Mr Fullerton giving him an explanation of the effect of cl 20.9. He did not deny that Mr Fullerton told him that the lessee's obligations were guaranteed by Pacific International Hotels limited to the amount of the first years rent. He said only that he did not recall this. I am satisfied that Mr Fullerton explained cl 20.9 to Mr Di Giulio at the meeting on 17 March 2000. In 1998 Mr Di Giulio had commenced giving financial planning advice as part of his business. I am of opinion that his caution in asking the questions of his solicitors and taking the considerable time of three months in which to finally decide to enter into the contract arose because he appreciated there the investment carried a risk. Once he learnt of the role of Mustara and the effect of cl 20.9, he nonetheless concluded that he could afford to take that risk based on his own perception of the likely success of a hotel at The Entrance. Mr Di Giulio's view was that the resort would be a success because it would have no trouble attracting customers and that there was every likelihood that it would be an ongoing generator of income managed by a recognised hotel operator. I accept that evidence, but I also infer that he realised that the operator needed to be successful in order to be able to continue to meet the future rent obligations. Mr Di Giulio hoped that there would be a significant capital gain from the investment when he entered into it. Mr Di Giulio said he undertook no investigations to find out who the proposed lessee was. I do not accept that evidence. By the time he received Mr Dunn's response in early February 2000 Mr Di Giulio knew that the lessee would be Mustara and that there was a guarantee by Pacific International Hotels. He said that if he had understood at the time of entering the contract and the lease that the proposed lessee was a subsidiary within the Pacific International Hotels group, he would have had no concern at all about that situation. I find that he had that understanding about Mustara and that he had no concern that it was the lessee. Mr Di Giulio fully appreciated that there was a risk that the hotel operator would "go broke" because he asked that that as question 9 of Mr Dunn. I do not accept his evidence that he did not understand that the rental guarantee to which the question referred was different to cl 20.9. The question clearly separated the concept of the manager going "bad/broke", there being a change of manager and, hence, the reference to "the change over period" and "... also the guarantee net 7% return". If he had understood the return to be a sure thing for 10 years, that question simply could not have arisen in his mind. I do not accept Mr Di Giulio's evidence that the disclosure statement was given to them "at the eleventh hour". In fact, Mr Fullerton sent it to Taldarmar and Mr Luciani about one month before it was signed. They had all the time they needed to understand it, including the opportunity to discuss it in conference with Mr Fullerton on 17 March 2000. Mr Di Giulio said that he did not read the disclosure statement, only briefly looking at the first few pages. Mr Di Giulio's assertion that the disclosure document was sent so late that he did not have a proper opportunity to consider it, is a further reason why I am cautious about the quality of his evidence over all. I did not regard Mr Di Giulio as a reliable witness. In addition, where his evidence conflicted with that of Mr Fullerton or the contemporaneous documents, I prefer the other evidence. Mr Luciani said that he was not aware of the 12 month limitation in Pacific International Hotels' liability until May 2002. He claimed that at the time of entry into the contract his understanding was that Pacific International Hotels would guarantee the 7% net return for 10 years and that he would not have proceeded if the guarantee was limited. He claimed that after speaking to Mr Fullerton he was satisfied the guarantee would be in place and that he did not appreciate that there were any commercial risks because he had confidence the guarantee was in place. He also claimed that he did not think that Pacific International Hotels would go broke because of the size of the company. I do not accept that evidence. He understood by the use of the word "guaranteed" that the operator would pay him a 7% net return irrespective of the level of occupancy by way of hiring out the apartment. --- I thought that The Entrance was screaming out for a place like this because of the high no vacancies that were present at The Entrance and, as I said this morning, the light industry that was moving up around The Entrance I thought it would be a winner . Mr Luciani said that he understood that the hotel manager might go broke. But he claimed that did not apply to Pacific International Hotels and it did not cross his mind that it might go broke. Mr Luciani asserted that the reason why he asked question 9 in the letter to Mr Dunn was that Mr Dunn had told him Mustara had a $2 paid up capital. He said that they had assumed that Pacific International Hotels were putting someone in place to manage the hotel, but that Pacific International Hotels would be the guarantor. I formed the view that he was being evasive about the clear answer that Mr Dunn gave that the guarantee was as relevant as the liquidity of the guarantor. Mr Luciani was seeking to eschew any possibility of admitting an awareness that there was any commercial risk, and I do not accept that he was unaware of there being risks. Mr Luciani understood that Mustara was a $2 company and that Pacific International Hotels would guarantee its obligations. He asserted that the limitation of the first 12 months rent did not apply to the guarantor, Pacific International Holdings, but to Mustara. The incomprehensibility of Mr Luciani's evidence on this point demonstrated that he was not reliable witness. When I asked him how he understood Mustara and the 12 month limitation were related, he simply asserted that he did not know what it meant and that he was comfortable because Pacific International Hotels was the guarantor. I find that he was comfortable with a guarantee of Mustara by Pacific International Hotels limited in amount to the first 12 months rent when he entered the contract and the lease. He was then conscious of the substance of cl 20.9 because Mr Fullerton had told him about it. In the process of receiving detailed advice from first, Mr Dunn, and secondly, Mr Fullerton, Mr and Mrs Di Giulio and Mr Luciani received a full and clear understanding of the nature of the investment and its risks. In their evidence-in-chief, each said that he or she would not have gone ahead had they been aware of the limitation of Pacific International Hotels guarantee under cl 20.9. Mr and Mrs Di Giulio also said in chief that they would not have gone ahead had they been aware of the possibility that Pacific International Hotels could cease its entire involvement with the resort but Mr Luciani did not address this in chief. However, as I have found, he was comfortable because Pacific International Hotels was the guarantor and said, "I'm not sure in regards to Mustara" That is, I find that he was not concerned with details concerning Mustara so long as the 12 month guarantee under cl 20.9 was in place. Each asserted that they saw no risk in the investment which is why they proceeded. For the reasons I have given I do not accept their evidence. I think that each of Mr and Mrs Di Giulio and Mr Luciani have persuaded himself and herself that they must have believed that there was no risk in the development, since and because of the financial stress which they have suffered as a result of Mustara's demise. Also, I am not satisfied by their evidence that had they been aware that Mustara was not a subsidiary of Pacific International Hotels they would not have proceeded. However, I am comfortably satisfied that at the times they entered into the contract and the lease, as a result of their enquiries and investigations, they were aware of the effect of cl 20.9 and that the ability to obtain the return depended upon the viability of the operation of the resort. The significance of their evidence-in-chief that they would not have gone ahead had they been aware of the effect of cl 20.9 and my conclusion that they did go ahead with an accurate awareness of its existence explained to them by Mr Fullerton, has led me to conclude that I am not satisfied by their evidence that they were misled by any of the representations or conduct alleged against Austcorp into proceeding with their investment. 4. WERE THE REPRESENTATIONS MADE IN TRADE OR COMMERCE CORRECT? The promotion and sale of developments in which it had an interest was a fundamental business activity of Austcorp. That conduct was quintessentially of a trading and commercial character. It included promotional activities in relation to, or for the purposes of, the supply of goods or services including land: Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17 ; (1990) 169 CLR 594 at 604 per Mason CJ, Deane, Dawson and Gaudron JJ; see too Braverus Maritime Inc v Port Kembla Coal Terminal Ltd [2005] FCAFC 256 ; (2005) 148 FCR 68 at 108 [142] per Tamberlin, Mansfield and Allsop JJ. As explained above, it is necessary to consider whether Austcorp's conduct in making each representation to each of Mr Owers and Ms Tan-Bounkeua was misleading or deceptive: Butcher 218 CLR at 604-605 [36]-[37]; Campomar 202 CLR at 85 [103]. It is not necessary to consider the position of Mr and Mrs Di Giulio and Mr Luciani because I have not accepted their evidence that they relied on any of the representations. 5. It said that each accepted in cross-examination that the source of the guarantee was the fixed net rent paid by the lessee (i.e. the investor was certain of, or "guaranteed" by entry into the lease, a net 7% p.a. return for 10 years paid by the lessee). Austcorp emphasised that the applicants all understood that the guarantee was not a third party guarantee of the lessee. It then argued that the applicants had failed to make out their case on representations (a), (h) (which were the same but conveyed by the brochure and leaflet respectively) and (b) because they all agreed that they would enter a lease with a subsidiary of Pacific International Hotels. I reject this argument. It ignores the reality that each applicant was induced by the promotional material into believing that Pacific International Hotels was leasing the apartment. In their lay understanding, if Mustara was a subsidiary, that did not affect the substance that the parent was standing fully behind the subsidiary. The presence of cl 20 in the lease to some extent reinforced this. However, Austcorp created the wrong impression in the applicants' minds by using unequivocal and false statements in the promotional material which conveyed the representations complained of. Austcorp never corrected these; it even repeated that Pacific International Hotels was the lessee in correspondence with the applicants after the contract was entered into and before completion. Austcorp saw value in marketing the apartments as leased by Pacific International Hotels. It certainly did not use a marketing campaign that the unknown Mustara was the lessee and operator while its parent, Pacific International Hotels, was prepared only to offer a very limited guarantee of its subsidiary. Austcorp expressed disdain that its marketing was so effective that the applicants did not undertake a detailed legal analysis to expose its marketing falsehoods, but gave their evidence, which I accept, that they had the very understanding of Pacific International Hotels being in substance, or practical reality, the operator and lessee which that marketing created. The correctness of these representations depended on the nature of the "assurance" of the net rental return of 7% of the purchase price for 10 years. (Mr Owers did not receive the leaflet so only representation (a) is relevant to his position. ) At the time of entering into the contracts each of the applicants understood that the way in which they would be paid the return was through their lease of their apartment to Mustara on terms that it pay the rent at the rate of 7% of the purchase price net of deductions for 10 years. The "assurance" came from this understanding and, in Mr Owers' and Ms Tan-Bounkeua's cases, the connection that Mustara was a subsidiary of Pacific International Hotels which guaranteed the performance of Mustara. In other contexts the word "guarantee" can have a range of connotations, but as Mason P observed in Coluzzi [2002] NSWCA 74 at [46] (Giles and Heydon JJA agreeing on this issue at [92]-[93]) it can certainly include a firm assurance as to a state of affairs. Thus, since I have found that, when entering the contract and signing the lease, Mr Owers and Ms Tan-Bounkeua were not aware of the nature and effect of cl 20.9 of the lease, limiting the guarantee, it was false to represent to them that payment of the rent for the entire term was "assured" in the sense that they understood the representations. That is, it made no difference to either of them that Pacific International Hotels was not the lessee if Mustara were its subsidiary and, in substance, Pacific International Hotels would stand completely behind Mustara. If that were the case then, as a matter of substance, the statements in the promotional material of the "security of a lease to Pacific International Hotels" would have been true, even though the technical legal mechanism of a lease to Mustara with a guarantee by its parent was utilised. They saw themselves dealing with, and receiving assurance from, the involvement of Pacific International Hotels for the lease of their apartments and the operation of the resort. But, that was not the true position. Mustara had ceased to be a subsidiary on 23 December 1999. And, as they understood the position, if Mustara failed they could still look to Pacific International Hotels to honour the promise for the full 10 years. Because cl 20.9 of the lease qualified their entitlement to look to Pacific International Hotels for payment, one means by which Mr Owers and Ms Tan-Bounkeua understood that the return would be assured, namely that Pacific International Hotels would be liable to pay it in full for the whole 10 year term, was falsified. Additionally, Austcorp's failure to correct the position in relation to Mustara not being a subsidiary of Pacific International also falsified the basis of the assurance. Mustara was a $2 company and, in effect, a special purpose vehicle incorporated for the purpose of running the resort. It had no assets at the time of the making of the representations and other than what it would need to operate and manage the resort, it could not expect to acquire any. In effect, it was a shell and was in no position to promise any "guarantee" or assurance of a net return of 7% of the purchase price of apartments in the resort for 10 years with two further 10 year options regardless of the operating revenues of the resort itself. Mustara, itself, had no qualifications in the conduct or operation of hotels or resorts and was wholly reliant on its connection with Pacific International Hotels. Mustara was a corporate shell and had never traded. It had no financial substance independent of Pacific International Hotels' limited support in cl 20.9 and what it might earn in the future from operating the resort. Moreover, Mustara was not a subsidiary of Pacific International when each of the applicants entered into the lease and, with the exception of Ms Tan-Bounkeua, when they entered into their contracts to purchase. Austcorp failed in its duty to correct this representation to Ms Tan-Bounkeua after it had become falsified on 23 December 1999 when Mustara was taken over by Mr Wong's group: cf: Briess [1954] AC at 349. And, after 23 December 1999 it was not a subsidiary of Pacific International Hotels. Therefore, the representation was false by the time each of Ms Tan-Bounkeua and Mr Owers acted on it by completing their contracts. Mr Wong's group were financers, not resort or hotel operators. And cl 20.9 significantly limited the financial responsibility of Pacific International Hotels in respect of Mustara. Thus, there was a real separation between the two so that Mustara could not be said to be the same entity as Pacific International Hotels. Had they known the true position created by cl 20.9, neither Mr Owers nor Ms Tan-Bounkeua would have regarded the two companies, in a lay sense, as the same entity. As I have found, they would not have been troubled, and would have regarded Mustara and Pacific International Hotels as one entity, if there were no limitation of the latter's responsibility for Mustara's financial commitment to them as found in cl 20.9 of the lease. Of course, as a matter of law the two companies were different legal persons. Ms Tan-Bounkeua was not told of the change of Mustara's relationship to Pacific International Hotels following her entery into the contract, when the representation had been substantively accurate. In fact, at the time Mr Owers entered into his contract and at the time he and Ms Tan-Bounkeua completed, Mustara was not a subsidiary of Pacific International Hotels. Thus, this representation was also false. Austcorp contended that, even so, the risk in cl 20.9 was patent both in the draft and actual versions of the lease (the former being part of the contract) and, if properly advised, they would have been informed of it. Austcorp also argued that Mr Owers should have learnt of cl 20.9 from the disclosure statement and Ms Tan-Bounkeua or her husband could have read it for themselves in the transaction documents. Since I have rejected these arguments [see above 2.11, 2.18 and 2.19], the risk in cl 20.9 was hidden from both of them. Representations (f) and (i): those responsible for the marketing of the resort were so confident of the success that they could and were prepared to say, without qualification, that investment in the complex would lead to a guaranteed 7% p.a. The promoters, including Austcorp, could not say, without making the qualification in cl 20.9, that the investment would lead to a guaranteed 7%p.a. return for at least 10 years. The transaction documents included cl 20.9, which reflected a caution that the representation concealed. Moreover, Mr Chappell was conscious that at the time of the marketing in 1999, Mustara as a $2 company was not in a position to give a meaningful or substantial 10 year guarantee to anybody. I accept that evidence. It accords with commonsense. Representation (g): "Pacific International" was so confident in the development success that it was prepared to guarantee for a 10 year period a 7% p.a. 6. They alleged, somewhat inelegantly, that those representations were taken to have been misleading by virtue of s 51A of the Act. However, s 51A is a qualified and complex deeming provision: McGrath v Australian Naturalcare Products Pty Limited [2008] FCAFC 2 ; (2008) 165 FCR 230. What the section does is, first, provide that where a corporation makes a representation with respect to any future matter and it does not have reasonable grounds for making the representation, the representation shall be taken to be misleading: s 51A(1). Secondly, s 51A(2) provides that for the purposes of s 51A(1) the corporation is deemed not to have had reasonable grounds for making the representation "... unless it adduces evidence to the contrary". If the alleged representor does adduce evidence to the effect that it had reasonable grounds for making the representation, the deeming provision does not operate: Australian Naturalcare 165 FCR at 242 [44] per Emmett J and 283 [191]- [192] per Allsop J. That throws back onto an applicant the ultimate onus of proof to make good a claim that there were no reasonable grounds for making the representation. The Court then decides in the ordinary way, on the balance of probabilities whether the representee has established that the representor did not have reasonable grounds for making the representation. And, the representor must have had reasonable grounds for a representation as to a future matter at the time he, her or it made the representation: Australian Naturalcare 165 FCR at 284 [198] per Allsop J. Genuine or honest belief in a representation is not sufficient to amount to having reasonable grounds for making it: Cummings v Lewis (1993) 41 FCR 559 at 565 per Sheppard and Neaves JJ. Indeed, as in so many other areas, a court may find the overall probabilities to which the circumstances of a given case give rise, the background to it and the conduct of parties prior to conversations taking place as providing better guides to whether or not they had particular states of mind or whether particular factors existed which would establish evidence of something such as reasonable grounds. It was the overall circumstances of the case which enabled his Honour to say, in relation to both Mr Leckie and Mr Lewis, that each genuinely believed the encouraging assertions which his Honour found them to have made. If one changes the exercise to an inquiry, not into genuine or honest belief, but into whether there were reasonable grounds, it is again the overall circumstances of the case which will provide more reliable guidance than would oral evidence on the part of interested parties. The Court must determine whether the evidence is "evidence to the contrary" so as to throw onto the representee the onus of proving that the representor did not have reasonable grounds for making the representation: Australian Naturalcare 165 FCR at 282-283 [191]-[192] per Allsop J. In the context of a trial, the representee will not need to lead evidence in chief on the issue since he, she or it can rely on the deeming in the provision which is only displaced by the representor adducing evidence to the contrary. That evidence, if adduced, will lead to a case in reply. The Court still has to decide whether the evidence relied on as being "to the contrary" adduced by the representor is capable of amounting to reasonable grounds for making the representation. Then, if it is so capable, the Court assesses whether the representee has proved, on the whole of the evidence, that the representor did not have reasonable grounds for making it. 6.1 WERE ANY OF THE REPRESENTATIONS WITH RESPECT TO A FUTURE MATTER? In Sykes 88 FCR at 514D-515A Heerey J and at 519F-520D Sundberg J (see too per Emmett J at 535B) approved what Hill J had said in Ting v Blanche [1993] FCA 524 ; (1993) 118 ALR 543 at 552-553. Hill J, as an example, suggested that a representation as to future rental will be with respect to a future matter although it may at the same time be a representation as to the maker's state of mind. The context and circumstances in which a representation is conveyed will affect its characterisation for the purposes of s 51A: Sykes 88 FCR at 521E per Sundberg J, 535B-E per Emmett J. When, as here, the representation is an assurance of an income stream over a period, it has the character of a prediction or forecast. It is about a future state of affairs which can only be verified by future experiences over the term of 10 years. Such a representation has a character distinct from that of a statement about rent which is currently due and payable. The latter is a statement with respect to an existing or present state of fact. The maker of a representation with respect to a future matter cannot know, however sure he or she is, that it will come true. There can also be a qualitative distinction between stating: the weather will be fine tomorrow or that the sun will rise at a particular time and stating "I believe that ..." one or other will occur. The first way of putting it may be understood as a prediction while the second may be understood as no more than a revelation of the speaker's then present state of mind. If a 5 year old child or a senior meteorologist made either statement it could be understood differently, as it might if it were made as a joke. Context and circumstances are important features to an assessment of the substantive characterisation of a representation for the purposes of s 51A. The 5 year old's view, whichever way it was put (either absolutely or as a belief) would be likely to be given little credence as a prediction simply because most adults would consider that, in the context, the child was in no position to provide a prediction; rather the child would be understood as making a statement about his or her state of mind. The meteorologist could be understood, even when using the preface "I believe", as basing the statement on his or her qualifications, knowledge and experience so as to convey more than just his or her present state of mind. That is, the meteorologist could be understood to assert a conclusion or a fact with respect to a future matter. Just as the ascertainment of whether a particular representation was made to a representee, or any other issue concerning the meaning of words, the task of evaluating whether s 51A(1) applies to a representation requires the Court to ascertain the meaning conveyed by the words in the context. There can be no prescriptive rule that any particular form of expression must be, or not be, a representation with respect to a future matter: cf: Lewis [1964] AC at 285 per Lord Devlin. And, for the purposes of evaluating the issues arising under s 51A , in a case like the present, the understanding of each applicant is crucial. First, the representation objectively must be capable of being characterised as made with respect to a future matter. Secondly, the applicant must have understood it in that way. Thirdly, if the applicant did understand the representation to be with respect to a future matter, he, she or it will need to establish that, understood, in that way, he, she or it suffered loss of damage "by" the contravening conduct under s 82. Section 51A recognises that representations with respect to a future matter can be objectively misleading or deceptive if the prediction turns out in due course to be wrong. If s 52 operated in that unqualified way, because of the consequence of future error it would create liability for every representation about future matters, however responsibly the representation may have been made at the time. So, s 51A ordinarily affords a representor an important protection in making such a wrong prediction if, when making it, the representor had reasonable grounds for doing so. The protection is not absolute as s 51A(3) recognises. The existence of reasonable grounds will not excuse the making of a misleading or deceptive representation as to a future matter, when, say, the maker's opinion is a part of the representation, and the maker, in fact, did not have that opinion. Representations with respect to the future reliability or success of a business, as with other matters in daily life, involve a mix of accumulated experiences and prediction; the experiences being the foundation on which the predictive element is based. In substance there is no difference between saying that a person who (in the future) signs a lease is assured of the payment of the rent by the tenant over the term and saying that the tenant will pay the rent over the term. Each statement predicts or forecasts that a presently expected behaviour or series of events will occur in the future. Austcorp argued that representations (a), (h), (b) and (e) were not representations with respect to future matters but rather they were made as to the structure of the investment being offered. I reject that argument. The context in which these representations were made in the promotional material and the way in which they were conveyed were powerfully suggestive of a prediction or long term future outcome. The "guaranteed" return was not only guaranteed because the lease provided for that rent --- it was "guaranteed" because the representations to Mr Owers and Ms Tan-Bounkeua conveyed that it would be paid. The assurance was at both levels --- it was not just a five star investment because the contractual documents established a set of enforceable promises. Mr Owers and Ms Tan-Bounkeua had that understanding because of the involvement of Pacific International Hotels for the long term of 10 years and the location and potential of the area, as reinforced in the promotional material. And, while their return did not depend on occupancy rates, the fact that this was offered by the apparently experienced and successful promoters conveyed assurance and certainty not simply for the present, but for the term of the investment: 10 years with two 10 year options. It worked on Mr Owers and Ms Tan-Bounkeua. They understood that from day one for 10 years they would receive that return. The promise of a guaranteed return was a prime consideration for them, as Austcorp understood it used this as its marketing strategy based on the experts assessment of each of Mr Walker (in his letter of 3 June 1999), Mr Chappell and Mr Hung. In Coluzzi [2002] NSWCA 74 at [57] Mason P observed of a similar representation, that it may be reasonable to make a qualified estimate or prediction but quite unreasonable to make "... an unqualified and firm prediction such as is conveyed by the word 'guaranteed' in the present context". That context was a guaranteed net 7% p.a. return on capital invested in a serviced apartment bought off the plan. The assurance, here, was no doubt reinforced by the understanding (unrealised because of cl 20.9) that the legal structure of the lease to the entity referred to as "Pacific International Hotels" and "Pacific International" in the promotional material would reflect these representations. Last, representation (e) was also predictive of the outcome of the investment. Its verification was dependent on what would transpire after the representation was made. The assessment of how the investment would turn out could only be made after the making of that representation. I am satisfied on the basis of the findings I have made above when considering their individual positions, that each of Mr Owers and Ms Tan-Bounkeua understood representations (a), (h), (b) and (e) as containing a prediction. However, none of those four representations ceased to be predictive when the contracts were entered into or the leases executed. They remained, in character, forecasts of what would occur thereafter during the term of the lease or life of the investment. Representations (c) and (d) were different in the sense that they referred to an entity that would become the tenant. At the time that representations (c) and (d) were made, the brochure, leaflet and promotional material were understood by the applicants to have some ambiguity; each said that he or she was not sure who the lessee would be and each accepted that it could be a subsidiary or related company of whatever was "Pacific International" or "Pacific International Hotels", the brand names used in the promotional material. However, the lessee's identity was objectively certain and a matter of existing fact by the time that each applicant entered into each of the contract and the lease. And at each of those moments both representations (c) and (d) would have been understood by the applicants to speak of Mustara in the context of whatever they knew or understood of its relationship with Pacific International Hotels. So, at the time of entry into the contract and lease, each applicant knew something present and certain about that entity. At that moment, the entity (as so understood) either matched the descriptions in representations (c) and (d) or it did not. Despite the use of the conditional tense, "would", each of representations (c) and (d) referred to the then existing characteristics of the lessee (including its relationship with Pacific International Hotels as understood by the applicants by reason of the representations) at the time each applicant entered into the contract and the lease. That result follows from the use of the past tense "was" in each of those representations before the description of the presently existing laudatory features of the lessee entity. It follows that I am of opinion that representations (a) (h), (b) and (e) were with respect to a future matter, while representations (c) and (d) were not. I will now consider whether Austcorp has adduced sufficient evidence to displace the deeming in s 51A(1) and to cast the onus on the applicants to establish that Austcorp did not have reasonable grounds for making representations (a) (h), (b) and (e). 6.2 DID AUSTCORP HAVE REASONABLE GROUNDS? It argued that the applicants had failed to prove that it did not have reasonable grounds for making the representations I have found were made as to future matters. In essence the substantive issue on this aspect of the case was whether there were reasonable grounds for making the assertion that a guaranteed net 7% p.a. return would be paid over 10 years in the terms of the various representations. If there were a basis for the first 10 years, there is nothing in the evidence to suggest any contravention of s 52 with respect to one or both option periods. The answer to the essential question depends upon identifying what basis Austcorp had for making the representations as to future matters. If Mustara, or any subsequent operator and lessee, were to meet the guaranteed rent for 10 years then the operating revenues and profits of the resort would have to be sufficient to ensure that the payments could be made. If there were a shortfall, then Pacific International Hotels had to have a sufficiently strong financial position to make up that shortfall for as long as was necessary during the 10 year term. (For simplicity in these reasons I have not referred specifically to the additional costs to Mustara or the lessee of maintaining the standard of the resort and the individual apartments. These were additional financial burdens that Mustara, or its assignees, and Pacific International Hotels would have to meet over the term of the lease. I have had these extra costs in mind, however, when considering the ability of Mustara and Pacific International Hotels to meet the guaranteed rent for the term. ) This is another way of putting the concept in representation (e), that the purchase of an apartment in the resort would be an outstanding investment with no hidden risks. Austcorp argued that Mr Chappell and Mr Hung did not take success of the resort for granted, but made enquiries to satisfy themselves that it would be successful. It relied on the evidence it adduced from Mr Chappell and Mr Hung about the previous discussions in about 1998 between them on behalf of Austcorp and both Mr Wong and Mr Corne to which I referred earlier as a basis on which it could have reasonable grounds for making the representations. I reject those assertions. The earlier discussions and whatever work Austcorp did in relation to them did not bear on the proposal for the resort or the financial position of Pacific International Hotels at the later time when the representations were made. At best this was background information. Austcorp relied on the following further matters for saying there was a reasonable basis for making representations (a), (h), (b) and (e). It asserted that: The accounts and 29 November 1999 projections have no real probative value. There is no evidence how those projections were arrived at or of the underlying valuations in the accounts or their basis. They assume that the resort will have 149 rooms, whereas the draft strata plan attached to the applicants' contracts had only 145 apartments shown on it. That plan had been amended just before these projections were sent to Mr Zantiotis and on 29 November 1999 Austcorp sent earlier purchasers from Landillo a letter (which I have referred to above) enclosing the same draft plans with a deed of variation replacing the earlier draft strata plan in their contracts with this new version. There was no explanation for the use in the projections of 143 rooms in May 1999 or 149 rooms in November 1999 when the strata plans provided for 140 and 145 rooms respectively. Mr Zantiotis said that he sent the documents he received from Mr Corne in November 1999 to prospective purchasers who asked about them. But senior counsel for Austcorp did not examine Mr Zantiotis in chief on what he did with these documents, apart from forwarding them to prospective purchasers and reviewing the projections. After objection from the applicants, senior counsel for Austcorp desisted in questioning Mr Zantiotis in respect of these documents saying that they were "... not going anywhere". Mr Zantiotis did not give any evidence about any conclusions he drew from his review or what he did after reviewing the documents and neither Mr Chappell nor Mr Hung gave any evidence about them. Pacific International Hotels' operating profit after tax in the special purpose accounts for the year ended 30 June 1998 was about $171,000 and it had retained profits of about $285,000. Pacific International Hotels' total income for the year ended 30 June 1998 was about $1.35 million and its total expenses about $1 million dollars. According to the May 1999 projections Mustara's annual base rent was $2.45 million. Although the net assets of Pacific International Hotels were disclosed in the accounts at around $4 million, over $3.5 million comprised assets described as "intangibles" being the value of the leaseholds of "Bankstown Pacific Apartments" and "Pacific International Extension". The basis of these valuations was not explained in the accounts. It is not clear whether this was a value of goodwill or the difference between the agreed and market rents or of something else. The accounts were not audited but were prepared as a special purpose financial report for use by members of the company (note 1). Austcorp argued that Mr Hung was impressed by Mr Corne, saw him as a "down to earth operator" who knew what he wanted and what he could do. It argued that Mr Hung also considered that Mr Corne's business model was a good one. Mr Hung claimed that he had seen some financial accounts for Pacific International Hotels for 1997/1998 which showed net assets of around $4 million. This is likely to have been a reference to the 1998 special purpose financial statements. Austcorp asserted that because of these matters Mr Hung was entitled to consider the projections he had seen in May 1999 to be reasonable. However, a cursory review of those financial statements would have revealed that the only substantial asset was the intangible comprising two leaseholds which Pacific International Hotels said were worth about $3.5 million. The third forecast was not referred to during evidence or address, other than in a reference in the written submissions of Austcorp. There is no evidence as to how it was prepared and what, if any use, was made of the document. It appeared in Austcorp's tender bundle behind a page being a fax from Richfield to Robertson & Robertson, valuers dated 16 October 2000. I give the document no weight. Austcorp argued that these projections showed that the business was viable and Mustara would be able to meet its obligations under the proposed transactions and leases. Austcorp argued that there was no reason to believe that the projections were other than the work of competent professionals in the hotel/serviced apartment business. In my opinion there is no evidence that Austcorp made any use of the second and third sets of projections for the purposes of forming any view of its own as to the reasonableness of the subject matter of the representations. The first set, which may be the projections Mr Chappell and Mr Hung saw in May 1999, had a format that appeared to be repeated in the latter two, but the numbers changed. No explanation for those changes appeared in the evidence. I have found that it was unreasonable for Mr Chappell and Mr Hung, on behalf of Austcorp, to have placed any reliance on the first projections without conducting an independent analysis of them. I find that none of these matters provided reasonable grounds for Austcorp to make the representations as to future matters making assertions as to the future capability of Pacific International Hotels or Mustara to pay the promised guaranteed return for 10 years. Austcorp argued that on the basis of those projections, Pacific International Hotels was prepared to commit its corporate reputation to the business of operating the resort knowing, that if it failed the damage to its business and future plans would be likely to be significant. If this argument had any weight, every applicant for finance, by giving the financier its projections, would provide the financier with reasonable grounds for concluding that the projections would be met. It should not obscure the absence of evidence that Austcorp did no substantive analysis to see whether these projections, accounts or other information were reliable. A quick review of the May 1999 projections by Mr Chappell and Mr Hung in a meeting and some awareness of Pacific International Hotels and Mr Corne was not an adequate foundation to make the representations as to future matters carrying the degree of assurance that they did. Austcorp did not make any substantive check or assessment of the capacity of Pacific International Hotels and Mustara to achieve the guaranteed return for 10 years. Apart from a general awareness that Pacific International Hotels had an association with managing the Toukley property there is no evidence that Austcorp had any information about that operation itself. Mr Chappell said that he was aware that Pacific International Hotels had been operating a hotel at Toukley, about 20 or 30 minutes north of The Entrance which he "understood" was making a profit. But he and Austcorp did not examine any operating or other accounts for that business and none was tendered. They simply took at face value what Austcorp repeated in the promotional material, namely that Pacific International Hotels was reputable, capable and experienced in managing and operating hotels and serviced apartments around Australia. Austcorp submitted that Pacific International Hotels' liability under cl 20.9 of the leases to pay up to one year's rent provided a reasonable basis for Austcorp's confidence that the resort would be able to meet its rental obligations under the leases entered into with the applicants. However, in 1999 Mr Hung thought that the guarantee in cl 20.9 was an important part of the transaction because it showed to him that Pacific International Hotels would give a commitment to back the $2 company, Mustara. And he thought that Pacific International Hotels' balance sheet could support a 12 month commitment which was very important to him in deciding to go ahead. This showed that Mr Hung was concerned by Mustara's lack of substance to meet long term financial commitments but regarded the limited support of its parent in cl 20.9 as important. That evidence can be juxtaposed with what Mr Hung knew was in the promotional material and the unequivocal nature of the representations. I am satisfied that cl 20.9 provided no reasonable ground for Austcorp to make the representations as to future matters. Mr Chappell and Mr Hung thought that Mr Corne and his managers were competent. But as I have found Austcorp did not do any due diligence or analysis to see how Mustara or Pacific International Hotels could meet the guaranteed return over 10 years. Moreover, Austcorp knew of, but did not examine, Pacific International Hotels' business. That business was apparently committed to or contemplating other, equally unexamined, expansion plans. Austcorp argued that the advice that Mr Walker gave Mr Chappell when he visited The Entrance and Mr Chappell's own impressions of the site, the work that the council had done there and the following evidence from Mr Chappell was evidence of reasonable grounds that it and he had for making the representations as to future matters. First, Mr Chappell said he looked at the projections and they indicated a profitable hotel. Secondly, he trusted Mr Corne's experience. There was no evidence beyond attendances at a meeting that Mr Corne's work was "well researched". But tellingly, Mr Chappell asserted that Mr Corne, or (I infer) a member of the Pacific International Hotels group, had committed money to buy the manager's and or restaurant lots at the resort. In fact, no member of the Pacific International Hotels group committed any money to buy the management or restaurant lots (to which Mr Chappell, in the answer above, referred as the "hotel lot"). Mr Chappell was aware that originally Mustara had agreed to lease the manager's and hotel lots from Landillo for $225,000p.a.. He was also aware of the transaction in which Richland had agreed in late December 1999 to purchase the manager's, restaurant and hotel lots for $3,680,000 and of the increase in the rent payable by Mustara to $335,000 p.a. for the lease of those lots because it was financially significant to Austcorp as a major sale. Mr Chappell acknowledged that it would have been in Austcorp's financial interest for Mustara to have entered into a contract with Landillo to acquire the manager's and restaurant lots in 1999. Instead, Mustara entered into a variation to the management agreement (in January 2000) increasing the rent for those lots that it had agreed to pay Landillo from $225,000 to $335,000p.a.. Mr Chappell was aware at the time the representations were being made that Pacific International Hotels and Mustara had not purchased the manager's lot, or the restaurant lot, but, rather, would be leasing those lots, thereby increasing the ongoing recurrent liabilities to operate the resort. Thus, if Mr Corne had told Mr Chappell that his group would buy those lots and later did not, in my opinion that would have raised a concern for Austcorp to understand why Mr Corne had changed his mind. The real possibility that the Pacific International Hotels group was not later able to or, perhaps, prepared to invest in this project with its "guaranteed" returns for investors should have rung warning bells to Mr Chappell and Mr Hung. I did not accept Mr Chappell's evidence that he took into account that Mr Corne (or one of the Pacific International Hotels group) had committed money to buy either manager's or restaurant lots or both at the time of Austcorp making the representations. The objective evidence gives no support to this assertion. In my assessment, given his extensive commercial experience, Mr Chappell gave that answer in order to bolster the flimsy bases he was conscious he claimed that he had for making the representations. The applicants argued that the base rent of $225,000 as at May 1999 for which Mustara would be liable to Landillo in respect of the restaurant and manager's lots had not been included in the projections, thus making them inaccurate. Austcorp contended that the figure in the projections of $2,447,000 as the "base rent" included the $225,000. The base rent figure appears to accord roughly with the rent payable by Mustara of $2,262,664 for 140 apartments as at May 1999 when added to approximately $225,000. There is a discrepancy of $40,664, but the figures appear close enough. This demonstrated a further difficulty in Austcorp using those projections, because, once it became involved, a redesign occurred. There were five further apartments added to the development. That resulted in more rent being payable by Mustara and an increased rent for the manager's and restaurant lots. Of course, there was a potential increase in income receivable by Mustara but, unlike its lease liabilities to the investors, that income was dependent on the market. And in June 1999 Mr Walker had suggested increased selling prices, which would again have changed the rents due when those apartments were sold and thus required new projections. Austcorp also argued that it was entitled to rely on what Mr Wong had done by way of due diligence for his group's purposes together with what Mr Corne had done in making the representations. However, there is no evidence of what Mr Wong or his companies did, let alone how that activity provided reasonable grounds for the representations as to future matters. In effect, Austcorp was trusting the judgment of each of those persons. However, there was no evidence of the reasonableness of what either Mr Wong or Mr Corne or their organisations had done, or of any investigation that Austcorp had undertaken, as to the financial viability of the project for the purposes of providing the guaranteed return. Austcorp's enquiries were perfunctory and did not provide it with reasonable grounds for making the representations of a guaranteed return for 10 years. Additionally, no projections were prepared for any period beyond the first five years. For the reasons I have given the projections and other contemporaneous matters which Austcorp claimed it had relied on were inadequate to provide any evidence of reasonable grounds it had for making representations. I am not satisfied that any of these matters amount to evidence to meet Austcorp's preliminary burden of proof under s 51A(2). And I am not satisfied that they provide evidence of Austcorp having had reasonable grounds for making the representations as to future matters. That position never changed. Austrcorp did not establish any basis for ignoring that warning. The special purpose accounts for the year ended 30 June 1998 did not assist matters. Austcorp ignored that advice and made the representations thereafter to each of the applicants. It was unreasonable for Austcorp to ignore those common sense warnings from its independent solicitors and persist with making misleading and deceptive representations about the strength of the investments. After all, these were its solicitors informing it of the danger of asserting that there would be a guaranteed return. Mr Chappell was aware in 1999 that there had been a huge growth in accommodation in the Sydney region to take advantage of the 2000 Olympic Games. And he knew that a lot of that development included conference facilities. He was aware also that by November 1999 Wyong Council had given development consent for 800 new apartments at The Entrance (including those in the resort). He was aware that these other developments were bound to generate competition for the resort. Indeed, within a few hundred metres of the site of the resort another development, the Waldorf, was planned which if constructed would be in direct competition with the resort. It had 200 rooms and faced north over the water. Additionally, Mr Chappell was aware in 1999 that at Ettalong, close to The Entrance, a 10 storey 228 luxury resort apartment development, to be called the Grand Mercure Ettalong Beach Club Resort, worth $93 million was under construction. He understood that this too would be in direct competition with the resort if it were built. As Mr Chappell said, the obvious conclusion was that if the operator of the resort did not make a sufficient net profit to meet its obligations under the leases, there was a real risk that the lessor purchasers of the apartments would not receive their guaranteed return over the 10 year term. Yet Austcorp did not do any study or analysis to ascertain the possible impact on the resort and the returns it might be able to guarantee in light of all the other actual and potential development at The Entrance or in the resort's likely market area. There was no evidence that Austcorp had made any effort or enquiries to ascertain or understand what, if any, impact on demand for accommodation and prices this significant development activity would have over the 10 year term of the lease. These matters satisfy me that Austcorp did not have reasonable grounds for making the representations as to future matters. Austcorp also argued that it was entitled to rely on Mr Ronald de Wit's evidence to establish that at the time of making the representations the projections afforded reasonable grounds. He was the expert it called in relation to hotel and resort forecasts and financial viability. However, because I am not satisfied that Austcorp has adduced any evidence that it had any reasonable grounds in 1999 or 2000 for making the representations as to future matters, Mr de Wit's evidence is not relevant to the issues under s 51A. Austcorp had no information from Mr De Wit in 1999 or 2000. What an expert witness such as Mr de Wit might identify as being reasonable grounds on which to make a representation as to a future matter cannot convert a guess made on an inadequate basis by the representor into a guess which happens to be supported by what someone else, after the event, identifies as being a reasonable ground on which the representor, had it done the work or possessed the information, might have based his, her or its representation. In any event, for the reasons given below [see 8.1], I am not satisfied by Mr de Wit's evidence that the projections were reasonable. I have considered the overall circumstances of what Austcorp did and the information which it had at the time of making the representations. I am satisfied that Austcorp did not have reasonable grounds for making any of the representations as to future matters. As Sheppard and Neaves JJ indicated the inquiry is still directed to the representor's state of mind or to the existence of particular factors which would establish something as to the representor's reasonable grounds: Cummings 41 FCR at 566. 7. In early October 2003 Mr Owers approached Mr Bignold of Raine & Horne at The Entrance to assist him in selling the property. Mr Bignold advised him that he was confident of achieving a sale at over $400,000 and would be working to achieve a price of around $450,000. Mr Owers signed an agency agreement shortly afterwards in which the agent's opinion as to the apartment's current estimated selling price was given as that range. However, when the property was put to auction before Christmas in 2003, it was passed at about $400,000 in with no registered bidders and no interest shown in it. After the auction he left the apartment in the hands of Raine & Horne in order to see whether he could secure a sale by private treaty. Initially he had an asking price of $389,000 and then lowered it to $379,000 in 2004. He had some telephone contact with Mr Bignold over the next year or so but no interest was being shown in the apartment. Ultimately, Mr Bignold stopped telephoning him. After a period, Mr Owers rang the agency in early 2006 and was told that Mr Bignold no longer worked there, and they had no record or file concerning his property. He then signed another agency agreement with Raine & Horne in late March 2006. Mr Check, the agent, told him that his opinion of the current selling price was between $300,000 and $330,000. Mr Owers wanted more. Mr Check said that there were about 30 or 40 apartments in the resort on the market and that he could not sell them because no-one wanted anything to do with them. Mr Check recommended that he drop the price. Mr Owers dropped the asking price to either $349,000 or $339,000 and received an offer. A purchaser was interested at a price of $320,000 which, by then Mr Owers would have accepted. However, subsequently, the purchaser lost interest and informed Mr Check that their solicitor had uncovered information in the owners' corporation's minutes about defects in the building and exposure to substantial expense. The interested purchaser then decided not to go ahead. Austcorp argued that because Mr Owers had purchased the apartment with a view to capital gain, as well as using it for family holidays, he displayed little urgency in seeking to sell it. It argued that during a lengthy period Mr Owers could easily have sold his apartment at prices at or above his purchase price but chose not to do so. Austcorp contended that this was because after May 2002 Mr Owers perceived that there was a significant capital gain in the value of his apartment and he saw the prospect of further capital gains. In my opinion, Mr Owers continued to be affected by the erroneous perception of the market which had been, and remained, distorted by the representations until he received the advice from Mr Check that there was little prospect of any sale. This was because, initially, the market had not appreciated the true value of the apartments - a matter it came gradually to understand. Mr Owers' evidence was consistent with the picture that emerged from the agreed evidence of sales and sales attempts not resulting in a sale which I have summarised in the table below. More than 25 apartments were offered for sale but less than 40% of them were sold. And in 2005, only 25% of the 20 apartments offered were sold. By early 2006 sales of the apartments began occurring at prices less than over 5 years before. While about 25 apartments had been sold in 2003, most of those had cost less than $200,000 off the plan although some had been purchased for larger prices. After December 2003, no apartment originally purchased for more than $255,000 was sold until early 2008. Then, one that had been purchased for $465,000 in January 2001 was sold for $350,000 (about 75% of its original sale price). This suggests, at least, that from late 2003 it was difficult to sell the more expensive apartments, such as Mr Owers'. A number of apartments were offered for sale on more than one occasion. Austcorp argued that it was unreasonable for the applicants not to have sold because the market was apparently rising when they realised that the representations had been falsified on Mustara's collapse. I reject this argument. It seeks to have things both ways, when Austcorp itself created the difficulty for the applicants. In Banco de Portugal v Waterlow & Sons Limited [1932] UKHL 1 ; [1932] AC 452 at 506 Lord Macmillan tellingly observed that it was often easy, after an emergency had passed, to criticise the steps which had been taken to meet it, but that such criticism did not come well from those who themselves had created the emergency. That principle accords with the statutory purpose. It would be unreal to argue that every purchaser who had been misled, as the present three applicants claim, into buying an apartment in the resort should have put their property on the market in 2003 for sale. The market would have been flooded as it was from 2004 onwards. In my opinion, Mr Owers acted reasonably in his decision to offer the property for sale when he did and the steps he took in the difficult situation in which he found himself. She was aware of two people who had sold their apartments after May 2002. She had taken a keen interest in real estate and the market. In the year following June 2002 she claimed that she perceived that there was no market for the apartments because there was no longer a guaranteed return and they were not selling. However, over 20 apartments were sold in that period of which she was aware of two. None of the apartments sold in this period sold for less than their purchase price, and indeed most of them sold for a substantive increase. Ms Tan-Bounkeua asserted that had she tried to sell the price would have been a lot less than her purchase price. I do not accept Ms Tan-Bounkeua's evidence about why she chose not to offer her apartment for sale. I think that she wanted to see how the situation developed after Mustara's collapse so as to ascertain what value she could get for her apartment. In the meantime, she was prepared to utilise the apartment as her own holiday accommodation, because it suited her family situation at the time. She was pregnant with their second child who was born in May 2003. Then she realised that the best commercial result was offered by Mirvac and accordingly she decided to have Mirvac manage her apartment. In August 2003, Ms Tan-Bounkeua and her husband informed their bank that her apartment had a value of $280,000, when they were seeking a further loan. At the same time she represented to the bank that the apartment was earning a 7% net return on her initial purchase price. In my opinion, the distortion of the market price (above the true value), which I have found, was what influenced Ms Tan-Bounkeua into her consideration that her apartment was worth more than she had paid for it and was the reason she retained it. Of course later, after the market turned, a sale would not have yielded any profit. Despite my misgivings about her evidence, I do not accept Austcorp's argument that Ms Tan-Bounkeua was the author of her own loss in not making an attempt to sell. As Austcorp argued, she considered that her apartment was increasing in value. That consideration was supported by what was happening in the market. I am satisfied that a cause of Ms Tan-Bounkeua's loss was her initial reliance on the misleading representations. I do not consider that it was unreasonable for her to have perceived the market to have risen after May 2002 and that the rise was continuing. Indeed, this was Austcorp's case and the objective evidence supported that perception. It was reasonable for her to retain the property with a view to seeing if she could recoup her position in due time. The risk of loss when the market ultimately attributed a true value to the apartments in the resort was hidden by the rising market. In the period following May 2002 apartments were sold at a profit that had originally been purchased in the same price range as Ms Tan-Bounkeua's apartment. However, I am not satisfied that, had every apartment owner in the resort put their apartments on the market at that time, they would all have been able to sell at a profit. The likelihood is that the market would have been flooded and they would have sold at a loss or not sold at all. Nor am I satisfied that Austcorp has established that Ms Tan-Bounkeua was likely to have sold her apartment at a profit at this time. It was a possibility that she could, but as Mr Owers' evidence demonstrates, it was also possible that she may not have succeeded. It is difficult to make a finding about Ms Tan-Bounkeua's thinking processes given my rejection of her stated reason for not investigating the possibility of selling her apartment in the period after Mustara's collapse. However, I am satisfied that she retained her apartment initially because she saw market prices rising. I suspect that Ms Tan-Bounkeua conflated her reasoning process when giving her evidence by asserting, as was later the case, that apartments had been put to market and were not selling. Looking at her position as a matter of commonsense, I infer that by the time she realised that the true value of her apartment was less than its previous market value, it was too late for her to sell and make a profit. She was in this position because of her initial decision to purchase. I am not satisfied that she acted unreasonably in retaining her apartment. Mr Di Giulio did not give any evidence on the question whether Taldarmar decided to retain or sell the apartment. However, Mrs Di Giulio, who gave evidence before him, said that they seriously thought about selling the property at the time that Mustara collapsed. She said that they were told that things would improve under Mirvac's management of the resort and they decided to retain their property. Mr Luciani gave similar evidence. He thought that things would get better eventually. He claimed to have spoken to some people at the annual general meeting of the owners corporation on one occasion and to have walked down the street at The Entrance seeing that a number of apartments in the resort were being offered for sale by real estate agents. Mr Luciani thought that the value of the property had increased, despite that the collapse of Mustara in mid 2002 and that it was increasing in value thereafter. In June and July 2003 Mr Luciani signed applications to St George Bank for an increase in his credit facility. He ascribed two different values to the apartment in both documents, one, for his half-share of $225,000 (i.e. $450,000 in full) and at another point in the documents he described the value as $480,000. Mr Luciani gave some unsatisfactory evidence about this discrepancy. I think it is likely that he was careless in filling out the form. Mr Luciani accepted that by June 2003 he had perceived that their property had increased in value, despite the problems with Mustara and the fact that Mirvac was not then promising a guaranteed return in respect of its management of the property. In July 2004 Mr Luciani applied to St George Bank to increase his facilities. The form described his half-share in the resort as worth $230,000 (i.e. the apartment was worth $460,000). In March 2005 he made a further application to St George Bank giving an estimated value of the apartment as $400,000. Mr and Mrs Di Giulio signed this latest application as guarantors. Mr Luciani's perception of the market movements reflected the objective evidence of sales prices achieved in the resort. By early 2005, Mr and Mrs Di Giulio and Mr Luciani perceived that the value of their apartment had fallen. That appears to accord with the contemporaneous sales evidence from the latter part of 2004 when most of the properties sold realised about the same as their purchase price or slightly more, though some were realising lesser prices. While I have not found that Mr and Mrs Di Giulio and Mr Luciani were reliable witnesses on the issue of inducement, I accept that, like Ms Tan-Bounkeua, they perceived initially that the market was rising and were unaware that the true value of their apartment was less than that being shown in the market. The rise in the prices of apartments sold in the resort was not as great as the increase in value of other apartments sold in Wyong Shire generally. I do not draw any adverse inference from their decision to retain their property. The original price and value of their apartment was similar to Mr Owers'. There was no contemporaneous evidence of any apartments in the resort purchased off the plan in that price range being sold at all. In my view, it was not unreasonable for them to have retained their apartment. They would have had no better prospect of selling it had they chosen, than Mr Owers. 8. That has made it difficult to arrive at an assessment of the value of each applicant's apartment at the time of the registration of the strata plan on 1 August 2000 and on completion of their purchases which occurred shortly afterwards in 2000. The values at both dates were materially the same. By early 2008, the prices of apartments in the resort had fallen to about 20% below the purchase prices agreed in the period before August 2000. The recent price level was radically different from the general trend of an increase in prices in The Entrance over that period of about 55%. I have concluded that the original purchase prices paid by the applicants in 2000 did not reflect the true value of apartments in the resort both at completion and at the time of registration of the strata plan, which was substantially less than the prices paid for them. The applicants called Robert Dupont as an expert valuer. Austcorp called Mr de Wit and Robert Tew on issues related to valuation. Mr de Wit was not a valuer. His expertise was, relevantly, in the preparation of forecasts and projections for developments like the resort. Mr Tew was an expert valuer. Mr Dupont and Mr de Wit gave concurrent evidence on hotel and resort performance issues, and for a time they did so with Mr Tew. On a later day Mr Dupont and Mr Tew also gave concurrent evidence on valuation issues. All three were experienced in their fields. They also agreed on the average tariff or room rates to use in calculating revenue for the resort. However, they disagreed about occupancy rates. The long term level of occupancy rates has a critical bearing on the income of an accommodation property such as the resort and on its overall financial viability. Both Mr de Wit and Mr Dupont agreed that calculation of occupancy rates was very subjective and complicated. This made it difficult to determine with precision what occupancy rate was appropriate. These matters were relevant to assessing, first, how the resort could be expected to perform financially and, secondly, whether the projections could be relied on by Austcorp as evidence of it having had reasonable grounds for the purposes of making representations as to future matters. Hence, the importance of this issue to the two aspects for which this evidence was led. Austcorp relied on Mr de Wit's evidence that he would comfortably have concluded in mid to late 2000 that the resort would be likely to perform at higher than average occupancy levels. He opined that it should have been able to achieve occupancy rates in the region of 65%. He also relied on his work in arriving at these opinions to conclude that the occupancy rates in the November 1999 projections made by Pacific International Hotels were relatively close to his own. Mr de Wit was not aware of any proposed developments as at 2000 in the area of the resort when preparing his report. He agreed that knowledge of these would be "absolutely critical" in making an assessment of occupancy rates. Thus, his opinion that the resort would achieve a stabilised occupancy rate of 65% was arrived at on the assumption that it would not have any new competition. Since he was not aware that at the time development approvals existed for another 650 apartments at The Entrance including a proposed nearby competing resort, I am not satisfied that Mr de Wit's opinions in respect of occupancy rates for the resort or as to Pacific International Hotels' projections should be given weight. He did not make any study of The Entrance area itself to prepare his report but relied on an earlier study by KPMG about the proposed Grand Mercure at Ettalong. I am not intending to criticise Mr de Wit by saying this; he simply was not aware of and, about 8 years after the event, was not able to find the development approval information of which Austcorp was aware in 1999 and 2000. Indeed, Mr Dupont did not refer to these matters in his reports either. However, that information was relevant in 1999 or 2000 to any informed or reasonably based assessment made of likely occupancy levels for the resort or for use in projections made at that time. That information was readily available in 1999 as Mr Chappell's November 1999 press release and his evidence revealed. Austcorp argued that Mr Chappell had asserted that the other 650 proposed or approved apartments were simply apartment buildings, in contrast to the 145 in the resort which he said would be in a serviced apartment hotel. That answer overlooked the Waldorf development which was a potentially competing property at The Entrance in close proximity to the resort. The effect of its presence in the market, as then proposed, obviously required analysis in order to assess the reliability of the November 1999 projections. So too did the other developments because they were potential competition, unless analysis or knowledge of their nature enabled them to be put to one side. Since Austcorp knew of this level of proposed or approved development, Mr de Wit's opinion is of little assistance in assessing first, whether Austcorp had reasonable grounds for the representations as to future matters and, secondly, what occupancy rates would have been appropriate to use in preparing a projection or valuation in August 2000. Austcorp argued that Mr de Wit had examined the 29 November 1999 projections and opined that the expense figures arrived at by Pacific International Hotels were reasonable. Mr de Wit selected as comparable properties for the resort for the purpose of comparing expenses, a number of city and metropolitan hotels, and one at Alice Springs. When cross-examined, he accepted that none of those were resorts, not even the one at Alice Springs. He did not obtain comparable data about regional resorts. I am not satisfied by Mr de Wit's evidence that Pacific International Hotels' projections of expenses for the resort were reasonable. He did not engage in any comparative analysis of the style of operation of each of his selected comparable hotels with the style of operation of the resort. He stated that he would "... need a lot more data, a lot more information" to assess their comparability. The expert evidence identified that one difficulty in such comparisons is that the comparative data is not always readily available. Mr de Wit said that in assessing a forecast for a hotel that has not been built, one was looking to a future situation. It would be perhaps two years before the hotel would begin operating. Thus, the person making the assessment has to assume in a general way the style of operation of a proposed hotel and compare the promoter's forecast projections with selected benchmark data. The latter data may be publicly available but may not be of strictly comparable properties. Mr de Wit normally gave advice on forecasts at an indicative rather than detailed level. He was not a valuer. Mr Dupont's selection of comparable properties, his research, and his experience of the area in which the resort was located were more impressive and reliable than Mr de Wit's. For example, Mr de Wit agreed that the four comparable properties used by Mr Dupont were superior choices to the ones he (Mr de Wit) had selected with which to assess occupancy rates for the resort. Mr Dupont said that Mr de Wit's examination of comparable properties offered an overall view of the market at the time (2000). However, Mr Dupont had been more specific and had analysed the market in 2000 at The Entrance in detail, as, Mr de Wit appeared to agree. In addition, Mr de Wit made no allowance in his calculation for risk, possibly because he was not a valuer, unlike Mr Dupont. Mr Dupont's opinion was that at August 2000 one would expect a stabilised occupancy rate for the resort of 50%, in line with Central Coast averages. (Such a projected rate represents a likely level of sustainable, medium to a long term performance after the first three or so years of operation in which the property builds up its goodwill and reputation. ) He considered that The Entrance was not a popular tourist area and that a resort development of 145 rooms would not generate enough enthusiasm within the market to create a high stabilised occupancy rate. In his reports, Mr Dupont explained that although the resort was classified as four star, about 90% of the rooms had layouts like large motel rooms rather than serviced apartments. He thought the size of the rooms was not suited to the family holiday market because they were too small and also criticised the room mix. He noted that on completion the resort would increase room supply on the Central Coast by 10% but would almost double it at The Entrance. Occupancy rates in the initial start up phase of a resort usually begin at a lower level before building up over time to a long term stabilised rate after the property has established itself in the market and attracted goodwill. I am satisfied that in 1999 and 2000 it was unreasonable to postulate a stabilised occupancy rate of 65% for the resort. That rate was not supported by contemporaneous data. And, given the very significant amount of competing development which was then approved in, both, The Entrance and surrounding areas, including Ettalong, the way in which the accommodation market in that area would respond to the substantial increases in room supply was uncertain. I accept the thrust of Mr Dupont's view that stabilised occupancy rates would have been assessed, by reasonable analysts, in 1999 to 2000 at around 50%. The scale of actual and proposed development in the area suggested a degree of market optimism that would have allowed reasonable minds to choose a stablised occupancy rate up to 55%. I consider that the range of occupancy rates which it was reasonable to use in projections for the resort at this time was between 50% and 55%. This is a common measure of damage in claims under s 82 of the Act where land has been acquired in consequence of a contravention of s 52: see HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54 ; (2004) 217 CLR 640 at 656 [35] . However, the rule is not inflexible or rigid and, as Gleeson CJ, McHugh, Gummow, Kirby and Heydon JJ went on to point out, the test depends on the difference between price and the real or fair or intrinsic value of the asset, as opposed to its market value: Astonland 217 CLR at 656-657 [35]-[36]. In Astonland 217 CLR 658-659 [38]-[40] the Court indicated that subsequent events could be used to arrive at an assessment of the real value of an asset for the purposes of calculating compensation under s 82 of the Act in respect of a claim of overpayment at the time of acquisition. Events after the date of acquisition can be taken into account but when that is done care must be taken in distinguishing among possible causes of the decline in value of what had been bought. Thus, there is a fundamental distinction between causes inherent in the property acquired, and independent or extrinsic causes. To the extent that the latter causes have affected the value, then loss flowing from them would not have been caused by the inducement of the misleading or deceptive conduct. But if the value of the property acquired was always going to fall when some inherent cause began to operate (e.g. when a competing property, not adverted to by the negligent valuer in performing the valuation for the acquisition, commenced operation) that would be indicative of the true value. Such a loss in the value was, accordingly, inherent in the nature of what was purchased namely, that it would decline in value because of the operation of the competing property in close proximity: Astonland 217 CLR at 660 [43]. Their Honours said that the rental levels and, therefore the value of, Astonland's property were doomed from the start because, so long as the construction of the neighbouring shopping centre continued to completion, the plaintiff's loss would be inevitable. In such a case the court is not limited to the assessment of risk of loss at the time of purchase "... but is entitled to take account of how those risks had evolved into certainties at dates after the date on which the comparison of price and true value was being made": Astonland 217 CLR at 661 [45]-[46]. In particular, some material factor may not be apparent to it. A mistake of this kind, it seems likely, was present here. Though the market value on 21 April 1997 was $400,000, and in July 1997 it was $375,000, one matter was not apparent then which was apparent later. The trial judge found that $130,000 was "the value of the land more or less since it became apparent that tenants were largely unavailable except at minimal rentals" (footnote omitted). That unavailability was an inevitable consequence of the Beach Road Shopping Centre once it was completed, but the perception of the likely effect of that completion was obscure in 1997, and only became clearer from the latter part of 1998 on. That approach was to allow a plaintiff to recover the purchase price of the asset less whatever was "left in its hands": Astonland 217 CLR at 666-668 [63]-[67]. They concluded that once the plaintiff had been induced to buy the property "... at a time when it was perceived to be valuable, and was forced to retain it because it increasingly became to be perceived as being of declining utility and value": Astonland 217 CLR at 668 [67]. In such a situation the plaintiff's property was not a readily marketable asset. It is important for this purpose to have regard to the statutory subject, scope and purpose of the Trade Practices Act , as Gummow, Hayne and Heydon JJ observed in Allianz Australia Insurance Limited v GSF Australian Pty Limited [2005] HCA 26 ; (2005) 221 CLR 568 at 597 [99] . It is attributing legal responsibility; blame. This is not done in a conceptual vacuum. It is done in order to give effect to a statute with a discernible purpose; and that purpose provides a guide as to the requirements of justice and equity in the case. Those requirements are not determined by a visceral response on the part of the judge assessing damages, but by the judge's concept of principle and of the statutory purpose. (See also at 121-122 [33], per Gleeson CJ; at 132 [69] per McHugh J. It is enough to demonstrate that contravention of a relevant provision of [that] Act was a cause of the loss or damage sustained. ' (Original emphasis. Some were comparable with Ms Tan-Bounkeua's apartment. The pattern that emerged after Mustara's collapse until about mid 2004 was that market prices realised for apartments in the resort were generally greater than the purchase prices. In about mid 2004 they became similar. However, considerable difficulty was experienced in achieving sales of quite a number of units, including Mr Owers'. And, the number of properties which had been listed for sale, but not sold, had increased markedly since the turn of the market in mid 2004. By mid 2005 the market had turned down and almost all the properties in the resort were sold at a price less, and sometimes up to about 25% less, than their acquisition cost. Mr Dupont noted that the more recent sales results were in marked contrast to movements in median sale prices of apartments in Wyong Shire during the period between 2000 and 2007. He said that, although sale prices in the resort were slightly erratic, there was a general weighting indicating an increase in value of apartments in the resort of around 40%-50% from 2000 to the peak of the market in 2004. In comparison, median values of ordinary residential units (without a restriction on use similar to that affecting the resort) in Wyong Shire increased by 84% in the same period. He said that the reduction in values in recent years was partly a result of over supply in The Entrance unit market, as well as a general softening of the property market due to interest rate rises, affordability and macro economic conditions. Mr Dupont said that generally a lower capital gain was not unusual in serviced apartments because that was off-set by the prospect of higher returns (such as 6% or 7%) as compared to a return of 3%-4% for general residential real estate. He concluded that this consideration was especially relevant for apartments such as those in the resort because full-time occupancy was prohibited. Although unit prices have fallen in recent years, median unit prices in Wyong are still 55% over 2000 values and this is consistent with my observations in the general market. Mr Tew observed that most of those sales were of apartments with less attractive aspect or amenity or little or no water view. He suggested that the market's expectation of capital gain had changed, leading to the present prices. I do not accept that this provides an adequate explanation for the dramatic fall in prices of apartments in the resort. Mr Tew did not explain satisfactorily how or why any "broader factors" were not inherent in the apartments. Nor did he identify in any report market evidence of other comparable property which experienced such falls. I do not give Mr Tew's evidence on this point any weight. Thus, by the end of 2007 general prices of apartments in Wyong Shire were about 55% above their 2000 level, but prices in the resort were materially below their 2000 level by the end of 2007. I accept Mr Dupont's evidence that this indicates a fundamental flaw or an unsustainable assumption in the motivation of purchasers underlying the earlier sale prices. That was the date on which the strata plan was registered. Mr Dupont also valued the apartments by taking into account subsequent events specific to the property to arrive at what he said was a value to each applicant "according to known factors". Mr Tew adopted a comparative sales analysis based on actual sales both of properties within the resort and other properties which he assessed as being comparable. He used a rate per square metre of floor area to calculate the value of the applicants' apartments. On the other hand, Mr Dupont rejected using sales of apartments in the resort as comparable sales. He had adopted a capitalisation of income analysis as his chosen method of valuation. Mr Dupont referred to the Principles and Practice of Valuation published in 2007 by the Australian Property Institute to support his approach. That text stated that a rate per square metre of floor area, which Mr Tew used, was not a reliable guide to valuing small accommodation establishments such as motels and hotels. That was because of, first, their limited uses as specialised accommodation and, secondly, accommodation properties are not bought let or sold on floor area, but on income. Important assumptions in Mr Dupont's analysis were the occupancy rate, the room rate, the capitalisation rate and the discount rate. Capitalisation and discount rates involve the application of a valuer's judgment as to the risks of achieving the return expressed in each rate. In his reports, Mr Tew disagreed with Mr Dupont's use of the capitalisation of income approach. However, initially in his oral evidence he accepted that this was an appropriate method with which to check a comparable sales valuation but ultimately he accepted that Mr Dupont had used an appropriate primary method of valuation. I accept Mr Dupont's evidence that a capitalisation of income approach is more appropriate to use in valuing the apartments in the resort. His reasoning to support this method is more cogent than Mr Tew's. These apartments were assets sold on the basis that they offered a guaranteed return and had planning constraints preventing their use as residences or long term accommodation for a single user. Mr Dupont also used a method that he described as being one "in accordance with known factors". I explain later why I have rejected this latter approach, which assessed the value of the cash flows generated by the property together with a notional receipt after time of the sale proceeds and discounted them back to a present value at 1 August 2000 [see 8.8 below]. Mr Dupont considered that the more appropriate range for a discount rate was 8.5% to 9% which included an allowance of about 2.5% for inflation over the general return from real estate of 6% to 7%. In that joint report Mr Dupont had assessed a yield, and consequently a capitalisation rate, of 7% for Ms Tan-Bounkeua's apartment and 6.5% for Mr Owers' and Luciani/Taldarmar's while Mr Tew had assessed a yield of between 6%-7%. At the time that report was prepared there were three more applicants' apartments in issue, two owned by a couple and one by another applicant whose proceedings settled during the course of the hearing. In his earlier reports Mr Dupont had examined returns from other resorts in the region in order to arrive at his rates. Later, Mr Tew participated in preparing a second joint report with Mr Dupont. Mr Dupont and Mr Tew prepared calculations in their first joint report to reflect a discount factor of 9% and a terminal value of the property (i.e. sale price at the end of the 10 year lease) based on direct comparisons, supported by a 7% capitalisation rate on stabilised income. (Stabilised income was the income which could be expected once occupancy rates and average room rates had stabilised after the first three or so years of operation. By then the property would have developed an established trading pattern and goodwill. ) They also prepared an alternative table using a discount rate of 8% and a capitalisation rate of 6% on the same assumptions. They used stabilised occupancy rates of 50%, 55%, 60% and 65% for each of their two sets of calculations (together with the other variable factors agreed between Mr de Wit and Mr Dupont for tariff or room rates and the 45% return paid to the owner). Austcorp argued that this would result in a valuation of a different asset from that each applicant purchased. It argued that this necessarily would produce an under valuation since the existence of a lease would have added value to the asset. While there is some superficial force in this criticism, I am not satisfied that there is likely to be a distortion of the true value of the apartments by use of this methodology. The experts were not asked to address the factual scenario that Austcorp suggested ought to have been put to them. The lease to Mustara, in fact, realised about 18 months of income based on 7% return on the purchase price. However, the lease also resulted in the applicants experiencing subsequent difficulties in earning a return. The value of the lease would be diminished because Mustara was a bad tenant in the first place. In my opinion, the evidence of what the apartments were worth without a lease in place, but with the potential for them to be leased, is relevant to assessing damages in the circumstances of this matter. Mr Dupont arrived at his capitalisation rates after taking into account the following factors that he considered were significant risks. Mr Dupont considered that these factors required use of a high capitalisation rate. Mr Tew disagreed based on the sales history of apartments in the resort in the period following Mustara's collapse. He argued that those sales showed that the market was prepared to pay increased prices without any guarantee of a return from Mirvac after it took over operation of the resort. In a second joint report and at the hearing Mr Tew changed his evidence from that to a range of 5% to 6%. Use of a capitalisation rate of 5% results in a larger value than 7%. Mr Tew said that the reason for this change was that the first joint report dealt with six properties, three of which were owned by applicants whose proceedings settled during the trial. Mr Tew asserted that he changed his range because the three remaining apartments were in a superior location, and two were larger with better aspects and views. Mr Tew gave no reasoning process about what risk factors he considered or how he took them into account when he changed his view as to the appropriate capitalisation rates for the three apartments now in issue. Most of the properties that he asserted were comparable for the purpose of his new view had been referred to by Mr Dupont in his initial reports as supporting his selections of 6.5% for the two larger apartments and 7% for Ms Tan-Bounkeua's. Nor was Mr Tew able to articulate a reasoning process as to his assessment of risk in his oral evidence, even though he agreed it was an important component in arriving at a capitalisation rate. I accept Mr Dupont's evidence that he and Mr Tew arrived at the range of 6% to 7% for the resort as a development after considering capitalisation rates between 5% and 7% that varied throughout New South Wales. The experts agreed that a discount rate of between 8% and 9% was appropriate. Mr Tew preferring 8% and Mr Dupont 9%. In my opinion, if differing capitalisation rates were appropriate for the different apartments (as they were in respect of Ms Tan-Bounkeua's) Mr Tew, as a professional valuer, should have used them in the first joint report. I am not satisfied that he has expressed any reasoned basis for changing his evidence. I reject his revised range of 5% to 6%. As Mr Dupont pointed out, if 5% were the appropriate capitalisation rate on which to value these apartments, that would show that their sale on a return of 7% was out of the market. The market evidence he used in his reports supported Mr Dupont's view. Neither expert gave any closely reasoned explanation for selecting these percentage ranges or the individual percentages based on detailed comparison with other properties. I infer that each applied the understanding he had given in evidence of the market and conditions in which the hypothetical value was to be assessed. The selection of such rates is a matter of judgment based on experience. In order for me to choose between such projections it would be more satisfying to have greater detail. But the Courts cannot impose an unreal standard on expert evidence when to do so would rob the expert of the right to use his or her judgment based on not only knowledge, analysis and training but also on a professional "feel" for the right or better answer that has no rational or externally verifiable justification. A surgeon performing emergency surgery draws on that well of background to make a choice of what to do. There is no time to run every test and if asked why he or she so acted, the honest answer, as so often in life, will be that it seemed like the right way to proceed. The values which underlie such judgmental behaviour cannot always be exposed, not because of a lack of candour, but because the person may not be aware of them. Here the two experts gave evidence about a range of rates. Neither explained in detail exactly how he arrived at his conclusion, yet each looked at a number of properties and had years of experience in forming such views. In that context is their evidence, though imperfect in the legally technical sense, worthless? The best expert in a field may not be able to give a textbook explanation of the basis for his or her opinion; does the Court discard it as worthless evidence? A reasoning process provides transparency as to how the conclusion has been revealed. Often a tribunal of fact will say that a witness was not satisfactory or reliable. That conveys a conclusion based on an overall assessment of the person as seen and heard. Yet a fully transparent reassessing process for the conclusion is not always possible because, in part, it may depend on the values, perceptions and prejudices of the fact finder, some known by that person, some not. Courts recognise this in the way discretionary judgments are treated on appeal: House v The King [1936] HCA 40 ; (1936) 55 CLR 499. I have been conscious that the two experts have not given enough reasoning to enable me to dissect or analyse which end of the range is more likely to be correct. On the other hand, I am satisfied that the market for apartments in the resort between 1999 and 2004 was not operating in a fully informed manner and that the prices paid then did not reflect the true value of the asset. And I am satisfied that the more recent 2006 to early 2008 sales were reflective of the, then, current true values. (There was no suggestion that conditions in the Australian or world economies were deteriorating at this time or otherwise having an impact on these values of the disportion they reveal as against movements in value in the area around the resort. ) That is, I am satisfied the influences which distorted the market earlier for apartments in the resort were no longer operative at the time of the more recent sales in evidence. He chose properties as his comparable sales in established four star holiday destinations, such as Nelson Bay, when they were not reasonably comparable. His principal choices were two resort apartments in the Landmark at Nelson Bay. However, unlike The Entrance as Mr Tew was aware, in 2000 Nelson Bay had both about four or five established 4 star resorts together with a reputation for that class of accommodation and appropriate local restaurants for such a market. He said that he gave consideration to the income streams of the two Landmark apartments (104 and 117) he used as comparators for the two larger apartments of Mr Owers and Luciani/Taldarmar. But, he said that he did not refer to their income streams in his reports because he used the direct comparison method. At the hearing, he said these two apartments "... are the two most reliable" for his comparable sales analysis. Mr Tew agreed that a sample of two was not ideal to use as basis for a comparable sales analysis. In their joint report, Mr de Wit and Mr Dupont agreed that the mean of differences between the latter two's average room rates was reasonable for calculating projected income. Mr Tew was party to that report but did not offer a view on this issue at that time. Mr de Wit had calculated an average room rate of $157.50 over the whole range of rooms in the resort as at 1999. Mr Dupont had calculated $140 for Ms Tan Bounkeua's studio which had no views and $185 for the other two one bedroom loft apartments which had views. However, in his second joint report with Mr Dupont, Mr Tew set out a table showing that the Landmark, which opened in 2000, had occupancy rates of between 71% and 77% between 2001 and 2003 and average room rates in that period between $86 and $99. The room rates for the Landmark were very different from those the experts projected for the resort. In my opinion they were not comparable. The difference in room rates signifies that the market in Nelson Bay was different to that projected for the resort. Mr Owers' apartment was 55m 2 (including a 5m 2 deck) and Luciani/Taldarmar's was 62m 2 (including an 8m 2 deck) and each had a car space. Apartments 104 and 117 in the Landmark were 81m 2 and 84m 2 respectively. Each had two car spaces, were on the top floor and had north facing broad views of the water, though some distance away. These apartments had been sold off the plan without a rental guarantee. In cross-examination, Mr Tew agreed that apartments 104 and 117 were about 25% larger than the two comparators in the resort. He said that he allowed "in the order of 5% to 10%" to adjust for that 25% difference in size. He could not identify any valuation principle or literature, apart from his experience, to support that "adjustment". It did not sit easily with his valuation approach of using a rate square metre. Mr Tew did not give any explanation or reasoning process in his reports as to how he adjusted the significant differences I have mentioned to make his comparison. I reject Mr Tew's comparison as made without a rational or transparent basis. I accept Mr Dupont's evidence that the two Landmark comparators were significantly superior. In the broader environment, yes. --- Probably not even as close proximity as perhaps Salamander is to Nelson Bay but Wyong is similar in distance. He was evasive in his evidence about what, if any, weighting he gave to the Landmark's proximity to the golf course in making use of it as a comparator. He accepted that a golf course in or next to a conference and resort centre was a popular development that might attract a different market to the resort at The Entrance but he made no allowance for this difference in markets of potential purchasers. --- Well, the other way of looking at that is that the Pacific has greater opportunity. --- Possibly. It's definitely, isn't it? --- It's possibly. --- That's exactly right. --- What weighting one applies then comes down to a personal interpretation of it. The comparator apartments he used were between 56m 2 and 63m 2 and had a car space, as opposed to her apartment which was 36m 2 with a deck of 5m 2 and had no car space. In his own reports Mr Tew did not use Landmark apartments of 37m 2 as comparators. However, at Mr Dupont's suggestion, he included these smaller apartments in a joint report. There can have been no reason for Mr Tew to have ignored apartments of a similar size and location to Ms Tan-Bounkeua's open plan apartment in the Landmark and to have selected far larger ones with a separate bedroom, kitchen and car space that could not have provided a reasonable comparator. Mr Tew said that he did not even check on these or similar comparators after Mr Dupont drew his attention to the 37m 2 Landmark apartments. I find it difficult to accept that a professional valuer would not have found the strata plan with apartment sizes and lot numbers and then searched for the comparable size sales but rather used, as his prime comparators, apartments that were obviously not comparable in size, layout or location. And he used no comparators, outside of sales in the resort to value Ms Tan-Bounkeua's apartment as at 21 September 2000, the date of her lease. In my opinion those latter sales did not provide a proper basis for comparison because their purchasers were likely to have been affected by the representations. Mr Tew chose significantly larger apartments in a different market with different amenities (including the neighbouring golf course) with which to make his comparisons, even though there was no apparent justification for doing so. He made no allowance in his valuation as at 2000 for actual and pending competing development at The Entrance. I am not prepared to accept his evidence as being reliable: see Maurici v Chief Commissioner of State Revenue [2003] HCA 8 ; (2003) 212 CLR 111 at 121 [18] per McHugh, Gummow, Kirby, Hayne and Callinan JJ. I consider that it indicates that Mr Tew did not select appropriately the properties which he used to arrive at or support his valuations. His approach did not identify properties that reasonably assist in indicating values of a comparable kind to those in the resort. In addition, because the apartments in the resort were purchased for the, or a, purpose of earning investment returns, I am of opinion that Mr Dupont's approach is generally to be preferred. It argued that the method produced a different value depending on when the exercise was done and that he had arbitrarily selected an unspecified date in 2007 and an unreasoned sale price for the purposes of preparing this valuation. I think there is force in these criticisms. Mr Dupont made a calculation of the 2007 net present value of cash flows from each applicant's apartment. But he said that in order to assess the apartments' values based on events that became known after their purchases, it was necessary to take into account both the actual income they guaranteed from 2001 to 2007 and the apartment's "potential value at today's date". Those potential values were, in the case of Mr Owers $300,000 (as compared to a $330,000 purchase price in 2000), Luciani/Taldarmar $310,000 (as compared to a purchase price of $340,000 in 2000) and $190,000 for Ms Tan-Bounkeua (the same as her purchase price in 2000). His valuation was made in March 2008. Mr Dupont gave no basis explaining how he arrived at those potential values for three properties on this assumed basis. Mr Dupont's failure to set out in full his reasoning process for selecting the potential values which he put into his value according to known factors calculation undermined the alternative methodology he adopted. I am not satisfied that this was an appropriately explained or reasoned methodology and I reject it. In determining that value, there must be attributed to the parties a knowledge of all matters that affect its value. Those matters will include the predicted impact of future events as well as the experience of the past and the rates of return on other investments. As Isaacs J pointed out in Spencer v The Commonwealth ((1907) 5 CLR 418 at 441): 'We must further suppose both to be perfectly acquainted with the land, and cognisant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property. (Emphasis added. Initially, the market was created and affected, in part, by the misleading and deceptive representations. These attributed to apartments in the resort an aura of being good, solid investments with the prospect of a guaranteed return for many years. After Mustara's collapse, a substantial number of sales occurred at higher price levels which have not been sustained since 2004. Even then, as Mr Dupont's analysis showed, from 2000 to 2004 the rise in sale prices for apartments in the resort was around 40% to 50%, while the rise of 84% in Wyong Shire for that period was substantially greater. Thus there was some, but not a full, appreciation that the value of an apartment in the resort was not as good as in the general area. But the subsequent drop of prices to levels generally materially below the original purchase prices off the plan, demonstrates that the market was not operating efficiently before this later time. Mr Dupont concluded that by March 2008 the value of apartments, based on the latest sales, had fallen to around 20% below their 2000 level while median apartment prices in Wyong Shire had increased 55% in the same period. I accept that evidence. I am satisfied that the present level of prices reflects the true value now of the apartments. The consequence is stark. The real value of the applicants' original investments in comparison to similar property in the surrounding area has decreased markedly over the eight or more years since they entered into their contracts to purchase. That decrease and its very different direction to the significant increase in value of immediately surrounding properties were not explained by any evidence. I discount the suggestion made to Mr Owers of a concern that some costly remedial work may be needed for the resort. There was no evidence of what that was or of any effect on the value of the apartments. No expert referred to it and I am not satisfied that, whatever the basis of the concern conveyed to Mr Owers was, it affords any explanation of this marked decrease in the market price of apartments in the resort. Rather, commonsense suggests that the reasons for this recent reflex of value were that the apartments cannot generate a sufficient return on the previous price levels and their value to an owner as accommodation is severely restricted by the condition of use as a serviced apartment in the development consent for the resort. It took a considerable time for the market to appreciate the true impact of the misleading conduct. The difference in price levels is so marked that I am comfortably satisfied that there is no explanation other than that the true value in 2000 of an apartment in the resort was substantially less than what was paid at that time. It is counter intuitive to think that the value of the apartments in the resort increased (as they did) after they ceased to have any guaranteed return following the collapse of Mustara in circumstances where the market had a correct, or fully informed, perception of their worth. The apartments had inherent and significant limitations on their utility and value. First, they had to be used, if they were to produce income for their owners, within the scheme of the overall resort. Of course, it was an advantage of ownership that the owners could visit and stay for short periods each year, without residing, at their apartment whenever they wished. However, that was not the principal basis upon which the apartments were sold initially. Nor could this right have provided a sufficient basis to support the value reflected in the purchase price. Secondly, the loss of a guaranteed net return of 7% p.a. coupled with the much lower actual returns generated by the subsequent operators Mirvac and The Oaks and the restriction on use, suggests that the apartments in the resort were not, overall, an attractive investment. Nonetheless, the market evidence up to early 2004 suggested that the resort was to some degree attractive for capital gain. However, I am of opinion that such an attraction was fundamentally misguided. Moreover, not all apartments put onto the market sold quickly and some did not sell at all. In the long-term it had become evident that ownership of the apartments had not realised a sufficient capital gain as compared to property generally in the area of The Entrance. The market had an appreciation that, irrespective of who operated the resort, there was no significant income or capital return to be achieved from an investment. Thus, up to early 2004 market values of apartments in the resort did not keep pace with the rises in the general market in Wyong for serviced apartments, although they still increased. Since then, market prices in the resort have declined in the unprecedented way identified by Mr Dupont. Again, this indicates that there was some unusual factor at work in the market for these apartments over the whole period. Mr Dupont opined that the resort was an over-development of the site. He said that had led to poor occupancy rates and, in turn, poor returns to owners, thus reducing each apartments' value in the market. I accept that evidence. Mr Dupont accepted that if the apartments in the resort had been sold before 2004 the owners would have made a profit. But he said that profit would not have been as much as if they originally had purchased another property nearby. He said, and I find, that if they were to have sold their apartments in September 2008 they would have made a loss. And, Mr Owers tried to sell his apartment at auction in late 2003 with a reasonable reserve that he had placed on the property having regard to the current state of the market, but it failed to attract a single bid. On the other hand, there were over 30 sales of apartments between Mustara's collapse and the end of 2003. Each of those sales was at a price above the original purchase price. But, there was a certain amount of serendipity in which units were sold and which were not. This is evident from the agreed evidence of sales and sales attempts. It is because this extraordinary reduction in prices for apartments in the resort has occurred but has not been otherwise explained on the evidence, that I reject Mr Tew's direct comparison approach between other sales of properties in the resort and the applicants' apartments as an appropriate way of valuing them at an earlier time than the present. Those earlier prices, while genuine market prices, did not reflect the true value of the apartments. I find that the market was not then operating as an efficient market: cf: Walker Corporation 233 CLR at 276-277 [51]. It may be that the purchasers who paid increased prices for apartments in the resort from the time of Mustara's demise till the current trend emerged were acting under a misconception that there was a real prospect of capital growth. But, even then those prices were generally significantly less than the increase in median prices in the immediate area. This is a sure indication that the values in the resort were affected by some factor outside ordinary market forces: i.e. by factors other than those bearing on the true value of the apartments. Significant (as opposed to normal market) capital growth was not a real possibility for these particular properties. They were in a resort with substantive restrictions on their use, either as a long-term residence for their owners or when let short term to other individuals. They had to be part of a resort complex if they were to be likely to earn any shorter term significant investment return. But the actual operations of the resort have been desultory compared to what was necessary in order to support a net return paid by a lessee over 10 years of 7% of the purchase price. I am satisfied, having considered the evidence for myself, that the true value of the apartments in the resort at the time each applicant purchased is better reflected by reference to the current and more recent sale prices. Since these are materially less than the purchase prices some seven to eight years later, I am satisfied that each of the applicants acquired on completion of their purchase an apartment which was worth less than what was paid for it. However, the methodology each valuer used and his reasoning process do not enable me to adopt either's ultimate valuation using their respective approaches. The market in 1999 and 2000 ascribed values to apartments in the resort that were distorted by the effect of the misrepresentations, including the earlier assurances by Landillo of guaranteed returns of 8%, then 7.5% (before Austcorp's involvement) and finally 7%p.a. The apartment of each applicant was worth less than what was paid for it at the time of contract and of completion. There is no reason to think that the value of apartments in the resort changed in any material way between 1 August 2000 when they lost their contractual rights to rescind and the respective completion dates of each applicant's purchase. Nor is there evidence of any significant increase or change in value to that time from their respective dates of contract. The latest market evidence suggested a decline from the purchase prices in 1999 and 2000 of about 20%. Making a rough allowance for inflation in the intervening eight years, the real decline in 2000 prices is likely to be in the order of 30%-40%. That, however, would not allow for any value actually derived by the applicants from the leases to Mustara and the limited guarantee. Such a range would only reflect the relative uncertainty of a return under the present arrangements with the Oaks group, and possibly also the earlier returns after Mustara's collapse. On the other hand, the value of the lease in 2000 was fragile, given the over optimistic projections on which the promoters proceeded and the limited financial worth of both Mustara and Pacific International Hotels' guarantee. There is no evidence of the worth of Parkes Street (Mustara's owner after 23 December 1999) or its capacity to support Mustara, except that its support was withdrawn in May 2002. Balancing these factors, I should allow that some value would have been attributed in an efficient market in August 2000 for the lease and limited guarantee by Pacific International Hotels. I find that the true value of the apartments in the resort on 1 August 2000 and at the time of completion was, in general, 30% less than the purchase price. A reduction of 30% from the purchase price would result in values of Ms Tan-Bounkeua's apartment at $133,000, Mr Owers' at $231,000 and Luciani/Taldarmar's at $238,000. As a check of the reasonableness of these values, I note that the latter two are close to the upper end of the range agreed (at one point) by Mr Dupont and Mr Tew if a capitalisation approach were used to value the apartments. That joint report gave values based on stabilised occupancy rates of 50% to 55% and a 9% discount rate between about $159,000 to $175,000 for Ms Tan-Bounkeua's apartment (on a 7% yield or capitalisation rate) and about $208,000 to $229,000 for the other two (on a 6.5% yield). Ms Tan-Bounkeua's smaller apartment was likely to attract a higher yield and thus a crude reduction of 30% is likely to produce too small a final value. The evidence of recent sales of apartments since about September 2006 showed that 7 of the 9 sales were at prices between 75% and 90% of their purchase prices paid in late 2000 or January 2001. One sold for just more (104%) than its original price. Of these, the smaller ones with good east or north facing views achieved the relatively higher prices. Mr Dupont said that Mr Owers' east facing sixth floor apartment had panoramic views over The Entrance, the beach and promenade. Mr Dupont described Ms Tan-Bounkeua's apartment as having an easterly waterfront aspect with excellent lake, beach and promenade views. The recent reductions in value confirm the general trend but do not identify any precise basis on which I can arrive at a value for Ms Tan-Bounkeua's apartment. Nonetheless, I again note the joint report used a higher capitalisation rate and range of values for Ms Tan-Bounkeua's apartment significantly above the value of $133,000 which would result from a crude reduction of 30% of her purchase price. This has caused me to consider whether, despite my reservations about the actual valuations arrived at by Mr Dupont and the agreed calculations using the capitalisation and discount rates, I should apply a reduction of 30% to arrive at the true value of Ms Tan-Bounkeua's apartment in 2000. I accept Mr Dupont's evidence that a higher capitalisation rate was appropriate to use in valuing Ms Tan-Bounkeua'a apartment. This results in a lower value for it than is realised by the use of a lower capitalisation rate for other apartments. This suggests that I should be cautious in reducing the value of her property by as much as the 30% I have used in valuing the others. Of course, my use of a general 30% reduction is a use of simple arithmetic based on the reasons I have given and is not any attempt to use capitalisation or discount rates. In Ms Tan-Bounkeau's case, doing the best I can, I find the true value of her apartment was 20% less than what she paid for it. ARE THE APPLICANTS' CLAIMS STATUTE BARRED? Mr Owers exchanged contracts on 14 June 2000, Ms Tan-Bounkeua on 14 December 1999 and Luciani/Taldarmar on 10 April 2000. Mr Owers settled his purchase and entered the lease on 18 September 2000, Ms Tan-Bounkeua on 21 September 2000 and Luciani/Taldarmar on 22 December 2000. The applicants argued that the first time they could have suffered loss or damage was on the registration of a strata plan on 1 August 2000. The application was filed six years later, to the day. Austcorp pleaded that the claims were time barred because each applicant entered into the contract more than six years before the commencement of the proceedings. Austcorp also argued that the applicants had become committed to, first, the contracts which they had entered prior to 1 August 2000 and, secondly prior to that date, to paying legal fees incurred and other costs. However, the applicants did not claim any damages in respect of transaction costs incurred before the registration of the strata plan. Austcorp argued that an applicant will be found to suffer loss immediately upon entering into a contract for the purchase of land if the true value of the land at that time is less than the contract price. Accordingly, it contended that the applicants' causes of action under s 52 of the Act accrued at that moment relying on Astonland 217 CLR at 654-655 [28] and 656 [33] per Gleeson CJ, McHugh, Gummow, Kirby and Heydon JJ. In Astonland the plaintiff had relied on the advice of a valuer before entering into a contract to purchase an income producing shopping arcade. The valuer advised that the construction of a new shopping centre nearby was not likely to affect adversely the arcade's existing retail tenancy levels. But, there was unchallenged evidence that on the date of the contract, and the date of completion, the land was worth less than the price payable or paid under the contract. That was because the valuer on whose valuation the plaintiff had relied advised the plaintiff incorrectly: Astonland 217 CLR at 655 [28]-[29]. Their Honours distinguished that situation from the category of case where a contingency, which might or might not come to pass, was hidden by a representor's conduct. They said that the plaintiff could have found out at once that the market value of the arcade was less than it had agreed to pay. Thus, the risk of the catastrophic effect on rent levels of the plaintiff's land to which the defendant valuer had not alerted the plaintiff, in fact, had already had an impact on the value of the plaintiff's land at the time of the purchase. Austcorp argued that on the applicants' cases, their apartments must have been worth less than the price paid for them at the dates of entry into the contracts for sale. I reject that argument. Indeed they were entitled, if that registration had not occurred by 31 December 2000, to rescind their contracts. It was only when the strata plan was registered that the applicants were faced with the obligation to complete the contracts and deprived of the opportunity to rescind under cl 33.2. Thus, when each of the applicants became bound to complete or later completed their contracts, they would suffer loss or damage because only then would they pay or be liable to pay more for their apartment than it was worth: Scarcella v Lettice [2000] NSWCA 289 ; (2000) 51 NSWLR 302 at 309 [32] per Handley JA, 310 [41] per Giles JA and cf per Powell JA at 310 [37]. Until 1 August 2000 the applicants had only a contingency of suffering loss depending on whether they completed their contracts. The economic interest of the applicants that would be infringed by Austcorp's misleading conduct was their obligation to complete their purchase consequent upon the registration of the strata plan and the loss of their right to rescind: Wardley 175 CLR at 532-533 per Mason CJ, Dawson Gaudron and McHugh JJ. Austcorp contended that this analysis overlooked the liability for legal costs before 1 August 2000 that the applicants (other than Ms Tan-Bounkeua) incurred. I reject that argument. First, Austcorp did not plead those matters as material facts. Secondly, the applicants in any event may have incurred a contingent liability for the legal costs of receiving advice on whether or not to enter into the contract. No solicitor rendered an invoice for those fees before 1 August 2000 and, thus, the applicants had no legal obligation to pay those fees before that date. Had Mr Owers been advised not to enter into the contract or of the effect of cl 20.9, he would have followed the advice. There is no evidence whether he would have been charged by Mr Joseph for the advice. The question was not in issue. Next, Austcorp argued that Luciani/Taldarmar had incurred legal fees of $1,700 as at 7 February 2000. However, Shephard & Shephard, in the course of giving their fee estimate on that date advised, them that they would charge that amount for acting on the purchase. Shephard & Shephard only invoiced that sum on 15 December 2000, being the day when the contract was completed. On 7 February 2000 Shephard & Shephard had asked only for a sum of $200 on account of anticipated immediate disbursements. I am not satisfied payment of this sum (if it were paid) would amount to loss or damage, since it was sought to enable the solicitors to investigate and advise upon whether the applicants should go ahead with the purchase by binding themselves to a contract. That is, the expense would have been incurred in investigating whether the applicants could rely on Austcorp's representations. Austcorp relied on the payment by each of Mr Owers and Ms Tan-Bounkeua of the $1,000 holding deposit and their later payments of the balances of their respective deposits prior to 1 August 2000 as damage suffered by them. However, those moneys would have been refunded if the contracts had been rescinded. In that event they would not have suffered any loss. Therefore, those deposits were in the category of contingent loss or damage. Austcorp also argued that Luciani/Taldarmar suffered loss or damage on 14 March 2000 when they paid St George Bank $352 for a deposit bond of $34,000. Leaving aside that this too was outside Austcorp's pleaded defence, I am of opinion that the outlay of $352 on the deposit bond was not loss or damage suffered by Luciani/Taldarmar more than six years before 1 August 2006. This is because the economic interest they claimed was infringed was the overpayment of the purchase price representing the difference between that price and the true value of the apartment which they paid to Landillo. The applicants' claim was for damage caused by their entry into contracts which they became obliged to complete only on 1 August 2000. That was the first occasion of any relevant infringement of the applicants' economic interests, for they were then legally obliged to pay the price which the wrongdoer (misrepresentor) had misled them to agree to pay: Wardley 175 CLR at 533. In Wardley 175 CLR at 527 Mason CJ, Dawson, Gaudron and McHugh JJ explained the distinction between detriment, in a general sense, and damage suffered on entry into an agreement induced by a misrepresentation which is, or proves to be, to an applicant's disadvantage. The applicant will sustain a detriment in a general sense because the agreement subjects him, her or it to obligations and liabilities which exceed the value or worth of the benefits which it conferred on that person. But such a detriment will not necessarily amount to more than a contingency of future loss. In general, it is only when the contingency is fulfilled that an applicant will be found to have suffered loss or damage sufficient to infringe his, her or its economic interests for the purposes of an action under s 82(1): Wardley 175 CLR at 533. It is self-evident that the applicants would not have been able to sue for damages in respect of the losses they claim here before they completed or were legally bound to complete their contracts. Risk of loss is not actual loss. The mere entry into the contract did not, of itself, require each applicant to complete it since that obligation would only arise, or be able to be enforced by or against the applicant, once the strata plan was registered: Murphy v Overton Investments Pty Ltd [2004] HCA 3 ; (2004) 216 CLR 388 at 407-409 [46] - [54] . In Karedis Enterprises Pty Ltd v Antoniou (1995) 59 FCR 35 at 43C-D Burchett and Hill JJ (Sackville J agreed at 45C; see too at 48E) held that where a lessee had been induced by the lessor's misrepresentations as to takings into entering into a lease, the question for limitation purposes was " ... when was it that the loss which the [applicants] ultimately suffered (or a more than negligible part of it ) was either ascertained by them or reasonably ascertainable? " Here, the small amounts paid for the deposit bond and other disbursements were negligible in comparison to the price payable to Landillo. Moreover, no issue was raised on the pleadings that some other matter, such as legal costs and disbursements or the cost of a deposit bond created a time bar. I reject Austcorp's reliance on these matters as being outside its pleadings. But, in any event, the relevant loss or damage that the applicants claimed under s 82 of the Act was that "by" Austcorp's contravention of s 52 they paid Landillo more for their apartments than they were worth: Wardley 175 CLR at 527, 532-533. I am of opinion that Mr Owers and Ms Tan-Bounkeau are not prevented by s 82(2) from recovering that loss 10. Those amounts were agreed by the parties' expert accountant witnesses in a joint report. On this basis, Ms Tan-Bounkeua had incurred a loss of $52,473 and Luciani/Taldarmar had incurred a loss of $116,868. This recognised that those applicants had incurred these losses before taking account of income tax deductions or benefits which they obtained in consequence of their expenditures included in the total sums. The parties accepted that any taxation consequences for those applicants were not relevant to the amount of damages to which they were entitled. The individual applicants will have to deal with the taxation consequences of any award in due course. However, Austcorp claimed that after taking into account taxation, Mr Owers was $2,335 better off for having made his investment even though it conceded that he incurred $48,837 (before tax) in expenses of the same nature as it accepted were recoverable by Ms Tan-Bounkeua and Luciani/Taldarmar were they to succeed. Austcorp gave no satisfactory explanation as to why Mr Owers' damages should be assessed differently in respect of the money which he had had to expend in holding his property which he would not otherwise have spent. In my opinion, the fact that Mr Owers achieved a position, after tax, in which he was $2,335 better off ignores his having to expend the $48,837 which he would not otherwise have spent. No doubt if he receives damages in the latter sum he will need to account for that for his current taxation purposes. Tax savings, if any, made by an applicant should not be taken into account in reduction of a claim made under s 82 of the Act: Milner v Delita Pty Limited (1985) 9 FCR 299 at 304, per Lockhart J. Lockhart J held that money contributed by an applicant who was induced by conduct that contravened s 52 to enter into a partnership for the processing and growing of guavas had been applied for the purposes of the partnership. He said that it had been envisaged in the misleading promotional brochures that the expenditures would give rise to tax losses that could be claimed as deductions against their income by the investor tax payers. But Lockhart J held that that was an irrelevant consideration for the purposes of an assessment of damages under s 82. He found that there was no relevant nexus between the contravention of the Act by the respondent and any benefit gained by the applicant by reason of the allowability of the claimed losses. Lockhart J applied Simpson Ltd v Hubbards Pty Limited (1982) 44 ALR 695 at 702-703. There Bowen CJ, Franki and McGregor JJ held that since damages were compensatory, the question of deducting probable taxation did not arise. They said that an applicant could not be required to set off past tax losses against an award of damages so as to reduce the total sum of damages ordered by the Court. They regarded the tax losses as being, in one sense, an asset of the applicant who should not be required to dissipate that asset for the benefit of the person who contravened s 52 of the Act: Simpson 44 ALR at 703. In Australian Breeders Co-operative Society Ltd v Jones (1997) 150 ALR 488 at 543-545 Wilcox and Lindgren JJ (with whom Lee J agreed on this point (at 560)) noted that the trial judge (Davies J) found that taxation benefits, which applicant investors in a horse breeding syndicate had obtained, should be taken into account in reduction of damages for their losses up to the time at which they terminated the breeding partnership. However, in that case, Davies J had refused to make an allowance for those taxation benefits in relation to the years of income after termination and awarded compensation on the basis that those damages not be taxable in the hands of the applicants. There was no issue in the appeal as to the question of taking into account taxation benefits. Mr Owers had continued to incur the expenses in order to hold the asset that he acquired "by" the misleading conduct for which Austcorp is liable. He expended money because of the position in which he had been placed by Austcorp's contravention of s 52 of the Act. Although Mr Owers has achieved a small net taxation saving over a number of years that has come at the expense of his being involved in an investment which he would not otherwise have pursued. I am of opinion that it is not appropriate to require Mr Owers to use his own money to pay the cost of financing a venture he would not have undertaken had he not been misled by Austcorp's contraventions of the Act: see also Henderson v Amadio Pty Limited (No 1) (1995) 62 FCR 1 at 200A-D per Heerey J. He has lost the opportunity of using the $48,837 paid by him for which he claimed tax deductions and received a net benefit, in other ways. He is entitled to damages in the whole sum claimed, without making allowance for taxation benefits. I accept that evidence. Instead of borrowing the whole of the purchase price, he used initially $33,000 of his cash savings to pay the deposit. Ultimately, he borrowed $31,000 from his bank and paid about $10,000 of that to pay back into his other bank account. Thus, he borrowed about $31,000 of the $330,000 price, and claimed damages for the loss of opportunity to invest the balance of either $20,000 or $30,000 in a better investment. Originally, Mr Owers sought damages for loss of a chance to obtain a better investment outcome from a possible purchase of investment property in Lithgow for this sum. But in the applicants' written submissions in reply, Mr Owers abandoned that argument and sought compensation such as simple interest on that sum. He does not now claim any substantive damages for the loss of the opportunity to invest beyond the amount which Austcorp agreed he should be allowed as interest on the net capital sum he invested from his own savings. Austcorp conceded in final address that if he were entitled to recover damages, some sum in the nature of interest should be awarded on the $20,000 to $30,000 figure. In my opinion Mr Owers should recover damages in the nature of interest on $20,000 (being the difference between the purchase price and what he borrowed). I am not satisfied that he has established that the appropriate figure is the larger sum of $30,000 originally used for the deposit. In reality, he used the $10,000 difference for other purposes ultimately unrelated to the purchase of the apartment. In light of Austcorp's concession that Mr Owers is at least entitled to interest on the $20,000 he should receive interest on that sum at the rate payable on a judgment from 14 June 2000. This takes some account of the vicissitudes of investment and recognises that Mr Owers still retains the apartment and will recover other damages including for the loss of value suffered. The applicants raised a suggestion in a footnote to their submissions that they were entitled to compound interest on a basis and in a sum that was not made clear. The argument was not explored orally. It is not clear to me whether, and if so how, it is pressed. I will leave the parties to address issues about interest and the form of final relief after they have considered these reasons. 11. (2) Add the agreed net loss before tax (and in Mr Owers' case the interest on $20,000). (3) Calculate interest from the relevant dates of the loss on the totals of each of (1) and (2). I will direct the parties to bring in short minutes of the appropriate orders necessary to give effect to these reasons. Some provision will need to be made to deal with the still unresolved outstanding claims of other applicants with whose claims I have not yet dealt. I certify that the preceding five hundred and twenty-seven (527) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

causation s 52 trade practices act 1974 (cth) misleading or deceptive conduct misleading conduct in relation to purchase of investment property unequivocal representations by promoter of real property investment contained in glossy promotional brochure and leaflet promoter not the vendor of land fine print of contract for sale of land conflicted materially with representations made in promotional material contract contained entire agreement clause and clause acknowledging no reliance by applicant on any representations whether contractual clauses corrected, or relieved promoter from liability for, misleading representations whether promoter can rely on terms of contract to which it not party whether promoter can rely on possibility or likelihood that a representee's solicitor will explain contract so as to correct fully the misleading representations where promotional material calculated to interest prospective investors to enter contract to purchase by omitting material matter contained in fine print in contract whether misleading conduct caused applicant to enter the contract corporations corporate groups where holding company and subsidiary involved in the same conduct or transaction where only group's logo used in promotional material to identify promoter where holding company officers employed by it but also act as agents of subsidiary where holding company publicly states that it is the project promoter, writes correspondence on its letterhead, issues promotional and advertising material in its name as promoter, and instructs third parties to act in relation to pursuing venture where group affairs conducted on basis that holding company often paid invoices addressed to it, and not its subsidiary, in relation to the venture and recorded such payments in internal group accounting as loans to subsidiary by holding company importance of corporate identity in determining liability causation s 52 trade practices act 1974 significance of legal advice whether applicant acted unreasonably in relying on promotional material for sale of apartments "off the plan" promising a guaranteed return vendor using standard form contract applicant deciding not to obtain legal advice on contractual documents but to rely on promotional material and fact of large number of earlier presales and vetting of contract by other purchaser's solicitors whether legal advice could have prevented representations being misleading where evidence that some lawyers had and others had not found or advised other purchasers or investors of important difference between promotional material and the actual rights under the contract whether misleading representation a cause of loss s 51a trade practices act 1974 whether corporation had reasonable grounds for making representation with respect to future matter whether corporation can rely on information provided to it by another promoter without actively analysing it importance of carrying out due diligence s 84(2)(b) trade practices act 1974 conduct by directors, servants or agents whether conduct performed in the course of corporation's business affairs or activities s 82(1) trade practices act 1974 damages quantum where loss claimed is overpayment for purchase of investment property caused by misleading representations principles of valuation where market value inflated because of misleading representations comparable sale or capitalisation of income valuation approaches s 82(1) trade practices act 1974 damages quantum whether tax benefit obtained by applicant as a result of reliance on misleading conduct should be taken into account in determining quantum of damages s 82(2) trade practices act 1974 limitation period contingent loss when cause of action accrues when loss occasioned in the context of a contractual contingency contract providing right of recession for both parties if event not occur by a particular time contract entered into by applicant more than 6 years before proceedings applicant brings proceedings within 6 years of occurrence of contractual contingency trade and commerce trade and commerce trade and commerce trade and commerce trade and commerce trade and commerce trade and commerce trade and commerce

2 The name of the person whose matter was before the Board is confidential and he will be referred to as "the Partner". 3 Mr Albarran appeared before the Board on 7 February 2007 but he declined to answer certain questions that were put to him by the Panel Chairman. 4 Section 219(2)(b) of the Australian Securities and Investments Commission Act 2001 (Cth) ("the ASIC Act ") provides that a person appearing as a witness at a hearing must not refuse or fail to answer a question that he or she is required to answer by the Panel Chairperson. This subsection does not apply to the extent that the person has a reasonable excuse: s 219(2A) of the ASIC Act . 5 The Panel Chairman certified in writing under s 219(6) of the ASIC Act that Mr Albarran had, when required by the Chairman to answer 37 questions specified in the certificate, refused or failed to comply with that requirement, without reasonable excuse. 6 The plaintiff, the Australian Securities and Investments Commission, seeks orders under s 219(7)(b) of the ASIC Act punishing Mr Albarran for his refusal or failure to answer the questions, in the same manner as if he had been guilty of contempt of court. 7 The question which now arises is whether I am satisfied that Mr Albarran had a reasonable excuse for his refusal or failure to answer the questions: s 219(7) of the ASIC Act . That was not the reason he gave to the Panel Chairman on 7 February 2007. On that occasion he told the Chairman that he believed that answering the questions may prejudice his interests in a separate matter that he had brought in the Administrative Appeals Tribunal ("the AAT"). 9 That matter arose out of disciplinary proceedings that were determined adversely to Mr Albarran by the Board in December 2005. Mr Albarran sought a review of that determination by the AAT. Mr Albarran's proceeding in the AAT had not been heard at the time when he was summoned to give evidence in the Partner's matter before the Board. 10 Mr Albarran and the Partner were both members of a firm of Chartered Accountants, Hall Chadwick. I will set out the background facts in more detail below. It is sufficient to say by way of introduction that the issues before the Board in both matters were substantially identical, each of them arising out of the voluntary administration of a company, Formula Engineering Pty Ltd, which was a client of Hall Chadwick. 11 In Mr Albarran's disciplinary proceeding the Board found that he had been party to a contrived arrangement to appoint a person as voluntary administrator of Formula Engineering in circumstances in which Hall Chadwick and its members were precluded from taking that appointment. 12 The Board organised the disciplinary proceedings in respect of Mr Albarran and the Partner such that the two sets of proceedings were kept separate, and the Panels were constituted by different members. Its functions and powers include those conferred on it by s 1292 of the Corporations Act 2001 (Cth): see s 204 of the ASIC Act . 14 Section 210A(1) of the ASIC Act provides that the Board's functions and powers in relation to an application to the Board by ASIC for a person to be dealt with under s 1292 of the Corporations Act are to be performed and exercised by a panel constituted under s 210A(2). 15 Section 210A(2) of the ASIC Act provides that the Chairperson of the Board is to determine in writing the members of the Board who are to constitute the Panel that is to hear the matter. 16 Section 1292 of the Corporations Act confers powers on the Board, if it is satisfied on an application by ASIC, to cancel or suspend the registration of the person as an auditor or liquidator. 17 Section 1292(2) of the Corporations Act deals with liquidators. 19 Section 219 of the ASIC Act imposes an obligation upon a person served with a prescribed summons to appear as a witness before the Board, to attend and give evidence. As I said in the introduction, the obligation is subject to the exception of "reasonable excuse". The section contains the procedure, to which I have referred, for the Chairperson to give a certificate, and it confers power on the Court where a certificate is given. 22 The note appearing under s 219(2A) of the ASIC Act refers to s 13.3(3) of the Criminal Code Act 1995 (Cth). That subsection is contained in Part 2.6 of the Criminal Code which deals with proof of criminal responsibility. The exception, exemption, excuse, qualification or justification need not accompany the description of the offence. The first issue is whether reliance on legal advice amounts to reasonable excuse. 26 Senior counsel for ASIC submits that reliance upon legal advice cannot constitute reasonable excuse; to permit such an excuse to be raised would be to defeat the very purpose of the proceeding before the Board. 27 Nevertheless, senior counsel for Mr Albarran points to the provisions of the Criminal Code set out above. The essence of his submissions is that Mr Albarran's evidence before me discharges the evidential burden referred to in s 13.3(3) of the Criminal Code . 28 The second issue is whether Mr Albarran received the legal advice that he claims to have relied upon. This is an issue of fact which turns upon whether I accept his evidence. 29 The third issue is whether, even if Mr Albarran received the advice that he claims, reliance upon it was reasonable. This issue turns upon the nature of the advice said to have been received and the circumstances in which the advice was communicated to him. 30 In order to determine the second and third issues, it is necessary to set out the relevant factual background. An important part of this centres upon an application made by Mr Albarran, several weeks prior to his attendance before the Board to give evidence, to be excused from attendance. 31 That application was unsuccessful. What was said by Mr Albarran's legal advisers, and by ASIC, prior to the hearing of the application, and by the Board Chairman, Mr Magarey, are critical to the determination of the issues before me. Moreover, the Board did not find that Mr Albarran acted dishonestly. 34 The gravamen of the Board's finding against Mr Albarran was that he did not properly understand his professional duty, or did not give it sufficient consideration, or simply ignored it; a reasonably competent liquidator would have given consideration to and understood that the contrived arrangements were contrary to published professional codes and standards. 35 On 3 May 2006, the Board made orders against Mr Albarran in his disciplinary proceedings. On 8 May 2006, Mr Albarran made application to the AAT for a review of the adverse determination. The matter was remitted to the Federal Court which dismissed the application. Special leave to appeal was granted by the High Court on 29 September 2006 but the appeal was ultimately unsuccessful. 37 On 27 June 2006, at the request of ASIC, the Panel Chairman of the proceeding against the Partner issued a summons to Mr Albarran to appear before the Board on 18 December 2006 in that matter. The summons was served on 18 July 2006. 38 In November 2006, the solicitors who were acting for Mr Albarran in his disciplinary proceeding gave consideration as to whether he could decline to appear in answer to the summons to attend before the Board in the Partner's matter. The solicitors who were acting were NOTLawyers. The relevant persons were Mr Simon Gallant, a partner in that firm, and Mr David Blessington, an employed solicitor. 39 On 21 November 2006, Mr Blessington attended a conference with Mr AJ Sullivan QC and Mr K Eassie. Mr Sullivan was briefed as senior counsel for the Partner. Mr Eassie was briefed to appear for Mr Albarran in his disciplinary proceeding. The email was sent in the afternoon of 21 November 2006 and it was copied to Mr Sullivan, Mr Eassie and Mr Gallant. That expression is used in s 219 of the ASIC Act but research will have to be done as to the meaning it has been given in other cases. Serious allegations were made against ASIC including a contention that the summons was issued for the collateral purpose of a "dress rehearsal" of Mr Albarran's proceeding in the AAT and a conflict of interest on the part of the Panel in the Partner's proceeding. 43 It is not suggested that the letter was settled by Mr Sullivan or Mr Eassie. As well, and as a separate ground, Albarran relies upon what was said in the High Court in Taikato v R [1996] HCA 28 ; 139 ALR 386, that what amounts to a "reasonable excuse" depends not only on the circumstances of the individual case, but also on the purpose of the provision to which the defence of "reasonable excuse" is an exception. CALDB is obliged pursuant to s.218(2) of the ASIC Act to observe the rules of natural justice "... at and in connection with a hearing ", and we submit that the matters referred to above, considered together, plainly constitute a reasonable excuse for him not to attend the hearing of the [Partner's] Proceedings to give evidence (Section 219(1) of the ASIC Act ), as well as for refusing to comply otherwise with Section 219 of the ASIC Act . 46 ASIC replied on 14 December 2006 stating that it would not agree not to call Mr Albarran at the hearing of the Partner's matter which had been reconvened to commence on 5 February 2007. ASIC denied the "baseless allegation" that the summons was issued for an improper purpose. ASIC observed that the summons was sought for the legitimate forensic purpose of having Mr Albarran available to give evidence relevant to ASIC's case for orders against the Partner. 47 Importantly, ASIC's letter of 14 December 2006 made it clear that the evidence which ASIC sought to adduce from Mr Albarran in the Partner's matter was the same evidence he had given in his own matter before the Board. ASIC merely seeks to adduce from Mr Albarran the same evidence which he has already given at his own CALDB proceedings. ASIC has provided Mr Albarran with a copy of the transcript of the evidence he gave at his own CALDB proceedings. ASIC has also provided him with an outline of the evidence which ASIC expects to adduce from him. The outline is a summary of the evidence which Mr Albarran gave at his own CALDB proceedings. Mr Blessington stated that "Its contents are predictable. Mr Albarran and the Partner were present. So too were Mr Blessington and Mr Eassie. It appears that Mr Gallant was also in attendance. 54 The Partner is recorded in the notes as having made reference to the possibility of Mr Albarran raising the privilege against self-incrimination. Should focus on reasonable excuse. Whatever discussion took place between Mr Albarran and Mr Blessington about that topic, it is clear that privilege against self-incrimination was not raised before Mr Magarey or when Mr Albarran appeared to give evidence. 57 Mr Magarey held a pre-hearing conference on 22 January 2007 to deal with Mr Albarran's application to be excused from attendance in response to the summons. Mr Magarey also dealt, at the same time, with an application by the Partner that the summons against Mr Albarran should be dismissed. 58 Mr Magarey gave his ruling on both applications on 25 January 2007. He rejected both of them in a detailed set of rulings and reasons delivered on that date. 59 The ruling contains two important preliminary comments about Mr Albarran's application. First, Mr Magarey observed that there may be an argument that no application of this nature could be made until there was a failure to attend or to answer questions. However, Mr Magarey accepted Mr Albarran's submission that it was realistic to deal with the application on an anticipatory basis, there being said to be a basis which would constitute a reasonable excuse for an anticipated failure to attend or to answer questions. I understand that the parties do not disagree with this. It further seems that that expression in s 219 is to recognise that (in addition to physical excuses such as sickness, transport strikes, etc) there may be good reasons affecting that particular person which should justify an excuse. However, I take the purpose of the expression in s 219 to be that unless there can be established (to my satisfaction in this case) some particular prejudice to the particular person which is such as to displace the general presumption of compliance with the summons then the general purpose of compliance should be enforced. Mr Blessington also sent a copy to Mr Gallant. 64 Later in the afternoon of 25 January 2007 Mr Blessington had a conversation with Mr Albarran about Mr Magarey's ruling. Mr Blessington's note records that he told Mr Albarran that they needed to discuss the "next move". Mr Gallant noted Mr Albarran's instructions that he would prefer Mr Blessington to make the application. I believe I have a reasonable excuse not to answer that question and will not do so. Mr Albarran attended with Mr Blessington on 7 February 2007. It is unnecessary to set out the exchanges that took place in relation to every one of the 37 questions the subject of the present application. Mr Albarran's approach is sufficiently revealed by the portions of the transcript set out below. As a salaried partner, were you given directions from time to time by equity partners to undertake tasks in 2000? I will allow the question and I can't see the need to confer. It doesn't specifically relate to anything here except background. I believe I have a reasonable excuse not to answer that question. At this point in time, I'm not able to answer that question. I'm happy to return, once my appeal has been concluded, and answer that question. I can't see such a big issue about me being required at [the Partner's] hearing. To me, it seems that ASIC want to have a go at me before they get to my appeal, but that's just simply me as a layman. It is binding, I think, on the parties and on you to the extent that you made the application, so you have to accept the fact that you are here. If you come here and refuse to answer reasonable questions relating to this case, then you negative that ruling and you are of no value as a witness to anyone in this case, so we can't allow that to happen. At this point in time, I'm not in a position to answer the questions because of my position. There's a difference between refusing to answer the question and not being in a position to answer the question because of my position. This Panel can only proceed on the basis that witnesses answer legitimate questions that are put to them. Otherwise, there is no point in calling the witness, for whatever reason. It would seem that I have already ruled that there is a legitimate question if it is sufficiently clear to you what the question is. It is not a question on which I think you should need to confer, because we have ruled that the evidence here, in the opinion of the Panel, will not incriminate you in your own case. So, again, if you want me to answer the question, Mr Chair, I have a matter currently before the Administrative Appeals Tribunal. I believe that answering this question may prejudice my interests in that matter. I believe I have a reasonable excuse not to answer that question and cannot do so at this point in time. My lawyers were present, so can I confer? You, through counsel, made an application to be excused from the hearing. My understanding is that that was argued at some length and that a decision was made. That decision was that you were not excused from attendance. There is no point in you coming here and nor answering questions. It's just as if you are not here at all. I believe your statement is incorrect there. I believe that the reason that the Chairman required my attendance here today is because, at that point in time, there was no knowledge of what questions were going to be asked and he couldn't possibly say whether I would or I wouldn't have a reasonable excuse. But, clearly, the questions that are being asked and are being put to me relate to my case and I believe I have a reasonable excuse. If you go to the Chairman's ruling, that was his ruling. Have you seen the document produced by ASIC, "Evidence to be adduced by Mr Albarran"? I am ticking off straight down the list, and there hasn't been a question asked here that is not on this list. But to the extent that you are asked questions on this list, you are on notice of the questions. He contended that the ruling of Mr Magarey related to "the first limb" of s 219, whether or not Mr Albarran had reasonable excuse not to attend. Mr Blessington contended that Mr Albarran was entitled to rely on "the second limb" of s 219 which related to answering specific questions. 71 There was then some further discussion, after which Mr Speakman addressed the Panel Chairman. Mr Speakman referred to Mr Magarey's observation about the anticipatory basis of the application to be excused from attendance. He pointed to Mr Magarey's statement that it was not open to Mr Albarran to agitate the matters he had relied upon in his application to be excused from attendance. This ruling, despite what ASIC claims, is in relation to the first limb of section 219, nothing more, that is, whether he had reasonable excuse not to comply with the summons to be here, and he is here. That could not have been covered by the Chairman, because he did not know the questions which were going to be put to him. He didn't have in front of him, so far as I'm aware, the list of questions. They were not contemplated, they were not tendered. How could that possibly be the case? Mr Albarran used slightly different formulation in relation to some of his refusals but the effect of each was that Mr Albarran had a matter currently before the AAT and he believed that answering the question may prejudice his interests in that matter. He said he believed he had a reasonable excuse and would not be able to answer "at this point in time". 74 When asked to elaborate on the question of reasonable excuse, Mr Speakman observed that there could not be reasonable excuse to refuse to answer a question on the basis that it would prejudice the AAT proceedings. There's no implicit concession in that submission that if any evidence went beyond this transcript there would be prejudice, but at least on this narrow question there can't be any prejudice in being asked to give the same evidence that's been given before. At the conclusion of Mr Albarran's evidence, the Panel Chairman stated to him, the Panel "does appreciate your position... and that you are acting on legal advice". However, the Chairman pointed out that the absence of his answers prejudiced the matter before the Panel which was left to make what it could of the "patchwork quilt" of Mr Albarran's answers. 76 This was a reference to the fact that Mr Albarran did answer some questions that were put to him. 78 The authorities on the scope of "reasonable excuse" as a ground of exculpation from the operation of a statutory prescription were comprehensively analysed and explained by Hely J in Bank of Valletta PLC v National Crime Authority (1999) 164 ALR 45 at [36] ff. 79 Justice Hely's explanation of the authorities indicates that the proper construction of "reasonable excuse" in s 219 is consistent with the view taken by Mr Magarey, as set out at [61]. That is to say, the person seeking to rely upon it must establish some particular prejudice which is sufficient to displace the assumption of compliance with the summons. 80 In Valletta , Hely J referred to authorities of the High Court, the New South Wales Court of Appeal and the Privy Council. Three propositions may be gleaned from his Honour's analysis of those authorities. 81 First, the question of what constitutes "reasonable excuse" is to be determined from the terms and structure of the particular statute and the circumstances of each particular case: Valletta at [39], [47]. 82 Second, reasonable excuse is not confined to physical or practical difficulties in complying with the statutory prescription. It includes any excuse which would be accepted by a reasonable person as sufficient to justify non-compliance, but it is necessary to bear in mind the importance of the particular statutory prescription to the overall statutory regime: Valletta at [42]. 83 Third, the question of what constitutes reasonable excuse involves an objective determination in all the circumstances. These include the adverse consequences to an individual of being compelled to answer and the adverse consequences to an inquiry if the questions are not answered: Valletta at [44], [47]. 84 Applying these principles, it is quite plain that reliance on legal advice as a ground of reasonable excuse would be inconsistent with the statutory scheme contained in particular in s 1292 of the Corporations Act and ss 68 , 217 and 219 of the ASIC Act . 85 The primary function of the Board is to hear disciplinary proceedings brought by ASIC in respect of auditors and liquidators. Privilege against self-incrimination and privilege against exposure to a penalty do not constitute reasonable excuse for failing to answer. It seems to me that the Board's statutory functions would be rendered otiose if reliance on legal advice were to constitute reasonable excuse. 86 In my view, support for this proposition is to be found in the remarks of the High Court in Ostrowski v Palmer [2004] HCA 30 ; (2004) 218 CLR 493 at [2] per Gleeson CJ and Kirby J; at [53] --- [54] per McHugh J; and at [85] per Callinan and Heydon JJ. However, the approach stated by their Honours is applicable by analogy in the present context. 89 In Re Modern Woodcraft Pty Limited (In Liquidation) (1997) 75 FCR 245 at 253-254, Lindgren J appears to have considered that reliance on legal advice was reasonable excuse for failure to file affidavits within the time limited for the purpose of s 597A(3) of the Corporations Law . Nevertheless, for the reasons stated by his Honour at 254, that decision is confined to its own facts. That sub-section falls to be considered in its own terms, in its full statutory context. 91 Section 219(7) is in the nature of a contempt proceeding. It provides that if the Court is satisfied that the person to whom a certificate has been given has "without reasonable excuse" failed to comply with a requirement stated in the certificate, the Court may punish the person "in the same manner as if he or she had been guilty of contempt. It follows that charges must be proved to the criminal standard. It does not follow that every provision of the Criminal Code is imported into the proceeding. 93 The note under s 219(2A) of the ASIC Act refers to s 13.3 of the Criminal Code in an aid to the construction of s 219(7) and part of the statutory context: Pearce, D C & Geddes, R S, Statutory Interpretation in Australia (6 th ed, LexisNexis Butterworths, 2006) at [4.49]. But it does not follow from this that the provisions of Ch 2 of the Criminal Code dealing with the General Principles of Criminal Responsibility are applicable. Rather, it is in the nature of a fault element within s 5.1 of the Criminal Code . 96 Senior counsel for Mr Albarran sought, in my view incorrectly, to treat the absence of reasonable excuse as a physical element. He then sought to argue that the prosecutor was required to prove that Mr Albarran intended to refuse to answer the question without reasonable excuse. I reject that submission as contrary to the terms of s 219(2) , (2A) and (4) of the ASIC Act . 97 Section 219(2A) imposed an evidentiary burden on Mr Albarran. The question which arises before me under s 219(7) is whether I am satisfied that the burden has been discharged. 98 The view which I have reached that reliance on legal advice cannot amount to "reasonable excuse" disposes of the matter but even if I am wrong on that question, I am not satisfied that Mr Albarran has discharged the burden upon him. Moreover, even if the absence of reasonable excuse is a physical element, I am satisfied of this element beyond reasonable doubt. 100 I accept that Mr Albarran received advice from Mr Gallant and Mr Blessington prior to the conference of 21 November 2006 that Mr Albarran "may have a reasonable excuse" not to attend the hearing which was, at that stage, scheduled to take place in December 2006. 101 I also accept that the preliminary advice given by those solicitors was confirmed in the letter of 21 November 2006 following upon Mr Blessington's conference with Mr Sullivan and Mr Eassie. But the letter did not convey the advice in unqualified terms because the confidence expressed in the opening words of the second sentence is tempered by the statement that "no guarantees can be given. Once Mr Magarey's ruling was handed down on 25 January 2007, the relevant question was whether Mr Albarran received legal advice that he had reasonable excuse for not answering the questions that were put to him when he appeared before the Panel on 7 February 2007. 103 It is true that Mr Albarran was accompanied at the hearing on 7 February 2007 by Mr Blessington. It might be inferred from this, and from what Mr Blessington said before the Panel that Mr Albarran was acting on legal advice. The Panel Chairman's remark which I have recorded at [75] might also be thought to support that view. 104 However, the content of any advice which Mr Albarran might be thought to have acted on 7 February 2007 was not established. Nor was the occasion on which it was given established on the evidence before me. Accordingly, upon a careful consideration of the whole of the evidence, I reject Mr Albarran's contention that he received or acted upon legal advice that he had reasonable excuse for not answering the 37 questions which he was required to answer before the Panel on 7 February 2007. 105 There are four reasons for this finding. First, Mr Albarran was an unsatisfactory witness and I reject critical aspects of his evidence as untruthful. Second, his evidence was not supported, and was in some respects contradicted by Mr Gallant. Third, Mr Blessington was not called. Fourth, the entire documentary record is inconsistent with a finding that Mr Albarran received legal advice in the terms that he asserts. I will expand on these reasons below. 106 Mr Albarran commenced his evidence-in-chief by stating that Mr Blessington told him that after reviewing the matter, Mr Sullivan and Mr Eassie believed that Mr Albarran "may have a reasonable excuse" for not attending the hearing. Not long after, he said the advice that Mr Blessington conveyed to him was that Mr Sullivan and Mr Eassie were "of a firm opinion" that he had a reasonable excuse for not attending. 107 This later evidence was, plainly, an embellishment of what Mr Albarran said at the outset. It was contrary to the evidence given by Mr Gallant who said that after the conference with counsel he confirmed his firm's preliminary view to Mr Albarran that he "may" have a reasonable excuse for not answering the summons. 108 Moreover, Mr Albarran's evidence is contrary to the only contemporaneous written record of the advice that was communicated to him. That advice was contained in the letter of 21 November 2006 which was qualified by the statement that no guarantees could be given. 109 Mr Albarran agreed that he had produced, in response to a notice to produce given to him by ASIC, all documents that he and his solicitors had been able to locate that recorded advice given to Mr Albarran on this topic. As I have said, none of them supported him. 110 Moreover, in spite of the clear terms of the statement in the letter of 21 November 2006, Mr Albarran would not accept that the words "no guarantees could be given" qualified the terms of the advice that preceded it. Mr Albarran's credit was adversely affected by his refusal to accept the obvious. 111 A further example of this was Mr Albarran's evidence that the Partner wanted him to give evidence at the hearing of the Partner's matter before the Board. 112 Mr Albarran's evidence on that issue is contradicted by the note of the conference of 17 January 2007 set out above. The Partner raised the possibility of Mr Albarran claiming privilege against self-incrimination. The only conceivable explanation for the Partner's suggestion was that he did not want Mr Albarran to give evidence. 113 Indeed, the Partner persisted in this approach after the conference, as is recorded in Mr Albarran's email to Mr Blessington of 18 January 2007 forwarding the comments by the Partner as to his view, namely, that privilege against self-incrimination may be claimed by Mr Albarran. 114 What is more, Mr Magarey's ruling of 25 January 2007 deals not only with Mr Albarran's application to be excused from attendance. Mr Magarey also dealt with the Partner's application that the summons against Mr Albarran should be dismissed. 115 Notwithstanding the overwhelming body of evidence against him, Mr Albarran stubbornly refused to depart from his statement that the Partner wanted him to give evidence before the Board. 116 Another example of the unsatisfactory nature of Mr Albarran's evidence is to be found in his assertion that at the conference of 17 January 2007 Mr Eassie was of the "very strong opinion" that Mr Albarran had a reasonable excuse not to attend, and that even if he did attend, not to answer questions that may affect his AAT appeal. 117 Mr Eassie was not called but the note of what he said at the conference is inconsistent with the proposition that any such advice was given. 118 Mr Blessington's note records that Mr Eassie said that the right to claim privilege against self-incrimination was not clear and "(s)hould focus on reasonable excuse. " If Mr Eassie had gone beyond this and given "a very strong opinion" that Mr Albarran had reasonable excuse, it would have been recorded in Mr Blessington's note, which on its face, contains a comprehensive record of what was said at the conference. 119 Mr Albarran was taken to the note but he clung to his earlier evidence, insisting that Mr Eassie said that it was his "opinion or it was his firm opinion" that Mr Albarran had a reasonable excuse. 120 Despite his professional qualifications as a chartered accountant, Mr Albarran's evidence was that he did not read Mr Magarey's ruling of 25 January 2007. Having regard to his overall approach to the matter, I am inclined to accept this piece of evidence, although his failure to read it reflects adversely upon the third limb of the argument, namely the "reasonableness" of his professed excuse. 121 However, I do not accept Mr Albarran's evidence of the terms in which the content of Mr Magarey's ruling was conveyed to Mr Albarran. His evidence was that he was told that the basis of the ruling was that Mr Magarey could not know what questions were going to be put to Mr Albarran and whether those questions would be ones which, if answered, could affect his AAT proceedings. 122 That was plainly not the basis on which the application was made to Mr Magarey or the basis of his ruling. The letter of 14 December 2006 from ASIC made it clear that the evidence which was to be sought from Mr Albarran was the same evidence he had given in his own disciplinary proceeding. That was why Mr Magarey was able to rule upon the first of the two preliminary points, namely that it was realistic to deal with the application on an anticipatory basis, it being known what the scope of the questions would be. 123 Mr Magarey's ruling expressly dealt with the application on the basis that there was no indication from ASIC that it would seek to adduce evidence from Mr Albarran other than that which he had given in his own proceedings. 124 In light of this, I cannot accept that any of Mr Albarran's legal representatives conveyed the substance of the ruling in the terms stated by Mr Albarran. To make a finding that the advice was in those terms would be to say that the legal representatives gave an entirely inaccurate account of the ruling. That would be a most surprising result and there is no evidence before me (other than Mr Albarran's assertion) to support it. 125 Mr Albarran agreed that after Mr Magarey's ruling, he discussed what was to be done thereafter with Mr Gallant and Mr Blessington. Notwithstanding Mr Magarey's adverse ruling, Mr Albarran said that Mr Gallant and Mr Blessington gave firm advice that he still had a reasonable excuse for not answering questions. 126 This evidence was contradicted by Mr Gallant who said that the question of whether Mr Albarran had a reasonable excuse was "not revisited in great depth" after Mr Magarey's ruling. 127 Furthermore, in cross-examination on this topic, Mr Albarran departed from what he had said in chief. Mr Albarran said in chief that the people with whom he discussed Mr Magarey's ruling were Mr Gallant and Mr Blessington. He said they told him they were still "very confident" or still "confident" that he had a reasonable excuse. Yet in cross-examination Mr Albarran said, for the first time, that the advice was conveyed, albeit indirectly from Mr Sullivan and Mr Eassie. Later he said he could not remember mention of Mr Sullivan but he said that Mr Gallant told him he had discussed it with Mr Eassie. 128 The documentary evidence discloses that there was a discussion between Mr Blessington and Mr Albarran on 25 January 2007 after Mr Magarey's ruling. But the terms of Mr Blessington's note, and Mr Albarran's answers to questions about it provide yet further reason for rejecting his evidence. 129 The note of the conversation states in plain terms that Mr Albarran said he would not be answering questions if he thought it would prejudice him in the AAT and they could take him to the Federal Court if they wanted to. 130 Notwithstanding this, Mr Albarran at first denied that he had spoken those words. He persisted with this even after he was taken to the note. Later, he gave a version of the conversation which was not supported by the note. This included the self-serving statement that Mr Blessington "believed strongly that I still had a reasonable excuse". No such words, or words touching on that subject, were contained in the note. 131 Upon a careful consideration of the whole of Mr Albarran's evidence, I have come to the view that he has, without any foundation, convinced himself that advice was given even though it is plain that no such advice was received by him. No responsible lawyer could have given the advice that Mr Albarran asserts. Yet he persisted with his assertion and was not prepared to depart from it despite being taken to the overwhelming evidence against him. 132 It is plain that he was prepared to run the risk of the consequences that would flow from his failure to answer the questions regardless of what was told by his lawyers and regardless of the obvious effect of Mr Magarey's adverse ruling. 133 It follows that I do not need to consider the third issue, namely "reasonableness" but I will do so briefly. 135 Nevertheless, Mr Albarran asserted that Mr Magarey's rejection of Mr Albarran's lawyer's arguments did not cause him to have doubt whether the advice be claimed to have received from his lawyers was correct. 136 There are only two possibilities that follow. Either Mr Albarran's evidence as to this was false, or, if his evidence is to be accepted, his approach was entirely unreasonable. 137 So too with his evidence that he did not read Mr Magarey's ruling. This evidence was either false, or, alternatively, if he did not read the ruling, his approach was not reasonable. No person, let alone a professional person, can be heard to assert the reasonableness of an excuse that relies upon a failure to read a document, which is central to a consideration of the excuse that is proffered. Senior Counsel for Mr Albarran conceded that Mr Albarran's approach was cavalier, yet he asked me to accept it as reasonable. 138 Even if I were to accept Mr Gallant's evidence that a view had been formed before Mr Magarey's decision was handed down, that there was a second limb to Mr Albarran's claim of reasonable excuse which may still be open after the ruling, it does not assist Mr Albarran. This is because it is plain from the ruling that this excuse was not open in respect of questions that were intended to elicit evidence that had already been given by Mr Albarran in his own disciplinary proceeding. 139 There was no suggestion before me that any of the 37 questions asked of Mr Albarran went beyond the subject matter of his evidence in the earlier proceeding. Indeed, a schedule prepared by ASIC indicates that the questions did not go beyond those which had been the subject of Mr Albarran's earlier evidence and of which he was given notice in ASIC's letter of 14 December 2006. 140 I should add that I do not consider that Mr Gallant's evidence that "the view had been formed before the decision of Mr Magarey was handed down" that Mr Albarran may have a second limb to his approach, namely reasonable excuse not to answer, supports Mr Albarran's case. In my view, the only fair reading of the evidence is that Mr Gallant was referring to advice given in November 2006. That advice was superseded by ASIC's communication of 14 December 2006 and by Mr Magarey's ruling. 141 The absence of any reasonable excuse is graphically illustrated by Mr Albarran's answer to the last line of questions put to him in cross-examination. Certain questions may have been answered differently. So that's how I could have been prejudiced. Despite his denials, I find that Mr Albarran was told that if he failed to answer questions before the Board without a reasonable excuse, he would commit a criminal offence and it was possible he would go to gaol. 145 If, as was submitted by Senior Counsel for Mr Albarran, I am required to be satisfied of the absence of reasonable excuse as a physical element, I am satisfied to the requisite standard. Upon consideration of all the evidence, I am satisfied beyond reasonable doubt that Mr Albarran failed or refused to answer the questions without reasonable cause or excuse. 146 I will order, pursuant to s 219(7)(b) of the ASIC Act that Mr Albarran be punished in the same manner as if he had been guilty of contempt of court. 147 I propose to stand the matter over to a date to be fixed for the making of further orders on the question of punishment. I certify that the preceding one hundred and forty-seven (147) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.

defendant refused to answer questions before the companies auditors & liquidators board disciplinary panel no "reasonable excuse" reliance on legal advice not "reasonable excuse" advice not given reliance not reasonable defendant to be punished as if guilty of contempt of court corporations

On 5 October 2000 on a reference from the Federal Race Discrimination Commission or to the Human Rights and Equal Opportunity Commission, the Inquiry Commissioner determined that the respondent had engaged in conduct rendered unlawful by s 18C of the Racial Discrimination Act 1975 (Cth) (the Racial Discrimination Act ) by publishing on a website material racially vilifactory of Jewish people and ordered the respondent to remove the website from the World Wide Web. On 30 March 2001 the applicant brought a proceeding against the respondent, Dr Toben for a declaration that Dr Toben had engaged in conduct rendered unlawful by Part IIA s 18C of the Racial Discrimination Act by having published on the World Wide Web at websites collectively known as "The Adelaide Institute Website" material which was racially vilifactory of Jewish people. The applicant sought consequential orders in relation to the published material. The application was supported by an affidavit of Peter John Wertheim who exhibited a document (PJW4) which was entitled "About the Adelaide Institute" (the AI Document). She allowed the application. On 17 September 2002 she made the following declaration and orders (the September 2002 orders): It be declared that the respondent has engaged in conduct rendered unlawful by Part IIA of the Racial Discrimination Act 1975 (Cth) by publishing to the public on the World Wide Web the document headed " About the Adelaide Institute " a true copy of which is part of annexure ' PJW-4 ' to the affidavit of Peter John Wertheim sworn 29 March 2001 and filed in this proceeding (the document headed " About the Adelaide Institute "). This order is not intended to derogate from the time allowed by Order 2 hereof for the removal of material from World Wide Web websites controlled by the respondent or by the Adelaide Institute. The respondent pay the applicant's costs of the proceeding, including reserved costs if any. She found that the material contained in the AI Document conveyed the imputations which were the subject matters of the orders mentioned above. She found that publishing material on a website which is not password protected had the effect of communicating that information to the public. Such publication allows persons who access the website with a browser to view the material. Two related sets of communication instructions, Transmission Control Protocol, (TCP) and Internet Protocol, (IP), govern how information will move through the system, defining addresses, routing systems, and all the regulation necessary to permit communication among users. There are two active components on the Web: a server that stores and transmits information, and a client or browser that requests, receives and displays the information obtained from the server. A "web site" is a collection of computer files that are coded in a specific way ... to allow information to be sent on request to a browser. The files are then displayed in a way consistent with the instructions provided by the creator of the web site. Every web site has a unique Uniform Resource Locator (URL), akin to their Internet address. Her Honour found that the AI Document and other material published by the respondent on the World Wide Web conveyed the imputations in paragraph 2 of the September 2002 orders. Her Honour found that the first and second imputations would engender feelings of hurt and pain within members of the Jewish Community who would, by reason of the publication, consider themselves being treated contemptuously, disrespectfully and offensively. She also found that the third and fourth imputations would offend, insult, hurt and wound members of the Jewish Community and engender the same senses. The judge found that the publication of the AI Document was unlawful under s 18C of the Racial Discrimination Act and that it was published because of the ethnic origin of the people in the group identified in the document, namely Jews and it was an act reasonably likely to humiliate and intimidate Jewish people. The judge found that the respondent had not established any exceptions under s 18D of the Racial Discrimination Act . Her Honour made a permanent injunction restraining the respondent first, from publishing to the public on the World Wide Web the AI Document or any document with substantially similar content to that document; and secondly, from publishing any material which would convey the imputations which she had previously found to be unlawful. The respondent deleted all material on the website within the time prescribed by paragraph 1 of her Honour's orders. That action indicates an awareness of the September 2002 orders. However, some time before 23 September 2002, the material which was contained in the AI Document was again published on the same website. On 14 December 2002 the respondent attended the 3 rd International Historical Revisionism Conference in Italy and published further material on the website. On 5 February 2003 the respondent entered the September 2002 orders. Initially the respondent argued that the sealed order now on file did not reflect her Honour's reasons but that argument was abandoned. The notice of appeal did not challenge the finding made by Branson J that publication of the material was conduct which was rendered unlawful by s 18C of the Racial Discrimination Act , being conduct which was reasonably likely in all the circumstances to offend, insult, humiliate and intimidate the groups or persons identified by her Honour. Three matters were argued on the appeal. First, that Part IIA of the Racial Discrimination Act was unconstitutional. Secondly, the material which had been published on the website did not have a sufficient degree of causal connection with race, colour or national or ethnic origin as required by s 18C of the Racial Discrimination Act . Thirdly, the published material fell within the exemption to the provisions of Part IIA in s 18D. In May 2003, at or about the time the matter was heard by the Full Court, the respondent published on the website "that the appeal would signal how strong the Jewish Zionist influence is in Australia's judiciary where a battle rages between common law and talmudic law. " The Full Court dismissed the respondent's challenge to the validity of Part IIA of the Racial Discrimination Act . Carr and Kiefel JJ found that the provisions of Part IIA were supported by the external affairs power. Allsop J found that Part IIA , ss 18C and 18C (1)(b) "in its statutory context, are reasonably capable of being considered as appropriate and adopted to implement the obligations ... assumed by Australia" under the International Convention on the Elimination of All Forms of Racial Discrimination done at New York on 7 March 1966. The Full Court found that the AI Document was calculated to offend in itself those who maintain that the holocaust occurred and, in particular, Jewish people. It concluded at least one reason the AI Document was published was because of the race or ethnic origin of Jewish Australians. It found that the AI Document was deliberately provocative and inflammatory, and contrived to smear Jews. It rejected the respondent's contention that he was entitled to an exemption by reason of s 18D(b) which provides that s 18C does not render unlawful anything said or done reasonably and in good faith in the course of any publication made for genuine academic or other genuine purpose in the public interest. On the contrary, the terms of the Document are, in my view, deliberately provocative and inflammatory. The reference to the Lenin and Stalin eras was, in my opinion, contrived to smear those on the receiving end of the appellant's message. The appellant described the Jews as "also murderers". This reference was made almost as an aside, clearly to paint the Jews in a bad light, before the author resumed his flamboyantly-worded challenge. I would go further and hold that there is no proof that the publication was done reasonably or in good faith. Refers to Diary of Anne Frank as one of "those self-serving Holocaust frauds", to "Holocaust stories and myths", and repeatedly to the "Holocaust lie". ] a lie". Case proven that the holocaust was a hoax. There were no gas chambers. States "the holocaust is a lie", that school education teaches "the lies of the holocaust" and refers to "the Auschwitz Lie". The Germans had no gas chambers, no gas vans, and did not commit any inexcusable crimes. Revisionists understand that the holocaust did not happen. On December 19, the Mehr News Agency conducted an interview with Toben to ask why Western countries were so outraged when Iranian President Mahmud Ahmadinejad called the Holocaust a myth. However, he also said some European countries insist that millions of innocent Jews were killed during the Second World War by Hitler, and asked why the Europeans don't give part of their land to the Jews if they are correct. What is your view? Germany --- Hitler systematically exterminated European Jewry. There is simply no proof of this claim --- it was a transfer of Jews, and together with Zionist collaboration, German Jews arrived in Palestine --- with their property. Others were moved out of German territory --- and Auschwitz was a transit camp. The killing was done in huge chemical slaughterhouses --- homicidal gas chambers. This is a technical impossibility because you can work out how long it would take, for example, to kill one million people --- the size of a city like Adelaide --- without anyone finding out about it. The world soon found out President Bush lied about Iraq's Weapons of Mass Destruction --- that lie didn't last even one year. Six million Jews were killed --- this number is mythical/religious --- and although at one time the numbers killed at Auschwitz was claimed to be 4 million, then reduced to 1-1.5 million, and now to around 500,000, the six million remains the same. Why? The applicant sought an order that "the respondent be punished for contempt including that the respondent be committed to imprisonment for disobedience of the said order of this Court and that a warrant be issued accordingly". The notice of motion was accompanied by a Statement of Charge in conformity with O 40 r 5 of the Federal Court Rules 1979 . A Second Further Amended Statement of Charge was filed on 2 November 2007 which was the Statement of Charge under consideration when the matter came before Moore J. The respondent did publish or republish the document headed "About the Adelaide Institute" to the public, by himself or by any agent or employee, on the World Wide Web during or about August 2007, and again on 31 October 2007, as part of the Adelaide Institute Newsletter No 346 and on 31 October 2007 at the foot of the pages of the Newsletters/Archive sections on the said website for Newsletters 50-88 and 93-112 respectively. Schedule A identified 144 separate statements of fact (sometimes in these reasons called "items") which were said to have been published on the World Wide Web and to give rise to the four imputations identified in the September 2002 orders. The first imputation that "[t]here is no serious doubt that the Holocaust occurred" was said to arise out of statements of fact numbered 1-81. The second imputation that "[i]t is unlikely that there were homicidal gas chambers at Auschwitz" was said to arise out of the statements of fact numbered 81-117. The third imputation that "Jewish people who are offended by and challenge Holocaust denial are of limited intelligence" was said to arise out of statements of fact numbered 119-122. The fourth and last imputation "[s]ome Jewish people, for improper purposes (including financial gain) have exaggerated the number of Jews killed during WWII and the circumstances in which they were killed" is asserted to arise in statements of fact numbered 123-144. Mr Margo SC, who appeared for the applicant, informed the Court that the respondent wished to purge his contempt by agreeing to give undertakings to the Court and to the applicant to comply with the orders made by Branson J. Further, to remove all files and material identified in the second further amendment (sic) statement of charge, the material from the Adelaide Institute website and from all other Worldwide websites, the content of which is controlled by myself or the Adelaide Institute by no later than 4 pm on 5 December 2007, and without limiting undertaking (a), not cause any of the material to be replaced on the Worldwide web. Of course I do. Having regard to both the apology and the undertaking I will make the orders that have been agreed between the parties, namely orders 1 through to 4. The Notice of Motion is stood over until 28 February 2008, at 9.30am. Liberty is reserved to the applicant to apply on 48 hours' notice to re-list the Motion and in that event leave is granted to the applicant further to amend the Second Further Amended Statement of Charge to include any alleged contempt arising or discovered after the date of these orders. Costs of the Motion are reserved subject to the agreement of the parties referred to in paragraph 7. The Court notes the agreement of the parties that no application will be made for costs if and for so long as the Respondent complies with each of his said undertakings. Now more than ever it is still possible to defame anyone with the Holocaust allegations --- and get away with it because courts have sanctioned such defamation actions. A sad day for free expression, really --- still, I shall attempt to comply for a fourth time with such orders. The ECAJ was vindicated in their actions and has forced him to acknowledge his contempt of court and remove the offending material. " which Lewis said he would take up with Dr Töben next week. The account of his apology to Moore J and the email was, as can be seen, published on the Adelaide Institute website. On the same day (12 minutes later), an email was sent to Moore J's associate which was in the same terms as that sent to Mr Lewis. On Sunday, 2 December 2007 the respondent emailed Moore J's associate (again sending a copy to his barrister). In an earlier email, Friday 30/11/2007 12:52 PM, I indicated to all parties that when I became aware of the 30 November 2007 article in the Australian Jewish News >Töben gives Holocaust denial apology in court<, I reluctantly ceased deleting the material as agreed upon in the Consent Order made by you at the 27 November 2007 hearing in Adelaide. I agonized over the matter, especially because on the evening after the Consent Orders were made I had happily informed my former barrister, Mr David Perkins, Melbourne, that the matter had been settled without going to trial. He stated it was gratifying to see reason for once settling a dispute. I now also invoke the letter written by Mr Alan Goldberg QC, then Chairman Anti-Defamation Committee, ECAJ, to Mrs Joyce Steele, as featured in our Newsletter No 363 --- http://www.adelaideinstitute.org/newsletters/n363.htm --- and also presented in Affidavits in this matter before Your Honour. I find myself unable to continue embracing the details of the Consent Agreement and I now request that I be permitted to bring this matter before you again and that there be a full trial where all matters can be canvassed so that I am accorded Natural Justice by responding to all 144 allegations and by relying on the material contained in all of my submitted Affidavits. Since Friday lunch-time, 30 November 2007, I have not heard from Barrister Paul Charman and hence I am sending this email to you requesting your assistance. On Monday, 3 December 2007 I will be travelling to visit my sick 85-year-old mother and so during the next two weeks I will not be able regularly to check my emails or other mail, and mobile phone reception is difficult in the country. It is important to note that your apology was to the Court for breaching an Order not an apology for your views as such. It is also important to note that the orders preclude from (sic) using the internet in the manner set out in the order, it does not preclude you voicing your views in any other forum although the Racial Discrimination Act would apply. Thank you for your email and I have noted your comments. Per this email I thank you for your pro bono work and now release you from any obligations you may have felt you still had towards me. I was very pleased with your work and especially with the comments you made on my behalf to His Honour about the matter. The transcript will reveal quite clearly that you advised me correctly about accepting the Consent Agreement, something that the Applicant's legal counsel subsequently dishonoured through their comments about the nature of the Consent Agreement to the media. This fact has now brought the matter back to where I started. The published comments in the Australian Jewish News on 30 November 2007, and in the Weekend Australian of 1-2 December 2007 reveals how the Jewish lobby operates when defending its version of the Holocaust-Shoah, something that is so clearly highlighted in the Goldberg letter to Mrs Joyce Steele and in Mr Jeremy Jones' 1991 article about Antisemitism in Australia. As you know I am reluctant to call this conspiratorial --- it is a battle-of-the-wills --- and it certainly highlights deception when one moves from a particular to a generalisation, using the latter abstract concept to defame a dissenting belief. This pattern of behaviour is not new and there are many examples that reveal how a legal process is thereby abused. I have placed a notice on our website >>OWING TO A LEGAL DISPUTE THIS WEBSITE FROM 2 DECEMBER 2007 WILL CEASE TO BE UPDATED<<, which in effect freezes the material until further legal action eventuates. I have also ensured that no other person will be able to gain access to the website. There are now too many moral and legal principles at stake here, which a simple deletion of the material would merely further compromise, something I am not prepared to accept without having them clarified in open court. He also sought to be relieved from compliance with the undertaking contained in paragraph 6 of the order. It is not clear what the respondent was seeking in relation to paragraphs 5, 6 and 7 of the November 2007 orders which were matters the Court had noted, being his apology and his undertaking to comply with the September 2002 orders and the parties' agreement as to costs, except that he apparently sought to be released from his undertaking. Paragraph 3 of the November 2007 orders was simply procedural. On 19 February 2008 the respondent filed two affidavits in support of that application. The respondent's notice of motion was heard at the same time as the applicant's notice of motion for contempt. In one of those affidavits the respondent referred to and exhibited the letter which Mr Alan Goldberg QC (as he then was) wrote in his capacity as Chairman of the Anti-Defamation Committee of the Executive Council of Australian Jewry to Mrs Joyce Steele MP, who was formerly the Minister for Education in South Australia. That is the same letter to which Dr Toben referred in his email to Moore J's associate of 2 December 2007. In his affidavit Dr Toben states: On 18 February 2008, I received per email a letter from the Applicant's solicitor wherein it is expressed that an Order for costs be made against me. I refer to Annexure "1" being a copy of this letter from solicitor for the Applicant, dated 18 February 2008. The application to be made for costs at the 28 February 2008 hearing exemplifies my case against the Applicant that this matter before the court is a political matter, that it is persecution through legal prosecution and thereby an abuse of process. The problem that initially gave rise to the action in 1996 still exists and is thereby not resolved in any way. I refer to Annexure "2" as being a copy of a letter Alan Goldberg, QC, now Justice Goldberg of the Federal Court of Australia, wrote to a former South Australian politician wherein the former Minister for Education, Mrs Joyce Steele, OBE, is threatened/blackmailed into Zionist Jewish submission. Needless to state that Mrs Steele did not bend to Jewish pressure. It is impossible to understand how the letter could have any relevance to the issues before Branson J in September 2002 and Moore J in November 2007. The circumstances of the report ' Toben gives Holocaust denial apology in Court ', in the Australian Jewish News , dated 30 November 2007, concerning Orders of 27 November 2007 be investigated by the Registrar of the Federal Court of Australia. --- it is Jewish interests that are legally protected by such legal censorship preventing investigation of an historical event, and that the Jewish Holocaust-Shoah guarantees a perpetual victimhood status of Jews while the Armenian Holocaust protects Jews from being regarded as perpetrators, which they were, and as they were in the 1917 Soviet Bolshevik Holocaust. There be such further or other Order as the Court may consider appropriate. Although the applicant's solicitors were later given a copy (probably at the hearing), they say they have never been served with a sealed copy. The document which has been provided to the Court is unsealed. I direct that the document provided to the Court be accepted for filing. No submissions were made by the respondent's counsel in support of the "notice of motion". That "notice of motion" was also heard at the same time as the respondent's notice of motion of 4 January 2008 and the applicant's notice of motion for contempt. The respondent, as I have said, tendered no evidence. He was entitled, of course, to rely on any evidence tendered by the applicant which supported his case. No evidence of that class was identified. However, it may be assumed that the respondent "withdrew" his apology and sought the orders in the notice of motion of 4 January 2008 as a response to the applicant's solicitor Mr Lewis' comments to the Australian Jewish News. Assuming that to be the case, however, whatever was said by Mr Lewis or reported by the Australian Jewish News would not entitle Dr Toben to disobey the September 2002 orders or fail to honour the November 2007 undertaking. Dr Toben's notice of motion of 4 January 2008 seeks the suspension of paragraphs 5, 6 and 7 of the November 2007 orders. Those paragraphs which the notice of motion addresses are not orders of the Court. They are matters the Court has noted has happened. First, that Dr Toben has apologised; secondly, that he has given an undertaking noted in paragraph 6; and thirdly, that the applicant will not seek costs so long as the respondent complies with his undertaking. None of those matters can be "wholly suspended" or "suspended". Paragraph 1 of the notice of motion is dismissed. Paragraph 3 of the November 2007 orders is mechanical and the order sought in paragraph 2 of the notice of motion is unnecessary. The other orders are also procedural and the order sought in paragraph 4 is also unnecessary. Paragraphs 2 and 4 of the notice of motion are also dismissed. The matter of substance is that contained in paragraph 3 of the notice of motion. The respondent seeks to be relieved of the undertaking given in November 2007. That application, however, must be dismissed. First, because the respondent has not adduced any evidence or advanced any reason for making the order. It is not suggested that the undertaking which was given was not fully informed. The respondent was represented. He knew the substance of his undertaking. He gave it freely and voluntarily. It was given after negotiation between the parties and partly, I suspect, in exchange for paragraph 4 of the November 2007 orders. But there is a better reason to refuse this application. The September 2002 orders will stand whatever the result of this application. That being so, Dr Toben will have to comply with those orders. The undertaking given in paragraph 6(a) of the notes to the November 2007 orders is something that Dr Toben is obliged to do in any event. The further undertakings in paragraph 6 were given in order that Dr Toben could comply with the undertaking in paragraph 6(a) and the September 2002 orders. It would be inappropriate to release Dr Toben from his undertakings in case it be thought that he could thereafter disobey the September 2002 orders. The respondent's notice of motion of 4 January 2008 is dismissed. I do not intend to address the "notice of motion" which seeks an order and declarations which are mainly not within the jurisdiction of this Court to make and which, in any event, are not relevant to the notice of motion seeking the respondent's punishment for contempt in any detail. The order which is sought in paragraph 1 would not be made and the declarations sought in paragraphs 2.2 to 2.4 could not possibly be made in a proceeding in which the applicant succeeded both at trial and on appeal. The other declarations which are sought seem to raise the question whether the Holocaust occurred. That is simply not an issue for the contempt proceeding. The contempt proceeding does not require the Court to inquire into Dr Toben's claims that the Holocaust did not occur. The September 2002 declaration and orders are the starting point for the question of the contempt proceedings. A further and compelling reason for not dealing with the notice of motion is that the respondent offered no evidence in support of the notice of motion. For those reasons, the "notice of motion" of 19 February 2008 is dismissed. Both parties filed a number of affidavits. On 11 June 2008 the matter came on before me for directions and for the setting of a date for trial. At the directions hearing on 11 June 2008 the respondent sought leave to issue a subpoena directed to The Honourable Justice Goldberg for the purpose of establishing on this hearing that The Hon Justice Goldberg had written the letter to Mrs Joyce Steele in 1984. As already observed, it is patently obvious that any communication that The Hon Justice Goldberg had with Mrs Joyce Steele in 1985 could not be relevant in determining whether the respondent has complied or not complied with the September 2002 orders or the November 2007 undertaking. I refused the request for leave to issue the subpoena. The hearing date of 30 June 2008 having now been vacated and the hearing being now fixed for 5 August 2008, grant the applicant such leave, if any, as may be necessary to file a further amended Statement of Charge and direct that any such further amended Statement of Charge be filed and served by 4.00pm Sydney time on 27 June 2008. Direct that if the respondent elects to file and serve any further material, he shall do so by 4.30pm Sydney time on 25 July 2008. Direct that if the respondent elects to rely at the hearing on any material filed and served or to be tendered by him, he shall by 4.30pm Sydney time on 25 July 2008 transmit by email to the applicant's solicitors a letter identifying each affidavit and any other material on which he will seek to rely at the hearing. Order that by 4.30pm Sydney time on 31 July 2008 each party shall by email transmit to the other (in the case of the applicant to its solicitor at [email protected]) and copy to Lander J's Executive Assistant at [email protected] any objections, or in the case of the applicant further objections, he proposes taking to any affidavit or other material served or notified by the other party. Note that the parties consent to Lander J looking at affidavits any party has said he will rely on, and objections to same, prior to the hearing on 5 August 2008, should his Honour wish to do so for the purpose of preparing to rule on objections. 11a. The respondent to give particulars of the orders sought in the notices of motion of 4 June 2008 and 19 February 2008 by 25 July 2008. The directions hearing be adjourned until 5 August 2008 at 10.15am at which time the trial will commence. Reserve costs of 11 June 2008 and of these orders. Liberty to apply by arrangement with or on reasonable notice to the other party. On 27 June 2008 pursuant to those orders, the applicant filed an amended notice of motion and a Third Further Amended Statement of Charge. The Third Further Amended Statement of Charge as filed is annexed to these reasons. Leave was given at the hearing for the applicant to amend the Third Further Amended Statement of Charge by in the case of charge 7 to delete the words "From Jeremy's 14 December affidavit"; charge 9 to add the words "and in Exhibit JJ1 to the affidavit of Jeremy Jones sworn on 1 November 2006"; and in charge 28 to amend the date from 24 June 2007 to 24 June 2008. Those amendments have not yet been made to the document but should be attended to by the applicant's advisers. That the respondent be punished for contempt including that the respondent be committed to imprisonment for disobedience of the said order of this Court and that a warrant be issued accordingly. That the Sheriff be directed to bring the respondent before the Court before taking the respondent to the place of imprisonment. That the respondent pay the applicant's costs of and incidental to this motion on an indemnity basis. Such further or other orders that as the Court thinks appropriate. The November 2007 undertaking was, of course, to comply with the September 2002 orders. Dr Toben was under a duty to comply with those orders in any event. The applicant seeks an order that the respondent be committed to prison and a warrant issue for his imprisonment. In the Third Further Amended Statement of Charge, the applicant identified 28 separate charges of contempt in two parts. Part A consists of 15 charges of contempt for the wilful and contumacious disobedience of the September 2002 orders. Part B consists of 13 charges of contempt for breaching the November 2007 undertaking. It was agreed by the parties that it would be appropriate for the Court to proceed by way of a two-stage process. The Court should first determine whether the respondent has been guilty of contempt. If the Court is of the opinion that any of the charges of contempt have been made out, then the Court should hear the parties as to penalty. I think the course which the parties proposed is sensible and I will proceed therefore to consider in these reasons only the question whether a contempt has been proved. Section 24 of the Judiciary Act 1903 (Cth) (the Judiciary Act ) provides that the High Court shall have the same power to punish contempts as was possessed at the commencement of the Judiciary Act by the Supreme Court judicature in England. The rationale for the exercise of the contempt power is "to protect the effective administration of justice by demonstrating that the Court's orders will be enforced": AMIEU v Mudginberri Station Pty Ltd [1986] HCA 46 ; (1986) 161 CLR 98 at 107. The law recognises a distinction between civil and criminal contempts. A civil contempt usually involves disobedience to a court order or breach of an undertaking. On the other hand, a criminal contempt is committed where there is contempt in the face of the court or an interference with the administration of justice. In The King v Metal Trades Employers Association; Ex parte Amalgamated Engineering Union, Australian Section [1951] HCA 3 ; (1951) 82 CLR 208 at 243 Latham CJ said, "Wilful disobedience to an order of the Court is contempt of a criminal nature. On the other hand, when the disobedience is accompanied by public defiance it may as readily be seen that the primary purpose of exercising the power is the vindication of the court's authority. But the classification in terms of primary purpose is a more complex and artificial undertaking when the punishment is for wilful disobedience unaccompanied by defiance. There is, accordingly, much to be said for the view that all contempts should be punished as if they are quasi criminal in character, notwithstanding the adoption of the contrary view by some members of this Court in the decisions to which we have already referred. In Witham v Holloway (1995) 183 CLR 525 , Brennan, Deane, Toohey and Gaudron JJ described the distinction between civil and criminal contempts as illusory. In that case, the majority held that because contempt proceedings are brought to punish the contemnor either for the purpose of vindicating judicial authority or for the purpose of coercing obedience to an order, the proceedings must realistically be seen as criminal in nature. For that reason, whether the contempt is civil or criminal, the charge must be proved beyond reasonable doubt. The onus of establishing the contempt is, of course, on the party asserting it. The applicant contends that the respondent's conduct is contumacious and in deliberate defiance of the September 2002 orders and the November 2007 undertaking. In those circumstances, it was put that the respondent's conduct must be characterised as criminal contempt because "it occurs in circumstances where the conduct amounted to public defiance, involves a public injury and this calls into play a penal disciplinary jurisdiction to deal with criminal contempt": Mudginberri Station [1986] HCA 46 ; 161 CLR 98 at 108. In discharging the onus of proof, the applicant must establish beyond reasonable doubt that the respondent had knowledge of the order or undertaking and voluntarily did an act or omitted to do an act in breach of that order or undertaking. A party must comply strictly with an order that requires the party to do something or to refrain from doing something. I adopted the procedure of having the charges read over to Dr Toben. He pleaded not guilty to each of the 28 charges. The applicant tendered, without objection, six affidavits sworn by the applicant and four affidavits sworn by the applicant's solicitor in support of the notice of motion for contempt. Each of those affidavits contained a number of exhibits which contained information which was found on the Adelaide Institute website on different dates including the dates contained in the various charges. The applicant also tendered three affidavits of service. The respondent had filed a number of affidavits prior to the filing of the notice of motion and Statement of Charge of 27 June 2008. The applicant contended at the hearing that a number of admissions were made by the respondent in those various affidavits and sought to tender those admissions. The respondent objected. First, it was contended by the respondent that the applicant should not be allowed to tender any extracts from the respondent's affidavits whether they be admissions or not. Secondly, it was contended that if the applicant was entitled to tender an admission the applicant should be called upon to tender the whole of the affidavit in which the admission was contained. I examined the statements contained in the affidavits to determine whether those statements could be properly described as admissions. In a number of cases, I formed the conclusion that the paragraphs which were sought to be tendered did not contain admissions. In other cases, I concluded that the paragraphs sought to be tendered might contain admissions. The applicant argued, relying upon a decision of the Supreme Court of Victoria in Wimpole v McIlwraith [1923] VLR 553 , that those paragraphs of the respondent's which contained admissions were admissible without the applicant being required to tender the whole of the affidavit. One course I might take here would be to admit the four paragraphs tendered, subject to and along with any other qualifying paragraphs to which the defendant's counsel would be at liberty to refer without thereby being taken to be tendering evidence. The other alternative is to insist on the whole document going in, but with these reservations, which seem to be just---firstly, that the plaintiff putting in the document would only be bound by the admissions to which he calls attention and any qualifications contained in any other part of the document. The defendant would not be treated as calling evidence by calling attention to any such qualifications. As regards statements appearing elsewhere in the affidavit prejudicial to the plaintiff, I should hold that he is not bound by them in the circumstances, and, so far as those statements were in support of facts, the proof of which was on the defendant, I should not accept them as being sufficient proof of those facts by the defendant for the purpose of satisfying that proof. If it were a criminal trial, s 90 of the Evidence Act 1995 (Cth) (the Evidence Act ) would give the Court a discretion to refuse to admit the evidence of an admission if, having regard to the circumstances in which the admission was made, it would be unfair to a defendant to use the evidence. The admissions were contained in affidavits filed prior to the present charges being laid. The respondent was unrepresented at that time. He was apparently not warned that anything contained in an affidavit might be used against him in contempt proceedings. The applicant only seeks to put part of the respondent's affidavit, effectively reserving to himself the editing of the respondent's affidavits. However, this is not a criminal trial, even though the charges must be proved to the level of satisfaction required in a criminal trial, so s 90 of the Evidence Act does not control the admissibility of the evidence of an admission. Section 135 of the Evidence Act applies to both criminal and civil trials. It permits the Court to refuse to admit evidence if the probative value of the evidence is substantially outweighed by the danger that the evidence might be unfairly prejudicial to the party against whom the evidence is sought to be tendered. It seems to me the unguarded admissions made by a party which are sought to be used for the purpose of proving the party to be in contempt of Court and therefore liable to be imprisoned could be unfairly prejudicial to that party. They might, if admitted, mean that that party is put at a forensic disadvantage by having to give evidence to explain the admissions where otherwise that party would choose not to give evidence. The Courts have said the inability to cross-examine on material sought to be adduced in a civil trial may attract the discretion in s 135: Bakerland Pty Ltd v Coleridge [2002] NSWCA 30 at [55] ; Longhurst v Hunt [2004] NSWCA 91 at [46] - [49] . This is a trial in which the applicant seeks an order for the imprisonment of the respondent for his contempt of court. Whilst, of course, it is not thereby a criminal trial, it seems to me that the respondent should be entitled, if possible, to the same evidentiary protection given a person in a criminal trial. That does not mean to say that all of the procedures and rules of evidence which attach to a criminal trial must attach to a trial for contempt. But where there is a choice open to the Court to reject evidence that would not be admissible in a criminal trial, the Court would usually reject that same evidence in a trial where the proof of the assertions might lead to the imprisonment of a party. For those reasons, I rejected the tender. In relation to Part A of the Statement of Charge, were the September 2002 orders made by Branson J? Are the orders unambiguous? Was the respondent aware of the orders? Has the respondent breached paragraph 2 of those orders? If a finding is made that the respondent has breached either or both of paragraphs 2 and 3 of those orders, were those breaches wilful and/or contumacious? In relation to Part B of the Statement of Charge the issues to be determined are whether the respondent gave the November 2007 undertaking recorded in the orders made by Moore J; whether the respondent has breached that undertaking by failing to comply with the orders made by Branson J or failing to remove all files and materials as identified in paragraph 6(b) of the orders made by Moore J or failing to comply with the undertaking recorded in paragraph 6(c) of his Honour's orders. If the finding is made that the respondent has breached the September 2002 orders and the November 2007 undertaking and those breaches are found to be wilful and/or contumacious, whether an order should be made for the respondent's imprisonment and, if so, the length of the term of imprisonment. That last mentioned matter will be addressed at a later time if the previous matters are established. I find that the respondent gave the November 2007 undertaking on 27 November 2007 to Moore J as noted in the November 2007 orders. I will address each of those arguments but those arguments have to be understood against the principle that an order of a superior court stands until it is set aside on appeal or it is revoked or discharged by the Court. While the order stands, parties who are affected by the order must comply with the order. Dr Toben has published remarks which might be described as insulting of the Court and which tend to scandalise the Court. An act which is calculated to lower the authority of the Court or a judge of the Court or an act which is calculated to obstruct or interfere with the course of justice will be a contempt: The King v Nicholls [1911] HCA 22 ; (1911) 12 CLR 280. The first class is often referred to as scandalising the Court. Mr Perkins, Dr Toben's counsel, argued that the Court should not have regard to those remarks in considering whether these charges of contempt have been made out. I think that contention is partly right. Clearly enough, whatever remarks Dr Toben has made about the Court would not be relevant in determining whether his other remarks or his other publication was in disobedience of the September 2002 orders or breached the November 2007 undertaking. However, his remarks may be relevant for that aspect of the applicant's case which is directed to establishing contumacy. It was put by the respondent that the September 2002 orders ought to be understood as being subject to s 18D of the Racial Discrimination Act . It was put that her Honour's order merely reflected s 18C of the Racial Discrimination Act and the exemptions in s 18D continue to apply. I do not accept that argument in the form in which it was put. This is not a proceeding for a contravention of Part IIA of the Racial Discrimination Act . It is not a proceeding in which the moving party needs to establish that the party against whom the proceeding has been brought has done something unlawful by reason of a provision of Part IIA of the Racial Discrimination Act . The critical question for determination in this proceeding is whether the respondent has contravened the September 2002 orders or the November 2007 undertaking by publishing material which the September 2002 orders forbid. The exemptions in s 18D , in my opinion, have no application to the question of contempt. It was put by way of an alternative argument that the September 2002 orders ought to be construed as not intending to deny Dr Toben his right of free speech which was said to be given him by s 18D of the Racial Discrimination Act . Mr Perkins relied upon Evans v New South Wales [2008] FCAFC 130 ; (2008) 168 FCR 576. In that case, the Full Court of this Court held regulations made under the World Youth Day Regulation 2008 (NSW) which were in turn made under the World Youth Day Act 2006 (NSW) are invalid in that they impermissibly infringe freedom of speech. I do not think that directly impacts upon the proposition which was put by the respondent. I think the proposition that must be accepted is that the September 2002 orders were made for the purpose of preventing the respondent from engaging in conduct that is rendered unlawful by the Racial Discrimination Act . They ought to be construed in accordance with the provisions of that Act in the sense that Branson J would not have intended to make orders preventing the respondent from doing something which was otherwise lawful. The September 2002 orders ought to be understood as only preventing the respondent from doing something which is unlawful. The purpose of the orders was to require him to desist from further publications in contravention of the Racial Discrimination Act and requiring him to remove publications which had already been held to contravene the Racial Discrimination Act . Insofar as the orders acted prospectively in relation to further publications, then they must be understood to prevent any publications which would be unlawful under the Racial Discrimination Act and not to prevent any publications which are not unlawful under that Act. But, that said, the September 2002 orders which were confirmed by the Full Court determine authoritatively for the purpose of this application that publication of the AI Document to the public is rendered unlawful by the Racial Discrimination Act . Moreover, the argument put does not assist the respondent in the proceeding because the respondent has not tendered any evidence at all and there is no evidence that would bring the respondent within s 18D of the Racial Discrimination Act . The onus was on the respondent to establish an entitlement to an exemption under s 18D of the Racial Discrimination Act : Jones v Scully [2002] FCA 1080 ; (2002) 120 FCR 243 at [127] and [230]. Next it was put that the Australian Citizenship Act 2007 (Cth) (the Citizenship Act) has the effect of rendering the September 2002 orders nugatory. It was not explained what was meant by the term "rendering the order nugatory" but unless the Citizenship Act had the effect of discharging or revoking the September 2002 orders then the orders would continue to stand. That case was concerned with provisions of the Electoral Act 1918 (Cth) which disqualified as voters at federal elections persons who were serving sentences of imprisonment regardless of duration for offences against the laws of the Commonwealth, a State or a Territory. The reference to the reciprocity of rights and obligations is important in the context of membership of the community. Serious offending may warrant temporary suspension of one of the rights of membership, that is, the right to vote. Emphasis upon civic responsibilities a the corollary of political rights and freedoms, and upon society's legitimate interest in promoting recognition of responsibilities as well as acknowledgment of rights, has been influential in contemporary legal explanation of exclusions from the franchise as consistent with the idea of universal adult suffrage. Dr Toben has not been deprived of any rights attaching to citizenship. The declaration in paragraph 1 of the September 2002 orders is that the respondent in publishing the AI Document engaged in conduct rendered unlawful by Part IIA of the Racial Discrimination Act . The injunctions in paragraph 2 require him to remove from the Adelaide Institute website the AI Document and any other material which convey the imputations to which reference is made. That order contemplates that anything published which contains those imputations would contravene s 18C of the Racial Discrimination Act . The injunctions in paragraph 3 make the same assumptions. The injunctions restrain him from engaging in conduct which the Racial Discrimination Act renders unlawful. No citizen is entitled to engage in similar unlawful conduct because of the provisions of s 18C of the Racial Discrimination Act . Dr Toben has not lost any of the incidents of citizenship which are given by the Citizenship Act. In my opinion, there is nothing in the preamble to the Citizenship Act which would have the effect of discharging or revoking the September 2002 orders or rendering them "nugatory". Later in his argument, Mr Perkins argued that, if the Citizenship Act does not have the effect of revoking or discharging the September 2002 orders, those orders must be understood by reference to that Act. I cannot accept that argument because I cannot see that the Citizenship Act has any relevance to the construction of the September 2002 orders. The respondent next argued that the September 2002 orders were vague or unclear and therefore cannot be enforced in contempt proceedings, and in that regard relied upon the decision of the Full Court of this Court in Universal Music Australia Pty Ltd v Sharman Network Ltd [2006] FCAFC 41. Contempt proceedings are not appropriate for the determination of questions of construction of the injunction or the aptness of the language in which they are framed. The injunction must define precisely what acts are prohibited. The Court must ensure that the language of its order makes it plain what is permitted and what is prohibited. This is a well-established, soundly based principle. The person should not be put at risk of being in contempt of court by an ambiguous prohibition, or a prohibition the scope of which is obviously open to dispute. It was contended that the form of order required the respondent to make a subjective assessment of what might be substantially similar content to that which was contained in the document "About the Adelaide Institute". It was contended that in those circumstances the order was so vague that it should not be the subject matter of contempt proceedings. I disagree. The intention of the September 2002 orders is to prevent Dr Toben from continuing to engage in conduct that is rendered unlawful by s 18C of the Racial Discrimination Act . The September 2002 orders were designed to achieve that result in two ways. First, in paragraph 2 by requiring Dr Toben to remove from the Adelaide Institute website the AI Document and any other material which conveyed the imputations in paragraph 2(a)(iii). Branson J made that clear when she approved at [111] the approach taken by the Canadian Human Rights Tribunal which considered the utility of making any order in a similar case. There is also a significant symbolic value in the public denunciation of the actions that are the subject of this complaint. Similarly, there is the potential educative and ultimately larger preventative benefit that can be achieved by open discussion of the principles enunciated in this or any Tribunal decision. To that end, paragraph 3 restrains Dr Toben from publishing the AI Document anywhere on the World Wide Web and further restrains him from publishing material with substantially similar content to that document. It was necessary to include paragraph 3(b) because otherwise it might have been said by Dr Toben that he was entitled to publish on the World Wide Web information which was in slightly different form to that which was contained in the AI Document. Paragraph 3(c) of the orders is designed to reflect, insofar as future conduct is concerned, that which Dr Toben was obliged to remove from the World Wide Web website in accordance with paragraph 2(a)(iii). In my opinion, the orders are not imprecise or vague and uncertain. They do not become so because they require the party to whom they are directed to make a subjective assessment of the material which may be published on the World Wide Web. Lastly, the respondent argued that Dr Toben was provoked by Mr Jones' publication in the Australian Jewish News to publishing the material which he did and breaching the undertaking. The respondent relied on Fig Tree Developments Ltd v Australian Property Custodial Holdings [2008] FCA 1041. I do not, with respect, think that that case stands for the proposition which was put. That case involved an application for discovery and the judge made some observations about a party having the right to apply to be released from an undertaking. But, in any event, there are a number of difficulties with this argument. First, the September 2002 orders and the November 2007 undertaking operated in their terms for all circumstances. Dr Toben was obliged to comply with the terms of paragraphs 2 and 3 of the September 2002 orders until such time as those orders were varied or revoked. If he thought that Mr Jones had said something that would have allowed him to respond, but for the orders to which he was subjected, he could have applied to the Court for a variation or revocation of those orders. He was not entitled for himself to ignore those orders. Secondly, there is no evidence that he responded as he did because of the provocation which he said was displayed by Mr Jones. His articles suggest that he thought he had some right to respond because of what was published in the Australian Jewish News but there is no evidence because he gave none that he was provoked into doing what he did. Thirdly, and in any event, intention is not an element that needs to be established by the moving party when that party seeks punishment for contempt by another party disobeying an order of the Court. For all of those reasons, those arguments fail. As I have already said, the respondent, as was his right, elected to give no evidence in contradiction of the applicant's case or in support of any case which he might wish to advance. Nothing should be inferred from his exercising his right not to call evidence and remain silent. However, his case has to be considered in light of the absence of any evidence. That means, for example, there is no evidence that the publications were made in good faith and in the circumstances in s 18D of the Racial Discrimination Act . Moreover, the respondent did not address the publications themselves and put no argument as to whether the publications did or did not disobey the September 2002 orders or breach the November 2007 undertaking. On 13 September 2002 Branson J's associate emailed the respondent advising him that her Honour would be handing down her judgment on Tuesday, 17 September 2002 at 9.30am (Eastern Standard Time) in Sydney. If you wish, it may be possible to arrange a videolink from the Sydney Registry to the Adelaide Registry of the Federal Court for the handing down of the judgment by Justice Branson. Please let me know as soon as possible if you would like me to arrange a videolink. The judgment of the Court will be mailed to you if you do not attend Court in either Adelaide or Sydney to collect a copy of the judgment. He thereby became acquainted with the September 2002 orders. Indeed, he claims that he attempted to comply with the orders which indicates his awareness of the terms of the orders. Order 37 rule 2 addresses the service of orders before committal or sequestration. However, the respondent has not been served with the September 2002 orders. Nor has he been served with orders which satisfy O 37 r 2(3) by carrying the notice referred to in the subrule. I am satisfied that the respondent was aware of the terms of the orders made by Branson J at or about the time that the orders were made and certainly well aware of the terms at the time that he entered those orders. His awareness of the orders is demonstrated by his removal of the AI Document from the website within the time stipulated in paragraph 2 of the orders. Therefore, although he was not served personally with those orders, he was aware of them from that time. I am not satisfied that at any time prior to 16 November 2006 the respondent was made aware that a failure to comply with those orders could lead to his imprisonment. However, he became aware of that possible result when he was served by the applicant's notice of motion of 16 November 2006 which sought an order that he be punished for contempt including that he be committed to imprisonment for disobedience of the order of the Court and that a warrant be issued accordingly. I am satisfied therefore that he was aware from 16 November 2006 of the consequences of his failure to comply with the September 2002 orders. I am therefore prepared to dispense with service of the September 2002 orders in accordance with O 37 r 2(6) and further order that the September 2002 orders may be enforced by committal, notwithstanding that the applicant has failed to serve a notice in accordance with O 37 r 2(3). However, as there is no evidence that the respondent was aware of the consequences of non-compliance prior to 16 November 2006 the order will have effect only from that date. I should note that O 37 r 2(1) and (3) only apply when the order is to be enforced by committal or sequestration. It would not seem to apply if a fine were imposed. Of course, the November 2007 undertaking is in a different class. The respondent gave the undertaking himself. He has always been aware of that undertaking and its effect. So much is clear from his attempting to resile from the undertaking. An undertaking given to the Court is punishable in the same way as if it were an order of the Court. It is a contempt to breach an undertaking the same as it is to disobey an order of the Court: Biba Ltd v Stratford Investments Ltd [1973] Ch 281 ; Windsurfing International Inc v Sailboard Australia Pty Ltd [1986] FCA 384 ; (1986) 19 FCR 110. A breach of an undertaking will involve the same consequences for the party in breach as disobedience of an order of the Court: Milburn v Newton Colliery (1908) 52 S.J. 317. Where the undertaking is given to the Court by the person who is to be bound by the undertaking, the undertaking does not need to be served upon that person before contempt proceedings for a breach of that undertaking are commenced. Order 37 rule 3 only applies to orders, not undertakings: Windsurfing International Inc v Sailboard Australia Pty Ltd [1986] FCA 384 ; 19 FCR 110. Because the November 2007 undertaking was to comply with the September 2002 orders that means that any publication subsequent to 27 November 2007 which was in breach of the September 2002 orders would also be in breach of the November 2007 undertaking. It seems to me, however, the applicant was entitled to rely upon the separate breaches for the charges although, in due course, if the charges are established it might be appropriate to order one penalty for each of the separate breaches. The Adelaide Institute publishes newsletters on its website. Those newsletters have links, one of which provides access to a site called the "Wayback Machine". The Wayback Machine is a web archive crawler or browser. Mr Jones has exhibited to his affidavit of 25 April 2008 information which he accessed from the website www.archive.org on 24 April 2008 which refers to the Wayback Machine. The site described as the Wayback Machine has 85 billion web pages archived from 1996. It appears that as a result of a grant from the Mellon Foundation Internet Archive completed a 2 billion page web crawl in 2007 designed to take a global snapshot of the web at that time. The archive services are designed to archive and preserve information which has been posted on the web and which would ordinarily be deleted or removed after 44-75 days. It is recorded that a party must be a registered user to submit a site to the archive. That requires the party to login or register as a new user. It is also recorded that a party may remove the database from the archive site. The terms of use of the Wayback Machine which were promulgated on 10 March 2001 provides for accessibility to the archive collection. If the author or publisher of some part of the Archive does not want his or her work in our Collections, then we may remove that portion of the Collections without notice. For instructions on removing a particular set of pages currently included in the Collections, please see our policies and procedures for page removal. Contact the Archive by email at [email protected] to see, update, or delete your information. It was the applicant's case that the evidence exhibited to Mr Jones' affidavit showed that the Adelaide Institute must have cooperated in providing the information to the Wayback Machine but, even if it had not, it could have deleted the information which was available on the Wayback Machine. No attempt was made by Dr Toben to controvert this aspect of the applicant's case. The AI Document exists on the Wayback Machine. It can be accessed by going to the Adelaide Institute website and using the links on the Adelaide Institute's newsletters. I am satisfied and find that the information on the Wayback Machine which originated on the Adelaide Institute website and which was accessible by link from that website could have been deleted or removed but was not. The failure to delete or remove any information which was required to be removed by the September 2002 orders or the November 2007 undertaking constituted a breach of those orders or undertaking. However, there are three further schedules. Schedule B contains references to further publications which are said to support the existing statements of fact between numbers 68 and 144. Schedules C and D contain further references to publications which are said to support the first two imputations in the September 2002 orders. I should say something about the charges and the way in which the applicant has constructed them. The charges relate to the particular days when either the applicant, Mr Jones, or the applicant's solicitor, Mr Lewis, accessed the Adelaide Institute website. Where on each of the days Mr Jones or Mr Lewis read the AI Document a charge has been laid on the basis that the continued existence of that document on the website breaches either paragraph 2(a)(i) or 3(a) of the September 2002 orders and therefore is also a breach of the November 2007 undertaking. As well, however, a separate charge has been laid when any information apart from the AI Document might make out any of the imputations which were the subject matters of paragraph 2(a)(iii) and paragraph 3(c) of the September 2002 orders. For example, four charges have been laid in relation to publications prior to the hearing before Moore J. They relate to two separate occasions when Mr Jones accessed the Adelaide Institute website on 18 August 2006 and 11 October 2007. As a result, four charges have been laid; two in respect of 18 August 2006 and two in respect of 11 October 2007. Charge 1 is a claim that the respondent has been guilty of contempt in publishing information on 18 August 2006 which conveyed the imputations referred to in paragraph 2(a)(iii) and paragraph 3(c) of the September 2002 orders. Charge 3 is a claim that on 18 August 2006 the Adelaide Institute published the AI Document or material substantially similar to that document in contravention of paragraph 2(a)(i) or paragraph 3(a) of the September 2002 orders. Charge 2 relates to 11 October 2007 and complains of the publication of material which conveyed the imputations to which the orders refer. Charge 4 also relates to 31 October 2007 and relates to the publication of the AI Document on the website as part of the Adelaide Institute Newsletter 346. The same is so of the charges which relate to publications after the hearing before Moore J on 27 November 2007. Separate charges are brought in relation to the publication of the AI Document and the publication of information which would convey the imputations referred to in the September 2002 orders on each occasion when Mr Jones or his solicitor accessed the website. After the November 2007 undertaking was given, however, the applicant has not only laid a charge that the respondent has for example published the AI Document in contravention of the September 2002 orders but also, by that publication, has breached the November 2007 undertaking. Since 27 November 2007 Mr Jones has accessed the Adelaide Institute website on 7 December 2007 (charges 5 and 16), 11 December 2007 (charges 6 and 17, and 7 and 18 and 27), 24 April 2008 (charges 8 and 19 and 9 and 20), 23 May 2008 (charges 10 and 21 and 11 and 22), and 20 June 2008 (charges 12 and 23). Mr Lewis has accessed the Adelaide Institute website on 24 June 2008 (charges 13 and 24, 14 and 25 and 28), and 25 June 2008 (charges 15 and 26). On each occasion the applicant and his solicitors have accessed the Adelaide Institute website a charge has been laid for both a breach of the September 2002 orders and a breach of the November 2007 undertaking. Two charges arise out of Mr Jones accessing the Adelaide Institute website on 11 December 2007 and Mr Lewis accessing the Adelaide Institute website on 24 June 2008. The extra charges are numbers 27 and 28. Charge 27 relates to an alleged failure by the respondent as at 11 December 2007 (when Mr Jones accessed the website) to remove all files and materials identified in the Second Further Amended Statement of Charge by no later than 4.00 pm on 5 December 2007 in breach of paragraph 6(b) of the November 2007 undertaking. Charge 28 relates to an alleged failure by the respondent as at 24 June 2007 (sic) (when Mr Lewis accessed the website) to remove all files and materials identified in the Second Further Amended Statement of Charge by no later than 4.00 pm on 5 December 2007 in breach of paragraph 6(b) of the November 2007 undertaking. Charges 27 and 28 do not therefore rely in any way upon the September 2002 orders and, in that sense, are freestanding. However, the undertaking given in November 2007 and, in particular, the undertaking in paragraph 6(b) is in effect the same as paragraph 2(a)(iii) of the September 2002 orders. To that extent, the charges duplicate charges which rely upon the respondent's failure to remove material from the Adelaide Institute website in disobedience of paragraph 2(a)(iii) of the September 2002 orders. Moreover, charges 27 and 28 in some respects refer to the same material, albeit at the two different dates. The particulars of charge 27 rely upon the continued accessibility of items 18, 68-81, 94-101, 110-117, 119, 143 and 144, amongst other material, as the breach of the November 2007 undertaking. The particulars to charge 28 rely upon the material in Newsletters/Archive sections for newsletters 50-88 and 93-112 remain(ing) accessible as the breach of the November 2007 undertaking. The respondent did not take issue with the duplication to which I have referred or the repetitive nature of the charges. Nor did the respondent take issue with the particulars to charges 27 and 28 which do not reflect the form of undertaking given in November 2007 probably because the charge itself does reflect that form. However, the respondent's counsel submitted that charges 1, 2, 7, 9, 11, 14, 15, 18, 20, 22 and 26 should be stayed because they were inherently duplicitous. The duplicity as I understood the argument was two-pronged. First, the charges alleged that the respondent had published information which gave rise to more than one imputation. That, it was said, was the first reason the charges were bad. Secondly, the charges relied in their particulars on more than one statement of fact to prove each imputation. The second argument may be disposed of quickly. The applicant asserted by way of the particulars that each and every item of evidence would establish that the imputation was conveyed. The charges are not duplicitous because they can be proved by more than one item of evidence. The first argument must also be rejected. Paragraph 3(c) of the September 2002 orders restrained the respondent from publishing on the World Wide Web "any other material which conveys the following imputations or any of them". The impugned charges reflect the September 2002 orders and the particulars identified those imputations which were said to be conveyed by the particular publication. It is the publication on the World Wide Web which gives rise to the charge if the publication conveys any of the imputations in the September 2002 orders. The contempt is in publishing on a particular day on the particular website material which conveys any of the four imputations. The charge as drawn is not embarrassing. If it be the case that Dr Toben has never completely removed the AI Document from the Adelaide Institute website then, of course, on every occasion that Mr Jones or his solicitor or anyone else for that matter accesses the Adelaide Institute website and proceeds through the links which are available to reach the AI Document, there will be a publication of that document in disobedience of the September 2002 orders and in breach of the November 2007 undertaking. It is not clear why the applicant has made repeated efforts, albeit successful, to obtain access to the Adelaide Institute website for the purpose of establishing a publication for the further purpose of bringing charges. It may have been that the object was to establish that the information was still on the Adelaide Institute website. However, that could have been done by proving that fact without necessarily having to lay a charge. That would have been a matter, if there be a disobedience to the September 2002 orders or breach of the November 2007 undertaking, for penalty. The applicant may have adopted this course so the applicant could establish by inference that the information had been on the website over the whole of the period since a week after the September 2002 orders. The applicant relied on six affidavits of Mr Jones and three affidavits of Mr Lewis. The applicant has referred to each of the applicant's affidavits as "JJ1" to "JJ6" and each of Mr Lewis' affidavits as "SL1" to "SL3". The difficulty is that those affidavits have exhibits to them which are also styled "JJ1", "JJ2", etc and "SL1". The exhibits to Mr Jones' affidavits are voluminous containing a number of documents separated by tabs. The charges, as already indicated, contain four schedules. Schedules A and B identify statements which have been published at the Adelaide Institute website identifying the particular website where the statement have been read. Schedules C and D identify various publications which have been read on the particular Adelaide Institute website and identify the exhibit to Mr Jones' affidavit where they can be read. The particulars to the charges attempt to identify the place at which the particular publication can be found. There are many hundreds of pages in the exhibits to the affidavit and where imputations arise it is difficult to find the particular words relied upon to determine whether the words convey the imputation. In some charges many documents are relied upon to establish one imputation. I cannot set out in these reasons all of the statements said to convey the imputations. I will give, in the case of some charges, examples of the publications. The applicant provided the Court with a "key" to the charges and schedules to the charges. The key identified the charge number and the date of access to the Adelaide Institute website. It also identified the affidavit which was relied upon to establish the breach and the exhibits to the affidavit relied upon. In some charges the applicant alleged simply that the respondent had published on the Adelaide Institute website the AI Document. In others it was alleged that he had published material which conveyed one or more of the imputations referred to in the September 2002 orders. The exercise which the applicant left the Court was to trawl through the many hundreds of pages of evidence to determine whether, for example, the exhibited document which had been downloaded on a particular date contained information which established one of the statements of fact in Schedules A and B or was one of the publications in Schedules C and D and those statements of fact or publications conveyed any of the four separate imputations referred to in the September 2002 orders. I have undertaken the exercise and read the exhibits to the affidavits but it has been a very time consuming exercise for the Court. I make the same findings. To avoid doubt, I find that Dr Toben was able, at all times, to place material on the Adelaide Institute website and remove any material whether it was offending material or not. I am satisfied that there has been published on the Adelaide Institute website all of the material asserted by Mr Jones and Mr Lewis to have been published on that website on the dates upon which they asserted it to have been published. I am satisfied that the material which was published is that which is exhibited to their affidavits. I also find that the website was accessible by the public and that any material published on the website or available by link from the website was published to the public. The particulars relied on in the Second Further Amended Statement of Charge are the same as the particulars in charges 1 to 4 of the charges with which I am concerned. In my opinion, those four separate charges have already been heard and determined by reason of the undertaking given to Moore J in November 2007. As the transcript before Moore J demonstrates, the parties agreed upon the orders made by Moore J upon the respondent giving the apology and the undertaking at that time. That is made clear in paragraph 7 which is a note to the orders that no application will be made for costs so long as the respondent complies with each of his said undertakings. It was said at the hearing before Moore J that Dr Toben signed a document outlining the "terms ... to purge his contempt ...". I am not aware of any other document apart from the minutes of order signed by Dr Toben. There is no evidence that the applicant reserved to himself the right to prosecute the proceedings for contempt on the notice of motion of 16 November 2006 if the respondent breached the undertaking given on 27 November 2007. It seems to me, that it was intended that the apology and undertakings would dispose of those charges and it is not possible for the applicant to make those charges again in respect of the matters which were the subject of the orders made by Moore J. In those circumstances, I dismiss charges 1 to 4 without further considering whether or not there has been a publication of the kind described in each of those four charges. I would also dismiss charges 1 and 3 because those charges relied upon evidence of publications before 16 November 2006. For reasons already given, I am not satisfied that the respondent had been made aware of the information in the endorsement required by O 37 r 2(3) before that date. I have found that he became aware of the consequences of imprisonment by service of the notice of motion of 16 November 2006. Mr Lewis' evidence is that on 7 December, at approximately 8.30 am, he accessed the website of the Adelaide Institute, www.adelaideinstitute.org, and read and copied the following material: Newsletter No. 346 dated September 2007 and including the AI Document --- Exhibit "Q". AI Document at the foot of the page of newsletter --- "archive section for newsletters 50-88" --- Exhibit "R"; and AI Document at the foot of the page of newsletter --- "archive section for newsletters 93-112" --- Exhibit "S". Attached to the Newsletters/Archives sections for newsletters 50-88 and 93-112 is the AI Document. That document is in the same form as the document referred to in paragraph 1 of the September 2002 orders. In those circumstances, the publication of the AI Document is a contravention of paragraph 2 of the September 2002 orders; in particular, paragraph 2(a)(i). The publication of the documents also offends paragraph 3 of the September 2002 orders because they contain the AI Document and therefore contravene paragraph 3(a) of the September 2002 orders. It does not matter, it seems to me, that the AI Document is only accessed on the Adelaide Institute website by way of link to the document. The link makes the document accessible to any member of the public who accesses the website. Whilst that link remains on the website, so does the document and so there is a breach of the September 2002 orders. It follows that the particulars in charge 5 have been made out that on 7 December 2007 the respondent published to the public on the Adelaide Institute website www.adelaideinstitute.org material with the same content as the AI Document referred to in paragraph 1 of the September 2002 orders; first, as part of the Adelaide Institute's newsletter no. 346; secondly, on the pages of the Newsletters/Archive sections for newsletters 50-88; and, thirdly, on the Newsletters/Archive sections for newsletters 93-112. He thereby disobeyed the September 2002 orders. It also follows that the particulars in Charge 16 have also been made out and the respondent has thereby breached the undertaking noted in paragraph 6 of the November 2007 undertaking. I find both charges proved. On 13 December 2007 the applicant deposed that on 11 December 2007 he accessed the Adelaide Institute website. He observed the AI Document as part of the Adelaide Institute Newsletter 346. He further found the AI Document at three further locations on the Adelaide Institute website, Newsletters/Archives/Newsletters 50-88, Newsletters/ Archives/Newsletters 93-112 and Newsletters/Archives/Newsletters 113-128. Mr Jones' evidence is uncontroverted. The applicant's evidence establishes that the respondent published the AI Document as part of the Adelaide Institute's Newsletter 346 and under a link "About the Adelaide Institute" on the pages of the Newsletters/Archive sections for newsletters 50-88, 93-112 and 113-128 which was made accessible to the public on the Adelaide Institute website, www.adelaideinstitute.org. That publication was a contravention of the September 2002 orders and a breach of the November 2007 undertaking. I find the charges proved. He further observed that the masked items could be read by moving the cursor over the masking. The complete documents had not been removed from the website. It is not necessary to set out each of the items which may be read by reference to Schedule A of the Third Further Amended Statement of Charge. It follows, therefore, that the respondent has disobeyed the September 2002 orders and breached the November 2007 undertaking. I find the charges proved. The documents exhibited support his evidence. The respondent did not attempt to controvert the applicant's evidence. The publication of the AI Document on the Adelaide Institute website constitutes a disobedience of the September 2002 orders and a breach of the November 2007 undertaking. I find the charges proved. In the charges it is claimed that all four of the imputations referred to in the September 2002 were conveyed by material published on the Adelaide Institute website but the particulars to the charges only identify two imputations. I intend to proceed in accordance with the particulars. Mr Jones swore an affidavit on 25 April 2008 and exhibited to that affidavit a folder of documents which was described as Exhibit "JJ3". He said that the two items 36 and 60 which had been masked could be read by moving the cursor over the masking. He said that he observed the material, being the complete documents located at the website identified in the source material of Schedule A, had not been removed from the website. In addition to reading the AI Document at three locations on the Adelaide Institute website, namely Newsletters/Archive/newsletters 50-88, Newsletters/Archive/newsletters 93-112, and Newsletters/Archives/newsletters 103-128, he read a number of other documents which he exhibited as part of JJ3. In particular, the applicant relies upon a number of discrete documents which are identified in Schedule C as being part of JJ3 to establish two imputations: first, that there is a serious doubt that the Holocaust occurred; and secondly, it is unlikely that there were homicidal gas chambers at Auschwitz. The particulars claim that the imputation, "There is a serious doubt that the Holocaust occurred" was conveyed by the publication of the material in items 1-10 and the second imputation, "It is unlikely that there were homicidal gas chambers at Auschwitz" was conveyed by publication of the material in items 12-17 of Schedule C. This is an example of the morass of information that has been provided by the applicant in support of the charges. I will refer to some instances of the publications in Schedule C to show that in fact the evidence supports the applicant's allegations. The first document referred to in Schedule C, JJ1, pages 259-288 is in fact the Adelaide Institute Newsletter No. 262 (see also the identification under "Source"). With consummate understatement Butz labeled (sic) it "the hoax of the century. " Perhaps "racist blood libel of the millennia" is closer. Nothing more clearly shows how the Jewist elite has come to dominate the cattle-goyim than the way holocaustianity has become the obligatory new state religion throughout the Western world's HOGs [Holocaust Obsessed Governments]. The average UAssAer is like a panic striken (sic) rabbit mesmerized by the headlights of a propaganda steamroller. Only if Americans can be brought to see the "hoax" in holyhoax and the "costs" in the hoaxoco$t will: 1) German prisoners of conscience be released from incarceration, 2. ) Palestinians be saved from genocide-on-the-installment (sic) plan, and 3. ) Americans themselves be freed from the phoney fears of the haunted house of holyhoaxianity. Revisionists have caught the Jewist elite in flagrant lies and Semitists refuse to debate the issue. Jewists have been caught with their pants down and cannot blame any goyim-cattle and cannot claim to have simply made an honest mistake. And this Holocaust crime/libel is not just a peripheral part of the Judaic-Zionist-Semitist war against the Gentiles. They must be confronted with their current pack of lies and have that limb sawed off. The perduring (sic) constant and hardcore Holocaust blood libel is: "6,000,000 Jews were murdered. " This outrageous hyper-libel goes far beyond claiming that they were simply killed, merely died, or just disappeared. How were they murdered? Various fanciful answers [ranging from the utterly ludicrous to the totally unfounded] have been given. The story keeps changing but has never, ever been proven except in the minds of the already convinced. Where were they murdered? The answers depend upon which holocaustomaniac you ask and when you ask. 282. During World War II, Germany had an extermination policy against European Jewry, 2. of which they killed six million, 3. using as a murder weapon homicidal gas chambers. It is almost impossible to discuss the 'Holocaust' with such an imposed constraint. I therefore am merely reporting on matters that I am not permitted to state. For example, if I state the 'Holocaust' is a lie, the gas chambers did not exist, or six million Jews never died, then I claim that I am merely reporting what Professors Butz/Faurisson, and others, are stating in public. That is the question --- and email responses from supporters indicate that the perception is clear: I did bend. My response is that Jeremy Jones did not penetrate me because I merely apologized to the court and not to Jones or to Australia's Jewish community. I did not RECANT about my homicidal gassing views! Around 19:00 hours my legal counsel sent me a consent court order proposal wherein I was to acknowledge and apologize for having been in breach of those all-too-vague Justice Branson Court Orders of 17 September 2002. I accepted the fact that I shall always apologize if I have been rude and crude in my language use but cannot apologize if I am factually telling the truth, as I did in the Orders A and B about the 'Holocaust' and the 'Auschwitz homicidal gas chambers'. It is unnecessary to identify each document and what is contained in each document. The documents to which I have already referred convey the imputation that "there is serious doubt that the Holocaust occurred". The applicant relies on items 12-17 in Schedule C for the claim that the applicant has published material that conveys the imputation that, "It is unlikely that there were homicidal gas chambers at Auschwitz". Document No. 12 in Schedule C is the Adelaide Institute Newsletter No. 368. 370, the author, writing of Holocaust Revisionism, says that there were no homicidal gas chambers. The two items to which I have referred and the further items in Schedule C convey, as the applicant claims, the imputation, "It is unlikely that there were homicidal gas chambers at Auschwitz". It is not necessary to identify each of the further statements in the other items in Schedule C. I find that the applicant has proved the two charges of contempt, numbered 9 and 20. He has deposed in an affidavit, sworn on 23 May 2008, that on that day he accessed the Adelaide Institute website and read the AI Document as part of a document headed "Affidavit of Frederick Toben", dated 2 May 2008; in a link to the page Newsletters/Archives through the link "newsletters 93-112" and the link to the page Newsletters/Archives through the link "newsletters 113-128". No issue is taken with Mr Jones' evidence. I am satisfied that the respondent published on the World Wide Web the AI Document on 23 May 2008 in contravention of paragraph 3(a) of the September 2002 orders and in contravention of the November 2007 undertaking which was to comply with the September 2002 orders and to remove all files from the material identified in the undertaking. I am satisfied, therefore, that charges 10 and 21 have been proved. The respondent relies upon Mr Jones' affidavit of 23 May 2008 which exhibited JJ4, which itself contains 25 separate documents running into many hundreds of pages. The particulars, however, to the charge identify only two imputations, being the imputation that "there is a serious doubt that the Holocaust occurred" and the imputation that "it is unlikely that there were homicidal gas chambers at Auschwitz". The particulars rely on further documents in exhibit JJ4. For the first of those imputations, the applicant relies on all of the documents in items 1-18 in Schedule D. For the second imputation, the applicant relies upon all of the documents in items 19-29 in Schedule D. In the "key" to the charges the applicant relies upon JJ5 [10], Exhibit JJ4, Tabs 6-11, 13-24 [St Ch Sch D]. This is another example of the unsatisfactory nature in which the applicant presented his case by leaving it to the Court to read voluminous material to ascertain whether the two imputations complained of were made out. I am satisfied that the information which is identified in Schedule D to the Third Further Amended Statement of Charge was published on the websites identified in Schedule D and in the documents identified in Schedule D. The website is that of the Adelaide Institute. In Newsletter No. In Newsletter No. The importance of this legal battle rests on a simple fact: the enforcing of the Holocaust-Shoah belief is a direct attack on our civilisation's basic values --- TRUTH and HONESTY. It continues to be claimed that six million Jews were slaughtered by the Germans, even though some Jewish organisations with access to reliable information, for several years now, have disputed the assertion of six million slaughtered Jews. I refuse to believe, without physical proof, in the systematic extermination of six million Europeans Jews in homicidal gas chambers. The holocaust believers have never proven their case but instead use legal means to silence those who refuse to believe in the Jewish Holocaust-Shoah, Frederick Toben, Adelaide Institute. It is not necessary, and would only be tedious to do so, to set out those further statements. It must be remembered that no submission was put by the respondent either that the information was not published on the Adelaide Institute website or that the information which was published, and which is exhibited to the affidavits of Mr Jones and Mr Lewis, did not give rise to the imputations which were the subject of the September 2002 orders. However, I will address some of the evidence which was relied upon by the applicant to establish that the respondent had breached the September 2002 orders and the November 2007 undertaking by publishing information which raised the second imputation that "it is unlikely that there were homicidal gas chambers at Auschwitz". In Adelaide Institute Newsletter No. Again, Meyer's (sic) reduces the victims number from 1.-1.5 million to 500,000 thousands (sic). Again, it would be tedious to repeat each of the publications in these reasons. I find charges 11 and 22 proved. Mr Jones has deposed in an affidavit sworn on 23 June 2008 he accessed the Adelaide Institute website, http://www.adelaideinstitute.org , and read the document headed "About the Adelaide Institute" and accessed the home page of that website. He clicked on the link to "Newsletters" which took him to a page which listed Newsletters 178-399 where he clicked on "Archive". That took him to a "Newsletter Archive" page where he clicked on "Newsletters 50-88" which took him to a page where he read the AI Document. He has exhibited that document to an affidavit which he swore on 23 June 2008. It is a copy of the AI Document. His evidence has not been controverted or challenged. I find that charges 12 and 23 have been proved and that, contrary to the September 2002 orders and the November 2007 undertaking, the respondent published the AI Document on the Adelaide Institute website. On 24 June 2008 the applicant's solicitor, Mr Lewis, accessed the Adelaide Institute website, http://www.adelaideinstitute.org , and read, so he deposes in his affidavit of 26 June 2008, multiple copies of documents headed "About the Adelaide Institute". He accessed the home page of the website and clicked on "Newsletters" which took him to a page listing "Newsletters 178-399" where he clicked on "Archive" which then took him to a "Newsletter Archive" page where he clicked successfully on "Newsletters 50-88", "Newsletters 93-112" and "Newsletters 113-128". He has exhibited the documents which he accessed. I am satisfied that he has accessed on a number of occasions the AI Document on the newsletters to which he referred in his affidavit. He said that he returned to the home page on the Adelaide Institute website and clicked on "Toben Legal Appeal" which took him to a page under a heading "2007 TOBEN'S LEGAL BATTLE --- since 1996" where he clicked on "Affidavit --- 2 May 2008" which took him to an unsigned copy of Mr Toben's affidavit, paragraph 6 of which sets out the AI Document. I am satisfied that charges 13 and 24 have been proved, it having been established that the AI Document was published on the Adelaide Institute website in the circumstances deposed to by Mr Lewis in his affidavit of 26 June 2008 in contravention of the September 2002 orders and the November 2007 undertaking. The particulars of the charge limit the charge to the two imputations that "there is a serious doubt that the holocaust occurred" and that "it is unlikely there were homicidal gas chambers at Auschwitz". The material which supports the charge that those imputations were conveyed are identified in Schedule C to the Third Further Amended Statement of Charge and exhibited to the affidavit of Mr Jones sworn on 25 April 2008. This is some of the same material which was the subject of charge 9 and charge 20. For these charges the applicant relies on items 7-9 in Schedule C for proof of the first imputation, and on items 14-17 in Schedule C for the second imputation. On this occasion, however, it was Mr Lewis who viewed the material on 24 June 2008. Mr Lewis has deposed to the circumstances in which he viewed the material in his affidavit sworn on 26 June 2008. Items 7, 8 and 9 of Schedule C are respectively Tabs 5, 6 and 7 of JJ3, being the exhibit to Mr Jones' affidavit of 25 April 2008 (styled by the applicant JJ4). Mr Lewis has deposed to reading those documents on the Adelaide Institute website on 24 June 2008. Items 14-17 of Schedule C which are relied on as proof that the second imputation was conveyed are respectively Tabs 5, 7, 8 and 6 of JJ3. Again, Mr Lewis has deposed to reading those documents on 24 June 2008 on the Adelaide Institute website. I did not discuss those particular documents in considering charge 9 and charge 25. For item 7 of Schedule C all 28 pages of the exhibit are relied on. I am therefore bound to trawl through the document to look for any statement that might convey the first imputation. Considering all the absurdities, impossibilities, contradictions, how could all these witness tales ever be believed? And how could anybody, who has his five senses together, believe that such a thing could have happened? Thousands of historians and other researchers, hundreds of prosecutors, judges, and jurors --- have they all lost their minds? Or were they all so brainwashed by wartime propaganda or trembling in fear of the Jews that they did not dare to rock the boat? As stated in the introduction, it is not possible in the available time to present a detailed report on an issue such as the alleged 'Holocaust' murder weapon. Yet even a limited discussion of the gassing claims indicates the gassing stories to be mere puffery --- the product of a feverish pathological mind filled with pure hatred, mostly directed against Germans and anything German, and greed, and if not that, then certainly the product of an appalling state of ignorance of natural and chemical processes. In my talk I tried to present a brief overview of the homicidal gas chamber thesis as it applies to Auschwitz and Treblinka concentration camps, and with the help of a model show that technically the claims made by 'Holocaust' believers about the mass gassings and burnings are a physical impossibility. This fact alone justifies the Iranian President Dr Mahmoud Ahmadinejad's aim in holding the conference, to urge historians and scientists to investigate the whole 'Holocaust-Shoah' matter in a rational way without fear or favour. The urgency is there because the 'Holocaust' has distorted our understanding of world history and brought injustice and unimaginable suffering to the Palestinians. At page 4 the claim cited from page 1 of item 7 is repeated. The rest of the document is mainly pictorial with some comment. The thrust of the comments convey the imputation that "there is a serious doubt that the Holocaust occurred". Item 9 of Schedule C (Tab 7) is said to be a transcript of an interview of Dr Toben published in the "Tehran Times". However, he also said some European countries insist that millions of innocent Jews were killed during the Second World War by Hitler, and asked why the Europeans don't give part of their land to the Jews if they are correct. What is your view? You begin by stating a fact --- that Jews were moved out of Europe. Then you exaggerate the suffering such uprooting causes to individual Jews --- the suffering is not denied by anyone. Then outright lying occurs --- that Jews were gassed because Hitler hated them. World War Two was more than Hitler and the Jews. Hitler disconnected the German economy from international predatory capitalism --- and bartered freely with nations that refused to be locked into debt finance --- which was mainly controlled by International Jewish Finance. The Holocaust has become a religion --- in European countries you can criticise and defame Jesus, Mary, etc. but you cannot criticise the Jews and their 'Holocaust'. Item 14 of Schedule C is relied upon to support the assertion that the second imputation was conveyed. Item 14 is the same document as item 7. The document is subtitled: "The Alleged Murder Weapon --- Homicidal Gas Chambers". Up to 1996 this claim remained authentic, but then 'Holocaust' historians, professors Robert Jan van Pelt and Deborah Dwork, stated that mass killings in this crematorium never took place, and that the facilities were restructured to symbolically represent what was happening at Auschwitz II, Krema II in particular. The document argues that it was impossible neither to gas nor cremate so many people as is claimed. Item 15, which is the transcript of the interview of Dr Toben in the Tehran Times, is also relied upon for proof that the second imputation arises. Germany --- Hitler systematically exterminated European Jewry. There is simply no proof of this claim --- it was a transfer of Jews, and together with Zionist collaboration, German Jews arrived in Palestine --- with their property. Others were moved out of German territory --- and Auschwitz was a transit camp. The killing was done in huge chemical slaughterhouses --- homicidal gas chambers. This is a technical impossibility because you can work out how long it would take, for example, to kill one million people --- the size of a city like Adelaide --- without anyone finding out about it. The world soon found out President Bush lied about Iraq's Weapons of Mass Destruction --- that lie didn't last even one year. the gas chambers did not exist, then I would claim that I am merely reporting on what expert Revisionists such as Professors Butz/Faurisson, et al, are stating in public. Anyone who refuses to believe in these three pillars of orthodoxy will face a world-wide group of enforcers who will use any means to destroy dissenting voices. The problem is that these pillars are not set in concrete, though attempts at setting them in legal concrete have been under way for decades --- without success. I am satisfied that Mr Lewis viewed material on the Adelaide Institute website on 24 June 2008 which conveyed the imputation that "it is unlikely that there were homicidal gas chambers at Auschwitz". I find charges 14 and 25 proved. However, the particulars again rely only upon the publication of material which conveyed the imputations that "there is a serious doubt that the Holocaust occurred" and "it is unlikely that there were homicidal gas chambers at Auschwitz". The material relied on for the first imputation is items 1-18 of Schedule D and in respect of the second imputation items 19-29 of Schedule D. Mr Lewis has deposed in his affidavit of 26 June 2008 that he accessed the Adelaide Institute website on 25 June 2008 and read each of the documents which are contained in Exhibit JJ3 to Mr Jones' affidavit of 25 April 2008 (JJ4). The information relied upon in the particulars is the same information which was relied upon for the particulars to charge 11 and charge 22. There is no need to repeat the publications which I have already found establish that both of the imputations were conveyed. For the reasons given in relation to charges 11 and 22, I find charge 15 and charge 26 have been proved. The undertaking referred to the statements of fact which were accessible on the websites, which were identified in Schedule A to the Second Further Amended Statement of Charge filed on 2 November 2007. He further deposed that the material which had been masked in (1) above could be read by moving the cursor over the masking. Moreover, he observed that the material, being the complete documents which were located at the website as set out in the second column of Schedule A under the heading "Source", had not been removed from the website. Thirdly, he read the AI Document as part of Adelaide Institute "Newsletter 346". He also found and read the AI Document at three further locations on the Adelaide Institute website, namely Newsletters/Archives/Newsletters 50-88, Newsletters/Archives/Newsletters 93-112, and Newsletters/Archives/Newsletters113-128. Mr Jones' evidence is uncontroverted. The respondent was obliged in accordance with the undertaking noted in paragraph 6(b) of the November 2007 undertakings to remove the material which Mr Jones observed on the Adelaide Institute website by 5 December 2007. I am satisfied that the applicant has established that the respondent has breached his undertaking given in November 2007 in respect of the information contained in items 18, 68-81, 94-101, 110-117, 119, 143 and 144, and the AI Document insofar as the latter document was contained in the Adelaide Institute Newsletter 346 and was accessible in the Newsletters/Archives sections for newsletters 50-88, 93-112 and 113-128. In making that finding, of course, I not only rely upon the evidence of Mr Jones insofar as he said he accessed the website and viewed the material but also the evidence to which I have earlier referred where Dr Toben made it plain very shortly after 27 November 2007 that the apology which he had given to the Court was withdrawn and that he would not comply with the undertaking given on 27 November 2007. For all those reasons, I am satisfied beyond reasonable doubt that Mr Jones viewed that which he deposed to on 13 December 2007. I find the charges proved. I should say that this charge relies upon the same material as charge 18. As already noted, that charge is for the breach by the respondent of the November 2007 undertaking as recorded in paragraph 6(a) of the November 2007 orders. Paragraph 6(a) of the November 2007 orders required the respondent to comply with the orders made by Justice Branson which included, of course, an obligation to remove the material mentioned in paragraph 2(a) of the September 2002 orders. The material in charge 18 is the material referred to in charge 7 which is the same material in this charge. Mr Lewis swore an affidavit on 26 June 2008 in which he deposes that on 24 June 2008 he accessed the Adelaide Institute website and, by way of link, accessed the pages of the Newsletters/Archives section for newsletters 50-88 and 93-112. By reason of access to both of those sites, he obtained access to the AI Document. Such access was available to the general public. In my opinion, Mr Lewis' evidence establishes to the required level of satisfaction that the respondent breached the November 2007 undertaking as recorded in paragraph 6(b) of the notes to the orders made by Moore J on that date. I am also satisfied by the evidence earlier referred to that Dr Toben publicly claimed, shortly after 27 November 2007, that the apology which he had provided to the Court on 27 November 2007 was withdrawn and that he would not comply with the undertakings given to Moore J on that date. In my opinion, that evidence supports the uncontroverted evidence of Mr Lewis. Charge 28 has been proved. Where the charge alleged that imputations were conveyed by the publication of the material on the Adelaide Institute website, it must be understood that I have found the charge proved in accordance with the particulars and, if those particulars raise only two of the four imputations, in relation to those two imputations. I should address the question of contumacy because it is important in classifying the contempt and in considering any penalty to determine whether the disobedience to the order has been wilful or contumacious: Mudginberri Station [1986] HCA 46 ; 161 CLR 98 at 105-107 and 111-113. I am satisfied beyond reasonable doubt that the separate publications on the Adelaide Institute website of the material which has established each of the charges which I have found proven was wilful and contumacious. The fact that the AI Document has appeared regularly on the Adelaide Institute website on each of the days accessed and can be accessed through a number of the Adelaide Institute newsletters is evidence of a wilful and contumacious disobedience of the September 2002 orders and the November 2007 undertaking. Moreover, the number of statements which have been identified by the applicant in support of the charges giving rise to the imputations, in particular imputations 1 and 2 of the September 2002 orders which I have found proven on the various dates upon which the Adelaide Institute website was accessed, shows a wilful and contumacious disregard of the September 2002 orders and the November 2007 undertaking. Dr Toben's behaviour immediately following the 27 November 2007 hearing before Moore J and the article published in the Australian Jewish News of that hearing is further evidence of his wilful and contumacious disobedience of the September 2002 orders and the November 2007 undertaking. His correspondence with the applicant and Moore J's associate is further evidence of contumacy. He said there that he was "withdrawing from the Consent Agreement and although I have begun deleting material from the website, as part of the undertaking given to the Court and to the Applicant, I am now stopping the action". Moreover, some of the publications themselves establish the contumacy of his conduct. Dr Toben has published material on a number of occasions which shows that he does not accept the underlying reasons for the September 2002 orders which were confirmed by the Full Court. He apparently does not accept that the applicant should be entitled to call in aid the Court to restrain him from publishing material which is vilifactory of the Jewish race by reason of their race. He is also not prepared to accept that the Court has made its decision that the publication of the AI Document and of material which conveys the imputations in the September 2002 orders is conduct which is rendered unlawful by a valid Act of the Parliament of the Commonwealth. The Courts have held, but his conduct shows he does not accept, that the freedom of speech citizens of this country enjoy does not include the freedom to publish material calculated to offend, insult or humiliate or intimidate people because of their race, colour or national or ethnic origin. His conduct has been proved to be wilful and contumacious because he has steadfastly refused to comply with a law of the Commonwealth Parliament and refused to recognise the authority of this Court. I am satisfied therefore that the applicant has proved that the conduct in publishing the information which was relied upon for proof of charges 5 to 28 was a wilful and contumacious contempt of court. It is conduct that amounts to criminal contempt. That leaves for consideration the question of penalty upon which I shall hear the parties. I certify that the preceding three hundred and three (303) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander.

disobedience of orders made in 2002 undertakings made to the court in 2007 to comply with 2002 orders orders followed declaration that respondent had contravened part iia of the racial discrimination act 1975 (cth) for publication of racially vilifactory material on world wide web contempt proceedings must realistically be seen as criminal in nature charge must be proved beyond reasonable doubt whether respondent acted wilfully and contumaciously whether orders were subject to statutory exemptions orders ought to be understood as only preventing the respondent from doing something which is unlawful orders also confirm that publication of relevant material was unlawful whether preamble to australian citizenship act 2007 (cth) renders orders "nugatory" respondent not deprived of any rights attaching to citizenship orders required respondent to make a subjective assessment whether orders vague, uncertain or imprecise whether respondent provoked into breaching undertaking by applicant's publication in media orders and undertaking operated until varied or revoked and for all circumstances whether appropriate to dispense with service in accordance with o 37 r 2(6) publication of material proved beyond reasonable doubt separate publications of material were wilful and contumacious contempt of court admissions and declarations applicant sought to tender parts of respondent's affidavits that contained admissions operation of s 135 of the evidence act 1995 (cth) affidavits tendered before contempt charges laid respondent was unrepresented when affidavits filed admissions likely to be unfairly prejudicial tender rejected contempt where some charges previously heard and determined by reason of undertaking given in 2007 no evidence the applicant reserved to himself the right to prosecute the proceedings for contempt if respondent breached undertaking not possible to make those charges again contempt application for stay of charges on grounds they were inherently duplicitous charges not duplicitous because they can be proved by more than one piece of evidence charges reflected orders made in 2002 contempt is in publishing on a particular day on the particular website material which conveys any of the imputations identified in orders charge as drawn not embarrassing interlocutory application seeking suspension of operation and effect of orders and relief from undertaking where undertaking was to comply with previous orders of the court where respondent tendered no evidence application dismissed contempt evidence practice and procedure practice and procedure practice and procedure

The learned federal magistrate dismissed an application by the appellants to set aside a bankruptcy notice. The bankruptcy notice was founded on a judgment of the County Court of Victoria, which was given in default of defence. The federal magistrate refused to exercise the discretion to go behind the judgment. The substantial question in the appeal is whether this exercise of discretion miscarried, because the federal magistrate did not apply the correct principle. The respondent is a firm of solicitors. The appellants engaged the respondent to act for them in litigation with another party or parties. The details of that litigation are not relevant to this appeal. The appellants paid the respondent three sums of money in respect of costs and disbursements in relation to the litigation. The respondent alleged that the appellants owed further money. The respondent sued the appellants in the Magistrates Court of Victoria. The appellants counterclaimed for alleged negligence by the respondent in the conduct of the litigation. Their counterclaim was for an amount that exceeded the jurisdiction of the Magistrates Court of Victoria. The proceeding was therefore transferred to the County Court of Victoria. On 12 December 2006, the proceeding came before a judge of the County Court for directions. The respondent then filed affidavit material and the proceeding came before another judge on 29 January 2007. That judge directed the appellants to file and serve a defence and counterclaim in proper form and adjourned the matter until 23 February 2007. On that occasion, his Honour struck out the defence and counterclaim because they were not properly pleaded. He refused to give judgment for the respondent then and there, without a formal application for judgment. On 16 April 2007, the judge gave judgment for the respondent for $3,211.15 plus interest of $848.68 and ordered the appellants to pay the costs of the proceeding in the Magistrates Court of Victoria and the County Court. On 9 July 2008, the respondent procured the issue of a bankruptcy notice directed to both appellants, claiming a debt of $4,659.77. This was made up of the total amount of the judgment, $4,059.83, and interest accrued since the date of the judgment of $599.94. The respondent did not claim anything in the bankruptcy notice in respect of the costs of the proceeding in the Magistrates Court of Victoria and the County Court. The appellants applied to the Federal Magistrates Court on 15 August 2008. Taking into consideration that I am from a non-English speaking background, nor am I a legal practitioner, which is evident. This should have been presented to the Judge and Jury. This order appears to have prompted the appellants to file a notice of motion on 18 June 2009, the day on which the appeal was heard. The effect of that notice of motion appears to be to seek an order that the case be heard by a judge other than me. From the affidavit in support of the notice of motion, it appears that the first appellant thought that what occurred at the directions hearing on 27 October 2008 was that I invited or directed that there be an objection to the competency of the appeal. He took this to be an indication that I had pre-determined the case. At the hearing of the appeal, I explained to the first appellant, who appeared on his own behalf and also made submissions on behalf of the second appellant, that the object of my order was simply to ensure that there would only be one day of hearing in relation to the appeal, rather than the possibility of a day devoted to hearing an unsuccessful objection to competency and a day devoted to hearing the appeal. The first appellant did not press the motion. It is sufficient to say that it is immediately apparent that the competing factual assertions to which that would give rise would doubtless be both lengthy and complicated. Rather, from the transcript it is quite apparent that his Honour dismissed the defence on the footing that there was no proper defence pleaded. His Honour had already given clear warning on two occasions that that might be the way things would proceed and indeed it would appear that Judge Lawson made remarks to not dissimilar effect. From the way in which the matter has proceeded today it is more probable than otherwise to me, to the extent that I have discretion, that I should exercise it in favour of the creditor. It is far more probable that this would give rise to a welter of further and unnecessary litigation. They won't come to trial. It doesn't matter how forceful or how wrongly they have been done. Is that correct? Yes. Thank you. Thank you, Your Honour. His Honour was endeavouring, at great length and in a perfectly, if I may respectfully say so, appropriate and courteous way, to explain to Mr Boglari the necessity for him to comply with the Rules of the Court. Mr Boglari was, albeit understandably perhaps, indicating an incapacity and inability to do so. It does not appear to me to involve anything in the nature of an abuse of process such as to ground the application that Mr Boglari presses. In an appeal from a judgment involving the exercise of discretion, the question for the appeal court is not whether it would have exercised the discretion differently from the court below. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. The court has a discretion whether or not to go behind the judgment. The discretion is of a limited kind. That discretion is not well exercised where substantial reasons are given for questioning whether behind that judgment there was in truth and reality a debt due to the petitioner. See Corney v Brien [1951] HCA 31 ; (1951) 84 CLR 343 at 348 per Dixon, Williams, Webb and Kitto JJ and 357-358 per Fullagar J and Wolff v Donovan (1991) 29 FCR 480 at 486 per Lee and Hill JJ. There is no indication in his reasons for judgment that the federal magistrate in the present case applied these principles. His Honour did not determine whether there was or was not a substantial reason to question whether the judgment of the County Court was in respect of an actual debt. Although aware that the judgment was a default judgment, his Honour was more concerned that the judgment was "made following proper process" and was "regularly made". His Honour therefore acted on a wrong principle. In addition, his Honour allowed an irrelevant matter to guide him, namely that "the competing factual assertions" that would be encountered in going behind the judgment "would doubtless be both lengthy and complicated" and that it was "far more probable" that exercising the discretion in favour of the appellants "would give rise to a welter of further and unnecessary litigation. " If there is a substantial reason for questioning whether a judgment is in truth underlain by a debt, the difficulty and expense of determining whether there is in truth a debt is not a reason for refusing to go behind the judgment. From the material the appellants placed before the federal magistrate, it was apparent that there was a real dispute between them and the respondent as to whether the appellants owed the respondent the amount claimed. The first appellant maintained that he had declined to sign a costs agreement, pursuant to s 93(a) of the Legal Profession Act 1996 (Vic) (the legislation applicable at the time the appellants engaged the respondent to act for them - see now s 3.4.19(a) of the Legal Profession Act 2004 (Vic)). He was contending that he had made clear to the respondent that the appellants wished only to incur expense on the basis that they were making progress payments for work actually done. This is also apparent from the first appellant's correspondence to the respondent. Further, the first appellant was saying that the appellants had paid the respondent the amounts demanded of them from time to time while work was being done. If these contentions were to be accepted, the basis on which the respondent would be entitled to claim additional costs would need to be explored. Because the judgment of the County Court was a default judgment, the appellants had not had a proper opportunity to explore these issues. This combination of facts amounted to a substantial reason for going behind the judgment, and for questioning whether the appellants in fact owed the respondent the amount claimed in the proceeding in the County Court. The federal magistrate should have so found. If his Honour had applied the correct principles, and had not been distracted by the irrelevant considerations to which I have referred, he would have done so. It is also unfortunate that the federal magistrate devoted a significant part of his reasoning to defending the position of the County Court judge in the exchange referred to in [9] above. This was but one passage of several in the transcript of the County Court proceeding before the federal magistrate in which the County Court judge appeared to be suggesting that, unless the appellants could afford to engage a lawyer, or could comply strictly with the rules of the County Court, they would lose the case. It would be a pity if, in the 21st century, any court were to take the view that precise pleadings were always necessary. Because of the decline in legal aid, and perhaps for other reasons, there is a plethora of unrepresented litigants in all courts. It has been so in this case. It is necessary to focus on the material placed before Tadgell J and to ascertain whether, on that material, a refusal to extend time bespeaks an error of principle affecting the exercise of the discretion to extend time. Nevertheless, it was apparent from what the first appellant told the County Court judge that he claimed to have a defence of the kind outlined above. Even if it could be said that the purported counterclaim of the appellants, based on alleged negligence by the respondent, was so incompetently drafted as to require striking out, it is difficult to see how the striking out of the counterclaim would justify treating the appellants as if they had no defence to the respondent's claim. For the foregoing reasons, the federal magistrate's refusal to exercise the discretion to go behind the County Court judgment in favour of the appellants should be set aside. Rather than remitting the matter to the Federal Magistrates Court, I should exercise the discretion myself. My finding that there is a substantial reason for questioning whether the County Court judgment is based on an actual debt leads to the conclusion that the discretion should be exercised in favour of setting aside the bankruptcy notice. If it were necessary to come down on one side or other of this controversy, I should be inclined to hold that the judgment was final. Subject to appeal, it determined the rights of the parties in relation to the bankruptcy notice. It is true that, if there were to be a creditor's petition, based on an act of bankruptcy constituted by a failure to comply with a demand made in the bankruptcy notice by the due time, there would be further proceedings between the two parties. They would be proceedings instituted separately, however, in respect of different rights from those the subject of an application to set aside the bankruptcy notice. It is unnecessary to determine the controversy, however. Any requirement that there be leave to appeal ought not to be allowed to stand in the way of the appellants in the present proceeding. To the extent necessary, an extension of time to seek leave to appeal should be granted, and leave should be granted to appeal, so that the appeal can be heard and determined in their favour. Ground 2 of the notice of objection to competency attacks the validity of the grounds in the notice of appeal. It is true that the grounds are not in perfect form. It could hardly be expected of a litigant in person whose first language is not English that he display the skill of a legal draftsperson. Following what the High Court said in Neil v Nott , this is another situation which the Court must not have its attention diverted by the misconceived advocacy of an unrepresented litigant, but must endeavour to ascertain the rights of the parties. There is sufficient substance in the complaints made by the appellants in the grounds of appeal to enable the appeal to proceed. The grounds are directed to criticism of the judgment of the County Court. They do contain considerations that I have held the federal magistrate should have taken into account, namely the fact that the County Court judgment is obtained by default and the allegation that the debt on which the County Court judgment was based was not in fact due. There are sufficient grounds to make the appeal competent. Grounds 3 and 4 of the notice of objection to competency refer to the fact that the notice of appeal seeks orders having the effect of setting aside the judgment of the County Court. Manifestly, this Court does not sit on appeal from the County Court in relation to judgments for debts. The presence of the claim for orders beyond the powers of this Court does not render the entire notice of appeal incompetent. Grounds 3 and 4 of the notice of objection to competency are not proper grounds for dismissing the appeal as incompetent. The orders sought by the appellants, to which grounds 3 and 4 of the notice of objection to competency relate, simply cannot be made. To the extent to which it is necessary, time should be extended to enable the appellants to apply for leave to appeal, and leave should be granted to the appellants to appeal from the judgment of the Federal Magistrates Court. The appeal should be allowed and the orders made by the federal magistrate should be set aside. For those orders, there should be substituted an order setting aside the bankruptcy notice. The appellants are litigants in person. They cannot claim professional costs in relation to either the proceeding in the Federal Magistrates Court or the appeal. Nevertheless, they may have incurred out-of-pocket expenses for which they can claim. Accordingly, orders should be made that the respondent pay the appellants' costs, both of the proceeding below and of the appeal. This result leaves the controversy between the parties in an unsatisfactory state. The judgment of the County Court remains on the record. The only result of this appeal is that that judgment cannot be enforced by means of a bankruptcy notice. Unless the appellants apply to the County Court to set aside the judgment in default, so that the issues between the parties may be determined by the County Court, it will be open to the respondent to take other steps to execute the judgment. Whether the respondent will do so, in light of the dispute that exists over the correctness of the judgment, remains to be seen. Whether the appellants will apply to set aside the County Court judgment, and whether they will succeed if they do, are matters on which I cannot comment. It would be desirable, however, that the dispute between the parties about any liability of the appellants to the respondent in respect of professional costs and disbursements should be resolved as quickly and cheaply as possible. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray.

bankruptcy notice setting aside bankruptcy notice based on judgment of county court judgment given after striking out defence for failure to comply with rules of court federal magistrate refused to exercise discretion to go behind judgment whether federal magistrate's exercise of discretion miscarried whether substantial reason to question whether judgment in respect of an actual debt whether material indicating real dispute between appellants and their former solicitors about whether appellants were liable for costs beyond what they had already paid whether county court should have taken the view that strict compliance with rules by an unrepresented litigant was required whether exercise of discretion miscarried because the correct principles were not applied bankruptcy practice and procedure

2 The applicant is an Hazara from Afghanistan. He is also a Shia Muslim. He is largely uneducated, and comes from a village in the Jaghouri province. 3 He came to Australia on 15 January 2001, and soon afterwards applied for a protection visa under the Migration Act 1958 (Cth). He claimed to have a well-founded fear of persecution by reason of his race, as the Taliban then in control of Afghanistan were victimising Hazaras. There was a significant personal history in support of his claim, as well as general country information about the behaviour of the Taliban in Afghanistan. 4 The applicant was found to have a well-founded fear of being persecuted by the then ruling regime in Afghanistan, the Taliban, by reason of his race and his religion. He was granted a subclass 785 (Temporary Protection) visa. It enabled him to stay in Australia for a period of three years. It was then necessary to apply for a subclass 866 (Protection) visa before his temporary protection visa expired. He did so. His application for a permanent protection visa was refused by a delegate of the first respondent, and then by the Tribunal. The Tribunal's decision was based upon its finding that the reasons for the grant of the temporary protection visa had ceased to exist. It found that the Taliban would not re-emerge as a political power in Afghanistan following its removal from power in November 2001. It also found that the applicant's further grounds for being granted a permanent protection visa were not made out. 5 It is that decision of the Tribunal which is the subject of the present application. Section 36(2) of the Act provides that a criterion for the grant of a protection visa is that the decision-maker be satisfied that Australia owes protection obligations to the visa applicant. It therefore directs attention to the relevant provisions of the Refugees Convention as amended by the Refugees Protocol. 7 Article 1A(2) of the Convention generally defines when a person is to be regarded as a refugee. It defines a refugee as a person who, owing to a well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside their country of nationality and is unable or, owing to such fear, is unwilling to avail himself or herself of the protection of that country. Article 1C(5) then appears to mirror the provisions of Art 1A(2). It says that the Convention ceases to apply in circumstances where the person who previously was accepted to be a refugee can no longer, because the circumstances in connection with which that person has been recognised as a refugee have ceased to exist, continue to refuse to avail himself or herself of the protection of his or her country of nationality. 8 The applicant contended that the Convention as a whole, in his circumstances, and in particular Art 1C(5), required that the change in circumstance in Afghanistan should be more than transitory, and that the decision-maker must be satisfied that the change is durable rather than transient and substantial and effective. The expression used in submissions was that the change be 'fundamental, stable and durable'. It was then contended that the Tribunal had failed to apply that measure to his permanent protection visa application, but had erroneously simply had regard to whether, at the time of its decision, the test established by Art 1A(2) was satisfied. That is, it was claimed, the Tribunal when addressing Art 1C(5) had erred in law. 9 In my judgment, even if it be assumed that the Tribunal simply applied Art 1C(5) as a mirror of the Art 1A(2) test to the applicant's permanent protection visa application, the Tribunal has not committed jurisdictional error. At present, the authority binding on me is the decision of the Full Court of this Court in NBGM v Minister for Immigration & Multicultural & Indigenous Affairs [2006] FCAFC 60. As the Chief Justice points out at [25], the majority decision in that case required the Tribunal, where (as here) it was said that the relevant circumstances had changed since the grant of a temporary protection visa, to be satisfied in accordance with s 36 of the Act that the applicant for a permanent protection visa at the time of the decision has a well-founded fear of persecution for a Convention reason. There is no additional element to be applied because of Art 1C(5) in the Convention. 10 Accordingly, even on that assumption, the first basis of jurisdictional error is not made out. It is not necessary in that regard to consider whether the Tribunal did approach the question it was to decide in the way contended for by the applicant. The claim concerning the Taliban: was it properly considered? I do not accept that there is more than a remote chance of the Taliban re-emerging as a viable political movement in Afghanistan in the reasonably foreseeable future. 14 The Tribunal then proceeded to address whether the applicant is a person to whom Australia has protection obligations for other reasons. It identified those other reasons as being for political opinion imputed to the applicant consequent upon his father's political activities, and his membership of a particular social group which it described loosely as 'those tainted by the west'. It did not accept that the applicant has a well-founded fear of persecution for either of those reasons. It is not necessary to refer further to them. 15 The Tribunal did not, when addressing the other reasons, have regard to the applicant's claimed fear of persecution by reason of the renewed activities of the Taliban, even if (as it found) the Taliban was unlikely to re-assume political power in Afghanistan in the foreseeable future. That was a claim made by the applicant. If it were a real possibility that the Taliban might pose a serious threat to the applicant if he were to return to Afghanistan, because the Taliban (on the Tribunal's findings) would be a non-State entity, it would also be necessary for the Tribunal then to address the capacity of the Afghani authorities to protect the applicant and others from the threat of the Taliban: see Minister for Immigration & Multicultural Affairs v Respondents S152/2003 (2004) 205 ALR 487 at [23]. The Afghani authorities are obliged to take reasonable measure to protect the lives and safety of its citizens from non-State violence, including by provision of an appropriate criminal law and the provision of a reasonably effective and impartial police force and justice system: per Gleeson CJ, Hayne and Heydon JJ in Respondents S152/2003 at [26]. 16 In my view, the Tribunal's failure to address that particular claim of the applicant's is apparent from the part of its reasons for decision to which I have referred. Immediately preceding the passage quoted, the Tribunal recognised that Taliban remnants are in Afghanistan, and that its activities demonstrate that its power, militarily and politically, is growing. It quoted material headed 'Stronger and more deadly, the terror of the Taliban is back'. Its conclusion that the Taliban is unlikely to be able to take control of the country again was reached in part because it had not disrupted the 2004 general election, nor prevented the formulation of an elected government. The conclusion referred to in the context of that reasoning does not address the significance of the Taliban as a non-State threat to the applicant by reason of his race or religion. The use of the conjunctive 'and' before reference to it persecuting particular minorities is in the context of its re-emergence as the political controller of Afghanistan. 17 Counsel also referred to a later passage in the reasons for decision of the Tribunal in which it said it was not satisfied that there is a real chance that harm will 'befall the applicant at the hands of the Pashtuns (and/or Taliban remnants)'. That passage occurs as a conclusion to its consideration of the applicant's other claims. It explained why it rejected his claim to have a well-founded fear of persecution because of his father's earlier political activities. It then explained why it rejected his claim to have a well-founded fear of persecution because of his being perceived as 'westernised'. It then turned to his claim to have a well-founded fear of being persecuted by Pashtuns who lived near his village. It referred to the relevant geography. It identified the threat as being from Pashtuns who may have continued to support the Taliban, and observe that there had not been any reports of Taliban incursions into Jaghouri since November 2001. This is the market town to which the applicant's family must go if it needs supplies, although the applicant said he had not been there except on his departure [from] Afghanistan. His father, however, went regularly. I note that the route from the applicant's village to Sang-e Masha is entirely within the central part of Jaghori, not close to any district borders, and as there are no reports of incursions by Pashtuns into Jaghori, I discount this claim. The claim being considered is based upon an asserted fear of Pashtuns. It does not, upon reading the whole of the Tribunal's reasons, represent a conclusion of the Tribunal based upon a consideration of the applicant's claim to have a well-founded fear of persecution by reason of the renewed activities of the Taliban as non-State agents. 19 The failure to address a particular claim of the applicant clearly expressed amounts to jurisdictional error: see Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 ; (2003) 197 ALR 389 at [24] - [25] per Gummow and Callinan JJ. In this matter, there was also evidence which the Tribunal accepted, which might support the conclusion that the Afghani authorities might be unable to provide the protection of the law and its agencies to the applicant. The Tribunal accepted that there was a lack of the rule of law and unprofessional police force throughout the province of Jaghouri. The inquiry required by Respondents S152/2003 in respect of the applicant's fear of violence from non-State agencies, namely the Taliban, would not obviously be a fruitless one. 20 It is not necessary to address the second of the contentions referred to in [11] above. However, I observe that the independent country information about the activities of the Taliban up to the time of the Tribunal's decision, and its uncontrovertible (and accepted) previous persecutory behaviour in relation to Hazaras, may well make it difficult for the Tribunal to be so confident that the Taliban would pose no threat to the applicant that it properly took into account the chance that the applicant may be at risk in the future from the Taliban, and that the Afghani authorities can provide a reasonably effective and impartial police force to protect him from such threats: see Minister for Immigration and Ethnic Affairs v Guo [1997] HCA 22 ; (1997) 191 CLR 559 at 576 per Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ; Minister for Immigration and Multicultural Affairs v Rajalingam [1999] FCA 719 ; (1999) 93 FCR 220. Its decision of 6 April 2005 is therefore quashed. The Tribunal is directed to rehear and determine the applicant's application made on 14 October 2004 to review the decision of the delegate of the first respondent of 1 October 2004 according to law. The first respondent should pay to the applicant costs of the application in this Court. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

application for permanent protection visa whether failure by tribunal to consider well-founded fear of persecution by reason of the renewed activities of the taliban as non-state agents whether failure to accord procedural fairness migration

On 11 April 2005 the Tribunal affirmed a decision of a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs ("the Minister") refusing to grant the appellant a protection visa. He was detained on 8 February 2005 after having lived and worked illegally in Australia since the expiry of his 6 week visitor's visa in November 1991. After being detained, he lodged two protection visa applications with the Department of Immigration ("The Department") within a week, claiming to fear persecution for different reasons. First, because he was a Hindu who had married a Christian and then because he had married a woman of a lower caste. The Tribunal rejected the new claim, found the appellant was entitled to live in India and that his substantive claims were unreliable and not Convention related. In considering the appellant's subjective fear, the Tribunal took into account the appellant's delay in bringing his protection visa application. The Federal Magistrate found there was no breach of s 424A of the Migration Act 1958 (Cth) ("The Act") and that the Tribunal was entitled to reject the new claim. His Honour found that the Tribunal's decision ultimately turned on the lack of Convention nexus with the harm feared, rather than a right to live in another Country. The information was said to be "... the apparent absence of any confirmation in the Departmental records before it of the appellant's claim to have previously lodged an application for recognition as a refugee many years earlier". (ii) The Tribunal erred in law in ascertaining whether any persecution the appellant may have suffered and might suffer was for a Convention reason. (iii) The Tribunal erred in law in its application of s 36(3) in relation to the appellant's right to enter and reside in India. 6 The first ground was based on the premise that the Tribunal had information it was obliged to give in accordance with s 424A of the Act The Tribunal was said to have gained this "information" from examining the Departmental file. In effect, the "information" was the absence in the file of any record of an earlier protection visa application. 7 The Tribunal recorded in its reasons for decision that it had before it the appellant's Departmental file. It did not, at that point in its reasons, say it had read the file, although it did say it "had regard to the material referred to in the delegate's decision, and other material available to it from a range of sources". Later in its reasons, the Tribunal said that it had "before it no evidence of that application [for what appears to be a residence under skills visa] or any protection visa application that could have preceded it". The Tribunal's reference to not having before it any evidence of an earlier visa application may be a reference to what the Tribunal had gleaned from an examination of the Departmental file. However, it may also be a reference to material (or the absence of material) furnished by the appellant in support of his application. Indeed the solicitor representing the appellant conceded before the Tribunal that material concerning the earlier protection visa was on the Departmental file, which suggests that the Tribunal's reference to there being "no evidence" was not based on an examination of the file. It is more likely that the Tribunal was referring to an absence of material furnished by the appellant to support his claim that he had made an earlier application which had not been pursued to decision. The premise is not made out. 8 The second ground does not appear to me to be one of substance. The gist of the appellant's claim was that he incurred the wrath of his uncle for not marrying his uncle's daughter and for marrying a Christian not of the same class. That claim does not point to his religion as being a basis for any harm, on his account of what had happened in the past and might happen in the future. The conclusion of the Tribunal that any persecution the appellant might suffer was not "Convention related" does not involve, in my opinion, any misunderstanding or misapplication of the applicable law. 9 As to the third matter, it was submitted that the Tribunal misconstrued the Treaty between India and Nepal which, it was argued, did not entitle the appellant, a Nepalese citizen, to reside in India. Reliance was placed on the observations of Lee J in WAGH v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 194 ; (2003) 131 FCR 269 at 278, which might be viewed as indicating that it is necessary for there to be a prior acceptance or acknowledgement by a third country to enliven s 36(3) of the Act. The short answer to this argument is that it was not part of the appellant's case that he could not enter and reside in India. To the contrary, he indicated in his application for a protection visa that he could enter or reside in India. This proposition was repeated at the Tribunal at hearing. While it appears his position on this issue wavered at the hearing, in a written submission made after the hearing, it was not suggested that he could not enter and reside in India. Even if the Tribunal erred in construing the treaty (probably a question of fact in any event), it was open to it to make the finding it did, namely that the appellant could enter and reside in India. 10 The appeal should be dismissed with costs. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

no point of principle migration

5 Before me ASIC sought interlocutory relief which, so far as now relevant, is for the appointment of provisional liquidators to the corporate defendants (other than APM) within the Australvic Group, injunctions restraining the transfer of property held in the name of the defendants, and various injunctions in relation to the conduct of the corporate defendants and of Mr Kyriackou, along with ancillary orders. 6 Interim orders are in place preventing the disposal of property and in relation to the financial records held by APM, AF and MK River. No restraining order is currently in place affecting AHL. On 5 October 2007, in related proceedings before the Court that were heard concurrently with this proceeding, APM was wound up in insolvency pursuant to s 459A of the Corporations Act and Mr Michael Wesley McCann was appointed liquidator. Whilst ASIC initially sought the appointment of Mr Andrew James McLellan as provisional liquidator to all the corporate defendants, I understand that it is accepted by ASIC that the same liquidator should be appointed (at least initially) to all the corporate defendants. As Mr McCann has been appointed as liquidator to APM, I propose to proceed on the basis that he would be the appropriate person to be appointed as provisional liquidator to the other corporate defendants if it were otherwise appropriate to appoint a provisional liquidator. 7 The main issue in this interlocutory hearing raised by ASIC is whether in fact the Australvic Group operated an unregistered managed investment scheme. In the application, final relief is sought winding up 'the Scheme' as described by ASIC but, for the purposes of this interlocutory application, no order is sought specifically relating to the Scheme, but only in relation to its participants. 8 It is necessary then to consider the nature of the arrangements which primarily involve APM and other third parties. It will be apparent from my reasons that follow that no view needs to be now expressed as to the legal nature of the Scheme. However in light of my approach to this interlocutory hearing, I propose to set out the basic operation of the arrangements agreed to by the parties and to say something of the participants to the Scheme as contended for by ASIC. 9 The purpose of APM was to effectively 'bail out' land owners and builders under financial pressure by providing borrowing capacity to the existing owners of property by acting as a trustee and developing the acquired property to increase its value. Upon final development of the acquired property, APM would dispose of the acquired property and make payment to the beneficiaries after payment of its costs and remuneration. 10 A case study of the way the arrangements worked can be seen by looking at the properties under the control of Mr Rocco Antonio Calderone. APM was trustee of various properties owned by Mr Calderone and his associated companies the ('the Calderone Properties'). It seems that in respect of those properties, first mortgagees were in the process of entering into possession, and one of Mr Calderone's companies was being wound up. At a meeting between Mr Kyriackou and a number of financiers, the concept of APM 'bailing out' the Calderone properties by acting as trustee and providing borrowing capacity, developing the acquired properties to increase their value, and making payment to the beneficiaries after payment of costs and remuneration, was discussed. The proposal of APM acting as trustee was approved by all of the financiers of the Calderone Properties. 11 Further discussions ensued, culminating at a meeting on 3 August 2005 at which an agreement was formalised by way of a memorandum of agreement dated 3 August 2005, prepared by Mr Edwards as director of APM ('the Calderone Trust Agreement'). It was agreed that the financiers of the Calderone Properties were to become creditors of APM as per a 'payout schedule' attached provided that the financiers were not to lodge or cause to be lodged any caveat or registered mortgage that may prevent APM from raising development and/or construction funds on any of the Calderone Properties. 16 It would appear that it was expected that the financiers, as and when required, would provide additional funding to progress the properties into construction, either as a term of the Calderone Trust Agreement or Calderone Financiers Agreement. At least, this was what was contemplated by Mr Kyriackou and APM. As it later transpired, further money was required from the financiers and it appears that such money was asked to be contributed by the advancing of further funds to APM. It would appear that from time to time financiers and 'outside other lenders' were being requested to provide further funds to assist in the development of the Calderone Properties. Promissory notes would then be provided in favour of the lenders once the monies were provided to APM or to its agent Mr Edwards. The investors had no day-to-day control over the use of the contributions to generate the return or benefit or over the Scheme. 19 It was also contended that ASIC had not properly particularised the Scheme in that it was unclear whether it was alleged that APM and the other defendants had operated the Scheme in conjunction with each other, and it was also unclear as to who the participants of the Scheme were. In Australian Securities and Investments Commission v Takaran Pty Ltd [2002] NSWSC 834 ; (2002) 43 ACSR 46, Barrett J adopted the description and explanation of a 'managed investment scheme and its components' in Australian Securities and Investments Commission v Knightsbridge Managed Funds Ltd [2001] WASC 339 at [45] - [49] and Australian Securities and Investments Commission v Pegasus Leveraged Options Group Pty Ltd (2002) 41 ACSR 561 at [26]-[32]. Justice Goldberg in Australian Securities and Investments Commission v Primelife (2006) 235 ALR 328 agreed with and adopted those descriptions and I would be content to do likewise. 22 It is important to recall that I am considering the issue in the context of an application for an interlocutory order - significantly the appointment of a provisional liquidator and particular restraining orders. 23 The principles governing the grant or refusal of interlocutory injunctions have recently been confirmed in Australian Broadcasting Corporation v O'Neill [2006] HCA 46 ; (2006) 229 ALR 457. These are the organising principles, to be applied having regard to the nature and circumstances of the case, under which issues of justice and convenience are addressed. We agree with the explanation of these organising principles in the reasons of Gummow and Hayne JJ, and their reiteration that the doctrine of the court established in Beecham Group Ltd v Bristol Laboratories Pty Ltd [(1968) [1968] HCA 1 ; 118 CLR 618] should be folIowed. The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted. At [71] their Honours emphasise that 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. 26 This application is also brought in reliance of provisions of the Corporations Act , and I am mindful of the need to consider the purpose and objectives of that legislation in the consideration of the relief sought, particularly pursuant to ss 1323 and 1324 of the Corporations Act . I should therefore consider the public interest that would be promoted by the making of certain orders if a proper legal basis existed for such relief: see generally Pegasus 41 ACSR 583-584 at [108]-[110]. I must consider whether it is necessary or desirable to make orders for the purpose of protecting the interests of aggrieved persons where orders are sought prohibiting the transfer of property (see for example s 1323 of the Corporations Act ). However, I must be careful not to go beyond what is necessary in the circumstances of this case in making interlocutory orders, based on the extent of the evidentiary material before me. 27 APM has already been wound up. A liquidator, Mr McCann, has been appointed. As I have said, no relief at this interlocutory stage is sought directly in relation to the alleged Scheme, only in relation to its participants. Ancillary orders are sought, for instance, that the provisional liquidator provide a written report as to certain aspects, including the future disposition, of the Scheme but the making of these orders depends on the appointment of a provisional liquidator to the corporate defendants. 28 My function now is to preserve the status quo and to protect insofar as is necessary the interests I have outlined above. As contended by ASIC, the main participant in the Scheme was APM, which is now in liquidation. APM was described by ASIC as the 'linchpin' of the Scheme. It cannot now obtain further finance, nor does it appear able to complete development of the properties it controls. In my view, no further order is required in respect of APM, including the continuation of the orders preventing disposal of property in its name. The liquidator, appointed by the Court, is presumed to act according to the law, and can approach the Court for directions. The liquidator has, since my reserving my decision, made application to discharge the existing interim orders made against APM, but such application is opposed by ASIC at this stage. However, I do not consider that I need to continue the interim orders against APM. The concerns of ASIC can longer apply as the effective control of APM is with the liquidator, not the operators of the Scheme. I cannot imagine the liquidator dissipating any assets contrary to the expectations of ASIC or other than through appropriate court direction. If ASIC considers that this assumption is false, further application by it can be made to this Court. 30 As to the appointment of a provisional liquidator to the other corporate defendants, even assuming the Scheme is an unregistered managed investment scheme, the role of each corporate defendant (other than APM) is uncertain. I do not propose to appoint a provisional liquidator to such companies. I accept the contentions put against ASIC that at the moment it is unclear how the Scheme is operated, other than by APM, and the participants are not clearly identified. I do not think it is sufficient merely to refer to the Australvic Group as one entity when attempting to describe the participants in the Scheme. In relation to some companies within the Australvic Group there is simply no evidence of any involvement in the Scheme, either through receipt of money or the holding of property. 31 The inability to identify sufficiently the participants is a particularly important factor when considering the relief sought, especially in relation to the appointment of a provisional liquidator to each company. 32 I am mindful of the following statements of principle when considering the appointment of provisional liquidator. The task of the provisional liquidator is to attempt to maintain the status quo until a final decision can be made, after a full hearing, whether the company should be wound up: Re Carapark Industries Pty Ltd (in liq) [1967] 1 NSWR 337 at 341. Such an appointment is not to be made lightly. It works a major interference in the management of the company . 36 I consider that if other appropriate orders can be made to protect the public interest element contended for by ASIC, which in my view there can be in the current circumstances, then the appointment of a provisional liquidator to the corporate defendants is not warranted. 37 I have come to this conclusion because whilst there is evidence of a large number of transfers of money within the Australvic Group, and between the Group and Mr Kyriackou and Mr Edwards, and available records are inadequate to enable various payments and receipts to be reconciled, the status quo can be maintained by appropriate restraining orders against certain of the corporate defendants other than APM. 38 I am of the view that interlocutory restraining orders against certain of these companies within the Australvic Group which are trading and which may have some property in their name should be made to prevent the disposal of such property and to protect the integrity of the financial records held. This will leave the liquidator of APM in place until trial for practical purposes, along with restraints upon appropriate corporate defendants from disposing of relevant assets and from parting with the financial records. I do not consider this to be an unfair or inappropriate restraint upon those corporate defendants in view of their current trading and operating position. I do not need to go further in restraining the promotion of the Scheme or arrangements as there is no material to suggest that this has happened at all since the institution of these proceedings, and particularly since the winding up of APM, the 'linchpin' to the operation of the Scheme. 39 In further support of my conclusion that restraining orders should be made, for the purposes of this interlocutory hearing, I make the following observations and findings. 40 I do not revisit the position of APM --- I proceed on the basis it has been wound up. I do not and need not consider independently the true financial position of APM, the state of its financial records, or the transfer of monies to and from APM. 41 Not all the corporate defendants are in the same position. 42 It would appear that ACS and APM 2 have not commenced trading, have no bank accounts, and have not yet completed the tax or financial statements for the year ending 30 June 2007. In view of the fact that they have not commenced trading and that there is no evidence they hold any assets or have been in the receipt of moneys in any way associated with the Scheme, I do not propose to make any orders in relation to these companies. 43 AHL and AF have been trading, but apparently have no bank account and have not prepared tax or financial returns for the year ending 30 June 2007. It does not appear that AHL currently holds any real property associated with the Scheme, although it does appear that substantial sums of money have been transferred between AHL and APM. Given that AHL and AF are trading, and in light of my views which I am about to express as to the state of their financial records, I do propose to continue the restraining orders against AF and impose such orders on AHL. 44 In relation to MK River, it has been trading and Mr Andrew Leonard Dunner was appointed Receiver and Manager on 23 March 2007. In relation to both MK River and AF there is some uncertainty as to whether they hold any real property in their name. Apparently transfers of land dated 23 March 2007 purporting to transfer from MK River to AF certain real properties were provided to ASIC but, as at 21 May 2007, the respective titles were still registered in the name of MK River. Further, there is some evidence that monies have been paid by at least one investor (Mr Steemers) into the account of MK River, so that it would appear MK River was at least in receipt of funds, even if some doubt exists as to its existing liability to any investor. As I have said, I do not consider that the evidence sufficiently connects any corporate defendant to the Scheme (including MK River) so as to warrant relief on that basis. It may have been appropriate to consider the appointment of a provisional liquidator to MK River, assuming I had come to the view that MK River was involved in an unregistered managed investment Scheme, having regard to the fact there is some evidence about its receipt of funds from investors. Assuming then that MK River could be identified as a participant, and assuming the Scheme is an unregistered managed scheme, I still would not appoint a provisional liquidator to MK River. Mr Dunner, appointed a Receiver and Manager to MK River, would appear to be cooperating with ASIC, and I have no doubt that this will continue. I propose to continue the restraining orders made in relation to MK River; this will be sufficient relief in relation to MK River at this time. 45 The evidence as to the affairs of each of AHL, AF and MK River shows an incomplete picture of their financial position, but nevertheless seems to indicate that their assets would be insufficient to meet liabilities and that their financial records are inadequate to enable payments, receipts and accounts to be reconciled. 46 The defendants have not demonstrated that the financial position of and the books of account of each corporate defendant (putting aside APM) is other than has been suggested by ASIC, and for the purposes of this interlocutory hearing, demonstrated by the evidence. The evidence further shows that funds have been advanced by investors and financiers to at least some entities within the Australvic Group and that there has been a large number of transfers of money within the Australvic Group and between the Group and Mr Kyriackou and Mr Edwards (some of which cannot be explained satisfactorily). The records of the corporate defendants (putting aside APM) have been incomplete and unsatisfactory since at least October 2006, and such must be treated as a continuing and serious problem. There is sufficient evidence of a breach of s 286(1) of the Corporations Act in respect of each corporate defendant, again putting aside APM. 47 The relief I propose to grant is reasonable having regard to the interests of the public and the balance of convenience considering the position of each corporate defendant (other than APM). Having regard to the trading position of each corporate defendant (other than APM) and the state of the financial records as I have found for the purposes of this interlocutory hearing, there is a proper basis for concern that the assets of each trading corporate defendant be maintained and that there is no intermingling of assets. The orders that I propose restraining the disposition of assets will deal with that concern. 48 In light of the above, I propose to make orders restraining AHL, AF and MK River from disposing of their assets or property, and to make orders in relation to their financial records, until the hearing and determination of this proceeding or further order. 49 I now turn to Mr Kyriackou. There is no material to suggest that Mr Kyriackou proposes to continue to solicit further funds from investors or financiers in relation to the Scheme. No court order is required to deal with that eventuality, even assuming that the Scheme as alleged is illegal. The main company (APM) with the Australvic Group has been wound up. 50 I do not consider that there is any evidence to suggest that Mr Kyriackou is unlikely to cooperate with any investigation into the affairs of the Australvic group or that he will not remain within the jurisdiction. In fact, the available evidence suggests the contrary. I do not have before me any evidence or basis to restrain Mr Kyriackou from disposing of any assets in his own name. I see no necessity to order Mr Kyriackou, where there is no evidence to suggest he will not cooperate, to deliver up books and records in relation to the various company defendants. 51 Interlocutory orders were sought pursuant to s 601EE and s 1323 of the Corporations Act directing the liquidator (if appointed) to file a written report as to certain aspects of the Scheme. I do not consider this order needs be made now in relation to the liquidator of APM, who is the only liquidator appointed who would be in a position to file such a written report. Of course, the liquidator of APM has various responsibilities under the Corporations Act and to the Court which will involve him in carrying out investigations which may impact on any report he may be directed to give at a later time. I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton.

application by asic for interlocutory relief whether defendants involved in unregistered managed investment scheme application for appointment of provisional liquidators application for injunction restraining transfer of property by defendants where one defendant has been wound up in insolvency and liquidator appointed extent of interlocutory orders necessary to preserve status quo " managed investment scheme" corporations words and phrases

2 The applicant was born in the United Kingdom in August 1943. He and his family emigrated to New Zealand in 1988. Between 1995 and 1999, the applicant was engaged as an engineering consultant in relation to energy policy reform then being implemented by the government of Victoria. Since 2002, the applicant has been resident in the United Kingdom and is now retired. 3 On 9 May 2007, the Commissioner assessed the applicant for income tax for the years ended 30 June 1996, 1997, 1998, 1999 and 2000. The total of those assessments was $5,616,712.30, all but $112,303.00 of which remains outstanding. On 13 May 2007, the Commissioner made an order under s 14S(1) of the Administration Act prohibiting the departure of the applicant from Australia for a foreign country. The applicant, who arrived in Australia on 16 April 2007, had proposed to leave Australia on 30 May 2007. The DPO prevented him from doing so. 4 In the period between the date of the making of the DPO and September 2007, there was correspondence between the applicant, and solicitors acting on his behalf, and the Commissioner. Information was provided by the applicant which dealt both with his liability to pay Australian tax in the years to which the assessments related and with the appropriateness of maintaining the DPO. On 20 June 2007, the applicant's solicitors requested the revocation of the DPO pursuant to s 14T of the Administration Act . On 26 June 2007, the applicant attended for examination pursuant to s 264(1) of the Income Tax Assessment Act 1936 (Cth) and s 353 -10 of Schedule 1 to the Administration Act . He was accompanied by his legal representatives, who requested, on his behalf, that the DPO be revoked. That request was repeated, and formalised, in letters to the Commissioner from the applicant's solicitors on 29 June, 10 July and 16 August 2007. It was those requests which led to the Commissioner's refusal to act under s 14T of the Administration Act on 14 September 2007, and it is that refusal which forms the subject matter of the present proceeding. 5 The heading to Part IVA of the Administration Act is "Departure from Australia of certain tax debtors". Division 2 thereof, headed "Prohibition and authorisation of departure of certain tax debtors", contains the provisions which are principally of present concern. By s 14R , it is provided that a person in respect of whom a DPO is in force, and who knows that it is in force in respect of him or her, shall not depart from Australia for a foreign country. That prohibition does not apply if the departure is authorised by a "departure authorisation certificate", a subject which I shall mention shortly. Section 14S provides for the making of DPOs. (2) Where a departure prohibition order is in force in respect of a person, the Commissioner may, in the Commissioner's discretion and on application being made to the Commissioner to do so or on the Commissioner's own motion, revoke or vary the departure prohibition order. (3) A reference in paragraph (1)(a) to tax liabilities having been wholly discharged includes a reference to arrangements satisfactory to the Commissioner having been made for those tax liabilities to be wholly discharged and a reference in that paragraph to the Commissioner being satisfied that it is likely that tax liabilities to which a person may become subject will be wholly discharged includes a reference to the Commissioner being satisfied that it is likely that arrangements satisfactory to the Commissioner will be made for those tax liabilities to be wholly discharged. (5) As soon as practicable after a decision is made under subsection (1) or (2) refusing to revoke a departure prohibition order made in respect of a person, the Commissioner shall cause to be served, as prescribed, on the person notification of the decision. By s 14V , a person aggrieved by the making of a DPO may appeal to the Federal Court, or to the Supreme Court of a State or Territory, against the making of the DPO. By s 14Y , an application may be made to the Administrative Appeals Tribunal for a review of a decision under s 14T or s 14U. 7 Division 4 of Part IVA deals with "Enforcement", a subject to which it is unnecessary further to refer. 8 In the present proceeding, the applicant did not challenge the making of the DPO with respect to him. Further, he accepted that the existence of his tax liability --- upon which the DPO was based --- was not here contestable; and he did not seek to contest it. The applicant confines his challenge to the Commissioner's refusal to act under s 14T of the Administration Act to revoke the DPO. Within that context, the application is further confined, in a respect to which I shall refer presently. 9 The decision maker under s 14T of the Administration Act was Mr Gregory John Trewin, Regional Director (Wickenby) in the serious non-compliance business line of the Australian Taxation Office. In making his decision, Mr Trewin had regard to many documents, to which he referred in his affidavit sworn on 23 November 2007. Perhaps the principal document to which he referred was an internal submission dated 12 September 2007 by the Operational Director, Debt --- Project Wickenby. Many of the other documents to which Mr Trewin had regard were also referred to in the internal submission. 10 The internal submission was a document of 19 pages, more than 13 of which were concerned with the question whether Mr Trewin should be satisfied that the applicant's tax liabilities were "completely irrecoverable" within the meaning of s 14T(1) of the Administration Act . The submission dealt very briefly only, and in terms to which I shall refer in due course, with the considerations that were thought to bear upon the general discretion arising under subs (2) of s 14T. It was recommended that Mr Trewin should not be satisfied that the applicant's tax liabilities were completely irrecoverable, and that he should find that the briefly-identified factors said to bear upon the general discretion were not sufficient to warrant the revocation or variation of the DPO. 11 In a document signed by the applicant on 20 June 2007 which was before Mr Trewin, the applicant said that his only assets were an entitlement to an annual pension payment from an occupational pension fund in the United Kingdom, in an amount not exceeding [sterling]UK40,000 per annum (after tax) and about $108,000 in an Australian superannuation fund. Additionally, he referred to two bank accounts which he held jointly with his wife: one in the United Kingdom, then having a balance of about [sterling]UK25,000; and the other in New Zealand, then having a balance of about $NZ65,000. He said that he held "no beneficial interest or legal interest in any other assets". He added that the funds necessary for his legal representation in Australia were being provided by his son. The applicant asserted that he was unable to pay his Australian tax liability. The liability was, according to the applicant, completely irrecoverable within the terms of s 14T. 12 The Commissioner, however, had access to a deal of information which, in the view of Mr Trewin, cast doubt upon the applicant's assertions that he had no assets other than those to which he referred. The author of the internal submission, and subsequently Mr Trewin himself, considered the extent of the applicant's assets by reference to four broad categories: assets in Australia; assets in the United Kingdom; assets in New Zealand; and assets in Switzerland. For present purposes, I need say nothing further about the first two of these categories. It was Mr Trewin's treatment of the applicant's asset situation in New Zealand and Switzerland which constituted the focus of the applicant's case in this proceeding. 13 Save for the bank account held jointly with his wife to which I have referred, there appeared to be no evidence of any New Zealand assets owned absolutely by the applicant. However, the applicant was involved (to use a neutral expression at this stage) in two family trusts which did hold assets in New Zealand. He was a joint trustee, with his wife, of both trusts, and was within the class of discretionary beneficiaries under one of them. Mr Trewin was not persuaded that the applicant did not have an interest in, or access to, the property of these trusts, or at least one of them, or that he did not have control over that property. The Swiss assets with which the applicant was said to be connected were, it seems, bank account funds held under a trust of which, according to the applicant's own evidence provided at the examination on 26 June 2007, he had been the settlor, but was not the trustee, and in which he had no beneficial interest. He said that the beneficiaries of this trust were his children. However, the applicant did not provide a copy of the trust deed or other relevant documents, notwithstanding a request which he made in that behalf of the trustee. It seems that the trust was administered under the auspices of a Swiss firm called "Strachans", with whom Mr Trewin and others in his section had had experience which caused him to form the view that the firm was involved in the establishment and operation of offshore trust structures that would facilitate the concealment of income that might otherwise be subject to Australian tax. For those reasons, and particularly because the applicant had been unable to provide complete and satisfactory answers to a number of the Commissioner's inquiries with respect to the Swiss trust, Mr Trewin found himself unable to be satisfied that the applicant had no interest in, or control over, that trust and its assets. 14 Under s 14T(2) of the Administration Act , it was noted in the internal submission that it "does not appear to be suggested" that the applicant was suffering from financial hardship as a result of the DPO. The submission also noted the existence of a circumstance which had been drawn to the Commissioner's attention by the applicant, namely, that his wife had recently been diagnosed with breast cancer, and was requiring ongoing treatment. It was noted that she would "obviously prefer" to have the applicant by her side in the United Kingdom. However, the view was taken that Mrs Troughton's circumstances were not sufficient to warrant the exercise of a general discretion to revoke, or to vary, the DPO. 15 In par 8 above, I said that the application in this proceeding was confined in a way to which I would return. I refer to that subject now. In the requests made on behalf of the applicant for the DPO to be revoked, no grounds were explicitly articulated. However, from the general flow of the correspondence between the applicant's solicitors and the Commissioner, and from the tenor of the answers given by the applicant at the examination on 26 June 2007, it would seem that the applicant's basic proposition was that he was quite unable to discharge his Australian tax liabilities. If so, the applicant's position would bespeak reliance upon subs (1) of s 14T , namely, by implicitly asserting that the Commissioner should be satisfied that the liabilities were completely irrecoverable. No doubt it was the way in which the applicant had generally balanced his representations to the Commissioner which was responsible for the emphasis given to the subject of irrecoverability in the internal submission. However, in his case in this court, the applicant did not attack so much of Mr Trewin's decision as arose under subs (1) of s 14T of the Administration Act . Rather, he confined his attack to so much of that decision as arose under subs (2) thereof. 16 As I have mentioned above, the internal submission addressed the subject of the general discretion under s 14T(2) as though it were distinct from the subject of irrecoverability under s 14T(1). However, as I read it, it did so in a way which took the conclusion under subs (1) as a given. That is to say, the submission suggested that Mr Trewin should not be satisfied that the applicant's tax liabilities were completely irrecoverable, and then addressed the further question whether, in those circumstances and against that background, there were any other general discretionary matters, of a kind proper to be taken into account under subs (2), which should lead to the revocation or variation of the DPO. It is implicit that Mr Trewin took the view that, absent the applicant's presence in Australia, the Commissioner's ability to recover the tax liabilities in question was substantially compromised. On the other hand, it necessarily followed from Mr Trewin's decision under subs (1) that, at least so long as the applicant remained in Australia, the liabilities were not completely irrecoverable. It seems inescapable that Mr Trewin took the view that the applicant's continued presence in Australia was relevant to the practical capacity of the Commissioner to recover the tax. Before doing so, however, it will be necessary to deal with important submissions which the parties made as to the nature of the discretion given by s 14T(2), and as to the purpose of Part IVA of the Administration Act generally. 19 As may be seen, the decision whether to revoke a DPO under s 14T(2) of the Administration Act is a discretionary one. No criterion is expressly mentioned in the subsection. That led Northrop J to describe the discretion as "unfettered" in Edelsten v Commissioner of Taxation (1992) 36 FCR 236, 240. However, counsel for the Commissioner accepted, correctly in my view, that such a discretion must still be exercised in accordance with the scope and objects of the legislation, particularly of the part of the legislation in which the relevant statutory provision is to be found: see FAI Insurances Ltd v Winneke [1982] HCA 26 ; (1982) 151 CLR 342, 368. Counsel submitted that of particular relevance were the purposes for which the power to make a DPO under s 14S is conferred. I accept that admission: see Edelsten at 244. Counsel for the applicant made a submission to like effect in general terms, but at the point of detail, and of relevance to the facts of the present case, that submission departed from that being advanced on behalf of the Commissioner. The applicant's case stressed the severe impact upon freedom of movement which was occasioned by a DPO, and would have it that the Commissioner was always obliged, under s 14T(2) , to take that impact into account, particularly with reference to the circumstances of the taxpayer himself or herself. It was also said that the Commissioner was obliged to consider whether the departure of the taxpayer would in fact affect the recoverability of tax. The Commissioner's case was that, as a matter of statutory purpose, Part IVA was overwhelmingly concerned with the protection of the revenue, and that such a consideration should always inform the exercise of a discretion under s 14T(2). 20 I agree with the submissions made on behalf of both parties that the starting point is s 14S. Uninstructed by authority, I would have taken the view that that section contains its own explicit statement of purpose, namely "the purpose of ensuring that the person does not depart from Australia for a foreign country" without discharging, or making arrangements for the discharge of, his or her tax liability. There are two things to note about this provision. The first is that the word "ensuring" is a strong one. It conveys the meaning that preventing a person from leaving Australia with an undischarged tax liability should be regarded as a high priority. The second thing to note is that s 14S(1)(b) is not expressed thus: "where ... the Commissioner believes on reasonable grounds that the person should not depart from Australia for a foreign country without ...." If it were so expressed, the paragraph would require the Commissioner to exercise a discretion as to the desirability of the person leaving Australia without discharging, or making arrangements to discharge, the tax liability in question. However, in the way the paragraph is in fact expressed, it is a given that the person should not depart from Australia without discharging, or making arrangements to discharge, the tax liability. The Commissioner's function is to consider the desirability of making a DPO in order to ensure the achievement of that objective. 21 However, there is authority which I should follow that suggests that the purposive dimension of s 14S should not be ascertained from such a literal reading of the words of the section. The Commissioner is to believe on reasonable grounds that it is desirable to stop a person leaving Australia because it is necessary to collect the tax that is owed to the government and that that discharging of the tax liability will be affected by the person going overseas. In the latter case, Pincus J said that "there must be ... the circumstance that recoverability will be affected by the departure of the taxpayer from Australia. Thus it is not to be taken as a given that, in every case, the departure of the person from Australia will make it unlikely, or at least less likely, that the tax liability will be discharged, or that the ability of the Commissioner to recover the tax will be impaired. These are things which must be considered by the Commissioner in every case. The purpose of s 14S , and accordingly a central purpose of Part IVA , is not the prevention of persons (owing tax) from leaving Australia simpliciter : it is the prevention of such persons from leaving Australia where, in the Commissioner's belief reasonably arrived at, the recovery of tax would or might thereby be impaired. 23 In that result, at least so far as revealed by s 14S , the general scope and objects of Part IVA of the Administration Act are as contended for by both sides in the present case. As contended for by the Commissioner, they are the protection of the revenue. As contended for by the applicant, they are the prevention of persons (owing tax) from leaving Australia where that would affect the recoverability thereof. 24 The next provision to which reference should be made is s 14U. Here the legislature has turned its mind to the kind of exceptional circumstances that might arise, in which the non-achievement of the purpose referred to in s 14S(1) might be tolerated. Section 14U deals with four situations. First, there is the situation in which the Commissioner is satisfied that the person, having departed from Australia, will return within an appropriate period, that existing liabilities will be wholly discharged, and that future liabilities will either be wholly discharged or be completely irrecoverable. Secondly, there is the situation in which the person has given security. Thirdly, there is the situation in which permission to depart might be sustained on humanitarian grounds. And finally, there is the situation in which a refusal to permit departure would be detrimental to the interests of Australia. The circumstances to which s 14U is addressed are detailed and apparently comprehensive. The section is plainly relevant to the applicant's contention that the impact of a DPO upon the particular taxpayer had to be taken into account under s 14T(2). The contention was based upon what the Full Court said in Poletti v Commissioner of Taxation (1994) 52 FCR 154. The evident purpose of the right of appeal is to enable departure prohibition orders which the Commissioner may make, to be set aside where the person against whom the order is made is not subject to a tax liability or where the Commissioner's belief (to which para (b) of s 14S(1) is directed) is not held bona fide or is not based on reasonable grounds. The requirement that reasonable grounds must exist to support the Commissioner's belief is a safeguard to the taxpayer that departure prohibition orders will not be made against him or her in unreasonable circumstances. The making of such an order is a severe intrusion into a person's liberty, privacy and freedom of movement. On the other hand, the protection of the revenue is of great importance to Australia. These two interests must be balanced. Section 14S is an example of a situation where it is necessary to achieve this balance. They were not concerned with s 14T(2). For my own part, I consider that, at least so far as it goes, s 14U encapsulates such legislative concern as there is in the personal circumstances of a taxpayer with respect to whom a DPO is extant. 25 Returning to the case before the court, the applicant identified six considerations which he alleged had been taken into account by Mr Trewin, and which were said to be irrelevant. the fact that advisers used by Dr Troughton have also advised Australian taxpayers whose affairs are being investigated in Project Wickenby. Neither did counsel for the applicant so treat it in their submissions. They relied upon the allegation of duress in their case under s 5(2)(c) of that Act, and it is there that I too consider that the matter is more appropriately addressed. 26 As to items ii-v on the applicant's list under s 5(2)(a) of the ADJR Act , the point appeared to be that those matters were relevant under subs (1) of s 14T, but not under subs (2) thereof. They are relevant to the question of whether the Commissioner must revoke the DPO. The question in that regard is whether the Commissioner can be satisfied that the tax liability is irrecoverable. Items ii-v on the list were centrally relevant to that task, and the contrary was not submitted. The applicant may have confined his application in this court to so much of Mr Trewin's decision as was made under subs (2), but Mr Trewin himself was not so confined. Merely to point to considerations that Mr Trewin took into account for the purpose of subs (1) does not make good the proposition that he took irrelevant considerations into account when he came to subs (2). 27 I would add that, in a case such as the present when a taxpayer makes an undifferentiated application for revocation, I consider it both logical and manifestly in harmony with the structure of s 14T for the decision-maker to consider first whether he or she must revoke the DPO under subs (1), and only if a negative answer is given to that question to turn to consider whether he or she should revoke the DPO under subs (2). At that second stage, the fact that a conclusion had been reached that the tax liabilities in question were not completely irrecoverable would seem to be an entirely proper consideration to take into account, even if only by way of background. Different considerations may, of course, come into play in the case of an application for revocation which relies on subs (2) alone; but that is not this case. 28 Neither in their written outline nor in their oral submissions did counsel for the applicant deal with item vi on the applicant's list. The matter was raised with Mr Trewin in cross-examination, and he made it clear that he had had experience of other situations in which the same advisers (as used by the applicant) had been involved in the establishment of trusts, and in which persons assessed for Australian tax had been found, contrary to ostensible documentary appearances, to have had control over trust assets, and to have had "the final say in what to do with the money". Although it was put to Mr Trewin that he was confusing ownership and control, it was not submitted that, if the identity of the advisers had a rational tendency, as a matter of fact, to assist Mr Trewin in arriving at a particular state of satisfaction as to ownership (or, if it matters, control) in relation to the assets of the Swiss trust, he was, as a matter of law, prohibited from taking it into account. the absence of utility of the continuation of the DPO in that the continuing presence in Australia of the Applicant can have no effect on the lawful recovery by the Respondent of the Applicant's tax liability. The Applicant has been served with proceedings for recovery of the tax liability. 2. The Respondent has obtained judgment in respect of the Applicant's tax liability. 3. The Applicant has attended an interview and had answered under affirmation all questions asked by the Commissioner of Taxation in relation to the Applicant's financial affairs, and that examination has concluded. 4. The Applicant has complied to the extent he is able with all requests by the Respondent for documents. 5. The lawyers for the trustee of the Trevi Trust have advised that he has no interest in or control over the Trevi Trust. What factors a decision-maker is bound to consider in making the decision is determined by construction of the statute conferring the discretion. If those factors are not expressly stated, they must be determined by implication from the subject matter, scope and purpose of the statute. When a statute confers a discretion which in its terms is unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except insofar as there may be found in the subject matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard: Peko-Wallsend at 40. Where the ground of review is that a relevant consideration has not been taken into account, and the discretion is unconfined by the terms of the statute, the Court will not find that the decision-maker is bound to take a particular matter into account unless an implication to that effect is to be found in the subject matter, scope and purpose of the statute: Peko-Wallsend at 40. Where, as here, a discretion is conferred in very general terms, it is generally a matter for the decision-maker to decide what is relevant and what is not. It is largely for the decision-maker, in the light of the matters placed before him, to determine which matters he regards as relevant and the comparative importance to be accorded to matters which he so regards: Sean Investments Pty Ltd v MacKella r (1981) 38 ALR 363 at 375. As long as the decision-maker considers those things that the legislation requires to be taken into account and ignores any prohibited consideration, the grounds of failing to take into account a relevant consideration, or taking into account an irrelevant consideration, will not be available. Nor are those grounds available where the essence of the complaint is that the decision-maker paid either too little or too much attention to a relevant factor: Aronson & Dyer Judicial Review of Administrative Action (2nd ed 2000), p 225. In the instant case the discretion was, therefore, to be exercised by reference to the subject matter, scope and purpose of Part IVA of that Act, a subject with which I have dealt above. There is nothing in the subject matter, purpose and scope of Part IVA that required Mr Trewin, as a condition to the valid exercise of his discretion under s 14T(2) , to take into account the matters referred to in items i and ii on the applicant's list. The proposition can be tested this way: if those matters had not been mentioned by the applicant at all, would Mr Trewin's decision under s 14T(2) have been vitiated for failure to take a relevant consideration into account? The question needs only to be expressed that way for a negative answer to be obvious. In truth, the nature of the applicant's complaint in this regard is not such as would be admitted under s 5(2)(b) of the ADJR Act at all. It is more that Mr Trewin failed to deal with a proposition, based in the alleged facts of the particular case, upon which the applicant had relied. Whether or not there is any substance in that complaint (a matter to which I will turn next), the fact is that it does not match with the ground, or with any ground, upon which the applicant relies under s 5 of the ADJR Act . 32 For the sake of completeness, I would add two comments: first, had the matters referred to in items i and ii been squarely raised by the applicant, Mr Trewin would, in my view, have been justified in declining to deal with them under s 14T(2) upon the ground that humanitarian considerations of that kind were more appropriately addressed under s 14U(1)(b)(ii)(A). Secondly, as a matter of fact, I note that the illness of the applicant's wife was the subject of a paragraph in the internal submission. Mr Trewin was cross-examined on that subject, and said that he accepted the applicant's claim that his wife was ill with breast cancer, that he treated it as a consideration relevant to the decision whether to vary or to revoke the DPO, but that he was "sceptical" as to whether it was the sole reason why the applicant wanted to leave Australia. I accept Mr Trewin's evidence as to his state of mind at the time he made the decision. If Mrs Troughton's illness were a relevant consideration that Mr Trewin was obliged to take into account, I find that he did so. 33 The other family obligation in the United Kingdom referred to in item i of the applicant's list related to his elderly mother, who lives in the UK. Her situation was neither relied on nor referred to in any of the written applications for revocation made on the applicant's behalf. At the hearing in this court, however, counsel for the applicant submitted that Mr Trewin should have been aware that that situation was relied on by the applicant by reason of something he said in the examination on 26 June 2007. During the course of the examination, a copy of the applicant's 1997 New Zealand tax return was produced, and the applicant was asked questions about it. A series of questions related to a sum of about $NZ200,000 which the applicant said (in the return) he had earned from self-employment. Reference was then made to the applicant's work in Victoria in that fiscal year, and the applicant was asked about a requirement that he then had to travel overseas as part of his "lifestyle". My - you already heard from the beginning of the interview that my wife's parents emigrated to New Zealand in, I think late 1990. Her mother became increasingly sick, she is an only child. She was not going to move out of New Zealand as a result of that and I have a dependant mother in the UK all of whose blood relatives and husband had died by the early 1990s. I needed to visit her roughly once every three months, which I did fairly religiously during that period. She was on the phone most of the time, she was living in a dilapidated house which I have since - which has since gone, basically, and she required very large amounts of support over this period of time. So about every three months I have to go to the UK to support her and from 1995 onwards we decided we would basically spend as much of the year we could in the UK which is why we bought a UK home and a car, etcetera, in the UK because both of our sons were at university over there, etcetera, and the only way we could keep our family together was by doing that. So we established another home, other than our New Zealand home, which was in the UK and lived there for the balance of the year with our family. I do not believe that the passage is capable of being pressed into service in this way. The examination was relevantly concerned with the applicant's situation in 1997 and thereabouts. The applicant expressed no complaint that he was, in 2007, suffering hardship as a result of being unable to travel to the UK to care for his mother. As I said above, no such complaint was ever articulated in writing. If matters of this kind might otherwise be regarded as relevant considerations for the purpose of s 14T(2), they could only be so, in my view, when squarely raised. I do not consider that Mr Trewin was under an obligation to turn his mind to every piece of information which had come to his, or to his advisers', attention about the applicant and then, in effect, to join the dots in a way that the applicant himself had not chosen to do so as to optimise the prospect of the applicant achieving a favourable outcome under the subsection. 34 The applicant's submission with respect to item iii on his list was that the Commissioner had now done everything to which the applicant's continued presence in Australia might have been useful. The applicant's Australian bank account had been garnisheed, summary judgment had been obtained against the applicant in the Supreme Court of Victoria in relation to the tax liabilities, and the applicant had been examined on oath, and required to produce documents. Dealing specifically with Mr Trewin's suspicions that the applicant may have an interest in assets in New Zealand, it was submitted on behalf of the applicant that, if those suspicions were well founded, the Supreme Court judgment could be enforced in New Zealand, as a result of the operation of the International Tax Agreements Act 1953 (Cth) and the Foreign Judgments Act 1991 (Cth). As for the prospect that the applicant may have an interest in Swiss assets, the "Trevi trust" to which particular 5 refers is the Swiss trust mentioned in par 13 of these reasons. The particular implies, and Mr Trewin was cross-examined so as to suggest, that the conclusion which he should have reached about those assets was that the applicant had no interest in or control over the trust, and therefore no property from which there could be any expectation that the tax liabilities would be realised. 35 As the applicant's grounds and particulars make clear, his point in this respect has two levels. At the first level, it was submitted on his behalf that the utility of maintaining a DPO will generally be a consideration required to be taken into account under s 14T(2) of the Administration Act . Although expressed rather tendentiously apropos the facts of the present case, this was a proposition which counsel for the Minister did not seek to contest, at least at the general level. At the second level, it was submitted on behalf of the applicant that Mr Trewin did not turn his mind to the particular facts of the potential asset situation in New Zealand and Switzerland to which I have referred in the previous paragraph. Merely to make good that second proposition, however, does not mean that the applicant has demonstrated that Mr Trewin failed to give consideration to the matter of utility. As Mr Trewin made clear under cross-examination, so long as the exact legal and factual situations as to the applicant's interest in these foreign trusts remained less than wholly clear, the applicant's continued presence in Australia might be expected at least to facilitate the making of further inquiries by the Commissioner. Whether or not that is so, however, it is a matter for the Commissioner, not for the court. It is sufficient to say that it has not been established by the applicant that Mr Trewin approached his task under s 14T(2) on the basis of an assumption --- whether or not consciously made --- that the continued operation of the DPO was of no utility. 36 I would add, again for the sake of completeness, that I regard the applicant's complaint that Mr Trewin did not turn his mind to particular issues as to the foreign enforceability of the Supreme Court judgment and the prospect of finding that the applicant had a present interest in the Swiss trust as another example of the applicant now raising circumstances (in this case, circumstances substantially involving legal issues) which, as a matter of argument, the applicant would now say ought to have moved Mr Trewin to decide the matter favourably to him under s 14T(2). They were not, however, considerations mandated by s 14T(2) itself, or by any other relevant provision of the Administration Act . Neither, as it happens, were the circumstances relied on by the applicant in the correspondence in which his solicitors requested that the DPO be revoked. 37 The next ground relied upon by the applicant was that Mr Trewin had exercised the power under s 14T for a purpose other than that for which it was conferred. A proper purpose, it was submitted, was to enable or to assist the lawful recovery of a tax liability. A number of circumstances, however, gave rise to the inference that Mr Trewin's, and therefore the Commissioner's, real purpose was to place such duress upon the applicant as would cause other members of his family, other persons close to him, or the trusts with which he was associated in some way, to pay the tax on his behalf. The purpose of Part IVA of the Administration Act , it was said, was to facilitate the recovery of tax from persons who might be minded to leave Australia. However, the Part was concerned with the recovery of tax from those persons . It would be improper, it was said, for the Commissioner to resort to the personal duress occasioned by a DPO when he knew that the person was unable to pay tax directly, and for the purpose of compelling persons or entities other than the taxpayer to do so. In the case of the trusts of which the applicant was a trustee (the New Zealand Trusts), it was submitted that it would be quite improper for the applicant to divert the assets thereof to the payment of his own personal tax, and therefore wrong, and beyond the scope of s 14T(2) , for the Commissioner to maintain the DPO in place with the purpose, or in the expectation, that the applicant would so proceed. 38 It will be apparent that this ground is concerned with recoverability as such, at least more obviously so than with matters of general discretion that might arise under subs (2) of s 14T. Had the applicant been concerned to challenge Mr Trewin's decision under subs (1), a submission that, in considering whether the liabilities were completely irrecoverable, he instructed himself by reference to the matter of recoverability from persons other than the applicant, would have been intelligible (whether or not well founded). However, the same cannot be said of a like submission made as part of an attack upon Mr Trewin's decision under subs (2), in circumstances where there is no attack on the decision under subs (1) and where the starting point must be that he properly and lawfully took the view that the tax liabilities were not completely irrecoverable (or at least was not persuaded to the contrary by the applicant). In such a case --- which is the present case --- it is very difficult to see how the applicant could, absent explicit indications of bad purpose, weave into his attack an allegation that Mr Trewin's refusal to revoke was based upon an ulterior purpose of the kind suggested. To say the least, the allegation sits most uneasily with the applicant's acceptance of the decision under subs (1). However, the allegation has been made, and the applicant's point must be considered. 39 On the facts of the present case, I could not find that the actual purpose of Mr Trewin was to have persons other than the applicant pay his tax liabilities. I find that Mr Trewin approached his task as though the question was whether the tax liabilities were completely irrecoverable from the applicant. He was not satisfied that they were. It is true that, in this regard, Mr Trewin took account of assets as to which he was not satisfied that the applicant did not have an interest, or as to which he was not satisfied that the applicant did not have access, but it was always the applicant's capacity to muster the necessary funds that was the focus of his deliberations. He carried this approach through into subs (2). He referred to his belief "that the applicant had access to funds outside Australia from which the tax liabilities could be discharged". I reject the submission that Mr Trewin's purpose was nothing more than to impose duress upon the applicant so that other persons or entities would discharge the applicant's liabilities. 40 It was submitted on behalf of the applicant that, properly instructing himself, Mr Trewin could have come to no conclusion other than that the applicant had insufficient assets to discharge his tax liabilities and that, therefore, his (Mr Trewin's) purpose could only have been to use the continued existence of the DPO as a means to prevail upon the applicant to cause other persons to do so for him. This might have been a submission of some force had the Commissioner chosen not to call Mr Trewin, but such was not the case. I am satisfied from the evidence given by Mr Trewin that he had no such purpose as the applicant alleges. I find that he conventionally turned his mind to the question whether the liabilities were "completely irrecoverable" (as required by s 14T(1)) , and in that context considered whether there was no prospect that the liabilities could be recovered from the applicant. I consider that it was appropriate for Mr Trewin to have taken into account assets to which the applicant might have had access, in the sense of being in a position so to influence the disposition thereof as to leave open the prospect that recourse might be had to them to meet, or to assist in meeting, the tax liabilities in question. None of this was inconsistent with the objects of Part IVA as I have identified them above. 41 For the above reasons, I reject so much of the applicant's case as is based on s 5(2)(c) of the ADJR Act . 42 It was finally submitted on behalf of the applicant that Mr Trewin's decision under s 14T of the Administration Act involved an error of law. I have referred above to the two New Zealand trusts in which the applicant was involved. They were the Peter Troughton Family Trust and the Joyce Troughton Family Trust, each constituted by deed dated 11 September 1991. Further, clauses 3.01(b) and (c) effectively provide that during the Restricted Period no income or capital of the trust is to be distributed to the discretionary beneficiaries. He was, however, a discretionary beneficiary under the Joyce Troughton Family Trust. However the applicant's interest, or potential interest, as a beneficiary may be, it seems fairly clear that the author of the internal submission misread the trust deed in each case. As appears from the extract set out above, the view seems to have been taken that the trustees (the applicant and his wife in each case) were to hold the trust fund upon trust for themselves at their absolute and uncontrolled discretion. It could not seriously be suggested, and counsel for the Commissioner did not submit, that the trust deeds operated in this way. Rather, the relevant provision was a quite conventional one in which the trustees were directed to hold the fund upon the specific trusts referred to in subclauses (a), (b) and (c) as set out above. They involved the accumulation of income, the application of capital and the application of income respectively. These were New Zealand trusts and, as was submitted on behalf of the applicant, their construction is a matter of New Zealand law. Being foreign law, the content of New Zealand law in this court is a question of fact. To the applicant's affidavit was exhibited a letter dated 7 November 2007 from a New Zealand solicitor. Unsurprisingly, he expressed the view that the interpretation given by the author of the internal submission to the trust deed was erroneous in point of law. 44 That raises the question whether the error made by the author of the internal submission, and adopted by Mr Trewin, was an "error of law" within the terms of s 5(1)(f) of the ADJR Act . Questions of foreign law are treated as questions of fact in Australian courts. Indeed, as noted above, the applicant himself dealt with issues arising under the New Zealand trust deeds as though they were questions of fact: he relied upon the opinion of his New Zealand solicitors. Whether s 5(1)(f) of the ADJR Act itself should be construed as referring only to errors of Australian law is a matter of construction, and appears never to have been judicially considered. However, in Singh v Minister for Immigration and Multicultural Affairs (No 2) [2001] FCA 327 , Heerey J held that the expression "error of law" then appearing in s 476(1)(e) of the Migration Act 1958 (Cth) referred to an error of Australian law: at [22]. That provision was, I consider, relevantly indistinguishable from s 5(1)(f) of the ADJR Act . I note that Ambrose J arrived at the same conclusion regarding what was a "question of law" for the purposes of s 38(2) of the Commercial Arbitration Act 1990 (Qld) in Re Independent State of Papua New Guinea (No 2) [2001] 2 Qd R 162, 186 [109]. I take the view, with respect, that these authorities were correctly decided in relevant respects. However that may be, Singh was a judgment of this court under an analogous provision, and should be followed. 45 I hold that the error made by Mr Trewin as to the construction of the New Zealand trust deeds was not an error of law within the meaning of s 5(1)(f) of the ADJR Act and cannot, therefore, provide a ground of review in the present case. 46 After I had reserved judgment, the applicant indicated by correspondence that he desired to seek leave to amend his application in a particular respect. I permitted him to seek that leave, and I subsequently received the parties' written submissions with respect to the application to amend. 48 Under cross-examination, Mr Trewin was asked whether he had received any advice or suggestion about the question of the revocation of the DPO, save that contained in the internal submission. He said that he had, and, relevantly to the present application to amend, indicated that one of the persons involved had been the Assistant Commissioner, Mr Trewin's "SES Officer". He had expressed the belief that the DPO should not be revoked. Mr Trewin said that he believed that he acted independently, but that he "heard what the Assistant Commissioner had to say". When asked whether, in making his decision, he took the Assistant Commissioner's advice into account, he replied "not particularly, no". When pressed upon this point, Mr Trewin repeated that he had heard what the Assistant Commissioner had to say, but that he "had very little of this information before him". Mr Trewin said that he was himself the decision maker, but that he thought it was "smarter" to find out whether the opinion of others with whom he worked (including the Assistant Commissioner) accorded with his own, and "whether I am making the right decision". 49 On the basis of this evidence, it was submitted on behalf of the applicant that, realistically, the position could not be other than that Mr Trewin regarded himself as organisationally obliged to act in accordance with what he perceived to be the views of his supervising officer. I was, in effect, invited to reject Mr Trewin's denials in this regard. I do not propose to do so. Although the matter of acting under direction was not covered by the applicant's then grounds, and although Mr Trewin was (in the circumstances) seemingly taken by surprise that the subject should be entered upon in cross-examination, he answered counsel's questions readily and frankly. The thrust of that evidence was that he discussed his decision under s 14T with others with whom he worked, including the Assistant Commissioner, and noted the opinions which they held in that regard. He recognised throughout that the decision was his alone to make. On the state of the evidence, I could not find that Mr Trewin was so overborne by the strength of the expressed opinions of others, or so preoccupied with doing the bidding of the Assistant Commissioner, to render the decision one which was not effectively made by him individually. In the circumstances, I take the view that, if the applicant has otherwise made good his application to amend, the proposed ground would have no reasonable prospect of succeeding. 50 There are, however, two other considerations which were pressed upon me by counsel for the Commissioner and which, if accepted, would lead to the rejection of the present application. The first relates to the nature of the jurisprudential basis of the proposed ground. In written submissions filed on behalf of the applicant, it was taken as a given, rather than established by legal argument, that the power which Mr Trewin exercised under s 14T of the Administration Act was a personal discretionary one. I am not persuaded that it was. In terms, the power to revoke a DPO is given to the Commissioner. It is common ground that that power was delegated to the Deputy Commissioner. It seems that the Deputy Commissioner has provided a general authorisation to officers at the levels of "EL 2" and "SES" to revoke DPOs. It was pursuant to that authorisation that Mr Trewin, whose position is at the "EL 2" level, exercised power in the present case. It was only in a brief written submission in reply, filed on 15 January 2008, that counsel for the applicant addressed the significance of this authorisation to a ground of review such as that now proposed. It was submitted, in effect, that, Mr Trewin having been authorised to exercise the power, he should then be regarded, for the purposes of s 5(2)(e) of the ADJR Act , as someone invested with "a personal discretionary power" in the same way as would have been the case had he, or his position, been specifically nominated in the statute. 51 The Commissioner drew my attention to the judgment of Gibbs CJ in O'Reilly v State Bank of Victoria [1982] HCA 74 ; (1983) 153 CLR 1, 12-13, as authority for the proposition that, at least in the context of income tax decisions, a power given in terms to the Commissioner would normally be properly exercised where the actual decision was made by an officer reporting to, and having the relevant authority of, the Commissioner. The applicant did not dispute that proposition at the general level, but, as I have indicated above, submitted that the legal question effectively remained the same, namely, did Mr Trewin, as the relevant authority-holder, exercise the power himself, or at the direction or behest of another person? 52 The question whether a ground of review of the kind referred to in s 5(2)(e) of the ADJR Act would be available in a situation where the decision-maker acted pursuant to an authorisation uncontroversially given by the person named as the statutory repository of the power has not been fully or, I would have to say, adequately argued in the present case. That was, I consider, largely because the applicant did not make this ground part of his original application. I do not consider it to be satisfactory that, because of a few, at best ambiguous, answers given by a witness under cross-examination, the applicant should, after judgment is reserved, seek to introduce a new ground of review, and to do so upon the strength of a supposed proposition of law which is not manifestly correct, and which has been neither fully nor adequately argued. 53 There is, however, a further point. The applicant's proposed ground is that Mr Trewin made his decision at the direction or behest of the Assistant Commissioner. That officer was, however, occupying a position at the "SES" level, and, therefore, also held a standing authorisation to make decisions under s 14T of the Administration Act . That authorisation was sourced in the same document as provided the authorisation for Mr Trewin himself. In the circumstances, either of them could have made the decision which Mr Trewin in fact made in the case of the applicant. Counsel for the Commissioner submitted that they could likewise have made the decision together, or in collaboration. I accept that submission. If it be correct that the authorisation of a single person in accordance with the principle referred to in O'Reilly leads to the conclusion that the power becomes a "personal discretionary power" within the terms of s 5(2)(e) of the ADJR Act , manifestly the same could not be said --- or could be said only in a highly modified way --- in the case of a general authorisation of a number of persons. In the circumstances of the present case, the Assistant Commissioner was no less authorised than Mr Trewin, and the former's input into the latter's decision under s 14T, such as it was, could not be regarded as having taken the decision outside the scope of the statute, assuming always, as I do, that O'Reilly applied in the circumstances. 54 I propose to refuse leave to amend, substantially for the reasons set out above. In summary, they are that, on the facts, the applicant has no reasonable prospect of establishing that Mr Trewin did make the decision in question at the direction or behest of another person; that the jurisprudential basis of the proposed ground is not manifestly sound, and has not been fully or adequately argued; and that the "other person" at whose direction or behest the decision was said to be made was himself the holder of an authority, no less complete than that of Mr Trewin himself, to make the decision. My conclusion applies equally to each of the two proposed grounds referred to in par 47 above. 55 The second consideration pressed upon me by counsel for the Commissioner related to the lateness of the application to amend and to the circumstance that the need to amend in relevant respects became apparent during the trial and was adverted to by senior counsel for the applicant; yet no application was made at that time. I have not found it necessary to base my conclusion upon this consideration. I am inclined to think that, if the applicant's new point were otherwise of obvious merit, and if arrangements could be made, even at this late stage, to avoid any prejudice to the Commissioner, the consideration should not be allowed to stand in the way of the amendment which the applicant seeks. However, for reasons which I have given, I am persuaded that leave to amend should be refused in any event. 56 For the above reasons, the application must be dismissed with costs. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.

taxation administration departure prohibition order application to revoke refusal to revoke general discretion to revoke or to refuse scope and objects of legislation whether irrelevant considerations taken into account whether all relevant considerations not taken into account whether power exercised for improper purpose whether exercise of power attended by error of law. error of law error in construction of trust deed governed by foreign law whether error of law. exercise of statutory power by persons authorised by repository of power person taking the advice of another person also so authorised whether amounted to exercise of personal discretionary power at direction or behest of another. administrative law administrative law administrative law

2 He arrived in Australia on 13 January 2007 and applied to the Department of Immigration & Citizenship for a Protection (Class XA) Visa on 1 February 2007. A delegate of the Minister refused the application on 13 February 2007 and an Application for Review was lodged with the Refugee Review Tribunal on 9 March 2007. 3 The Tribunal affirmed the decision of the delegate by its decision handed down on 3 July 2007. The Tribunal clearly found the now Appellant to be an unsatisfactory witness who did not give truthful evidence. There were numerous major inconsistencies between the claims made in writing in his protection visa application and the statement in support, and his oral evidence at the hearing ... The applicant was both evasive and unresponsive in his demeanour at different times ... ... I am not satisfied that the applicant has told the truth about the circumstances leading up to his departure from Pakistan either in his application or before the Tribunal. ... ... ... I conclude that the applicant was not a truthful witness. 4 A decision of the Federal Magistrates Court dismissed an application to review the decision of the Tribunal: SZLBJ v Minister for Immigration & Citizenship [2008] FMCA 90. 5 The Appellant now appeals to this Court. THAT THE APPLICANT DID NOT RECEIVED THE INCITATION OF HEARING IN THE TIME AS PER MIGRATION REGULATION 4.35D. 2. THAT THE RRT FAILED TO COMPLY WITH THE MANADATORY REQUIRMENTS UNDER THE MIGRATION REGULATION AND MIGRATION ACT . 3. THAT THE APPLICANT FULLY DESCRIBED THE ABOVE SITUATION IN HIS APPLICATION SUBMITTED BEFORE THE FEDERAL MAGISTRATE ON 30/1/2008 THE SAME WAS NOT CONSIDERED BY THE RESPONDENT OF THE RRT. THEY HAVE COMMITTED THE LEGAL AND PRICEDURAL ERROR AND COUPLE THE JURIDICTIONAL ERROR. 6 The Appellant appeared unrepresented before the Court this afternoon, but he did have the benefit of a Court appointed interpreter. 7 There are difficulties in respect to each of the Grounds of Appeal and each ground should be rejected and the appeal dismissed. 9 There are at least two difficulties in respect to this Ground of Appeal. It is considered that leave to raise this ground for the first time on appeal to this Court should be refused. 11 Appellants, whether represented or unrepresented, should be required to articulate before the Federal Magistrates Court their challenges to a decision of the Refugee Review Tribunal. They should only be permitted to raise before this Court a new ground if there is an adequate explanation for not having raised the ground before the Federal Magistrate and if the ground has merit. [39] If the appellant were entitled to raise these new grounds, it would mean that this Court would have to sit, as it were, as the Court at first instance to determine whether these new grounds would give rise to the relief sought in the application before the Federal Magistrate. Parliament has given the responsibility for hearing these applications exclusively to the Federal Magistrates Court. The parties, whether they are represented or unrepresented, ought to articulate all of their complaints in relation to the Tribunal's reasons in the Federal Magistrates Court so that that Court can make the appropriate findings and reach a considered decision on all aspects of the Tribunal's decision. [40] To allow the appellant to articulate these grounds on appeal would be to allow the appellant to treat this Court as a Court at first instance. Such a course of action is unsatisfactory, not only for this Court but also for the High Court which would hear any application for special leave from this decision. It would put the High Court, as it were, in a position of hearing applications for special leave from a court of first instance: SZKMS v Minister for Immigration and Citizenship [2008] FCA 499. [41] However, authority seems to suggest that I need to consider whether the grounds have merit before I determine whether I should give leave for the appellant to raise the matters: VUAX v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 158. In VUAX the conclusion was reached that 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: [2004] FCAFC 158 at [46] . 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. ... There was no adequate explanation in the present proceedings as to why the first Ground of Appeal was not raised before the Federal Magistrate. Nor was it raised as an issue before the Tribunal. 12 The Appellant, when asked this afternoon to explain why the Grounds of Appeal now relied upon were not previously identified, maintained that those grounds had been sought to be relied upon but that he had been told that it was " too late " to do so. Counsel for the Minister, who also appeared before the Federal Magistrate, maintained that there had been no previous reliance upon the grounds now put forward. There is no reference to the grounds now advanced for consideration in the detailed Amended Application as filed in the Federal Magistrates Court on 18 September 2007. Although there is reference in the Federal Magistrate's decision to leave having been granted to raise an additional ground in that Court directed to the adequacy of the interpreter's services, there is no other reference in those reasons to any other application having been made to raise any other grounds. It is considered that the grounds now relied upon were not previously relied upon and have been raised for the first time in this Court. 13 The second difficulty is the simple fact that an invitation to appear before the Tribunal was in fact posted to the now Appellant by a Tribunal officer on 20 March 2007. The letter of that date bears a handwritten notation " Posted on 20/3/07 D.K. " The initials are those of the Tribunal Officer. A response to that invitation was provided by the now Appellant and is dated 12 April 2007. That response set forth as the " home address " the address to which the invitation had been forwarded; it also set forth a different " mailing address ". The " home address " was also the residential address provided by the now Appellant in his Application for Review as lodged with the Tribunal. The now Appellant was also asked to confirm his mailing address and he did so on 18 May 2007, confirming as his address that to which the 20 March 2007 letter had been sent. 14 Section 425A of the Migration Act 1958 (Cth) requires that an applicant be invited to appear before the Tribunal and s 425A(2)(a) provides that notice must be given by one or other of the methods specified in s 441A. Section 441A provides in part for the giving of notice in a number of ways, including by prepaid post to the last address for service or the last residential address provided to the Tribunal. Section 425A(3) provides that the period of notice to be given must be either the prescribed period or a reasonable period. Regulation 4.35D relevantly provides that the period prescribed " starts when the applicant receives notice of the invitation to appear before the Tribunal and ends at the end of 14 days after the day on which the notice is received". Section 441C(4)(a) provides that the letter is taken to have been received 7 days after it was dispatched -- a date well prior to the hearing before the Tribunal. And the invitation was obviously received by the now Appellant. He responded on 12 April 2007 and appeared before the Tribunal on 15 May 2007. No breach of either the Act or the Regulations is discernible. 16 A copy of a letter forwarded on 17 May 2007 pursuant to s 424A of the 1958 Act, it may be noted, was sent to both of the addresses that had been provided. 17 Leave to raise the first Ground of Appeal should thus be refused -- there has been no adequate explanation as to why it is now being raised for the first time in this Court; and, even if leave be granted, it should be dismissed as being without substance. 20 Potentially, the now Appellant may have envisaged reliance upon s 425 of the 1958 Act and an alleged failure to provide an adequate opportunity to be heard by reason of the interpreter provided at the hearing using Urdu as opposed to Punjabi. This was a ground relied upon before the Federal Magistrate but which was rejected. The Tribunal's reasons record that the now Appellant " spoke Urdu equally well and was happy with an Urdu interpreter ". If this was the " requirement " which was envisaged, it is without substance. It should also be noted that in his response to the invitation to attend the Tribunal hearing it was the now Appellant who requested that an Urdu interpreter be provided. 21 Other than the matter raised in respect to the first Ground of Appeal and potentially s 425, a review of the material before this Court does not disclose any other self-evident legislative requirement which has not been complied with such as to constitute jurisdictional error. 22 When asked this afternoon to explain the reference to " mandatory requirements " in the second Ground of Appeal , the Appellant explained that the reference was to three documents received by the Tribunal on 18 May 2007. The documents included a document headed " Police Station Kotwali Sialkot Pakistan "; a document signed by Naeem Raja; and a document which shows details of family membership. The Appellant's contention was that these three documents had not been considered by the Tribunal. How such a contention falls within the ground as set forth may be left to one side. The Appellant's contention may be addressed by a simple recognition that the three documents were in fact considered by the Tribunal. While the letter submitted on 18 May 2007, signed by Naeem Raja, presumably purports to be from the PML-N, there is nothing on the face of the letter to indicate that this is so. Such a contention should thus be rejected. 24 The second Ground of Appeal , it should also be recorded, suffers the same fate as the first -- it was not a ground relied upon before the Federal Magistrate and leave to raise it in this Court should be refused. It is without substance. 25 It should finally be noted that this Court should not be left in the position where a Notice of Appeal does not set forth in any meaningful manner the grounds of appeal sought to be relied upon, even in the case of unrepresented appellants. It neither facilitates the disposition of appeals by this Court, nor the preparation of the submissions of the Minister, if otherwise meaningless grounds may be given substance only during the course of oral submissions. 27 It, too, is rejected. The Notice of Appeal as filed on 6 February 2008 be dismissed. 2. The Appellant to pay the costs of the First Respondent of and incidental to the appeal. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

leave to raise new ground of appeal refused attendance at hearing before tribunal no specification in notice of appeal of mandatory requirements said to have been not complied with migration

On 22 October 2002 I ordered that the Commission pay Safeway and Mr Jones' costs of and incidental to the application. The Commission appealed to the Full Court of the Federal Court and on 30 June 2003 the Full Court delivered judgment in the appeal, allowing it in part: Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd and Anor [2003] FCAFC 149 ; (2003) 129 FCR 339. On 1 August 2003 the Full Court made orders giving effect to its earlier reasons. 2 The Commission, Safeway and Mr Jones filed applications with the High Court seeking special leave to appeal in respect of the judgment of the Full Court. On 10 September 2004 the High Court refused those applications. Consequently the orders of the Full Court remain in full force and effect. 3 Ten incidents involving allegations of contraventions of the Act had been raised before me. Of those ten incidents the Full Court allowed the appeal in respect of five of them. The Full Court made declarations that there had been five specific contraventions of the Act , ordered that the orders made on 21 December 2001 and 22 October 2002 be set aside and that the proceeding be remitted for further hearing and determination in relation to the imposition of pecuniary penalties in respect of the contraventions declared, injunctive relief, the liability of Mr Jones and the costs of the trial. Declares that the first respondent by its arrangement or understanding with Tip Top made or arrived at on 27 and 28 April 1995 whereby Tip Top would sell at its Preston market stall Code C plain wrap bread at $1.50 per loaf and Code D plain wrap bread at $1.90 per loaf made an arrangement or arrived at an understanding that contained a provision having the purpose, or being likely to have the effect, of substantially lessening competition in contravention of s 45(2)(a)(ii) of the Act . The liability of Mr Jones in respect of the Frankston, Cheltenham, Vermont and Albury incidents ("the four incidents") was not pursued by the Commission. Mr Jones accepted liability under s 76 of the Act in respect of Safeway's contravention of s 45(2)(a)(ii) of the Act in the Preston Market incident and agreed with the Commission in a joint submission to the Court that $30,000 was an appropriate penalty to be imposed. They are set out in my earlier reasons and in the reasons of the Full Court. I do, however, refer to findings and conclusions of the Full Court which are relevant in the context of the penalties to be imposed. 7 In summary, the majority of the Full Court concluded that in relation to the four incidents involving deletions of bread products at Safeway supermarkets at Frankston, Vermont, Cheltenham and Albury, I had erred in not finding that Safeway had taken advantage of its market power in the wholesale bread market for a proscribed purpose, in contravention of s 46(1)(c) of the Act . In each of the four instances with which we are concerned Safeway deleted all or most of the plant baker's products from one of its supermarkets. Its reason for doing so was to induce the plant baker to cease supplying discounted bread to an independent retailer in competition with a Safeway supermarket. As we have explained, there would have been no purpose in Safeway acting in this manner in a competitive market. On the contrary, had Safeway done so it would have inflicted economic harm on itself for no gain. Safeway's conduct in the four instances was therefore materially facilitated by the existence of its market power even though that same conduct would not have been 'absolutely impossible' without that power. The making or reaching of that arrangement or understanding was authorised by Mr Jones for Safeway and Mr Gunton for Tip Top. Mr Feldgen and Mr Lovett had the necessary meeting of minds, as did Mr Jones and Mr Gunton. This is not a case, for example, where the Safeway representatives had a mere hope or expectation that Tip Top would act in a particular way. Safeway gave approval, through Mr Feldgen, for the prices to be charged at the Preston Market stall and in return Tip Top was readmitted as a supplier to Safeway Preston. In any event, the critical question is whether an arrangement was made or an understanding arrived at between Safeway and Tip Top. On the facts of this case it was. Accordingly, s 45A(1) of the Act deems the provision, for the purpose of s 45(2) , to have the purpose or to be likely to have the effect of substantially lessening competition. It follows that the Commission has made out its case that Safeway contravened s 45(2)(a)(ii) of the Act by making an arrangement or arriving at an understanding having the purpose or likely to have the effect of substantially lessening competition. • $1.5 million in respect of the Preston Market incident. 10 The principles applicable to the imposition of penalties for a contravention of Pt IV of the Act are not in issue. These factors are not exhaustive; other factors may be relevant in a particular case depending upon the issues raised: Trade Practices Commission v CC (New South Wales) Pty Limited & Ors (1994) ATPR 41-363 at 42,723. 14 The French factors and the Heerey factors have been applied in numerous subsequent Federal Court decisions: see, for recent examples, Australian Competition and Consumer Commission v D M Faulkner Pty Ltd [2004] FCA 1666 at [53] ; Australian Competition and Consumer Commission v Ferndale Recyclers Pty Ltd [2004] FCA 1597 at [7] ; Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 3) (2005) 215 ALR 301 ( "ACCC v Leahy" ) at [32]---[33]. 15 It has been accepted for some considerable time that the principal object of s 76 penalties is deterrence, both specific and general: Trade Practices Commission v Mobil Oil Australia Ltd (1984) 4 FCR 296 per Toohey J at 298; TPC v CSR at 52,152; Australian Competition and Consumer Commission v George Weston Foods Ltd (2000) ATPR 41-763 at 40,986; NW Frozen Foods v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 294-295 (" NW Frozen Foods "). For a penalty to have the desired effect, it must be imposed at a meaningful level. Most antitrust violations are profitable. Accordingly, the penalty must be at a level that a potentially-offending corporation will see as eliminating any prospect of gain. This rule is so well entrenched that citation of authority is unnecessary. Moreover, as deterrence (especially general deterrence) is the primary purpose lying behind the penalty regime, there inevitably will be cases where the penalty that must be imposed will be higher, perhaps even considerably higher, than the penalty that would otherwise be imposed on a particular offender if one were to have regard only to the circumstances of that offender. 16 There has also been some debate as to whether the issue of punishment ought to also be considered: see Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) ATPR 41-562 at 43,810---43,811; ACCC v ABB No 1 at 42,936. In Australian Competition and Consumer Commission v Ithaca Ice Works Pty Ltd (2002) ATPR 41-851 at 44,543, the Full Court raised the issue of the dispute in relation to the role of punishment in imposing penalties. This proposition also raises for consideration the size of a contravening company, which has been regarded as a relevant consideration to take into account in determining what is an appropriate penalty to impose. One of those factors is the size of the corporation involved, since '[w]hat would deter a small company might have little effect on a very large one'. Plainly, if deterrence is the object, the penalty should not be greater than is necessary to achieve this object; severity beyond that would be oppression. Schneider's size and profitability doubtless explain why it did not dispute its capacity to pay any penalty that might reasonably be expected to be imposed and, to that extent, its size has already been taken into account. As I have said, from the point of view of deterrence, it is the nature of the contravening conduct that is the central determinant in determining an appropriate penalty. The size of a corporation may bear on the assessment of the seriousness of the contravening conduct, as when a large corporation has substantial market power which it uses to intimidate or cajole others to join in contravening conduct. Nevertheless it is necessary to bear in mind what is generally referred to as the parity principle. All other things being equal, similar conduct should be deserving of similar penalties. Of course, as the Full Court said in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission ... 'other things are rarely equal where contraventions of the Trade Practices Act are concerned'. It is also desirable to bear in mind the penalties that have been imposed in past cases. A dramatic departure from previous practice might be seen as representing unjustifiable disparity but may also demonstrate that a level or quantum of previous penalties may, now in the present circumstances under consideration, be regarded as inadequate. Conduct that affects the public, such as the anti-competitive behaviour that is outlawed by the Trade Practices Act , can never really be considered as anything other than serious. 22 The Commission submitted that large and wealthy corporations such as Safeway should expect high penalties, and that general deterrence is of particular significance as relatively few cases have considered the imposition of penalties for contraventions of s 46 of the Act . A contravention of s 46 of the Act is particularly serious where a substantial degree of market power is taken advantage of by a major and significant corporation in a market such as a market for food, which can have an impact on the purchases of thousands of consumers. More particularly is this so where the market power is exercised for the purpose of deterring competitive conduct by smaller operators who are competing for custom with the larger corporation. An exercise of a substantial degree of market power for the purpose of insulating a corporation from the effects of competition is to be condemned. 23 Safeway submitted that before deterrence can be a relevant factor, it must be found that the circumstances which gave rise to the contraventions merit deterrence. Further, the four separate incidents of conduct contravening s 46 of the Act occurred over a period of twelve months and the repetition of the conduct over that period of time warrants the application of a specific deterrent component in the penalties. 24 I do not accept Safeway's submission that because such conduct is unlikely to re-occur, deterrence does not need to be taken into account. Although it may be less likely that after this long and complex proceeding Safeway will again participate in the particular prohibited conduct, it is important to note that contraventions were found against Safeway with respect to five separate incidents, and not just one isolated incident. In any event general deterrence cannot be disregarded especially having regard to Safeway's size and relative position as a purchaser in the wholesale market and as a seller in the retail food market. 25 The Commission is correct in submitting that even if Safeway is unlikely to participate in similar conduct again, one of the main objectives of penalties is general deterrence. Regardless of any need to deter Safeway itself from again engaging in prohibited conduct, it is imperative to ensure that participants in the business and commercial community are made aware that contraventions of Pt IV of the Act are serious. Any penalties imposed should be significant enough to deter those who may be considering contravening the Act . 26 The Commission submitted that Safeway's contraventions of s 46 could only be regarded as extremely serious unlawful conduct. 29 The s 46 contraventions were extremely serious as they involved Safeway taking advantage of its market power for the purpose of deterring or preventing the plant bakers and the independent retailers from engaging in competitive conduct. Safeway's conduct in the four instances is only rationally explicable as the use of the leverage it had in the market to inflict pain on the plant baker concerned and thereby dissuade it from continuing to supply discounted bread to Safeway's local competitor. That may be so, but as the majority of the Full Court pointed out it was the purpose of each deletion which was decisive. 31 The Commission submitted that what was before the Court was not the case of a single isolated contravention. That is correct in the sense that there are five separate contraventions to be considered. However, those contraventions should not be seen as the implementation of a general policy. The Full Court did not regard the policy in respect of which I made findings as decisive of whether Safeway had contravened s 46(1) of the Act . The critical question posed by s 46(1) of the Act is whether Safeway took advantage of a substantial degree of power in the relevant market for one of the proscribed purposes. That question requires attention to be focussed on Safeway's actions and the purpose or purposes with which those actions were carried out. Clearly enough, the fact that a senior officer of Safeway devised a particular policy and had an identifiable purpose in doing so might have an important evidentiary bearing on the purpose or purposes for which Safeway engaged in conduct carried out in conformity with that policy. But whether Safeway's conduct was or was not by way of implementation of a preexisting policy cannot be decisive of whether it contravened s 46(1). Certainly it is not a necessary precondition to a contravention of s 46(1) that a corporation has implemented a predetermined policy of some kind. It was submitted that behind the judgment of the Full Court was the recognition that this was the imposition of statewide conduct. I do not consider that the majority of the Full Court put it so broadly. 33 Paragraph [338] of the majority's judgment in the Full Court deals with the conclusion that Safeway, in four instances, contravened s 46(1)(c). It is in the context of discussing the four incidents that the majority refers to the plant bakers and independent retailers. Its reason for doing so was to induce the plant baker to cease supplying discounted bread to an independent retailer in competition with a Safeway supermarket. I do not agree with the Commission's submission. It is not supported by the reasoning of the majority of the Full Court. 35 The majority of the Full Court does not go so far as to say that this was a term of trade that applied to all dealings with respect to the particular plant bakers but rather says " Safeway can be said to have imposed that term of trade in four of the nine instances . " I do not consider that on the basis of that finding of the majority of the Full Court, I can conclude that Safeway imposed such a term of trade generally, and as such, the conduct was statewide. I consider that it is appropriate that I only consider the four incidents in imposing penalties, recognising that they were separate incidents occurring over a twelve month period. 36 The Commission submitted that the contraventions extended beyond the limited geographical areas where each deletion occurred and beyond the temporal period of each individual deletion. The Commission cites pars [322]---[323] of the judgment of the majority of the Full Court in support of these submissions. I do not consider that this passage supports the proposition for which the Commission contends. Each of the four s 46 incidents must be considered as an incident where the effect of Safeway's conduct impacted on the particular plant bakers which were the object of Safeway's conduct and on the particular Safeway store from which the plant baker's products were deleted. 37 Safeway submitted that the contraventions had a limited geographical and temporal effect. That is true in the sense that the effect was not statewide and over a uniform period. Nevertheless the deletions had a distorting effect on the market in which each of the relevant supermarkets operated and they had a significant impact on the relevant plant bakers. 38 The period during which Safeway's conduct had an effect on the plant bakers in the wholesale market generally varied. 40 It is clear that plant bakers suffered economic loss. As the majority of the Full Court found at par [314], each loaf which was not baked and delivered to Safeway and sold to a consumer represented a return that was lost to the baker forever. By deleting a plant baker's products from a particular supermarket, Safeway was able to reduce the quantity of products sold by that plant baker. Just as refusal to supply a customer can indicate both the existence and use of market power (as in Queensland Wire), so can a refusal to acquire products from a supplier. Moreover, bread is a staple which is sold and consumed (both in the economic and literal sense) day by day. Each plant baker's loaf which was not baked and delivered to Safeway and sold to a consumer represented a return which was lost to the plant baker forever. This feature, accentuated by the over-deletions and loss of price-fighting bread sales, would increase the pressure on plant bakers to comply with Safeway's wishes: see the observations on the significance of perishable commodities in the exercise of monopsonistic power by R D Blair and J L Harrison, above, (at 313-314). 41 Conduct in contravention of s 46 is regarded by the Act as inherently anti-competitive. This is supported by the fact that such conduct cannot be authorised under the Act . The general effect of anti-competitive behaviour must be considered in imposing penalties in addition to the particular effect of the relevant transactions. 42 Safeway's conduct in the s 46 incidents exploited a critical feature of the wholesale bread market, the substantial over-capacity in bread baking. This was known to Safeway through Mr Brookes. This over-capacity enabled Safeway to engage in the contravening conduct which was a deliberate use of its market power. Safeway did not delete simply for the sake of doing so or because of any problems with quality of product, reliability of supply or other legitimate business considerations. It is clear that in the four instances with which we are concerned, Safeway's deletion of the plant baker's products was directed to the plant baker's conduct in supplying discounted bread to Safeway's retail competitor. A firm without market power would not have pursued a policy of deletion because to do so would have produced harm for itself without any countervailing benefit. A firm without market power would commercially be compelled to stock the full range of products in order to satisfy consumer demand. The only consequence of the deletion would be the adverse reaction of customers, of which there was ample evidence. As we have discussed, the fact that the deletions had adverse consequences for Safeway strongly suggests that there must have been a rational purpose underlying its conduct. That purpose could only have been to persuade the plant bakers to cease supplying discounted bread to the independent retailers and, in turn, to end discounting by those retailers. This was because, among other things, Safeway was considered by Woolworths to be a division of Woolworths. For example, Woolworths' 2004 Annual Report described its supermarkets division as "trading as Woolworths and Safeway". Accordingly, the Commission submitted that the position of the parent company was relevant to the quantum of penalty having regard to the manner in which Safeway was incorporated into the Woolworths corporate and business structure. 47 In the present circumstances, I consider it of little relevance to the imposition of the penalties to take into account the fact that Safeway is a wholly-owned subsidiary of a major public company. Safeway is a large company in its own right. At the relevant time it operated some 130 supermarkets in Victoria and Albury. It employed approximately 18,000 to 20,000 employees and had some 28,000 product lines and 1,500 suppliers. However, I do not regard the size of Schneider's parent company, or of the group of which it forms part, to be a relevant factor in the present case for three reasons. First, it is not suggested that the parent had any involvement in Schneider's contraventions. Second, Schneider did not put in issue its capacity to pay any penalty that may be imposed. Third, it is clear that Schneider operates a substantial business in Australia in its own right. In 2000 it employed 420 employees and had an annual turnover in excess of $200 million. Since 1996, other than in 2000, it has regularly earned net annual profits before tax well in excess of $18 million. Thus, the present case is not one in which it is necessary to determine the circumstances in which the size of a parent of an offending subsidiary will be relevant to the quantum of the penalty that is appropriate. 49 The Commission submitted that the involvement of Mr Brookes, merchandise manager for Safeway, in the four s 46 incidents was an exacerbating factor that the Court ought to take into account in imposing penalties. The Commission said that Mr Brookes was directly involved in the Frankston incident as he made the decision to delete. 50 In relation to the incidents at Frankston, Albury and Preston Market, Mr Jones, category manager, was the actor for Safeway who undertook the critical conduct giving rise to the contraventions. Safeway's proprietary bread category was the direct responsibility of Mr Jones. Whilst the position of category manager was not regarded as part of senior management, it was a position of importance and responsibility, given the tasks for which the category manager was responsible. At the relevant times, Mr Jones was responsible for buying and merchandising the designated products sold by Safeway in Victoria, negotiating promotions, recommending whether new products should be ranged and existing products should be discontinued or deleted, and the marketing issues affecting products in the category such as pricing and shelf management. Mr Jones reported to Mr Brookes, and the line of authority was directly to senior management. 51 It is clear that Mr Jones had the authority to delete products. Although Mr Jones may not be described by Safeway as being in a position of senior management, he was a senior staff member and in a management position in the sense that he had authority to make decisions which impacted significantly on the operations of Safeway in all its supermarkets. Although it may have been Mr Jones' purpose that was attributed to Safeway with respect to the Frankston incident, Mr Brookes participated in and approved of the decision to delete at that store. 52 There was no finding as to whom on behalf of Safeway directed the deletions in the Cheltenham and Vermont incidents. The Commission submitted that those incidents occurred as part of the practices that had been directly implemented by Mr Brookes and Mr Jones at Frankston in 1994. In those circumstances, it is appropriate that I take into account that persons in management positions, senior or otherwise, participated in the contraventions. 54 I turn to the Preston Market incident. The Full Court held that on the findings made, I erred in concluding that no arrangement or understanding had been made between Safeway and Tip Top. The making or reaching of that arrangement or understanding was authorised by Mr Jones for Safeway and Mr Gunton for Tip Top. Mr Feldgen and Mr Lovett had the necessary meeting of minds, as did Mr Jones and Mr Gunton. 56 As a result of the Preston Market incident consumers paid more for bread at the Preston Market stall and were denied the benefit of competition in relation to branded bread. This incident was inherently anti-competitive, although the extent of the anti-competitive consequence cannot be quantified. That does not alter the significance of the contravention. The important point is that price-fixing arrangements and understandings of the kind made and given effect to in the present case have been treated by the legislature as per se contraventions of the Act because their inherently anti-competitive nature inevitably harms consumers and has a deleterious and pernicious effect on economic efficiency. In relation to price fixing agreements, the law itself assumes that the purpose and/or the effect of the proscribed behaviour is to "substantially lessen competition": s 45A of the TPA and see Brunt Economic Essays on Australian and New Zealand Competition Law (2003) at 133. Given that assumption, it cannot be a factor in mitigation of a pecuniary penalty for engaging in price fixing that no such purpose or effect occurred in the particular case. If it is true that the uncompetitive purpose and effect did not result in a measurable or ascertainable loss to a particular individual, that is necessarily fortuitous and coincidental. It is not a matter of mitigation. Further, as already noted, the reason for the prohibition is the effect of the behaviour on the overall market, not on a particular transaction. Collusive bidding practices are unacceptable whatever their effect in a particular transaction. Those involved in them must expect significant penalties. 59 The Commission submitted that Safeway did not have any substantial trade practices compliance program in place, and to the extent it had any at all, it was ineffective. The Commission contended that Safeway did not call evidence or tender any contemporaneous documents that showed any substantial or systematic program of compliance at the time of the contraventions. 60 At relevant times Safeway did not have any substantial or systematic compliance program in place. It did not appear that employees at the level of Mr Jones had any significant training in, or understanding of, trade practices law, nor was there a culture of compliance. Mr Jones acknowledged in cross-examination that he never thought that Safeway should not try and influence the prices at which plant bakers should try and sell bread to its customers. He said that it was never an issue that had come to his mind. Yet he was the category manager who dealt with suppliers and made agreements for the supply of products in respect of around 130 supermarkets and in respect of a number of categories of which bread was only one. 61 Mr Brookes only recalled attending two trade practices seminars. Further, the Commission contended that it was significant that Mr Brookes recognised that a consequence of the "policy" was that plant bakers might react against independent retailers. 62 Safeway led evidence that it had a substantial compliance program in place at the time of the contraventions which had been actively implemented. Although the contraventions occurred despite the existence of Safeway's compliance program, it does not follow that the program was completely ineffective. Mr Jones obviously knew that price-fixing was contrary to the Act , and appreciated the significance of discussing prices. 63 Safeway's evidence as to its trade practices compliance program and trade practices training, adduced through Mr Gerard Rohl, at relevant times a corporate lawyer employed by Woolworths Ltd, disclosed an ongoing formal trade practices compliance program since 1988. A Compliance Program Manual was prepared and it dealt with, inter alia , price fixing agreements and misuse of market power. 64 However, prior to 1996, trade practices compliance training was only given to senior management and relatively few senior employees. It was only after 1996, after the contraventions had occurred, that an updated compliance program was extended to all levels of management. From 1993 to 1996, save for one memorandum, there appears to have been no development of, or addition to, Woolworths' or Safeway's trade practices compliance program until March/April 1996. At that time, Woolworths acknowledged that its trade practices compliance program needed to include direct training for middle and lower levels of employees, in addition to the senior management to whom training had been provided directly prior to that time. The fresh program was designed to have increased coverage to all management levels, covering in excess of 1,500 employees, including store managers and category managers. 65 The key points the Court needs to consider are the nature and extent of the program, its effectiveness and whether it permeated through the corporation. It was only in 1996 that an updated compliance program was introduced and training was provided to all levels of management. In circumstances where those persons in management positions would already have been in situations, likely on a daily basis, where knowledge of trade practices was essential I consider that the compliance program was lacking in the period, at the least, up until 1996. Any program that was in existence could certainly not be said to be comprehensive or appropriate for an organisation such as Woolworths/Safeway. 66 It is important to also consider whether any program that did exist was successfully implemented. Of crucial significance in this regard is that the Court is not dealing with one isolated incident in the present case. Five contraventions of the Act have been found. That alone is indicative that any compliance program in place had not permeated through the organisation. 67 A more comprehensive compliance program is presently in place and has been in place for some time. This is why the Commission does not seek an injunction or a non-punitive order under s 86C of the Act . However, the present existence of a comprehensive program does not negate the fact that an inadequate program was in place at the time of the contraventions. 68 It is appropriate that the Court take into account and allow a discount on penalty, where appropriate, where a party has admitted the contraventions instead of forcing the Commission to engage in lengthy litigation. In the present case Safeway contested every legal and factual issue. This does not mean that a more significant penalty is to be imposed in respect of the established contraventions. Rather it means that a discount on penalty, otherwise available, is not available. 69 Safeway submitted that it should not be penalised more severely than the total penalties imposed on George Weston Foods Limited ("Tip Top") in this proceeding: Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 75 FCR 238. I reject that submission. The only penalty imposed on Tip Top that could be relevant to any penalties imposed on Safeway is the contravention of s 45 at Preston Market. Tip Top's other contraventions were for contraventions of s 48 of the Act . There were no allegations of breach of s 46 as against Tip Top. It would be plainly wrong to compare penalties in circumstances where the contraventions relate to different sections of the Act and different types of conduct. 70 Tip Top was ordered to pay $300,000 in respect of the making of the price-fixing agreement and $450,000 in respect of the implementation of it. However, Safeway's contravention was substantially more serious than Tip Top, given that it was Safeway's conduct which brought about the events which led to the contravening conduct. There should not be such an inequality as would suggest that the treatment meted out has not been even-handed: cf the criminal 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. 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. In the present circumstances there are significant differences between the position of Baker Bros and its directors on the one hand and SIP and Mr Ippaso on the other. In particular, Baker Bros admitted its contraventions at a very early stage of the proceeding, as did its directors in relation to their participation in those contraventions. Baker Bros was a much smaller company than SIP by reference to factors such as financial resources and commercial resources generally and SIP's market share between 1994 and 1998 and its turnover were significantly greater than Baker Bros' turnover. Further, Baker Bros and its two directors actively co-operated with the Commission in finalising the case against them and assisting it in prosecuting its case against SIP and Mr Ippaso. Although SIP and Mr Ippaso co-operated with the Commission when s 155 notices were served on them, they contested the proceeding. They are not to be penalised for so doing but they are not entitled to any discount in respect of co-operating with the Commission so as to obviate the necessity for a trial. Further, although Baker Bros committed the contraventions, it did so only after significant commercial pressure was placed upon Messrs Baker by Mr Ippaso. The role played by Mr Ippaso and SIP in procuring and implementing the March 1994 agreement was significantly different in that it was the initiating factor and the factor which drove the negotiations which culminated in the agreement. This difference warrants SIP and Mr Ippaso being given significantly and substantially greater penalties than Baker Bros and their directors. On one view comparing their positions is akin to comparing apples with oranges. In particular, Tip Top admitted the contraventions at an early stage and co-operated with the Commission and so became entitled to a significant discount in the penalties to be imposed. Further, the penalties imposed upon Tip Top were based on an agreed statement of facts, which were not tested by cross-examination. It is inappropriate to use those facts, which were agreed, as relevant to Safeway's position in this penalty hearing. 75 The allegations against Tip Top were contraventions of ss 45 and 48 , and not s 46. In the four incidents, Safeway's purpose was to deter or prevent supply, whereas Tip Top did not have such a purpose. 78 The Commission submitted that having regard to the authorities a high penalty is generally appropriate for contraventions of s 46. The Commission referred to the cases of Trade Practices Commission v Carlton United Breweries Ltd (1990) 24 FCR 532 , TPC v CSR, Australian Competition and Consumer Commission v Rural Press Ltd (2001) ATPR 41-833, Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd No 2 (2002) 201 ALR 618 (and on appeal: Universal Music Australia Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 193 ; (2003) 131 FCR 529) and Australian Competition and Consumer Commission v Fila Sport Oceania Pty Ltd (Administrators Appointed) (2004) ATPR 41-983 (" ACCC v Fila ") in support. 79 Safeway submitted that if the penalties sought by the Commission are imposed, such penalties would be in stark contrast to those imposed in the ACCC v Fila decision, given that the contraventions in that case were more damaging, intentional, sustained and widespread. A dramatic departure from previous practice might be seen as representing unjustifiable disparity but may also demonstrate that a level or quantum of previous penalties may, now in the present circumstances under consideration, be regarded as inadequate". 80 There are several difficulties in the application of the parity principle. The first is that all of the authorities referred to by the parties differ in some way, and in some instances many ways from the present circumstances. I do not consider that it is useful to use any one case as a determinant of the quantum of penalty for another. 81 Secondly, a number of the authorities referred to were decided when the maximum penalty for corporations for contraventions of ss 45 and 46 was $250,000. This is in contrast to the maximum penalty of $10 million that is now available. If an appropriate case were identified, the question arises as to how one compares a penalty that was imposed at a time when the maximum penalty was different. The Commission approached the issue on a percentage basis, and identified what percentage of the maximum penalty was imposed. I doubt that this is the correct approach, as the Court is not engaged in a mathematical exercise in which precise calculations are derived from specified or identified integers. Rather the Court is engaged in a weighing and balancing exercise. 82 The "totality" principle requires the Court, after determining an appropriate sentence or penalty for specific offences or contraventions in accordance with proper principles, to review the total of the sentences or penalties and consider "whether the aggregate is 'just and appropriate'": Mill v The Queen [1988] HCA 70 ; (1988) 166 CLR 59 at 63, approving of the description of the totality principle in Thomas, Principles of Sentencing , (2nd ed) (1979) pp 56-57. The totality principle finds its genesis in the criminal law but it has also been applied in the context of fixing penalties for contravention of the Act : Trade Practices Commission v Allied Mills Industries Pty Ltd (1981) 37 ALR 256 at 258; ACCC v McMahon at [90]. However, an application of the totality principle in the present circumstances must take into account, and make an allowance for the fact, that there are a number of contraventions of the Act which did not arise out of one, or a single, plan, arrangement, proposal or sequence of conduct. This is not to say that the determination of the appropriate penalties should be disproportionate to the severity and significance of the contraventions established. The total of penalties fixed for separate and discrete contraventions of Pt IV of the Act should not be disproportionate to the severity and significance of the various contraventions which have been established. Nevertheless, it must be remembered that there are separate and discrete contraventions not linked in point of time or causation. 83 In having regard to all of the above factors, I have nevertheless borne in mind the totality principle. That is, I have ensured that having determined an appropriate penalty for each contravention, I have, as a check considered whether the aggregate is appropriate for the various acts of contravening conduct involved: McDonald v The Queen (1994) 48 FCR 555 and Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) ATPR 41-562 at 43,817. I do not, however, accept Safeway's submission that the penalties to be imposed ought to be no greater than those imposed upon Tip Top. Having regard to all of the factors explored above, and having particular regard to the seriousness, deliberateness, and recurring nature of the four s 46 contraventions and their effect on the competitive process, and the relevant periods of deletion of bread products, I consider that the penalties imposed on Safeway ought to be substantial and reflective of the need, in particular, for general deterrence. This submission was made on the basis that Mr Jones accepted liability for the Preston market incident, and the Commission did not pursue Mr Jones in relation to Safeway's contraventions of s 46. When a court is presented with an agreed penalty, the proper task is to determine whether the proposed penalty comes within the permissible range: NW Frozen Foods at 290-291 per Burchett and Kiefel JJ and Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd (2004) ATPR 41-993 per Branson, Sackville and Gyles JJ at 48,627. 88 I have considered whether it is appropriate to give Mr Jones any discount in penalty by virtue of his admission of the contravention at Preston market. Once the Full Court made its findings with respect to Mr Jones' role in the Preston market incident, Mr Jones had little option but to admit liability. In those circumstances, it cannot be said that Mr Jones' admission has saved any substantial amount of court time. 89 There was no evidence before me as to Mr Jones' financial position. Accordingly I am unable to take into account the ability of Mr Jones to pay any particular penalty. 90 I do however consider it relevant for specific deterrence that Mr Jones has been subject to these proceedings for ten years. I have little doubt that the experience will act as a deterrent for Mr Jones in engaging in similar conduct in the future. I must also, however, consider the element of general deterrence. The commercial community needs to be aware that persons in management positions, whether they are senior management positions or middle management positions, must observe their obligations with respect to the Act . Mr Jones was in a position of authority and responsibility. His conduct was deliberate and serious. In those circumstances, and having considered all other relevant factors, I consider that the proposed penalty of $30,000 is not within the permissible range. I consider that the lower end of the permissible range is no less than $50,000 and in all the circumstances I consider that a penalty of $50,000 should be imposed on Mr Jones. I certify that the preceding ninety-one (91) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg.

pecuniary penalties misuse of market power price-fixing arrangement factors relevant to imposition of penalty whether participation by senior management application of totality principle where separate but related incidents whether parent company relevant to capacity to pay whether trade practices compliance program effective whether parity with penalties imposed in related decision [2006] fca 21 trade practices

These orders are opposed by the first and second cross-claimants ('FKP' and 'FGUP', respectively). FKP is a 'federal treasury enterprise', being a commercial organisation which holds property settled on it by the Russian Federation 'by right of operational management'. FGUP is a 'federal State unitary enterprise', being a commercial organisation which holds property settled on it by the Russian Federation 'by right of economic management'. In her affidavit Ms Mozgonenko confirms the foregoing (at [11] and [12]) and explains what is meant by the terms 'by right of operational management' and 'by right of economic management' (at [13] --- [19]) and Mr Tsyplakov, in his affidavit, confirms that he 'substantially agrees' with Ms Mozgonenko on all these matters (at [23]). 5 It is also common ground that FKP did not exist at the time of the centrally disputed events in this case, which took place in 1990 --- 1992. FKP was created by Order of the Government of the Russian Federation in 2001 and, according to Ms Mozgonenko, was first registered as a legal entity in the Russian Federation on 9 April 2002. It also seems to be common ground that FGUP was first registered as a legal entity in the Russian Federation on 18 April 2001 but that is where the common ground ends. FGUP contends, according to the further amended cross-claim, that it did exist at the relevant time, albeit in the form of Sojuzplodoimport, and that it (FGUP) is the legal successor to that entity. Spirits disputes this contention and contends that following the lawful transformation of Sojuzplodoimport into VAO-SPI around 1991 and 1992, VAO-SPI became the legal successor to Sojuzplodoimport, including its assets and liabilities which vested in VAO-SPI, and Sojuzplodoimport ceased to exist from approximately 20 January 2002. 6 Common ground aside, Spirits contends that the factual background should also be understood in the context of what is set out in [7] to [12] below. 7 The basis for the claims made in the cross-claim --- for cancellation of certain Australian trade mark registrations ('Australian Trade Marks') or for rectification of the Trade Marks Register in relation to the Australian Trade Marks --- lies in events which occurred around the time of the dissolution of the Soviet Union in 1991, a decade prior to the creation of FKP. FKP and FGUP's claims concern, in particular, challenging the validity of Spirit's reliance on the transformation of a State-owned corporation (Sojuzplodoimport) into a private corporation ('VAO-SPI') between 1990 and 1992 and the succession of assets (including trade marks) from Sojuzplodoimport to VAO-SPI. 8 Notwithstanding that (on Spirit's case) the transformation of Sojuzplodoimport into VAO-SPI occurred over a decade ago, it seems that the dispute which precipitated the present proceedings in Australia did not originate until 2000, when the President of the Russian Federation issued an instruction to senior officers of the Russian Federation 'to take urgent measures to reinstate and protect the State's rights over the intellectual property in the area of production and circulation of vodka products, and to identify and bring legal action against the persons involved in the infringement of those rights': Tzyplakov [44], Exhibit MT7. Spirits contends that the present case, in effect, is but a manifestation of that ukase; and FKP and FGUP are but amanuenses of its implementation. 9 Since 2000, the Russian Federation, acting through its appointed representative FKP, has taken procedural steps in several countries with the aim of wresting ownership of foreign registrations for trade marks from their present owner, Spirits: Tzyplakov [22], Exhibit MT4. The claims in relation to the Australian Trade Marks were commenced in November 2004. The other international cases are also still pending. All are strongly contested by Spirits. 10 FKP has represented on several occasions that the claims brought in the Australian proceedings and in related overseas proceedings are brought on behalf of the Russian Federation . Examples are referred to in the affidavits of Mr Swinson [11], Tzyplakov [18] --- [20], [22], Annexure D, Exhibits MT2 and MT4. [FKP] has been appointed by the Government of the Russian Federation to recover and protect the rights of the Russian Federation in relation to trade marks for alcoholic products outside the Russian Federation, including by conducting court proceedings. [FKP] is authorised by Sojuzplodoimport to act on its behalf in proceedings commenced outside the Russian Federation, and particularly in relation to the protection of Sojuzplodoimport's rights in trade marks. [FKP] was established and appointed by the Government of the Russian Federation to hold and to use certain trade marks for the benefit of that Government, including the trade marks STOLOCHNAYA and MOSKOVSKAYA, the Stolichnaya Label Mark, the Moskovskaya Label Mark and the House Mark, in connection with the export of Russian vodka. The phrase 'use and dispose of (exclusive of the right to assign)' is probably better rendered in English as 'make use of, at discretion, but not surrender, relinquish or transfer'. 12 Russian State bodies have also adopted the position that the Russian Federation is the owner of the trade marks in Russia and has rights in respect of the trade marks outside Russia: Tzyplakov [21], Exhibit MT3. 13 In response, FKP and FGUP say that the relevant context needs to be understood by reference to the common ground referred to in [4] and [5] supra, but also by reference to the matters set out in [14] to [17] below. 14 Although no precise analogy can be drawn, FKP and FGUP submit that they are not unlike State-owned corporations of the kind regularly established by governments in Australia, which hold particular assets for the benefit of the State or carry out particular functions or activities which might otherwise be carried out by the State, a practice which has been developed in part for reasons of commercial efficacy. Such State-owned corporations operate independently of the State, but, in a general sense, are subject to the overall direction and control of the State. 15 Little weight should be given to the statements relied on by Spirits and referred to in [10] supra having regard to the particular context in which they are made. In substance, they are no higher than the matters pleaded by FKP and FGUP in the further amended cross-claim. 16 Ms Mozgovenko's evidence, which is unchallenged in this respect, also established that FKP and FGUP do not hold, and generally do not have, the capacity under Russian law to compel production of documents held by the various ministries, agencies and instrumentalities of the Russian Federation which were previously identified in Spirits' proposed categories (save, of course, to the extent that copies of such documents are actually held in the files of FKP or FGUP). 17 In effect, the orders now sought by Spirits would require every ministry, agency and instrumentality of the Russian Federation, not just FKP and FGUP, to undertake searches for documents in numerous, broadly defined categories, for the purposes of giving discovery in these proceedings. Even aside from questions of power, a lack of evidentiary support and the inappropriateness of granting such orders against an entity outside the jurisdiction, the orders are inappropriate because of their sheer scope. Further, the application is premature, in circumstances in which FKP and FGUP --- the entities charged with dealing in and conducting proceedings in relation to the trade marks in question --- have yet to give inter partes discovery. 20, [1991] 2 Lloyd's Rep. 508, cf James Nelson & Sons Ltd v Nelson Line (Liverpool) Ltd [1906] 2 KB 217. (ii) By Decree No 494 of the Government of the Russian Federation dated 4 July 2002 the right to use and dispose (without the right to assign) the Russian Trade Marks in the name and on behalf of the Russian Federation was granted to FKP. (iii) Pursuant to Order No. . 860 of the Government of the Russian Federation dated 30 December 2005. FKP's authority to represent the Russian Federation in these proceedings is presently due to expire on 1 January 2007. (v) The representations and pleadings in respect of FKP referred to in [10] supra. (vi) The pleadings in respect of FGUP referred to in [4] of the further amended cross-claim, in particular that it is the legal successor to Sojuzplodoimport, an instrumentality forming part of the former Union of Soviet Socialist Republics (USSR). (vii) FKP only came into existence in 2001 and only became a legal entity separate from the Russian Federation on 9 April 2002. (viii) FGUP only became a legal entity separate from the Russian Federation on 18 April 2002 and if it did exist back in 1990 --- 1992 in the form of Sojuzplodoimport, it did so as part of the USSR and subsequently as part of the Russian Federation, at least until 18 April 2002. Such State-owned corporations do not hold their assets for the benefit of the State, rather they hold them in their own right albeit that such corporations may be majority, or even wholly, owned and controlled by the State. It is only upon the dissolution of such wholly owned corporations that ownership of their assets would revert to the State. In the case of FKP and FGUP, they held no assets other than assets they hold on behalf of, or for the benefit of, the Russian Federation. I do not regard this alternative basis as, in substance and effect, a request for third party discovery pursuant to O 15A r 8 of the Federal Court Rules . It is a totally discrete basis founded on s 23 of the Federal Court Act ; wide enough to cover orders requiring the discovery, production and inspection of documents: Commonwealth v Northern Land Council (1991) 30 FCR 1 per Black CJ, Gummow and French JJ; see also Gambro Pty Ltd v Fresenius Medical Care Australia Pty Ltd [2002] FCA 581 ; at the same time, accepting that the Court has a general power under s 23 to prevent the abuse or frustration of its processes in relation to matters coming within its jurisdiction ( Hunter v Leahy [1999] FCA 1075 ; (1999) 91 FCR 214) or where it is otherwise necessary to protect the integrity of the processes of the Court: CSR Ltd v CIGNA Insurance Australia Ltd [1997] HCA 33 ; (1997) 189 CLR 345 at 391 --- 392; Cardile v LED Builders Pty Ltd [1999] HCA 18 ; (1999) 198 CLR 380. 23 On the view I take, it is unnecessary to address the order sought in par 4 of the Notice of Motion on the basis of O 15A r 8 of the Federal Court Rules , but in deference to the submissions that were made, I think I should. That rule enables the Court to 'order that a person who is not a party and in respect of whom it appears that the person has or is likely to have or has had or is likely to have had in the person's possession any document which relates to any question in the proceeding shall make discovery to the applicant of any such document'. 24 The reference to 'a person who is not a party' is undoubtedly a reference to a person who is not a party of record and that could include not only a person who/which is the 'real' applicant/plaintiff, but any person who is not a party of record. Of course, the Court would need to be satisfied that the other requirements of the rule are met before acting upon it. 25 FKP and FGUP submitted that an order for third party discovery ought not to be granted against a foreign entity which is not a party to the proceeding and is not otherwise subject to the jurisdiction of the Court. They point out that there is ample authority in the context of applications for leave to serve subpoenas outside the jurisdiction for the proposition that such leave should not be granted in respect of a non-party foreign entity 'except in the most exceptional circumstances': Stemcor (Australasia) Pty Ltd v Oceanwave Line SA [2004] FCA 391 at [12] per Allsop J. See also Arhill Pty Ltd v General Percival Company (1991) 23 NSWLR 454; Aetna Pacific Securities v Hong Kong Bank of Australia Ltd (20 April 1993, Supreme Court of New South Wales, Giles J, unreported). The cases suggest, they submit, that this will particularly be the case where (as here) the foreign jurisdiction in question is a civil law jurisdiction: Arhill . 26 Underlying this principle is the view that service of an order upon a foreign entity demanding that it do something in Australia on pain of punishment in proceedings to which it has not submitted is an invasion of the foreign territory's sovereignty: Stemcor . In addition, such a subpoena, even if it is served, is not capable of enforcement: Stemcor . The position, they submit, is no different in principle in the case of an order for third party discovery pursuant to O 15A r 8; the order compels production of documents, disobedience of it would give rise to contempt, and leave is required in order to serve it outside the jurisdiction: See O 8 r 3. Compare Arhill . None of the cases included in Spirits' list of authorities, they observe, involved the making of an order for third party discovery against a foreign entity. 27 Finally, it was submitted that these considerations, and particularly the concerns about the invasion of sovereignty, are heightened given the particular nature of the order sought in the present case: discovery by the Russian Federation, a foreign State. 28 While these submissions may well have considerable force where the non-party person sought to be subject to an order under O 15A r 8 of the Federal Court Rules is a foreign entity, particularly a foreign State, that force is undermined in the face of a finding that the foreign entity is the 'real' applicant/plaintiff and the party or parties of record are but 'nominal' applicants/plaintiffs. None of the cases to which I was referred by FKP and FGUP had this particular feature. 29 As I am satisfied that the other requirements of O 15A r 8 are met in the present case, it is supportive of the order sought in the present case. However, this should not be read as indicating the form of the order I think should be made. There are other matters which need to be considered before formulating the final terms of the order and I refer to these at [36] below. 30 On the conclusion I have reached, it is not necessary that I deal with the motion insofar as it seeks an order in terms of par 5 of the amended notice --- a Sabre order --- requiring FKP and FGUP to take steps to obtain the documents, within the listed categories or as otherwise ordered by the Court, in the possession, custody or control of the Russian Federation, and an order in terms of par 6 thereof for the provision of such documents to Spirits together with verifying affidavits. Nevertheless, again in deference to the submissions that were made, I should indicate why, had it been necessary to consider this aspect of the motion, I would have been minded to dismiss it. 31 First, there must be a real likelihood that the party, in this case FKP and FGUP, who is to take steps to obtain access to and discover the documents which are in the possession, power or control of a third party, would be given access to the documents upon request: See Sabre at 432 --- 433. This likelihood must be established by evidence: Gambro at [8], [17] --- [19]. In the present case, Spirits has made no attempt to establish this. There is nothing in the evidence from which the inference could be drawn that any documents within the very broad categories requested by Spirits would be provided by the Russian Federation or its ministries, agencies and instrumentalities. 32 Second, there must be a likelihood that the documents sought are in fact in existence in the possession of the third party. It may be accepted for the purpose of argument that at least some documents sought by Spirits are held somewhere within the many ministries, agencies and instrumentalities of the Russian Federation; and that some such documents may be so held. But the form of order does not identify the relevant ministries, agencies and instrumentalities which are thought to be likely to hold such documents. It ought to do so, by reference to the particular kinds of documents in each instance. 33 Third, the form of order in par 5 is otherwise inappropriate. In particular, the word 'reasonable' in the phrase 'take all reasonable steps' has been omitted from the usual form of order. Further, I agree with the submissions of FKP and FGUP that it would be preferable for any such order to set out explicitly the steps which, if taken, would satisfy the order. This is particularly so given the potentially broad range of documents the subject of the order and the broad range of ministries, agencies and instrumentalities that may be subject to it. 34 Finally, such an order should be considered, if at all, only after inter partes discovery has taken place, based on appropriate evidence as to the likelihood of existence and provision of documents, and by reference to far more targeted and specific requests for documents, consistent with the authorities on such orders. 35 For these reasons, if it had become necessary, I would have dismissed this part of the motion. 36 At this stage, I am not convinced that the discovery that might be given by the Russian Federation needs to be as comprehensive as '... all documents falling within the categories set out in the schedule to the Notice of Motion'. It may be that I can be persuaded, in the interests of doing justice between the parties, that discovery by the Russian Federation needs to be that comprehensive but I would first want to hear the parties on the matter. It may be that the parties can agree more confined categories, but if not, I will hear the parties prior to formulating the precise terms of the order. 37 I propose to stand the motion over to a date to be fixed to hear the parties on the categories of discovery that might be given by the Russian Federation and how the orders to give effect to these reasons might be formulated.

discovery and interrogatories where discovery sought against non-party foreign state where inter partes discovery yet to take place whether discovery available pursuant to rules or otherwise whether sabre order appropriate procedure

On 21 October 2004, whilst still employed, she made a complaint of discrimination occurring over a period of some four years to the Human Rights and Equal Opportunity Commission. The discrimination was alleged to have been carried out by the first respondent, Michael Brungs, an employee of the second respondent. On 20 April 2005, the complaint was terminated. On 17 May 2005, the applicant filed an application (Form 5) and claim (Form 167) under s 46PO of the Human Rights and Equal Opportunity Commission Act 1986 (Cth) in the Court. On 28 July 2006, Tamberlin J dismissed the applicant's claim pursuant to both O 35A r 3(1) and O 20 r 2 of the Federal Court Rules ( Sheikholeslami v Brungs [2006] FCA 933). The applicant was ordered to pay the costs of the respondents on a solicitor/client basis. The applicant seeks leave to appeal from the dismissal of the proceeding and the order for costs. 2 Tamberlin J was the docket judge and had management of the proceeding from its inception. Tamberlin J reserved his decision, having had the benefit of argument from counsel for the respondents and counsel for the applicant, although the applicant had represented herself up to that time. His Honour referred to authority and recognised that dismissal of proceedings on either basis required considerable restraint and would be ordered sparingly. As to O 35A r 3(1), his Honour applied the principles outlined by the Full Court in Lenijamar Pty Ltd and Others v AGC (Advances) Limited (1990) 27 FCR 388. His Honour concluded that the history of non-compliance by the applicant was such as to indicate an inability or unwillingness to cooperate with the Court and the other party in having the matter ready for trial within an acceptable period. His Honour took the view that the way in which the litigation had been conducted by the applicant rendered it impossible for the respondents to meaningfully address any case against them. There had been a persistent failure to identify any specific incident which had any connection to discrimination. His Honour was also satisfied that the way in which the proceeding had been conducted amounted to an abuse of process under O 20 r 2, such that the process was an instrument of injustice or unfairness to the respondents. An order for costs on a solicitor/client basis was founded upon the same findings. 3 Counsel for the applicant recognised the difficulty of upsetting an interlocutory judgment of this kind concerning matters of practice and procedure by the docket judge having an intimate knowledge of the progress of the case. It commenced with a detailed examination of the procedural defaults found by Tamberlin J and a submission that there was no proper basis for a number of those findings. Suffice to say that, for the purposes of this application, there is an arguable case that a number of the defaults either did not occur or are explicable. Investigation of those issues by a Full Court would involve considerable time and effort and would involve no issue of principle. Even if established, the result is unlikely to be different. 5 One question of potential importance is whether or not it is arguable that the finding that there had been a persistent failure by the applicant to identify any specific incident which had any connection with discrimination was wrong as that was the most significant basis upon which the decision was made. It is submitted that the material filed by the applicant with her original application to the Court did specify particular instances of discrimination. Upon examination, that material does not specify particular instances of discrimination in the sense used by Tamberlin J. 6 It was submitted that Tamberlin J did not take into account the fact that the Court in these matters is not bound by technicalities or legal form (s 46PR of the Human Rights and Equal Opportunity Commission Act 1986 ). I do not regard the judge as having been concerned with technicalities or legal form but rather with the failure of the applicant to state her case in a manner which could be grappled with by the respondents and dealt with by the Court. 7 It was also submitted that the Court had not taken into account the fact that the applicant had been unrepresented until the notice of motion in question. It was submitted that coping with issues such as particulars, discovery, framing a case and responding to a subpoena place an unrepresented litigant at a significant disadvantage. The difficulties faced by an unrepresented litigant are well understood, but so are the difficulties of a respondent to a claim brought by an unrepresented party who cannot or will not comply with the ordinary rules. The application was hardly precipitate. The proceeding had been on foot for more than 12 months. 8 It was submitted that Tamberlin J failed to take into account the fundamental objective of Court process, being to decide cases brought to the Court ( The State of Queensland and Anor v JL Holdings Pty Limited [1997] HCA 1 ; (1997) 189 CLR 146 at 154). The judge was conscious of the need to sparingly exercise the powers that he did and had given the applicant every opportunity of outlining her case, over many months. 9 It is also put that the judge erred in failing to consider the other powers of the Court to sanction non-compliance such as the use of costs orders. That argument does not meet the fundamental nature of the problem found by Tamberlin J. 10 It was submitted that the circumstances were not within those recognised as being appropriate for the grant of indemnity costs ( Colgate-Palmolive Company and Anor v Cussons Pty Limited (1993) 46 FCR 225; Re Wilcox; Ex parte Venture Industries Pty Ltd and Others (No 2) (1996) 72 FCR 151). I can see no arguable error of principle in the award of costs on a solicitor/client basis, bearing in mind the basis of the order of dismissal, the effect of which was that the proceeding had never been in appropriate form. 11 One aspect of the matter dealing with potential injustice to the applicant requires consideration, although it was not drawn to the attention of Tamberlin J, that is, the time limit for the commencement of the proceedings pursuant to the Human Rights and Equal Opportunity Commission Act 1986 (s 46PH(1)(b) and s 46PO(2)). If the result of the order dismissing the proceeding is that the applicant right to litigate would be lost, then there would be a lower practical threshold for the grant of leave. However, the Court can extend the time for commencing a proceeding and, subject to issues as to costs, it is difficult to imagine that time would not be extended if a properly framed claim was ready for prompt filing. 12 In my opinion, there is not sufficient doubt about the judgment in question to warrant the grant of leave to appeal, taking into account the potential effect upon the interests of the applicant. The motion is dismissed with costs.

proceeding dismissed for non compliance with orders and as an abuse of process leave to appeal refused practice and procedure

Although the proceeding is still at an interlocutory stage, a considerable amount of evidence has been gathered already as a result of previous orders made by the Court. A convenient starting point is the judgment of French J (as his Honour then was) on 7 September 2006 ( Austal Ships Pty Ltd (ACN 079 160 679) v Thurlow [2006] FCA 1219). As can be seen from that judgment, Austal manufactures high speed ferries including catamarans and trimarans. It competes in an international market. One of its major competitors is Incat. Incat's principal ship building facilities are located in Tasmania. It is common ground that in May 2006, the ninth respondent (Mr Thurlow), who was a marketing consultant employed by Incat sent an email to Master Ferries. Master Ferries is a Norwegian company. Included with the email was a confidential report prepared within Austal. Contained within the report was a mathematical modelling of the comparative sea keeping characteristics of Austal's catamaran and trimaran ferries. This case is somewhat unusual in that the internal communication of Austal was critical of one of Austal's own vessels. Subsequently, that criticism has been reviewed and withdrawn but the confidential yet mistaken criticism has been used, Austal says, to the advantage of Incat and detriment of Austal. The suggestion in the report was that the sea keeping characteristics of the 126 metre Austal trimaran were inferior to those of the 101 metre catamaran. Mr Thurlow then used the Austal report in the email to Master Ferries as a basis for making disparaging remarks about the Austal trimaran. Mr Thurlow had come into the possession of the report as a result of it being passed on by a former employee of Austal, the eighth respondent, Mr Merrigan. In January 2005, Mr Merrigan had left Austal's employ and in June of that year commenced employment as a public relations and marketing officer for Incat. Austal contends (amongst other things) that the report which Mr Thurlow emailed to Master Ferries was obtained as a result of a breach of obligations of confidentiality Mr Merrigan owed to Austal and that its reproduction involved an infringement of Austal's copyright in the report. In September 2006 in Austal Ships v Thurlow [2006] FCA 1219 , French J granted preliminary discovery to Austal pursuant to O 15A rr 3 and 6 of the Federal Court Rules . Austal then issued proceedings. Subsequently additional orders were made by French J for the examination of various individuals. In relation to item (c), I indicated that it was not open to the Court to direct a response to the applicant's notice to admit facts and documents. The two day hearing from Austal's perspective was essentially concerned with obtaining additional discovery from Incat. I did not understand (d) to be pressed. As to (e), no order is presently necessary but if Austal prepares limited draft interrogatories and applies by reference to such a draft, due consideration can then be given to the application. Incat strenuously resists further relief of any nature being granted to Austal and by its own amended notice of motion seeks summary judgment against Austal pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) in respect of the claim insofar as it refers to entities described below as Higashinihon, Spanish Acciona and PATT . It manufactures a range of lightweight, high speed vessels including monohulls, catamarans and trimarans. Those vessels range in size from 20 to 130 metres and are used for commercial, military and naval applications. Austal employs 1700 people at its ship building facilities located on the waterfront at Henderson, immediately south of Fremantle in Western Australia and at Mobile in Alabama in the United States. It has designed and secured orders for the manufacture and delivery of over 160 vessels since it was formed. A number of those vessels are fast passenger and vehicle passenger ferries. In June 2003, Austal contracted for the design and construction of a 126 metre trimaran, vehicle passenger ferry for a European ferry operator Fred Olsen SA. As was observed in Austal Ships v Thurlow [2006] FCA 1219 , at that time the high speed vehicle passenger ferry market had been dominated by catamarans and the use of trimarans was a relatively new concept in that market. Austal's internal research was contained in a report entitled 'Analysis of the Ship Motion Performance of an Austal 101 metre Catamaran and a Comparison with a 126 metre Trimaran in the Irish Sea' (the first Report). As indicated above, the first Report reached the conclusion that the trimaran was significantly inferior to the catamaran on the routes and conditions to which it referred. The first Report and the follow up reports were stored in a computer archive within Austal. The document was strictly an internal and confidential document of Austal. In fact it transpired, according to Austal, that both the conclusion and the basis for it in the first Report were quite erroneous. In a subsequent report, the error was explained and the conclusion in the first Report was corrected. It is now common ground that Mr Merrigan had access to the first Report while he was employed with Austal. He made that Report available to Mr Thurlow of Incat when Mr Merrigan was subsequently employed by Incat. The text of the offending email attaching the first Report and sent by Mr Thurlow is set out in Austal Ships v Thurlow [2006] FCA 1219. In particular, it observed that it was well known in the market that the Austal 101 is ' far inferior to the Incat 98 metre in terms of sea keeping, yet in this Austal report the Austal 101 comes out significantly better than the trimaran which is around 26 metres longer on the waterline ...'. (emphasis added) The email also observed that a 'move into the 98 metre' (being the Incat vessel) is a timely, sound and logical step forward in order to be able to carry freight and to get good all round weather reliability. It observed that the Incat vessel 'costs a little over half the capital cost of a trimaran', was proven in service and was available quickly. As French J observed, however, other representations contained in the email concerning fuel usage, pricing, delivery and technical problems with the trimaran were not extracted from or reflected in the contents of the first Report. Austal duly obtained preliminary discovery and aided with that discovery brought a further application ( Austal Ships Pty Ltd (ACN 079 160 679) v Thurlow (No 2) [2007] FCA 202). Discovery having been given for Incat and for each of Messrs Thurlow and Merrigan, Austal sought further discovery on 19 October 2006 seeking an order for forensic examination of the electronic databases held by Incat, preservation orders with respect to discovered documents and the examination of ten persons before a Deputy District Registrar of the Court. It abandoned the orders for further discovery and forensic examination but persisted with the application for examination of certain named persons. French J made orders for examination of Messrs Thurlow, Merrigan, Carter and Clifford, the latter two being officers of Incat. Austal contended that it wished to have examination as to the identity discovery of any person who caused, procured or authorised the doing in Australia or outside of Australia of various acts including reproduction of the first Report; printing the Report; and distributing the Report. His Honour was satisfied that what Messrs Clifford and Carter did with the first Report and a subsequent report after those reports came into their hands may be relevant to the question of whether Incat was a party to an infringing reproduction assuming copyright does subsist in favour of Austal. Although neither was named as a respondent to the proceedings, the fact that they were officers of the respondent companies and had entered appearances in the proceedings was sufficient to satisfy his Honour that the orders should be made. The examinations duly proceeded. Several subsequent orders have been made by the Court since the examinations. On 11 April 2008, French J ordered that the parties file and serve witness statements. Additional supplementary orders in relation both to the filing of witness statements, discovery and a mediation were made on several occasions. Further, should the Court deem it appropriate, the categories of documents as referred to below, by reference to the matters referred to in paragraphs 1, 2 and 3, and also by reference to Defined Matter , as referred to in paragraph D (sic E) below, are to apply to the order for discovery as sought in paragraph 1 of the Notice of Motion . In the unusual circumstances arising in this litigation, the interlocutory relief sought by each party is supported by quite extensive evidence. The evidence therefore needs to be considered in these reasons, not with a view to drawing any conclusions as to the ultimate issues at trial but in order to evaluate the strength of the current interlocutory arguments. Some of the evidence is clearly more relevant to a trial than an interlocutory application. That observation is no way intended to be deprecating because the witness statements were in fact intended to be those that would be relied upon at trial. I have also not referred to much of the evidence as notwithstanding the fact that the application is interlocutory, a great deal of it is hearsay, speculation, argument and generally inadmissible. Nevertheless, I have endeavoured to reflect the substance of the relevant issues for the purposes of the current applications. As discussed, Austal has had the benefit of preliminary discovery, compulsory examination on oath of Incat officers and the provision of Incat witness statements and affidavits. It has had all of these sources of information before seeking further discovery. While there may have been some misunderstanding as to the topics that Austal was to cover in its witness statements, the statements collectively advert to all the pleaded transactions. Austal has not pointed to any additional evidence it would have adduced to supplement that so far supplied. Austal's affidavits and witness statements were subject to extensive objections raised by Incat. I do not propose to deal with the objections in detail for reasons which will become evident in due course. Nevertheless, while to some extent on an interlocutory application hearsay material may be admissible, in light of the extensive benefit which Austal has had already in having access to Incat's information, I would be giving little weight to material which is no more than hearsay. The witness statements and affidavits relied upon include the following: an affidavit of Mr Darren Frederick Thomas Edwards, sworn on 14 October 2006; witness statement of Mr James Bennett of 2 May 2008; witness statement of Mr Richard Regan of 2 May 2008; witness statement of Mr Kobayashi Toyohiko, undated but apparently signed on 16 May 2008; witness statement of Mr Christopher Gerrard dated 20 May 2008; witness statement of Mr Darren Edwards of 7 July 2008; witness statement of Mr Richard Regan dated 9 July 2008; witness statement of Mr James Bennett dated 9 July 2008; witness statement of Mr Christopher Gerrard dated 9 July 2008; witness statement of Mr Christopher Pemberton filed 20 October 2008; witness statement of Mr Richard Regan dated 24 October 2008; and a witness statement of Mr Michael Wake signed 27 October 2008. In Mr Timoney's affidavit sworn on 27 August 2008, he recounts the history of the matter and the history of communications between the parties and records his belief that further discovery is critical in relation to Austal's ability to advance and prove its case against Incat. As, by its very nature, Austal's claim is for breach of confidence, infringement of copyright and contravention of s 52 of the Trade Practices Act 1974 (Cth), it raises matters solely within the knowledge of the respondents. In that regard, Mr Timoney observes that the discovery given by Incat through solicitors so far effectively simply mirrors that which had been given in the preliminary discovery proceedings with some minor exceptions. Mr Timoney also deposes to his belief that Incat's position in relation to discovery is at odds with the range of documents which Mr Timoney would have expected to be produced on discovery given the obligations of a corporation to maintain documents recording the commercial activities of a company. Statutory requirements arise under the Corporations Act 2001 (Cth) (Corporations Act). It is suggested Incat would have included at least the files recording all evidence in matters relating to the sales or marketing efforts made in relation to Incat built vessels to Master Ferries through the Contract for Supply of Ship dated 24 November 2005; the Port Authority of Trinidad & Tobago in February 2006; correspondence with Acciona Transmediterránea in May 2006; and Libera Corporation Higashinihon Ferry in May 2006. In a further affidavit of 17 October 2008, Mr Timoney explains the basis on which the witness statements deal exclusively with the Higashinihon dealings and the Master Ferries incident as distinct from other aspects concerning Acciona and the Port Authority of Trinidad and Tobago (PATT). Shortly stated, the reason for confining the content of Austal's witness statements to the first two incidents was an understanding that a direction to that effect had been given by French J in the course of a case management conference. The reasons for that understanding were explained by Mr Timoney. These issues go predominantly to the question of the strike out application or the application for partial dismissal advanced by Incat. Mr Timoney describes the central issue as the Higashinihon issue which was the issue on which the primary focus was placed by the witnesses for Austal. I need not focus a great deal of attention at this stage on this explanation as I have reached the conclusion, in any event, that no judgment for Incat should be given at this stage. In response, I said words to the effect that he should ensure he did his due diligence. Tom asked me if there was any comparison. I said yes there was and showed him a copy of an Austal report from my laptop. Tom then asked if he could have a copy of the report. To the best of my recollection I said words to the effect that I would send it to him. He said that the presentation covered topics like Incat's history, product development, where Incat vessels were operating around the world, operating concepts and the availability of future tonnage. Mr Thurlow says that at no time during that presentation did he refer to Austal or to the Austal Reports. As will be seen below in these reasons, however, Austal contends that there is no denial of other 'usage' of the content of the reports. Mr Timoney also annexed to his affidavit some reasonably extensive transcript of examinations by counsel for Austal of the nominated officers of Incat. These for the record include Mr Clifford (pp 13-51), Mr Merrigan (pp 75-110), Mr Thurlow (pp 1-40 on 4 July 2007 and pp 1-27 on 5 July 2007) and Mr Carter (pp 52-74 on 26 July 2007). Each of those officers was represented by senior counsel who also briefly questioned the officers. I was taken to very little of that material in oral argument. I now turn to the witness statements of the various Austal witnesses. He is the Commercial Sales Manager for Austal. He has been employed by Austal for 20 years and is a qualified naval architect. In 1998 he was appointed as Technical Manager with primary responsibility for technical aspects of sales proposals. He observes that the international market for fast ferries is extremely competitive with a limited number of potential customers and a relatively large number of competing ship yards, other ship yards include Incat, Damen, Fjellstrand, Rodriquez, Fincantieri and Marinteknik. He purports to describe the practice within the industry observing that customers usually seek quotations from or issue requests for tenders to several ship yards for new vessel orders. While the inquiries or tenders vary in detail and complexity, they usually specify the particular requirement which the new vessel should meet. In the case of Austal, when a new inquiry is made, Austal forms a sales team which includes a technical manager. The customer's requirements are addressed and a sales proposal or tender is prepared offering a vessel which is carefully designed to meet the specific requirements of the customer. He proceeds to describe the technical processes in greater detail and says that a substantial quantity of written material is required to be submitted by a ship yard to a potential customer in response to any serious inquiry or request for a tender. He says it is also very common in his experience that the sales team is invited or arranges to provide formal presentations to prospective customers outlining the details of a sales proposal. Such presentations are often computer-based in the form of a PowerPoint or similar branded presentation with a series of slides containing condensed information in support of the bid. He says that the practice of Austal is to persuade the customer as to the relative merits and advantages of an Austal vessel by comparison with other vessels offered by competing ship yards. In some cases, customers invite such criticism and may actively encourage Austal to highlight weaknesses in opponents' vessels. He also says that at Austal it is the policy within the sales and marketing department that all documentation referred to in this process is saved and stored on a secure database or server to which access can be granted to approved persons when necessary. He often travels overseas with the sales team in order to meet prospective customers. He said that as part of the Austal sales team and as Technical Manager he was aware of and generally familiar with Austal's marketing endeavours in relation to the tender for the sale of Austal' s 126 metre high speed trimaran ferry to Higashinihon in Japan. He was also aware that Austal utilised the services of Mr Kobayashi whom he understood was a Japanese national based in Japan serving as an agent for Austal in relation to Austal's endeavour to win the tender contract with that company. As part of his work, Mr Bennett would regularly write reports of his activities and significant events and developments with respect to projects and sale prospects. Those reports would include travel reports, meeting notes and minutes as well as copies of presentations and file notes of telephone discussions. Mr Bennett also signed a witness statement on 2 May 2008. The contents of the witness statement expand upon but are substantially similar to the content of his affidavit referred to above. Generally, on the basis of this and other evidence, Austal asks the Court to infer that, notwithstanding Incat's very limited discovery, it is very likely that Incat has kept many more potentially relevant documents that it has failed to discover. He is the Sales Manager for Austal. He is responsible as a senior member of the sales team for the sales of new vessels to Austal's local and international commercial customers. He has been continuously employed in that capacity for eight years since 2000 and prior to that was employed by another Western Australian ship yard, Tenix Marine as sales manager. Prior to that he was the general manager for a company involved with the purchase, charter and commercial management of high speed ferries. In relation to the Higashinihon project, he says that in the second half of 2005 as Sales Manager he was responsible for the Higashinihon tender. Throughout that six month period and during the first quarter of 2006, he led an ultimately unsuccessful effort by Austal to sell two vehicle passenger ferries to Higashinihon. Ultimately that project was won by Incat. He says that Mr Kobayashi assisted him in the sales and marketing efforts and was the source of most of his day to day information regarding the progress of the project. Mr Regan said that Mr Kobayashi first informed him about the project in July or August 2005 and said that Higashinihon was seeking to purchase two or three high speed ferries to operate between Hakodate and Aomori. The details at that stage were sketchy but he could identify the nature of the route and the weather conditions it would experience. He believed that on that route the conditions could be very uncomfortable in a high speed catamaran. He concluded that the route would be ideal for Austal' s 127 metre trimaran. That vessel is said to have been designed specifically to improve the sea keeping and passenger comfort of high speed ferries operating in rough seas, especially when those seas were on the beam. He arranged for Mr Bennett to assist him in preparing a market presentation. They visited Japan in August 2005 and met with a number of managers from Higashinihon, including Mr Koga, Chief Executive Director of Higashinihon and members of his technical and operations team. They made a presentation to Mr Koga and a larger team. The presentation was delivered by Mr Bennett and translated by Mr Kobayashi. Mr Regan was of a view that the project was at its preliminary stage then as the specifics of what was required were not clear. They discussed the weather conditions with the Captain of the Higashinihon ferry who invited them to inspect the logbooks and weather observations. Mr Kobayashi informed them that a delegation of Higashinihon managers planned to visit different vessels of various ship yards for inspection purposes. Mr Kobayashi asked him to arrange a visit to Tenerife for a group of Higashinihon managers for the purpose of inspection of an Austal Hull 260 which was the Austal 126 metre trimaran ferry owned and operated by Fred Olsen SA. He had been closely involved with a sale of that vessel to Fred Olsen SA and was very familiar with the managers of the company. He has no written records of his visit to Tenerife. The Higashinihon delegation, accompanied by Mr Kobayashi, were due to fly in on 30 September 2005. The delegation comprised Mr Koga, the Chief Executive Director of Higashinihon; Captain Yuzo Kikuchi, one of Higashinihon's captains; and a young marine engineer. The flight was delayed and diverted due to bad weather. They eventually arrived at the hotel in Santa Cruz at lunchtime. Mr Juan Ramsden of Fred Olsen SA explained his experience with the Austal vessel. Questions were asked about it by the delegation from Higashinihon. They were given a detailed inspection of it. They also travelled on it. He was under the impression that they viewed the Austal vessel favourably. After completion of this process, Mr Koga informed Mr Regan that they were very impressed with the Austal ship but they also had to make an inspection of the Rodriquez monohull. Rodriquez is an Italian ship builder. Mr Koga said they were also inspecting the Incat catamarans and during the same conversation, Captain Kikuchi expressed the view that he already thought the trimaran would be the best vessel for the route. Mr Regan continued to say that it was almost inexplicable to him that despite what the Higashinihon delegation had seen and heard during the presentations and the visit to Tenerife and despite the various comments made by each of them and their positive reactions expressed of the trimaran during the visit, when the time came later on for Mr Koga to specify the exact requirements for the vessel, he did not do so. He ignored the offer from Austal to undertake at Austal's cost an operability study to determine the right size, capability and hull form for the proposed new vessels and simply sent a description of the performance and capacities of the Incat 112 metre catamaran. Mr Regan pressed Mr Kobayashi subsequently to try and get some feedback from Mr Koga. He was only informed that Mr Koga wanted Austal to requote on a smaller trimaran. Mr Kobayashi informed Mr Regan that during Mr Koga's visit to the United Kingdom to inspect Incat catamarans, the Incat representative hosting the visit was a 'Mr Schlling' who had joined Incat in February 2005 but had worked at Austal prior to that time. Prior to joining Austal he had worked with Incat. Mr Regan assumed from this information that Mr Schlling was in fact Mr Merrigan. He took steps to warn Mr Kobayashi about this. Subsequently Mr Kobayashi reported that Mr Koga had dismissed the Italian monohull, that the Austal 127 metre trimaran was 'number one', that the indicative price of the trimaran was higher than that quoted by Mr Merrigan of Incat for an Incat 98 metre catamaran, that Mr Merrigan would also be quoting a larger Incat 112 metre catamaran. Austal was asked to propose or quote a new design of a low cost trimaran for Higashinihon's board meeting of 21 October 2005. Following that board meeting, Mr Kobayashi reported that Higashinihon were actively evaluating two Austal trimarans of 117 metre and 127 metre against Incat catamarans of 98 metres and 112 metres. He understood that Mr Merrigan and Mr Thurlow were meeting with Higashinihon in the following week in Japan. On 8 November 2005, Mr Kobayashi reported to Mr Regan that Mr Koga had then been requested by the Chairman of Higashinihon, Mr Yamamoto to 'rush' again to the Canary Islands to travel on the Austal 126 metre trimaran in rough sea conditions. There was a further board meeting of Higashinihon on 10 November 2005. Mr Regan started to get concerned. He had explained to Higashinihon on a number of occasions that Austal could design virtually any vessel to meet almost any set of requirements. The difficulty at that stage was that Higashinihon had not actually given any precise set of requirements. Accordingly, the quotations to that period had been based on assumptions made by Austal as to Higashinihon's needs. There were ongoing emails. Further requirements were expressed by Higashinihon. Austal's design staff worked on those requirements and proposals were emailed to Higashinihon. There was a meeting of the Higashinihon board on 24 November 2005 and a meeting between Mr Kobayashi and Mr Koga on 29 November 2005. Mr Kobayashi reported to Mr Regan that the Incat Chairman, Mr Bob Clifford and another Incat representative, Mr Nick Wells were scheduled to visit Higashinihon on 9 December 2005 to meet with Mr Koga and possibly the Chairman, Mr Yamamoto. It was also reported that two Higashinihon engineers had recently visited Incat's shipyard in Tasmania to travel aboard an Incat 98 metre catamaran and inspect its engines. They had apparently found the vessel and its engines to be impressive. Mr Regan understood that sea keeping was still a critical issue in the mind of Mr Yamamoto and he was confident that the trimaran would be superior to the catamaran in terms of sea keeping on the intended route. On 2 December 2005, Mr Kobayashi and Mr Regan discussed the prospect of a visit by the Austal Chairman, Mr John Rothwell to Higashinihon during early December 2005 to meet with Mr Koga and Mr Yamamoto to support the Austal bid. This was intended to pre-empt the visit from Incat on 9 December 2005. By letter, Mr Rothwell offered to visit Japan for discussion with Mr Koga and Mr Yamamoto and suggested that an independent expert be retained to evaluate the sea keeping performance of the competing vessels for the route concerned and offered to provide confidential performance data to that expert for the purpose of the evaluation. Mr Kobayashi discussed the correspondence with Mr Koga. Mr Koga was not enthusiastic about the proposed visit. Mr Koga told Mr Kobayashi that he would prefer to await receipt of the promised new proposal from Austal. On 7 December 2005, the revised proposal for a larger Austal 130 metre trimaran and a 114 metre catamaran was emailed to Mr Kobayashi. Mr Regan was again confident of success. There was a board meeting of Higashinihon on 9 December 2005 but no response to the proposal emailed on 7 December 2005 had been forthcoming. Mr Regan was conscious of the visit by Incat on 9 December 2005 which was confirmed by email from Mr Kobayashi of that day. On 12 December 2005 an email was sent by Mr Kobayashi forwarding an email from Mr Koga in which Mr Koga advised that the board meetings had been held on 8 and 9 December 2005 and that the Incat 112 metre catamaran had been selected by Higashinihon for the new ferry route. Mr Koga explained that the reasons for the decision were that the Incat 112 metre catamaran complied with Higashinihon's requirements of deadweight service speed and price. Mr Kobayashi provided a detailed report of a further meeting with Mr Koga where Mr Koga had now highlighted two entirely new technical issues in relation to Austal's proposal. In relation to the proposal, Higashinihon had formed the view that the 130 metre trimaran, due to its slender monohull structure and limited buoyancy when compared with a catamaran would be unable to carry the specified deadweight and, therefore, not appropriate for a heavy truck route. He also thought that the frame spacing of the Austal 101 catamaran which had been inspected by Higashinihon engineers sometime before was no longer than the frame spacing of Incat catamarans. These were new issues which had never been raised. Mr Regan was under the impression that these were not legitimate reasons for rejecting the proposal from Austal. In a subsequent statement, Mr Regan stressed the commercial confidentiality of the Austal Report. He expressed the view that misuse of the Austal Report in order to denigrate or disparage the sea keeping properties of an Austal vessel could be devastating to Austal in the market. He gave evidence of negotiations with Acciona who had been operating a number of Incat catamarans. Despite conducting a substantial presentation to Acciona and maintaining subsequent close contact with Acciona, orders were placed by Acciona with Incat rather than Austal. He was then employed as the Research and Development Manager for Austal. In that capacity he was responsible for the concept and development of the world's first high speed trimaran ferry, a unique three hulled solution for high speed and a high degree of passenger comfort. He describes a four year program of research and development from 1999 to 2003 leading to the award of a contract for design and construction of Austal Hull 260, Benchijigua Express , a 126 metre long 40 knot trimaran ferry carrying over a thousand passengers and 400 cars. That successful project also led to a joint bid by Austal USA with General Dynamics to design and build the next generation of United States warships, the Littoral Combat Ship using a similar trimaran concept with three hulls. He was nominated as one of the top one hundred Australian influential engineers by 'Engineers Australia' in June 2007. Mr Armstrong says that it is unusual amongst ship builders that one would have the capacity to design and manufacture an extensive range of customised aluminium vessels to suit specific operational requirements primarily featuring monohull catamaran and trimaran hull forms. Austal has that capacity. He said that as a general statement Austal strives to produce high quality, lightweight vessels and this goal has led to Austal carrying out considerable research and development as to various methods of optimising vessel strength for minimum weight including the use of advanced materials such as carbon fibre composite drive shafts, ceramic structural fire protection and composite outfit materials, many of which have been derived from aerospace technology. Mr Armstrong described 'sea keeping' as a term often used to describe the motion of the vessel, that is, its roll, pitch, yaw, heave, sway and surge which are the six degrees of freedom of any body moving in space like a ship. Minimising the effect of these forces, particularly vertical acceleration, is the key to maximising passenger comfort. He says that in some context 'sea keeping' can be used to describe the general seaworthiness of a vessel, however, that is not the context in which sea keeping was being used in the two Austal Reports. Mr Armstrong's witness statement deals with technical information which may be more significant for the purposes of a trial rather than this interlocutory application. In my view, much of the information goes to the generation of the content of the two Austal Reports. In doing so, he explains the need to correct the errors which gave rise to conclusions reached in the first Austal report. He is employed by Austal in a position of Service Manager Europe & Middle East. He lives in Sweden. In May 2006, he was contacted by a person from Master Ferries who explained that the Austal Report had been received from Incat, specifically Mr Thurlow. He reported this information to Mr Bennett in Austal. He was also contacted by someone in Irish Ferries who informed him that he had seen the Austal Report. He is an Austal employee in the position of Sales Manager. He has been employed by Austal for some 15 years. He describes the process undertaken at Austal in preparing costing estimates for new vessel projects and the formal price quotations for customers. He expresses views in relation to profit arising from the dealings with Higashinihon. It is unnecessary to examine that aspect closely for present purposes. In a subsequent witness statement, he refers to a visit in mid-March 2005 to Trinidad and Tobago in connection with a tender for a high speed ferry issued by PATT. PATT had trialled a catamaran to test whether it would cope with reputedly rough seas between the islands. That catamaran had been built by Incat some years before and had been leased from its owner, Bay Ferries in Canada. It was reported to him by PATT that the experiment was popular and successful. He submitted Austal's tender for the permanent replacement or long-term replacement. The tender did not succeed. Mr Pemberton explained that he expected to have an opportunity to present details of the Austal tender in order to explain the sea keeping advantages of the Austal trimaran in person. His usual experience was that customers considering purchasing a multimillion dollar vessel would seek a presentation from its builders because it was difficult to make a decision based only on documents. It was confirmed by PATT that they would appreciate a presentation. The tender was lodged. Despite what he says was a superior tender by Austal (the process being public), support for the Incat tender was publicly expressed. Ultimately he was not invited to make any presentation. As distinct from making a presentation, PATT requested Austal to extend its tender for 90 days and it requested a meeting with PATT to discuss the progress. Mr Wake, a sales consultant at Austal initially replied to PATT's request. Mr Pemberton then sent a further reply to PATT and requested a meeting with PATT to review the status of the evaluation. There was no response to that request but Austal was then asked to extend its tender for a longer period to 31 December 2005. In the meantime, PATT issued a new invitation to tender for the supply of one or two high speed passenger/cargo roll-on, roll-off ferries on similar terms to the tender invitation of April that year. This also took Mr Pemberton by surprise. Nevertheless, a new tender was submitted by Austal. Ultimately Austal was unsuccessful in any tender. For Incat, statements have been given by several of its officers. In relation to the allegation by Austal of alleged misuse of the Austal Reports in dealing with Higashinihon Ferries, Master Ferries Holdings AS, PATT, Compania Trasmediterránea SA and Irish Ferries, he gave evidence as to his involvement. He confirms that he came into possession of the Austal Reports at a date between August and November 2004. A hard copy of the reports had been placed on his desk by Mr Regan with an invitation for him to familiarise himself with the content. He did so. At the time there were discussions with representatives of the Isle of Man Steam Packet Company. Austal was bidding for the supply of a new vessel. Mr Merrigan asked if it were possible to have the file in electronic form which was duly arranged. On 7 June 2005, after joining Incat, Mr Merrigan wrote and sent an email attaching the first and second Austal Reports to Mr Carter, Legal Manager for Incat. On the same date he also sent an email to Mr Clifford. He did not, however, discuss the Austal Reports with Mr Clifford either before or after sending the email on 7 June 2005. Dealing first with Higashinihon, he confirms that Incat was commissioned in 2006 by Higashinihon to build two 112 metre ferries and that in relation to the sale of the two ferries, he was responsible for customer care. This involved attending to the wellbeing of the clients and arranging facilities for clients when they travelled to Australia. He was not involved in negotiations between Higashinihon and Incat leading to the contract for the sale of the two ferries. That work was carried out or supervised to the best of his knowledge by Mr John Harris of Incat. Mr Merrigan has never provided the Austal Reports or any part of them to any representative of Higashinihon. Nor has he discussed their content with such people. As to the other negotiations with Master Ferries, PATT, Compania Trasmediterránea SA, and Irish Ferries, the position was the same. He had not at any time provided the Austal Reports or discussed any aspect of them with any representatives of those entities. As a result of those discussions a sale ensued. On 26 April 2006, he attended the ceremony to mark the commencement of the operation of the vessel known as the Mad Mols in Norway. Mr Clifford from Incat also attended. At some time during that day, a representative of Master Ferries, Mr Tom Bringsvaerd told him that Master Ferries was thinking of expanding its operations and that he was under pressure to look at Austal's vessels. In response, Mr Thurlow said that he should ensure that he did his due diligence. Mr Bringsvaerd asked him if there were any comparisons. Mr Thurlow said there were and showed him a copy of an Austal report from his laptop. Mr Bringsvaerd asked if he could have a copy of the report and Mr Thurlow thinks that he agreed that he would send it to him as he did so. On 3 May 2006, he sent an email to Mr Bringsvaerd at Master Ferries attaching the Austal Report which he had shown him. He says he cannot now recall how he received the Austal Report that was attached to his email nor why he copied the email to Mr Bernt Mykjaland of Master Ferries. In February or March 2007, Mr Bringsvaerd told him that Master Ferries were not looking to acquire a fast ferry in the foreseeable future. He says that he has not at any time provided the Austal Reports or any part of them to any other person at Master Ferries nor discussed the content with any other person at Master Ferries. In relation to Higashinihon, he confirmed having conducted a general PowerPoint marketing presentation. At no time did he make any reference to either Austal or the Austal Reports. That was the position also on a subsequent visit by a delegation from Higashinihon to the United Kingdom at which Mr Thurlow was present. Mr Thurlow said that he has not at any time provided the Austal Reports or any part of them or referred to them in any sense to anyone from any of Higashinihon, PATT, Irish Ferries or Acciona Trasmediterránea. In fact he has had no dealings at all with Irish Ferries or with Acciona Trasmediterránea in the last five years. He did have negotiations with PATT. He is a Legal Manager for Incat. In June 2005, in that capacity he received Mr Merrigan's email attaching the Austal Reports. Prior to the commencement of pre-action discovery proceedings, no one within Incat had raised the content of the Austal Reports in any sense with him. After Mr Carter received the Austal Reports by email, he deleted them from his computer in the course of regular document deletion. He believes that deletion would have occurred within six months after receipt of the email attaching the reports on 7 June 2005. He has not copied them or provided or discussed them with any person other than in relation to these proceedings as Legal Manager. He says that he is not aware of and has no reason to believe that either the Austal Reports or the emails have been copied or reproduced by any of the respondents as alleged in the statement of claim except to the extent expressly admitted in connection with Master Ferries. Mr Carter was involved as Legal Manager for Incat in settling the terms of the contract for the sale to Master Ferries. Negotiations commenced in October 2005 and concluded in late November. The vessel was delivered on 27 February 2006. At no time in his negotiations did he use, provide copies of or refer to the Austal Reports or their content nor at any time did he do so subsequently with Master Ferries. He is not aware of the Austal Reports or their contents being referred to at all in the dealings between Incat and Master Ferries other than by the one email from Mr Thurlow on 3 May 2006 which was some five months after the contract for sale was executed and two months after the vessel was actually delivered to Master Ferries. That vessel was the one and only vessel that Incat has ever sold to Master Ferries. It has subsequently been sold and Master Ferries, as he understands the position, has not subsequently purchased any other fast ferry vessels. Mr Carter was also involved since about 2004 in negotiations with PATT in preparation of tenders and negotiation of contractual terms. As with Master Ferries and, indeed, as with Compania Trasmediterránea SA and Higashinihon and with Irish Ferries there has never been any reference at all or usage in any way of the Austal Reports to the best of his knowledge and information. Mr Carter also swore an affidavit on 12 September 2008. Specifically in relation to the extensive further discovery sought by Austal, apart from the express admissions as to the usage of the Austal Report by emailing it to Master Ferries, he argues that the allegations in the statement of claim are vague and unsubstantiated especially given the fact that discovery has already been given and Austal sought and obtained orders permitting extensive oral examination of Mr Clifford, Mr Merrigan, Mr Thurlow and Mr Carter. He observes that the discovery categories in the application as currently formulated are extraordinarily wide and would encompass an enormous number of documents which have no relevance whatsoever to the pleaded issues. Compliance would require examination of documents which are highly confidential and commercially sensitive. The discovery as sought would effectively encompass all of the documentation relating to all of Incat's design, production and marketing activities in the relevant period. Mr Carter says that it would be extremely difficult to locate, identify and quantify the number of communications relating to the sale and marketing of Incat vessels over the relevant period as it would encompass thousands of documents located in five offices and a great number of archival locations in three separate countries. The number of sales and/or marketing presentations relating to the sale or marketing of vessels by Incat would encompass thousands of documents located in those five offices and a greater number of archival locations in three separate countries. All of those materials are highly confidential, commercially sensitive and valuable to Incat. The materials contain information relating to Incat's clients and potential clients which is not in the public domain and is collected through extensive and costly research and other efforts of Incat. The materials also contain and reveal extensive detail of Incat's design, production, marketing and pricing strategies with respect to Incat vessels and would give a competitor a substantial and unwarranted competitive advantage if released. Even if the application were limited to the Relevant Vessels as defined, he expresses the belief that the number of documents falling within the scope of the categories sought would still extend to hundreds of thousands in number and would be located in a number of offices and archive locations in three separate countries. It follows that it would be extremely difficulty, costly and time consuming for Incat to comply with orders as sought and it would take many months to search for, locate, identify, collate and assemble documents within categories 1-4 as sought. It would require a search and review of an extensive number of files located in the various offices or archives. This would extend to many thousands. Clerical staff would be needed to be diverted to that task or, alternatively, staff would need to be externally hired to carry it out. The cost of engaging such staff in England and Denmark would be considerably greater than the cost in Australia. Senior employees in the Incat group would be required to work with the clerical staff to review and identify the documents and they would also, therefore, be diverted from their normal duties causing interruption to the operation. The documents would need to be scanned to or shipped to Austal's solicitors at a cost which would be significant and the documents would need to be examined by Incat's solicitors to ascertain whether or not they were to be protected by legal professional privilege. Mr Carter was cross-examined on this evidence as to the burden of inquiry required. His answers on cross-examination accorded with his affidavit evidence. [Incat] is prepared to file amended or supplementary statements of Steven Thurlow, Robert Clifford and Justin Merrigan with wording consistent with [Incat's] remaining witness statements so as to put the issue beyond doubt. I do not consider that to be a reasonable construction to be given to the contents of the paragraph. The point arising is that some of the witnesses expressly refer to no 'use' being made of the reports; and to no copying or reproduction. However, 'use of' does not appear in every witness statement which is what Mr Carter is offering to address. It may reasonably be inferred and I do, in the absence of any evidence to the contrary that reference to no 'use of' the reports would be added only if such a statement were believed by Mr Carter, a solicitor, to be true in each instance. He is Chairman of all the companies in the Incat group. He lives in the United Kingdom as does Mr Thurlow. He confirms that on 7 June 2005 he received an email from Mr Merrigan attaching the first and second Austal Reports. This was the first time he had seen them. He does not recall any subsequent discussion on the reports with Mr Merrigan. On 7 June 2005, the same date that he received them, he emailed the reports to Mr John Adams who was a friend and retired naval architect. Two days later Mr Adams replied. Apart from that exchange, there was no discussion with Mr Adams in relation to the reports. He expressly denies the allegation raised by Austal that the email was sent to Mr Adams in order to advance or secure a sale of Incat vessels. He says that Mr Adams is not involved in the industry and has no financial or commercial association with any company operating a ferry service to the best of his knowledge. Moreover, Mr Adams is retired and has been since 2001. Sometime prior to April or May 2006, he also showed the images of the reports to Mr Thurlow on his office computer but apart from that has not printed, emailed or otherwise dealt with the reports in any way. He accepts the possibility that he may have discussed becoming aware of the existence and contents of the reports with other people in the Incat groups but has no specific recollection of any such conversations. He can recall the first report being discussed by Mr Thurlow at Norway. This was at the commencement of commercial operations of an Incat constructed vessel which had been sold to Master Ferries in November 2005 and delivered in February 2006. There has been no other discussion between Mr Clifford and Mr Thurlow since that occasion. He has not at any time provided the Austal Reports or any copy or part of the Austal Reports or referred to them in any of the dealings referred to by Austal in the statement of claim and of those dealings was only involved in the Master Ferries and the Higashinihon dealings. He was in charge of negotiating the terms of the supply or sale of all the vessels on behalf of the Incat group and in charge of overseeing and supervising the performance of those contracts. He was the primary point of contact between Incat and Higashinihon in relation to the negotiation and performance of the contracts. Neither in that or at any other time did he ever have access, use, provide copies of or refer to the Austal Reports or their content. He is not aware of the Austal Reports or their content being referred to by Incat in any other dealings with Higashinihon. He did not actually have dealings with PATT or with Irish Ferries. He is the Information Technology Manager for Incat. Essentially he confirms the financial and time burden to which Incat would be exposed in compliance with the discovery as sought. He gives a more detailed explanation in relation to that burden indicating that Incat currently has 95 personal computers with an average hard disc size of 80 GB. This equates to a total of 7600 GB of memory or 7.6 TB. It currently uses six servers containing a potential live storage of 2760 GB or 2.76 TB of information. That includes an email server with 70 GB total storage, a Blackberry/proxy server with 70 GB total storage used for communication between the Blackberry mobile phone devices and the email server. Incat have 24 Blackberry mobile phone devices. There is a file and print server with 680 GB total storage; an application server with 70 GB total storage; a storage/backup server with 1.6 TB total storage and an enterprise resource planning system server with 270 GB total storage. By way of clarification and expansion, he explains a one-page Microsoft word document is 40 KB. (There are one million kilobytes in a gigabyte and there are one thousand gigabytes in a terabyte. ) He goes on to explain the enormous nature of the task which would be required to give discovery in accordance with the terms sought by Austal. Mr Cotton was also cross-examined on this evidence as to the burden of inquiry required. As with Mr Carter, his answers on cross-examination accorded with his affidavit evidence. Those are the documents in respect of which a party is required (by the Practice Note issued by the Chief Justice on 3 December 1999 (No 14)) to undertake a 'reasonable search'. In Fieldturf Inc v Balsam Pacific Pty Ltd [2003] FCA 809 at [1] - [2] , Finkelstein J observed: According to Lord Woolf the overriding objective of civil procedure is to enable the court to deal with cases justly. This means the court must, so far as is practical, attempt to place the parties on an equal footing; save expense; deal with the case in ways which are proportionate to the amount of money involved, the importance of the case, the complexity of the issues and the financial position of the parties; ensure that the case is dealt with expeditiously and fairly; and allot to the case an appropriate share of the court's resources while keeping in mind the necessity of allotting other resources to other cases. If an action is to be conducted with a minimum degree of fairness, and a modicum of efficiency, the parties must be allowed to go into court with some identification of the subject matter of their dispute. There should be some process by which the subject matter is specified and the range of evidence at trial is kept within the limits of relevance. Moreover, to ensure that the system operates fairly, each party must disclose the facts that are within his knowledge and on which the case of the other depends. In our system an attempt is made to satisfy the need for efficiency and fairness by pleadings and discovery. Austal argues that the purported due and proper compliance by Incat with the fundamental discovery obligations is in a non-compliant form of an unsegregated, unspecified and impermissibly rolled up form under the hand of the solicitor for all of the Incat respondents. The discovery for Incat has disclosed only seven documents, two of which comprise the first Austal report and the second Austal report. They are the same documents that Incat produced during a preliminary discovery proceeding. Austal argue that the order made by French J was for general discovery and that his Honour did so mindful of the quite apparent difficulties faced by Austal which justified ordering preliminary discovery coupled with the uncommon step of ordering examination of witnesses. Austal complain that the corporate structure of the Incat group is irrelevant and that discovery should be given regardless of the complexities which may arise from the way the Incat group is structured. There is no doubt (despite the fact that the companies are located in different countries) that they, nevertheless, have central control and are connected one to the other. Against that background, it is said unsurprisingly, that the discovery of only seven documents, two of which are the Austal Reports, strains credulity. It is also said that the purported compliance with the obligations of discovery reveals a misunderstanding as to the nature of the claim made against them. As an example of this submission, Austal contends that should it be the case that Incat are proceeding on the basis that Austal's complaint is that Incat did not provide a copy of or disclose part of or all the content of any part of the Austal Reports to any prospective customer, particularly Higashinihon, this would be an erroneous apprehension of the relevant legal principles to be applied in relation to Austal's claims. Austal emphasises that each of the reports was marked 'Commercial in Confidence' making it very clear to persons coming into possession of them that they should not be used or disclosed. It is argued that the circumstances in which the Incat group came into possession of the reports needs to be examined. For example, the 7 June 2005 email from Mr Merrigan formerly of Austal, now of Incat to Mr Carter with a copy to Mr Clifford and with a cryptic email saying 'Simon will discuss this one with you Rgds'. Happy for him to use it as long as a copy does not leave his hand (sic hands). The next fact stressed by Austal is that Incat had commenced construction of the Incat 112 metre wave piercing catamaran early in 2006 in circumstances where it did not have a customer for that vessel but in mid-2006, Mr Clifford whilst at Incat's office in Woking, in the United Kingdom, where Mr Thurlow also works, showed Mr Thurlow the first Austal report which was on Mr Clifford's laptop computer. Mr Thurlow began to laugh on being aware of the contents of the report. Mr Clifford then requested Mr Thurlow to assist in the marketing of the Incat 112 metre vessel, then the subject of a tender process involving Higashinihon. Austal was a direct competitor with its trimaran. In compliance with Mr Clifford's request, Mr Thurlow travelled to Japan on his way back to Europe and stayed for four days at the end of October 2005. He travelled to Hakodate to meet representatives of Higashinihon. He knew that they were interested in buying one or more vessels for their fleet. He conducted the PowerPoint marketing presentation for some two hours on 2 November 2005 directed to promoting the Incat vessels. On his laptop computer he had each of the Austal Reports. At the same time, Mr Merrigan was also involved in the Incat endeavour to secure the contract under the Higashinihon tender. He also visited Japan for that purpose. He also had the Austal Reports on his laptop computer. Austal's summary of the key facts as disclosed from the summary of the evidence breaks into an area at this point on which much criticism is raised by Incat. Austal says that its participation in the Higashinihon tender changed abruptly in early November 2005 from what was regarded as being a well respected participant to a position where a marked change occurred. The relationship was consistent, it is said, with an opposing party to the tender assuming a favoured status over Austal. What had changed, it is said, is the attendance of Mr Thurlow and Mr Merrigan in Japan with Higashinihon, each of whom had the Austal Reports on their laptop computers. Added to that as a significant factor, was the need for the successful tenderer to Higashinihon to have satisfactory, if not superior, sea keeping or ship motion characteristics catered for the proposed Japanese ferry route. It was this important characteristic that was incorrectly described in the first Austal Report which incorrectly recorded a superior performance with regards to sea keeping by the Austal 101 catamaran as distinct from the Austal trimaran. Austal argues that it should be inferred that the whole purpose of Mr Merrigan's email to Mr Carter was to enable Mr Thurlow to have knowledge of the criticisms of the Austal trimaran as set out in the first Austal Report so as to assist Mr Thurlow in his role of marketing the Incat vessels. Mr Thurlow had been directly involved in the promotion, marketing and securing the sale of an Incat built vessel to Master Ferries by a Contract for Sale of Ship dated 24 November 2005. In relation to that transaction, it is known that the Austal Reports were forwarded to Master Ferries. Once again, the sea keeping capacities and quality was an important factor for Master Ferries. Austal relies on the fact that Mr Thurlow did use the first Austal Report at least once as disclosed to him by Mr Clifford in mid-2005 successfully in achieving the sale of the Incat vessel to Master Ferries. I believe this will be the case with the trimaran and having read the attached report I am absolutely convinced that this trimaran is a con. It is well known in the market that the Austral 101 is far inferior to the Incat 98 in terms of sea keeping, yet in this Austal report the Austal 101 comes out significantly better than the trimaran which is around 26 metres longer on the waterline and offers a four metre wider beam. Austal complains also that the certification by Incat's solicitor in purported compliance with the discovery order of the Court is fundamentally deficient by failing to address the individual discovery obligations of each of the nine respondents. For example, what has not been disclosed are documents which did exist but no longer exist and to which reference has been made, for example, by Mr Thurlow who says that the reports are no longer held on his laptop computer. It is also suggested that the Court should infer that these were destroyed once Mr Thurlow became aware of the application for preliminary discovery by Austal. It is contended that with two exceptions, none of the witnesses for Incat have given any evidence in relation to the 'use' of the confidential information contained in the Austal Reports notwithstanding the fact that Austal's claim clearly goes to the question of 'use' of the information by way, amongst other things, of a springboard benefit. It is only Messrs Carter and Harris who expressly deny 'usage' in any way of the content of the reports. Finally, Austal stresses that the email from Mr Craig Clifford (Mr Bob Clifford's son) of Incat to Mr Rothwell, Chairman of Austal of 21 June 2006, although stated to be 'without prejudice' has been waived in respect of privilege for the all the respondents. That document has already been identified as being a document of key significance according to the decision of French J ( Austal Ships v Thurlow [2006] FCA 1219) in relation to preliminary discovery. That compulsion is one of the reasons that the extent to which discovery must be given is limited. I can appreciate that this may disclose no more documents than those already discovered but I do not understand the relaxation of the conventional discovery requirements to have been implicit in any way in the orders made by French J. In circumstances where it is clear that deep suspicion attends the paucity of discovery, formal compliance with the Rules where pressed, is essential. Equally, it needs to be said that Austal is seeking far more than simply the formalisation of the discovery and I note that as senior counsel for Incat has made clear that if formalisation of the discovery were all that were sought by Austal, it would have been provided. Regardless of the conclusion to be reached in relation to the scope of the discovery, I propose ordering that each of the respondents give general discovery on oath or affirmation in accordance with the Rules of the Court. The question is whether the applicant has shown a good case, proof of which is likely to be aided by discovery. In Trade Practices Commission v CC (New South Wales) Pty Limited (1995) 58 FCR 426 , Lindgren J dealt with the balance between a fishing expedition and giving discovery by a party who has the only knowledge on which the claim is based. In that case, the applicant had already supplied reasonably detailed particulars and had the benefit of transcripts from compulsory examinations. His Honour said at 439: Apparently the Commission does not know what was said at either the Meeting or at the alleged prior meetings . I do not think, however, that this means that it does not know whether it has a case. The pleading and the particulars supplied are reasonably detailed. Moreover, there is some evidence in the transcripts of the evidence given by individuals to the Commission of the existence of a case of the kind pleaded . In my view, the Commission's application is not a "fishing expedition". The respondents submit that the Commission should be directed to "supply particulars by putting on its affidavit evidence" before the discovery issue is decided. I do not agree. A well accepted situation which the court often exercises its discretion by ordering discovery before particulars are supplied is that in which the party which seeks particulars and resists discovery is alone in possession of the relevant documents: Millar v Harper (1888) 38 Ch D 110 at 112; Egg & Egg Pulp Marketing Board v K H Korp Tocumal Trading Co Pty Ltd [1963] VR 378 ; L Grollo & Co Pty Ltd v Nu-Statt Decorating Pty Ltd [1978] FCA 33 ; (1978) 34 FLR 81 at 90-91; Halsbury's Laws of England (4th ed, 1975), Vol 13, par 28; BC Cairns , Australian Civil Procedure (3rd ed, 1992), p 348. In my view, I should exercise my discretion accordingly in the present case. (emphasis added) Although the concepts of fishing and oppression are distinct, if the extent of discovery sought is so broad, the two concepts may converge. Perhaps it should be seen as a metaphor with more colour than substance. Modern procedures actually provide as something desirable for what might once have been criticised as fishing - see Order 15A of the Rules of this Court, particularly Rule 6. It would be ironic if the Court refused an applicant, on this basis, discovery after action, when discovery could have been obtained (at the expense of incurring extra costs) by an application before action. The real objection which, in some cases, justifies discovery being limited to particular issues is the objection of oppression. Under O 15 r 8, however, there is a procedure under which particular discovery may be sought where a party is dissatisfied with the extent of the discovery made by the opposing party. The Court may exercise its discretion under O 15 r 8 where it is clear that there has been a defect in compliance with an earlier order for discovery if it appears, for example, that a party has excluded documents under a misconception of the case as Austal argues is the position here: Mulley [1959] HCA 23 ; 103 CLR 341 at 343. However, in Slick v Westpac Banking Corporation (No 2) [2006] FCA 1712 at [43] , particular discovery was refused on the basis that 'the theoretical possibility that something might turn up [was] well and truly outweighed by the cost and burden to Westpac' (see also Betts [2007] FCA 1983). There are special considerations which arise in the context of confidential information cases. That circumstance has already been recognised in this litigation by the special orders that have been made, including preliminary discovery and, in particular, orders that have been sought, made and extensively acted upon, by Austal, for examination of officers of Incat. Unless I draw the inferences which Austal press me to draw, it seems relatively clear from Austal's own submissions, that the outcome of those processes has been to identify very little more than the admissions already contained in the defence. It is argued that any manner in which that material was used so as to gain an advantage on the topic of sea keeping, would be actionable by Austal. Austal stresses that even if there were no copying or discussion of the reports with Master Ferries, Higashinihon, PATT and/or Acciona Transmediterránea beyond any admission in the defence, unconscious or conscious use of the information would still be actionable. In relation to an action for breach of equitable obligation of confidence, the summary by Megarry J in Coco v AN Clark (Engineers) Ltd [1969] RPC 41 at 47 is the starting point. For present purposes and in light of Incat's pleaded (limited) admission, the only question that remains to be decided in the case is the nature and extent of the use by Incat. Austal relies on the 'springboard doctrine' described in a number of cases such as in LAC Minerals Ltd v International Corona Resources Ltd (1989) 16 IPR 27. The Supreme Court of Canada (following Cranleigh Precision Engineering Ltd v Bryant [1964] 3 All ER 289) there observed that where the duty of confidence is breached, the confidee will not be allowed to use the information as a springboard for the activities detrimental to the confider. In LAC the court held that the evidence amply sustained the finding that the confidential information which LAC received from Corona was of material importance in its decision to acquire the particular property. But for the confidential information which LAC had received from Corona, it was not likely that it would have acquired the particular property. Austal argues that the burden of proof has been shifted to Incat given Incat's effective admission as to a breach of confidence in the possession (on an unauthorised basis) of the first Austal Report and in its use with Master Ferries. The view expressed in LAC (1989) 16 IPR 27 was that the onus of proof was reversed. It was said at 36/40-50 and at 37/5-10 by La Forest J that when information is provided in confidence, the obligation is on the confidee to show that the use to which he or she put the information is not a prohibited use (see Megarry J in Coco [1969] RPC 41) (emphasis added). See also Printers and Finishers Ltd v Holloway [1964] 3 All ER 731 per Cross J and Mediterranean Bakery Pty Ltd v Vardakis (1976) ACLD 649 in the Supreme Court of New South Wales. (Two of the witnesses expressly deny any usage and the other witnesses expressly deny making any reference in any sense to the content of the Austal Reports). In this regard, I also observe that Austal has not even pointed to a hypothetical 'use' of the reports except to stress that it was surprising that interest in the Austal tenders suddenly ceased and in the case of Higashinihon that despite their denials as to usage of the Austal Reports, both Messrs Thurlow and Merrigan had access to them on their laptop computers when in Japan. It is important to look at the content of the confidential information to see what 'use' there could possibly be in those impugned negotiations or transactions if the substance of the Austal Report was not referred to in some way. To merely refer to alleged superiority of a vessel without in turn identifying a basis on which the superiority was in effect admitted by a competitor would carry very little weight. It would not be the slightest bit uncommon for any tenderer or presenter to advance the assertion that the product sought to be sold was superior. The 'usage' must be identifiable in some sense whether it is conscious or unconscious. Incat have been required to answer questions on oath or affirmation by way of compulsory examination and to produce witness statements and/or affidavits. In these compulsory ways, Incat has given evidence on the topic. The fact that the onus may shift to the party who is identified as having misused confidential information, does not automatically mean that that party must turn over at great expense and delay a large portion of its business records in the mere possibility that in transactions in respect of which there is express denial of usage, such denial may be proven to be incorrect. The enormity of providing the discovery sought weighs heavily against making the orders sought by Austal. As Incat stresses, it is not in issue that one of the Austal Reports was sent by Mr Thurlow to Master Ferries and that Mr Clifford sent both copies of the reports to Mr Adams. Incat argues that in light of the very limited facts established through the process to date, the genuine extent of the dispute would be very narrow. In contrast, the statement of claim runs to some 52 pages with allegations raised at a 'high level of generality'. There is no particularisation whatsoever in relation to the general allegations and they are speculative. In the context of the discovery sought, 'document' has a wide definition. Austal did not advance any specific argument to each of the topics on which it sought discovery. Rather it stressed the basis on which the inferences it asks the Court to draw are said to be reasonable. I consider the discovery sought by Austal would be a fishing expedition made in an effort to find some piece of information which could provide a basis for Austal's claims. But also it would be quite oppressive in that circumstance. At this stage, there is no significant evidence at all in relation to the allegations concerning Higashinihon Ferries, Spanish Acciona and PATT. The oppression involved in the proposed discovery, in my view, far outweighs the benefit that might be obtained from it. As to the burden and benefit principle, see also O 15 r 8 and Molnlycke AB v Proctor & Gamble Limited (No 3) [1990] RPC 498 at 503 and Slick [2006] FCA 1712 at [43] . There is no power in the Court to make such an order. The notice issued by Austal contains 391 questions with a bundle of documents referred to in the notice running to several hundred pages. Austal sought answers within 14 days of the notice being administered which was, in my view, quite unrealistic. A failure to answer a notice to admit facts goes only to costs, albeit on an indemnity basis in a suitable case: Polygram Records Inc v Raben Footwear Pty Limited (1996) 140 ALR 617. I note in the correspondence exchanged, however, that Incat have indicated that the notice will be answered in due course. Therefore, I decline to make any order to that effect. Incat relies on s 31A of the Federal Court of Australia Act 1976 (Cth). The material relied upon in opposition to the further discovery is relevant to the same argument. In my view, however, the considerations are different. Pursuant to s 31A , the Court may give judgment for one party against another in relation to the whole or any part of a proceeding if it is satisfied that the party prosecuting the claim has no reasonable prospect of successfully prosecuting it. It is expressly emphasised that for the purposes of s 31A , a proceeding need not be hopeless or be bound to fail for it to have no reasonable prospect of success. The section has been discussed in numerous cases including Fortron Automotive Treatments Pty Ltd v Jones (No 2) [2006] FCA 1401. It is clear that it is open to the Court to consider evidence in the context of such an application and it is clear that the language of the section imposes a different and less stringent test to the former test described in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 129-130. Austal has stressed that its case depends upon drawing inferences. It is true that the existence of a fact may be inferred from other facts when those facts make it reasonably probable that it exists. However, as Incat submits, if they go no further than to show that its possible that it may exist, then its existence does not go beyond mere conjecture and an inference is not open to be drawn: Carr v Baker (1936) 26 SR(NSW) 301 at 306-307. The plaintiff must prove his case; and although he may establish a state of facts which leads one to think that his version is quite a possible version of what took place, he must do something more than show a state of facts which is consistent with one view or with another view ... [a] guess is a mere opinion or a judgment formed at random and based on slight or uncertain grounds. In contradistinction to such a conjectural opinion, an inference is a reasonable conclusion drawn as a matter of strict logical deduction from known or assumed facts. It must be something which follows from given premises as certainly or probably true, and the mere possibility of truth is not sufficient to justify an inference to that effect. I do not accept, however, that the claim as formulated is destined to failure as asserted by Incat. In large measure the body of law drawing a distinction between an inference and conjecture is drawn from circumstances in which there has been a substantive hearing or trial. In such a circumstance, there is the opportunity to hear the entirety of the evidence through oral testimony, conventionally tested by cross-examination. At present, it is clear that Austal would have to establish more at trial in order that the inference it wishes the Court to draw may properly be drawn. But there are ways in which that may occur, for example by use of a far more restrained collection of Incat discovered documents than the collection sought, by answers to interrogatories or by evidence from third parties or by demonstrating the unreliability of Incat's evidence. It is possible that the Court could draw an inference after hearing the evidence of the witnesses and the cross-examination of them that there has been a usage of the confidential information, not only in connection with the Master Ferries negotiations but also in connection with the other transactions. There is not a proper basis for drawing such an inference at this stage but I would be reluctant to deny Austal the opportunity to pursue a very much more restrained discovery request and to have its assertions tested at trial. This will be subject to the parties first having mediated which I propose ordering in due course. Austal's application for further discovery and to direct Incat to respond to the notice to admit facts will be refused. Austal will be permitted to apply for leave to administer a limited number of interrogatories providing it does so within a narrow time frame. These reasons do not preclude Austal seeking far more confined and specific discovery. After interrogatories have been admitted and answered I will direct that the parties mediate. Incat's application for judgment will be dismissed. I consider that there should be no order as to costs but I will consider any written submissions to the contrary from the parties. Submissions, if any, should not exceed five pages and should be filed and served within 14 days. Accordingly I make the following orders: Each of the respondents is to file and serve an affidavit of discovery which conforms to the Rules of the Court within 21 days. The respondents' application for judgment is dismissed. Any written submissions on costs are not to exceed five pages and are to be filed and served within 21 days, failing which there will be no order as to costs. I certify that the preceding one hundred and sixty-six (166) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

application for further particular discovery principles governing discovery whether burden of discovery outweighs benefit whether discovery relevant to pleaded issues whether sufficient evidence to support order for further discovery whether application constitutes 'fishing expedition' whether respondents should be directed to respond to applicant's notice to admit facts whether leave should be granted to applicant to administer interrogatories application for summary dismissal by respondents whether reasonable prospect of success applicant claims two reports on sea keeping of its vessels confidential alleged misuse of confidential information springboard doctrine practice and procedure equity

The Full Court refused the application of the applicant (Cadbury) for a new trial and remitted the matter to me as the trial judge for the purpose of receiving the wrongly rejected evidence and relevant opposing evidence on behalf of the respondent (Darrell Lea). The further hearing has been fixed to commence on 11 March 2008. The parties duly filed detailed written submissions, Cadbury's on 17 December and Darrell Lea's on 19 December. 4 Cadbury complains of the lack of an oral hearing and alleges there has been a breach of natural justice. However, I am satisfied I have the power to make the direction in question under s 23 of the Federal Court of Australia Act 1976 (Cth). That section confers a general power that may be invoked to facilitate the judicial process for various purposes, including ensuring the convenient, expeditious and fair conduct of legal proceedings: Keith Hercules & Sons v Steedman (1987) 17 FCR 290 at 300. It is an everyday practice in this Court for subsidiary matters, for example questions of costs, to be dealt with on the papers. It can be an efficient and cost-effective procedure without in any way impairing the parties' rights to make an appropriate presentation of their arguments to the Court. Cadbury's written submissions were detailed and covered twelve pages. Darrell Lea's were of eight pages. Having read them, I cannot think of any further questions I would have wished to ask in an oral hearing. I now turn to the orders sought. Rather, the Court was of the view that justice would be served by a further hearing before the primary judge, at which Cadbury would have another opportunity of adducing the disputed evidence . [7] The proceeding was remitted on the basis that it would be before the primary judge as though the case were part heard. Thus, it would be a matter for the primary judge to determine the extent to which, after entertaining all proper objections and making rulings on such objections, additional or further evidence should be admitted . That may have the consequence that Darrell Lea would seek to adduce its own evidence in response to the disputed evidence. That would be an aspect of the management of the further hearing by the primary judge in the same way as it would have been had his Honour not rejected the disputed evidence in its entirety. That is to say, it would be for counsel for Darrell Lea to make such objections to the admissibility of the disputed evidence on formal grounds as they may consider appropriate. If, in the exercise of his discretion, the primary judge were to permit Cadbury the opportunity of adducing further evidence to overcome any objections, that would be a matter entirely for his Honour at the further hearing. On appeal Cadbury sought a new trial. The Full Court rejected that application and removed any doubt on the second hearing. Subsequently the High Court refused Cadbury's application for special leave to appeal. 11 Darrell Lea says that third party usage is highly relevant to the question whether there was a likelihood of deception. Whether this be so or not is plainly a matter to be considered at the further hearing. The relevance and weight to be accorded to such evidence, in the light of the Full Court's decision, is a matter for trial, not for pre-emptive strike on interlocutory application. In any event, there was nothing to stop Cadbury putting such matters to the Darrell Lea witnesses at the trial. 15 The evidence already given should not be excluded; see the observations above in relation to Mr Nowicki. Since Cadbury has failed on all contested issues there will be an order that it pay Darrell Lea's costs of the motion. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.

remitter by full court for further hearing in order to receive applicant's expert evidence held to have been wrongly rejected motion by applicant seeking leave to conduct further consumer survey, orders that certain evidence of an applicant's witness given at earlier hearing be not admitted, that an applicant's witness be recalled for further re-examination, that certain passages from the evidence of some respondent's witnesses be not admitted and that they be available for further cross-examination motion heard on the papers practice and procedure

The tender of Mr Salter's report be rejected. Mr Salter is a Principal of the Salter Group and is based in the Group's Los Angeles office, where he directs the firm's overall practice and project management efforts. Mr Salter's curriculum vitae shows that he has undertaken valuation and advisory work in the United States, the United Kingdom, Canada, France, Germany, Italy and Brazil. His experience in Australia, however, appears to be limited to the valuation of a film library on a number of occasions for a particular company which has links with a company in the United States. There is nothing to indicate that Mr Salter has particular knowledge of or substantial experience in the Australian media industry. They also rely on reports prepared by Professor McFadden, an expert in economics and econometrics. The text of Professor McFadden's reports exceeds 550 pages in length. Professor McFadden also addresses the impact on Seven of its alleged loss of the opportunity to pursue an IMC strategy. 6 Mr Salter's approach is to study the premiums associated with mergers and acquisitions among media companies of varying degrees of corporate integration. He limits his analysis to cases where both the target and acquirer corporation were publicly traded and where he can determine whether the acquirer was motivated by what he describes as strategic or financial considerations. With the launch and steady buildup of a successful sports-oriented pay television channel, Seven would have been able to launch additional content-based channels, consistent with many other IMCs worldwide. The value of the opportunity lost by Seven Network to be an integrated media company in the counter-factual world (over and above the value of Seven Network's individual business units on a standalone basis) is in the range from A$169.171 million to A$338.341 million'. Importantly, he acknowledges that the degree of valuation premium placed on an IMC depends on an individual company's ability to implement the various strategies. Nonetheless, he considers that a 'robust IMC' can take advantage of a potential valuation premium. 10 Mr Salter records that he has been asked to assume that Seven would have pursued an IMC strategy had it not lost the AFL pay rights and been unsuccessful in obtaining the NRL rights in 2000. (Seven's case, in substance, is that these detriments were brought about by contraventions of the TP Act on the part of a number of the respondents. In my opinion, if Seven positioned itself as an IMC in a manner that leveraged its content, core operating efficiencies and brand in a complementary manner across a number of different media and distribution channels, the Seven Network would benefit from increased revenue opportunities, including offering integrated advertising packages, without substantially increasing its costs'. He describes that approach as 'the Merger & Acquisition Analysis' ('M&A Analysis'). He expresses the opinion that the M&A Analysis: 'is the most appropriate method under the circumstances to determine an indication of the IMC valuation premium'. These transactions, so it appears from the summary material in his report, took place in eight different countries: the United States, Great Britain, Canada, New Zealand, France, Germany, Hong Kong and Australia. It appears that only three of the transactions fall into the category of 'financial acquisitions', as distinct from strategic acquisitions (that is, the acquisition of one media company by another). 17 Four of the 52 mergers and acquisitions involved Australian corporations. However, one of these was a financial acquisition and one was an acquisition by an Australian company of a Hong Kong company conducting a motion picture business. Thus only two of the transactions involve mergers between Australian media companies. Neither of these was a transaction between a free to air television and a pay television business. 18 Of the 'strategic acquisitions', the 'deal premiums' ranged from 62.7 per cent to 0 per cent. Mr Salter's report does not provide information as to the value of any of the 52 transactions, including the two Australian strategic acquisitions. The average premiums that he calculates are not weighted averages. One is the use of transactions that have taken place in a variety of countries for the purpose of determining an average strategic acquirers' premium, which is then said to be applicable to Seven's circumstances in Australia in 2001. Mr Salter makes no systematic attempt to analyse the disparate circumstances of the various transactions, let alone the characteristics of the markets, regulatory regimes and other factors that might have influenced the 'deal premiums' that he identifies. It is difficult to understand how average deal premiums derived from the 52 transactions can shed meaningful light on the specific circumstances of Seven in 2001, assuming that Seven proposed to follow the IMC strategy recorded in Mr Salter's report. 20 It is also difficult to understand the basis for selecting a range between 10 and 20 per cent of the market capitalisation of Seven in 2001 as the appropriate determinant of its loss. I note however that the median and average are comparatively similar and given the circumstances consider that extending the indicated premium by an amount of one-third above and below the mid point of the average and median is an appropriate approach to take. As such, in my opinion, the appropriate IMC premium range which I have applied is 10% to 20%. 21 In my opinion, however, there is a more fundamental problem with Mr Salter's report. His argument is that the M&A Analysis is not only the most appropriate method to assess 'the IMC valuation premium' in general, but is the appropriate method to assess the IMC valuation premium lost by Seven in 2001 as the result of anti-competitive conduct. That argument ultimately rests on the proposition that the deal premiums inherent in the transactions he identifies (more accurately, the average deal premium) can be regarded as providing 'a reasonable proxy for the valuation of synergies and opportunities available' to Seven on the counter-factual basis that it retained the AFL pay television rights or acquired the NRL pay television rights. 22 Mr Salter does not simply assume that Seven's proposed strategy in 2001 to develop its activities as an IMC would have been effective to produce benefits comparable to the benefits obtained, on average, by strategic acquisitions within the media industries of the various countries with which Mr Salter may be familiar. If Mr Salter had done that, the methodology he suggests conceivably could advance matters, provided there was independent evidence supporting that underlying assumption. Instead, Mr Salter expresses his own opinion that Seven was positioned to utilise C7 to enhance its market presence without significantly increasing its costs (see [11], above). It is this opinion that underpins his view that the M&A Analysis, as applied to the transactions he has selected, is the appropriate method to quantify the loss of opportunity sustained by Seven. 23 As I have noted, there is nothing in Mr Salter's report that establishes that he has any substantial expertise or relevant experience in the Australian television industry, whether as an analyst, valuer or adviser. Nor does his report contain any analysis of the regulatory framework in Australia, the market conditions applying in 2001 (in particular the conditions prevailing in the free to air and pay television industries) or the other financial considerations that might have had a bearing on the potential success or otherwise of Seven's assumed business strategy. (A separate question arises, which is not necessary to explore here, as to whether the facts ultimately proven will make good the assumptions concerning Seven's proposed business strategy. ) Similarly, the report makes no attempt to show that the market, regulatory or business conditions that obtained in the seven countries, excluding Australia, referred to in Mr Salter's report, mirrored conditions prevailing in Australia in 2001. 24 The report thus contains no reasoning process that demonstrates that Seven's (assumed) IMC strategy would have been likely to succeed in the circumstances prevailing in Australia in 2001. Nor does the reasoning in the report explain why Seven's IMC strategy, if successful, would have yielded benefits comparable to the average deal premium paid by the 49 strategic acquirers identified by Mr Salter. 25 In the absence of any such reasoning, it is in my view impossible to ascertain whether Mr Salter's opinion that the M&A Analysis, as applied to the transactions he selects, is an appropriate method of valuing Seven's loss of opportunity in the particular circumstances that prevailed in 2001. It is also impossible to ascertain whether Mr Salter's opinion is truly based on any specialised knowledge that he has. For example, for all that appears in the report, Mr Salter may simply have assumed that conditions in the Australian pay television industry at the relevant time were no different from those, say, in the United States. Yet the evidence suggests that there may have been very significant differences. These include the Australian anti-siphoning regime; the regulations governing pay television in Australia, such as limitations on advertising; the relatively low penetration rates for Australian pay television platforms; the lack of profitability (at the time) of those platforms; and the number of participants in the various markets (however defined). Mr Salter does not advert to these matters in his report. By directing attention to whether an opinion is wholly or substantially based on specialised knowledge based on training, study or experience, the section requires that the opinion is presented in a form which makes it possible to answer that question. Experts who venture "opinions" (sometimes merely their own inference of fact), outside their field of specified knowledge may invest those opinions with a spurious appearance of authority, and legitimate processes of fact-finding may be subverted. Thus, a report in which an opinion is recorded should expose the reasoning of its author in a way that would demonstrate that the opinion is based on particular specialised knowledge. ' (Emphasis in original. In particular, it is impossible to ascertain whether the opinions expressed by Mr Salter quantifying losses sustained by Seven because of its inability to pursue an IMC strategy reflect his specialised knowledge, based on his training, study or experience. The report must therefore be rejected. 30 As I have pointed out, Mr Salter expresses the opinion that Seven, if it adopted its proposed IMC strategy, would have benefited from increased revenue opportunities, integrated advertising packages and other benefits, without experiencing an increase in its costs. That expression of opinion is supported by a footnote reference to one of the assumptions provided to Mr Salter that he was asked to accept for the purposes of preparing his report. In his report, Mr Salter goes beyond this assumption and expresses the opinion that the assessment was in substance correct. There is, however, no reasoning process that explains why Mr Salter considers that Seven Network's assessment would have proved to be correct in the particular circumstances of the Australian television industry in 2001. 32 Nothing has been put to me in argument to suggest that there is evidence, other than the opinions expressed by Mr Salter, that would justify finding that Seven's proposed IMC strategy (assuming that such a strategy was in fact in place) would have been likely to succeed or, more particularly, that the strategy would have produced benefits comparable to those apparently available to the firms involved in the mergers of media companies identified by Mr Salter. If there is such evidence, it might be argued that Mr Salter's report should be admitted as explaining and justifying a methodology that could be utilised to assess the value of the loss of opportunity sustained by Seven. 33 If, however, such an argument is advanced, either on the basis of existing evidence or evidence yet to be adduced, it will be necessary to take account of s 135 of the Evidence Act .

whether report on the value of a lost economic opportunity satisfies the requirements of s 79 of the evidence act 1995 (cth) admissibility of report expert evidence

The undertakings which had substantially the same effect as an extension of protective orders under s 1323 of the Corporations Act 2001 (Cth) (the Act) in respect of the assets of the various defendants, are in effect until 30 June 2008. At that time the undertakings will expire and these proceedings will effectively be at an end. The ex tempore reasons for judgment in relation to the acceptance of the undertakings have been published as: Australian Securities & Investments Commission; In the matter of Richstar Enterprises Pty Ltd v Carey (No 21) [2008] FCA 381. 2 In addition to accepting the undertakings proffered by Mr Carey the Court made certain substantive orders. 4 Mr Carey filed an affidavit on 20 March 2008. No responding affidavit has been filed by the Australian Securities and Investments Commission (ASIC) which indicated at the hearing on 12 March 2008 that it did not intend to make any submissions on the continuation of the expenses allowance. There was therefore no contradictor on the question. 5 In his affidavit, Mr Carey said that his living allowance has been set at $4,000 per week since the proceedings commenced. We are not aware of any material adjustments that would require an alteration to this amount. 6 Mr Carey exhibited to his affidavit a letter sent to Mr McMaster's solicitors containing an annexure setting out his living expenses. The letter annexed a further 140 pages with invoices and receipts verifying the payments in accordance with Mr McMaster's request. 7 Mr Carey said that since the review to which his letter referred, which was undertaken in April/May 2007, his living expenses have increased. He exhibited to his affidavit a residential property lease dated 12 September 2007 for a term of six months at $850 per week. It appears from the lease that he is renting the premises through a company, Earlmist Pty Ltd. He signed the lease on behalf of the company. Also exhibited was a fax from real estate agents sent on 18 January 2008. It indicated that the owner had agreed to a new lease with a rent increase of $50 per week. (b) The school fees payable by Mr Carey for his children pursuant to Family Court orders have increased to $576.77 per week. He exhibited supporting invoices to his affidavit. (c) Maintenance and child support payable pursuant to court orders was increased to $710.23 per week. Mr Carey exhibited to his affidavit a letter dated 16 June 2007 from the Child Support Agency indicating the relevant increase. 8 The schedule of living expenses which Mr Carey sent to the receiver's solicitors in April 2007 showed expenses in excess of $4,000 per week. The major items were rent, school fees and levies, maintenance and child support. Food and household provisions and gym and personal trainer costs were each budgeted at $250 per week. The actual expenditure on food and household provisions was $598.20 and on gym and trainer was $173.08. 9 Mr Carey argued in his affidavit that if he were to make up all of the actual expense incurred on a weekly basis as at April 2007, which totalled $4,683.09, together with the increases that have occurred since then, he would need to expend $5,062. He said he does not spend that much as he does not have access to that amount. He saves on holidays, entertainment and hobbies, food and household provisions, car hire and an item described in his schedule as 'Other Necessary Commitments/Extra Curricular Activities'. He says he tries to attend the gym to keep healthy and deal with the stress which he is under. He said he has found it increasingly difficult to live within the $4,000 allowance with the widely reported increase in the cost of living. 10 Mr Carey says that if his living allowance were reduced from $4,000 per week the impact upon him and his family would be catastrophic. He draws the current living allowance in that amount with the surplus accumulating in a bank account with the Home Building Society. Proactive and Keyworld are not entities within the s 1323 regime and so no issue of asset preservation arises with respect to them. 12 Mr Carey says that Richstar currently has $2,168,886 cash at bank. He believes it is able to meet all of its obligations including his remuneration from return on those moneys without any risk of diminishing its underlying assets. 13 In the submissions made on behalf of Mr Carey his counsel argued that the asset preservation regime which has been imposed pursuant to s 1323 of the Act and which is to be continued until 30 June 2008 pursuant to the undertaking, requires a balancing of his private needs with the public interest purpose of the provision. 14 It was submitted that the asset preservation regime constitutes a substantial imposition on his basic rights. It is a restriction not to be imposed without good cause and only to the least extent consistent with the purposes of the law. This, it was submitted, is particularly true where the restrictions have been in place for an extended period and without the benefit of final positive findings of wrong doing. 15 It was submitted that the question of the amount of the allowance turns to a large extent on the propriety and reasonableness of what is being sought. Mr Carey's counsel argues that housing is a fundamental need and unless the rent being paid were extravagant the Court would not normally force a person out of their home. Almost a quarter of Mr Carey's living expenses go on a rental property which he has occupied before and during these proceedings. They pointed to the short time left during which the restrictions will be in place pursuant to his undertaking and the cost of moving to cheaper premises within that time. 16 The Family Court orders and Child Support Agency payments mean that more than 30% of the proposed allowance is applicable to pre-existing obligations arising from statute and Family Court orders. Mr Carey's actual 'living' portion of the allowance would amount to about $1,800 per week. The other part is effectively committed without any real discretion. It was submitted that it is not unreasonable nor does it offend any public policy that a person in his position have that amount to live on. 17 It was suggested that one way of dealing with the issue would be to separate his actual living expenses from his rent and money payable under court orders on the basis that one is legally mandated and the other is a compulsory payment, so reducing the living amount required to $1,800 to $2,000 per week. 18 As I said in the reasons for judgment delivered on 12 March 2008, it is necessary to bear in mind the nature and purpose of orders under s 1323. They are not punitive. They are intended to protect, for a time, the interests of potential claimants against the assets and thereby the public interest. They are necessarily of a temporary character. They are temporary because, notwithstanding that they are made in the public interest, they involve a significant interference with the property rights of the parties affected by them. The Court, acting under s 1323 , must therefore keep in mind the need to maintain an appropriate balance between those legitimate and competing interests in circumstances in which the evidence before the Court is necessarily incomplete. 19 It is not the function of the Court to punish Mr Carey because there may be a case that he has contravened the Act or because he may be held responsible for losses suffered by investors. Punitive or compensatory orders can only be made in proceedings in which positive findings are made adverse to him which give rise to liabilities in respect of which the Court may make dispositive orders. While the Court can appreciate the anger and distress of many investors who lost money through the Westpoint Group it is not part of its lawful function to reflect that anger or distress in orders of an interim character made under s 1323 of the Act. 20 In my opinion the only question which is relevant here, is whether the allowance that Mr Carey is authorised to receive under the s 1323 orders is at such a level that it would tend significantly to undermine the purpose of protecting the affected assets for the balance of the period for which the restrictions are in place. I do not consider that it is at such a level. 21 While it may be possible to go through the various expenses claimed by Mr Carey and to trim or reduce some items in the exercise of a judgment of what seems reasonable, this would largely be a cosmetic exercise with no real impact on the practical operation of the undertaking so far as it relates to the protection of assets. In coming to that conclusion I bear in mind that the allowance has been in place for a considerable period of time, that it was negotiated with the receivers and that there is only a short period of time remaining for the operation of the restrictions. I have regard also to the absence of any submissions from ASIC which would suggest that the protective purpose of the undertakings between now and 30 June 2008 would be compromised by the continuance of the expenses and living allowance which has been in effect for about two years. 22 In the circumstances therefore, I propose to permit the continuation of the allowance at the rate that has been in place since the proceedings commenced. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.

asset preservation orders under s 1323 corporations act 2001 (cth) undertaking proffered in lieu of orders weekly allowance for rent, school fees, child support and living expenses amount of allowance not inconsistent with protection of assets weekly allowance continued at existing rate corporations

Leave is required pursuant to an order of French J (as he then was) in Yap v Australian Securities & Investments Commission [2008] FCA 534. Mrs Yap in those proceedings sought the following relief: Cheshire Securities Pty Ltd ACN 009 264 082 be reinstated and ASIC to compensate the company for its wrongful deregistration on 20 June 2000. Curtin University of WA to reinstate the company's 50-years [sic] LEASE executed on 11 August 1988 between Curtin U (Lessor) Cheshire (Lessee) and CS Yap (Guarantor). Esanda F Ltd to reimburse the company all rents derived from its Student Housing "Don Watt House" from 17 November 1988 with interest compounded at Court rate till Judgment and to compensate its Guarantors (Arcola Pty Ltd and CS Yap) for wrongful seizure and sale of their properties. Challenge Bank to reimburse CS Yap all rents derived from Lot 896/No 235 Preston Point Rd Bicton from 25.5.88 with interest at Ct rate till Judgment. The State of WA to compensate Cheshire Securities Pty Ltd as the Court sees just as it is the victim of Curtin U Student Housing project that WADC facilitated. Mr Peter Fermanis to repay Cheshire Securities Pty Ltd all monies he received from Public Trustee unlawfully pursuant to his SC CIV 1172/88 P Fermanis vs Cheshire Hldgs Pty Ltd CSY2. The bankruptcy of Yap Cheng See pursuant to WG 7047/98 effected by Granich & Asso on 10.12.98 ought to be annulled as a result of fraud by P Vivante & Co Pty Ltd in DC1536/89 in CSY78. On 31.10.93 CS Yap was declared a vexatious litigant pursuant to SC CIV 2722/02 by Granich & Asso ought to be rescinded for same reason as in par 10 evidence in CSY79. Mrs Yap's application was there supported by an extensive affidavit sworn by her on 5 November 2007. French J described it as "long and turgid (covering) events dating back to 1987 and which appeared to make allegations of fraud and improper conduct against a variety of parties: Yap [2008] FCA 534 at [2] . His Honour noted in that case that four earlier attempts had been made by Mrs Yap to reinstate Cheshire in the Supreme Court of Western Australia as well as two other unsuccessful applications which were brought by Mrs Yap's son, Mr Chong, again in the Supreme Court of Western Australia at [6-7]. His Honour observed that if Cheshire had any valid claims against any of the respondents before him then they must have accrued prior to Cheshire being deregistered on 13 April 1992 and any cause of action was likely now to be statute barred at [10]. His Honour described Mrs Yap's claims in the affidavit material before him as "almost unintelligible". The remedies sought in the application before French J as his Honour observed at [12] substantially depended upon the reinstatement of Cheshire. His Honour was of the opinion that that application had no reasonable prospect of success and was on its face an abuse of process seeking, as it did, to relitigate issues that had been litigated over many years. His Honour further observed that "if there be, buried in the mound of material that Mrs Yap submits to this Court, some issue which has not been litigated it is not the task of the Court to unearth it". Mrs Yap's application was then dismissed by his Honour under s 31A of the Federal Court of Australia Act 1976 (Cth) and alternatively on the basis that it was an abuse of process. His Honour, satisfied that Mrs Yap had habitually, persistently and without reasonable grounds instituted vexatious proceedings in this and the Supreme Court of Western Australia, directed under O 21, r (1)(b) of the Federal Court of Australia Rules that in future Mrs Yap may not institute a proceeding in this Court without the leave of the Court. The history of Mrs Yap's disputes in various courts is set out in Granich v Yap [2004] FCA 1567 at [3] : P Vivante & Co Pty Ltd obtained a default judgment against Mrs Yap in District Court action 1536 of 1989 on 10 April 1989. On 23 June 1992, District Court Registrar Kingsley set aside the default judgment and gave Mrs Yap leave to defend the proceedings provided she paid $39,000 into court by 7 July 1992. Mrs Yap failed to pay the money into court. Mrs Yap appealed the decision of District Court Registrar Kingsley to his Honour Judge Viol. The appeal was heard by his Honour on 3, 10 and 21 August 1992. His Honour dismissed the appeal with costs. Mrs Yap applied for leave to appeal the decision of his Honour Judge Viol to the Full Court of the Supreme Court. On 10 June 1993 the Full Court dismissed her application for leave to appeal and ordered that she pay the costs. Mrs Yap commenced proceedings against Granich & Associates for alleged negligence in District Court action 6202 of 1993. Her action related to the firm's conduct of the District Court proceedings. Her action was dismissed by Commissioner Martin QC on 7 May 1996. He found she failed to prove the firm had been negligent. The solicitors, Granich & Associates, were awarded the costs of the action. Mrs Yap instituted an appeal to the Full Court of the Supreme Court. That appeal was dismissed on 21 July 1997 for want of prosecution. Mrs Yap was ordered to pay the costs of the appeal. Granich & Associates initiated proceedings in the Local Court to recover legal costs from Mrs Yap. She brought a counterclaim in those proceedings and sought to have it transferred to the Supreme Court. On 24 October 1997, Master Bredmeyer dismissed the action for removal as an abuse of process. Mrs Yap applied for special leave to appeal the judgment of the Full Court to the High Court. The special leave application was dismissed on 22 October 1998 with costs. On 14 December 2001, Mrs Yap applied for judgment in the District Court action which had been dismissed by Commissioner Martin QC on 7 May 1996. The application for a judgment was allegedly based on admissions. It was dismissed with costs by his Honour Judge Wisbey. On 15 March 2002, Mrs Yap applied to the District Court for a retrial of the 1993 action against her solicitors based on alleged fresh evidence. Commissioner Greaves dismissed the application with costs on 22 March 2002. Mrs Yap's appeal against the decision of Commissioner Greaves was dismissed with costs by his Honour Judge Williams on 12 April 2002. Mrs Yap applied to the Supreme Court for a rehearing of the 1996 District Court action based on alleged fresh evidence. Her application was heard by the Full Court of the Supreme Court on 14 August 2002 and dismissed by the Court on 4 December 2002. The Full Court found that she was making the same allegations as she had in the hearing before Commissioner Martin QC. On 30 December 2002, Mrs Yap made an application for special leave to appeal to the High Court seeking, inter alia, to set aside the judgment of the Full Court of 4 December 2002. That application is yet to be listed for hearing. On 13 December 2002, Granich & Associates made an application for leave to apply in the Supreme Court of Western Australia to have Mrs Yap declared a vexatious litigant under the Vexatious Proceedings Restriction Act (2002) (WA). In a judgment delivered on 31 October 2003, Heenan J made an order prohibiting Mrs Yap or any person acting on her behalf from instituting proceedings against Granich & Associates without leave of the Court or Tribunal in the manner prescribed in s 6 of the Vexatious Proceedings Restriction Act --- Granich Partners v Yap [2003] WASC 206. The history extends to proceedings in this Court. That was also summarised in Granich v Yap [2004] FCA 1567 at [4] : On 11 October 1997, Granich & Associates caused a bankruptcy notice to be served on Mrs Yap. The notice required payment of $33,184.11. The debt comprised taxed costs of $29,790.45 which Mrs Yap had been ordered to pay to Granich & Associates upon the dismissal of her claim by Commissioner Martin on 7 May 1996, and post-judgment interest of $3,393.66. The costs had been taxed on 12 August 1996. On 17 October 1997, Mrs Yap filed an application to set aside the bankruptcy notice on the basis that she had a counterclaim based upon the negligence of Granich & Associates. On 1 December 1997 the District Registrar of the Federal Court dismissed that application. Mrs Yap did not seek review of or appeal from that order. On 1 May 1998, Granich & Associates filed a creditor's petition seeking sequestration of Mrs Yap's estate. The act of bankruptcy relied upon was non-compliance with the bankruptcy notice served on 11 October 1997. On 13 May 1998, Mrs Yap filed a notice of intention to oppose the petition based on a pending application for special leave to appeal to the High Court of Australia in relation to her unsuccessful professional negligence action against Granich & Associates. Between the filing of the notice of intention to oppose the petition and 10 December 1998, the hearing of the petition was adjourned five times and Mrs Yap filed six affidavits. On 10 December 1998 the Registrar made a sequestration order against Mrs Yap's estate. The matter came before me as a result of a motion filed by Mrs Yap on 16 December 1998 seeking an order that the judgment of the Registrar be set aside, the sequestration order be annulled, and that Granich & Associates pay damages and costs. The motion to review and set aside the sequestration order was dismissed by me on 30 July 1999 - Granich & Associates v Yap Cheng See [1999] FCA 1039. Mrs Yap appealed against my decision to the Full Court which dismissed her appeal on 29 November 1999 --- Yap v Granich & Associates [1999] FCA 1867. On 6 October 2000, Mrs Yap lodged an application for the annulment of her bankruptcy. On the respondent's motion, RD Nicholson J dismissed the application on the basis, inter alia, that Mrs Yap was seeking in it to raise the same allegations which she had previously raised in the Full Court of the Federal Court --- Yap v Granich & Associates [2001] FCA 799. Mrs Yap applied to the Full Court of the Federal Court for leave to appeal against the decision of RD Nicholson J. Her application was dismissed by the Full Court on 29 November 2001 --- Yap v Granich & Associates [2001] FCA 1735. Mrs Yap was ordered to pay the costs of Granich & Associates. Mrs Yap appealed against the decision of the Federal Magistrate. Her appeal was heard by a single judge, Marshall J, who dismissed the appeal on 21 May 2004 --- Yap v Granich & Associates [2004] FCA 647. McKerracher J refused leave dated 5 August 2009. Mrs Yap had relied heavily on the content of her extensive affidavit sworn in the previous proceedings before French J in 2007. The submissions before his Honour would appear were a reiteration of what had been put previously to French J. As his Honour McKerracher J observed at [7] each of the claims articulated had been previously pursued or alternatively depended upon other claims which had been previously pursued, sometimes on numerous occasions and in all cases were claims which had been rejected. McKerracher J was unable to identify any new material, new evidence or new or different arguments since the application had last been considered in Yap v Granich Partners [2008] FCA 1380. The application before me in respect of which leave is sought is in substance the same as the one which was before McKerracher J and which is the subject of judgment in Yap [2009] FCA 831. However two of the respondents in that case, Granich & Associates and State Government of Western Australia are not named as parties to the present application. Mrs Yap's aim, through the vehicle of the proposed application, is to unravel the many court orders made over the last 20 years and to obtain compensation from the respondents for loss and damage she says is a result of the orders made. The application before me also seeks by way of interlocutory relief an order for the annulment of Mrs Yap's bankruptcy. Mrs Yap is no longer bankrupt but submits that the annulment of her bankruptcy is necessary in order for her to revisit, in respect of litigation, the consequences of her having been declared bankrupt. In the proceedings before McKerracher J, Mrs Yap relied upon an affidavit of 37 pages with annexures of 55 pages. In this present application Mrs Yap relies upon her affidavit sworn 14 September 2009 which she described as "fresh evidence" to support the application. The affidavit is 38 pages long with a further 39 pages annexures. I have read this affidavit and the affidavit which was before McKerracher J. In her current affidavit Mrs Yap purports to also rely upon, as she did before McKerracher J, the lengthy affidavit sworn 5 November 2007 in the proceedings which were before French J. I am conscious of the injunction of Kirby J in Re Attorney-General (Cth); Ex parte Skyring (1996) 135 ALR 129 at 31-32 that, in such cases, particularly where the applicant is unrepresented that the judicial mind must remain open in the case of a person who has been rejected by the Court in the past as there maybe a good point, not previously seen and which may have merit hidden amongst the verbiage of the applicant's arguments. The supposed new material which I will turn to was, in the broad, a reventilation of allegations previously made by Mrs Yap going back to May 1987. Much of it is disjointed. It is difficult to discern any further reasoning upon which to understand Mrs Yap's claim. It contains what appears to be excerpts from the transcripts of various court hearings as well as reference to exhibits in cases in which she was a party. The allegations range widely and include negligence, misrepresentation, fraud, theft and perjury. The allegations were often made against legal practitioners and bank officers. I invited Mrs Yap in the course of the hearing to identify fresh evidence and to explain why it was said to be fresh evidence. The copy letter of 4 February 1988 from Mr Yacopetti was before McKerracher J on what was the same application before him as indeed were the reasons of Macknay DCJ and Nicholson J to which I have referred. What may be said of all of the evidentiary material upon which Mrs Yap relies is that none of it is "fresh evidence" in the relevant sense. It is merely assertive and argumentative material sourced from cases past. In any event Mrs Yap could never in a proceeding such as this, in effect, appeal against judgments earlier made whether in this Court or other courts. That, in my view, is the thrust of the proposed application. In my opinion, the proposed proceedings are an abuse of process. There are no prima facie grounds for the proposed application. I would refuse leave to the first applicant. The application on the part of the second applicant was unnecessary. The application will be dismissed. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

vexatious litigant application for leave to issue proceedings no fresh evidence proceedings abuse of process. practice and procedure

2 I have now heard submissions as to the punishment to be imposed. Counsel for ASIC submitted that the circumstances of this case call for the imposition of a substantial fine. ASIC also seeks an order that Mr Albarran pay its costs on an indemnity basis. 3 Unless otherwise indicated, all paragraph references in these reasons refer to my decision in Australian Securities and Investments Commission v Albarran [2008] FCA 147. 5 As a statutory analogue for the exercise of the power to punish for contempt, no question arises under s 219(7) as to the Court's power of punishment. In any event, the Court's power to punish for contempt is well-established: Siminton v Australian Prudential Regulation Authority [2006] FCAFC 118 ; (2006) 152 FCR 129 at [74] . 6 In Siminton , a Full Court observed at [74] that where a natural person is the contemnor, the Court has power to impose a fine, order that the person be committed to serve a term of imprisonment, or to order both a fine and imprisonment. The statutory sources of the power are s 31 of the Federal Court of Australia Act 1976 (Cth), s 24 of the Judiciary Act 1903 (Cth) and rule 11.04 of the High Court Rules. 7 The distinction between civil and criminal contempt is no longer of any practical significance: Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525 at 534. Nevertheless, a number of relevant principles are to be found in their Honours' analysis of the distinction that was previously thought to underlie the difference between the civil and criminal species of contempt. 8 First, disobedience to a court order or breach of an undertaking to a court amounts to a criminal contempt if it involves deliberate defiance or is contumacious: Witham v Holloway at 530. A contempt which is characterised in this way is therefore at the more serious end of the spectrum, although any contempt is a serious matter. 9 Second, proceedings for breach of an order or undertaking have the effect of vindicating judicial authority, and a remedial or coercive effect: Witham v Holloway at 533. 10 Third, as was earlier observed by the High Court in Australasian Meat Industry Employees' Union v Mudginberri Station Proprietary Limited ("Mudginberri") [1986] HCA 46 ; (1986) 161 CLR 98 at 108, the punitive and remedial objects of the exercise of the contempt power are inextricably intertwined: Witham v Holloway at 533-534. 11 In Mudginberri their Honours referred to the "strong stream" of authority for the proposition that a fine may be imposed when the contempt consists of wilful disobedience of a court order, at least in the sense that the disobedience is not "casual, accidental or unintentional": 106-107, 109, 112-113. 12 Reference was also made in Mudginberri to the underlying rationale of every exercise of the contempt power, namely the need to uphold and protect the effective administration of justice. Their Honours quoted from the then current edition of the seminal work on the law of contempt, Borrie & Lowe's Law of Contempt (2 nd ed, 1983): if a court lacked the means to enforce its orders, or if its orders could be disobeyed with impunity, the administration of justice would be brought into disrepute. The seriousness transcends matters such as the personal dignity of the judiciary, or the rights in this case of the Commissioner as a litigant in this Court. The offence involves interference with the effective administration of justice, by impeding and perverting its course: Johnson v Grant (1923) SC 789 at 790 per Lord President Clyde. Contempt of court is a matter of basic and public significance. Unless the laws of contempt are properly enforced our whole system of justice is at risk. Orders for penalties recognise the need to deter not only the defaulting party, but others who might be like-minded. 16 The Board is furnished with a very significant disciplinary and regulatory function in the exercise of its power under s 1292 of the Corporations Act 2001 (Cth) to cancel or suspend the registration of an auditor or liquidator. 17 In aid of its disciplinary function the Board is given power in s 219 of the ASIC Act to summons witnesses and to require them to answer questions. 18 As Emmett J remarked, in a different statutory context, in Australian Securities & Investments Commission v Pappas [2007] FCA 672 at [23] , the power to examine witnesses is a significant one which is conferred in the public interest. 20 It follows from these authorities, and from the statutory regime to which I referred at [13] --- [21] of my principal judgment, that an appropriate penalty would be one which signifies to Mr Albarran and to the public, that failure to comply with the obligation to answer the Board's questions will be treated no less seriously than it would in the exercise of similar functions by a Court. 22 Eight of those factors were listed by Emmett J in Pappas at [2] as relevant to the question of determination of penalty in the case of failure to assist ASIC in connection with an investigation under s 19 of the ASIC Act . 23 I adopt the factors listed by Brereton J in Anderson , and accepted by Emmett J in Pappas , as guiding principles for the determination of the appropriate penalty. The tenth factor referred to by Brereton J, namely denunciation of the contempt, was not included in Emmett J's list. However, in my opinion it is a factor to be taken into account. 24 A number of those factors point to the imposition of a substantial punishment on Mr Albarran. In particular, his contempt was serious, he was aware of the consequences and he has not apologised to the Court or the Board. 25 I will deal with these factors, and the presence of any mitigating factors in considering the circumstances of the case which are relevant to the question of punishment. 27 It is not to the point that Mr Albarran indicated a willingness to re-appear before the Panel after his AAT hearing. He was summonsed to appear before the Panel in the Partner's matter on 7 February 2007 and declined to answer questions that were put to him. His refusal constituted deliberate and stubborn defiance of the Panel, notwithstanding the failure of his application to be excused from attendance and the absence of any prejudice to him. 28 Mr Albarran's failure or refusal to answer questions that were relevant to the disciplinary proceeding in the Partner's matter was a deliberate and stubborn defiance of the Panel. The contempt was contumacious in the sense referred to in the authorities. 29 It is perhaps unnecessary to repeat the findings I made in my principal judgment which establish the contumacious nature of the contempt but I will do so briefly. 30 A chronological account of the events from November 2006 to January 2007 shows that Mr Albarran, initially on the advice of solicitors and counsel, contended that the summons to give evidence was invalid. But despite the assurance given in ASIC's letter of 14 December 2006 that it merely sought to adduce the same evidence he had already given, Mr Albarran persisted in his application to be excused: see in particular [38], [39], [42], [47], [48], [50]. 31 Mr Magarey's detailed ruling of 25 January 2007 made it plain that Mr Albarran had no basis for a refusal to answer questions which sought to adduce evidence that Mr Albarran had previously given in his own disciplinary proceeding: see in particular [60] and [62]. 32 I accepted at [120] that it is likely that Mr Albarran did not read Mr Magarey's ruling but this is a further aspect of his deliberate defiance of the authority of the Board. His attitude, as I said at [143], is graphically revealed by what was recorded in the file note of 25 January 2007, "they can take me to the Federal Court": see [64]. 33 Mr Albarran's defiance is further revealed in what he said to the Panel Chairman on 7 February 2007. I have set out the whole of the relevant exchange at [69]. It is pertinent to note that when told by the Chairman that his appearance would be virtually useless, Mr Albarran replied that the Partner who was the subject of the proceedings before the Board "wasn't required at my hearing. " He continued to defy the Panel Chairman even after counsel assisting the Panel pointed out that there could not be any prejudice in being asked to give the same evidence he had given previously: see [74], [75]. 35 That Mr Albarran was aware of the consequences of the contempt is revealed in the file note of 25 January 2007, to which I have referred, and even more graphically in that part of the file note of 17 January 2007 set out at [55]. Mr Albarran was aware from this that failure to answer questions without reasonable excuse was a criminal offence for which he could be imprisoned: see [143]. 36 To this must be added my finding at [132] that Mr Albarran was prepared to run the risk of the consequences that would flow from his failure to answer questions. 37 Senior counsel for Mr Albarran, Mr Byrne SC, put a number of well-directed submissions to me on the question of mitigation. 38 I accept that there was no direct personal benefit to Mr Albarran from his refusal to answer the questions. I made no finding as to the reason or motive for the contempt, but it is probably to be gleaned from Mr Albarran's remarks in the exchange with the Panel Chairman which I referred to above. That is, he said he may have answered some questions differently. 40 In short, I do not consider the absence of any direct personal benefit to be a relevant mitigating factor in the present case. 41 Nor do I consider it relevant as a mitigating factor that the refusal to answer was in the Partner's disciplinary proceeding, rather than Mr Albarran's own matter. The factor relied upon by Mr Byrne is therefore a fact which, subject to the issue of a certificate under s 219(6) , enlivened the jurisdiction of the Court. Accordingly, it cannot be a mitigating factor. 42 It is true that Mr Albarran's refusal to answer the questions did not prevent the Panel from completing its hearing, or from carrying out its function of disciplining the Partner. This is not an answer to Mr Albarran's contempt, but it carries a small amount of weight in mitigating the seriousness of the offence. 43 Apart from what is said in three character references, all that is relevantly known of the defendant's antecedents is that in 2005 the Board made a finding that Mr Albarran participated in contrived nominee arrangements for the appointment of administrators of Formula Engineering. The Board did not find that Mr Albarran acted dishonestly: [33] --- [34]. 44 I accept, as was stated in the references, that the effect of the disciplinary ruling has been very severe for Mr Albarran. I accept that he was previously of good standing professionally and that he enjoyed considerable professional success. But the consequences which flowed from the disciplinary proceeding, including the stress and personal turmoil are not related to the contempt proceeding. 45 I do not accept that the stress and turmoil in Mr Albarran's personal life explain his failure or refusal to answer the Panel Chairman's questions. However, I consider that some weight should be given to the fact that the present matter, and my findings in it, will inevitably receive publicity within the accounting profession, especially among insolvency practitioners. This constitutes a form of punishment which will have a specific and general deterrent effect. 46 Whilst I accept that Mr Albarran has informed the persons who provided character references of his regret for his decision to refuse to answer the questions, I do not consider that this demonstrates genuine contrition. The short answer to Mr Byrne's submission on this factor is that Mr Albarran has not expressed contrition to the Board or to the Court. 47 The lack of contrition is especially relevant in light of my rejection of critical aspects of Mr Albarran's evidence as untruthful (see at [105]) and my finding that Mr Albarran's state of mind after Mr Magarey's ruling was "entirely unreasonable" (at [136]). 48 In my view, the factors in this case show that a substantial fine is required to vindicate the authority of the Board and to serve the requirements of personal and general deterrence. I accept that a term of imprisonment is inappropriate, that being a punishment of last resort. However, ultimately the authorities provide only the most general guidance because each case turns on different factual considerations. 50 This is not a case in which I am asked to take into account the defendant's limited financial circumstances: cf Pappas at [24]; Australian Securities and Investments Commission v Wynhoven (2004) 51 ACSR 384 at [10] per Selway J. Here, there is no evidence as to Mr Albarran's financial circumstances. Accordingly, this factor can neither increase nor reduce the penalty: Four Seasons Gutter Protection Pty Limited v Leafbusters Pty Limited (No 2) [2004] FCA 1402 at [18] per Heerey J. 51 For reasons mentioned below, I will make an order for indemnity costs. This is said to be a mitigating factor: Four Seasons Gutter Protection at [17]. But it does not follow that there ought to be a mechanical process under which the level of fine is reduced to reflect the difference between indemnity costs and party and party costs. 52 Taking into account all of the factors mentioned above, in particular the seriousness of Mr Albarran's contempt, his knowledge of the consequences and his failure to show contrition, I consider that I ought to impose a fine of $20,000. 55 Gillard J ordered costs on a solicitor and own client basis rather than indemnity costs but those two bases are "more or less equated": EMI Records Ltd v Ian Cameron Wallace Ltd [1982] 2 All ER 980 at 984, 989; Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (FCA, French J, 3 May 1991, unreported) at 5-6. 56 As Sir Robert Megarry VC said in EMI Records at 984, indemnity costs are commonly ordered in contempt cases. The same practice is adopted in Australia, for reasons which include those stated by Kiefel J in BHP Steel . I therefore propose to order Mr Albarran to pay the costs of the proceeding (including the costs incurred prior to the substitution of ASIC as plaintiff) on an indemnity basis. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.

defendant refused to answer questions before the companies auditors and liquidators disciplinary board defendant to be punished as if guilty of contempt of court principles for imposing punishment defendant fined $20,000 order for indemnity costs corporations

The portions to which objection is taken and a summary statement of the grounds of objection are set out in the 'Table of Objections' in the schedule to these reasons. Also contained in that schedule is the ruling on each objection together with a short statement of reasons for the ruling. 2 The short statements of reasons are based upon the considerations arising, not only generally at law but also from the submissions of the parties in relation to which I make the following observations. Alternatively, it is submitted that if the evidence is not sought to be tendered to prove the existence of the 'asserted fact' as defined in s 59(2) of the Evidence Act , then it is irrelevant. 4 In respect of the vast number of hearsay objections, the applicant submits that supplementary affidavits would clarify what events were observed by the deponent and what were observed by others. In reply to this, the respondents submit that such is not a satisfactory course and that the appropriate course is to strike out paragraphs which are expressed in a manner suggesting they are not based on the deponent's personal knowledge or which leave the Court unable to determine whether they are or are not based on such knowledge. That then leaves it for the deponent to swear a further affidavit in a proper form if that is able to be made. 5 I agree with the submissions in reply of the respondents. The evidence falls to be considered against the objection as it stands at the time the objection is made and required to be ruled on. It is not for the Court to conjecture how the evidence would stand in the light of evidence not yet to hand. The applicant accepts that there are elements of submission or argument in various paragraphs of the affidavit. Where those paragraphs are not the subject of other objections, the applicant undertakes that the submissions in those paragraphs will be taken up by way of submission following the evidence of the respondents' witnesses to which they relate. The applicant responds generally that the deponent, by reason of her qualifications and experience as set out in her affidavit and in particular her lengthy experience with the community in question, is qualified as an expert to provide opinions so far as they can be related to and are based on her observations over the 26 years of the applicant community at Lockridge campsite. It submits that where statements can be read on their face as applying to a group broader than those within that experience, they ought to be read down to apply to the Swan Valley Nyungah Community. Alternatively, it is submitted that to the extent that the deponent is expressing opinions based on what she perceived about the relevant matters or events and the evidence is necessary to obtain an adequate account or understanding of her perception of the matters or events, those opinions are admissible: s 78 of the Evidence Act . The respondents contend that the deponent's 'specialised knowledge' within the meaning of that term in s 79 of the Evidence Act is psychology. It is said that her opinions on the community cannot be wholly or substantially based on that knowledge. Where claims of her expertise are relied upon, the foundations of the specialised knowledge are challenged by the respondents. Further, where the statements of opinion relate to matters an ordinary person commonly perceives, it is said that s 78 cannot apply in respect of them. It is submitted that the section has no application to the opinions expressed by the deponent in her affidavit. 8 I have been unable to agree with this latter submission. Where the opinions are expressed about matters concerning the community based on the deponent's long association with it, in my view there is scope for some application by s 78. As a consequence of her long association with the community she cannot be regarded as 'an ordinary person' in making her perceptions. This is a report of a select committee of the Legislative Council of the Parliament of Western Australia. The conduct of committees of Parliament cannot be called into question in proceedings before any court: s 1 of the Parliamentary Privileges Act 1891 (WA). However, the references to the Report are explained in various ways by the applicant, in particular, the references are not intended to put in issue the truth of any statement in the Report. The consequence is that the applicant states that any references by the deponent are not intended to be utilised by it to call into question the conduct of a committee of Parliament. Whether or not this is an exonerating circumstance depends on the application of the objection made in relation to each particular statement. 10 These are the general principles in accordance with which I have endeavoured to consistently resolve each of the objections. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson. Par Portion Grounds Ruling Reasons 1. 104 From 'The inconsistency is very...' to '... paragraph 24). 37. 126 From 'As any anthropologist...' to '... is the white society'.

applicant's deponent's affidavit objections rulings long association with community not relevant field of expertise nevertheless such association takes observer out of the 'ordinary' for purposes of s 78 parliamentary privilege not in issue as truth of reports not in contest evidence

The Australian Competition and Consumer Commission ("the ACCC") and the respondents have jointly put forward to the Court pecuniary penalties in amounts agreed between them in respect of those contraventions. They submit that these amounts are appropriate penalties to be imposed on the respondents under s 76 of the Act . This public interest extends to the settlement of proceedings in which corporations acknowledge contraventions of the restrictive trade practices provisions of Part IV of the Act . 4 Nevertheless, the parties accept, as they must, that the Court is not merely a "rubber stamp" for the agreement reached between them. It is for me to determine the appropriate penalties having regard to all the circumstances: NW Frozen Foods Pty Limited v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 290-291 (per Burchett and Kiefel JJ); Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd (2004) ATPR 41-993 (per Branson, Sackville and Gyles JJ). Rather, it is whether those amounts are "within the permissible range" in all the circumstances: NW Frozen Foods at 291. between 2001 and 2004, Navman supplied marine navigational equipment and personal and in-car navigational products ("PCN products") through selected retail dealers in Australia. 8 Mr Baird and Mr King were senior executives of Navman during the relevant period. Mr Baird was the General Manager of Navman's marine division. He was also a director of the company from November 2003. 9 Mr King held the position of National Sales Manager from about August 2003. Later, he became the Australasian Sales Manager for Navman's PCN division. He was the most senior manager in that division and was responsible for its operations in Australia. 10 Navman is a subsidiary of Navman NZ Limited ("Navman NZ"). Navman was established in Australia in 1997. Both Navman and Navman NZ are ultimately owned by Brunswick Corporation ("Brunswick"), a global marine and leisure equipment company based in the USA. Brunswick acquired an initial shareholding in Navman in mid-2003. It acquired the balance of its shareholding in 2004. 11 After the date of commencement of these proceedings, Navman's operations were sold to third parties. It is an agreed fact that the purchasers of the business are not related to Navman NZ or Brunswick. The marine product business and the PCN business were sold in March 2007. The balance of Navman's business operation was sold in July 2007. 12 Following upon the sale of Navman's business operations, the company is now a shell which is not trading. Nevertheless, it retains funds to pay a pecuniary penalty of $1,250,000. I have not been told whether it has sufficient funds to pay a higher penalty if I were to come to the view that such a figure is appropriate. 13 Navman has now changed its name to Aus Holdco Pty Ltd . This of course does not alter its corporate identity or its liability to meet the penalty for its contraventions. 14 Mr Baird held the position of General Manager of the marine division, and his office as a director of Navman until January 2005. At about that time the ACCC notified Navman of its investigation into the resale price maintenance which is the subject of these proceedings. Navman terminated Mr Baird's employment by reason of his involvement in that conduct. 15 Mr King continued to hold his position as National Sales Manager of Navman after the ACCC commenced its investigation. He remained in that position until about June 2006 when he was demoted to Business Development Manager. He was demoted because of his involvement in the conduct which is the subject of the proceedings. 16 Mr King is no longer employed by Navman but he is employed by the company that purchased Navman's PCN product business. Its conduct extended to the supply of both marine equipment and PCN products. Its conduct in relation to the supply of marine equipment covered the period from 2001 to 2004. Its resale price maintenance conduct in the supply of PCN products covered the period from 2003 to 2004. 18 Navman's conduct involved more than 35 individual acts. The conduct may be conveniently divided into ten separate episodes. The first of these episodes consisted of communications which Navman sent to all of its dealers during the period from 2001 to 2004, enclosing price lists and containing statements discouraging the dealers from discounting their prices below those set out in the price lists. 19 The other nine episodes consisted of contraventions arising from dealings between Navman and nine of its appointed dealers. The conduct consisted of statements made by representatives of Navman to dealers discouraging them from discounting products below Navman's specified prices. 20 The conduct also included threats to terminate, and subsequent termination of, two dealerships for discounting below Navman's specified prices. In addition, Navman representatives sent emails to another dealer threatening harm to the relationship between Navman and the dealer if it did not take steps to prevent discounting of prices on the internet. 21 By engaging in resale price maintenance conduct for its marine products, Navman sought to ensure that dealers did not sell below the price at which a major marine dealer advertised its products in its catalogue. That major dealer was Whitworth's Nautical World Pty Limited ("Whitworth's"). 22 The "Whitworth's price" or "street price" was an industry benchmark which Navman used as a benchmark for pricing its marine products. 23 Navman's aim in relation to the pricing of its PCN products was to avoid retail prices being driven down by discounting on the internet. (The full name of this entity was not provided; I will refer to it as "Brightpoint"). 28 Mr Baird was also involved in Navman's contraventions consisting of its conduct toward five of the marine dealers. Those dealers were Emjay, Alec's Marine, Hirecraft Marine, Glascraft Marine and Challenge Marine. 29 Mr King was involved in Navman's contraventions comprised in its conduct toward four dealers who dealt in PCN products. They were Hirecraft Marine, Bulbeck, Family Boats and Brightpoint. 30 The conduct comprised in the ten episodes summarised above was set out in some detail in the Joint Submissions. I will refer to the salient facts. There were approximately 250 such dealers during that period. The price lists were accompanied by communications from Navman, and statements were made by Navman representatives to the dealers, that were likely to be understood as statements of prices below which Navman's marine products were not to be sold. 32 Following the introduction of Navman's PCN products in about August 2003, Navman regularly sent price lists for those products to its PCN dealers. The price lists suggested retail prices which were likely to be understood by the dealers as the approximate prices below which the products were not to be advertised or sold. 33 In some instances, Navman's price lists were accompanied by a letter to its marine dealers from Mr Baird. Those letters urged Navman's marine dealers not to discount below Navman's recommended prices or street prices. In addition, Mr Baird sent a number of communications to dealers about particular Navman marine products which were referred to in the Joint Submissions. I will refer to those communications below. 34 On or about 1 March 2001, Mr Baird sent a letter and a price list to all of Navman's marine dealers. If we have good products that are priced below our competitors, as I have stated before, the discounting of our products makes no commercial sense. As stated many times by myself, please do not discount these new products, as they are excellent and extremely well priced anyway. Turnover is easy but profit is why we open the doors!! The document referred to a combined package of two Navman products. They were the Trackfish 6600 model, which was a marine product, and the "PiN" pocket PC street navigator which was a Navman PCN product. I just cannot understand the mentality where you have an extremely popular product that is priced under the market with good margin and we still have dealers that discount heavily. There is only one issue that will stop NAVMAN and that's discounting!! I will not allow our great products to be prostituted --- take the warning now! If you can't sell our products without discounting, then I suggest it's time to sell any of our competitors' products --- simple as that!! It was also a dealer for Navman's PCN products from about September 2003. Emjay sold both lines of products through its retail outlet. It also advertised Navman's marine products for sale on its website. 43 Between 2002 and 2004, Emjay advertised Navman's marine products on the Emjay website at prices that were lower than the retail prices stated in Navman's price lists, and below Whitworth's prices. 44 There were a large number of conversations during the period from November 2002 to October 2003 between Navman's National Sales Manager for marine products and Emjay's manager, in which Navman told Emjay to keep its prices for Navman's marine products up to Whitworth's prices. Those conversations took place between Mr Cummings of Navman and Mr Adamson of Emjay. 45 Mr Cummings reported to Mr Baird. Mr Cummings had received instructions from Mr Baird to ensure that Navman marine dealers kept their prices at least as high as Whitworth's prices. Mr Baird had also instructed Mr Cummings to keep Emjay's prices under control. Mr Baird was aware of Mr Cummings' conduct in relation to Emjay, which was in response to Mr Baird's instructions. 46 There were regular conversations between Mr Cummings and Mr Adamson between November 2002 and 2003 about Emjay's pricing of Navman's marine products. Sometimes Mr Adamson increased the prices of Navman's marine products to Whitworth's prices after he was contacted by Mr Cummings. 47 There were also four conversations between Mr Cummings and Mr Adamson in the period from November 2002 to October 2003 which were referred to in the Joint Submissions. 48 In those conversations Mr Cummings told Mr Adamson to keep prices up to Whitworth's prices and not to sell below them. 49 In one of the conversations Mr Cummings told Mr Adamson he would not be entitled to credit and would have to pay cash up front if he continued to sell below Whitworth's prices. In another, Mr Cummings told Mr Adamson that he had received a complaint from some Navman dealers about Emjay's discount prices. 50 In November 2003 and December 2003 Navman entered into, or offered to enter into, an agreement with Emjay for the supply of Navman marine products. In the course of the negotiations Navman induced Emjay not to sell, or advertise for sale, Navman marine products and Navman's PCN products at prices less than Whitworth's prices. 51 Navman's inducement to Emjay in the period November and December 2003 consisted of Navman terminating and subsequently reinstating Emjay's dealership when Emjay increased its prices in response to the termination notice. Emjay was reinstated in correspondence from Mr Baird dated on or about 10 December 2003. Mr Baird was aware of Mr Cummings' conduct which was in accordance with Mr Baird's instructions to him. 53 Mr Cummings had a number of conversations in the period from January or February 2004 to August 2004 with Mr Watters of Emjay. In those conversations Mr Cummings told Mr Watters to keep Emjay's prices up to Whitworth's prices. In one conversation Mr Cummings told Mr Watters that Navman's business would be better if Emjay increased pries on its website. In another he said that other Navman marine dealers were upset with Emjay's pricing. 54 In about April 2004, Mr Cummings told Mr Adamson that other dealers were complaining about Emjay's prices and that Emjay should take its prices off its website. In response, Emjay removed its prices and inserted "Price on application". On about 18 June 2004, Mr Cummings told Mr Adamson that Emjay should put its advertised prices back up to Whitworth's prices. 55 Mr Cummings continued his efforts in July and August 2004. On about 29 July 2004, Mr Cummings told Mr Watters that Navman would take steps to see that Emjay did not obtain the benefit of a sale of a Tracker 5600 for which Emjay had quoted a discounted price. The quoted discount was $100 below the Whitworth's price for the product. 56 In his conversations with Mr Watters about the discounted Tracker 5600, Mr Cummings told Mr Watters that Navman would not continue to supply Emjay with Navman marine products if Emjay continued to sell them below Whitworth's prices. 57 There was another conversation between Mr Cummings and Mr Watters about Emjay's prices on 16 August 2004. Mr Cummings told Mr Watters that Emjay's prices were "too cheap", ie. below Whitworth's prices. Mr Cummings said that the Perth Show was on at that time and Emjay's prices would not help. Mr Cummings told Mr Watters to remove Emjay's prices from its website and to change Emjay's prices (ie. to Whitworth's prices). 58 Also, on or about 17 August 2004, Mr Cummings had a conversation with Mr Adamson about Emjay's prices. The conversation was in response to Emjay's advertisement on its website at prices below Whitworth's prices. Mr Cummings told Mr Adamson that Emjay should remove its prices for Navman marine products from the website. 59 Navman also engaged in resale price maintenance conduct in relation to Emjay's sales of Navman's PCN products. Navman attempted to induce Emjay not to sell or advertise Navman's PCN products at prices less than those specified by Navman. 60 This conduct consisted of two conversations held by Navman's Regional Sales Manager for PCN products for New South Wales and Queensland, Mr Marriott. The first was in May 2004 between Mr Marriott and Mr Watters. Mr Marriott told Mr Watters that Navman would like Emjay to sell Navman's PCN products at around the prices stated in Navman's price lists, or not more than $50 below that price. 61 The second conversation was between Mr Marriott and Mr Adamson in about July 2004. Mr Marriott said that Emjay must not sell Navman PCN products at below the retail prices specified in Navman's price lists. The reasons also included the fact that Emjay had not agreed not to sell the products at less than Navman's specified prices. 63 On or about the same day, 31 August 2004, Navman terminated Emjay's dealership arrangement with Navman . The letter was signed by Mr Baird. He instructed Mr Cummings to encourage Navman marine dealers to keep their prices for Navman marine products at least as high as the Whitworth's prices, by means including conduct constituting resale price maintenance. Mr Baird directed Mr Cummings to keep Emjay's prices under control; and on or about 15 August 2004 sent an email to Mr Cummings to the effect that Mr Cummings should take further steps to control Emjay's prices. 66 There were a number of conversations between Mr Baird and the Manager of Alec's Marine, described in the Joint Submissions only as Cass, in which Navman attempted to induce Alec's Marine not to sell Navman marine products at prices less than those specified by Navman. The conversations took place during the period from 2001 to September 2004. 67 In the conversations between Mr Baird and Cass, Mr Baird said that Alec's Marine should sell particular Navman marine products at prices which he described as "street prices. " Those prices were approximately equal to Whitworth's prices. 68 In addition, during the period from August 2003 to September 2004, Navman's Regional Sales Manager, Marine, for Victoria and Perth, Mr Paul Cameron had a number of conversations with Cass in which he attempted to induce Alec's Marine not to sell Navman marine products at less than those prices specified by Navman. 69 In those conversations Mr Cameron told Cass that Alec's Marine's prices for Navman marine products were too low and that Cass should price the products at Whitworth's prices. 70 On some occasions after these conversations took place, Cass took the step of raising the price at which Alec's Marine displayed Navman marine products for sale, to prices that were about the same as Whitworth's prices. 71 In July 2004 and August 2004, Mr Cameron engaged in further resale price maintenance conduct by attempting to induce Alec's Marine not to advertise or sell Navman marine products at the 2004 Perth Boat Show at prices below those specified by Navman. 72 In particular, on or about 27 July 2004, Mr Cameron sent to Cass a list of wholesale prices at which Navman dealers could purchase Navman marine products for supply at the Perth Boat Show. He also sent to Cass a list of retail prices for Navman marine products applicable to sales made at the Perth Boat Show. 73 At some time after 27 July 2004, Cass sent an email to Mr Cameron suggesting that Cass proposed to discount Navman marine products below the prices contained in the retail price list. He instructed Mr Cameron to advise Alec's Marine of the prices applicable to the 2004 Perth Boat Show. Moreover, he instructed Mr Cameron to encourage Navman marine dealers, including Alec's Marine, to keep their prices for Navman marine products at least as high as Whitworth's prices, by means including conduct that constituted resale price maintenance. 75 In 2004 Navman withheld supply of Navman marine products from Alec's Marine. It did so primarily because Alec's Marine was switching its customers to other competitive products, but also because Alec's Marine had been selling, and had not agreed not to sell, those Navman products at prices less than the prices specified by Navman. The latter reason was a substantial reason for the conduct. 76 On or about 31 August 2004, Navman by correspondence from Mr Baird, terminated Alec's Marine's dealership for Navman marine products. It ceased thereafter to supply Navman marine products to Alec's Marine. It was also a dealer in Navman PCN products from about August 2003. The Joint Submissions do not state whether Hirecraft Marine ceased to be a Navman dealer or, if so, when that occurred. 78 The Joint Submissions record two conversations between Mr Cummings, on behalf of Navman, and Mr Damien Hurt, the owner of Hirecraft Marine, which constituted engaging in the practice of resale price maintenance. 79 In or about early 2002, Mr Cummings stated to Mr Hurt that Hirecraft Marine should not sell Navman marine products at prices less than the current Whitworth's prices. Mr Cummings' statement was likely to be understood by Hirecraft Marine as the prices below which the goods were not to be sold. 80 In about March 2004, Navman, by its representative Mr Cummings, stated to Mr Hurt that Hirecraft Marine should not sell Navman PCN products at prices less than the prices at which they were being sold by Whitworth's. 81 Navman thereby made a statement of prices for its PCN products which was likely to be understood by Hirecraft Marine as the prices below which the goods were not to be sold. In making the statement, Navman also attempted to induce Hirecraft Marine not to sell Navman PCN products at prices less than Whitworth's prices. 82 Mr Baird was aware of Mr Cummings' conversation with Mr Hurt about Navman marine products. Mr Baird instructed Mr Cummings to encourage Navman marine dealers, including Hirecraft Marine, at least as high as Whitworth's prices, by means including conduct that constituted the practice of resale price maintenance. 83 Mr King was aware of Mr Cummings' conversations with Mr Hurt about Navman PCN products. By an email dated 9 March 2004, Mr King instructed Mr Cummimgs to ensure that Hirecraft Marine adhered to the retail prices set out in the Navman price list. Mr Cummings' conversation with Mr Hurt was in response to the instruction given by Mr King in the email. It was a dealer in Navman PCN products from about March 2004. The Joint Submissions do not say whether Bulbeck ceased to be a Navman dealer or if so when. 85 Between 2001 and October 2004 Navman had dealings with Bulbeck by which it attempted to induce Bulbeck not to sell Navman marine products at prices less than Whitworth's prices. Navman used statements of prices for its marine products, namely Whitworth's prices, which were likely to be understood by Bulbeck as the prices below which the goods were not to be sold. 86 The only details provided in the Joint Submissions of the dealings or statements in relation to Navman marine products are the price lists and communications referred to under the heading "The Price List Conduct" set out above. 87 Navman also attempted to induce Bulbeck not to sell Navman's PCN products at prices less than Whitworth's prices. In about March 2004, Navman, by its representative Mr Cummings, told the manager of Bulbeck that Bulbeck should not sell Navman PCN products supplied by Navman at prices less than the Whitworth's prices. 88 Mr Cummings' statement to the manager of Bulbeck was in response to the instruction given to him by Mr King in the email of 9 March 2004. This was the same email as I referred to in relation to Hirecraft Marine. It also contained an instruction by Mr King to Mr Cummings to ensure that Bulbeck adhered to the retail prices set out in the Navman PCN price list. It was also a dealer in Navman PCN products from about March 2004. 90 In about March 2004, Mr Cummings told the manager of Family Boats, Mr John Smale, that Family Boats should not sell Navman PCN products at prices less than those which the goods were being sold by Whitworth's. 91 Mr Cummings' statement to Mr Smale was in response to Mr King's email of 9 March 2004. This was the same email to which I referred above at [83] and [88]. It also instructed Mr Cummings to ensure that Family Boats adhered to the retail prices set out in the Navman PCN price list. 93 On 11 July 2002, Navman's commissioned agent for Queensland, Mr Ian O'Rourke, sent an email to Glascraft Marine setting out retail prices for particular Navman marine products, including the Tracker 5600 unit. 94 Mr O'Rourke's email stated that Glascraft Marine's current catalogue price was below the marketplace pricing for the Tracker 5600 by an amount of between $30 to $80. 95 The email also stated that Glascraft Marine should use its catalogue price rather than an even lower price in its special advertising for the Brisbane Boat Show in September 2002. The email stated that Glascraft Marine's catalogue price was already too heavily discounted considering the strength of the product in the market. 96 The email of 11 July 2002 was copied to Mr Baird to whom Mr O'Rourke reported. 97 Mr Baird, on behalf of Navman, also sent to Glascraft Marine all of the price lists and communications referred to under the heading "The Price List Conduct" above, other than the communication referred to in [34]. 99 Mr Baird, on behalf of Navman, sent Challenge Marine each of the price lists and communications referred to under the heading "Price List Conduct" above. 100 Mr Baird also had conversations with the manager of Challenge Marine during the period between 2001 and 2004 in which Mr Baird stated that Challenge Marine should not sell or advertise Navman marine products at less than the Whitworth's prices. Mr Baird sometimes referred to Whitworth's prices as the "street prices. 103 In or about November 2004, C H Smith Marine was advertising Navman PCN products at prices below those set out in the Navman PCN price lists. At about that time, a representative of Navman, Mr Daniel Duncan, stated to C H Smith Marine that it should advertise Navman PCN products at around the retail prices set out in the Navman PCN price lists. 104 Mr Duncan's statement to C H Smith Marine was made in response to its advertisement of Navman PCN products at below the retail price lists. C H Smith raised its prices to the levels sought by Navman. 106 In June or July 2004, Navman attempted to induce Brightpoint to engage in acts of resale price maintenance, namely of a kind referred to in s 96(3)(b) of the Act . The conduct consisted of statements and emails from Mr King and an email from another representative of Navman. 107 In June and July 2004, Brightpoint was advertising Navman PCN products at heavily discounted prices by internet retailers supplied by Brightpoint. In response to this, Mr King stated to the Managing Director of Brightpoint, Mr Felix Wong, that Brightpoint should ensure that retailers supplied by Brightpoint, who sold the products on the internet, should move their prices closer to Navman's recommended retail prices. The email also stated that discounting by those retailers was damaging to Navman's relationships with other retailers. The email said that this was making Navman "less than comfortable in dealing with Brightpoint. In response to this, a representative of Navman, named Marriott, sent an email dated 9 July 2004 to Brightpoint. It will only work if all internet retailers change their prices together ... Ideally we would expect them to be advertising around the $1949 mark (you can tell them that Strathfield and Harvey Norman advertise at full RRP and Dick Smith have the ICN530 in their current catalogue at $1988). The authorities have identified a number of additional factors which the Court may take into account: Trade Practices Commission v CSR Limited (1991) ATPR 41-076 at 52,152-52,153; NW Frozen Foods at 292-293. 113 The principal, and probably the only, object of the penalties that are imposed by s 76(1) is deterrence, both specific and general: CSR at 52,152; NW Frozen Foods at 292-293; Australian Competition and Consumer Commission v High Adventure Pty Limited (2006) ATPR 42-091 at [11]. There are many other authorities to the same effect. 114 The penalty should take into account the deliberateness of the contravention and the period over which it occurred. The involvement of senior management and the corporate culture in which the conduct occurred are also relevant factors: CSR at 52,152-52,153; NW Frozen Foods at 292-293. 115 The penalty should constitute a real punishment which takes into account the size of the company and the overall commercial environment, but it should not be so high as to be oppressive: CSR at 51,152-52,153; NW Frozen Foods at 293. 116 Determination of the amount of a penalty is not an exact science. Each case turns on its own facts and limited assistance is to be obtained from considering the amounts imposed in other proceedings: NW Frozen Foods at 295; Mobil Oil at [51]; Australian Competition and Consumer Commission v Visy Industries Holdings Pty Limited (No 3) [2007] FCA 1617 at [320] . 118 The policy which underlies s 48 of the Act is that competition is an important feature of the distribution of goods. Resale price maintenance, as a form of vertical price fixing, eliminates the competition which Part IV of the Act seeks to achieve: ACCC v High Adventure at [7]. 119 As the Full Court observed in ACCC v High Adventure , a number of reasons have been put forward to explain the undesirability of the practice. One of them is that resale price maintenance is often a manifestation of price fixing among retailers. Another is that it inevitably eliminates dealer competition, thereby restricting freedom of competition in the price of goods in the marketplace: ACCC v High Adventure at [7]. The Full Court in Mobil Oil set out at [51] the six propositions which emerge from the reasons in NW Frozen Foods. 122 It is unnecessary for me to repeat the six propositions enumerated in Mobil Oil . I referred at [3] --- [5] above to the principal factors to which I must have regard. I would add to this that the view of the regulator, as a specialist body, is a relevant consideration, but it is not determinative of the ultimate question of the appropriateness of the penalty: Mobil Oil at [51(iv)]. 123 It is open to the Court to commence its reasoning by referring to the proposed figure and then limiting itself to considering whether that penalty is within the permissible range. Alternatively, the Court may adopt the reverse process of addressing the appropriate range independently of the agreed figure and then determine whether the proposed penalty falls within the range: Mobil Oil at [54]. 124 Either approach raises broad questions of judgment because s 76 imports concepts of moral responsibility derived from the criminal law: Visy at [304]. 126 It seems to me that these difficulties inform the approach which Spender J took in Australian Competition and Consumer Commission v Jurlique International Pty Ltd [2007] FCA 79. The effect of what his Honour said at [109] --- [111] is that the Court should only depart from the penalties agreed by properly informed and legally assisted parties where it is clear that it should do so. Its conduct was deliberate and was carried out over a lengthy period of time in relation to a range of expensive products. Navman's conduct extended over a period of more than three years in the distribution of marine products, and more than a year in the distribution of PCN products. 128 I am entitled to draw inferences and reach conclusions from the facts that have been agreed in the Joint Submissions: Visy at [1]. 129 The details of the contraventions show that Navman's conduct was not merely deliberate. It was pursued in an aggressive and high-handed way by the company's most senior managers. 130 Navman's corporate culture was not conducive to compliance with the Act . Mr Baird and Mr King did not receive any trade practices training from Navman. I would have thought that senior managers of a multi-national company would have, at very least, a basic understanding of the law even without the need for detailed training. In any event, the failure of the company to provide training and see that its senior managers arranged training for their subordinates reflects badly on Navman's corporate culture. By its actions in policing its resale price maintenance policy, Navman sought to avoid complaints from some of its larger retailers about the prices of other retailers. Navman sought to protect higher margins for dealers, so that dealers could afford to offer the level of customer service that the complexity of its products demanded . I accept that Navman sought to avoid complaints from some of its larger retailers. The threats contained in the emails of Mr Baird and Mr King to non-compliant distributors suggest that this was so. But this also suggests that Navman's resale price maintenance conduct was a manifestation of price fixing among retailers: ACCC v High Adventure at [7]. 133 During the period when the contraventions took place, Navman's turnover and profit increased substantially. Its turnover grew from approximately $3.6 million in 2001 to over $29 million in 2004. Navman was not profitable in 2001 but its financial reports for 2004 disclosed a profit of $1.3 million. 134 Moreover, Navman's level of profitability was determined by internal transfer pricing decisions made within the Navman group. If the profit accruing to Navman NZ were included in Navman's accounts, Navman would have recorded a profit of just under $5.6 million for 2004. 135 Navman's changes in ownership and the subsequent sale of its business reduce the significance of specific deterrence. However, general deterrence remains important. A significant penalty is warranted against Navman to deter other suppliers from engaging in this type of conduct. 136 The amount of $1.25 million is a significant sum. But in view of the seriousness of the conduct, it seems to me that it is at the very bottom of the permissible range. 137 Accordingly, I have come to the view that it is an appropriate penalty. His conduct was deliberate and high-handed and it was carried out over a period of more than three years. 139 At one stage Mr King suggested that Mr Baird seek legal advice before Mr Baird terminated a Navman marine dealership for discounting. It is plain that Mr Baird did not seek such advice. 140 It is true that Mr Baird was encouraged by officers of Navman to ensure that retail prices remained high. But this cannot be accepted in mitigation. He adopted their instructions enthusiastically and actively instructed and encouraged his staff to implement the resale price maintenance policy. 141 Despite some misgivings, I have come to the view that this is not a clear case for the Court to depart from the agreed penalty. In particular, I take into account that Mr Baird has cooperated with the ACCC by admitting the conduct pleaded against him and making himself available to meet with the ACCC as well as submitting to the proposed orders. The penalty has been discounted by a figure in the order of 25% to 30% to reflect Mr Baird's cooperation in this process. I have real reservations as to whether it is within the permissible range. 143 It is true that Mr King has cooperated with the ACCC and that the penalty has been discounted by the same percentage as is applicable to Mr Baird. It is also true that Mr Baird played a more significant role over a longer period of time. The parity principle therefore points toward a lower penalty for Mr King. 144 However, Mr King's conduct involved serious contraventions of s 48. He actively instructed and encouraged his staff to discourage discounting in a way which resulted in resale price maintenance. 145 Mr King was aware of the need for Navman to comply with the Act . He acknowledged this in the Joint Submissions. I give no weight to his statement that he did not have a detailed knowledge of the Act . He was sufficiently concerned about Navman's conduct to suggest that Mr Baird obtain legal advice. Moreover, Mr King failed to seek advice when a distributor raised with Mr King concerns that his conduct may breach the Act . 146 Mr King acknowledged in the Joint Submissions that he did not approach trade practices compliance with the diligence to be expected of a senior manager in his position. 147 In my opinion, as with Mr Baird, he was prepared to persist in conduct which he ought to have known to be unlawful, without regard to the consequences. 148 It seems to me that even allowing for a 25% to 30% discount, the penalty is so close to the bottom of the permissible range as to risk falling below it. Mr King is still employed in the industry. He is employed by the company that purchased Navman's PCN business. Specific deterrence is to be taken into account. 149 Nevertheless, with considerable reservations, I have come to the view that this is not a clear case where the Court should depart from the agreed penalty.

resale price maintenance pecuniary penalties multiple serious contraventions admitted considerations where parties agree on penalties whether penalties are in permissible range trade practices

The applicant was not present in Court and has not answered to the call of his name outside the courtroom. The respondent has invited the Court to dismiss the proceeding, not simply for non-appearance by the applicant, but pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth), on the ground that the applicant has no reasonable prospect of successfully prosecuting the proceeding. 2 In form, the proceeding is an appeal from a decision of the Administrative Appeals Tribunal ("the Tribunal"). In other words, it is not permissible to appeal under s 44(1) in respect of any decision at any interlocutory stage of a proceeding before the Tribunal. See Director-General of Social Services v Chaney (1980) 31 ALR 571 at 593, per Deane J, with whom Fisher J concurred, and Lowth v Comcare [1999] FCA 1692 at [3] - [5] . 4 I am advised by the solicitor appearing for the respondent that, on Friday 30 November, he sent by email to the applicant a brief letter, enclosing the notice of appearance of the respondent, as well as another letter dated 30 November 2007 and a copy of the judgment in Lowth v Comcare . The substantive letter notified the applicant that the respondent would argue at this directions hearing that the proceeding should be struck out, on the basis that it relates to an intermediate decision and not a final decision of the Tribunal. 5 The nature of the decision that the Tribunal is said to have made can be discerned in part from the notice of appeal itself. It does appear, however, that there is a proceeding before the Tribunal, in which the applicant seeks review of a decision to recover from him amounts allegedly overpaid to him by way of social security payments. It appears that the Tribunal adjourned the hearing at the end of the first day, the only day which had been designated for the hearing, and indicated that the Tribunal would take steps to obtain by summons documents from the accountants administering, or with knowledge of, a family trust from which it was alleged that the applicant had received payments. Apparently, it is the decision to adjourn the hearing and the decision to obtain further evidence by compulsion from the accountants that have motivated the applicant to bring this appeal. 11 The powers of the Tribunal are well-known. It is well-established that the Tribunal conducts its review of an administrative decision by way of what is called a hearing de novo. That is to say, the Tribunal makes its own decision on whatever material is before it at the time when it makes that decision. The Tribunal's function is not to examine the reasoning of any earlier decision-maker, whether the Social Security Appeals Tribunal or any particular officer, for the purpose of determining whether there is error. The Tribunal stands in the shoes of the original decision-maker and makes its own decision. 12 By s 33(1)(c) of the AAT Act , the Tribunal is not bound by the rules of evidence, but may inform itself on any matter in such manner as it thinks appropriate. Of course, a power of that nature is subject to requirements of procedural fairness. The Tribunal cannot simply obtain its own information, without disclosing that information to the parties and giving them a proper opportunity to be heard in relation to it. The Tribunal is clearly not bound to have regard only to the material that was before the Social Security Appeals Tribunal in a matter such as this, and clearly has the power to obtain material by whatever means it sees fit. There can be little doubt that the Tribunal also has a power to obtain evidence by compulsion, by issuing its own summons if it considers that that is appropriate. That power is expressed in s 40(1A)(a) , (b) and (c) of the AAT Act . It follows that, to the extent to which the notice of appeal seeks to rely on the proposition that the Tribunal lacked power to adjourn the proceeding, and lacked power to obtain by summons information from the accountants, the appeal would have to fail. 13 There are perhaps greater difficulties in relation to the questions of bias and discrimination. There is little doubt that a denial of procedural fairness can amount to an error of law on the part of the Tribunal, and that the Court can receive evidence and make findings of fact in relation to such a denial. See Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143 (2003) 131 FCR 28 at [3] - [13] per Gray ACJ and North J. There is also little doubt that the Tribunal is bound by the Racial Discrimination Act 1975 (Cth) ("the Racial Discrimination Act ") and the Human Rights and Equal Opportunity Commission Act 1986 (Cth). Under the latter, of course, before a proceeding is taken in Court in respect of a complaint of discrimination, including a complaint of discrimination under the Racial Discrimination Act , it is necessary to make that complaint to the Human Rights and Equal Opportunity Commission, and to have the certificate of the Commission before the proceeding can be commenced in the Court. To the extent, therefore, that the applicant seeks to rely on those Acts, there is nothing to show that the proceeding is properly within the jurisdiction of this Court. 14 The orders that the applicant seeks in the notice of appeal, with the exception of the awarding of costs to the applicant for the proceeding in this Court if he should succeed, are manifestly orders that the Court could not make. The question whether the Social Security Appeals Tribunal decision should be set aside is a question entirely for the Tribunal and would not activate this Court's jurisdiction at all. For the Court to order that the Tribunal set aside the earlier decision would be for the Court itself to engage in merits review in a proceeding which can only be on a question of law. An order that the Tribunal apologise for racial discrimination would also be beyond the power of the Court, at least without a complaint having been lodged with the Human Rights and Equal Opportunity Commission as a preliminary to the proceeding in this Court. An order that the Tribunal award costs of the proceeding in the Tribunal to the applicant is likewise beyond the power of the Court. 15 The end result, it seems to me, is that if the applicant wishes to raise any question of bias on the part of the Tribunal, his obligation is to await the conclusion of the proceeding in the Tribunal. If he were to be successful in that proceeding, of course, he would have no right of appeal on the question of bias, and would be bound in any event to fail. If he were to fail in that proceeding, it would then be open to him to pursue, by way of appeal to this Court, any question of bias on the part of the Tribunal. In my view, I am bound by the authorities that say that, with limited exceptions, a decision for the purposes of s 44(1) of the AAT Act is only a final decision. 16 For these reasons, the application before the Court must be dismissed, pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth), on the ground that the applicant has no reasonable prospect of successfully prosecuting the appeal. An order dismissing the proceeding will therefore be made. There appears to be no reason why costs ought not to follow the event. The order will be accompanied by an order that the applicant pay the respondent's costs of the proceeding. The appeal be dismissed. 2. The applicant pay the respondent's costs of the proceeding.

appeal from administrative appeals tribunal whether right of appeal presiding member adjourned tribunal hearing and announced intention to obtain further evidence by summons decision to adjourn not final and conclusive determination of the application "decision" administrative law words and phrases

Each side has a probability of winning and a complementary probability of losing. The parties may dislike the risk that is involved and pay something to avoid it. Making an offer of compromise is designed to put pressure on a risk-averse party by adding significantly to the cost of losing. There are cases, and this is one, where the stakes are so high that each party is willing to take their dispute to judgment whatever the cost. I have to determine that cost. In this action the plaintiffs alleged that a funded class action constituted a managed investment scheme which was required to be, but was not, registered under s 601EB of the Corporations Act 2001 (Cth): s 601ED (MIS action). The plaintiffs raised this issue because they are defendants in a shareholder fraud class action funded by the first and second defendants, in which the fourth and fifth defendants are the representative parties and the third defendant, Maurice Blackburn Pty Limited, are their lawyers (class action). In the class action the defendants seek to recover hundreds of millions of dollars by way of compensation. If the plaintiffs had succeeded in the MIS action they may have got rid of the class action. The plaintiffs commenced the MIS action on 18 November 2008. Appearances were filed between 24 November 2008 and 24 December 2008. Shortly thereafter, on 5 January 2009, the defendants, through their solicitors, made a "Without Prejudice Save as to Costs" offer of compromise. We consider that your clients' claim is completely without merit. Now the defendants rely on the offer to argue they are entitled to have the costs, which will be awarded in their favour, taxed on a party and party basis up to 5 January 2009 and from then on an indemnity basis. The defendants' submission requires a consideration of O 23 r 11(6) of the Federal Court Rules and Calderbank offers (after Calderbank v Calderbank [1976] Fam 93). There are two lines of authority. First, there is the literal view of O 23 r 11(6) which is that if the rule is attracted, it "creates a presumptive entitlement in the respondent to indemnity costs after 11 am on the day after the offer was made": Review 2 Pty Ltd v Redberry Enterprise Pty Ltd (No 2) [2008] FCA 1805 at [20] . In that event the court's discretion to allow a party to escape from the obligation to pay indemnity costs "will, in general, be exercised only in an exceptional case --- Leichhardt Municipal Council v Green [2004] NSWCA 341 and it is for the plaintiff to prove that the court should 'order otherwise' --- Gretton v The Commonwealth of Australia [2007] NSWSC 149 at [9]": Pollard v Baulderstone Hornibrook Engineering Pty Ltd (No 2) [2007] NSWSC 486 at [6] cited with approval in Equity 8 Pty Limited v Shaw Stockbroking Limited [2007] NSWSC 503 at [33] . Second, there is the non-literal approach namely that "the fact that the unsuccessful applicant rejected an offer of compromise made by a respondent pursuant to O 23 is far from determinative on the question of indemnity costs" and that the court "is required to consider whether the rejection of the offer of compromise was unreasonable": Seven Network Ltd v News Ltd [2007] FCA 1489 ; (2007) 244 ALR 374 at [65] --- [66]. In other words, there is no presumption so far as what costs order should be made and the fact that an O 23 offer is not bettered is but one factor to be taken into account in determining whether indemnity costs should be awarded. Indeed, it is no more than a "good start": Seven Network Ltd at [66] citing Wilcox J in Coshott v Learoyd [1999] FCA 276. A Calderbank offer is similar to an O 23 offer. Specifically, a Calderbank offer is a "well recognised means of making offers of settlement in circumstances where the party making the offer ultimately seeks a costs advantage if the offer is not accepted": Jones v Bradley (No 2) [2003] NSWCA 258 at [5] . There is also a divergence in approach regarding the precise effect of a Calderbank offer where the offer is not bettered by the judgment. Once again there are two lines of authority. On the one hand, there are cases which hold that "there should be a prima facie presumption ... that the party rejecting the offer should pay the costs of the other party on an indemnity basis from the date of the making of the offer": Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425 , 451. On the other hand, there are cases which reject the "prima facie presumption", holding that "the mere making of an offer by a Calderbank letter ... will not automatically lead to the making of an order for payment of costs on an indemnity basis": MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236 , 239; see also Jones at [9]. According to this view, whether indemnity costs are awarded will depend on all the circumstances of the case. This is not the occasion upon which to resolve the difference in approach with respect to Calderbank offers and O 23 offers if for no other reason than the point was not argued. It is sufficient for present purposes to do no more than state my tentative view. So far as an O 23 offer is concerned, I think it does give rise to a presumptive entitlement to indemnity costs: MGICA (1992) Pty Ltd at 240. So far as Calderbank offers are concerned, the weight of authority is to the effect that the key issue is to determine whether rejection of the offer was unreasonable in all the circumstances (see Pollard at [9]; Crump v Equine Nutrition Systems Pty Ltd trading as Horsepower (No 2) [2007] NSWSC 25 at [40] ; Gretton at [16]; Equity 8 Pty Limited at [33]), but not whether the rejection of the offer was "plainly unreasonable" ( University of Western Australia v Gray (No 21) [2008] FCA 1056 ; (2008) 249 ALR 360 at [36] ). If the matter were not covered by authority, I would hold there to be no difference between an O 23 offer and a Calderbank letter provided the Calderbank offer allows for a reasonable time for acceptance. Each serves precisely the same function, encouraging parties to compromise the dispute. There seems to be no principled reason for there to be a difference between them. The offer in this case may loosely be described, and in some cases has been described, as a "walk away" offer. A "walk away" offer may or may not constitute an offer for purposes of O 23 and Calderbank. The starting point is that "an offer which does not involve a real and genuine element of compromise, will not be taken into account in relation to costs": The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120 ; (2006) 67 NSWLR 706 , 708; see also Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 , 368 ("Compromise connotes that a party gives something away. A plaintiff with a strong case, or a plaintiff with a firm belief in the strength of its case, is perfectly entitled to discount its claim by only a dollar, but it does not in any real sense give anything away, and I do not think that it can claim to have placed itself in a more favourable position in relation to costs unless it does so"). It is therefore necessary to determine whether the defendants' "walk away" offer was a genuine offer of compromise. One can easily envisage circumstances where a "walk away" offer must be regarded as a genuine offer of compromise. Take for example a case that has progressed for some time and the parties' costs are quite high. In that event an offer to walk away may, in a business sense, be a significant offer: see for example Commissioner of Taxation v Evenfont (No 2) (2009) 223 FLR 28 at [31]. Conversely there are circumstances, and this case is an example, where an offer to walk away does not involve any real give and take. Here the offer was made some 12 days after the last appearance was filed, and some allowance must be made for the Christmas period when little work is done. I accept that up to the time of the offer the defendants had incurred some costs. But probably not a lot. Certainly the amount was not proved in evidence. On this view indemnity costs should not be awarded. There is in any event a more important reason for refusing indemnity costs. The issue raised in the litigation is of some importance. There are several litigation funders operating in the Australian litigation market. Between them they fund many large actions. From my observations their mode of operation is similar. Sooner or later the legality of their funding technique had to be ruled upon. And it is in the public interest that the issue be resolved, one way or another. So, far from it being unreasonable for the plaintiffs to decide to go on with their case, it was important that they did. The importance of the decision, coupled with the fact that the issues raised by the plaintiffs were not easy to resolve (see Brookfield Multiplex (No 3) at [6]), mean that the plaintiffs should not be punished by a special costs order. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.

application for indemnity costs "walk away" offer of compromise not accepted what constitutes a genuine offer of compromise calderbank offer and rules of court test to be applied costs

The Tribunal affirmed a decision of a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs, as the Minister's title then was, refusing an application for a Protection (Class XA) Visa ('a Protection Visa') by the applicant. The Tribunal did not consider my application according to S91R of the Migration Act . The Tribunal misunderstood my claims. The Tribunal failed to carry out its statutory duty. The Tribunal failed to consider my application according to S.424A of the Migration Act 1958 . Federal Magistrates Court did not fully consider the information provided for the review of my application. In oral submission to the Court the appellant, who appeared with the assistance of an interpreter, also alleged that the Tribunal was biased, was not fair, and did not have regard to all the documents which the appellant had submitted, and the decision of the Tribunal was made without sufficient evidence. 4 So far as the findings of the Tribunal are concerned, the appellant, a citizen of the People's Republic of China, had sought a Protection Visa on the ground that she had a well-founded fear of persecution based on the circumstance that she was a practitioner of Falun Gong. The appellant claimed that she was an active organiser of Falun Gong assisting her husband, who was the head of Falun Gong in Liaoning Province of the People's Republic of China. She claimed that she had been arrested by the police at her husband's office where their Falun Gong group met and detained for 12 days. 5 The Tribunal did not accept any of her claims relating to involvement in Falun Gong activities in the People's Republic of China. The reasons for this conclusion included a finding that her testimony was vague, lacking in detail, internally contradictory, and implausible. There were other aspects of her accounts which the Tribunal found implausible or implausible and contradictory. Amongst other reasons for that primary conclusion the Tribunal in particular found that it was implausible that she could have been detained for 12 days, and then return to her normal activities at work in a government office with no questions being asked of her. The Tribunal also found reinforcement for its conclusion that her account of her activities in the People's Republic of China was implausible in her failure to attend a Falun Gong practice group in Australia, and her lack of knowledge of Falun Gong activities in Australia. 6 The reasons for judgment of the Federal Magistrates Court show that in its judgment there was no failure to comply with s 424A of the Act. The reasons for this conclusion of no breach of the requirements of s 424A is anchored in the opinion of the Court that while the claim in the Protection Visa to having been detained for 12 days provided a starting point for questioning the appellant at the Tribunal hearing, the claim of detention for 12 days in the Protection Visa application was not a reason for affirming the decision under review. The lack of satisfaction by the Tribunal that the appellant had been detained for 12 days as she claimed was one of the reasons for the Tribunal's decision. 7 The Court also found that the Tribunal did not have any concern about inconsistency between the Protection Visa application and the claims at the hearing. The Court concluded that the evaluation by the Tribunal of the appellant's testimony was not 'information' which was required to be disclosed under s 424A(1) of the Act. 8 In relation to the ground in her appeal which asserts that the Tribunal was in breach of s 91R of Act, there does not appear, in my judgment, to be any misconstruction of s 91R of the Act by the Tribunal, and there is no basis for the Court to interfere with the Tribunal's factual finding as to the harm the appellant claims to have suffered. The appellant's own evidence was that despite her claim of arrest and detention for 12 days, the police and authorities in the People's Republic of China had not caused her any harm. I simply note that it would have been open to conclude that detention for such a period might constitute 'persecution' within the meaning of the Convention. That claim simply provided the starting point for questioning of the applicant at the hearing. (See the observations by Allsop J in SZEEU v Minister for Immigration [2006] FCAFC 2 at 227). The RRT was not relying upon the fact that she had said that she was detained for twelve days as part of the reason for its decision. It simply was not satisfied that she had been detained for twelve days. This is not to use "information" (here the "information" that she was detained for twelve days) as part of the reason for the RRTs decision. It is accordingly not a matter which, applying the principles in SZEEU v Minister for Immigration [2006] FCAFC 2 , gave raise to an obligation to issue an invitation under s.424A(1). That assessment falls within the third proposition in paragraph [24] of VAF v The Minister for Immigration (2004) 206 ALR 471, which was accepted in SZEEU. See SZEEU at [18] - [20] per Moore J, and, more particularly, at [205] -[207] per Allsop J with whom Weinberg J relevantly agreed. 12 The Tribunal's obligation pursuant to s 424A extends only to particulars of the information which the Tribunal considers would be ' the reason, or a part of the reason, for affirming the decision that is under review '. It is necessary to look at the Tribunal's express reasons for its decision in order to decide whether it considered any of the information in the applicant's Protection Visa was a reason or part of the reason for affirming the delegate's decision: VEAJ of 2002 v Minister for Immigration Multicultural and Indigenous Affairs [2003] FCA 678 ; (2003) 132 FCR 291 at 41 per Gray J. 13 When one looks at the reasons of the Tribunal, the reason for the Tribunal's conclusion was that the material was inadequate to satisfy the Tribunal that the appellant had a well-founded fear of persecution. The Tribunal said of that material that it was vague and lacked explanation for implausible claims and inconsistencies, these not being inconsistencies with the material in the Protection Visa application. It is plain that where the reason for the Tribunal's decision is its inability to reach a state of satisfaction as to the claim given the absence of sufficient material, s 424A(1) is not enlivened. 14 Allsop J in SZEZI v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1195 at 21 gave an analysis of the 'information' in which s 424A(1) operates. That is too simplistic an analysis. ...Whilst in some cases an "unbundling" is necessary in order, sensibly, to apply s 424A to the expressed reasons of the Tribunal, here, the reason for the decision is plain. The Tribunal, having read all the material and having evaluated its content and weight, was unable to reach a specified mental state. It was not satisfied that the appellant had a well-founded fear because of subjectively perceived inadequacies in the information. The reason for the decision was simply (and no more than) the evaluative conclusion founded on the perceived inadequacy of the information, in the sense of an absence of detail and extrinsic explanation which had been invited. It would be an inadequate and misleading statement to say that the information was the reason or part of the reason for the decision. It was the lack of the requested further assistance and explanation that was the reason. It is not the information in the originating application for a visa, namely, the claim that the appellant had been detained for 12 days, that was the reason or part of the reason for the Tribunal's decision. The reason or the decision was simply, and no more than, the absence of material which it required to reach a state of satisfaction, no findings of fact remain. The Tribunal concluded that on the material the absence of information was such that it was not able to reach the requisite state of satisfaction. That such information does not come within s 424A(1) has been reaffirmed in SZEEU v Minister of Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214 at [223] to [224] and again in SZCIA v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 238 at [12] . In that matter, Finn and Stone JJ helpfully digested the cases concerning what constitutes "information" for present purposes. In its reasons for decision, the Tribunal had referred to aspects of the appellant's conduct in Australia which, seemingly, did not reflect the conduct of a person who had a well-founded fear of persecution. One aspect of the conduct was the appellant's tardiness in applying for a protection visa. All members of the Full Court concluded that these matters constituted information, though Finn and Stone JJ (Merkel J dissenting) concluded that it was not information that formed part of the reasons for affirming the decision of the delegate. In this context, the word has been taken as referring to knowledge of relevant facts or circumstances communicated to, or received by, the Tribunal: Tin v Minister for Immigration and Multicultural Affairs [2000] FCA 1109 at [3] , approved in VAF at [24] or knowledge which has come to, or has been gained by, the Tribunal: Paul at [95]. In this respect, it is relevant to recall the root of the word "information": that of which one has been told or apprised, or informed. The distinction can become fine: Paul at [95]. It is a distinction, nevertheless, to be maintained. Also, the fact that appraisal, thought processes and determination are not information does not mean they are not relevant to the operation of s 424A. The thought processes of the Tribunal may reveal the relevance of information for s 424A(1)(b) and may assist in understanding what the Tribunal must say or do to comply with s 424A(1)(a) , (b) or (c). It will be necessary in due course to explain the limits of this expression of view. It expresses disagreement with the outcome of the review by the court. In my opinion it impermissibly seeks merits review. No error of law is established. 22 In respect of the oral allegations raised by the appellant in this Court, the allegation of bias and failure to consider all of the material which the appellant submitted to the Tribunal are raised for the first time. They are not particularised. They were not consequently before the Federal Magistrate and provide no basis for impeaching his decision. In the absence of particulars in any event, the allegations cannot be accepted as correct. 23 In my judgment the reasons of Driver FM reveal no error. No ground of review which amounts to jurisdictional error is established. The decision of the Tribunal is therefore a decision which falls within the statutory description in s 474 of the Act as a 'privative clause decision'. 24 For the reasons I have set out above, the appeal should be dismissed with costs. 25 The appeal is dismissed with costs. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender.

protection visa whether refugee review tribunal complied with s 424a of the migration act 1958 (cth) migration

The Application was said to be made under O 54 of the Federal Court Rules . Those Rules relate to applications made in this Court pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth) ( the ADJR Act ). The applicant does not rely upon s 39B of the Judiciary Act 1903 (Cth) in the Application. The decision which the applicant seeks to overturn ( the Registrar's decision ) is a decision by a Deputy District Registrar of this Court ( the second respondent ) made on 7 July 2009 and notified to the applicant by letter dated 7 July 2009. By that decision, the second respondent declined to accept for filing a document entitled: Notice of Appeal ( the proposed Notice of Appeal ). The applicant had attempted to file the proposed Notice of Appeal on 7 July 2009. By the proposed Notice of Appeal, the applicant sought to challenge a decision of a Federal Magistrate, Driver FM, made on 16 June 2009, in which the Federal Magistrate dismissed as an abuse of process an application made by the applicant to set aside a sequestration order made in respect of his estate. In the application before Driver FM, the applicant also sought an order annulling his bankruptcy and damages against the first respondent. The applicant also sought other related orders and interim relief. Under the Federal Court Rules , the last day on which the applicant could file any Notice of Appeal in respect of Driver FM's decision was 7 July 2009. The first respondent was the petitioning creditor in the applicant's bankruptcy. On 26 August 2009, when the proceedings came before me for the first time, I drew the applicant's attention to the fact that he needed to join the second respondent as an additional respondent party. On that occasion, I also fixed the proceedings for final hearing before me on 15 September 2009. When the proceedings were called on for hearing before me on 15 September 2009, the applicant applied to join the second respondent and several others as respondent parties to the proceedings. He did so outside the time which I had allowed to him to obtain orders for the joinder of additional respondents under the orders which I had made on 26 August 2009. Notwithstanding the lateness of his joinder application, I made an order joining the second respondent but I declined to join any other parties. None of the other parties which the applicant sought to join on 15 September 2009 was either a necessary or a proper party. Applicant be granted leave to file & serve "notice of appeal" as to the refusal made by the registrar P Hannigan on 7/7/09. The registry of this court to make arrangement to transfer the file : SYG 786/2009 from the court below to this court, prior to the hearing of this application. Applicant be granted leave that the registry of this court to make arrangement to provide transcripts to the applicant in the court below matter SYG 786/09, before the Registrar Hedge on 12/5/09 & 16/6/09 [Verbal submissions by the parties on the directions dates] and before His honour Driver FM on 16/6/09, in consideration with the order- 2 above. It is extremely difficult to discern in the Application any intelligible grounds upon which the applicant relies in support of the relief which he seeks. It is also somewhat difficult to grasp the substance of some of the relief which he seeks. As far as the grounds relied upon are concerned, he seems to want to assert that the Registrar's decision was equivalent to a decision in his appeal on the merits and was therefore a decision which could only be made by a Full Court of this Court comprising a bench of three Judges. The applicant does not mention the ADJR Act in the Application and does not expressly or even impliedly refer to any of the statutory grounds set out in that Act by which relevant administrative decisions might be attacked. The applicant did not contend that O 46 r 7A(1) was invalid. Nor did he contend that the decision was a decision of a judicial character rather than a decision of an administrative character. Such a contention would have run counter to his whole case. The first respondent, on the other hand, did submit that the decision was judicial and not administrative in character in support of a submission that the applicant's claims made in the Application were misconceived and should be dismissed. His Honour Federal Magistrate Driver erred in law and facts by dismissing the applicant's application on 16/6/09 by hearing on "DURESS", which was listed for further direction of the substantive hearing of the matter 786/09 and the hearing listed for "interim orders" sought in the substantive matter, on the same day. His honour erred in law by entertaining and accepting respondent's verbal application heard and determined on 16/6/09 by dismissed the applicant's application. Respondent defaulted to do such application, on time. The court below applied "favors" to the respondent, unreasonably. His honour has been in the situation of "Apprehended bias" as to his honours previous dismissal of previous bankruptcy in 2002, which were challenged upo to High Court then. His honour erred in law by concluding the decision of the dismissal of the applicant's application in short period of time "within an hour" as to the serious matter raised before the court in the applicant's bankruptcy annulment application without having benefit of reading or understanding the issues raised in many materials, and affidavits, which were before his honoour, by such "Apprehended bias". Appellant relies on his verbal arguments made before his honour Driver FM on 16/6/08, as part of the appeal grounds, in addition to the as referred in his application in the court below matter: SYG 786/09, for which the respondent conceded by not challenging in the affidavits filed and served by the respondent in the court below, neither in the verbal arguments made by the respondent's counsel before his honour Driver FM on 16/6/09. Appellant's application as to the his annulment of his bankruptcy application SYG 786/09 was supported and consented by the Bankruptcy Trustee [ITSA], as to it's merits, as to the hearing before his honour FM on 16/6/09, though trustee was in presence in the court on 16/6/09, as in the court's records. Appellant has suffered unfairness treatments in the court below, as to procedural issues, which were "bypassed" as to the undue influence caused by the respondent before the court below. His honour erred in law by the assumptions that that the matter was already dealt with Her honor Stone J in this court on 11/5/09, in contrary, that Her honour left the matter to the court below to determine the issues, as to the left over evidence, though her honour was dealing with only issue of law, being an appeal, as it was raised before her honour in the morning hearing on 11/5/09, as recorded in the transcripts. As to consequences, the applicant has placed in a situation of "foot ball" in the foot ball ground where applicant has been kicked from both ends and became a victims, before the eyes of the justice and merits of the applicants' case, as a whole. The spelling errors and difficulties of expression are those of the applicant. I understand that he was the author of the document. In the proposed Notice of Appeal, the applicant seeks a stay of the sequestration order. He also seeks some unspecified relief in respect of the Supreme Court judgment which was the basis of the bankruptcy proceedings in which the sequestration order was made and other relief concerning transcripts of certain hearings. At [3] ---[10] of those Reasons, the Federal Magistrate said: The background to the matter is somewhat detailed but has been dealt with in earlier proceedings in various courts. On 12 December 2007 the Supreme Court of New South Wales made a costs order against the applicant. An appeal against the costs order was dismissed by the New South Wales Court of Appeal on 14 July 2008. On 10 December 2008 the High Court refused special leave to appeal to that Court. On 14 May 2008, the respondent creditor served a bankruptcy notice on the applicant based on the judgment debt created by the costs order. The bankruptcy notice was not complied with. The bankruptcy notice was challenged in earlier proceedings in this Court and that application was dismissed on 1 July 2008 by Smith FM ( Satchithanantham v NAB Limited [2008] FMCA 940). The applicant appealed from that decision to the Federal Court and on 27 February 2009 his Honour Edmonds J dismissed that appeal ( Satchithanantham v NAB Limited [2009] FCA 198). A creditor's petition was then brought and was listed to be heard on 15 October 2008. There was some delay pending the resolution of the appeal before Edmonds J. The applicant did not attend the hearing of the creditor's petition which occurred on 11 March 2009. A sequestration order and other orders were made by Smith FM on that day ( NAB Limited v Satchithanantham (No 2) [2009] FMCA 229). The applicant appealed from those orders to the Federal Court. On 11 May 2009 her Honour Stone J dismissed that appeal ( Satchithanantham v NAB Limited [2009] FCA 501). I understand that the applicant is also seeking special leave to appeal to the High Court against both the judgment of Edmonds J and the judgment of Stone J. I understand that there are also continuing proceedings in the Supreme Court. The application is supported by three affidavits by the applicant filed on 3 April 2009, 26 May 2009, and 16 June 2009. That comprises a substantial volume of material, some of which was objected to by the respondent. I received all of the affidavit material on the basis that I would attribute appropriate weight to it and would treat as submissions those parts of it which were submissions rather than assertions of fact. The respondent relies upon the affidavit of Jane Heather Pike made on 7 May 2009. I also received as an exhibit a bundle of documents comprising the applicant's notice of opposition to the creditor's petition, his notice of appeal in the Federal Court earlier this year, and an amended notice of appeal. The fundamental problem facing the applicant is that he is seeking to re-agitate in these present proceedings issues that have already been dealt with in this Court and in the Federal Court. He invites the Court to again revisit the costs order of the Supreme Court. He also invites the Court to revisit the earlier decisions of Smith FM and the appeals dealt with in the Federal Court. I am, of course, bound by the two judgments of the Federal Court relating to the bankruptcy notice and the sequestration order. I gave the applicant an opportunity to explain to me whether there was any basis other than the issues which have previously been dealt with in the earlier Court proceedings to support the application for annulment, but having heard his oral submissions at some length, I have not discerned any issue that was not dealt with in the earlier proceedings or which could not have been. In his judgment at [20], Edmonds J found that the various attacks by the applicant on the debt underlying the bankruptcy notice were vexatious and frivolous and were correctly dismissed by Smith FM. In her judgment at [14] Stone J rejected the claims of procedural unfairness arising out of the applicant's non attendance before this Court when it made its sequestration order. For his part, Smith FM dealt at some length with the issues raised by the applicant concerning the adverse costs order in the Supreme Court in both of his judgments. Having regard to the earlier proceedings and the material now presented by the applicant, I have come to the view that the present application is an abuse of process. It is simply a vehicle being used by the applicant to re-agitate issues that have already been dealt with. The application should not have been brought and further like applications should be prevented. I will order that the application is dismissed as an abuse of process, pursuant to rule 13.10(c) of the Federal Magistrates Court Rules 2001 (Cth). No further application by this applicant in relation to the sequestration order made by this Court on 11 March 2009 be received for filing in this Court, except by leave of a Federal Magistrate. The judgment to which Driver FM first referred at [8] of his Reasons is a judgment of Edmonds J delivered on 11 March 2009 ( Satchithanantham v National Australia Bank Limited [2009] FCA 198). That judgment contained his Honour's reasons for dismissing an appeal from Smith FM on 27 February 2009. Smith FM had declined to set aside the Bankruptcy Notice which was the foundation of the sequestration order ultimately made in respect of the applicant's estate. The underlying debt was $10,000.00, being the amount of a costs order made on 12 December 2007 in favour of the first respondent against the applicant by a Judge of the Supreme Court of New South Wales in proceedings in that Court. Leave to appeal from that order was refused with costs by the Court of Appeal on 16 June 2008. On 14 July 2008, a further attempt to challenge that order was also dismissed with costs by the Court of Appeal. The applicant's application to the High Court for special leave to appeal from the Court of Appeal's orders was refused. There is, therefore, no other avenue by which the applicant can have the costs order overturned. In the judgment of Stone J referred to at [8] of the reasons of Driver FM ( Satchithanantham v National Australia Bank Limited [2009] FCA 501) , her Honour dismissed an appeal from another judgment of Smith FM, who made the sequestration order against the applicant's estate on 11 March 2009. Once again the applicant attempted to go behind the costs order which was the foundation of the Bankruptcy Notice and Creditor's Petition, and once again failed in that endeavour. It is quite clear that the complexion on events given by Driver FM at [6] of his Reasons was an accurate one. She did not seek a direction from a Judge. She did not engage O 46 r 7A(2). She specifically relied upon the abuse of process ground and upon that ground alone. The second respondent did not appear on 15 September 2009 and has taken no part in the proceedings. The first respondent actively opposed the relief sought by the applicant. The applicant has not advanced any basis for setting aside the Registrar's decision under the ADJR Act. Notwithstanding that circumstance, I am obliged, I think, to consider the Application and the applicant's claims doing the best I can to arrive at the just result. The first question to be decided is whether the Registrar's decision was a decision of an administrative character within the meaning of s 5(1) of the ADJR Act. As I have already mentioned, the first respondent submitted that it was not such a decision but was rather a decision of a judicial character. In Letts v Commonwealth (1985) 8 FCR 585 , Toohey J (when sitting as a Judge of this Court) held that a decision made by the Registrar of the High Court to seek a direction from a Justice of the High Court pursuant to O 58 r 4(3) of the High Court Rules as to whether the Registrar should decline to accept a document for filing because it was an abuse of the process of the Court or a frivolous or vexatious proceeding, was not a decision of an administrative character. If the actions of the Registrar constituted a decision, I do not think it was a decision of an administrative character. The Registrar was in truth exercising the jurisdiction of the High Court to control frivolous or vexatious applications, a jurisdiction that may be exercised through officers of the court as well as justices. "Although he was not a member of the court he was ... part of the organisation through which the powers and jurisdiction of the court were exercised ...": see Commonwealth v Hospital Contribution Fund of Australia [1982] HCA 13 ; (1982) 150 CLR 49 per Gibbs CJ at 59. Order 58, r 3(4) provides convenient machinery by which a matter may be brought to the attention of a justice of the High Court. In this regard Legal Aid Commission of Western Australia v Edwards may be distinguished for there the action of the Deputy Registrar of the Family Court in refusing to accept a notice disputing a bill of costs was not readily susceptible of review by a judge of that Court. In Letts , the decision of the Registrar under challenge was a decision to refer a matter to a Justice of the High Court viz whether the Justice should direct the Registrar not to accept a document. The present case involves a decision made by the Deputy District Registrar not to accept the proposed Notice of Appeal. There was no attempt to involve a Judge of this Court in the relevant decision-making in the present case. Furthermore, Letts 8 FCR 585 concerned an application in this Court under the ADJR Act for judicial review of a decision of the Registrar of the High Court---a very different subject matter from the subject matter of the present case. Adequate provision is made by the High Court Rules for a justice of that Court to determine whether or not the Registrar shall issue the process in question. In those circumstances it would be quite inappropriate for a judge of this Court to determine what is in essence that very matter. There is authority in this Court to the effect that a mere direction by a Judge of this Court to a Registrar of this Court pursuant to O 46 r 7A(2) (and its predecessor rule) is not a judgment of this Court able to be subjected to appeal by a person whose document has been rejected by a Registrar pursuant to the direction given by the Judge (see Bizuneh v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 42 ; (2003) 128 FCR 353 at [11] ---[19] (pp 356---357) (per Lee, Whitlam and Jacobson JJ); Bahonko v Sterjov [2007] FCA 1556 at [16] (per Gordon J); and Bahonko v Sterjov [2007] FCA 1717 at [58] (per Lander J). See also Legal Aid Commission (WA) v Edwards (No 2) [1982] FCA 103 ; (1982) 61 FLR 419 ; 42 ALR 154 which is not directly in point but which contains reasoning to the same effect). In Bizuneh [2003] FCAFC 42 ; 128 FCR 353 , the Full Court said (at [15]) (p 357), that a rule substantially in the same form as the current rule " removed a clog on the Registrar's discretion ". The Full Court said that the Registrar can now act to refuse to accept or issue a document without first obtaining the authority from a Judge so to act. This power is intended to enable the Registrar to maintain the efficient operation of the Registry and thus, of the Court. This body of authority has developed notwithstanding the fact that an earlier Full Court assumed, without deciding, that a direction given by a Judge to a Registrar pursuant to O 46 r 7A was a " judgment, decree or order " of the Court (see Gunter v Doogan [1999] FCA 1648 at [12] , [14], [18] and [19]). Further, in Paramasivam v Randwick City Council [2005] FCA 369 , Sackville J observed that there was some doubt about the reasoning of the Full Court in Bizuneh [2003] FCAFC 42 ; 128 FCR 353 insofar as it classified a direction by a Judge to a Registrar pursuant to O 46 r 7A as " administrative in character ". His Honour nonetheless followed Bizuneh [2003] FCAFC 42 ; 128 FCR 353 as he regarded himself as being bound by the decision. Had the reasoning in Letts been followed, it would seem that the Judge's direction would have been regarded as a judicial act, although there still would have been a serious question as to whether the direction (or the Registrar's actions pursuant to the direction) constituted a 'judgment' for the purposes of the Federal Court of Australia Act 1976 (Cth) and thus whether it could be the subject of an appeal or an application for leave to appeal. If a direction by a Judge to a Registrar is an administrative decision and not a judicial decision, it follows that the decision by a Registrar taken on his or her own initiative pursuant to O 46 r 7A(1) is a fortiori a decision of an administrative character. Quite apart from the fact that the reasoning in Bizuneh [2003] FCAFC 42 ; 128 FCR 353 is binding upon me, I would have thought that a decision of the latter kind made by a Registrar on his or her own initiative is clearly a decision of an administrative character. For these reasons, I am of the opinion that the Registrar's decision was a decision of an administrative character and is thus susceptible to judicial review under the ADJR Act. Accordingly, the power reposed in a Registrar by O 46 r 7A(1) of the Federal Court Rules was reposed in the second respondent, amongst others, in the circumstances of the present case. The evidence before me discloses that the second respondent was of the opinion that the proposed Notice of Appeal was an abuse of the process of the Court because it was doomed to fail. The grounds available to the applicant to seek an order of review in respect of the decision are set out in s 5(1) of the ADJR Act. As I have already mentioned, the applicant did not mention the ADJR Act in the Application or in his submissions nor did he identify the basis upon which he sought judicial review of the decision. Doing the best I can to interpret the Application and the submissions which the applicant made to me in his oral submissions, he seems to want to argue that there is no power in a Registrar of this Court to deny to him his right of appeal because all appeals must be heard on their merits by a bench comprising three Judges of this Court. Upon the assumption that O 46 r 7A is valid, there is clearly power in a Registrar of this Court to refuse to accept a document for filing. The class of documents which may be rejected under that rule include an originating document. A Notice of Appeal from a decision or judgment of a Federal Magistrate is an originating document within the meaning of O 46 r 7A. I am unable to see any ground adumbrated in s 5(1) of the ADJR Act which could conceivably support the relief which the applicant claims in the Application. The applicant does not have an entitlement to investigate the merits of the decision by means of an application for judicial review. In Paramasivam [2005] FCA 369 at [43] ff, Sackville J considered whether the proceedings brought by the applicant in the case before him should be summarily dismissed. At [46]---[47], his Honour said: FCR, O 46 r 7A, confers on the Registrar certain powers if he or she forms a particular opinion. The requisite opinion is that a document presented to a Registry on its face is an abuse of the Court's process or is frivolous or vexatious. If the Registrar forms that opinion, he or she may, without more, refuse to accept or issue the document. Alternatively, the Registrar may seek the direction of a Judge. Although r 7A does not expressly say so, it is clearly intended that the Registrar must act in conformity with the Judge's direction. The Registrar's power to seek the direction of a Judge is thus conditional on the Registrar forming the opinion that the relevant document on its face is an abuse of the process of the Court or is frivolous or vexatious. In the first case, the Registrar's decision would not seem to have been authorised by the relevant enactment (that is, the FCR ) and thus the applicant could invoke s 5(1)(d) of the ADJR Act (providing a ground of review where the decision was not authorised by the enactment). In the second case an irrelevant consideration would have been taken into account and thus the applicant could invoke s 5(1)(e) of the ADJR Act (see s 5(2)(a)). Sackville J took the view that the existence of this accompanying memorandum which set out some of the applicant's litigious history was a sufficient basis to allow the proceedings to go to trial because it may have supported an ultimate contention on the part of the applicant that the Registrar had taken into account an irrelevant consideration, namely, that the applicant's litigious history was a matter to which regard might be had in forming the requisite opinion under O 46 r 7A. In the course of his Reasons for Judgment in Paramasivam [2005] FCA 369 , Sackville J discussed the meaning of the expression on its face when used in O 46 r 7A. Indeed, Counsel for the first respondent made detailed submissions designed to demonstrate that the proposed Notice of Appeal was, on its face, clearly an abuse of the process of the Court. Those submissions were based solely on the terms of the proposed Notice of Appeal. She submitted that the grounds of appeal were largely incomprehensible. Counsel also submitted that the pejorative terms " duress "; " suffering natural justice "; " apprehended bias "; " undue influence "; and " favouritism " were all bandied about in the proposed Notice of Appeal without any proper foundation. In the proposed Notice of Appeal, the applicant also sought to incorporate oral arguments made before the Federal Magistrate in an entirely impermissible way. There is a great deal to be said for the arguments advanced by Counsel for the first respondent in support of the proposition that the Registrar's decision was plainly correct. But the first respondent does not need to go that far. The language of O 46 r 7A(1) requires the Registrar to form the opinion that the document presented for filing " on its face " is " an abuse of the process of the Court or is frivolous or vexatious " (the words are " if the document appears to the Registrar ... to be ...") (Emphasis added). That opinion must be honestly and actually formed. It is the appearance to the mind of the Registrar of the requisite circumstances which enlivens the power to reject a document for filing. The Registrar must form that opinion reasonably ( Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17 ; (2001) 205 CLR 507 at [73] (p 532) and the cases referred to in footnote 52 on p 532 of the report). This latter requirement must not be used as a back door means of carrying out a merits review of the relevant decision. In the present case, there is no evidence upon which I could, let alone should, make a finding that the second respondent did not actually and honestly form the opinion which she expressed in her letter to the applicant dated 7 July 2009. The terms of the proposed Notice of Appeal itself provide a reasonable basis for the formation of that opinion. It may be that the expression on its face when used in O 46 r 7A allows the Registrar to consider other documents in addition to the document which is submitted for filing, if it is necessary to do so in order to make sense of that document. In the present case, there is no evidence to suggest that the second respondent did more than look at the proposed Notice of Appeal. In those circumstances, I do not need to determine the wider question. It was submitted on behalf of the first respondent that I have power to review the Registrar's decision pursuant to s 35A(6) of the Federal Court of Australia Act 1976 (Cth) ( the Act ). Section 35A(1) of the Act provides that certain powers of the Court may, if the Court or a Judge so directs, be exercised by a Registrar. Those powers are set out in subpars (a) to (h) of s 35A(1). (6) The Court may, on application under subsection (5) or of its own motion, review an exercise of power by a Registrar pursuant to this section and may make such order or orders as it thinks fit with respect to the matter with respect to which the power was exercised. It is a power given to the Registrar directly by the Federal Court Rules . Section 35A is intended to deal with powers of the Court other than powers already specifically given to the Registrar under the Rules. Furthermore, even if it were such a power, it does not fall within the specific powers referred to in s 35A(1)(a) to (h) of the Act. Finally, in this case, the second respondent did not act as she did pursuant to a direction from a Judge. For s 35A(1) to be engaged, there must first be a direction given by the Court or a Judge. For these reasons, the Registrar's decision was not a decision made in the exercise of a power of the kind referred to in s 35A(1) of the Act. For that reason, the Registrar's decision cannot be reviewed under that section because, under subs (5) and (6) of s 35A of the Act, only an exercise of power pursuant to s 35A is reviewable under those subsections. For these reasons, I reject the argument of the first respondent that I can review the Registrar's decision pursuant to s 35A(6) of the Act. The rejection of the first respondent's s 35A argument necessarily carries with it the rejection of the further argument put by the first respondent that, because the decision can be reviewed under s 35A(6) of the Act, I should refuse relief to the applicant under the ADJR Act on discretionary grounds, that is to say, I should refuse relief because he has a perfectly adequate alternative avenue available to him whereby he can redress the wrong about which he complains. The application must be dismissed with costs. I will make orders accordingly. I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster.

whether decision by a deputy district registrar of the federal court of australia made pursuant to o 46 r 7a(1) of the federal court rules to reject a notice of appeal submitted for filing within time on the ground that it constituted an abuse of the process of the court is a decision of an administrative character decision held to be a decision of an administrative character decision susceptible to review under the administrative decisions (judicial review) act 1977 (cth) applicant failed to specify or make out any ground of review application dismissed whether decision of a registrar of the federal court of australia made pursuant to o 46 r 7a(1) of the federal court rules to refuse to accept a notice of appeal for filing is reviewable under s 35a(5) or s 35a(6) of the federal court of australia act 1976 (cth) decision held not to be reviewable under s 35a administrative law practice and procedure

2 The principal proceedings involve a claim by the applicant, Mr Keays, against the respondent, JP Morgan Administrative Services Australia Limited. The statement of claim was filed on 2 September 2008. The subpoena is to Heidrick & Struggles Australia Limited dated 7 October 2008. It seeks production of documents recording evidence referring to or relating to the retaining by the respondent of Heidrick & Struggles or any of their employees or services performed by Heidrick & Struggles relating to the recruitment for the respondent of the applicant and certain other nominated persons (being three in number) as well as candidates for certain nominated positions. The notice of motion seeks to set aside those parts of the subpoena which refer to persons other than the applicant himself and the candidates for other positions. (2) A legitimate forensic purpose is to obtain documents that might be relevant to the proceedings. The test of relevance is apparent relevance, that is, if the document may be directly relevant to any fact in issue or might otherwise indirectly lead to any course of inquiry about other matters that might become relevant to a fact in issue. (3) This test has been expressed in a number of ways (as summarised at [33.4.30] of Ritchie's Uniform Civil Procedure NSW ) such as: - (i) the capacity to throw light on the issues in the main case, (ii) documents that might be connected with or pertinent to the proceedings, (iii) documents that could reasonably be expected to throw some light on the issues in the proceedings, or (iv) a sufficient apparent connection with the proceedings. 4 These principles were also summarised in a decision of Stone J, Dorajay Pty Limited v Aristocrat Leisure Limited [2005] FCA 588 at [12] to [18]. 5 In this case, the difficulty with the parts of the subpoena to which objection is taken is disclosed by the submissions made on behalf of the applicant (being the respondent to the notice of motion). In short, the submissions made in support of the apparent relevance of the documents required to be produced by the parts of the subpoena to which objection is taken appear to relate to alleged representations and an alleged course of conduct which is not part of the statement of claim as presently filed in the proceedings. That is representations said to have been made to the applicant that: - (i) his recruitment would be as part of a team, and (ii) the other persons nominated in the subpoena would form part of this team, and a claim that the alleged falsity of these representations is somehow connected with the involvement or potential involvement of representations to other employees. 6 None of these matters are apparent on the face of the statement of claim. It seems to me to be clear that the test of apparent relevance has to be applied at the time the subpoena is issued by reference to the pleadings as they exist at that time. As the statement of claim does not disclose any connection between the documents that are sought in the parts of the subpoena to which objection is taken and the claims as made in the present statement of claim I am of the view that those parts of the subpoena fail to meet the test of apparent relevance. Orders should be made in accordance with the notice of motion filed on 15 October 2008. (2) The applicant pay the respondent's costs of the motion. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

subpoena motion to set aside parts of subpoena no legitimate forensic purpose for production of documents sought by those parts of subpoena sufficient relevance tested by reference to existing statement of claim practice and procedure

The Refugee Review Tribunal accepted his claims concerning the circumstances in which he had fled from China to Australia in June 2004. 2 Despite its acceptance of those claims, the tribunal then found that there was a remote chance that the Chinese authorities or anyone else would seek to harm the appellant in the reasonably foreseeable future for political reasons. This was because, it said, he had not engaged in political activity since his arrest in October 2003 and he had not expressed an interest in pursuing further political activities in the reasonably foreseeable future. 3 But the tribunal never asked the appellant, or itself, about why, during and after his detention, the appellant's interest in political matters had ceased. In particular, the tribunal did not consider whether the appellant modified his conduct due to the threat of further harm were he to persist in expressing his political opinions. If it should have enquired about these matters, the tribunal's failure to do so was a jurisdictional error. 4 In short, the appellant's claims, which the tribunal accepted, were as follows. During 2003 the appellant organised protest activities in China after a friend, injured in a motor vehicle accident, had been denied compensation. The person who had caused the accident used connections in government to avoid both punishment and paying compensation. After taking a number of other steps to seek redress for his friend, on 10 October 2003 the appellant organised a large demonstration in which over 100 persons participated to protest about his friend's treatment. Later that day he was detained by the police who held him until 31 December 2003. During that detention he was severely mistreated. The appellant was released only after he signed a confession admitting that he had been involved in political activities against the government. Following his release, the appellant was monitored and questioned by the authorities at least 25 times before he fled to Taiwan. There he bought another person's passport and used it to enter Australia in June 2004. 5 The Federal Magistrates Court dismissed the appellant's application for constitutional writ relief. The trial judge held that the tribunal had addressed the risk of the appellant suffering continuing persecution by reason of his past political activities. He held that the tribunal did not assume that the appellant would modify his future conduct in the face of a threat of political persecution: SZHBP v Minister for Immigration [2007] FMCA 511 at [16] . Rather, his Honour found that the tribunal had made a factual assessment that the appellant had engaged in a brief episode of political activism but that he had no interest in pursuing further political activities in the reasonably foreseeable future ([2007] FMCA 511 at [17]). Each is related. The first is that the tribunal failed to ask whether the appellant's cessation of his political activities, and his failure to express interest in further involvement in them, was a consequence of the persecutory treatment which the tribunal found he had suffered. This ground is based on the decision in Appellant S395/2002 v Minister for Immigration and Multicultural Affairs [2003] HCA 71 ; (2003) 216 CLR 473. 7 The second ground is that the tribunal failed to consider whether the appellant had a well-founded fear of persecution, having regard to his individual circumstances, characteristics and history, because it was necessary for him to be inactive politically in China in order to avoid persecution. The trial judge found that no evidence was ever given to the tribunal corroborating any part of the appellant's original claims ( SZHBP [2007] FMCA 511 at [5] ). However, his Honour was incorrect. The tribunal found that at the hearing the appellant '... essentially repeated the claims he provided to the Department'. Those claims had been made in a statutory declaration which accompanied the appellant's claim for a protection visa. It is necessary to set out the claims in a little more detail than the summary I have already given. Since the tribunal accepted them, I have treated the claims as facts found by it. 9 The appellant was a self-employed truck driver engaged in transportation jobs in China. He had given one of his friends a job of transporting some building materials. In the course of executing that job the friend's small truck fell into a ravine when he was overtaken illegally by another truck. The appellant's friend survived the accident but was paralysed permanently. The friend was married with a small child and aged parents. Following the accident the friend was no longer able to support his family. The driver at fault did not have a driver's licence but his father was a senior and powerful government official in one of the Chinese provinces. The official used his position in government to protect his son from punishment and from having any obligation to pay compensation to the appellant's friend. 10 The appellant said that he could not keep silent about this state of affairs because he felt a sense of responsibility, having transferred the job to his friend. Between July to October 2003, the appellant engaged in a number of activities to seek redress for his friend. First, the appellant approached lawyers for legal assistance, but none wished to help him bring a case against a prominent government official's family. Secondly, the appellant contacted the local court seeking to sue the driver at fault together with his father. But the court refused to accept the application on the basis that the appellant was not qualified to bring it. The third action the appellant took was to gather a petition with some self-employed drivers, including his friend's relatives and friends. He sent the petition to the local, and then provincial, governments. The governmental response to the petition was to say that the public security bureau (PSB) had already made a fair decision not to take any action against the driver at fault. 11 Fourthly, at the end of September 2003 the appellant organised a sit-in protest of about 50 self-employed drivers in front of the provincial government's offices. They distributed copies of the petition to the public in the meantime. The government authorities did not respond directly. However, armed policemen in front of the government building threatened the protesters that they would have trouble and would be subjected to serious punishment if they continued their sit-in because the Chinese national day, 1 October, was approaching. The appellant and the drivers distributed propaganda material which encouraged readers to unite together to strive for their basic human rights. He called on the self-employed drivers to establish their own union to protect their human rights. Hundreds of people gathered around them and many other self-employed drivers stopped their vehicles and stood together with the protesters. The appellant did not expect the demonstration he organised to be so successful. 13 However, on the evening of the demonstration, the PSB arrested the appellant and kept him in detention until 31 December 2003. During his detention he was questioned many times and was physically tortured. His interrogators sought to force him to admit that he had organised an anti-government political demonstration. The appellant said that he refused to make that admission because he wanted respect and protection of self-employed drivers' basic human rights. On 31 st December 2003, I was eventually released after I signed ... a confession in which I admitted my so-called anti-government activities. The police often came to his home or took him to the PSB offices, questioning him about his daily activities or requiring him to submit an 'ideological report'. The tribunal found this form of harassment occurred at least 25 times in six months. The appellant said that it was impossible for him to have a normal life. He could not get work because the PSB had told everyone he was a troublemaker with an anti-government ideology. He said that to escape from this unfair persecution permanently he had to leave his country and that he could not return there '... because I have already become the victim of political persecution. I therefore have to seek protection in Australia'. During the hearing, the appellant told the tribunal that he had not been involved in any political activities since 2003. The tribunal also asked the appellant if he had been involved in any political activities in Australia or if he had attempted to publicise the plight of his friend after he had arrived here. He responded that he was not involved in political activities. The tribunal asked him why he thought the authorities in China would be interested in him in the future if he had not been involved in any political activities for almost 3 years. He responded they would seek to harass and arrest him for what he had done in 2003. 16 The appellant also told the tribunal that early in 2006 his mother had received a visit from the police who had sought to speak to him. The tribunal asked the appellant how he knew that the visit had any connection with his political activities in 2003 and the appellant said, in response, there was no other possible reason for the visit. The tribunal accepted that the authorities in China had visited the appellant's mother and that they had indicated that they wanted to speak to him. But, it did not accept that the visit demonstrated ongoing interest in the appellant by the authorities regarding his political opinion. 17 The tribunal found that there was compelling evidence from country information to indicate that persons such as the appellant, '... that is persons who were politically active but have ceased to be politically active against the government, do not attract the ongoing adverse interest of the authorities in China'. Consequently, the tribunal found that the appellant's claims that the authorities would still be pursuing him in China because of his 2003 political activities, or that they would still be seeking him in 2006 for expressing his political opinion in 2003, were mere speculation. 18 Next, the tribunal considered the appellant's claim that in the six months following his release from prison he was unable to obtain employment because the Chinese authorities had told employers that he was a troublemaker. The Tribunal is satisfied that the [appellant] will no longer be a person of interest to the authorities in China for reasons of political opinion and they will not seek to harm him or interfere with his employment opportunities for political activities and opinions he expressed in 2003. It concluded that it was satisfied the appellant would not be prevented from obtaining employment by the authorities in China because of his protest activities in 2003. The Tribunal finds that as the [appellant] has not been implicated in any activities of a political nature since 2003, or expressed an interest in further political activities in the reasonably foreseeable future ... [t] he Tribunal is satisfied that the chance that the PRC authorities or anyone else will seek to harm the [appellant] in the reasonably foreseeable future, for political reasons, is remote. Issue 1: Should the tribunal have asked itself why after his mistreatment in 2003, the appellant no longer had any interest in expressing his political opinion? He said that the principle in Appellant S395 216 CLR 473 was that the tribunal's function was to make that fact-specific inquiry in respect of the appellant's articulated claims, relying on Applicant NABD of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 29 ; (2005) 216 ALR 1 at 39 [162] per Hayne and Heydon JJ; see also 3-4 [8]-[11] per Gleeson CJ, 8-10 [27]-[31] per McHugh J, 16 [55] per Kirby J. He argued that once the tribunal addressed that inquiry it did not need to go further. 22 The Minister also argued that the tribunal's reasons exhaustively considered the appellant's actual claims. He said that the tribunal was not required to consider whether the persecutory conduct it found may have induced the appellant to drop his protest or to give up a wish to involve himself in political activity. Rather, the Minister submitted, the tribunal properly addressed all the claims which the appellant had actually made. 23 The Minister argued that the tribunal had found that the Chinese authorities were only interested in individuals who were politically active or suspected of being so. In Minister for Immigration and Ethnic Affairs v Guo [1997] HCA 22 ; (1997) 191 CLR 559 at 575, Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ said that a determination whether there was a real chance that something would occur required an estimation of the likelihood that one or more events would give rise to the occurrence of that thing. They said that in many, if not most cases, determining what was likely to occur in the future would require findings as to what had occurred in the past because what had occurred in the past was likely to be the most reliable guide as to what would happen in the future. And, they said that without making findings about the policies of the Chinese government's authorities, in that case, and the past relationship of Mr Guo with those authorities, '... the tribunal would have had no rational basis from which it could assess whether there was a real chance that he might be persecuted for a Convention reason if he were returned to the PRC'. 24 Of course, in Guo 191 CLR 557 at 568-569 the tribunal had found that a considerable number of the applicant's claims were not credible and only accepted one of them, on the basis of which it made its assessments. There the tribunal found that Mr Guo had not had any political profile attributed to him by the Chinese authorities, and accordingly he had no well-founded fear of persecution for a Convention reason ( Guo 191 CLR at 569). In the present case, the tribunal made clear findings about what happened to the appellant, his actual political profile, and the conduct and the policies of the Chinese authorities. [2003] HCA 71 ; 25 In Appellant S395 216 CLR 473, the tribunal concluded that because the appellants had lived together in Bangladesh for over 4 years without experiencing any more than minor problems with anyone outside their own families, they had conducted themselves in a discrete manner. It found that there was no reason that they would not continue to do so if they were returned to Bangladesh. Accordingly, the tribunal concluded that the persecutory behaviour of Bangladeshi society towards homosexuals did not give rise to a well-founded fear of persecution because the applicants in that case would live there discretely. 26 The majority of the High Court held that this approach constituted a jurisdictional error. McHugh and Kirby JJ noted there that the applicants had not raised any issue of modifying their behaviour because they feared persecution. If it is an error of law to reject a Convention claim because the applicant can avoid harm by acting discreetly, the Tribunal not only erred in law but has failed to consider the real question that it had to decide - whether the appellants had a well-founded fear of persecution. ' (Emphasis added. This is particularly so where the actions of the persecutors have already caused the person affected to modify his or her conduct by hiding his or her religious beliefs, political opinions, racial origins, country of nationality or membership of a particular social group. In cases where the applicant has modified his or her conduct, there is a natural tendency for the tribunal of fact to reason that, because the applicant has not been persecuted in the past, he or she will not be persecuted in the future. The fallacy underlying this approach is the assumption that the conduct of the applicant is uninfluenced by the conduct of the persecutor and that the relevant persecutory conduct is the harm that will be inflicted. In many - perhaps the majority of - cases, however, the applicant has acted in the way that he or she did only because of the threat of harm. In such cases, the well-founded fear of persecution held by the applicant is the fear that, unless that person acts to avoid the harmful conduct, he or she will suffer harm. It is the threat of serious harm with its menacing implications that constitutes the persecutory conduct. To determine the issue of real chance without determining whether the modified conduct was influenced by the threat of harm is to fail to consider that issue properly. ' (Their Honours' emphasis. The tribunal was required by s 425(1) of the Act to identify 'the issues arising in relation to the decision under review'. The Act assumes that issues can be identified as arising in relation to the review: SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63 ; (2006) 231 ALR 592 at 600 [33] - [34] , 601 [40] per Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ. The tribunal failed to enquire whether the appellant's lack of political involvement and interest after his release from detention in 2003 occurred as a consequence of the persecutory conduct he had suffered. (cf: Appellant S395 216 CLR at 493 [51] per McHugh and Kirby JJ). 28 The tribunal determined the issue of whether the appellant had a well-founded fear of persecution if he returned to China on the basis that he no longer wished to express political opinion. But in doing so it did not address why he no longer wished to exercise this fundamental right. Nor did it address whether the appellant's current position had been affected by the past conduct of the Chinese authorities towards him. Just as McHugh and Kirby JJ had held in Appellant S395 216 CLR at 489 [39], despite the fact that the appellant here did not raise explicitly any issue that he had modified his behaviour because of his fear of persecution, I am of opinion that it is highly likely that he did so. 29 The tribunal's findings of the harm which the appellant had suffered were that he had been jailed, tortured, made to sign a confession and he had then spent the next six months being harassed by the authorities until he had to flee here. The harassment continued to occur even when he had ceased expressing his opinions. The tribunal did not ask what effect that harm and the threat of its repetition in the future had on the appellant. In particular it did not consider why he had lost interest in expressing his political opinions. It is difficult to think that a person who had organised a sustained public campaign to achieve justice for his paralysed friend had lost all interest in the pursuit of that end independently of any connection to his arrest on the day of the final protest and his subjection to persecutory conduct for the next nine months. 30 The tribunal did not address whether the modification in the appellant's desire to pursue his political activity of seeking justice for his friend had been influenced by the actual harm that he had suffered and the threat of its continuation. Even in jail, for a time, he resisted making a confession until, as the tribunal found, he could no longer bear his mistreatment. That is not insignificant in the scheme of a proper consideration of whether his fear was well-founded. The Convention would give no protection from persecution for reasons of religion or political opinion if it was a condition of protection that the person affected must take steps --- reasonable or otherwise --- to avoid offending the wishes of the persecutors. Here, the tribunal should have asked the question why the appellant no longer wished to raise the political opinion which he had previously expressed. Gummow and Hayne JJ said in Appellant S395 216 CLR at 503 [88] that the tribunal there, as here, did not ask why the appellant would live 'discreetly'. That is, the Tribunal was diverted from addressing the fundamental question of whether there was a well-founded fear of persecution by considering whether the appellants were likely to live as a couple in a way that would not attract adverse attention. As McHugh and Kirby JJ had said, it is fallacious to assume that a person's conduct is uninfluenced by the conduct of the persecutor and that the only relevant persecutory conduct is actual harm that will be inflicted in the future. They emphasised that the threat of harm is relevant to the consideration of a claim such as the present ( Appellant S395 216 CLR at 490 [43]). 33 The tribunal should have addressed whether the appellant had changed or modified his interest in seeking justice for his friend or protesting against the government's conduct because of the persecutory consequences which the tribunal had found the appellant had actually suffered. This was relevant to whether the threat of further persecution gave rise to a well-founded fear in the appellant that he would be persecuted for reasons of political opinion on his return to China if he felt himself free to or did express the opinions he had previously expressed. 34 The tribunal simply assumed that the appellant's apparent disinterest in continuing to express the opinion which led to his arrest and mistreatment would mean he would not be at risk of further harm for a Convention reason. In ordinary aspects of human life, where people suffer a severe consequence for particular conduct, they do not usually repeat the conduct. One of the matters which courts take into account in sentencing offenders is deterrence; that is, the effects which the sentence or punishment inflicted is likely to have on the offender's propensity to re-offend and on others who, seeing or learning of the sentence, may assess their chance of suffering a similar fate as condign punishment. The aphorism, 'once bitten twice shy' has an obvious application to an experience of the kind the tribunal found the appellant to have had. 35 The tribunal did not address whether the appellant had been silenced effectively by the threat of further harm were he again to express any political opinion. On the tribunal's findings the appellant suffered further harm by reason of his previous conduct following his confession and release from custody. After such an experience not everyone in the appellant's situation would have the courage to continue the fight to express his or her political opinion or to have any interest in doing so. He organised the demonstration on 10 October 2003 because, as he said, 'I really could not give up'. But the appellant gave up his fight for justice for his friend after he had been persecuted. The tribunal did not address why, and thus failed to exercise its jurisdiction, because it did not ask itself the correct question or consider this relevant consideration. Issue 2: Did the tribunal consider properly the appellant's individual circumstances? There Young J, (with whom Gyles and Stone JJ agreed) said that the factual inquiry which the tribunal had to undertake was to be done by reference to an applicant's individual circumstances. However, for the reasons that I have given, that is the error which the tribunal made in this case. It failed to look at the circumstances of the appellant's claim concerning his treatment in China, which it found had occurred. After making that finding, the tribunal needed to consider whether the appellant had a well-founded fear of persecution by reason of his political opinions and whether he would fear to express them, were he returned to China. 37 The Minister argued that in order to establish a jurisdictional error by the tribunal it was necessary for the appellant to have expressly raised a claim that if returned to China he would continue to express his political opinion. He argued that because the appellant had not made this claim before the tribunal, he was precluded from doing so here. The Minister relied on NAEU of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 259 at [19] - [20] per Madgwick J, with whom Merkel and Conti JJ agreed. He argued that there had to be some evidence to establish that the appellant would seek to exercise his right to express political opinion if he were returned to China. Madgwick J identified the denial of a person's freedom to express his or her opinion, which the person aspires to express, as a serious affront to his or her human dignity were the person returned to his or her homeland, based on the test that he had earlier formulated in Win v Minister for Immigration and Multicultural Affairs [2001] FCA 132 at [20] . However, in NAEU [2002] FCAFC 259 there was no evidence to suggest that the applicant for a protection visa would wish to assert his opposition to the conduct he claimed to be offensive were he returned to Sri Lanka, nor that his conscience would seriously be affronted if he felt unable to do so ( NAEU [2002] FCAFC 259 at [20] ). 38 In Appellant S395 216 CLR at 491-492 [48] McHugh and Kirby JJ described Win [2001] FCA 132 as recognising that it was no answer to a claim for refugee status that the applicant took steps to hide political opinions and activities where the applicant claimed he or she would be persecuted for those opinions and activities. 39 I am of opinion that the appellant's claim before the tribunal of a well-founded fear of persecution on the ground of political opinion sufficiently raised a claim of an affront to his human dignity to require the tribunal to consider why the appellant had lost interest in expressing his opinions. After all, the appellant had said in his claim for a protection visa, that only after he signed a confession that he organised an anti-government political demonstration was he released from detention, during which he previously had been subjected to torture. He had claimed that he refused to sign a confession for some time '... because what I wanted was just respect and protection for our self-employed drivers' basic human rights'. 40 The Minister argued that the tribunal had found as a fact that the appellant had not been implicated in any political activity since 2003 or expressed an interest in further political activities in the reasonably foreseeable future. But in coming to that finding, it failed to consider its other findings about the appellant's individual circumstances. By late 2003 he had suffered for having engaged in political activity. He had been forced by the Chinese authorities to confess that this was wrongful conduct by him. In that scenario, the tribunal was required to address the question why the appellant, with that history, no longer wished to express his political opinions. 41 The tribunal referred to country information concerning the treatment of persons who were once politically active against the Chinese government, but later ceased to be so. It found that once their political activities ceased, persons such as the appellant no longer attracted ongoing interest from Chinese authorities. The country information led the tribunal to conclude that because of his political inactivity since his release from detention and his cessation of involvement, the appellant had no real chance of attracting the adverse interest of the Chinese authorities. The Minister argued that the tribunal had been entitled, for the reasons it gave, to decide that it was not satisfied in accordance with s 65(1) of the Act that the appellant had a well-founded fear of persecution for reason of political opinion. 42 But as McHugh and Kirby JJ emphasised in Appellant S395 216 CLR at 490-491 [43], to determine the issue of real chance without determining whether the applicant's modified conduct was influenced by the threat of harm '... is to fail to consider that issue properly'. 43 The Minister then argued that the appellant never put a claim to the tribunal that he wished to be active in the future but feared to do so. He argued that the tribunal was bound to consider only the claims raised by the appellant in the material before it. He said that a claim had to be a substantial, clearly articulated argument relying upon established facts: NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) [2004] FCAFC 263 ; (2004) 144 FCR 1 at 17-22 [55] - [68] , especially at 22 [68] per Black CJ, French and Selway JJ. The Minister argued that the tribunal was not bound to consider an hypothesis that had not been raised by an applicant for review, citing Minister for Immigration and Multicultural and Indigenous Affairs v SZANS [2005] FCAFC 41 ; (2005) 141 FCR 586 at 593 [46] - [47] where Weinberg, Jacobson and Lander JJ applied Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Applicants S134/2002 [2003] HCA 1 ; (2003) 211 CLR 441 at 457 [31] - [32] per Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ. The circumstances in SZANS 141 FCR at 593 [43]-[45] involved a situation in which the Full Court observed that it was difficult to see how the applicant there had raised before the tribunal the subjective fear of persecution on which he sought to rely in challenging the decision to refuse him a protection visa. 44 But here, the facts which the appellant claimed had occurred to him required the tribunal to consider what would occur in the future if he were to return to China. The tribunal erred because it limited its consideration of this question too narrowly. It failed to ask itself whether its findings as to what had happened to the appellant in China indicated that his lack of political activity, after he eventually signed his confession, was because he feared that expressing his opinions would subject him to further persecution. The tribunal's failure to enquire into this question was a constructive failure to exercise its jurisdiction: Appellant S395 216 CLR at 493-494 [53] --- [54] per McHugh and Kirby JJ, 503 [88] per Gummow and Hayne JJ. 45 Gummow and Hayne JJ said, in Appellant S395 216 CLR at 503 [88], that the tribunal there had been diverted from addressing the fundamental question of whether there was a well-founded fear of persecution because it had only considered whether the applicants were likely to live as a homosexual couple in a way that would not attract adverse attention. They held that the tribunal should have asked the fundamental question whether the applicants would live 'discreetly' '... because that was the way in which they would hope to avoid persecution'. They held that the tribunal there either did not apply correctly the law to the facts it found or its decision involved an incorrect interpretation of the law: Appellant S395 216 CLR at 503 [89]. Here, the fundamental question was whether the appellant had a well-founded fear of persecution in circumstances where the tribunal had found as a fact that he had been severely mistreated for Convention reasons. The tribunal needed to address, in light of its finding, whether he would have feared in the future to express his political opinions, or abstained from doing so, were he returned to China because in that way he would hope to avoid persecution. 46 As I have found, the original claim for a protection visa raised such a claim sufficiently for the purpose of requiring the tribunal to consider it. The appellant's disinterest in political expression after 2003 is highly likely to have arisen because of his well-founded fear of expressing any further political opinion based on his persecution in 2003, which the tribunal found he had suffered for having expressed it. 47 The tribunal was obliged to consider the appellant's claim for a protection visa by asking whether the appellant's disinterest in expressing his political opinion, since being forced to sign his confession in late 2003, was a way in which he hoped to avoid persecution. The tribunal committed a jurisdictional error by failing to do so. 49 When I granted leave to the appellant to rely on the amended notice of appeal, the Minister did not oppose the amendment provided that the appellant were ordered to pay the costs thrown away by the amendment. That is appropriate. I am of the provisional opinion that the appellant is otherwise entitled to his costs of the appeal and that there should be no order as to the costs below. (But cf: M175 of 2002 v Minister for Immigration and Citizenship [2007] FCA 1212 at [64] - [66] per Gray J. ) I will allow the parties seven days to make written submissions as to the precise costs orders I should make if either of them contends differently to my preliminary view. It would be desirable if they could agree on a fixed sum (even for any alternate contentions) which would save the need for any taxation or assessment. Alternatively, the parties can re-list the matter for brief oral argument. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

protection visa where appellant found to have been persecuted for past political activity and to have fled to australia to escape persecution where appellant has not since being persecuted expressed an interest in pursuing further political activity where decision to refuse visa has been affirmed on ground that appellant will not engage in further political activity whether tribunal erred by failing to ask why appellant had ceased to pursue or be interested in further political activity whether tribunal erred by failing to ask whether the appellant's cessation of and disinterest in further political activity was a consequence of the persecution it had found him to have suffered whether tribunal erred by failing to consider whether the appellant had a well-founded fear of persecution in circumstances where it was necessary for him to be inactive politically in order to avoid persecution held: tribunal erred migration

The Tribunal filed a submitting appearance in the proceedings. 2 The first respondent, which I refer to as the respondent, submitted that the appropriate order was that the appellants pay the first respondent's costs of the appeal. It essentially advanced four points in support of this contention. First, the appellants did not succeed on any of the grounds. Secondly, five grounds of appeal were raised in the appellants' amended notice of appeal, but the grounds were articulated differently in their written submissions. The respondent submitted that the shifting articulation should count against the appellants on the question of costs. The third issue related to the ground of appeal concerning the meaning of "Dependant" in the trust deed. While being a significant focus of both parties' written and oral submissions, it was ultimately not necessary to decide this issue. The respondent submitted that it was therefore not an issue on which it had failed fin the relevant sense. It also pointed out that the issue had been raised by the appellants and that by addressing the question, the respondent was simply meeting an argument the appellants had raised. The respondent defended its efforts in meeting the argument by reference to the significant consequences for the respondent and the superannuation industry generally if the appellants' argument that dependency in a superannuation trust deed included emotional dependency. It was therefore not an issue the respondent could responsibly have ignored. The fourth point advanced by the respondent was that a significant aspect of the appellants' case had been concerned with questions of the weight of the evidence. A significant amount of preparation time had therefore been required to understand the factual material so as to enable it to be able to properly address the distinction between Wednesbury unreasonableness and mere questions of weight. The respondent submitted that it should not be deprived of its costs where such time was required by reference to a question of law which it did not fail and which had been raised by the appellants. 3 The appellants submitted that there should be no order as to costs in favour of the respondent. The respondent had failed on the issue of whether, as a matter of construction, it was necessary to determine whether the word "Dependant" and notions of dependency in the trust deed, concerned only financial dependency. 4 In relation to the shifting articulation point raised by the respondent, the appellants submitted that they had always asserted, and maintained throughout the hearing and in the amended notice of appeal, the primary contention that the Tribunal erred by narrowly focusing on financial dependence in ascertaining whether the appellants were in any way dependent on the deceased. The respondents had in effect confirmed the appellants' submissions by the respondent's extensive and "unnecessary" submissions in relation to the notion of dependency. 5 The appellants also disagreed with the respondent's contention that the meaning of dependency was only one of the grounds of appeal. They submitted that all grounds concerned, either directly or indirectly, the meaning of dependency and whether the Tribunal applied the right test in affirming the trustee's decision. The respondent had failed on the dependency issue in circumstances where its primary contention was that the regulatory context of the trust deed concerned only financial dependency. It had failed to support the Tribunal's decision on its face as the Court did and had therefore made "unnecessary" submissions on the issue. 6 The appellants further submitted that the issue of unreasonableness and alleged failure on the part of the Tribunal to take into account irrelevant considerations was not a significant part of their case, but merely an alternative ground of review intricately related to the dependency issue. They also countered that this ground was never asserted on the basis of Wednesbury unreasonableness but rather in the Peko-Wallsend sense (see Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 41). 7 Ultimately, I am satisfied that some adjustment should be made in relation to costs having regard to the position adopted by the respondent on the question of what is a "Dependant". While it is unnecessary and undesirable for me to engage in a detailed consideration of the respondent's argument, it did not strike me as a particularly persuasive one. In addition, it was probably not necessary for the respondent to have developed the argument as fully as it did because it was clear from the Tribunal's reasons that it had not determined the matter on a narrow view of the meaning of the word "Dependant". Whether it is necessary or desirable to adopt a particular meaning in the context of the superannuation industry more generally is really beside the point. This case involved an unfortunate contest between individuals. As I made clear when I suggested mediation, it is a contest which ideally would not be fought out in the courts. 8 I propose to order that the appellants pay half the respondent's costs of the appeal. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

costs whether special circumstances justifying departure from usual rule that costs follow the event practice and procedure

He became bankrupt in 1995 and had assumed that, pursuant to the operation of the Bankruptcy Act 1966 (Cth) ("the Act"), he had been discharged in 1998. To his surprise, when he sought to travel overseas earlier this year he was advised that he could not do so because records maintained by the Insolvency and Trustee Service Australia ("ITSA") disclosed that he remained an undischarged bankrupt. He caused inquiries to be made. An examination of Court files and other documents yielded the following information which Mr Lelleton has deposed, on affidavit, to be true and correct. He was made bankrupt by order of the Court on 6 April 1995. Mr Clyde White was appointed his Trustee. Prior to the hearing on 6 April 1995, Mr Lelleton had filed and served various documents relating to his financial affairs. At this time Mr Lelleton was residing with a friend in Sydney although he retained an address in South Yarra. By letter dated 7 April 1995, Mr White wrote to Mr Lelleton formally advising him that he had been made bankrupt. Please provide me with a copy. Mr Lelleton deposes that he completed the Statement of Affairs on 19 April 1995 and, on or about that day, posted the document to the Registrar in Bankruptcy at 450 Little Bourke Street, Melbourne. The document was posted by pre-paid ordinary mail from a post box in Double Bay in Sydney. Despite being asked to do so, Mr Lelleton did not post a copy to Mr White. Mr Lelleton retained a copy of the Statement of Affairs which he posted to the Registrar. That Statement was produced to the Court this morning. The first two pages appear to be missing but the rest of the lengthy document appears to be intact. I note that it contains an instruction, at the end, that the Statement should be filed with the Registrar in Bankruptcy. There is no intimation that a copy should be sent to the Trustee. This may explain Mr Lelleton's failure to provide Mr White with a copy of the Statement of Affairs. I have sent certified letters to the last known addresses, being 33 Manning Street, Double Bay, New South Wales and 33 St Martins Lane, South Yarra, Victoria. However, the letters were returned to my office unclaimed. It may be that it was the letter addressed to 66 Abbotsford Street, Abbotsford which was returned. Mr White subsequently filed an affidavit in the earlier proceeding, VB 737/95, deposing that he had not been able to contact Mr Lelleton and that he had no details of Mr Lelleton's estate. There is no record of the Statement of Affairs being received by the Registrar in Bankruptcy. In these circumstances Mr Lelleton applies to the Court for declarations that his Statement of Affairs be deemed to have been filed on 19 April 1995 and that he was discharged from bankruptcy on 19 April 1998. Mr White has submitted to the jurisdiction of the Court and advised that he neither objects nor consents to the orders sought by Mr Lelleton being made. But, having regard to the context in which the word is used it should be regarded as a reference to the act of the bankrupt. In the first place, the obligation that is imposed by s 54(1) is an obligation that is imposed on the bankrupt. In the second place the obligation is to file a document at a particular place namely at a Registry. This suggests that the statement will be filed when it is left with an officer at the Registry rather than when it has been placed on a file that is maintained at the Registry. Thus the section will be complied with whether or not the statement is subsequently placed on a file by the officer who received it. It is authority for the proposition that it cannot be concluded that a statement has not been filed for the purposes of s 54(1) simply because the document does not appear on a file maintained by the Registrar. Mr Lelleton did not, however, hand deliver his Statement to the Registry. He posted it and is unable to explain why it does not appear on file. There are a number of possibilities, the most obvious ones being that it went astray in the mail or, having been delivered to the Registry it was, for some unknown reason, not placed on file. Mr Lelleton nonetheless contends that he satisfied the requirements of s 54(1)(a) of the Act by posting the Statement of Affairs to the Registrar in Bankruptcy. He relied on the decision of Kenny J in Trihakis v Official Receiver (Vic) [1999] FCA 1426. Her Honour there held that a Statement of Affairs could be filed by posting a completed original statement to the Registrar. In that case a declaration of the kind presently sought was granted in circumstances in which her Honour was satisfied that a Statement of Affairs had been posted but, for some undisclosed reason, could not be found on the Registrar's file. I am satisfied, on the balance of probabilities, that Mr Lelleton posted his Statement of Affairs to the Registrar as he claims, on or about 19 April 1995. I am so satisfied for a number of reasons. Mr Lelleton has sworn that he posted the document. He retained a copy of it. The copied form appears in a format that was in use in 1995 but is not presently in use. It is dated April 1995. It is inherently unlikely that Mr Lelleton would have attempted to reconstruct such a form so long after the event. It is also inherently unlikely that, having gone to the trouble of completing a long form in a timely way, he would not have attempted to comply with the obligation which Mr White had brought to his attention by posting it from Sydney to the Registrar. It does not run from the date on which the Trustee is provided with a copy of the Statement. Mr Lelleton's failure to provide a copy of the Statement to Mr White in 1995 can, therefore, have no bearing on the determination of the date of his discharge from bankruptcy. The relevant date is the date of filing. In Trihakis , Kenny J fixed the date of filing as a day that was three days after the Statement of Affairs was signed in order to allow for any delay in posting and delivery. Given that the Statement in the present proceeding was despatched from Sydney on 19 April 1995, I consider that an allowance of two business days should be made such that the date of filing should be fixed, not as 19 April 1995 (the date of signing) but 21 April 1995. Discharge, by operation of s 149(4) of the Act would, therefore, have occurred on 21 April 1998. I note that Mr White's letter to Mr Lelleton is dated 7 April 1995. If an equivalent allowance of two days is made for it to have been received by Mr Lelleton, his Statement of Affairs was filed, as required by s 54(1)(a) of the Act, within 14 days from the date on which he was notified of his bankruptcy. Declarations, consistent with these findings, will be made. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY.

undischarged bankrupt where a statement of affairs is not on record filing a statement of affairs pursuant to a sequestration order meaning of 'file' in s 54(1) of the bankrupcty act 1966 (cth) discharge of bankruptcy bankruptcy

The Republic of Ireland is seeking the extradition of Mr O'Donoghue in respect of charges of obtaining property by false pretences, alternatively, fraudulent conversion. Each of the applicants seeks an order in the nature of prohibition restraining each of the second respondents from conducting proceedings to determine whether each applicant is eligible for surrender for extradition pursuant to s 19 of the Extradition Act 1988 (Cth) ('the Act'). Each of the second respondents holds the office of magistrate of the State of Western Australia. Each of the applicants advances the same grounds in support of his application. Accordingly, these matters were heard together. The applicants contend that the second respondents are precluded from conducting the s 19 proceedings, on the grounds that it is unlawful for the Commonwealth to legislate for State judicial officers to carry out the functions prescribed by s 19 of the Act. Both applicants seek a declaration that s 19 and s 46 of the Act are invalid as being beyond the legislative power of the Commonwealth. The four stages have been described as commencement, remand, determination by a magistrate of eligibility for surrender and executive determination that the person is to be surrendered ( Harris v Attorney-General (Cth) (1994) 52 FCR 386 at 389). Under the first stage, which is described in s 12 of the Act, an extradition country may apply to a magistrate (as defined in the Act) for the arrest of the person sought to be extradited. If the magistrate is satisfied that the person is an extraditable person, the magistrate shall issue a warrant for the arrest of that person. Under the second stage of the process, the arrested person is brought before a magistrate to be remanded in custody or released on bail pending the conduct of the proceedings under s 19 of the Act. The third stage of the process occurs when a magistrate conducts proceedings under s 19 of the Act to determine whether the person is eligible for surrender in relation to the extraditable offence. It is a precondition to the conduct of those proceedings that the Attorney-General has issued a notice under s 16(1) of the Act notifying a magistrate, that he or she has received an extradition request from an extradition country in relation to the person. If the magistrate decides that the person is eligible for surrender the fourth stage is reached. Under the fourth stage, the Attorney-General determines under s 22 of the Act whether the eligible person should be surrendered to the country seeking extradition. Section 19 of the Act is central to this application. The applicants rely upon three grounds. I will deal with each of them separately. The applicants relied on a number of authorities in support of their argument that State legislative authorisation was necessary. The applicants relied upon Byrnes v The Queen [1999] HCA 38 ; (1999) 199 CLR 1 ('Byrnes') ; Bond v The Queen [2000] HCA 13 ; (2000) 201 CLR 213; Reg v Hughes [2000] HCA 22 ; (2000) 202 CLR 535 ('Hughes') and MacLeod v Australian Securities and Investments Commission [2002] HCA 37 ; (2002) 211 CLR 287, as instances involving co-operative legislative schemes, between the States and the Commonwealth, where said the applicants, 'the 'High Court had required reciprocal authorising legislation'. Further, the applicants relied upon the case of The Commonwealth v New South Wales [1923] HCA 34 ; (1923) 33 CLR 1 ('the Royal Metals case'). In that case the High Court held that the Commonwealth lacked the necessary legislative power to make a law requiring a State official, the Registrar-General of the State of New South Wales, to register the Commonwealth's title to land in circumstances not provided for under the New South Wales legislation, namely, the Real Property Act 1900 (NSW). The applicants also submitted that for there to be an effective State authorisation of the conferral of Commonwealth functions on the State magistrates, the State legislation needed to confer that authority in clear terms. Counsel for the applicants referred to Byrnes . The issue relevant to the applicants' contention was whether s 91(5) of the Corporations (South Australia) Act 1990 (SA) was to be construed as having conferred the power to appeal against sentence on the Commonwealth Director of Public Prosecutions ('the DPP') as part of the 'enforcement powers' which had been conferred on the DPP by that Act. The applicants submitted that the legislative authority is not to be found in s 6(3)(b) of the Magistrates Court Act which permits a State magistrate to perform, with the approval of the Governor, 'other public functions concurrently with those of a magistrate'. Firstly, it is said that the subsection is to be construed as only permitting a magistrate to perform other public functions at the instance of the State, and not at the instance of any other 'polity'. The applicants relied upon the case of Essendon Corporation v Criterion Theatres Ltd [1947] HCA 15 ; (1947) 74 CLR 1 ('Essendon') and observations of Mason CJ, Deane, Dawson, Toohey and Gaudron JJ in the case of Jacobsen v Rogers [1995] HCA 6 ; (1995) 182 CLR 572 at 585 ('Jacobsen') , and the observations of Kirby J in Hughes at 569, at [75]. The applicants also submitted that the construction contended for, is supported by the difference in the language of s 6(3)(a) and s 6(3)(b) of the Magistrates Court Act. Section 6(3)(a) expressly provides for a magistrate concurrently holding another public or judicial office or appointment, including one 'made under the law of another place', whereas in s 6(3)(b) there is no reference to 'the law of another place' in relation to the concurrent performance by magistrates of 'other public functions'. The absence of the reference to 'the law of another place' in s 6(3)(b) was, submitted the applicants, indicative of Parliament's intention to confine the performance of the 'other public functions' referred to in that subsection, only to those other functions conferred by the State of Western Australia, and not by the Commonwealth. The applicants relied upon the maxim 'expressio unius est exclusio alterus' . In my view, the validity of s 19 and s 46 of the Act does not depend upon there being State legislation which furnishes the requisite consent and authority for the performance by State magistrates of the Commonwealth functions referred to in s 19 of the Act. It is well established that the functions which are performed by magistrates under s 19 of the Act are performed in a personal capacity as a persona designata ('designated person') and not in their capacity as State officials ( Dutton v O'Shane [2003] FCAFC 195 ; (2003) 132 FCR 352 at 385; Cabal v United Mexican States (No 3) (2002) 186 ALR 188 at 231 ('Cabal') ). The Act does not purport to confer functions upon a State magistrate in his or her capacity as such, nor does it purport to prescribe how a State official should carry out his or her function as a State magistrate. I accept the submissions of senior counsel for the first respondent in each application and the third respondent in Mr Zentai's application ('the first and third respondents') that the Act is an Act with respect to external affairs within the meaning of s 51(xxix) of the Constitution ; and it is within the legislative power of the Commonwealth, by the Act, to confer s19 functions upon a State magistrate as a designated person without the need for any State legislation authorising the conferral of those functions. None of the cases relied on by the applicants deals with the conferral by a Commonwealth statute of Commonwealth functions on a State official as a designated person. They are all distinguishable. The observations in Cram were made in the context of the High Court considering the status of officers who were members of a single tribunal which was established jointly under both Commonwealth and State law. Neither the observations in [15] nor [16]-[17] above referred to the conferral of functions by a Commonwealth statute upon a State official as a designated person. The observations in [15] above refer to the conferral of power on State officials in their capacity as such. The observations in [16]-[17] above, refer to the conferral of powers on a State tribunal. Further, I accept the submissions of the first and third respondents to the effect that all the cases relating to co-operative legislative schemes, are distinguishable because they are cases about Commonwealth officials performing functions conferred by State law. They are affected by the operation of s 109 of the Constitution . As senior counsel put it, the cases do not 'speak to or establish any principle relevant to or supporting the applicants' contention that State legislation is necessary to authorise a magistrate to act as a designated person under Commonwealth legislation, the validity of which is not in issue'. The Commonwealth legislation considered in the Royal Metals case is distinguishable because it sought to direct how a State official should carry out his or her function in that capacity. His action is a State service, not an individual service. Sec. 20 attempts to create, not a new individual duty on the part of an inhabitant of the Commonwealth, but a new State governmental duty towards the Commonwealth. In the circumstances here appearing, that is not warranted by any provision of the Constitution , and the attempt fails. I also accept the submissions of the first and third respondents that, even if the validity of s 19 and s 46 of the Act depended upon the existence of State legislative 'consent and authority', such consent and approval is to be found in s 6(3)(b) of the Magistrates Court Act. I do not accept the applicants' submissions that s 6(3)(b) is to be construed as authorising the magistrates to perform other public functions only at the instance of the State and not at the instance of the Commonwealth. It is plain that Parliament intended that the words 'may hold concurrently another public or judicial office or appointment' in s 6(3)(a) of the Magistrates Court Act, were to be construed as not being confined to another public or judicial office or appointment made at the instance only of the State of Western Australia and no other polity. This is obvious from the presence in s 6(3)(a) of the additional words 'including an office or appointment under the law of another place'. An appointment of a State magistrate to public office by the Commonwealth would not be one made 'under the law of another place'. It follows that, if Parliament intended, as it clearly did, that the other offices or appointments referred to in s 6(3)(a) were to include an appointment made under the laws of places other than Western Australia, it must have intended that the words 'another public or judicial office or appointment' would include an eligible appointment made under the laws applicable in Western Australia, which would include the laws of the Commonwealth. There is no reason why the general words 'other public functions' in s 6(3)(b), should be read more restrictively than the general words in s 6(3)(a), so as to exclude the performance of Commonwealth functions. In this regard, it is significant that at the time that the Magistrates Court Act was enacted in 2004, there were in force several Commonwealth statutes which conferred functions upon State magistrates as designated persons. These include the Customs Act 1901 (Cth) (s 219ZK) and the Crimes Act 1914 (Cth) (s 4AAB). It is unlikely that Parliament would have intended to permit State magistrates to take up appointments under the law of places other than Western Australia as contemplated in s 6(3)(a) , while at the same time precluding magistrates from performing the functions prescribed under Commonwealth statutes applying in Western Australia. Further, I do not accept the submissions of the applicants that the operation of the maxim 'expressio unius est exclusio alterus' mandates a finding that s 6(3)(b) is confined to permitting a State magistrate to perform public functions only at the instance of the State of Western Australia. It is recognised that the maxim should be applied cautiously and 'applies only when the intention it expresses is discoverable upon the face of the instrument:...' ( Houssein v Under Secretary of Industrial Relations and Technology (NSW) [1982] HCA 2 ; (1982) 148 CLR 88 at 94). In my view the maxim is inapplicable and the intention it expresses is not discoverable on the face of the statute. As I have already said, any public appointment made, or public function conferred on a magistrate, by the Commonwealth will not be made 'under the law of another place'. The fact that a magistrate is permitted to hold a concurrent Commonwealth appointment under s 6(3)(a) is not, therefore, dependent upon the presence of those words in s 6(3)(a) of the Magistrate Courts Act. Accordingly, the absence of those words in s 6(3)(b) gives rise to no inference as to Parliament's intention in respect of the holding of Commonwealth appointments and the performance of Commonwealth functions. None of Essendon , Jacobsen or Hughes deals with the construction of the Magistrates Court Act. They are not directly on point. However, in the observations from these cases relied upon by the applicants, it is recognised that any presumption or rule of construction which might otherwise apply, must yield to the clear intention of Parliament. In this case, as I have already said, Parliament has made its intention clear that State magistrates are eligible to hold public offices or appointments, and, to perform other public functions, at the instance of 'polities' other than the State of Western Australia, including the Commonwealth. Further, in my view, contrary to the submissions of the applicants, the principle in Melbourne Corporation v The Commonwealth [1947] HCA 26 ; (1947) 74 CLR 31, that the Commonwealth lacks the power to pass laws which interfere with the exercise by the States of their constitutional functions, is not pertinent to the construction of s 6 of the Magistrates Court Act which, as I have already said, is to be derived from the words of the statute. The s 19 functions are performed pursuant to statutory authority, and are plainly public functions. Accordingly, in my view, even if the legislative authority of the State is necessary to make s 19 and s 46 of the Act constitutionally effective, such authority exists. This is because it is the Commonwealth, and not the States, that is authorised by s 61 of the Constitution to conduct Australia's international relations. This submission is premised on the assumption that the functions performed under s 19 of the Act are performed by State magistrates in their capacity as State officers. As I have already said, it is well established that the functions are performed in a personal capacity as a designated person. I, accordingly, reject this ground of challenge. The applicants submitted further that the magistrates were members of a State court which was vested with federal jurisdiction, and their participation in s 19 proceedings was incompatible with their function as officers of a court exercising from time to time the judicial power of the Commonwealth. It was said that the performance by the second respondents of the s 19 functions will damage the appearance of their judicial objectivity by their 'attending to the administrative needs of the Commonwealth'. The applicants also submitted that the s 19 proceedings comprise the third step in an 'intermeshing' process which involves a Commonwealth Minister and leads to the making of what is ultimately an executive government decision. It was also said the magistrate's performance of the s 19 functions affected the political affairs of the Commonwealth government and the magistrate was likely to be associated with the outcome. The applicants relied upon the authorities of Kable v Director of Public Prosecutions (NSW) [1996] HCA 24 ; (1997) 189 CLR 51 ('Kable') and Wilson v Minister for Aboriginal and Torres Strait Islander Affairs [1996] HCA 18 ; (1997) 189 CLR 1 ('Wilson') . In Kable , the High Court stated the importance of the judicial incompatibility principle and held that the principle could apply to a judicial officer of a State court which was vested with federal jurisdiction. However, the case did not involve a designated person and the case is, therefore, distinguishable from this case. The Wilson case did, however, involve consideration by the High Court of the position of a designated person. In Wilson , a judge of the Federal Court was appointed by the Minister for Aboriginal and Torres Strait Islander Affairs ('the Minister') as a designated person to prepare a report under s 10 of the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) ('the Heritage Protection Act'). Section 10 of the Heritage Protection Act provided that where the Minister received an application by an Aboriginal or a group of Aboriginals, seeking to have an area of land preserved or protected from injury or desecration, and he has received a report, from a person nominated by him, he may make such a declaration, after having considered the report and 'such other matters as he thinks relevant'. Among the matters required to be dealt with by the report were the 'extent of the area that should be protected' (s 10(4)(c)) and the 'prohibitions and restrictions that should be made' (s 10(4)(d)). The validity of the appointment of the judge was challenged on the grounds of it being incompatible with the holding of judicial office under Ch III of the Constitution . If an appointment to non-judicial office or performance of non-judicial functions prejudices that capacity it is incompatible with the office and function of a Ch III judge. And that is inconsistent with s 72 of the Constitution . The separation that is relevant here is separation in the performing of the particular non-judicial functions...Constitutional incompatibility has the effect of limiting legislative and executive power. Where it has that effect, it is discovered on the face of the statute, or on the face of those measures taken pursuant to a statute, that purports or purport to confer a non-judicial function on a Ch III judge. That is not to say that constitutional incompatibility is a matter of mere form. The operation of the statute or of the measures taken pursuant to it is ascertained by looking to the circumstances in which the purported function might be performed. Where a non-judicial power is purportedly conferred, constitutional incompatibility is ascertained by reference to the function that has to be performed to exercise the power. If the function is not closely connected with the Legislature or the Executive Government, no constitutional incompatibility appears. Next, an answer must be given to the question whether the function is required to be performed independently of any instruction, advice or wish of the Legislature or the Executive Government, other than a law or an instrument made under a law (hereinafter "any non-judicial instruction, advice or wish"). If an affirmative answer does not appear, it is clear that the separation has been breached...If the function is one which must be performed independently of any non-judicial instruction, advice or wish, a further question arises: Is any discretion purportedly possessed by the Ch III judge to be exercised on political grounds --- that is, on grounds that are not confined by factors expressly or impliedly prescribed by law? In considering these questions, it will often be relevant to note whether the function to be performed must be performed judicially, that is, without bias and by a procedure that gives each interested person an opportunity to be heard and to deal with any case presented by those with opposing interests. An obligation to observe the requirements of procedural fairness is not necessarily indicative of compatibility with the holding of judicial office under Ch III, for many persons at various levels in the executive branch of government are obliged to observe those requirements. But, conversely, if a judicial manner of performance is not required, it is unlikely that the performance of the function will be performed free of political influence or without the prospect of exercising a political discretion. A report is no more than a condition precedent to the exercise of the Minister's power to make a declaration. The function of a reporter under s 10 is not performed by way of an independent review of an exercise of the Minister's power. It is performed as an integral part of the process of the Minister's exercise of power. Also, the High Court observed that the decisions which the Heritage Protection Act required the reporter to make, such as the extent of the area that should be protected or the prohibitions that should be made, were not necessarily linked to findings as to the nature and extent of the Aboriginal connection with the land or by assessment as to the extent to which Aboriginal beliefs and lifestyles were under threat, and were 'political in character'. I am of the view that on the application of the criteria recognised by the High Court in Wilson , the administrative functions which are performed by a magistrate acting as a designated person in relation to s 19 proceedings are not such as would offend the constitutional incompatibility principle. Firstly, it cannot be said, as was said of the function of the reporter in Wilson , that the performance of the function is 'no more than a condition precedent' to the exercise by the Attorney-General of the power under s 22 of the Act to decide whether to grant the extradition request. This is because s 19(10) vests in the magistrate an independent power, in prescribed circumstances, to bring the extradition process to an end. The magistrate performs an independent and self-contained function, which contrary to the applicants' submission, is not simply a step in an intermeshing process which leads to the making of an executive government decision. The true position is that the s 19 process may or may not lead to the making of an executive government decision, depending upon the decision which is made by the magistrate. They are exercisable by different repositories in sequence, but none of them authorises the repository of a power to review the exercise of a power by another repository earlier in the sequence. Thus, if the Attorney-General forms an opinion when considering the issue of a s 16 notice that there is an extradition objection, he has no power to issue the notice (s 16(2)(b)); if the s 19 magistrate is satisfied that there are substantial grounds for believing that there is an extradition objection, the magistrate must order the person to be released (s 19(2)(d), (10)(a)); and unless the Attorney-General in making a determination under s 22 is satisfied that there is no extradition objection, he cannot issue a warrant for the person's surrender under s 23 (s 22(3)(a)). But the s 19 magistrate does not review the Attorney-General's non-formation of an opinion under s 16; nor does the Attorney-General review the s 19 magistrate's state of non-satisfaction. The existence or possible existence of extradition objections fall for consideration by the Attorney-General under s 16, by the s 19 magistrate and again by the Attorney-General under s 22 but on each occasion the repository of the relevant power makes an independent determination of the issue on which the existence of that power depends. The Act confers on the magistrate the function of determining whether a person is 'eligible for surrender', but that decision is to be made by reference to factors that are 'expressly or impliedly prescribed by law', namely, the provisions which are found in s 19 of the Act. The s 19 functions are to be performed independently of any non-judicial instruction, advice or wish. The absence of deference by the magistrate in carrying out the s 19 proceedings, to the political arm of government, serves to further distinguish the position of the magistrate from the position of the reporter in the Wilson case. Thirdly, s 19 of the Act contemplates that the magistrate will accord the parties procedural fairness in the conduct of the s 19 proceedings. Section 19 contemplates that both the person in respect of whom extradition is sought, and the country seeking extradition will have a fair opportunity to be able to participate in the proceedings. This is evident from s 19(1)(c) of the Act which requires that the magistrate only conduct the s 19 proceedings where he or she considers that the parties have had sufficient time to prepare for the proceedings. The applicants also submitted that the functions performed by a magistrate conducting s 19 proceedings were 'largely mechanical' and this detracted from the judicial function. I do not accept that the functions prescribed by s 19 are such as to detract from the judicial function. Among the prescribed functions that the magistrate must perform is to consider whether there are substantial grounds for believing that there is an 'extradition objection' in respect of the extraditable offence. Among the circumstances which may comprise an extradition objection (as defined in s 7 of the Act) are that the extradition is being sought for the 'purpose of prosecuting or punishing the person on account of his or her race, religion, nationality or political opinion' or that the 'person may be...detained or restricted in his or her personal liberty, by reason of his or her race, religion, nationality or political opinions'. In this context, the magistrate may need to consider and decide complex issues affecting the liberty of the individual. The involvement of the magistrate in a proceeding which has as an element, a concern for the protection of the individual from a threatened infringement of basic human rights by the abuse of executive power, is consistent with the judicial function ( Grollo v Palmer [1995] HCA 26 ; (1995) 184 CLR 348 at 367-368). Even the functions the magistrate must perform in relation to the assessment of the authenticity of the documents, involving as it does the construction and application of statutory provisions to the facts, is not, in my view, incompatible with the judicial function. The extent of the inquiries and the difficulty of some of the issues which a magistrate may have to decide is demonstrated by cases such as Cabal and Bennett v United Kingdom (2001) 179 ALR 113. Finally, it was submitted that the performance of the function was likely to give rise to a perception of bias because the magistrate was 'guided' by an officer of the DPP who represented the requesting country. It is said that the perception of bias arises from the fact that officers of the DPP are likely to be involved in future federal summary prosecutions in the Magistrates Court of Western Australia. I do not accept this submission. Section 19 of the Act does not contemplate proceedings in which the DPP 'guides' the magistrate. As previously stated, the Act contemplates both parties participating in proceedings, and having a fair opportunity to do so. The fact that the extraditing country may happen to be represented by solicitors and counsel employed or engaged by the DPP, would not in the mind of a fair-minded lay observer give rise to a reasonable apprehension that the magistrate would not bring an impartial mind to the conduct of future federal summary prosecutions in the Magistrates Court ( Ebner v Official Trustee in Bankruptcy [2000] HCA 63 ; (2000) 205 CLR 337 at 344). The circumstances of this case are distinguishable from the case of Re Grinter; Ex parte Hall (2004) 28 WAR 427 ('Grinter') , on which the applicants relied in support of this submission. In Grinter , the magistrate presided over an examination under s 102 of the Justices Act 1902 (WA). That would seem to be its very purpose, namely, to assist the prosecution to gather evidence and compile a prosecution brief. This assistance is provided without notice to and in the absence of the defendant. The s 19 proceedings do not involve the participation of the magistrate in an evidence gathering process for a criminal prosecution. I do not accept the applicants' third ground of challenge. Each of the applications is dismissed with costs.

whether s 19 and s 46 of extradition act 1988 (cth) are invalid whether state legislation is necessary to authorise the performance by a state magistrate of functions under s 19 of the extradition act 1988 (cth) whether performance by a state magistrate of functions under s 19 of the extradition act 1988 (cth) infringes the judicial incompatibility principle whether the magistrates court act 2004 (wa) authorises the performance of s 19 functions by a state magistrate constitutional law

There is a deal of history to this fiercely contested litigation. Much of it has been relied upon by Capital in its arguments. The result to date of the failure to pay the security into court has been the stay of the proceedings and the loss of imminent trial dates. Those dates were finally fixed in proceedings which were commenced as long ago as 2000. For reasons canvassed below the proceedings will not be dismissed now but if the security is not paid into Court within a further period of three months from the date of publication of these orders, the proceedings will be dismissed without prejudice to the applicant's entitlement to issue further proceedings. That was quite a brief timeframe, but the reason it was so was because the matter had already been listed for trial for five days from 28 April 2008. 3 The immediate consequence of the non-payment pursuant to the orders made in relation to the payment of security has been that the proceedings have been stayed. It has been accepted that it therefore follows as a matter of logic, if not by formal application, that the trial dates of 28 April 2008 for five days will have to be vacated. 4 As a separate consequence, by notice of motion dated 25 February 2008, Adultshop moved for orders dismissing the proceedings forthwith due to Capital's failure to comply with the security for costs order. 5 There have been previous security for costs orders. Capital has paid a total of $65,000 in to Court by way of security for costs in favour of Adultshop. The first tranche for $30,000 was ordered on 23 August 2000. Capital failed to provide security in the timeframe stipulated by the Court and took no further steps in the proceedings for over 7 months. The proceedings were then stayed. Capital ultimately paid the first tranche into Court on 10 April 2001. A second tranche in the amount of $35,000 to cover Adultshop's costs up to the final hearing of the proceedings was paid into Court on 20 June 2003 pursuant to orders of Nicholson J, made on 3 April 2003. 6 The current application was brought very soon after the failure to pay in the security. It is based on s 56(4) of the Federal Court of Australia Act 1976 (Cth) (the Act) which provides that if security or further security is not given in accordance with an order under this section, the Court or a judge may order that the proceeding be dismissed. 7 The discretion of the Court under s 56 of the Act is broad and unfettered but must be exercised judicially. 9 No explanation is proffered for the failure of a company officer (or any other person) to give such evidence. Lengthy delays by Capital in meeting prior orders for security are conceded. The inability of Capital, unaided, to satisfy the further security is not disputed. No evidence of the intentions, capacity or even identity of historical or future litigation financiers is before the Court. 10 Adultshop contends that the proper inference to be drawn from the absence of evidence and, in particular, Capital's failure to call evidence of its efforts, capacity or willingness to pay further security from an officer of Capital should be adverse. Adultshop stresses that the evidence clearly shows that Capital has no current assets other than this cause of action, that the shareholders of Capital are professional trustees who have no beneficial interest in Capital or in the cause of action and that the inability of Capital to meet from its own funds a security for costs order is readily conceded by Capital. Adultshop relies upon the fact that there is no evidence before the Court to suggest any improvement in Capital's position and while Capital was able to raise funds to meet earlier security for costs orders, there is no evidence as to the present ability of Capital to raise those funds. 11 Capital relies upon an affidavit of Ms Yin Fang, solicitor for Capital who outlines the history of the previous security for costs orders which have been met by Capital, albeit in some circumstances with a considerable delay. The other two factors arising from Ms Fang's affidavit are that Capital has spent in excess of the $309,000 in connection with this litigation including a recent payment made in January 2008 in excess of $79,000 in respect of costs and disbursements incurred by Capital's solicitors. The evidence about that payment is adduced not to demonstrate that Capital was able to find those funds but rather to clarify that the payment was made at a time before any order was made by this Court for security for costs to be paid (that order being foreshadowed in reasons on 30 January 2008). It is incumbent on parties in such circumstances to provide evidence of their position. 14 In Idoport Pty Ltd v National Australia Bank Ltd [2002] NSWSC 18 at [24] , Einstein J listed five factors flowing from remarks of the Full Court in Microbio Resources [1993] FCA 848. Those are the factors said to be relevant to the exercise of a discretion as to whether to dismiss a proceeding where there has been a failure to comply with an order for security for costs. The decision of Einstein J was upheld by the Court of Appeal of New South Wales on that issue in Idoport Pty Ltd v National Australia Bank Ltd [2002] NSWCA 271. The position of the Court. Adultshop has acted promptly in the circumstances but those circumstances include the fact that it was preparing in a concerted fashion for an imminent trial. The need to act promptly was necessary. Equally, the delay in compliance with the order could not be such as to suggest contumelious disregard of the order by Capital. Generally, this factor is neutral. • As to the question of when Capital was on notice of the application for dismissal, Capital would say that in light of the nature of the order originally sought for security for costs (that is say the stay of the proceedings rather than the dismissal), the notice given to Capital has only been evident from correspondence which immediately preceded the issuing of this motion. There is some force in that argument but equally, there was always the prospect that Adultshop would apply for dismissal as it has done on a number of previous occasions in these proceedings. Adultshop could be expected to seek dismissal, especially given the history of these proceedings and the fact that they were stayed in any event as a result of the non-payment of the security on both this occasion and previously. • On the topic of the inability to further fund the proceedings, the evidence is unclear. Counsel for Capital, Mr Tottle, urges me to take into account that Capital was close to being ready for trial and it has spent in excess of $300,000 on its own solicitor/client costs both in these proceedings and in connected proceedings such as a Full Court appeal and an application for special leave to the High Court. I do consider that the state of readiness for trial on the part of Capital and its financial commitment to its own solicitor/client costs as well as the earlier payments for security for costs are factors which do give rise to an inference that it is more likely than not that Capital will make an earnest effort to meet the security for costs order so that the trial which had been imminent can proceed. • With regard to the prejudice to Adultshop, the prejudice is self-evident. Adultshop has also invested a substantial amount in defending these proceedings. If Adultshop is not protected with suitable orders designed to go some way to ensure that if it succeeds it will recover a contribution to costs then the prejudice would be significantly increased. That risk of prejudice should be minimised. • Finally as to the position of the Court, it is unfortunate that the trial dates will have to be vacated in circumstances where there is a public need for the availability of the Court's resources. However, I do not consider this factor as being particularly significant in the present circumstances. I reiterate that I am unable to draw any conclusion that the failure to meet the security for costs order is a contumelious disregard of the orders. 16 The only inference currently available is that Capital is presently unable to meet the order for security. Although in correspondence from Capital's solicitors to Adultshop's solicitors, Capital's solicitors indicated that they were hopeful of being able to make the security for costs payment within a few weeks, there is no tangible evidentiary support for that 'hope'. The only support for the likelihood of the hope being met is the fact that given very considerable investment Capital has made over and above the earlier security for costs payments and bearing in mind that it is now largely ready for trial, Capital would do all reasonably within its power to meet the security for costs order so as not to sacrifice the investment it has made in these proceedings to date. Instead it is argued, Adultshop elected to apply for an order that the application be stayed 'pending compliance'. In effect and in substance, by now seeking dismissal rather than a stay, it is said Adultshop is seeking a variation to the terms of the order originally sought and made on 7 February 2008 (after reasons were published on 30 January 2008). No explanation for the changed circumstances necessary to justify a variation to the terms of the order has been provided. I do not consider in light of the fact that there is statutory power for making of the dismissal order that this argument carries weight. Two separate steps in the proceedings have been taken, in my view. The first was to seek an order that security for costs be paid into Court by a certain date, failing which the action would be stayed. The second step was to bring on a motion for further consequential relief, in this case, dismissal. It is not, in my view, in form or substance an application to vary an earlier order. 19 In my view compelling reasons have been advanced by Adultshop to enforce compliance with the security order made last month. I am not, however, satisfied that it is in the interests of justice to dismiss the proceedings forthwith as urged by Adultshop. What further period I should allow for compliance, especially now that an imminent trial date is no longer a factor, is less clear. There is hardly a bright line on such issues. There is no satisfactory evidence (if any at all) from which I could be reasonably confident that the funds can or will be raised and will be utilised for compliance. It would seem most unlikely however, having spent over $309,000 to date on the case to bring it to readiness for trial, that Capital would not seriously attempt to raise the funds within a more flexible time frame. I have given some consideration to time periods provided for in other cases and to the history in this case. 20 In my view, this litigation must come to a head. It is in the interests of all that the issues be tried and determined without further extensive delay. In addition, a very considerable use of the Court's resources over several years has been consumed. In saying that, I recognise that Capital is not responsible for all of the delays. It is, however, undesirable for any respondent to have litigation of this dimension hanging over its head for such a long period of time. 21 I can fully appreciate the concerns Capital has as to the prospects of losing the opportunity which this litigation presents by being unable to raise the funds to run it. However, the very reasons that underlie such concern are the reasons why it is necessary for security to be paid into Court without further delay. Counsel for Capital, Mr Tottle has proffered a variety of explanations as to reasons why it can be inferred that it would be difficult for Capital to go on evidence in relation to the source of its funding and as to the steps taken and the likelihood of further funds being raised to meet the security order. While, at least to some extent, those reasons have a ring of plausibility about them, Adultshop quite properly points to the fact that there is no evidence to support the nature of those concerns. Counsel for Adultshop, Mr Douglas also points to the fact that there is no evidence on which I could exercise a judicial discretion that within any further period there could be an expectation of compliance with the payment into Court of the further security ordered. On that basis and on the default and on the history of the matter and on the considerable prejudice to his client, he has most strenuously urged that the proceedings should be dismissed at this point. 22 I consider that taking into account the readiness of the parties for trial, taking the very substantial commitment so far in funding by Capital into account and taking into account the statement, albeit only a 'hope' that the funds will be raised to meet the Court orders within a 'few weeks', a period of three months to make the payment or face dismissal of the proceedings is an appropriate timeframe. Mr Tottle has urged me to simply adjourn Adultshop's motion but I do not consider that outcome would do justice to the prejudice facing Adultshop. All the arguments would just be ventilated once again. The orders I propose making do place some pressure on Capital but in the absence of evidence as to the impossibility of compliance with such orders and indeed any evidence on steps taken to achieve compliance of the orders, the time has come in my view for greater predictability and clarity if there is non compliance. I indicated to counsel that I had in mind a period of two months before those orders should operate. I have reflected on this since foreshadowing it in argument consider that three months would be more appropriate. I allow the period of three months on the basis that the trial is no longer imminent and the more immediate time frame in the context of an imminent trial is no longer necessary. By this expression Adultshop wishes to emphasise that the appropriate order to be made by the Court should reflect that it is intended that the issues in dispute between the parties should be resolved once and for all by way of the dismissal notwithstanding there has been no consideration of the substantive issues on which the proceedings are framed. It is submitted that the appropriate means to effect clarity with respect to the status of the judgment is to adopt the words 'with prejudice', which reflect, in negative, the language in O 35 r 6. Although reference is made in r6(1) of the Federal Court Rules to the ability of the Court to order that a dismissal shall be "without prejudice to any right of the applicant or claimant to bring fresh proceedings or to claim the same relief in fresh proceedings", this does not, in my view, mean that a dismissal which does not include such a "without prejudice" order results automatically in a bar to new proceedings being commenced. The Rule clearly proceeds on the basis that, should fresh proceedings be instituted, the fact that a previous dismissal order has been made need not necessarily prejudice such fresh proceedings. Whether they are prejudiced, or indeed precluded, will depend on whether the parties intended a dismissal or disposal that was interlocutory or final, as manifested by the order made considered in its forensic context. In this litigation a dismissal would occur without any real examination of the merits and by reason of default several years after the litigation was commenced in compliance with an order. While the likelihood of being entitled to issue fresh proceedings arising out of essentially the same subject matter would seem slim, I do not consider the present circumstances entitle the possibility to be permanently shut out. If such proceedings were commenced, it could be anticipated that Adultshop would be heard very clearly as to the facts and arguments it has raised in this motion. 27 Finally Adultshop sought costs on an indemnity basis and/or to be paid forthwith. I do not believe that the non compliance by Capital has been wilful or contumelious even though there is no evidence on that topic. The time frame was short and was not met. The far more obvious inference is that Capital was unable to raise the funding. Nevertheless costs of this application should follow the event and I would order that Capital pay Adultshop's costs of the application in any event, to be taxed or agreed. The applicant to pay into Court the further security due to be paid on 20 February 2008 ($68,000) on or before 3 months from the date of these orders (the due date). 2. If the further security is not paid on or before the due date, the application is to be dismissed without prejudice to the applicant's entitlement, if any, to issue further proceedings with the applicant to pay the first and second respondents' costs of the application to be taxed together with reserved costs. 3. The orders of 2 November 2007 be otherwise vacated. 4. The applicant to pay the first and second respondents' costs of the motion dated 25 February 2008 in any event. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

non-compliance with security for costs order no evidence as to capacity to comply application to dismiss proceedings deferred order to dismiss whether should be with or without prejudice to institution of further proceedings indemnity costs sought but not ordered practice and procedure

By s 21(2) of the Act the Court following review may by order confirm the order of the Magistrate or quash the order and direct the Magistrate to order the release of the person (in the case of an order under subs 19(9), or order by warrant in the statutory form, that the person be committed to prison to await surrender under a surrender warrant or temporary surrender warrant or release pursuant to an order under subs 22(5), in the case of an order under subs 19(10)). In conducting a review the Court shall have regard only to the material that was before the Magistrate: s 21(6)(d) of the Act. It follows from these provisions that the review in this Court is in the nature of a rehearing limited to the materials that were before the Magistrate. In other words, the review is not a fresh hearing at which new materials or evidence can be introduced. The applicant submits that upon the rehearing, the Court should find that the documents produced by Ireland to support its extradition request fail to identify conduct on the part of the applicant sufficient to: As a consequence the applicant submits the Court should quash the order of the magistrate and order his release. Once arrested, the person is required by s 15 to be taken before a magistrate and remanded in custody or on bail for such period as may be necessary for eligibility proceedings to be taken under s 19. Where a person is on remand under s 15 and the Attorney-General has given a notice under s 16(1), provision is made under s 19 for a magistrate to conduct proceedings to determine whether the person is eligible for surrender. If eligibility is so determined by the magistrate, provision is made by s 22 for the Attorney-General to decide whether the person is to be surrendered. The warrant was issued on the application made in the statutory form on behalf of Ireland, an extradition country for the purposes of the Act. That application alleged that the applicant is an extraditable person for the purposes of the Act in relation to Ireland. On 5 January 2005, the Hon Philip Maxwell Ruddock MP, Attorney-General for the Commonwealth of Australia signed a Notice of Receipt of Extradition Request (Notice) under the Act addressed to the Magistrate before whom the person named in the Notice is brought. That Notice was issued by the Attorney-General under subs 16(1) of the Act and stated that an extradition request had been received from Ireland in relation to the applicant for the following extradition offences: The Extradition (Ireland) Regulations made 13 March 1989 by reg 5 provides that the Act applies in relation to Ireland subject to the Treaty on Extradition (Treaty) between Australia and Ireland done at Dublin on 2 September 1985 (being the treaty a copy of the text of which is set out in the Schedule). The certificate itself was signed and sealed at Dublin on 12 May 2004 by a person authorised by law to authenticate the Seal of the Minister for Foreign Affairs of Ireland pursuant to the Ministers and Secretaries Act 1924 (Ireland). In particular the certificate had attached documents in purported compliance with the requirements of paras 2(a), 2(d) and 2(e) of Art V of the Treaty. • Statement of each offence. • Statement of the facts of the case. The First Secretary of the Embassy of Ireland in Canberra, being an officer of Ireland, provided a further certificate and documents relevant to the extradition request. The documents attached to this certificate included a certificate of the person authorised by law to authenticate the Seal of the Minister for Foreign Affairs of Ireland dated 23 December 2004. It also included the following: By further certificate of the First Secretary of the Embassy of Ireland in Canberra, being an officer of Ireland, further documents were supplied in support of the request for the extradition of the applicant by Ireland. These documents included a certificate signed by a person authorised by law to authenticate the Seal of the Minister for Foreign Affairs of Ireland, dated 3 August 2005. The documents also included a further statement pursuant to Art V of the Treaty made by the same solicitor and professional officer in the Office of the Director of Public Prosecutions in Ireland. First, it is important to note that the warrants referred to above reflect a primary charge and in effect an alternative charge in respect of particular conduct. Warrant A and warrant I are concerned with the same conduct, namely the dealing by the applicant with an Irish Permanent cheque number 555153 payable to Barry J Redmond in the sum of £4,000.00 on 25 November 1998. Warrant A alleges that the applicant converted that cheque to his own use or benefit, contrary to s 20(1)(iv)(a) Larceny Act 1916 as amended by s 9 of the Larceny Act 1990 (Ireland) when it was entrusted to Property World by Barry J Redmond to put as a deposit towards the purchase of 73 Omeath Street Belfast, Northern Ireland. Warrant I alleges that the applicant obtained that cheque from Barry J Redmond with intent to defraud by falsely pretending that it was required as a deposit towards 73 Omeath Street Belfast, Northern Ireland, contrary to s 32(1) of the Larceny Act 1916 as amended by s 9 of the Larceny Act 1990 (Ireland). The inducements took a number of different forms and were part of an ongoing process. By the use of conversation and property brochures, Geraldine Derwin, an employee of Property World, convinced Barry Redmond that Property World would secure the purchase on his behalf of the said premises. She made representations to Barry Redmond that the funds would be used to pay a large proportion of the deposit payment for the premises, the deposit being 10% of the purchase price. It is alleged that Vincent O'Donoghue subsequently took responsibility for the actions of his employee in obtaining said payment. Notwithstanding that the cheque was handed by Barry Redmond to Geraldine Derwin no material efforts were made by Vincent O'Donoghue or Property World to secure the purchase of the said premises. The cheque was made payable to Barry J Redmond and he endorsed the back of it before handing it to Property World. It is alleged that this cheque was presented at a bank by Vincent O'Donoghue on or about the same day and that, rather than lodging it in a bank account, he converted it to cash. Although premises at 73 Omeath Street were for sale and enquiries about it were made on behalf of Property World, ultimately the premises were sold to a different purchaser. It is alleged that the £4,000 paid by Barry Redmond was used for Vincent O'Donoghue's own purposes and that he never had any intention of directing it towards the purchase of 73, Omeath Street or any other premises. Such an allegation is based on inferences drawn from Vincent O'Donoghue's subsequent conduct in respect of Barry Redmond. Accordingly, it is alleged that the representation made to Barry Redmond that the cheque was required as part-payment of the deposit was false. Warrant B alleges that this cheque was entrusted to Property World by Barry J Redmond to be put as a deposit towards the purchase of 73 Omeath Street Belfast but was fraudulently converted to the applicant's own use or benefit. Warrant J alleges that the applicant with intent to defraud obtained the cheque from Barry J Redmond by falsely pretending that Property World required it as a deposit towards the purchase of 73 Omeath Street Belfast. The statement at para 4.2 discloses the same detailed allegations as are made in respect of warrant A and warrant I. In effect, warrant A and warrant I, and warrant B and warrant J are concerned with related conduct concerning Barry J Redmond on 25 November 1998. In short, the applicant is alleged to have converted to his own use the two cheques respectively for £4,000.00 and £592.00, or to have obtained those cheques by falsely pretending that they would be used as a deposit on the named property in Belfast. Warrant C and warrant K are concerned with the same conduct, namely the dealing by the applicant with an Irish Permanent cheque number 597103 payable to Barry J Redmond in the sum of £2,315.00 on 8 January 1999. Warrant C alleges that the applicant fraudulently converted that cheque to his own use or benefit, when it was entrusted to Property World by Barry J Redmond to put as a deposit towards the purchase of 49 Battenburg Street, Belfast, Northern Ireland. Warrant K alleges that the applicant obtained that cheque from Barry J Redmond with intent to defraud by falsely pretending that it was required as a deposit toward the purchase of 49 Battenburg Street, Belfast, Northern Ireland. Again, the inducements took a number of different forms and were part of an ongoing process. By the use of conversation and property brochures, and because of their previous dealings in respect of the first property deal, Geraldine Derwin and Anne Marie Murphy, employees of Property World, convinced Barry Redmond that Property World would secure the purchase on his behalf of the said premises. They made representations to Barry Redmond that the funds would be used to pay the deposit for the premises. It is alleged that Vincent O'Donoghue subsequently took responsibility for the actions of his employees in obtaining said payment. It is alleged that this cheque was presented at a bank by Vincent O'Donoghue on or about the same day and that, rather than lodging it in a bank account, he converted it to cash. Although premises at 49, Battenburg Street were for sale and enquiries about it were made on behalf of Property World, ultimately the premises were sold to a different purchaser. It is alleged that the £2,315 paid by Barry Redmond was used for Vincent O'Donoghue's own purposes and that he never had any intention of directing it towards the purchase of 49, Battenburg Street or any other premises. Such an allegation is based on inferences drawn from Vincent O'Donoghue's previous and subsequent conduct in respect of Barry Redmond. Accordingly, it is alleged that the representation made to Barry Redmond that the cheque was required as a deposit was false. Warrant D alleges that the applicant fraudulently converted that cheque to his own use or benefit, when it was entrusted to Property World by Barry J Redmond to pay surveyors' fees on 101 Ainsworth Avenue, Belfast, Northern Ireland. Warrant L alleges that the applicant obtained that cheque from Barry J Redmond with intent to defraud, by falsely pretending it was required for surveyors' fees for 101 Ainsworth Avenue, Belfast, Northern Ireland by Barry J Redmond. Again, the inducements took a number of different forms and were part of an ongoing process. By the use of conversation and property brochures, and because of their previous dealings in respect of the earlier property deals referred to in paragraphs 4.1 to 4.3 above, Anne Marie Murphy, an employee of Property World, convinced Barry Redmond that Property World would secure the purchase on his behalf of the said premises. She made representations to Barry Redmond that the funds would be used to pay surveyor's fees in respect of the premises. It is alleged that Vincent O'Donoghue subsequently took responsibility for the actions of his employee in obtaining said payment. It is alleged that this cheque was presented at a bank by Vincent O'Donoghue on or about the same day and that, rather than lodging it in a bank account, he converted it to cash. It is understood that premises at 101, Ainsworth Avenue were for sale but the purchase of them was never secured by or on behalf of Barry Redmond. Barry Redmond was informed by Property World that a particular firm of solicitors had conduct of the sale of all the Belfast Properties. In fact the named firm of solicitors never had any dealings with these premises. It is alleged that the £330 paid by Barry Redmond was used for Vincent O'Donoghue's own purposes and that he never had any intention of directing it towards the purchase of 101, Ainsworth Avenue or any other premises. Such an allegation is based on inferences drawn from Vincent O'Donoghue's previous and subsequent conduct in respect of Barry Redmond. Accordingly, it is alleged that the representation made to Barry Redmond that the cheque was required to cover surveyor's fees was false. Warrant E alleges that the applicant fraudulently converted that cheque to his own use or benefit, when it was entrusted to Property World by Barry J Redmond to be put as a deposit towards the purchase of 101 Ainsworth Avenue, Belfast, Northern Ireland. Warrant M alleges that the applicant obtained that cheque from Barry J Redmond with intent to defraud by falsely pretending that it was required as a deposit towards the purchase of 101 Ainsworth Avenue, Belfast, Northern Ireland. Again, the inducements took a number of different forms and were part of an ongoing process. By the use of conversation and property brochures, and because of their previous dealings in respect of the earlier property deals referred to in paragraphs 4.1 to 4.4 above, Anne Marie Murphy, an employee of Property World, convinced Barry Redmond that Property World would secure the purchase on his behalf of the said premises. She made representations to Barry Redmond that the funds would be used to pay a proportion of the deposit payment for the premises. It is alleged that Vincent O'Donoghue subsequently took responsibility for the actions of his employee in obtaining said payment. It is alleged that, at some stage between that day and the 4 th March 1999, this cheque was used to pay a debt incurred by Property World to the Sunday Tribune Newspaper and presented by an employee of Property World as part payment on an overdue bill. It is understood that premises at 101, Ainsworth Avenue were for sale but the purchase of them was never secured by or on behalf of Barry Redmond. It is alleged that Vincent O'Donoghue never had any intention of directing the £448 paid by Barry Redmond towards the purchase of 101, Ainsworth Avenue or any other premises. Such an allegation is based on inferences drawn from Vincent O'Donoghue's previous and subsequent conduct in respect of Barry Redmond. Accordingly, it is alleged that the representation made to Barry Redmond that the cheque was required as part-payment of the deposit was false. Warrant F alleges that the applicant fraudulently converted that cheque to his own use or benefit, when it was entrusted to the applicant by Barry J Redmond to put as a deposit towards the purchase of a portfolio of properties at Portmine, North Belfast, Northern Ireland. Warrant N alleges that the applicant obtained that cheque with intent to defraud from Barry J Redmond, by falsely pretending that it was required as a deposit towards the purchase of a portfolio of properties in Portmine, North Belfast, Northern Ireland by Barry J Redmond. Again, the inducements took a number of different forms and were part of an ongoing process. By the use of conversation and property brochures, and because of their previous dealings in respect of the earlier property deals referred to in paragraphs 4.1 to 4.5 above, Vincent O'Donoghue convinced Barry Redmond that Property World would secure the purchase on his behalf of the said portfolio. Vincent O'Donoghue made representations to Barry Redmond that the funds would be used to pay a proportion of the deposit payment for the four properties. Vincent O'Donoghue further represented that the monies already paid by Barry Redmond to Property World as referred to in paragraphs 4.1 to 4.5 above would be put towards the said deposit. It is alleged that Barry Redmond handed the cheque to Vincent O'Donoghue in person. It is alleged that this cheque was presented at a bank by Vincent O'Donoghue on or about the same day and that, rather than lodging it in a bank account, he converted it to cash. The four properties in question were for sale at the relevant time and the vendor had instructed Vincent O'Donoghue to handle the sale. However, the vendor subsequently withdrew these instructions and the proposed purchase by Barry Redmond was not completed. It is alleged that the £2,000 paid by Barry Redmond was used for Vincent O'Donoghue's own purposes and that he never had any intention of directing it towards the purchase of any of the properties in Portmine or any other premises. Such an allegation is based on inferences drawn from Vincent O'Donoghue's previous and subsequent conduct in respect of Barry Redmond as set out herein. Accordingly, it is alleged that the representation made to Barry Redmond that the cheque was required as part-payment of the deposit was false. Warrant G alleges that the applicant fraudulently converted this cheque to his own use or benefit, when it was entrusted to Property World by Barry J Redmond as a deposit towards the purchase of a portfolio of properties at Portmine, North Belfast, Northern Ireland. Warrant O alleges that the applicant obtained that cheque with intent to defraud, by falsely pretending that it was required as a deposit towards the purchase of a portfolio of properties at Portmine, North Belfast, Northern Ireland by Barry J Redmond. It is alleged that Barry Redmond handed the cheque to Vincent O'Donoghue in person. It is alleged that this cheque was presented at a bank by Vincent O'Donoghue on or about the same day and that, rather than lodging it in a bank account, he converted it to cash... the four properties in question were for sale at the relevant time and the vendor had instructed Vincent O'Donoghue to handle the sale. However, the vendor subsequently withdrew these instructions and the proposed purchase by Barry Redmond was not completed... It is alleged that the £9,643.05 paid by Barry Redmond was used for Vincent O'Donoghue's own purposes and that he could never have had any intention of directing it towards the purchase of any of the properties in Portmine, North Belfast, Northern Ireland or [any other premises]... Accordingly, it is alleged that the representation made to Barry Redmond that the cheque was required as part-payment of the deposit was false. Warrant H alleges that the applicant fraudulently converted that cheque to his own use or benefit, when it was entrusted to Property World by Ciaran Henderson to put as a deposit towards the purchase of 31 Richmond Square, North Brunswick Street, Dublin 7. Warrant P alleges that the applicant obtained that cheque from Ciaran Henderson with intent to defraud by falsely pretending that an apartment he was selling on behalf of Cliona Buckley to Ciaran Henderson at 31 Richmond Square, North Brunswick Street, Dublin 7 was eligible for s 23 tax relief of 80% of the purchase price of £155,000.00 and also eligible for full mortgage interest relief which was not the case. [The cheque represented the deposit payment for the premises,]... the deposit being 10% of the purchase price. ...In paying the deposit to Property World, Ciaran Henderson understood, as a result of oral representations made by or on behalf of Vincent O'Donoghue, that he would be entitled to tax relief at 80% of the total purchase price of £155,000. In addition, the newspaper advertisement placed by or on behalf of Vincent O'Donoghue, to which Ciaran Henderson had responded, had represented that the tax relief was 'full' and had implied that the premises qualified for mortgage interest relief. The Property World brochure in respect of the premises, supplied to Ciaran Henderson prior to his payment of the deposit, specifically stated that the premises qualified for 80% tax relief and for mortgage interest relief. Subsequent enquiries made by solicitors acting on behalf of Ciaran Henderson established that the entitlement to tax relief was limited to 80% of the original purchase price of the premises when newly built, namely £130,000, and that mortgage interest tax relief was not available. As a result, Ciaran Henderson sought to withdraw from the purchase but was unsuccessful in securing from Vincent O'Donoghue the return of his deposit. Instead, Vincent O'Donoghue attempted to interest Ciaran Henderson in the purchase of different premises in Pudding Row, Temple Bar, Dublin 2 and consistently refused any form of refund. It is alleged that the cheque for £15,500 was presented at a bank by Vincent O'Donoghue on or about the 22 nd January 1999 and that, rather than lodging it in a bank account, he converted it to cash. Although premises at 31, Richmond Square were for sale, a different agent had conduct of the sale on behalf of the vendor and, ultimately, the premises were sold to a different purchaser. Further, this different agent was the sole agent for the sale of all properties in Pudding Row. It is alleged that the £15,500 paid by Ciaran Henderson was used for Vincent O'Donoghue's own purposes and that he never had any intention of directing it towards the purchase of 31, Richmond Square or any other premises. Such an allegation is based on the fact that Vincent O'Donoghue had no authority to offer those premises for sale and on inferences drawn from Vincent O'Donoghue's previous and subsequent conduct in respect of Barry Redmond... Accordingly, it is alleged that the representation made to Ciaran Henderson that the cheque was required as a deposit was false. The allegations faced by Vincent O'Donoghue are that, during the course of just over seven months from November 1998 to July 1999, he induced a customer, Barry Redmond, to write cheques in respect of property deals which, it is alleged, were not genuine. The details of the payments are set out at paragraphs 4.1 to 4.7 below. Initially, Mr Redmond was led to believe by or on behalf of Vincent O'Donoghue that he was entrusting Property World with a payment constituting a deposit for the purchase of premises. When Barry Redmond was informed by or on behalf of Vincent O'Donoghue that this deal had fallen through, he was persuaded by Vincent O'Donoghue to invest a further sum in order to secure the purchase of different premises. This process occurred in respect of five different purchases, involving seven different cheques, before Mr Redmond realised that he had not received, and was unlikely to receive, any benefit from his investments. The matter was then reported to An Garda Siochana [the Irish police force]. During this series of transactions with Barry Redmond, Vincent O'Donoghue also obtained from another customer, Ciaran Henderson, a cheque for a similar property deal. The details of this transaction are set out at paragraph 4.8 below. The funds would then only be released as and when the required payment became due. Instead, it is alleged that Vincent O'Donoghue either converted the cheques to cash or diverted them to pay for debts accrued by Property World. Indeed, some of the properties were not for sale at the time when Vincent O'Donoghue's business sought the deposit cheques. Accordingly, it is alleged that the obtaining of all the cheques was achieved fraudulently, as a result of misrepresentation that a genuine transaction was anticipated. It may be seen that the ground of the complaint of the applicant in (1) is closely related to the ground of complaint in (2), in that each focuses upon the acts or omissions alleged and said to constitute the offence either in the extradition country or in Western Australia, Western Australia being that "part of Australia where the proceedings are being conducted "and in relation to which it is alleged that such "conduct or that equivalent conduct would have constituted an extradition offence in relation to that part of Australia". The applicant recognises that the statements produced by Ireland under s 19 of the Act serve the dual purpose of being supporting documents and the materials for the magistrate to consider when considering a determination pursuant to s 19(2) of the Act. However, the applicant says that even if the statements are considered sufficient to satisfy s 19(3)(c)(ii) of the Act they should be considered inadequate to establish criminality in Western Australia as required by s 19(2). In this regard the two preconditions should be noted and not ignored: see Griffiths v United States of America [2005] FCAFC 34 ; (2005) 143 FCR 182 at [53] , [55]. Both matters describe the 'payment' of cheques to Property World. It must have been intended that Property World would have possession of the proceeds. Such conduct as is set out cannot satisfy the Court that there has been a taking or a conversion. There is no conduct from which the Court might properly infer an intention as required by s 371 of the Criminal Code . The Court cannot determine if representations might be untrue and amount to fraud if the actual conduct is not set out. For these purposes, what the person said to have been induced considered the representations to mean, is insufficient. The allegedly induced person may have a wholly unreasonable interpretation of the word spoken. The Court must be able to satisfy itself whether representations constituted a fraud contrary to s 409 of the Criminal Code . If it cannot the matter must be determined against the request of a country. It is not contended that the applicant was the vendor's agent. The relevant property "transactions" can only have been in relation to seeking to negotiate a purchase or, as described in para 3.1 of the Allegations: Overview, "assisting" in the purchase of premises. The applicant therefore submits that to the extent that the applicant is alleged to have been a party to relevant conduct, as in warrant F/N and G/O, specific acts or omissions on the part of the applicant must be described from which it might properly be inferred there was a requisite intention, as required by s 371(1) of the Criminal Code (Western Australia) on the part of the applicant. The applicant submits that the allegations made by Ireland are that at the time of the matters referred to in warrants F/N and G/O Mr Redmond was aware that the prospective acquisitions of other properties had been unsuccessful. In relations to warrants F/N, a further cheque was allegedly handed to the applicant in relation to properties in Northern Ireland. The properties were for sale and the applicant had instructions (of an unspecified nature) from the vendor. In reality all that is advanced in support of the assertion of intention on the part of the applicant is that, ultimately, he did not secure the purchase of the properties on behalf of Mr Redmond and that funds drawn on the cheques were mixed with those of the business. That is insufficient to found an inference of intention required under s 371(1) of the Criminal Code o(WA). The applicant says that similarly in respect of the matters relating to warrants G/O: The applicant says the expression "not on the market" is vague and unhelpful. There is no assertion that the vendor would have refused any offer and the expression may mean no more than that the properties were not being advertised. As to the intent to defraud (or false pretences) offences, put in the alternative, the applicant makes the following submissions concerning s 409 of the Criminal Code (WA): The section contains a mental element which involves a question whether an accused person has a belief in the existence of a state of things, by virtue of the words 'with intent to defraud'. It is necessary to analyse the facts in order to identify the aspect which is alleged to reveal a fraud. If there is a fraud, there must be an intent to defraud and that intent may be revealed by knowledge. An intent to defraud is not to be equated with carelessness. The question of intent to defraud is essentially subjective; it is a question of what the accused intended, not of what a hypothetical reasonable man would have intended. Even if the actual conduct complained of was set out in the documents and was referable to the applicant, no conduct is set out from which it might properly be inferred that the requisite knowledge, belief or intent existed to defraud. If it would have then, in the circumstances of this case, there will also have been a sufficient statement in the documents setting out the conduct constituting the offence. As noted above, s 19(3)(c)(ii) provides a definition of "supporting documents" that includes "a duly authenticated statement in writing setting out the conduct constituting the offence". In Zoeller v Federal Republic of Germany (1989) 23 FCR 282 at 294, the Full Court confirmed that the phrase "the acts or omissions" refers to the elements or ingredients of the offence, not particular evidence adduced to prove those acts or omissions: see also Wiest v Director of Public Prosecutions [1988] FCA 450 ; (1988) 23 FCR 472 at 502 --- 503. It is well understood that it is not part of the magistrate's function (or this Court's on review) to determine whether an offence was committed in the requesting country: Zoeller 23 FCR 282 at 300, 303 (The Full Court); McDade v The United Kingdom [1999] FCA 1868 at [14] - [16]. In effect, that there is a foreign offence, is, for the purposes of s 19 proceedings, proved by the warrant or warrants duly authenticated; and that the offence is an extraditable offence in the requesting country is proved by the document required by s 19(3)(c)(i) --- that is a duly authenticated statement in writing setting out a description of, and the penalty applicable in respect of, the offence. It is well accepted that strict compliance with the formalities required by the Act is essential: Cabal v United Mexican States (No 3) [2000] FCA 1204 ; (2000) 186 ALR 188 , French J at 240; and authorities there referred to. Nonetheless, it is also accepted that in the conduct of a hearing "practical judgments and assessments are called for" by a magistrate, and this Court on a re-hearing. To some extent there is a tension between the "strict compliance" and the "practical judgments" approaches, although on closer analysis each approach has a different focus. Such criteria may be seen as involving value judgments. No doubt they do. The ultimate principle governing the court's approach remains --- the requested person must go free unless it can be shown, in accordance with the requirements of the Extradition Act properly construed, that the person is eligible for surrender. The same values inform that approach as inform an approach described by the use of such terms as 'strict construction'. The decision of the Full Court in Kainhofer v Director of Public Prosecutions (1996) (No 2) 70 FCR 184 at 190 --- 191 refers to what was said in Weist 73 FCR 472 and Zoeller 23 FCR 282 and confirms that inferences may be properly drawn from the materials produced. In Kainhofer 70 FCR 184 it was charged that the items in question were "obviously" subject to a reservation of title. The Court at 191 said it could be inferred from the reference to obviousness that Ms Kainhofer also had knowledge that the items in question were subject to a reservation of title, that is to say she had knowledge that the statement which she admitted was false, was knowingly false. In Kainhofer 70 FCR 184 at 191 --- 192 the Court was also satisfied that, while it was an essential ingredient of the offence of obtaining goods for credit by false pretences or wilfully false promise under s 427(1) of the Criminal Code (Qld) that there be an intent to defraud, that intent could be found in the use of the words "pretending to be solvent" and directly in the words "intending to defraud" in the statement. In Zoeller 23 FCR 282 at 302, the Court observed that, while it was true that the statement of facts in question contained no direct description of the appellant's state of mind in terms of that required by the statement of the Australian offences, the facts stated made it clear that the appellant knowingly entered into agreements that were backdated and that he did so to enable him to claim tax deductions. The Court said that these facts sufficiently stated the guilty mind of the appellant without the necessity to do so explicitly. In relation to the issue of dual criminality, the parties to this proceeding accept that the relevant local provisions to consider are s 378 and s 371 of the Criminal Code (WA) dealing with stealing and s 409 dealing with intent to defraud by deceit or any fraudulent means (false pretences). The remaining count of fraudulent conversion with the alternative charge of obtaining property by false pretences, concerns a Mr Henderson. The submissions made on behalf of the applicant and set out in some detail above, highlight the fact that the supporting documents, particularly the "Allegations: Overview" section and more detailed account of circumstances in which the offences are alleged to have been committed, so lack factual detail and contain ambiguities that they fail to set out relevant elements or ingredients of the Western Australian offences of stealing or false pretences. For example, it is said the supporting documents are ambiguous as to whether Property World was the applicant's business or that of a corporate entity. Further, that a question is raised whether instructions had been given by Mr Redmond and Mr Henderson that the cheques they provided to Property World, whether to an employee of the applicant or the applicant himself, were to be used for particular purposes and/or to be placed in a trust account pending the carrying out of a particular transaction. It is also said they raise the question of the basis upon which it is said the applicant took responsibility for the earlier conduct of his employees who had received cheques on behalf of the applicant's business. Indeed, counsel for the applicant contended in relation to warrants A/I that all that was put against the applicant was that "one of his employees obtained a cheque from someone and somehow, we don't know how, it came into his hands and he cashed it". The applicant also contends the documents do not address the question and so, in effect, negative the possibility that the applicant mixed the funds he allegedly obtained from cashing the cheques with his business monies such that he could not be guilty of stealing them under Western Australian law. That is to say, there is nothing to suggest the ratio in Parker [1997] HCA 15 ; 186 CLR 494 does not apply here. However, in my view, when one reads fairly the whole of the supporting documents, including the warrants, the detailed statement of facts and circumstances relating to the warrants and the conduct complained of, and the Allegations: Overview section, the material elements or ingredients of the offences stand out plainly, without ambiguity, and the mixing issue simply does not arise. For example, a fair reading of the supporting documents discloses that it is alleged that the applicant was personally the owner and operator of a business called Property World, and there is no question of some corporate entity owning or operating that business. It is also plain that, leaving aside the one cheque that was used to pay some advertising expenses of the Property World business, the blunt allegation is that the applicant personally cashed the cheques of Mr Redmond and Mr Henderson and applied the monies received to his own personal use, not that of the business of Property World. In such circumstances, the applicant's contentions that a Western Australian offence of stealing could not be made out because there has been a "mixing" of funds in an account, which account is then used for a mixture of business and personal transactions, is not open on the allegations made. The allegation does not permit a "mixing" defence. It is also plainly alleged in the case of the applicant's dealings with Mr Redmond that there was a course of conduct or a series of transactions involving Mr Redmond whereby he was induced to provide cheques to Property World, to the knowledge of the applicant, which cheques were not applied to the intended purpose of securing investment properties, but were in fact applied to the personal use of the applicant (or, in the case of the cheque used to pay the newspaper's advertising account, for an unrelated purpose). It is also clearly alleged that all of these transactions were not genuine. In this regard the supporting documents unambiguously allege --- and the Court is not required to draw inferences in this regard --- that the applicant knew or was aware at material times that: It is open to consider that the cheques themselves were material things that were capable of being stolen and were in fact stolen by conversion. In any event, the conversion of the cheques into cash as alleged which cash was applied to the applicant's own uses would satisfy the conduct referred to in s 371(1) and s 371(2) of the Criminal Code (WA) and thereby constitute stealing. Further, to obtain that property --- the cheques --- from Mr Redmond and Mr Henderson fraudulently, with intent to defraud, would constitute an offence under s 409(1) of the Criminal Code (WA). The allegations made support this as an equivalent offence in Western Australia. It is alleged that the applicant knowing that none of the particular property transactions was genuine, not intending to apply the cheques received towards that end, acquired the cheques and applied them to his own personal use. The elements or ingredients of the offences are bluntly stated and the question of the intent of the applicant is also unambiguously alleged. While some criticism may be made of the use of the expression "accepted business practice" in the Allegations: Overview section --- because it may be said to raise more questions than answers, in the sense that it is not clear whether it is alleged that the applicant and Mr Redmond, and the applicant and Mr Henderson had some common understanding about this practice --- that statement may be considered mere surplusage in the circumstances. Without it the remaining material still satisfies the requirements of s 19(2)(c) of the Act and indicates an equivalent offence in Western Australia of stealing or false pretences. No doubt the supporting documents could have addressed in more detail, and more methodically, the acts or omissions, and elements or ingredients of the alleged offences of fraudulent conversion and false pretences relied upon than they do. Nonetheless, when one analyses the supporting documents without an overly critical eye, the following elements or ingredients clearly emerge: The applicant owned and operated a business called Property World. A series of property transactions were proposed to Mr Redmond and Mr Henderson respectively that were not genuine to the knowledge of the applicant. There were a series of transactions which culminated in the applicant receiving a relevant cheque and converting it to his own personal use (or unrelated business use in one case). Employees of the business were acting on behalf of the applicant in the series of transactions which the applicant knew were not genuine. To satisfy the requirements of the Act it is not necessary for detailed factual evidence, for example concerning the conversations alleged to have occurred between the employees of the applicant and Mr Redmond and Mr Henderson, to be set out. Similarly there is no need here for advertisements and brochures referred to be produced in order to establish the elements or ingredients of the offences alleged. In conclusion, in relation to the dual criminality issue, I find that if the conduct of the applicant constituting each offence alleged in relation to Ireland, or equivalent conduct, had taken place in Western Australia, that conduct or that equivalent conduct would have constituted an extradition offence in relation to Western Australia, being either the offence of stealing, contrary to s 378 of the Criminal Code (WA), or intent to defraud (false pretences), contrary to s 409(1) of the Criminal Code (WA). It follows, in my view, and I find that the documents provided in support of the extradition request, that were relied upon by the magistrate and in this Court on this review application, also constitute a duly authenticated statement in writing setting out the conduct constituting the offences for the purposes of s 19(2)(a) and s 19(3)(c)(ii) of the Act. As a result I determine that the applicant is eligible for surrender within the meaning of subs 19(2) of the Act in relation to extradition offences. I certify that the preceding one hundred and eight (108) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker.

review of magistrate's decision pursuant to section 21(2) of extradition act 1988 (cth) supporting documents constitute a duly authenticated statement in writing setting out the conduct constituting the offence alleged conduct constituted an extradition offence in western australia. extradition

2 The defendant gave the evidence over two days, on 28 February 2006 and 20 March 2006. There are two charges --- one in respect of each day. The defendant knowingly gave misleading evidence on both occasions. 3 Section 155(6A) of the TP Act provides that a person who contravenes s 155(5) is guilty of an offence punishable on conviction by a fine not exceeding 20 penalty units ($2,200) or imprisonment for 12 months. Since there are two contraventions, the total of the maximum penalties is $4,400 or imprisonment for 24 months. 4 Section 163(2) of the TP Act confers jurisdiction on this Court to hear and determine prosecutions for offences against the TP Act. The following account of the objective circumstances is based on that statement. 6 Real estate agents generally compete on price through the level of commission charged. Most real estate agents charge a commission calculated as a percentage of the sale price. During the period of about January 2004 to July 2004, McGregor Real Estate (MRE), a real estate agency which operated in the Blue Mountains area, advertised a flat fee of $4,400 on the sale of real estate effected through it. MRE's advertisements referred to the greater amounts that were being charged by other agents. The defendant was one of a number of real estate agents in the Blue Mountains who attempted to prevent MRE's advertisements of its flat fee from coming to public attention. That conduct, if established, may have constituted one or more contraventions of s 45(2) of the TP Act. 7 The conduct included the removal of the MRE advertisements from The Blue Mountains Gazette (BMG) and the Focus on Property magazine (FOP), both publications in the Blue Mountains area. 8 The defendant was licensee of Century 21 Combined Wentworth Falls office between August 1994 and May 2005. The defendant was also Chairman of the Century 21 Blue Mountains Advisory Council from a date estimated by him to be 1995 until the sale of his Century 21 office in May 2005. The Advisory Council comprised licensees of eight Century 21 offices from Blaxland to Blackheath who met on a regular basis to discuss general advertising and promotions and other matters of interest to Century 21 offices in the Blue Mountains area. 9 The ACCC investigated the alleged anti-competitive conduct. The first charge relates to evidence the defendant gave a member of the ACCC on 28 February 2006. On that date, he denied that the "ripping out" or "tearing out" of the MRE advertisements from the BMG had been coordinated by Century 21 agents and that he was part of it. In truth he was involved in a Century 21 meeting in which consensus had been reached to embark on a campaign, which included the removal of MRE advertisements, and the defendant in fact coordinated and organised for MRE advertisements to be removed from the copies of the BMG that were in Century 21 offices. 10 The second charge relates to three pieces of evidence the defendant gave on 20 March 2006. 12 The defendant was born in North London on 12 February 1944, and is therefore 63 years old. He migrated to Australia in 1967 when he was aged 22. He was an only child and both of his parents are deceased. He was married for 23 years to his first wife and has two children aged 35 and 36 to that union. He also has two grandchildren. 13 The defendant resides with his present wife of two years, and her two children aged 16 and 18 years. According to the Report, it appears that he has close and supportive marriage and familial relationships. 14 The defendant left school at the age of 16 years and subsequently completed a Certificate in Mechanical Engineering in London and a Diploma in Real Estate Management after he settled in New South Wales. He was employed by an automobile company, in managerial positions from 1971 to 1985, and with another similar company from 1985 to 1989. He informed the Service that from 1985 to 1992 he also owned a restaurant, and subsequently, from 1992 to 1993, a coffee shop. 15 From 1993 until 2005, the defendant was the principal, and "for most of the time" licensee, of a real estate agency. (It was during that time that the offences were committed. ) According to the defendant, following that period, from 2005 to 2007, he was the Group Sales Manager/Licensee of another real estate agency. At the present time, he is employed in sales with a real estate agent, working three to four days a week. 16 The defendant informed the Service that during his interviews with the ACCC he had not realised the "gravity of the situation" and had felt overwhelmed and "intimidated" by the "circumstances of the investigation". He told the Service that with the benefit of hindsight, he was remorseful for his actions. 17 According to the Report, the defendant seems to enjoy a stable marriage and family life and is involved in community activities. He has had a varied and lengthy employment and business history and appears to be currently gainfully employed. The Service has assessed the defendant as representing a low risk of re-offending, with the result that he is considered unlikely to benefit from supervision by the Service. However, the list is not exhaustive, and, in particular, a court must consider general deterrence although it is not listed in s 16A(2): see R v Paull (1990) 20 NSWLR 427 at 434C---E; Director of Public Prosecutions (Cth) v El Karhani (1990) 21 NSWLR 370 at 377F---378G. 19 Counsel for the ACCC made submissions in relation to each of the considerations listed in s 16A(2). Counsel for the defendant, while making certain opposing submissions, did not, generally speaking, challenge the ACCC's submissions. 21 The defendant's contraventions were serious. The transcript of his examination shows that at the outset on both 28 February 2006 and 20 March 2006, the Commissioner explained that if the defendant gave evidence to the ACCC which he knew to be false or misleading, he would liable upon conviction to a fine not exceeding $2,200 or imprisonment for 12 months. 22 I doubt very much that the defendant was overwhelmed and intimidated, as has been suggested. He had ample time between the two hearing dates to consider the seriousness of his position, yet on the second hearing day resumed and persisted in the practice of giving evidence that he knew to be misleading. 23 Counsel for the defendant submitted that it had not been made clear to the defendant that his answers, although they might tend to incriminate him, would not be admissible in evidence against him in any criminal proceeding against him other than a proceeding under s 155 itself: see s 155(7) of the TP Act. In substance, the submission is that it is credible that the defendant felt overwhelmed and intimidated, as he claims, because it is likely that he believed that if he answered truthfully his answers might expose him to a criminal prosecution. 24 I think, however, that the more likely explanation is simply that the defendant treated the entire process in a cavalier and offhand manner. 25 I accept a submission by counsel for the ACCC that the conduct of the defendant during the examinations on 28 February 2006 and 20 March 2006 was that of denial and laying of a false trail rather than that of minimisation and evasion: cf Australian Competition and Consumer Commission v GIA Pty Ltd (2002) ATPR 41-902 at 45,419 [19] per Heerey J. On the other hand, a plea of guilty is ordinarily a matter to be taken into account in mitigation; first, because it is usually evidence of some remorse on the part of the offender, and second, on the pragmatic ground that the community is spared the expense of a contested trial. The extent of the mitigation may vary depending on the circumstances of the case. Their Honours went on to say (at 346) that a significant consideration on the issue of the extent to which a plea of guilty is indicative of remorse, acceptance of responsibility and willingness to facilitate the course of justice is whether it was entered at the first available opportunity. 21. Although there appears to be a divergence of opinion in the High Court with respect to a "two stage" approach to sentencing as opposed to an "instinctive synthesis" (as discussed by Kirby J in Cameron v The Queen at 361[ff]) it is submitted that it is permissible for a sentencing judge to identify the measure of discount allowed for a plea of guilty. By consent the first directions hearing was adjourned to 23 May 2007 and again to 27 June 2007, when the Court was informed that the defendant would be pleading guilty. I do not know the reasons for the two adjournments and I treat the defendant as having indicated at the earliest opportunity that he would plead guilty to both charges. 33 Because of this, there will be a discount of 20 percent off the penalties that I would otherwise have imposed. I do not find the defendant's statement of particular assistance. It repeats the questions and answers set out in the particulars to the two charges in the amended summons and elaborates a little on the answers. I do not regard any sentence or order under consideration to have the purpose of specific deterrence of the defendant. I regard the offending conduct as serious. The defendant persisted in giving false evidence to the ACCC in the face of the warnings that were given to him not long before each offence was committed. It will be recalled that the defendant is a 63 year old man with no criminal history. He is not known to suffer from any physical or mental ailment. Counsel for the defendant submitted, and I agree, that the publicity that has already attended the ACCC's investigation and the defendant's prosecution in the fairly small community of the Blue Mountains will itself have had an adverse effect on the defendant. 38 On the hearing a statement by Kerry Bartlett MP, Federal Member for Macquarie, was tendered. Mr Bartlett states that he has known the defendant for over 11 years and that the defendant has been an active member of the Blue Mountains community for nearly 30 years and a local businessman since 1986; that he has been involved in a number of community activities including charity work for Cystic Fibrosis and Multiple Sclerosis; and that in the time he has known him, Mr Bartlett has not had any reason to doubt the defendant's integrity or his business ethics. 39 I was informed by his counsel that the defendant is earning about $600 per week, plus a commission on any sales effected through his efforts. Counsel said that the defendant had earned a commission of about $4000 over the last three months. Counsel also said that there was a redraw facility available on the defendant's mortgage over his family home. 40 The defendant's financial position is relevant to his capacity to pay a fine and therefore to the impact that a fine in any particular sum will have on him (see s 16C of the Crimes Act ). As I indicated earlier, I do not think it likely that the defendant will reoffend. It is most important that persons furnishing information or giving evidence in response to a notice issued by the ACCC under s 155 of the TP Act do so frankly and honestly. It serves the public interest that the ACCC be enabled to carry out its investigations efficiently and effectively. Section 155 of the TP Act is directed to that end. If a person who is required to give evidence under s 155(1)(c) of the TP Act gives false or misleading evidence, not only does this have the immediate effect of obstructing and delaying the particular investigation: it also has the potential to direct the ACCC away from other sources of information and to draw human and financial resources away from its other work. The general public should know that conduct of that kind will be treated seriously by the Court. Since the offence described in s 155(6A) of the TP Act is an offence against a law of the Commonwealth, it is a "federal offence". It follows that upon conviction, the defendant is a "federal offender": also s 16 of the Crimes Act . 45 Part 1B of the Crimes Act contains provisions in relation to the sentencing of federal offenders. Within Div 2 of that Part, s 16A(1) provides that in determining the sentence to be passed or the order to be made in respect of any person for a federal offence, a court must impose a sentence or make an order that is of a severity that is appropriate in all the circumstances of the offence. 46 Section 17A(1) of the Crimes Act provides that a court must not impose a sentence of imprisonment for a federal offence unless, after having considered all other available sentences, the court is satisfied that no other sentence is appropriate. 47 Section 20(1) of the Crimes Act provides that where a person is convicted of a federal offence or federal offences, the court may, if it thinks fit, (a) by order, release the person, without passing sentence on him, upon his giving security, with or without sureties, by recognizance or otherwise, to the satisfaction of the court, that he will comply with certain conditions (that may be described as "good behaviour" conditions) for a period not exceeding five years as specified in the order, or (b) sentence the person to imprisonment but direct that he be released, upon giving security of the kind referred to in (a), either forthwith or after serving a specified period of imprisonment in respect of the offence or offences. 48 Section 20AB(1) of the Crimes Act provides for additional sentencing alternatives. The scheme of the provision is to make certain sentencing alternatives that are available in a "participating State or participating Territory" also available to a court in respect of a person convicted of a federal offence in the relevant state or territory. Relevantly, the expression "participating State" is defined in s 3B(2) of the Crimes Act . New South Wales is a participating State. Section 20AB(4)(a) permits a court to impose a fine in addition to making an order under s 20AB(1). 49 I will not identify all of the additional sentencing alternatives identified in s 20AB(1) of the Crimes Act , although I have considered them all. The defendant is a 63 year old man who has no prior convictions. 52 For two reasons, I do not think he is likely to reoffend. First, it is not often that a person is called upon to give evidence under oath or affirmation before a court or administrative body. Second, I accept that the defendant now appreciates the seriousness of his offence: the consequences that have already flowed from it have brought this home to him. 53 It seems to me that penalties in the nature of fines and community service orders are appropriate. 54 The Crimes (Sentencing Procedure) Act 1999 (NSW) (the NSW Act) provides in s 8 for community service orders. These provisions are elaborated upon in Part 7 of that Act. 55 Section 8(2) of the NSW Act limits the number of hours of community service that a court is empowered to impose for any one offence to 500 hours, or the number of hours limited by the regulations. Clause 22 of the Crimes (Sentencing Procedure ) Regulation 2005 (NSW) relates the maximum number of hours permissible to the maximum term of imprisonment available for the offence. As noted at [3] above, in the present case the latter term is twelve months. Under cl 22 the maximum number of hours of community service is 200 hours when the maximum term of imprisonment is more than six months but does not exceed one year. It follows that for the present two offences the maximum number of hours of community service that can be ordered is 400 hours. The Report states that the present defendant has been assessed as suitable for a community service order, and that if such an order is made, the offender should report to the Service's Katoomba District Office within seven days. Section 86(5) states that if a court makes a community service order, the offender must, as soon as practicable, sign an undertaking to comply with the offender's obligations under the order. The defendant has in fact signed such an undertaking. 58 The culpability associated with the second offence is somewhat greater than that associated with the first because the defendant had had the opportunity over a period of some three weeks to reflect on his having offended on the first day, yet he resumed and persisted in the practice on the second day. In my view they are. I take into account the fact in favour of the defendant that the two offences were part of a single course of conduct, and against him, that he deliberately repeated his offence on an occasion separated by three weeks from the first and the associated opportunity for reflection. (4) If a person is convicted of 2 or more offences referred to in subsection (3), the court may impose one penalty in respect of both or all of those offences, but that penalty shall not exceed the sum of the maximum penalties that could be imposed if a separate penalty were imposed in respect of each offence. The fine will be payable within three months. He will also be ordered to perform 200 hours of community service, for which purpose he will be required to report to the Katoomba District Office of the New South Wales Probation and Parole Service within seven days. 62 Pursuant to s 20AB(2) of the Crimes Act , I add the following observations in relation to the defendant's obligations under the community service order. The defendant will be handed a copy of Pt 5 of the Crimes (Administration of Sentences) Act 1999 (NSW) and Ch 5 of the Crimes (Administration of Sentences) Regulation 2001 (NSW). The defendant should understand that s 20AC of the Crimes Act provides that if he fails, without reasonable cause or excuse to comply with the sentence, or obligations imposed by the sentence, the Court may impose a pecuniary penalty on him, or revoke the sentence or order and deal with him in any manner in which he could have been dealt with for the offence for which sentence is now passed. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

defendant charged with having knowingly given misleading evidence before member of australian competition and consumer commission in contravention of s 155(5)(b) of trade practices act 1974 (cth) plea of guilty considerations relevant to penalty. held : defendant fined $2,160 and ordered to perform 200 hours of community service. trade practices

The trustee is a company and was appointed as the trustee of a trust known as the Gumala Foundation Trust, which was established pursuant to a trust deed made in 1997. The trustee has no purpose other than to act as the trustee of the trust. The trust has charitable status. 2 The trust deed was entered into in accordance with the provisions of the Yandi Land Use Agreement (the land use agreement). Pursuant to the land use agreement, certain members of the Hamersley Iron Group of Companies agreed to place substantial funds on trust for the beneficiaries of the trust in accordance with the trust deed. The evidence is that the trustee holds approximately $20 million at this time. The trust is established for the benefit of the Gumala people who are comprised of the following three language groups - the Bunjima people, the Niapiali people and the Innawonga people. The trust is intended to benefit the traditional owners who are referred to loosely in this judgment as "the trust beneficiaries". 3 The second respondent, is an association, and a body corporate incorporated pursuant to Pt 4 of the Aboriginal Councils and Associations Act 1976 (Cth) (the ACAA). The members of the second respondent are, to a large extent, the same people as comprise the trust beneficiaries, but there is some variation in the composition of both groups. The second respondent is a party to the trust deed, and accepted appointment as the manager thereunder. I will refer, henceforth, to the second respondent as "the manager". The manager is also the registered holder of the single share in the trustee. 4 The second applicant is a beneficiary of the trust as well as being a member of the manager. 5 The first respondents are members of the governing committee of the manager. 6 The manager's role under the trust deed is to consult the traditional owners, to develop proposals for the trustee to consider and to assist in the implementation of the proposals as required by the trustee. The manager is to act under the direction, supervision and control of the trustee. 7 Among the trustee's duties are the duties to act consistently with the objects of the trust, to consult with the traditional owners in a liaison committee, to determine the membership of, and maintain the register of the traditional owners, and to assist the manager to gain experience in management. The trustee is also to fund the manager appropriately. 8 The primary benefits to be provided by the trust are the funding and implementation of community projects; and not by way of significant distribution of cash to the trust beneficiaries. 9 The trust deed has provisions dealing with general meetings of the trust beneficiaries, and the passing of special resolutions at general meetings. The provisions dealing with special resolutions include a process whereby a special resolution can only be passed where it is passed by 75% of each of the three language groups of people. Clause 26 deals with variations to the trust deed. It provides that the terms of the trust deed may be varied only with the consent of the manager and the trustee and by special resolution of the trust beneficiaries. 10 Clause 27 deals extensively with the procedures for the removal of the trustee. At the expiration of the Minimum Term or within 90 days thereafter the General Meeting may by Special Resolution remove the Trustee and appoint a new Trustee selected by the Appointing Committee in its place in which case the new Trustee will be appointed for the Minimum Term. The encumbent Trustee will continue in the office of the Trustee until so removed. The Trustee will be entitled to attend the General Meeting and must be given reasonable opportunity to address the General Meeting before the resolution is moved. In the event that the Trustee does not remedy such breach within 60 days of receipt of such notice then the Manager may, with the sanction of the General Meeting, remove the Trustee in which case the Appointing Committee will as soon as practicable appoint a new Trustee for the Minimum Term commencing on the date of appointment. 12 The trust deed and the constitution of the trustee each require that half of the board of the trustee - that is, three out of the six directors - are to be independent of the traditional owners. The other three directors of the trustee must be independent of the manager, that is, they must not be on the governing committee of the manager, or be involved in the day-to-day management of the manager. 13 The trust deed also provides that if the trustee does not have the requisite degree of independence, the only alternative entity eligible for the appointment is a professional trustee company, such as Perpetual Trustees Limited. 14 Independence of the trustee and its supervisory role in relation to the manager is a fundamental tenet of the trust deed. 6.3 The Trustee has the ultimate decision making power in all matters relating to the Foundation. He gave evidence on affidavit. He said that in or about August 2006, three members of the Niapiali people signed a document called a notice of intent, to the effect that the Niapiali people intended to move a motion that the trustee be removed at the next annual general meeting of the trust. That document was faxed to the trustee. On 14 October 2006, the manager held its annual general meeting. Mr Softly said that from what people were saying he believed most of them wanted the directors of the trustee to resign. However, no resolution was proposed calling upon the directors of the trustee to resign, nor calling for the removal of the first applicant as trustee, nor supporting the winding-up of the first applicant. 16 By letter dated 21 November 2006, the trustee raised with the manager its concerns about various issues in connection with the manager's performance of its duties under the trust deed. The concerns related to the manner in which financial controls were exercised, and to the lack of proposals for projects being put forward by the manager. 17 Mr Softly says he obtained legal advice in November 2006 on how to remove the directors of the first applicant, or the first applicant as trustee. No resolution for the removal of the trustee was moved by the three members of the Niapiali people who signed the notice of intent, nor by anybody else. 19 In February 2007 Mr Softly says that acting at the direction of the first respondents, he requested the manager's solicitor to travel from Perth to Tom Price to address the first respondents on the question of removing the trustee. 20 On 23 February 2007 the solicitor provided the first respondents with a memorandum of written advice. That advice identified a stratagem to eliminate any scrutiny of the manager by an independent trustee. The stratagem comprised the following steps: first, use the power of the manager as sole shareholder of the trustee to vote to wind-up the trustee, then remove the trustee in liquidation at a general meeting, and install a new trustee company with sympathetic directors who would agree to vary the trust so as to eliminate the requirement for an independent trustee, and then install the manager as the trustee. 21 In early March 2007 the trustee sent the first respondents a letter dated 1 March 2007 which again expressed criticism of the manager's performance of its duties under the trust. These concerns again included the lack of proposals for projects being put forward by the manager and the concerns regarding the exercise of financial controls. 22 The first respondents held a meeting on 9 March 2007. Mr Softly invited the same solicitor who had given the advice referred to above, to attend the meeting. At the meeting the first respondents passed a resolution to requisition a meeting of the trustee for the purposes of winding it up. Further, they decided to respond to the letter of 1 March 2007 from the trustee by writing a letter requesting further particulars. 23 By letter dated 13 March 2007 the manager requested particulars of the trustee's letter of 1 March 2007. By letter dated 14 March 2007 the chief executive officer of the manager called upon the trustee, under section 249D(1) of the Corporations Act 2001 (Cth) (the Corporations Act ), to convene an extraordinary general meeting of the trustee for the purpose of considering, and if thought fit, passing a motion resolving to voluntarily wind-up the trustee. By letter dated 8 April 2007 the trustee supplied the particulars which had been requested by the first respondents. 24 On 11 April 2007 the manager's solicitors wrote to the trustee's solicitors. In that letter, the solicitors stated that the manager declined to accept an invitation from the trustee to mediate the issues raised in the trustee's letter of 1 March 2007. The solicitors' letter also stated that the manager would nominate a date for the meeting at which the resolution would be moved to wind-up the trustee, because it had received no response from the trustee. The letter also alleged that the trustee was in breach of its obligations under the trust deed. The breaches alleged were that the trustee had not sufficiently resourced the manager to enable it effectively and efficiently to perform its functions, or properly funded it to operate the manager's office. It also alleged that the trustee had failed to pay seven invoices submitted by the manager for approved projects and for funding the manager's office. The letter attached the invoices, and called upon the trustee to pay the invoices immediately. It also alleged that the trustee had allowed the foundation's charitable status to elapse. 25 On 15 May 2007 a meeting of the beneficiaries of the trust were held. The status of this meeting is challenged by the witnesses, including by Mr Lethbridge, one of the respondents' witnesses. However, there is evidence that at that meeting an attempt to halt the winding-up process failed. 26 The general meeting of the trustee, at which the winding-up resolution was to be considered, was due to be held on 21 May 2007. The interim injunction was granted after business hours on Friday, 18 May 2007. The three bases are: firstly, that the first respondents acted for an improper purpose in resolving to requisition a meeting of the trustee for the purpose of winding it up so as to avoid the independent trustee's scrutiny; secondly, that such an action would be in breach of the manager's fiduciary duty, and thirdly, such an action would be a breach of the manager's duties under the trust deed. Section 49C of the ACAA requires the members of the governing committee of a corporation incorporated under that Act to act honestly and diligently in the exercise of their powers. 29 Accordingly, I accept that there is a triable issue that the first respondents are under a duty to act bona fide in the interests of the manager as a whole, and that there is a fundamental duty on them to exercise their powers bona fide for the purpose for which they are conferred. Whether the first respondents acted bona fide, or not, is to be gathered from an examination of all the circumstances ( Whitehouse v Carlton Hotel Pty Ltd [1987] HCA 11 ; (1987) 162 CLR 285 at 301). 30 I now deal with the evidence in relation to the question of whether there was a triable issue that the first respondents have acted for an improper purpose, namely, seeking to avoid scrutiny of their actions by an independent trustee. As to the evidence, I note that some of the first respondents have deposed on affidavit that they deny that they acted for an improper purpose alleged by the applicants. Each of those means would have provided the trustee with an opportunity to oppose the proposed action and to defend itself. (7) The fact that by the date of the hearing of the application for the interim injunction, which was after the close of business on the last business day before the proposed meeting of the trustee, there had been no substantive response by the first respondents to concerns expressed in the trustee's letter of 1 March 2007 and the trustee's further letter supplying particulars. In this regard, I note that Mrs Parker has in her affidavit denied that she said words to that effect. 33 The meeting of 15 May 2007 was not a general meeting of the manager, and the status of that meeting is not clear on the evidence. In any event, the evidence does not reveal that the trust beneficiaries were appraised prior to the meeting of the criticisms made of the first respondents in the trustee's letter of 1 March 2007, nor of the overall stratagem of the first respondents to eliminate independent scrutiny through the abolition of the office of an independent trustee. 34 Accordingly, in my view, the evidence demonstrates that there is a serious question to be tried as to whether the officers of the first respondents acted for an improper purpose in exercising their powers to requisition the meeting. I accept the submission of senior counsel for the applicants that by reason of the nature of its obligations under the trust deed, there is a serious question to be tried that the manager has a fiduciary duty towards the beneficiaries of the trust. This arises from the fact that the trust deed requires the manager to act for and in the interests of the trust beneficiaries in order to give full effect to the terms of the trust. 36 I also accept that there is a serious issue to be tried that, as a consequence of the arguable fiduciary relationship already referred to, the manager does not have unfettered property rights in the share in the trustee of which it is the registered holder and that it may not exercise those rights to prefer its own interests, and to act in a manner inconsistent with its fiduciary obligations. 37 I, therefore, find there is a serious question to be tried that in exercising its voting powers in support of a motion for the voluntary winding-up of the trustee, the manager would be acting in breach of its fiduciary duty. I accept the submission of the applicants set out in paras 3.19, 3.20, 3.21 and 8 of their submissions, that there is a triable issue, the managers is under an implied obligation under the trust deed not to move for the voluntary winding-up of the trustee for the purposes of triggering an insolvency event, and thereby prevent the trustee from exercising its function as an independent entity responsible for performing for the trust in accordance with the trust deed and as contemplated by the land use agreement. It would be likely, say the respondents, that the liquidator would pay some of the outstanding invoices issued by the manager which were not the subject of dispute, and would investigate the disputes in relation to the other invoices. Also it was said that the liquidator would develop a new investment policy and invest the funds of the trust more profitably. 40 In my view, the balance of convenience favours the retention of the injunction. Firstly, if the meeting of the trustee is held it is inevitable that the manager, acting through the first respondents, would vote in favour of the resolution to wind-up the trustee, with the consequence that a liquidator would be appointed. 41 Secondly, it is inevitable that if a liquidator is appointed it would be necessary for the liquidator to become familiar with the affairs of the trustee and the trust. The liquidator would have to engage in a considerable amount of investigative work. The liquidator has agreed to act on the basis that it is the trustee that will be responsible for her costs. Thus, there would be an incurring of costs which may prove unnecessary in the event that the applicants were ultimately to succeed at trial. 42 Thirdly, there is a serious issue as to whether, in light of this proceeding, which in effect challenges the validity of the liquidator's appointment, the liquidator would on appointment engage in any activity because of the risk that her actions, if this application were to succeed, would be regarded as invalid. In this case, the liquidator would be appointed with notice of this proceeding which challenges the validity of her appointment (s 505(1) of the Corporations Act ). There is a further unsatisfactory element because the liquidator, if appointed, would have to consider whether to continue a proceeding which challenges the validity of her appointment. It may well be that the Court would then have to appoint a different person to decide whether to continue this proceeding because of the first liquidator's conflict, with attendant further expense to the trustee. 43 Fourthly, it is also possible that whilst the matter is awaiting trial, the general meeting of the trust would be held whereby the first applicant in liquidation, would be removed as trustee and replaced by a replacement trustee. The consequence may be that by the time the matter came to trial, the first applicant may have been deregistered and would have to be reinstated. Again, this would involve additional costs which would ultimately have to be borne by the trust beneficiaries. 44 In my view, the second respondent would not be unduly disadvantaged by the continuance of the injunction, because it would always be open to it to commence any action in the courts in order to enforce any payment of the invoices which it claims that the trustee in breach of its duty is refusing to pay. They rely particularly upon the case of Town and Country Sports Resort v Partnership Pacific (1998) 20 FCR 540 and Walter Rau Neusser Oel Und Fett v Cross Pacific Trading Ltd [2005] FCA 955. 46 For the non-disclosure to be a material non-disclosure in the relevant sense, the non-disclosed information or evidence would have to be such that it could possibly have led to a finding that there was no serious issue to be tried in respect of this question. This is illustrated by each of the Town and Country and Rau cases where the non-disclosure at the ex parte hearing led to a very different position emerging at the contested hearing. 47 The question of whether there was a material non-disclosure will vary from case to case and will be assessed by reference to the matters in issue at the hearing for the ex parte relief. The question that was in issue in this case was whether there was a serious question to be tried, that in resolving, as they did, the first respondents acted for an improper purpose, namely, to avoid having to account to the trustee, particularly in respect of the alleged criticisms of their performance identified in the trustee's letter of 1 March 2007. 48 In the context of this case, in light of the nature of the evidence relied upon by the applicants to which I have referred above, for the non-disclosure to have been material in the relevant sense, the non-disclosed evidence or material would have to be of a kind which showed that following full disclosure by the first respondents of the criticisms in the 1 March 2007 letter and of their stratagem of using liquidation as the first step to varying the trust deed so as to eliminate the scrutiny of an independent trustee, a fully informed general meeting of the manager unequivocally approved of the proposals to wind-up the trustee and to implement the stratagem proposed by the first respondents. 49 None of the matters referred to in paras 13(a), (b), (c), (d), (e), (h), (i) or (j) of the respondents' submissions are matters comprising evidence of the nature referred to in the preceding paragraph. There was no evidence that the first respondents had ever disclosed to a general meeting of the members of the manager either the trustee's breach letter or its ultimate stratagem. Nor was there evidence of the members of the manager in general meeting, whether fully informed or not, demonstrating unequivocal approval of the first respondents' proposals to wind-up the first applicant and their ultimate stratagem of eliminating the scrutiny of a an independent trustee. 50 There is also duty upon an applicant in an ex parte application, to refer to the case which it is anticipated would be made by the absent party. In my view, it is not reasonable to have expected the applicants to have put forward at the ex parte hearing a case for the respondents founded on the disparate matters referred to in the nominated subparagraphs of para 13 of the respondents' submissions, none of which either individually or collectively demonstrate evidence in support of a case which could possibly have caused the Court to come to a view that there was no question to be tried as to whether the first respondents had acted for the impugned purpose. 51 As already mentioned, matters referred to in the respondents' submissions do not go to demonstrating an informed consent or approval by an unequivocal majority of the manager's members in a duly constituted general meeting for the voluntary winding up of the trustee or the implementation of the first respondents' stratagem. Nor do those matters provide any grounds upon which the first respondents could legitimately believe that the members in general meeting had given a fully informed consent to the adoption of the stratagem which involved, as its first step, the winding-up of the trustee. 52 In any event, the affidavit of Mr Won Bon, which was before the Court at the ex parte hearing, refers to and exhibits, the solicitors' letter written on 11 April 2007 which alleges that the trustee had committed breaches of the trust deed. This letter referred specifically to the outstanding invoices - which are characterised amongst the non-disclosed matters by the respondents in their submissions. Secondly, the affidavit also referred at some length to a meeting held on 15 May 2007, not of the members of the manager, but of the general beneficiaries of the trust. As already mentioned, the status and significance of this meeting appears to be the subject of conjecture and disagreement by witnesses, but in any event, there was before the Court evidence that an attempt to pass a resolution seeking to halt the proceedings at that meeting failed. It is also said that the Court was not directed to the solicitors' letter of 11 April 2007 which alleged the breaches by the trustee. In my view, the fact that there was no express reference by senior counsel in his address to these matters did not amount to material non-disclosure. 54 Even if there had been express reference to these matters, there is no possibility that the Court would have come to a decision that there was no serious question to be tried in relation to which a purpose for which the first respondents acted in requisitioning the meeting. This is because, regardless of when the breach letter of 1 March 2007 was delivered, it is common cause that the letter was delivered prior to 9 March 2007, the date of the first respondents' meeting at which the resolution was passed. 55 As to the letter of 11 April 2007 alleging breaches by the trustee, the relevance of that letter is diminished by the fact that the resolution passed on 9 March 2007 by the first respondents was for the voluntary winding-up of the trustee. It was not a resolution for the initiation of a process for the removal of the trustee under cl 27.8 of the trust deed, premised on any allegation of breach of the trust deed. Further, the letter of 11 April 2007 was written more than a month after the first respondents had resolved to requisition the meeting with the trustee for the purpose of winding it up. However, the letter is further evidence of the fact implicit in their resolution of 9 March 2007, namely, that the first respondents were very unhappy with the trustee. 56 It was also said that there was no reference to the meeting of 15 May 2007 and that an attempt to halt the winding-up process had failed. That meeting was mentioned by counsel at the ex parte hearing. However, in any event, in light of the fact that the meeting was not, as I have previously said, a meeting of members of the manager held after full disclosure, and also, because of its indeterminate status, this evidence could never trump all the other evidence giving rise to inferences as to the first respondents' purpose, so as to result in a finding that there was no serious question to be tried. It is quite possible for misrepresentations to occur innocently. An example occurred at the hearing where counsel for the respondents innocently misstated the evidence in relation to the source of the funding of the proposed liquidation. It had no consequence because it was corrected by senior counsel for the applicants. In assessing whether there has been a misrepresentation of a case such as would constitute a material non-disclosure, the circumstances in which it is made, the seriousness of the misrepresentation and its consequence, must be taken into account. 58 In my view, the alleged misstatements by senior counsel for the applicants at the ex parte hearing, referred to in the respondents' submissions, were either statements or submissions based fairly on the evidence, or in the case of the statement referred to in para 14(j) of the submissions, an innocent and inconsequential overstatement. 59 The position in this case is clearly distinguishable from the position in Rau where the misstatements which occurred at the ex parte hearing went to the very heart of the case which was founded upon the serious allegation of fraud. In Rau the information which emerged at the contested hearing revealed that the material had been presented to Allsop J at the ex parte hearing, in a misleading and oblique manner, so as to obscure the true factual position relating to a material matter. In this case, however, the evidence at the hearing, particularly of the advice by the manager's solicitors prior to the meeting of 9 March 2007, has strengthened, rather than undermined, the case presented at the ex parte hearing in support of the contention that there is a serious question to be tried. Senior counsel for the applicants sought to explain the delay by reference to the fact that the applicants were hoping that there might be a resolution of the issue at the meeting on 15 May 2007. I also take into account the fact that notice of the ex parte hearing was given to the solicitors for the respondents but they advised that they did not have instructions to accept service. In my view, the delay factor does not warrant setting aside the injunction because the respondents have not demonstrated any prejudice by reason of the delay. 61 For the reasons which I have set out above, I, accordingly, extend the injunction until further order. I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.

duties of members of governing committee of association incorporated under the aboriginal councils and associations act 1976 (cth) whether serious issue to be tried that members of governing committee acted for an improper purpose whether the manager of the trust breached its fiduciary duties to the beneficiaries injunction

The Tribunal had affirmed a decision of a delegate of the Minister for Immigration & Multicultural Affairs made on 10 May 2005 to refuse to grant a protection visa to the appellant. Only the first appellant (who I will refer to as the appellant) has made specific claims under the Convention, with the second appellant relying on her membership of the appellant's family. Before the Tribunal, the appellant claimed to have been a member of an Underground Christian Church on a small island in China. His claims involved him distributing propaganda materials and being the leader and organiser of the bible study group in his village. His bible group was claimed to be part of the Underground Church, with propaganda materials and special lectures given by a named businessman and a priest. 3 In late November 2002, the appellant claimed that the named businessman's restaurant was surrounded by police, with staff, the businessman and the appellant being arrested. Consequently, the businessman's property was confiscated and the appellant was detained for three weeks. The appellant's claims also asserted that the appellant organised other bible groups in five villages on the island and that the island was investigated by the Public Security Bureau and the Religious Affairs Office. The Tribunal noted that if the appellant had participated in the religious activities as he had claimed, he would have been able to demonstrate significantly more knowledge of Christianity, but the appellant lacked details as to the claimed religion. The Tribunal did not accept the appellant had the capacity to lead bible study groups. The Tribunal was not satisfied the appellant was a Christian convert or a practising Christian in China. As the Tribunal found the appellant was not a witness of truth it rejected all of his claims. 5 Furthermore, the Tribunal found that the appellant did not have an imputed adverse political or religious opinion. The Tribunal was not satisfied the appellant had a well-founded fear of persecution for a Convention reason and dismissed the application. Firstly, the appellant claimed that there was a constructive failure to exercise jurisdiction where the Tribunal made unreasonable credibility findings. The appellant claimed that the assessment of his credit was tainted by the selective focus on the appellant's claims about being a leader and failed to give weight to the appellant's evidence. The Federal Magistrate found that this claim sought merits review as credibility findings were findings of fact. Secondly, the appellant asserted the existence of apprehended bias. His Honour noted that an allegation of bias must not be lightly made and concluded that he could found no evidence of actual or apprehended bias. Thirdly, the appellant claimed that the Tribunal denied him procedural fairness and natural justice as the appellant's answers were interrupted and the Tribunal unreasonably insisted the appellant's answers be kept short. His Honour found there was no evidence of procedural unfairness. 7 The Federal Magistrate was mindful the appellant was not legally represented, however on his Honour's careful reading of the Tribunal decision he was unable to discern any arguable case. His Honour found no jurisdictional error and dismissed the application. 8 In his oral submissions, the appellant also claimed that his and the second appellant's passports had been lost by the Department of Immigration and Multicultural Affairs. The Federal Magistrate was concerned by this assertion, and noted that although it would not affect the finding that there was no jurisdictional error, his Honour recommended inquiries needed to be made by the Minister into the matter. The learned Federal Magistrate erred in law. The learned Federal Magistrate was wrong in finding that the Refugee Review Tribunal acted properly in its findings. I can find no error in his Honour's reasoning or conclusion. 11 His Honour was clearly correct to say that findings of credit are matters for the Tribunal: Re Minister for Immigration & Multicultural Affairs; Ex parte Durairajasingham [2000] HCA 1 ; (2000) 74 ALJR 405 at 417. Findings of fact based on an assessment of credit that is itself open on the material or has some rational basis are not reviewable by the court: Kopalapillai v Minister for Immigration & Multicultural Affairs (1998) 86 FCR 547 at 558-9. 12 In this case, the Tribunal's finding that the appellant was not a credible witness was based on the Tribunal's assessment that the appellant did not appear to know the contents of the materials he claimed to have distributed and his knowledge of the practice and principles of Christianity was not consistent with his claim to have been the founder of bible study groups and to have risked his life in an underground church. These were rational bases for the Tribunal's findings. In this case the Tribunal simply did not believe the appellant, and on this basis rejected all his claims. In the circumstances of this case, this was a permissible approach. Accordingly, there was no jurisdictional error in the Tribunal's decision and his Honour was correct to dismiss the application. 13 In relation to the question of bias and procedural fairness, I agree with his Honour's view that there is no evidence in support of any such allegations. 14 The appellant raised before me the issue that because he could not remember a fourth Bible story, the Tribunal found against him on that basis. The appellant further contended that he was nervous and this affected his memory and his giving of evidence. He replied that immediately before 'Jesus was crucified', his disciples attempted to persuade him to flee. Jesus had replied that 'if he did not suffer who will do it? ' The second bible story the applicant referred to was about the 'loaves and fishes' when Christ had fed '5,000' people who had attended to hear him speak. The third bible story the applicant referred to was that 'Paul look for father and father no longer worried' (when asked, the applicant confirmed this was what he had stated). I stated words to the effect that I understood that it was difficult for many applicants to appear before the Tribunal but that based on the evidence he had thus far provided, I may not accept that he was either the leader of an underground Christian group as he claimed, or that he was even a Christian. I put to him that he had prepared his Protection Visa application with the assistance of a migration agent, and extensive written claims had been provided by him, or on his behalf, to the Department and to the Tribunal. I then put to him that I was obliged to consider any information/evidence/claims he provided to the Tribunal prior to the decision being handed down but that I was not requesting any information/evidence/claims from him. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton.

appeal from a decision of a federal magistrate to dismiss an application for review of a refugee review tribunal decision whether approach of tribunal in assessing credibility of the appellant involved an error of law whether denial of procedural fairness migration

The proposed appeal is from a judgment of Lander J made on 4 September 2006. The application for leave is dated 31 January 2007. Accordingly, the applicant is in delay in a period of a little more than four months. The application is supported by an affidavit sworn by the applicant on 31 January 2007. The applicant deposes that she has been, and is still acting in person, has no legal training, qualification or skills and is unable to afford the cost of instructing solicitors and a barrister to act for her in relation to the appeal. The explanation for the lengthy delay is that she was engaged in seeking to resolve the issue of costs ordered against her in her unsuccessful appeal before Lander J. She states that the respondent's solicitor wrote to her by letter dated 1 November 2006 asking her to pay the costs and in respect of which she sought advice from a barrister regarding the amount of such costs. She then deposes that she received a letter from this Court dated 24 November 2006 informing her about the amount of costs to be allowed, as to which she sought and obtained advice. As a result of the advice given to her she decided not to seek review of the amount of costs awarded. Beyond that there is no further explanation for the delay. 2 Her affidavit contains a draft Notice of Appeal to which I refer in detail later in these reasons. 3 The application is opposed by the respondent and supported by an affidavit sworn by Fiona Anne Humphries on 16 February 2007. She failed to lodge by the required dates income tax returns for the tax years ending 30 June 1999-2003, inclusive. This resulted in the respondent making a determination under s 298-20 of Schedule 1 of the Taxation Administration Act 1953 (Cth) (the Act) that a penalty amount of $550 for each of the 2001 and 2003 income years ("the income years") be imposed on the applicant for failing to lodge income tax returns for the income years on time. The total penalty of $1,100 was payable by 29 December 2004. On 23 December 2004 the applicant wrote to the respondent requesting remission of the penalties. On 24 February 2005 the respondent advised the applicant of its decision not to remit the penalty amount on the basis that the applicant had still not lodged the income tax returns for the income years ("the penalty decision"). The respondent then gave the applicant until 27 June 2005 to lodge the returns. However, they were not lodged by that date and on 28 June 2005 the respondent disallowed the applicant's objection against the penalty decision. Following a hearing on 18 January 2006 the Tribunal, on 13 February 2006, affirmed the penalty remission decision. The Tribunal, having considered the applicant's evidence, concluded that the decision of the respondent was justified and that the applicant had not advanced any grounds which would justify any remission of the penalties imposed by the respondent. 8 The appeal was heard before Lander J in this Court on 4 September 2006 and his Honour handed down an ex tempore judgment by which he dismissed the appeal and ordered that the applicant pay the respondent's costs to be taxed. Evidence that were (sic) not relevant. (b) The Tribunal erred and mislead (sic) by information/evidence provided by the Respondent. (e) There was no tax payable by the Applicant for years 2001 & 2003. As his Honour had earlier correctly stated, an appeal to this Court lies only on a question of law under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). [1]. However it concerned an allegation by Mrs Tey that certain documents which were before the Tribunal did not find themselves before his Honour below. 13 It is not apparent whether this was a ground raised before his Honour Justice Lander. Consideration of his reasons would suggest that it was not. However I am prepared to assume, for present purposes, that it was raised before his Honour below, because the grounds before his Honour were so broadly stated. In any event, no objection was taken to this new ground by counsel for the respondent. 14 The applicant filed a further affidavit sworn 20 March 2007 in support of this new ground. It raised the question of a brochure which as was later explained to me, was an Australian Taxation Office TAXPACK 2001 ("TAXPACK 2001"). It had formed part of the material in respect of which she gave evidence before the AAT on 18 January 2006. She deposed that she had returned this to Mr Maloney, an officer employed within the Australian Taxation Office ("ATO"). He had cross-examined Mrs Tey in the Tribunal and in particular concerning the TAXPACK 2001. The applicant says she did not keep a copy of the TAXPACK 2001 and despite her best efforts she has not been able to obtain another copy having, she said, approached both the ATO and the State Library without success. 15 On 11 April 2007 I adjourned the motion to 9 May in order to enable the applicant to make further enquiries in order to obtain a copy of the TAXPACK 2001, to which she had referred in her affidavit. 16 The respondent filed a further affidavit sworn by Fiona Ann Humphries on 1 May 2007. It is to the following effect. Ms Humphries is a solicitor employed in the Perth office of the Australian Government Solicitor ("AGS") and has the care and conduct of this matter on behalf of the respondent. She deposes to correspondence concerning the applicant's attempts to obtain the brochure to which I have referred. On 12 April 2007 the applicant wrote to the AGS requesting the original of TAXPACK 2001 which, according to the applicant, was the only "brochure" in her possession at the time of the entire hearing on 18 January 2006 before the Tribunal. She stated that to the best of her memory the TAXPACK 2001 was packaged with additional extra pages on top of it. The applicant's request was forwarded to Mr Frank Maloney on 13 April 2007. Mr Maloney forwarded to Ms Humphries by letter dated 23 April 2007 a computer print-out of the TAXPACK 2001. Mr Maloney advised that this was clearly the Tax Pack that the applicant was shown in Tribunal. On 24 April 2007 Ms Humphries contacted the applicant by telephone to advise her that the AGS had received this TAXPACK 2001 from Mr Maloney and advised her that, contrary to the claim in her letter dated 12 April 2007, there were no additional pages on top of the TAXPACK 2001. She advised the applicant that this copy of the TAXPACK 2001 was available for her collection and that an original of the TAXPACK 2001 which was shown to her during the Tribunal proceedings would be available for her inspection at the AGS's offices. The applicant replied that this was not the correct version of the TAXPACK 2001 and requested that she be supplied with the correct version with the extra pages. She also advised that she would not collect the TAXPACK 2001 from the AGS's offices. On 26 April 2007 Ms Humphries sent the computer print-out of the TAXPACK 2001 to the applicant under cover of a letter. 17 The matter came on before me again on 9 May 2007 at which time I gave consideration to further affidavits filed and served by the applicant. The first, sworn by the applicant on 7 May 2007, duplicates some of the correspondence contained in the affidavit of Ms Humphries sworn 1 May 2007. In addition it contains correspondence from the applicant addressed to the AGS being a letter dated 23 April 2007 and two letters dated 27 April 2007. The substance of these letters is to raise matters concerning the TAXPACK 2001 and her communications in relation to it with Ms Humphries. The correspondence provides no assistance to the resolution of the matter before me. Her affidavit also sets out under [6] in response to para 6 of the affidavit of Ms Humphries sworn 1 May 2007 her version of the relevant part of the conversation which she had with Ms Humphries on 24 April 2007, explaining in effect why she did not attend at Ms Humphries office to collect a copy of the TAXPACK 2001. 18 I have also considered an affidavit filed by the applicant and sworn by Claire J Hielkeme sworn 3 May 2007. Ms Hielkeme is a certified practising accountant and deposes that in the course of her "doing Tax Help at the Citizens Advice Bureau in Fremantle she became aware of the 2001 TAXPACK". She deposes that additional literature was supplied with that pack and annexes a copy document headed "Update TAXPACK 2001 --- A Message from the Commissioner of Taxation". This indeed contains a message from the Commissioner of Taxation advising as to important tax changes which were announced in the 2001 Federal Budget affecting senior Australians, Commonwealth taxable pension, allowance or payment recipients and former prisoners of war and their spouses. The message advised that if any person was affected by these changes and needed to complete a tax return then they should use TAXPACK 2001 with the "Update" as a result of which they would be covered by the Commissioner's TAXPACK 2001 guarantee and that they could be assured of receiving the benefits to which they are entitled. The applicant, in the course of her submissions, did not explain why this document is relevant nor is it obvious from reading it as to why it is relevant to any possible error of law made by the Tribunal or any appealable error made by his Honour Justice Lander. 19 During the course of the hearing I received into evidence an actual copy of the TAXPACK 2001. The applicant having considered this document acknowledged that she had been shown this during the Tribunal hearing and also at the offices of the respondent in Northbridge Perth shortly after the first directions hearing in this matter. She maintained before me, however, that there were additional pages accompanying the TAXPACK 2001 which were not put before Lander J. 20 Ms Humphries affidavit sworn 1 May 2007 [5] encloses a letter to her from Mr Frank Maloney who questioned the applicant in the course of the Tribunal hearing. In the letter to Ms Humphries from him dated 23 April 2007 he attached a copy of the TAXPACK 2001 which he said had been referred to the applicant in her cross-examination in the Tribunal and which was the subject of evidence at pp 104-105 of the transcript from the Tribunal hearing forming part of the appeal papers before Lander J. He stated that this was the TAXPACK that Mrs Tey was shown. It is a copy of the original TAXPACK 2001 which I received into evidence. I would like to refer to something on page 2. Can you turn to page 2, firstly, of the 2001 TAXPACK? You need to lodge if any of the following applied to you. You carried on a business. MR MALONEY: So you carried on a business, didn't you? MRS TEY: Yes, I carried --- which --- which --- which --- who do you refer to "carry on the business"? You carried on a business. MRS TEY: Yes. MR MALONEY: And in the 2003 TAXPACK, on page 2 as well. The same things are highlighted. You need to lodge if any of the following apply to you? MR MALONEY: So you did carry on a business. Is that right? In both of those years? MRS TEY: Yes. In a way. But the business in 2001 was --- it was closed. There was --- on --- in May 2001 the Travel Compensation Fund actually terminated Skyline Travel Service. MR MALONEY: But during the year ended 30 June 2001, you did carry on a business? MRS TEY: Yes. These are dealt with relevantly at pp 114 and 115 of the transcript. It is evident from a consideration of those pages that when, in effect, Member Sweidan reiterated the questions which Mr Maloney had put to the applicant these culminated once more in her acknowledging that she had carried on a business during, relevantly, the year ended June 2001. The relevant page (p 2) from the TAXPACK 2001 which was put to the applicant was admitted into evidence as Exhibit R3 and this was before his Honour Lander J in the appeal papers before him at p 90. Importantly, nowhere in the transcript can I discern that any other pages were put to the applicant. 23 Nonetheless I invited the applicant to advise me as to what was the substance of the content of the "missing pages" to which she persistently referred and in what way this was relevant to her application for an extension of time. She informed me that the substance was to be found in the third paragraph of a letter dated 12 April 2007 from her addressed to the respondent and copied to my associate. To the best of my memory, the TAXPACK2001 was packaged with additional extra pages on top of it. It appears that these were extra information to the tax payer 'Do you have to lodge a tax return' before opening up a page of the TAXPACK 2001 brochure. As much as I could remember the colouring and the setup of the pages were different from that of page 2 of the 2001 TAXPACK shown as R3 as page 90 of the Appeal Papers. Reason 1 was repeated on the extra page, but appears to be in bigger letterings. However, there was one page of the extra pages mentioned as above which I could remember very clearly, titled 'Carry on business' or 'Carrying on business' not 'you carried on a business'. The title was written in a print which instantly caught one's eyes. These were as much as I could remember of the brochure. It is that there be shown a special reason why the appeal should be permitted to proceed, though filed after the expiry of 21 days. In that context, the expression "special reasons" is intended to distinguish the case from the usual course according to which the time is 21 days. But it may be so distinguished (not necessarily will, for the rule gives a discretion) wherever the Court sees a ground which does justify departure from the general rule in the particular case. Such a ground is a special reason because it takes the case out of the ordinary. We do not think the use of the expression "for special reasons" implies something narrower than this. However, as I have referred to above, the mere absence of prejudice to the respondent is not enough to justify the grant of an extension. 27 I do not regard the applicant's explanation concerning the lengthy delay as acceptable. As the respondent has submitted, there is no foundation to the applicant's core explanation which was that her time had been taken up with resolving the costs issue in relation to the appeal before Lander J as a result of which the time for lodging a notice of appeal had elapsed. According to the applicant's affidavit the issue of payment of costs in respect of which she sought advice from a barrister emerged when she received a letter from the respondent's solicitor dated 1 November 2006 asking her to pay the costs ordered by Lander J on 4 September 2006. The last date for the filing of a notice of appeal, pursuant to O 52 r 15(1)(a), was 25 September 2006. Accordingly by the time the respondent's solicitor wrote to the applicant by letter dated 1 November 2006 the period for filing the notice of appeal had expired and the applicant was, even at that time, some five weeks in delay. No explanation was proffered for this period of delay. Accordingly I am not satisfied as to the applicant's explanation as to the delay. In any event I find that there is no prospect of success in her proposed appeal. 28 I have considered the merits of the proposed appeal. The grounds are set out in the draft notice of appeal annexed to the affidavit of the applicant to which I have referred. (b) His Honour ought to have ruled that my appeal ought to have been upheld because I held the reasonably formed belief that I was not liable to file a taxation return for the years in dispute having regard to my total income and tax credits. The facts were that there were tax refunds due to me. (c) His Honour ought to have considered my difficult financial situation before exercising his discretion to award costs against me. (d) His Honour, further was in error in awarding costs against me because to do so stifles the opportunity of citizens, on their own, to challenge the decisions of government. (e) The financial resources of the respondent are such that it suffers no loss by not receiving costs. 30 Grounds (a) and (b) do not disclose any appealable error of law on his Honour's part in so finding. 31 Grounds (c)-(e) relate to the question of costs. His Honour awarded costs against the present applicant who was the appellant before him. In the absence of special circumstances costs follow the event and any costs order should reflect the degree of success attained: Hughes v Western Australian Cricket Assn Inc (1986) ATPR 40-748 at 48,136. In the appeal the present applicant was wholly unsuccessful and in my opinion there were no special circumstances to justify departure from the general rule that costs follow the event: none of these grounds disclose a basis upon which it could be demonstrated that his Honour's discretion on the question of costs miscarried. 32 Finally, as to the new ground raised, the applicant has not satisfied me that there are any missing pages from or relating to the Tax Pack as deposed to her in affidavit. As I have pointed out there is no reference to additional pages in the transcript of the Tribunal hearing or in the reasons of Lander J. Furthermore, and in any event, although invited to do so, the applicant has not been able to identify any error of law to which the content of these alleged missing pages might go. The passage extracted above from the applicant's letter of 12 April 2007 and relied upon by her does not disclose any relevant error on the part of the Tribunal even if I were to accept, which I do not, that there were such missing pages, or that their alleged content was relevantly before the Tribunal. 33 Accordingly, I am of the opinion that the applicant's proposed appeal has no prospect of success. She has not established that special reasons exist for the grant of an extension of time within which to appeal. 34 For those reasons I am not prepared to exercise my discretion to extend the time for the applicant to file and serve a notice of appeal. Her application will be dismissed. I will hear the parties on the question of costs. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

procedure application for extension of time to file and serve notice of appeal unsatisfactory explanation for delay proposed appeal without merit. costs costs follow event discretion appeal appeal

In particular, the ACCC seeks declarations that StoresOnline has breached certain terms of the undertaking given by it on 24 April 2006 under s 87B of the Trade Practices Act 1974 (Cth) ("TPA"), and it seeks injunctions preventing it from committing any further breaches in relation to matters such as giving presentations about computer software packages which it offers from time to time for sale in Australia unless it notifies the ACCC and records the presentations, representing that their products are easy and profitable to use, using testimonials of past clients in a way that is misleading, and informing purchasers of its packages that they can avail themselves of a "cooling-off" period. 2 StoresOnline are two companies incorporated in the United States of America, carrying on the business of conducting seminars and workshops in Australia at which they promote and offer for sale to the Australian public a computer software package for setting up and operating online stores. In 2005, the ACCC commenced proceedings in this Court alleging, inter alia , that the StoresOnline had engaged in misleading and deceptive conduct in breach of the TPA. The matter was settled between the parties on the basis that StoresOnline gave an undertaking pursuant to s 87B of the TPA to the ACCC, in which StoresOnline agreed not to conduct the seminars and workshops in Australia unless they abided by certain restrictions imposed by the ACCC consistent with the purpose of protecting the Australian public from what the ACCC considered to be further misleading and deceptive practices. 5 The ACCC submits that StoresOnline has breached certain terms of the undertaking it gave to the ACCC on 24 April 2006. The present application is said by the ACCC to be urgent because StoresOnline is likely to continue to breach the undertaking when its representatives arrive in Australia next Monday 22 October 2007 to give further presentations relating to the products it offers for sale. It argues that the power of the Court to grant interlocutory relief is grounded in s 23 of the Federal Court of Australia Act 1976 (Cth) ("FCA Act"), which gives the Court " power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders ... as the Court thinks appropriate ". It says that the jurisdiction of the Court to entertain the matter is not limited by the TPA. Finally, it submits that the balance of convenience falls in favour of the Court exercising its power to grant the relief, and thereby protects what it claims is the " very strong public interest " in ensuring StoresOnline complies with the terms of its undertaking. 6 StoresOnline submits that it has complied with most of the terms of the undertaking it gave to the ACCC, and that any breaches were minor and should not persuade the Court to exercise its discretion to grant the relief sought. It says that it has taken steps to ensure there are no further breaches. In addition, StoresOnline says that the Court does not have jurisdiction to grant the relief, citing Thomson Australian Holdings Pty Ltd v Trade Practices Commission [1981] HCA 48 ; (1981) 148 CLR 150 (" Thomson ") and arguing that s 80 of the TPA is an exhaustive statement of the circumstances in which injunctive relief sought under the TPA may be granted, to the exclusion of s 23 of the FCA Act . StoresOnline also submits that the balance of convenience does not favour the ACCC because there has been no material harm or prejudice to the ACCC or its purchasers; reliance on the public interest is not decisive; and the breadth of the ACCC's Amended Application travels beyond the scope and duration of some of the terms of the original undertaking. 7 Three issues therefore arise. The first concerns the jurisdiction of the Court to entertain this application and, if it sees fit, its power to grant the relief sought. The second is whether the evidence establishes breaches by StoresOnline of the undertaking necessary to invoke the power of the Court to make orders under s 87B(4) of the TPA. The final issue is whether the balance of convenience weighs in favour of granting or refusing the relief sought. That power may be exercised in any proceeding in which the Federal Court has jurisdiction unless the jurisdiction invoked is conferred in terms which expressly or impliedly deny the s 23 power to the Court in that class of proceeding. It cannot be invoked to grant an injunction where the Court acquires its jurisdiction under a statute which provides an exhaustive code of the available remedies and that code does not authorise the grant of an injunction . The Act which conferred jurisdiction on the Federal Court in Patrick Stevedores was the Workplace Relations Act 1996 (Cth). No " exhaustive code " limiting the range of remedies which the Federal Court could grant was found in that Act by their Honours. 10 In the present case, s 87B(4) of the TPA gives the Court jurisdiction to make any order it deems appropriate in circumstances where a respondent has breached an undertaking given to the ACCC under s 87B(1). The ACCC has approached the Court for orders compelling compliance with the undertaking. More specifically, the ACCC seeks injunctions to restrain StoresOnline from committing further breaches. There is nothing in the language of s 87B which limits the jurisdiction of the Court to hear the ACCC's application and, if appropriate on the evidence, make the orders it sees fit. 11 StoresOnline disagrees with the proposition that the TPA does not exclusively set out the powers of this Court to make injunctions in respect of relief sought under the TPA. It refers to s 80 of the TPA, which set out circumstances in which injunctions may be granted for contravention or possible contravention of specified provisions in the TPA, and submits that there can be no other source of power for this Court to grant injunctions as relief in applications made under the TPA. 12 StoresOnline relies on Thomson as authority for the proposition that the Federal Court cannot grant injunctive relief in respect of matters under the TPA unless it does so pursuant to s 80 of the TPA, therefore rendering the ACCC's application for orders beyond the jurisdiction of this Court. In various sub-sections of s. 80 references are made to injunctions granted "under" the section or a particular sub-section and to applications for injunctions "granted" under the section or a sub-section --- see sub-ss. (1A), (4) (a) and (b), (5) (a) and (b) and (6). Section 80 makes special provision in several respects for the grant of injunctions under the section --- see sub-ss. (4), (5) and (6). It is scarcely to be supposed that the Parliament intended to draw a distinction in these respects between two classes of injunctions, one class of injunctions granted under s. 80 and another class granted under ss. 22 or 23 of the Federal Court of Australia Act . The inference is irresistible that Parliament looked upon s. 80 as a complete and comprehensive statement of the circumstances in which injunctions might be granted in respect of relief sought under the Trade Practices Act . The first is that, when Thomson was decided in 1981, the TPA did not include s 87B which was later inserted by s 13 of the Trade Practices Legislation Amendment Act 1992 (Cth). Counsel for StoresOnline invited me to infer that the insertion by Parliament of s 87B must have been done with the High Court's decision in Thomson in mind and as a guiding principle. This suggested inference is not supported by the language of the TPA itself or any extrinsic material to which I have been referred. The preferable approach, in my view, proceeds on the basis that Parliament introduced s 87B into the TPA to enhance enforcement by the ACCC by increasing the scope and flexibility of the powers of the Court to provide effective means of dealing with breaches or apprehended breaches of the TPA. The fact that Parliament granted power to the Court in s 87B(4) points to the conclusion that it did not intend the powers in relation to s 80 to be the exclusive expression of the Court's ability to grant relief of an injunctive nature. It is not correct, in my view, to regard s 87B as limited in its operation to the scope of the powers conferred by s 80. 14 The second difficulty for OnlineStores is that s 87B of the TPA regulates the particular circumstances in which an undertaking is given directly to the ACCC rather than to the Court. The Court is not involved in that process, and the undertaking is a binding agreement which arises in the context of a statutory regime. The power under s 87B is designed to give effect to and reinforce the undertaking where there has been non-compliance. The Court is given power for the purposes of more effective enforcement if the undertaking is breached. The ordinary and natural meaning of s 87B(4) is to give the Court power to better enforce undertakings by converting them into orders of the Court, and to make other orders in its discretion, if and when it becomes appropriate. 15 Section 80 is a provision invoked when there has been contravention or possible contravention of specified provisions in the TPA. Section 87B is not one of those provisions. The limitations imposed by s 80 on the ability of the Court to make " any other order ... [it] considers appropriate " under s 87B(4)(d) must, on the reasoning advanced by StoresOnline, be found to be implicit in s 80. In my view, there is no basis to imply such a limitation. Section 87B is directed to investing the Court with powers. To limit the Court's ability to grant injunctions at the request of the ACCC where undertakings given under s 87B have been breached is a non-beneficial and inappropriate interpretation of s 87B. 16 Given that s 87B is not an exhaustive expression of the power of the Court to make orders in relation to an application pursuant to that section, I consider that the Court has jurisdiction to entertain this application for the relief sought by the ACCC. 18 In this case, breaches of certain terms of the undertaking given by StoresOnline are conceded. Specifically, these admissions relate to the terms of the undertaking requiring StoresOnline (i) to ensure the testimonials used in the presentations contained certain information (paragraph [17(d)(ii)] of the undertaking) and (ii) to notify the ACCC of the dates and locations of presentations to be made in Australia (paragraph [27] of the undertaking). Having regards to these failings to comply with the undertaking and all the evidence, I am not persuaded that a regime is in place which will ensure further breaches by StoresOnline do not occur. A more effective sanction than an inter partes agreement is necessary in this case. 19 These conceded breaches establish that there has been a failure to comply with the undertaking given by StoresOnline to the ACCC on 24 April 2006. These breaches are sufficient to justify the exercise of the power of the Court in s 87B(4)(a) to make orders directing StoresOnline to comply with paragraphs [17] and [27] of the undertaking. 20 As for further breaches which the ACCC alleges, and which are denied, I am prepared on the basis of the evidence before me to rule that at least one important additional breach has occurred. This breach concerns the term in paragraph [14] of the undertaking which requires StoresOnline to make known to purchasers that they have a "cooling-off" period during which they could change their mind about the purchases they made within three business days, return the product and receive a full refund. I have seen a number of the written "disclaimers" relied on by StoresOnline and in my view some of them are manifestly inadequate on their face. Several affidavits sworn by purchasers of StoresOnline's packages were read by counsel for the ACCC. The evidence adduced in these affidavits, to which objection was not taken and which I accept, was that in some instances StoresOnline either did not notify purchasers of the cooling-off period, or if they did so, it was in a manner which was not readily brought to the purchasers' attention and not easy to understand, so that it could not be said to have been "made known", as required. I accept the evidence that, in some cases, presenters encouraged potential purchasers not to pay attention to the documents recording the cooling-off period. This conduct breaches the requirement in paragraph [15] of the undertaking that StoresOnline " make the content of the [cooling-off] undertaking in paragraph 14 above known to Purchasers before, and at, the time of purchase ". Accordingly, this breach is sufficient to enliven the jurisdiction of the Court in s 87B(4)(a) to make orders directing StoresOnline to comply with paragraphs [14] and [15] of the undertaking. 21 With respect to the other terms of the undertaking which the ACCC alleges have been breached, I do not make findings as to whether a breach has in fact occurred. However, in circumstances where StoresOnline has admitted to certain breaches of the undertaking given by it to the ACCC, and has been found to have engaged in other breaches which it denied, it is appropriate to invoke and exercise the discretionary jurisdiction given by s 87B(4)(d) of the TPA to order that StoresOnline comply with the other terms of its undertaking. I make this ruling because there is sufficient basis in the numerous past breaches of certain terms of the undertaking to give rise to a reasonable apprehension that there could well be future breaches of the same or other terms of the undertaking which could be prevented by the granting of the ACCC's application under s 87B on a quia timet basis. 22 Insofar as orders made by the Court on the present application go beyond the text and duration of the original understanding given on 24 April 2006, I accept the submission of the ACCC that s 87B(4)(d) is a conferral of broad power which is " additional to the power conferred by s 87B(4)(a), to make any order that the Court considers appropriate ". This approach is supported when one has regard to the explanatory memorandum to the Trade Practices Legislation Amendment Act 1992 (Cth), which introduced s 87B into the TPA. It is intended to provide the court with suitable flexibility to deal with the range of circumstances which may arise in the enforcement of undertakings. This is a cogent submission in the circumstances of this case. The ACCC says that StoresOnline's approach to compliance with the terms of the undertaking has been very unsatisfactory, and this is clearly demonstrated, for example, by the minimalist and embedded references made to the "cooling-off" period at the time purchasers bought the packages, and the inaccurate or ineffective "qualifying statements" contained in the scripts used in Australian presentations. StoresOnline's compliance with its agreement with the State of Texas in the United States of America concerning similar conduct, is said by the ACCC to be insufficient because it does not address all the requirements necessary to ensure compliance with the undertaking given in respect of its conduct in Australia. The ACCC also says that StoresOnline's dealings with the ACCC are characterised by delay and obfuscation, and that the detriment to the public is immediate, expensive and difficult to rectify. 24 StoresOnline submits that the interest of the Australian public is not an appropriate consideration in the assessment of the balance of convenience. Primary emphasis, it says, ought to be given to its claims that breaches of the undertaking have not caused material harm to purchasers of StoresOnline's packages, have not caused prejudice to the ACCC, are essentially administrative and not deliberate or contemptuous breaches, and have occurred in the context of substantial compliance with other terms of the undertaking and entry into the Texas agreement which outlines a compliance regime albeit in different terms. 25 In my view, the balance of convenience in this case comes down in favour of granting the relief sought in paragraph [20] of the ACCC's Amended Application because the relief does not prevent StoresOnline from conducting its scheduled presentations and workshops in Australia, but rather serves to discourage them, with the powerful sanction of contempt, from giving those presentations in a way that breaches its undertaking given to the ACCC. While the breaches of the undertaking by StoresOnline do not warrant a blanket order restraining StoresOnline from making any presentations in Australia, I am persuaded that the most appropriate course is to make orders requiring StoresOnline to give effect to the undertaking to which it made a commitment on 24 April 2006, until further order. This position, in my view, provides an appropriate balance between the ACCC's concern to protect consumers in Australia and StoresOnline's claimed financial commitments, which are said to involve expenditure thus far of approximately USD450,000 in relation to the scheduled workshops and seminars. 26 Finally, I reject the submission by StoresOnline that it should have an undertaking as to damages from the ACCC. The giving of such an undertaking is not a condition of the granting of injunctions: see Trade Practices Commission v Santos Ltd (1992) 38 FCR 382 at 388 (per Davies J). In any event, having refused to grant the blanket injunctions sought by the ACCC in paragraph [19] of its Amended Application, no significant damage should accrue to StoresOnline as it is still entitled to conduct its presentations in Australia, provided it does so within the ambit of the undertaking and the injunctions granted in these reasons. 27 As to costs, I consider that the respondents should pay the costs of the applicant in this application. However, given the unusual circumstances surrounding this application, I direct the parties to agree Short Minutes of Order giving effect to these reasons, and to provide them to my associate no later than 5.00 pm on Friday 26 October 2007. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.

application for enforcement of undertaking under s 87b of the trade practices act 1974 (cth) jurisdiction of the court invoked breach of undertaking established injunctive relief granted to ensure compliance with undertaking balance of convenience mandates injunctions granted until further order. trade practices

I granted leave to the respondent to file that affidavit, which in chronological order is the fourth affidavit sworn by Mr Lawrence ("the fourth affidavit"). However, I granted leave subject to the objection of Mr Franklin SC for the applicant as to its admissibility in whole or in part. 2 Before I adjourned the Court yesterday, I informed the parties that I would hear any objections to the fourth affidavit of Mr Lawrence this morning when Court resumed. 3 Today when Court resumed, Mr Stephens sought to file and serve another affidavit of Mr Lawrence, sworn 17 March 2008 ("the fifth affidavit"). Mr Franklin SC informed the Court that he had only received a copy of this affidavit immediately prior to Court resuming. I did not give leave for this affidavit to be filed. Rather, I adjourned the Court for 10 minutes to allow Mr Franklin SC time to peruse the affidavit, and form a view as to whether he wished to object to it being filed. 4 When Court resumed, Mr Franklin SC informed me that he objected to the admissibility, in their entirety, of both the fourth and fifth affidavits. I invited counsel to address me in relation to these affidavits. 5 The fourth affidavit consists of 17 paragraphs and five annexures numbered from "A" to "E". The fifth affidavit consists of five paragraphs and has no annexures. There is no explanation as to why this affidavit was filed and served after the trial had commenced. 2. I have, in the past, at a number of directions hearings, made numerous orders as to filing of evidence, discovery and written submissions. New evidence sought to be tendered by the respondent could have been tendered at any time in accordance with those orders. 3. While this affidavit seeks to deal with issues raised in Mr Franklin's written submissions, in particular with respect to ss 58 and 59 of the Trade Marks Act 1995 (Cth), those issues have always been live issues in these proceedings. 4. The respondent cannot claim it has not filed its evidence previously because it lacked legal representation. At various times, the respondent has been represented by Thynne & McCartney Lawyers, Bickfords Lawyers, Guy & Hinton Lawyers, and it is currently represented by Potts & Co Lawyers. 5. The material in the fourth affidavit seeks to contradict earlier evidence and advance a new case for the respondent, including in para 9 of the fourth affidavit with respect to which entity used and intended to use the relevant trademark. In particular, Mr Franklin SC submitted that material in the fourth affidavit contradicted material in Mr Lawrence's affidavit filed 1 November 2007. 6. Mr Franklin SC submitted that this evidence has not been tested by the applicant through the usual interlocutory steps which usually would be available. The version of events put by Mr Lawrence in paras 15 to 17 of the fourth affidavit represent not only an argument of the respondent, but does not accurately reflect the findings of the delegate as are in evidence in these proceedings. Admission of this affidavit would seriously prejudice the applicant because of its lateness in the proceedings. 2. Evidence with respect to recipes of the respondent was always potentially a live issue. In any event, to the extent to which the respondent wishes to rebut the evidence of Mr Tannahill, statements of that witness with respect to the recipes were made in response to cross-examination on this issue by Mr Stephens for the respondent. 3. To the extent that the affidavit seeks to prove sales of recipes, it is inadmissible. Section 58 Trade Marks Act was clearly not a live issue before the delegate, as made clear in the decision record. 2. The affidavit does not contain new evidence or purport to be proof of evidence, rather it represents a full explanation of material contained in Mr Lawrence's affidavit filed 1 November 2007. 3. The need for this evidence follows as a result of the misrepresentation of the respondent's position in para 34 of Mr Franklin's written submissions filed 14 March 2008, namely that the respondent created the opposed trademark and other trademarks at a time before it had been incorporated. The evidence in the fifth affidavit was the first opportunity to rebut the submission. 4. The relevant assignment of the trademark can be found on a search of the IP Australia website and a copy of the assignment obtained from that entity. Accordingly, the respondent is entitled to put a copy into evidence. The applicant is not entitled to claim surprise by this evidence. 5. The existence of the relevant licence agreement can be inferred from the substance of the original affidavit, and the loss of the original licence has been explained. The applicant is not entitled to claim surprise by this evidence. The evidence of Mr Tannahill yesterday was not correct. The fifth affidavit rebuts that evidence and sets the record straight. 2. Paragraphs 1 to 4 of the fifth affidavit did not purport to prove sales of recipes, but rather were a simpler explanation of how the client conducts its business and is relevant. 12 First, to the extent to which this evidence purports to rebut a written submission of Mr Franklin and any alleged inaccuracies in that submission, it seems to me the most obvious method of rebuttal is in the form of closing submissions from Mr Stephens. Although no written submissions were filed by the respondents in these proceedings in accordance with my directions, there is no reason why Mr Stephens cannot deal comprehensively in closing with any submission of Mr Franklin. 13 Second, the evidence which the respondent has filed and seeks to file is very late in these proceedings. Section 135 Evidence Act 1995 (Cth) provides the court with a general discretion to exclude evidence if its probative value is substantially outweighed by the danger that the evidence might be, inter alia , unfairly prejudicial to a party. In this case, the evidence contains unsubstantiated argument (for example, the views of the deponent as to Mr Tannahill's understanding in para 3 of the fifth affidavit), irrelevant material (for example, the last two sentences in para 4 of the fifth affidavit), vague references (for example, with respect to use of the trademarks in paras 10 and 11 of the fourth affidavit), possible inaccuracies (for example, in para 16 of the fourth affidavit), opinion evidence (for example, para 17 of the fourth affidavit) and inappropriate proof of material (for example, paras 3 and 4 of the fifth affidavit). I accept the submissions of the applicant that they will suffer unfair prejudice if this evidence is submitted, for the reasons I have already summarised and do not propose to repeat. 14 I note that Mr Lawrence has not yet been cross-examined. He is clearly the key witness for the respondent, and Mr Franklin SC has indicated that he will require a lengthy cross-examination of Mr Lawrence. Although not determinative of my decision in relation to refusing to allow the admission of this evidence, it is likely that Mr Lawrence will have the opportunity to more fully explain his evidence under cross-examination. 15 I note as an overall point that the solicitors and counsel for the respondent were appointed very late, and indeed a notice of appearance was only filed in court yesterday. It is clear that the solicitors and counsel have endeavoured to deal with the case which they have been handed, and are seeking to remedy what they perceive as evidentiary deficiencies in this case. I am also cognisant of the need to provide the respondent with the opportunity to raise an arguable case in accordance with the principles in Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146. However fairness to the applicant must not be ignored. Procedural flexibility, as described by Shaw J in Jermen v Shell Co of Australia [2004] NSWSC 168 , is one thing, but requiring the applicant to deal, on the run, with new evidence which they have not had the opportunity to test and which could have been produced at any time in the lead up to the trial, is another. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.

admissibility of affidavits sought to be filed by respondent during trial discretion to exclude evidence whether probative value of late evidence outweighs prejudice evidence

The merger is to be effected by way of schemes of arrangement whereby the Bendigo Bank will acquire all of the plaintiff's shares and the plaintiff will become a subsidiary of Bendigo Bank. 2 The proposed schemes of arrangement require the approval of this Court pursuant to s 411 of the Corporations Act 2001 (Cth) (the Corporations Act ) because it is a compromise or arrangement between a Part 5.1 body and its members and its classes of members. 3 The plaintiff has on issue three classes of shares, Ordinary Shares; Step Up Preference Shares; and Reset Preference Shares. Separate schemes are proposed for each class of securities. 4 The Ordinary Share Scheme is not conditional upon the Step Up Preference Share Scheme or the Reset Preference Share Scheme being approved by the holders of those securities. However, the Step Up Preference Share Scheme and the Reset Preference Share Scheme are each conditional upon the Ordinary Share Scheme being approved by the members holding the Ordinary Shares, although neither is conditional upon the other being approved. 5 The plaintiff is a public company and one of Australia's top 150 companies listed on the ASX. It has a market capitalisation of approximately $1.6 billion. As its name suggests, it is a bank which has as its principal banking activities the provision of mortgages, business loans, consumer loans, margin loans, savings and investment products. As at 30 June 2007 it had assets of approximately $32.4 billion and loans under management of approximately $27.5 billion. 6 Bendigo Bank, which is also listed on the ASX, has a market capitalisation of approximately $2.3 million. It is one of Australia's top 100 companies listed on the ASX. It is also, of course, a bank which provides a range of banking and other financial services to both retail customers and small to medium size businesses. It conducts similar but not the same activities as the plaintiff. Its products are distributed through a retail network. 7 The Ordinary Share Scheme of the merger proposal involves the Ordinary Shareholders of the plaintiff receiving 1.075 shares in the new merged bank in exchange for each ordinary share they currently hold in the plaintiff company. 8 The Step Up Preference Share Scheme and the Reset Preference Share Scheme provide that the holders of those securities in the plaintiff will receive one fully paid Step Up Preference Share and one Reset Preference Share in the merged bank for each Step Up Preference Share or Reset Preference Share held. 9 The plaintiff and Bendigo Bank entered into a Merger Implementation Agreement on 9 August 2007. It was a term of that agreement that Bendigo Bank's obligations to the plaintiff's shareholders (of all classes) would be secured by Bendigo Bank entering into a deed poll which, in fact, it did on 3 October 2007. 10 The purpose of today's hearing is for the plaintiff to obtain orders under s 411 of the Corporations Act to convene meetings of the three classes of members and for the Court to approve the Explanatory Statement which is proposed to be sent to those members as required by s 412(1)(a) of the Corporations Act . Consequential orders are also sought. 11 The plaintiff proposes that the three scheme meetings will take place separately on 12 November 2007 at the Adelaide Convention Centre, North Terrace, Adelaide, commencing with the Ordinary Share Scheme Meeting at 9.30 am, the Step Up Preference Share Scheme Meeting at 10.45 am and the Reset Preference Share Scheme Meeting at 11.30 am. 12 I have been provided with the draft Explanatory Statement which has been described by the plaintiff as the Draft Scheme Book. In this case, the plaintiff's solicitors provided me, in a timely fashion, with all the documents upon which the plaintiff intended to rely to allow me to study the necessary documents in advance of today's hearing. 13 The Court has a discretion to make the orders sought by the plaintiff where a plaintiff satisfies the criteria in s 411(1) itself and is not disqualified under s 411(2). Section 411(1) is engaged where a Part 5.1 body has proposed a compromise or arrangement with its members or any class of them. 14 I am satisfied that that criteria has been established. The plaintiff is a Part 5.1 body as defined in s 9 of the Corporations Act . A scheme of arrangement of the kind proposed is a compromise or arrangement within the meaning of s 411: Re Bank of Adelaide (1979) 22 SASR 481. Subject therefore to the other subsections of ss 411 and 412 , the plaintiff is entitled to seek the exercise of the Court's discretion and make the orders. 15 Two preconditions for the exercise of the power in s 411 are provided for in s 411(2). First, pursuant to s 411(2)(a) , the Court is not entitled to make an order under s 411(1) unless 14 days notice of the hearing of the application, or such lesser period of notice as the Court or ASIC permits, has been given to ASIC. I am satisfied on the evidence that 14 days notice of the application has been given to ASIC. 16 Secondly, s 411(2)(b) of the Corporations Act prevents the Court from making an order unless satisfied that ASIC has had a reasonable opportunity to examine the terms of the proposed compromise or arrangement and to make submissions to the Court in relation to the proposed compromise or arrangement, and the draft Explanatory Statement. 17 The Explanatory Statement was first provided to ASIC on 14 September 2007. The evidence discloses that ASIC has considered the Explanatory Statement over the period between 14 September and 4 October, and has required the plaintiff to make certain amendments to the Explanatory Statement. 18 On 4 October 2007 ASIC advised the plaintiff in writing that "... after examining the documentation for each scheme ASIC does not currently propose to appear to make submissions, or intervene to oppose the schemes the first hearing of which is scheduled for Friday 5 October 2007. It follows that s 411(2) does not preclude the Court making the orders sought under s 411(1). 20 There are two orders to be made. First, an order for the convening of meetings and, secondly, an order approving the Explanatory Statement. Both orders sought involve the exercise of discretion. 21 In theory, the Court might make an order convening a meeting but refuse to make an order approving the Explanatory Statement. That, however, would be unlikely. If the Court were not satisfied that the Explanatory Statement was appropriate to be sent to the members it would be unlikely to convene a meeting. On the other hand, the Court would not approve the Explanatory Statement but refuse to convene a meeting. It follows, because in all but the most exceptional case the Court is called upon to make both orders, that the Court must be satisfied that the members will be fully informed so that they may make a fully informed decision on the proposals of the schemes of arrangement. 22 It is proposed that three separate meetings take place for the three separate classes of members. That appears to me to be appropriate especially where, as is the case here, different benefits flow from the proposed merger to the different classes. It is also appropriate, having regard to the fact that the Step Up Preference Share Scheme Meeting and the Reset Preference Share Scheme Meeting are dependent upon the ordinary shareholders having first approved the scheme of arrangement insofar as they are affected at the first scheme meeting. It is appropriate that the three scheme meetings be held separately and sequentially as proposed by the plaintiff. 23 I am satisfied that proper arrangements have been proposed for the holding of the three meetings. The evidence discloses that two of the present directors of the plaintiff have made themselves available as chair and alternative chair of those meetings and that those persons do not have any conflict of interest. 24 Of course, it is not the case that the Court is presently concerned to pass any final opinion on whether any of the schemes that are proposed should be approved: s 411(17) of the Corporations Act . On the other hand, it would be unlikely that the Court would convene a meeting under s 411 unless it was satisfied that the nature of the compromise or arrangement, in this case a scheme of arrangement, is of such a kind that if it were to be approved by the members it would also be later approved by the Court. In doing so, the Court does not make its own commercial judgment as to the appropriateness of the proposal in the schemes of arrangement. That is a matter for the members. 25 Rather, at this first hearing, the Court needs to be satisfied that all of the statutory criteria have been met and that the proposed schemes of arrangement are legitimate commercial arrangements in the sense that they are not designed to avoid other provisions of the Corporations Act but are schemes of arrangement within the statutory concept of an arrangement or compromise. I am satisfied of both those matters. 26 The Court will have regard to the directors' recommendations and the independent expert's opinion. In this case, the directors have unanimously recommended that the members approve the schemes and become shareholders in Bendigo Bank. 27 The plaintiff has obtained an independent expert's report from KPMG Partnership. Mr Donald Manifold, an executive director of KPMG Corporate Finance (Aust) Pty Ltd, had the responsibility, together with two other employees of KPMG, of preparing separate reports in relation to the three separate schemes. In respect of each of the schemes, the authors opined that, in the absence of a superior proposal, on balance the schemes are in the best interests of the Adelaide Bank shareholders. 28 The Court needs to be satisfied that the Explanatory Statement has sufficient information to allow the members to make a commercial judgment. It also has to be satisfied that the Explanatory Statement does not apparently contain any matter that is false or misleading in any material particular. 29 I am satisfied that the plaintiff has negotiated each of the terms of the merger implementation agreement at arm's length with Bendigo Bank and that the terms which have been arrived at are commercially appropriate. 30 On the hearing of this application today, Mr Bathurst QC, who led for the plaintiff, brought to my attention three particular aspects of the proposed schemes of arrangement. First, he drew my attention to the exclusivity transaction and the "no shop/no talk" provision of the proposed merger. He also drew my attention to the fiduciary carve-out provision within the merger implementation agreement. The "no shop/no talk" provision is an unremarkable term commercially. It satisfies the criteria Santow J adduced in Re Arthur Yates & Co Ltd (2001) 36 ACSR 758. In my opinion, it is not a term which would make the proposed scheme of arrangement such that it ought not be submitted to its members. 31 Secondly, he brought to my attention the terms of the agreement relating to a break fee. In relation to the break fee, he emphasised that there was a break fee payable by both parties to the transaction. Both the plaintiff and the Bendigo Bank must pay a break fee in the sum of $15 million if the transaction does not go ahead for any of the reasons given in the proposed scheme. The break fee is less than 1% of the plaintiff's market capitalisation of $1.6 billion which is within the Australian Takeovers Panel's Guidance Notes: Guidance Note 7: Lock-up Devices (2 nd issue, 2005). In any event, the break fee is not payable in circumstances where the members vote not to implement the scheme. In those circumstances, the break fee is not a disincentive to the shareholders in their consideration of the proposed merger. 32 Lastly, he brought to my attention the provision in the agreement which deems the ordinary shareholder to have warranted to Bendigo Bank that their ordinary shares are fully paid and free from encumbrances. It is not practicable for amounts secured by encumbrance to be deducted from the scheme consideration payable to the relevant scheme participants on the implementation date. 60 The warranty will be deemed to have been given, not only by those offeree shareholders who vote to agree to the scheme, and who, therefore, can be seen to be consenting to give it, but also those who do not vote at all or who vote against the scheme. However, I do not think that this matters. What is important, in my view, is that the deemed warranty is no more than a device directed to ensuring that a scheme participant whose shares are subject to an encumbrance is not unfairly advantaged. The amount of the damages payable for breach of the warranty is the amount required to discharge the encumbrance. In all three instances, his Honour found that similar clauses in similar transactions were no bar to the implementation of the proposed transactions. I respectfully agree with his Honour's reasons. 34 I am further satisfied that the directors have unanimously recommended the schemes of arrangement to all three classes of members of the plaintiff and that in doing so they have not acted otherwise than in accordance with their duties. I am satisfied that an appropriate independent expert's report was obtained and that the opinion expressed is that held by the author. 35 I am also satisfied that the plaintiff put in place a due diligence committee which has rigorously examined the proposed merger. 36 I am satisfied that proper consultation has been had with ASIC and that ASIC does not oppose the orders sought on this occasion for the convening of the meetings and the approval of the Explanatory Statement. 37 The Explanatory Statement describes the merger implementation agreement and the proposed merger in sufficient detail so as to enable the members to make a fully informed decisions in relation to the proposal. I have not been able to detect any false or misleading statement within the Explanatory Statement. I am satisfied that the Explanatory Statement explains the effect of the schemes of arrangement. It discloses the directors' material interests as required under s 412(1)(a)(i). It also sets out the information which is proscribed by reg 5.1.01 of the Corporations Regulations 2001 (Cth) (the Regulations) and Schedule 8 of those Regulations. 38 The criteria referred to by Emmett J in Re Central Pacific Minerals N.L. [2002] FCA 239 and approved by Conti J in Re CSR Ltd (2003) 45 ACSR 34 at 36-37 have been met. The plaintiff has conformed with Santow J's test in Re NRMA Insurance Ltd (2003) 33 ACSR 523. 39 The plaintiff proposes to rely upon s 3(a)(10) of the Securities Act of 1933 (US) (US Securities Act) for exemption from the registration requirements of the US Securities Act. I therefore record, to facilitate that event occurring, that the Court has been advised that the Court's order will be relied upon for the purpose of s 3(a)(10) of the US Securities Act. 40 I should, for completeness, mention one final matter lest it be thought it had been overlooked. The proposal in the schemes of arrangement does not allow certain foreign resident shareholders to obtain the benefit of the shares offered by Bendigo Bank. Instead, in their case, if the schemes are implemented, the shares will be issued to a nominee and sold and the proceeds remitted to those foreign shareholders. That class of shareholders is less than 1% in each of the three classes of securities and therefore only comprise a small fraction of the shareholders in the three separate classes. It seems to me that the manner in which those shareholders' interests are dealt with is appropriate having regard to the proposed transaction. 41 I am satisfied, as Conti J was in Re CSR Ltd 45 ACSR 34, that the marginally different treatment of the ineligible foreign shareholders does not raise an issue as to the proper formation of classes of members affected by the scheme. 42 For those reasons, it would be appropriate to make the orders sought on the application and to appoint a further date for the consideration as to whether the Court should, if the members have so resolved, approve the schemes of arrangement. 43 For those reasons, I make the orders in the short minutes of order this day initialled by me. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander.

merger schemes of arrangement for an australian publicly listed company to become a subsidiary of another related publicly listed company separate schemes for each class of shares application pursuant to s 411(1) of the corporations act 2001 (cth) for an order to convene meetings of the three classes of members and for the court to approve the explanatory statement conditions precedent in s 411(2) satisfied consideration of "no shop/no talk" provisions, a break fee and a deemed warranty that shares are free from encumbrances plaintiff exempted from registration requirements of s 3(a)(10) of the securities act of 1933 (us) whether treatment of ineligible foreign shareholders acceptable appropriate that the plaintiff hold three separate scheme meetings therefore order granted explanatory statement approved. corporations

Without disrespect I will refer to them as Sam and David. They have a problem. Late last year Sam was charged by the New South Wales Police Force with fraudulently misappropriating some cheques made out to the Australian Tax Office ("ATO"). For present purposes attention may be confined to one of the cheques. It was for $282,799.35. The police say that Sam paid the cheque into the trust account of the tax agent business conducted by his cousin David. David is a tax agent and his business as such is conducted through a company called Armstrong Scalisi Pty Ltd which trades under the name CAP Accounting ("CAP"). There appears to be no dispute that the cheque was drawn by a client of CAP called Midnight Seas Pty Ltd ("Midnight Seas") in favour of the ATO. According to David, Midnight Seas owns a fruit shop in Leichhardt and had, at some point, instructed his firm to incorporate a company in the Seychelles with bank accounts in Singapore and Hong Kong. There is no debate that the cheque did find its way into CAP's trust account. Midnight Seas says, however, that it handed the cheque to Sam to pay its tax liabilities and not to pay CAP. Understandably, given the criminal proceedings against him, Sam has given little of his side of the story. Nor, I should say, does the evidence before me disclose the business relationship between David and CAP, on the one hand, and CAP and Sam, on the other. It is known, however, that CAP (and David) claim that CAP was entitled to bank the monies in question. This proceeding, and the cousins' problem, arises from the fact that Midnight Seas not only complained to the New South Wales Police Force (who charged Sam) but to the Tax Agents' Board of New South Wales which is now investigating CAP. The Board is responsible for the registration of tax agents such as CAP. The problem arises this way. Following a complaint to it by Midnight Seas the Board began, in about October last year, to ask questions of CAP designed to reveal how, and on what basis, the cheque came to be in CAP's trust account. Much correspondence passed between CAP and the Board which did not ultimately result in satisfaction on the Board's part. The police charged Sam at the very end of last year, after the Board's inquiries had begun. The Board has some powers to compel people to provide it with information. No doubt, in an attempt to obtain more and better information from CAP about the circumstances surrounding the banking of the cheque, the Board used those powers on 16 January 2009. It required CAP to provide information about various matters and to do so, ultimately, by 9 February 2009. Following further largely unhelpful correspondence, CAP did not comply with the notice. Doing the best that it could with what appears to have been reasonably lacklustre co-operation from CAP, the Board carried on with its inquiries. On 20 February 2009 it issued a show cause notice to CAP and on 27 February 2009 it suspended CAP's registration as a tax agent for a period of one month or until such time as it was provided with information explaining CAP's position in relation to the cheque. Such information was not forthcoming. On 27 March 2009, the Board suspended CAP's registration as a tax agent again --- this time until 28 June 2009. On 30 March 2009 the Board suspended David's registration as a tax agent for a period of three months expiring on 30 June 2009. CAP contends that once the Board had suspended its registration the first time, it had no power to suspend it a second time for the same conduct. Hence, the second notice of suspension should be set aside. Further, if that were correct, the Board had no continuing power to investigate the affairs of CAP at least so far as they involved the handling of the Midnight Seas cheque. (b) The onus of proof issue . Part of the reasons provided by the Board for suspending the registration of CAP included, on one view of things, a determination by the Board that it was not satisfied that CAP had not misappropriated the cheque. CAP submitted that the power of suspension conferred upon the Board was one which arose only upon the Board being affirmatively satisfied of misconduct. CAP submitted, and the Board denied, that the failure by the Board to be satisfied that CAP had not committed misconduct constituted an error of law. (c) The natural justice issue . CAP submitted that it had been denied natural justice because the Board did not give it the opportunity to cross-examine the complainant and because the Board had relied upon untested assertions by Midnight Seas. (d) The contempt issue . Sam submitted that the conduct by the Board of a parallel administrative investigation into CAP was very likely to prejudice the conduct of the criminal proceedings against him before the Local Court. He sought, therefore, to restrain the Board from further pursuing its inquiries whilst his criminal proceedings remained on foot. (e) The notice issue . Both Sam and CAP sought to set aside the Board's notice to CAP of 16 January 2009. They did so on different bases. CAP said the notice was invalid for various technical reasons; Sam said that the notice had a capacity to prejudice the integrity of the criminal proceedings against him in the Local Court. It is convenient to deal with those issues in the above order. On 27 February 2990, Tax Agents' Board of New South Wales (the Board) resolved to suspend the tax agent registration of the company pursuant to section 251K(2)(b)(i) and (ii) of the Income Tax Assessment Act 1936 (the Act), commencing on 27 February 2009 for a period of one month expiring on 27 March 2009 or upon response to Board correspondence which after review by the Board, it views as a satisfactory explanation, whichever is the sooner. Consequently the company is guilty of misconduct as a tax agent and has neglected the business of a principal. Accordingly, the Board has suspended the company's registration under section 251K(2)(b)(i) and (ii) and 251K (3) of the Income Tax Assessment Act 1936 , for the protection of the public, for a period of one month or upon responses to Board correspondence which after review by the Board, it views as a satisfactory explanation, whichever is the sooner. This will afford you the opportunity, if you so wish, to produce evidence, testimonials and any other material you think is relevant to your case as satisfactory explanation to the Board. The Board will consider any such material provided it is received in the secretariat before 27 March 2009 . The Board will review this matter as a result of any response (if any) and make a decision on your suspension, cancellation or any other appropriate action. The Board may, after consideration of any material submitted and review of the matter, further extend the suspension or cancel the registration. The Board's enquiries into the complaints against the company are continuing despite your lack of co-operation. The Board is extremely concerned about these matters. It will be observed that the suspension was for a period of one month and was imposed pursuant to s 251K(2)(b)(i) and (ii) of the Income Tax Assessment Act 1936 (Cth) ("the Act"). It expressly stated that to be so in its letter. What were the matters underpinning those conclusions? It seems to me that they must be the matters referred to in the two bullet points under the heading "Reasons for Decision". The first bullet point meant that the Board was affirmatively satisfied that CAP had acted contrary to the express instructions of Midnight Seas. The second bullet point was couched in language which suggested that the Board was not satisfied that CAP had not misappropriated the proceeds of the Midnight Seas cheque. The Board's determination also clearly conveyed that the matter was not concluded and that the suspension might be brought to an end by the provision by CAP of an adequate explanation of the events in question. So much flows from its call for further evidence and testimonials. Likewise the Board also indicated that it was proposing, in the future, at least to consider the question of a further suspension and possibly a cancellation of CAP's registration in respect of the same matter, that is, the circumstances surrounding the banking of the Midnight Seas' cheque. This is particularly to be emphasised because it suggests that the determination was not intended to be a final disposition of the questions then pending before the Board. Further correspondence then ensued between CAP and the Board which need not be set out. On 27 March 2009, the initial suspension was to expire. The Board remained dissatisfied with the quality of the response it had received from CAP. ... Accordingly the Board resolved to re-register the company under section 251JC(1)(c) of the Income Tax Assessment Act 1936 (the Act) and also resolved to continue the suspension of the company's registration. The Board has continued the suspension of the company's registration under section 251K(2)(b)(i) and (ii) and 251K (3A) of the Income Tax Assessment Act 1936 for a further period of three moths commencing on 28 March 2009 and expiring on 28 June 2009 or upon receipt by the Board of correspondence from the company which after review by the Board it views as a satisfactory explanation (whichever is sooner). The Board will review this matter as a result of your response (if any) and make a decision on the company's suspension. The Board may, after consideration and review of any material submitted, further extend the suspension or cancel the registration. The Board advises that it is extremely concerned about these matters and that its enquiries into the complaints against the company are continuing. Three aspects of this deserve emphasis. First , the suspension was for a period expiring on 28 June 2009. Secondly, it was expressed to have been imposed for the same reasons the first suspension had been imposed together with the additional reason said to be constituted by CAP's continuing non-cooperation. Thirdly, the decision was in terms interim. CAP submits that this second suspension should be set aside because it is, in effect, an act of double punishment. In my opinion, this contention should be rejected. I would accept that, generally speaking, an administrative power of suspension such as that conferred by s 251K(2)(b) may not be used more than once in relation to a single episode of conduct. This is so because it is appropriate --- if the text permits --- to interpret such powers in a way which is consistent with notions of good administration and finality: Kabourakis v Medical Practitioners Board of Victoria [2006] VSCA 301 at [64] per Nettle JA (with whom Warren CJ and Chernov JA agreed). Here, there is nothing in the text of s 251K(2)(b) which would suggest that, in an ordinary case, it can be used to inflict a sanction repeatedly for the same conduct. This is not to accept any application in disciplinary matters of principles of issue estoppel, a course barred by established authority: Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 630 at 635 per Gleeson CJ, Meagher and Handley JJA. Rather, it is simply to give effect to the meaning of the words in s 251K(2)(b). However, accepting that to be so does not assist CAP. I would not regard that principle of interpretation as preventing such an administrative power of suspension from being used on an interim basis or in a preliminary or provisional way. Where a determination is expressed to be preliminary or interim the principle upon which the submission proceeds does not apply. In such a case, there has been no 'final' determination. (Emphasis added. Here, it was quite apparent that the Board was expressly not dealing with the matter on a final basis. That is sufficient to dispose of the present argument. There may be limits to how long the Board may keep a matter in such an interim state. However, in circumstances where the interim nature of the suspension appears largely to have been driven by CAP's own refusal to cooperate with the Board, I would be most reluctant to embrace the notion that those limits had been sighted, still less approached. That provision, in terms, requires the Board to be satisfied about a state of affairs; what the Board had done was to find that it was not satisfied that there was not a state of affairs. A number of things may be said against this submission. The Board, despite the infelicity in the double negative, did ultimately express itself in the language of s 251K(2)(b) ; the Board is an administrative body whose decisions are to be construed in a practical and robust fashion and not with an eye attuned to the detection of error: Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ. So read, the double negative involved in the Board's statement should be understood as if it were a positive statement. Mr Wright SC, who appeared with Ms Hirschhorn for the Board, put it neatly by suggesting that the language simply showed that the Board was keeping an open mind on the matter. There is force in each of these points but ultimately I cannot escape the conclusion that the Board did regard itself as entitled to suspend CAP if it failed to satisfy the Board that it had not misappropriated the cheque. I accept, of course, that notions such as the burden of proof have a limited role to play in administrative decision-making but that, I think, only highlights how the Board has not actually discharged its function correctly. For the power to be enlivened the Board had to be satisfied that there had been one of the events referred to in s 251K(2)(b). In the critical part of its reasons --- as opposed to the statement of its conclusions --- it does not appear to have been so satisfied. There was an error of law. Of course that argument leaves unscathed the Board's conclusion on the first point --- that is, that CAP had acted contrary to express instructions. It follows, therefore, that the Board's power to suspend CAP arose independently of the error I have identified. However, whilst that may be so, the Board's view of the status of the cheque was obviously relevant to the extent of any suspension it imposed. That being so, it was the commission of an error of law which effected the discharge by the Board of its powers. It was, therefore, a jurisdictional error in the sense discussed in Craig v South Australia [1995] HCA 58 ; (1995) 184 CLR 163 at 179 per Brennan, Deane, Toohey, Gaudron & McHugh JJ. There are, so it seems to me, no discretionary reasons not to quash the Board's suspension. On 30 March 2009, the Board also suspended David's registration as a tax agent. A number of complaints were made about that step. For present purposes, however, it is clear that David's suspension followed on from CAP's suspension. Since I have concluded that CAP's suspension should be set aside it follows that David's must be set aside as well. Had it been, I would have rejected them. The first argument was that the Board was obliged to permit CAP to cross-examine the complainant. Procedural fairness may so require in appropriate, if somewhat rare, circumstances. Here, however, the circumstances included the interim nature of the Board's act of suspension and the relatively short duration of the suspension. The second argument was that the Board had denied CAP procedural fairness by acting on the untested assertions of Midnight Seas. Reliance was placed upon a dictum of Deane J in Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 at 367. I am by no means certain that the view of Deane J represents the current state of Australian administrative law. However, there is no need to decide that issue. The reasonableness, proportionality or arbitrary nature of the Board's decision is to be assessed in the context of its interim nature and the very limited co-operation provided to it by CAP. So viewed, the alleged want of procedural fairness is illusive. His concern is that the continuing investigation by the Board into the affairs of CAP has the capacity to prejudice his defence of the criminal proceedings against him. Those criminal proceedings are before the New South Wales Local Court. The charges arise solely under the Crimes Act 1900 (NSW). When hearing and disposing of those proceedings, the magistrate will not be exercising the judicial power of the Commonwealth. Further, the prosecutor is not a federal officer or a federal agency but is, instead, a detective in the New South Wales Police Force. An undermining of those proceedings might well be a contempt of the Local Court. As an inferior statutory court the Local Court does not have any inherent jurisdiction. It does, however, have a narrower implied jurisdiction which arises upon the principle that a grant of power carries with it everything necessary for its exercise: Grassby v The Queen [1989] HCA 45 ; (1989) 168 CLR 1 at 16-17 per Dawson J (with whom Mason CJ, Brennan and Toohey JJ agreed). In New South Wales much ink has been spilled on the question of whether that implied power extends to the making of non-publication orders which are rooted in notions of contempt: cf. John Fairfax Publications Pty Ltd v District Court of New South Wales [2004] NSWCA 324 ; (2004) 61 NSWLR 344 at 356-366 [38] - [99] per Spigelman CJ. For present purposes, what is relevant is the general acceptance that the inherent jurisdiction of the Supreme Court of a State extends to the protection of the jurisdiction of courts involved in the administration of justice in the State: John Fairfax Publications at 354 [27] per Spigelman CJ. That emerges from the Supreme Court's ultimate supervisory jurisdiction over the administration of justice. By contrast, this Court does not have a general supervisory jurisdiction over the administration of justice in New South Wales (or any other State). Thus, the mere fact that the Board's processes might constitute contempt of the Local Court is not, without more, sufficient to attract this Court's jurisdiction. There are a number of instances, of course, where this Court and the High Court in its original jurisdiction have assumed a jurisdiction in relation to criminal proceedings then pending before a State court: Hammond v Commonwealth [1982] HCA 42 ; (1982) 152 CLR 188 ; Commissioner of Taxation v De Vonk (1995) 61 FCR 564 ; Watson v Commissioner of Taxation [1999] FCA 1796 ; (1999) 96 FCR 48. However, in each of those cases the proceedings pending in the State court involved the alleged commission of a crime against a law of the Commonwealth. In Hammond, Mr Hammond had been charged with conspiracy in relation to the substitution of kangaroo meat for beef in the export market, apparently an offence against s 86(1)(a) of the Crimes Act 1914 (Cth). Not only that, but the prosecuting body was the Commonwealth as were, effectively, the commissioners conducting the Royal Commission. In De Vonk , the applicant was charged with conspiring to defraud the Commonwealth as was Mr Watson in Watson . In each case, the question of whether a contempt was being committed was part of a matter arising under a law made by the Parliament or in which the Commonwealth was a party. Federal jurisdiction was, therefore, clear. The present case does not reveal that circumstance. The prosecutor is a New South Wales detective, the offence a New South Wales crime. However, jurisdiction is conferred on this Court with respect to matters in which an injunction is sought against an officer or officers of the Commonwealth: s 39B(1) Judiciary Act 1903 (Cth). The second respondent holds office as the Chairperson of the Board under s 251D(1A) and is appointed by the relevant minister. So too, each member of the Board is appointed under s 251D. That provision makes clear that the Board consists of its members from time to time. For that reason, the Board, as a respondent, is but a shorthand way of referring to its constituent members each of whom is, so it seems to me, an officer of the Commonwealth. It follows that the Court has jurisdiction over the applicant's claims against those officers pursuant to s 39B(1). Granted then that the Court has jurisdiction to entertain the contempt argument against the Board, what are the relevant principles? Five propositions should, I think, be accepted. First , the existence of a parallel administrative inquiry is capable of constituting a contempt of criminal proceedings: McGuinness v Attorney-General (Vic) [1940] HCA 6 ; (1940) 63 CLR 73 at 85; Victoria v Australian Building Constructions Employees' and Builders Labourers' Federation [1982] HCA 31 ; (1982) 152 CLR 25 ("BLF") at 54 and 72; Hammond v Commonwealth [1982] HCA 42 ; (1982) 152 CLR 188 at 206. Secondly, whether it does so depends upon whether there is a real risk that the pursuit of the administrative investigation will prejudice, undermine or interfere with the conduct of those criminal proceedings: Attorney-General v Times Newspapers Ltd [1974] AC 273 at 299; BLF at 96. Thirdly , where the person facing prosecution is required to answer questions by such an inquiry this risk is particularly acute because of the capacity of such questions to undermine the accused person's right against self-incrimination. Fourthly , that risk will also be more pronounced where the identity of the prosecutor and the investigating body are the same or where they are connected in some way: Hammond at 207. Fifthly, a risk may well be shown where a person other than the accused is to be examined by the administrative inquiry: Watson v Commissioner of Taxation [1999] FCA 1796 ; (1999) 96 FCR 48 at 59-60 [54] - [56] . The application of those principles is not always straightforward. Ultimately, however, the question in each case is one of practical judgment and impression founded upon the need to identify a real risk of interference with the administration of justice. In this case, that risk is to be assessed in a statutory context which includes extensive secrecy provisions. These are to be found in Part II of the Act. Mr Dubler SC argued that the Board was not an officer. I accept that submission. However, the Board is constituted by its members and it has no separate legal personality from them. Indeed as I have said the joinder of the Board is but shorthand for the joinder of the members constituting the Board from time to time. In my opinion, each of those members is an officer of the Commonwealth. The consequence of these provisions is that, other than for the purpose of discharging its functions under the Act, the Board may not release, or be required by subpoena to release, such information. If the discharge of a member's duties required disclosure of information then s 16(2A) would have the effect of permitting that disclosure to occur. There is no evidence to suggest that the Board is deliberately interfering with the proceedings before the Local Court. It is likely, if that were to be suggested, that the provisions of the Act would not authorise such behaviour: De Vonk at 588. However, as De Vonk shows, unintentional action may yet have the capacity to prejudice the administration of justice. It is necessary therefore to attend to the relationship between the Board's proceedings and those in the Local Court. If it did, then it is difficult to see how Sam could have fraudulently misappropriated it. (b) Whether CAP was entitled to receive the cheque, and if so, on what basis, is a significant aspect of the Board's inquiry. (c) CAP denies Midnight Seas' claim that it was not entitled to the proceeds of the cheque. Any explanation of CAP's position can, indeed should, be conveyed to Midnight Seas as the complainant for its comment. The Board's function of inquiry requires as much. Any information provided to Midnight Seas in that way will not be immune from release by Midnight Seas for the secrecy provisions of Part II of the Act do not operate upon Midnight Seas. (d) If, and when, the Board comes to decide how it should proceed in relation to CAP's registration, then the Board will be required to give reasons for that decision. It is very likely that any such reasons will include the Board's conclusions on the questions of whether CAP was entitled to deposit the cheque together with an assessment of the circumstances leading to that conclusion. (e) That assessment will involve, most likely, a consideration of CAP's relationship with Midnight Seas, a matter also centrally relevant in the criminal proceedings. Because of the secrecy provisions in the Act I do not think that the conduct by the Board of its investigation poses, in itself, a real risk to the integrity of the criminal proceedings. However, part of that investigation will require the Board to obtain Midnight Seas' response to CAP's account of how the cheque came to be deposited into its trust account. That raises, to my mind, a risk that the prosecutor (through Midnight Seas) will come to know, in advance, of CAP's explanation of how it obtained the cheque. That has the capacity to interfere with Sam's defence of the proceedings against him. Independently of that conclusion, the delivery by the Board of its reasons, if it should decide to suspend or cancel CAP's registration, is likely to reveal in advance of Sam's trial CAP's explanation of how it obtained the cheques. It follows that some aspects of the ongoing investigation by the Board do pose a risk to Sam's defence of the criminal proceedings. That risk consists of the central issue of CAP's role being revealed to the prosecution in advance of the trial. That does not, however, lead to the conclusion that the Board's entire inquiry should be restrained. This is because it is possible to furnish relief which permits the inquiry to continue whilst safeguarding Sam's position by restraining the Board from communicating the results of its inquiries to any other person during the pendency of the criminal proceedings. By a parity of reasoning, it would also be necessary to prevent the Board from determining CAP's suspension or cancellation until the determination of the criminal proceedings so that it does not produce reasons which might imperil the trial. Against that it may be said that the Board's function of protecting the public is being thwarted. This is, in a sense, true. No doubt matters of public interest inform the breadth of injunctive relief which may be granted: see Hammond v Commonwealth [1982] HCA 42 ; (1982) 152 CLR 188 at 198-199 per Gibbs CJ (with whom Mason and Murphy JJ relevantly agreed) and 208 per Deane J. In that case the public significance of the investigation being performed by the Royal Commission made it appropriate only to prevent examination of the plaintiff and not any other witness. No doubt too, there is a public interest served by protecting the populace at large from unscrupulous tax agents, an interest to which the powers in s 252K seem naturally inclined. However, there is a countervailing public interest in ensuring the proper operation of the criminal justice system. In this case the former does not warrant a narrowing of the injunctive relief I am otherwise minded to grant. The effect of my orders will be that the Board will be entitled to continue its inquiries so long as it does not divulge any of its results to other persons during the pendency of the criminal proceedings. It will also be restrained during the same period from concluding whether the registration of CAP should be suspended or cancelled as a result of the matters arising out of the Midnight Seas' complaint. For practical reasons, these conclusions must apply mutatis mutandis to David. That information was required by the Board to be provided initially by 2 February 2009 but this was subsequently extended to the close of business on 9 February 2009. Some of the information sought in the notice was provided to the Board on 4 February 2009 but in respect of the balance a further extension was sought. That extension was not forthcoming and, assuming the notice to be valid, CAP had failed to comply with it by 10 February 2009. That failure may well have constituted an offence against reg 168 of the Income Tax Regulations 1936 . Regulation 168(2A) makes non-compliance with such a notice an offence punishable by a fine of 5 penalty units which, presently, is a fine of $550: see s 4AA Crimes Act 1914 (Cth). CAP submitted that the notice should be set aside on various grounds. It was said, first , that the regulation authorising the issue of the notice was invalid; secondly , that it was not properly addressed; thirdly , that it sought copies; and, fourthly , that it failed to state a "matter" to which it related. It is convenient to deal with these in turn. There are two limbs to this regulation making power. One concerns regulations which are "required or permitted to be prescribed"; the other, regulations "which are necessary or convenient to be prescribed for giving effect" to the Act. The prescription by this provision of the topic specified within it activated the power in s 266 to make a regulation. The topic specified is powers "with respect to the taking of evidence, the administration of oaths or affirmations, the summoning of witnesses and the production of documents". The applicants contend that the notice sought information. The applicants submit that a power to require information does not fall within the terms of s 251G. The applicants submitted that the view that s 251G did not prescribe a topic which permitted the production of information was supported by three authorities: Smorgon v Australia and New Zealand Banking Group Ltd [1976] HCA 53 ; (1976) 134 CLR 475 ; Fieldhouse v Commissioner of Taxation (1989) 25 FCR 187 ; O'Reilly v Commissioners of State Bank of Victoria (1983) 153 CLR 1. Nothing in those cases stands for the asserted proposition. Each was concerned with the operation of s 264 of the Act which expressly permitted the Commissioner to require a person "to furnish him with such information as he may require"; none considered the operation of s 251G or, indeed, anything resembling s 251G. The argument then falls to be decided on its own terms. I would reject it for two reasons. First , the power in s 251G authorises a regulation dealing with "the taking of evidence". The Board is not a curial body and the matter in which it conducts its business need not be attended by any particular formality; the evidence it receives need not be sworn and there is no apparent necessity for it to conduct an oral hearing at all. It is that controlling context which informs the meaning of the words "taking of evidence". I would infer in the context of a body such as the Board that it can take evidence in the form of writing. Once that is accepted there is no particular reason why that cannot take the form of notices requiring information. In a sense, evidence is merely information conveyed in a testimonial form. So viewed, s 251G authorises the making of a regulation requiring the provision of information. Secondly, the provisions of the second limb of s 266 permit the making of a regulation which is "necessary or convenient to be prescribed for giving effect to this Act". The power conferred by s 266 involves a well known statutory formula which authorises regulations to be made strictly ancillary to the Act but no so as to extend its scope or general application: Minister for Foreign Affairs and Trade v Magno (1992) 37 FCR 298 at 328 per French J citing Shanahan v Scott [1957] HCA 4 ; (1957) 96 CLR 245 at 253-254. As those authorities show, the criteria of necessity and convenience are not subjective. That means that the question of whether any particular regulation is authorised turns upon the Court's assessment of the regulation's necessity or convenience. Is the garnering by the Board of information necessary or convenient for the purpose of permitting the Board to carry out its duties and functions? In my opinion, it is convenient so that the answer to this question must be yes. It follows that the regulation is also supportable under the second limb of s 266. The applicants contended that a notice could not be addressed to a corporation but only to its proper officer. In truth, there were two submissions here; one, a submission that a notice could not be served upon a corporation; the other, that if it was, it had to be addressed to the corporation's proper officer. These arguments are, so it seems to me, quite without substance. It has been accepted that a corporation cannot be required physically to attend and give evidence for the very good reason that it is an abstraction lacking physical form: Smorgon v Australian and New Zealand Banking Group [1976] HCA 53 ; (1976) 134 CLR 475 at 481-482 per Stephen J. However, that physical constraint has no impact on the ability of a corporation to answer questions. It is for that reason well established that a corporation may be required to provide information. Indeed, Lockhart J described the contrary argument as "fallacious" in Fieldhouse v Commissioner of Taxation (1989) 25 FCR 187 at 198, an observation with which I respectfully agree. Burchett and Hill JJ also rejected the argument (at 203 and 218 respectively). The argument that the notice needed to be addressed to the corporation's proper officer is likewise of no merit. Regulation 168(2)(a) requires notice in writing to a person. The notice was addressed to the corporation; it came under cover of a letter addressed to one of the corporation's directors. CAP was given notice in writing. (d) Copies of any computer records pertaining to the invoices referred to in paragraph (c) above. The power in reg 168(2) to require production of books and documents is a power to produce books and documents in the custody of the person receiving the notice. It does not extend to require a party to bring documents into existence: Fieldhouse at 194-195 per Lockhart J, 204 per Burchett J and 209 per Hill J. It follows that the notice could not lawfully require the production by CAP of copies of original documents held by it. Of course, it is possible that the notice did not on its proper construction seek the creation of documents but instead the production of any copy documents which were in fact held. Lockhart J canvassed this possibility in Fieldhouse at 194-195. In this case, I do not think that the natural and ordinary meaning of subparagraphs (a), (c), (d) and (g) is that they require production of copies already in existence. It follows that these paragraphs are not supported by reg 168(2). Even if that were not so, however, the subparagraphs are ambiguous in that they leave the recipient unsure whether production of copies already existing is called for or whether copies of originals are to be made. The notice is, therefore, also bad for uncertainty: cf. Commissioner of Taxation v Australian and New Zealand Banking Group Ltd (1979) 143 CLR 499 at 525 per Gibbs CJ; Fieldhouse at 193 per Lockhart J, 204 per Burchett J and 210 per Hill J. It is common ground that the notice does not recite the matter which is before the Board or any opinion by the Board about such a matter. The applicants cited Smorgon as authority for the proposition that a failure to specify the matter meant the notice was invalid. Reliance upon Smorgon is, I think, misplaced. In that case Stephen J did uphold the challenge to the validity of a subparagraph of a notice issued under s 264 which sought "all other books, papers, writings and other documents concerning the said matters which are in your custody" (at 490). The "matters" were not defined in the notice but it was shown that they were the assessments of the incomes of various taxpayers. The recipient of the notice was a bank. The language of "matters" was drawn directly from the words of the latter part of s 264. These words describe the ambit of that power but do not provide a suitable formula for insertion in a notice. Such notice, given in exercise of the power, must instead specify with some degree of particularity, as do pars (i) to (vii) of the notice to the Bank, what documents are being sought. Failing this there will be no valid requirement. I do not think that this passage provides support for an argument that a notice must specify the relevant matter. To the contrary, it cautions against careless recitation of language of the provision. So much was held by Burchett J in Fieldhouse at 204 and by Hill J at 210. Lockhart J clearly assumed such a power to exist. However, on the facts in Fieldhouse , both Lockhart and Burchett JJ thought that severance was not practical because the provision of the copies was central to the notice so that parts of it no longer made sense if the paragraphs dealing with copies were excised. Hill J, on the other hand, did not share this concern. I do not think that the notice in this case suffers from that problem. Paragraphs (a), (c), (d) and (g) can be severed from the notice without the balance of it losing coherence. It should be noted in passing that the form of reg 168(2) may well present difficulties of application in the case of electronically held records, but it is not, presently, necessary to address the issues thereby arising. It is, I think, important to bring out into the open a suppressed premise upon which that argument rested. It was that the notice presently requires CAP to do something. In fact, the time for compliance with the notice expired on 9 February 2009 and it is no longer capable of being complied with. There is presently no legal obligation upon CAP to provide the information sought in the notice. It would not be possible to obtain a court order to compel CAP to provide the information. In a real sense, the notice is spent. If the information which was originally required by the notice were now volunteered by CAP it might be relevant to any penalty which was imposed upon it. A related concern, I would think, is the capacity of the continuing failure to provide the information to constitute professional misconduct. Voluntary production may well be likely reduce the seriousness of these matters. Failure to do so may result in prosecution under regulation 168 of the Income Tax Assessment Act 1936 . Any conviction may reflect poorly on your good fame, integrity, character and fitness and propriety. (b) It is possible that CAP may be prosecuted for a failure to comply with the notice. Despite these rather indirect incentives to provide the information to the Board, there was no evidence before me that CAP was proposing now to do so. I do not want to be issued with further notices that I believe are beyond what the Board is entitled to serve. Sam gave no evidence on this issue at all. There is, therefore, no evidence that CAP is intending voluntarily to produce the information previously sought in the notice. It is not the case that CAP is under a present obligation to provide the information sought. In that circumstance, the notice appears to present no real risk to the conduct of the criminal proceedings against Sam. Absent a real risk to the administration of justice in those proceedings, the notice should not be set aside on the basis that it constitutes a contempt: BLF at 56 per Gibbs CJ. He is also entitled during the pendency of the criminal proceedings to an injunction restraining the Board from determining whether to suspend or cancel the registration of CAP or David on the basis of the circumstances surrounding the depositing of the Midnight Seas cheque. CAP itself is not entitled to be protected from the notice of suspension by reason of double jeopardy. However, it is entitled to have the notice of suspension set aside because that notice on its face reveals jurisdictional error. The suspension of David's registration should, therefore, also be set aside. CAP's challenge to the legality of the notice to produce information largely fails but paragraphs (a), (c), (d) and (g) of the notice should be set aside. Sam's contention that that notice has the capacity to undermine the integrity of his proceedings should be rejected. It appears to me that all of this relief may be granted pursuant to s 39B of the Judiciary Act 1903 (Cth). To the extent that it cannot and relief is needed under the Administrative Decisions (Judicial Review) Act 1977 (Cth) I would extend the time for bringing the present proceeding pursuant to s 11(1)(c) of that Act. I do that because of the substance of some of the grounds advanced, the seriousness to the applicants of declining relief, the relatively short delay involved and the absence of real prejudice to the Board. The parties are to bring in short minutes of order giving effect to these reasons for judgment. I will hear the parties on costs. I certify that the preceding seventy-eight (78) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

power to suspend registration of tax agent whether multiple exercises of power in respect of same conduct infringed rule against double jeopardy notice to give evidence issued pursuant to reg 168(a) of the income tax regulations 1936 (cth) notice sought production of copies of documents whether issue of notice obliged recipient to produce copies not already in existence criminal proceeding pending in local court whether real risk that conduct of parallel administrative investigation would prejudice criminal proceeding administrative law taxation law contempt of court

The managing director of Bective Station is James Robert Vickery. Part of Bective Station's business involves operating a feedlot for the intensive fattening of livestock. 2 In 2002 Australia was experiencing a severe drought. Bective Station's feedlotting business expanded at this time. In August 2002 approximately 350 cattle per week entered Bective Station's feedlot --- ordinarily remaining there for 100 days before being replaced. In October 2002 approximately 4500 cattle were in the Bective Station feedlot. 3 Wheat constituted a significant portion of the ration fed to the cattle in the Bective Station feedlot in 2002. In August 2002 Bective Station entered into its first contract with AWB (Australia) Limited ('AWBA'). It agreed to purchase 6000 tonnes of 'general purpose wheat' for delivery between September and December 2002. On 5 November 2002 Bective Station entered into a second contract to purchase wheat from AWBA ('the Second Contract'). The Second Contract, which is the subject of this proceeding, provided for the delivery of 7000 tonnes of 'feed wheat' between March and August 2003. The terms and conditions of the Second Contract are considered below. 4 In December 2002 heavy rain fell in northern New South Wales. The price of wheat in Australia thereafter fell, in part it seems, because of the break in the drought. No wheat was ever delivered under the Second Contract and no payments have been made under it. 5 By a letter dated 20 October 2003 AWB Limited formally notified Bective Station of its default in relation to taking delivery of wheat under the Second Contract. This letter placed Bective Station on notice that 'AWB' proposed to 'washout Bective Station' . In this context a 'washout' involves a notional sale of the wheat the subject of the contract whereby the difference in value between the contract price of the wheat and its fair market value as at the 'washout' date is determined. Bective Station responded by disputing that it was under any obligation to accept delivery of wheat under the Second Contract alleging that it had been 'misled while under huge pressure battling the worst drought in 100 years. ' On 27 October 2003 AWB Limited issued an invoice to Bective Station claiming a ' washout amount ' of $1 368 500. 6 On 24 December 2004 Bective Station initiated this proceeding claiming that it had entered into the Second Contract in reliance on misleading representations made by an agent of AWBA. It sought an order declaring the Second Contract void ab initio or alternatively an award of damages. In the further alternative, Bective Station sought a declaration that the Second Contract was duly terminated following the failure of AWBA to deliver wheat under it. 7 On 24 March 2005 AWBA filed a defence and cross-claim. By its defence AWBA denied that Bective Station is entitled to the relief claimed by it. Additionally AWBA cross-claimed for damages in the amount of $1 368 500 alleging that Bective Station had refused to take delivery of wheat under the Second Contract. 8 The primary issue for determination in this proceeding is whether AWBA is entitled to damages for any breach by Bective Station of the Second Contract. For this reason it is convenient to give consideration to AWBA's cross-claim ahead of Bective Station's claim for relief under the Trade Practices Act 1974 (Cth) ('the TPA'). Unless AWBA would otherwise be entitled to recover damages for breach of contact from Bective Station, Bective Station will not be able to maintain its claims for relief under s 87(2)(a) and s 82 of the TPA because it will not have suffered, or be likely to suffer, any relevant loss or damage (see [44] below). 9 The only other relief claimed in the application filed by Bective Station is a declaration that the Second Contract was duly terminated by the failure of AWBA to deliver wheat under the Second Contract. This claim is considered below in the context of AWBA's cross-claim. The parties are described as AWB Limited (ABN 99 081 890 459) as agent for AWB (Australia) Limited (ABN 35 081 890 502) as seller and Bective Station Pty Ltd as buyer. The contract provided for the wheat to be delivered to the buyer at Tamworth during the period 1 March 2003 to 30 August 2003. 11 The Second Contract incorporated by reference the AWBA 'Standard Contract Terms and Conditions effective 1 July 1990' . The parties agree that the standard terms and conditions which thereby became part of the Second Contract are those set out in a document headed ' AWB Standard Terms and Conditions (Stockfeed)' ('the Standard Terms'). Sales on a delivered basis. The Seller undertakes to advise the Buyer of all despatches as soon as possible after despatch stating the haulier's name or railway wagon number and the number and gross or net weight of bags (if weighed) or approximately weight if in bulk. Advices should be available at the premises specified by the Buyer on or before arrival of delivery vehicles at those premises. PASSING OF OWNERSHIP: Ownership shall remain with the Seller until the goods are delivered to the Buyer. If a delivery date has been agreed in this contract immediately on the expiration of that date. If a period for delivery date has been agreed in this contract immediately upon the expiration of the last day of that period or, in the case of any portion of the goods subject to this contract which is due to be delivered within a particular month during that period, the last day of that particular month. Claims based on defect of quantity, quality or condition which shall be apparent upon reasonable inspection must be advised as soon as possible and confirmed by telegram, telex or by letter sent by first class post within three business days from the arrival of the goods at their destination under this contract. Technical claims, i.e. all others than those under (a) above, must be notified so as to be received by the Seller within 90 consecutive days from the last day of the delivery period with the same proviso as to series of contracts as in (a) above. DEFAULT: If either part [sic] defaults in the observance of any obligation imposed on him under or by virtue of this contract the other party shall be entitled to terminate this contract and thereafter to sue the party in default for breach of contract and if the Seller, to resell the commodity as owner or, if the Buyer, to purchase the commodity from another source and the loss (if any) arising on such resale or purchase and all expenses of and incidental to such shall be recoverable by the other party from the party in default as damages provided that proceedings for the recovery thereof be commenced within 12 months of the termination of this contract. ARBITRATION: Any dispute, controversy or claim arising out of or relations [sic] to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as at present in force. The appointing authority shall be the Secretary General at the Australian Centre for International Commercial Arbitration in Melbourne. The number of arbitrators shall be one. The place of arbitration shall be Melbourne. TIME LIMITS FOR CLAIMING ARBITRATION: Arbitration shall be claimed in relation to quantity, quality or condition within 28 consecutive days from the date of the arrival of the goods at their ultimate destination in Australia and in relation to technical claims within 120 consecutive days from the last day of the delivery period. NON PAYMENT: The Seller reserves the right to withhold deliveries under this contract until all and any overdue payments under this or any other contract with him by the Buyer have been received and reserves a lieu [sic] upon --- and the right to sell or otherwise dispose of --- all goods the subject of this contract whether appropriated to it or not, in respect of any such payments. TIME: The stipulations in the contract as to time are of the essence of the contract. In breach of the Contract, [Bective Station] refused to take delivery of the Wheat during the aforesaid period or at all. As a result of the aforesaid breach of the Contract, [AWBA] has suffered damage. 15 For the reason identified above, it is appropriate to leave aside for present purposes Bective Station's claim to be entitled to relief under the TPA. Was the Contract Terminated, and if so, when? 17 AWBA contended the Second Contract has never been terminated but rather remains on foot. AWBA asserted that it remains willing and able to perform the Second Contract. 18 It is common ground that Bective Station did not make full payment under its first contract to purchase wheat from AWBA until a date which the evidence does not fix precisely but which was shortly after 19 August 2003. It was on 19 August 2003 that AWB Limited (presumably acting on behalf of AWBA) issued a statement of liquidated claim against Bective Station in the District Court of New South Wales. Clause 12 of the Standard Terms authorised AWBA to withhold delivery under the Second Contract until all overdue payments were made under the first contract. AWBA was thus entitled to withhold delivery throughout March 2003 and, indeed, until at least late August 2003. Bective Station did not thereafter request delivery of wheat or purport to terminate the Second Contract for breach because of AWBA's failure to deliver wheat under the Second Contract. Clause 15 of the Standard Terms, which provided that stipulations as to time were of the essence, did not operate to bring the contract to an end; assuming clause 15 to have not earlier ceased to operate because of Bective Station's overdue payments, it authorised an innocent party to elect to terminate the contract ( Carr v J A Berriman Pty Ltd [1953] HCA 31 ; (1953) 89 CLR 327 per Fullagar J at 348). 19 The contentions of Bective Station that the Second Contract was terminated in March 2003 by reason of non-delivery of the wheat as required by the Second Contract, or alternatively on or before 31 August 2003 by effluxion of time, therefore fail. 20 Bective Station's further alternative contention that the Second Contract was terminated on 20 October 2003, or five days thereafter, is founded on AWB Limited's letter dated 20 October 2003. The expiration date of the contract was 30 th August 2003. Bective Station Pty Ltd, as the party in default, is liable for the loss incurred by AWB as a result of reselling the grain at a reduced price. AWB have obtained third party independent advice quoting fair market value for wheat delivered into a buyers nominated store in the Liverpool Plains region. Should you accept a washout AWB will apply market value as at the end of the contract the price being $215/MT, if not AWB will apply spot market price to determine fair value, indication as at 20/08/03 of $200/MT. AWB will issue a tax invoice within 5 business days. For your information the cost of a washout basis the October price is $1,368,500. We believe Steve Adams of AWB was not in touch with the forward market and supply of wheat. We believe the AWB should revisit the advice given and accept the fact the market and supply were not evaluated in a factual manner. The AWB took a position of advantage while advising Bective to take a position of disadvantage. Bective is not in default when the advice given is evaluated against supply and delivery of wheat during 2003. Therefore the sales contract and advice from AWB did not take into account "duty of care" considering AWB's protected position. The due date for payment was shown as 2 December 2003. 23 On 6 April 2004, Mr Vickery received a letter by facsimile transmission on AWB Limited stationery signed by Peter Jones, General Manager Trading. The letter advised Mr Vickery that Mr Jones was satisfied that AWB had ' conducted itself diligently and professionally and in no way contributed to the debt incurred ... as a result of the contracts [sic] being washed out. ' The letter requested payment of $1 368 000 [sic] on the invoice issued on 27 October 2003 and advised that, in the event of non-payment, legal action would be initiated to recover the amount. 24 On 24 August 2004, Eakin McCaffery Cox solicitors sent to McMahon & Broadhurst, then solicitors for Bective Station, a notice of arbitration with an attached statement of claim. This Notice is given to you pursuant to clause 10 of the Standard Terms and Conditions (Stockfeed) which forms part of Sales Contract No 2301055 dated 6 November 2002 ("Contract") between us and you. AWB Pty Ltd [sic] ACN 081 890 459 ("AWB") claims that you have breached the Contract by refusing to take delivery of the wheat referred to in the Contract. AWB claims damages against you for breach of the Contract. In accordance with Article 3 of the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL Arbitration Rules), AWB notifies you that it requires that the dispute which is more particularly set out in the Statement of Claim annexed to this Notice be referred for arbitration by a single arbitrator appointed by the Secretary-General of the Australian Centre for International Commercial Arbitration in Melbourne (which is required by clause 10 of the Contract). It was a term of the Contract that the Respondent would take delivery of the Wheat between 1 March 2003 and 30 August 2003. In breach of the Contract, the Respondent refused to take delivery of the Wheat during the aforesaid period or at all. As a result of the aforesaid breach of the Contract, the Claimant has suffered damage. AWBA contended that notwithstanding the 'washing out' of the Second Contract and the issue of the invoice to Bective Station dated 27 October 2003, the Second Contract had not been terminated and AWBA remained ready, willing and able to perform the Second Contract. It placed reliance on the fungible nature of wheat. It submitted that the 'washing out' merely demonstrated AWBA's attempt to mitigate its loss by crystallising an amount to sue for and that its conduct did not result in termination of the Second Contract and was not inconsistent with the continued performance of the Second Contract. 27 I reject the above contention of AWBA on two separate bases. 28 First, by the letter of 20 October 2003, AWB Limited invoked the terms and conditions of the Second Contract in asserting the discretionary right 'to resell the quantity of grain in default at fair market value. ' The terms and conditions referred to must, at the least, include clause 9 of the Standard Terms (see [11] above). Clause 9, in the case of default, gives the innocent party an entitlement ' to terminate this contract and thereafter to sue the party in default for breach of contract and if the Seller, to resell the commodity as owner ' (emphasis added). For this reason the letter of 20 October 2003 is to be understood as formal notice to Bective Station that, unless within five business days of receiving the letter it remedied its default in relation to taking delivery of wheat under the Second Contract, AWB Limited (presumably as agent for AWBA) would exercise its contractual right to terminate the contract for breach and fix the damages payable by Bective Station by reference to the fair market value of the wheat at that time (ie in October 2003). 29 The conduct of AWB Limited thereafter was entirely consistent with the above view of the purport of its letter of 20 October 2003. On 27 October 2003 it issued an invoice to Bective Station claiming payment of a ' washout amount ' of $1 368 500; that is, the amount which its letter of 20 October 2003 advised would be the cost of a 'washout' based on the October price for wheat. The issuing of this invoice to Bective Station is consistent only with AWB Limited (presumably as agent for AWBA) having terminated the Second Contract and formulated a claim for damages calculated by reference to the difference between the contract price and the fair market price as at October 2003 (ie the 'washout' amount). 30 Bective Station, by its counsel at the hearing, explicitly waived any entitlement that it may have had to object to the 'washout' procedure on the ground that it involved a notional, rather than an actual, sale of wheat. AWBA did not ever allocate wheat to the Second Contract. 31 The second basis on which I reject the contention of AWBA that the Second Contract has not been terminated is that by each of the invoice of 27 October 2003, the statement of claim which formed part of the notice of arbitration and the cross-claim in this proceeding, AWB Limited or AWBA has claimed common law damages for loss of bargain. That is, by each of those instruments it has advanced a claim for damages calculated by reference to the complete value to AWBA of the Second Contract had it been performed. Once termination due to the defendant's wrongful conduct is established the plaintiff is entitled to damages for loss of bargain ... Barwick C.J. suggested in Ogle [ Ogle v Comboyuro Investments Pty Ltd [1976] HCA 21 ; (1976) 136 CLR 444 at 450], that termination is not an essential element in an action for loss of bargain damages, except in the case of anticipatory breach, but the preponderant opinion in Australia and England is against his view' . It is for this reason that a vendor must bring his contractual obligation to sell to an end before he can maintain an action for damages for loss of bargain' . 34 I therefore conclude that the Second Contract was terminated, at the latest, on 27 October 2003 when AWB Limited issued an invoice to Bective Station claiming payment of $1 368 500 being the difference between the contract price of the wheat the subject of the Second Contract and the fair market value of that amount of wheat as at October 2003. Is AWBA's Claim Time Barred? However, the parties to the contract may agree a shorter limitation period ( Port Jackson Stevedoring Proprietary Limited v Salmond & Spraggon (Australia) Proprietary Limited [1978] HCA 8 ; (1978) 139 CLR 231 per Barwick CJ at 239-9). 36 The parties are in agreement that the time within which AWBA was obliged to institute a proceeding to recover damages from Bective Station for breach of the Second Contract is governed by the Second Contract, and in particular by the Standard Terms. However, there is a dispute between the parties as to the proper construction of the Standard Terms in this regard. 37 Bective Station placed reliance on clause 9 of the Standard Terms and argued that as the cross-claim was not filed within 12 months of the termination of the Second Contract it is time barred. The cross-claim was filed on 24 March 2005. 38 AWBA contended that the Second Contract has not been terminated and thus the 12 month period referred to in clause 9 has not commenced to run. I reject this contention for the reasons given above. The Second Contract was terminated, at the latest, on 27 October 2003. 39 AWBA alternatively contended that it commenced proceedings for the recovery of damages by giving Bective Station a notice of arbitration within the twelve month period referred to in clause 9. The validity of this contention depends on the proper construction of clauses 8, 9, 10 and 11 of the Standard Terms. In particular it depends on whether an action to recover damages pursuant to clause 9 is a 'dispute, controversy or claim' within the meaning of clause 10. 40 Clause 10 required a dispute, controversy or claim arising out of or in relation to the Second Contract, or the breach, termination or invalidity thereof, to be settled by arbitration. In my view, clauses 8 and 11 provide insight into the intended ambit of clause 10. Subclause 8(a) refers to claims based on defect of quantity, quality or condition which is apparent on reasonable inspection. Subclause 8(b) refers to technical claims which are 'all others than those under (a) above' . Clause 11 fixes time limits for claiming arbitration. For claims of the kind identified by clause 8(a), the time limit is 28 days from the date of the arrival of the goods at their ultimate destination in Australia. For claims of the kind identified in clause 8(b), the time limit is 120 days from the last day of the delivery period. The language of clause 8, when viewed together with the short time limits fixed by clause 11, tends to suggest that claims under clause 8 are claims directly relating to the goods sold under the contract. 41 This construction of clause 8 is consistent with the distinction drawn by the Standard Terms between 'claims' (clause 8) and 'default' (clause 9). Clause 9 provides a means whereby an innocent party may quantify its loss, if any, following termination of the contract because of the other party's default. It is, in my view, unlikely that the parties would have intended that arbitration was an appropriate means of recovering the loss so quantified. Support for this view is found in the language of clause 9 which authorises the innocent party 'to sue the party in default for breach of contract' (emphasis added). This language is in contrast to the language of clauses 10 and 11 pursuant to which arbitration is 'claimed' and disputes 'settled' by arbitration. I conclude that an action to recover damages following the termination of the contract pursuant to clause 9 is not a 'dispute, controversy or claim' within the meaning of clause 10. I therefore reject AWBA's argument that the final words of clause 9 provide for a time limit for claiming arbitration which is additional to the time limits fixed by clause 11. In my view, clause 9 fixes the time within which a party who terminates the contract in reliance on the default of the other party may institute legal proceedings for breach of contract and to recover damages in accordance with the clause. 42 I note incidentally that the conduct of AWB Limited in instituting proceedings in the District Court of New South Wales against Bective Station in respect of non-payment of the full purchase price under the first contract was consistent with the view which I have taken of the proper construction of clauses 9 and 10 of the Standard Terms. 43 The only legal proceeding in which AWBA has sued Bective Station to recover damages in accordance with clause 9 is the cross-claim in this proceeding. As the cross-claim was not commenced within 12 months of the termination of the contract, I conclude that it is time barred. Section 87 authorises the Court to make such order or orders as it thinks appropriate to compensate an applicant for loss or damage which the applicant has suffered or is likely to suffer because of a contravention of the Act. Section 82 allows a person who suffers loss or damage because of a contravention of the Act to recover the amount of that loss or damage. The only loss and damage pleaded by Bective Station in its statement of claim is based upon the invoice for $1 368 500 dated 27 October 2003 issued to it by AWB Limited. I have concluded that AWBA's claim to recover $1 368 500 from Bective Station is time barred. Unless and until my conclusion is overturned on appeal, Bective Station is under no legal obligation to pay the invoiced amount. It has thus suffered no loss and damage, and is not likely to suffer loss and damage, based on the invoice. 45 Nonetheless, lest an appeal is instituted from this judgment, it is appropriate for me to determine whether Bective Station entered into the Second Contract in reliance on conduct of AWBA which was misleading or deceptive, or likely to mislead or deceive, within the meaning of s 52 of the TPA. AWBA did not formally admit that, if the representations upon which Bective Station allegedly placed reliance were made, they were made in trade and commerce. However, it did not seek to establish otherwise. I am satisfied that if the alleged representations were made, they were made in trade or commerce. 48 The issues that it is therefore appropriate for me to determine are whether AWBA engaged in conduct that was misleading and deceptive, or likely to mislead or deceive (s 52) and, if it did, whether Bective Station, assuming it to have suffered loss and damage as a result of entering into the Second Contract, suffered that loss or damage 'by conduct of' AWBA (s 82). However, AWBA denies that Mr Adams made the representations alleged. AWBA did not dispute that if the representations, or any of them, were made, they were representations with respect to future matters which AWBA did not have reasonable grounds for making (s 51A of the TPA). 53 Mr Vickery had negotiated his first contract to purchase wheat from AWBA with Mr Adams. I thought I'd better give you a ring because as you know the wheat harvest is going to be poor and supplies of wheat are getting low. Your current contract ends in March 2003. Will you need wheat after that, because if you don't purchase now, there will be no wheat in Australia from March 2003 until the harvest begins in October. We're seeing heavy demand at the moment, but there's wheat available if you buy now. I'm holding some for you, but if you don't buy now you'll have to import wheat from March 2003 onwards. Let's do a hypothetical exercise. If you bought wheat from the US you'd have to pay Chicago prices, US freight, shipping, the cost of treatment of the wheat on arrival in Australia, you'd have to pay Australian customs duties and you'd have to pay the inland freight costs. Aust. I've already sold 25,000 tonnes of wheat this week. If you want to get some you'd better move quickly because otherwise there won't be any available. If you don't order promptly wheat will be unprocurable at the price we are now offering, and there'll be no wheat available from March onwards. (can not recall quoted price). Rob, there is a likelihood that market prices will come off in the event that there is general rain and a sorghum crop is planted. The quality of the wheat is being quoted is 72 kilograms per hectolitre and a maximum of 15% screenings. Price indicators at the moment for imported wheat ex-store the metropolitan area for January 2003 is $360 per tonne with a minimum test weight of 70 kilograms per hectolitre. The relevance of the first line of the entry is not apparent. This later entry includes the note '$375 -> Mch + $3.50/t APRIL' . I will get back to you. He said that he passed this information on to Mr Vickery who asked him to book the tonnage. 66 Mr Adams' notebook, under the date 4 November 2002 contains two entries beside the name 'Rob Vickery' . The first includes the notes '378 + $3.50/t to 30/8/02' and '7k tonne' . 69 However, Mr Adams agreed in cross-examination that topics discussed between him and Mr Vickery in October and November 2002 included the availability of wheat for feedlotting in 2003 and the importation of wheat. Mr Adams agreed that one of the things that feedlotters were worried about at the time was the supply of grain in the future. Bective Station was thereafter granted leave to file and read an affidavit sworn by Christina Maria Vickery, Mr Vickery's wife. I made an order under s 136 of the Evidence Act 1995 (Cth) ('the Evidence Act '), on the application of AWBA, that Mrs Vickery's evidence of what was said to her by Mr Vickery was only to be used to prove what Mr Vickery said to her and was not to be used to prove the truth of anything that Mr Vickery said to her. 71 Mrs Vickery gave evidence of a conversation between her and her husband which took place on about 1 November 2002 while they were driving to Noosa for a holiday. If we don't lock in wheat now, he said that there will be no wheat available. But if we were to do that we would have to bring in a whole shipment, which is way beyond Bective's needs and means. 73 While I accept that Mrs Vickery's recollection of the details of what Mr Vickery said to her in November 2002 may have become tainted by later conversations between them on the same topic, I am satisfied that Mrs Vickery was an honest and credible witness. Notice of Bective Station's intention to adduce evidence from these deponents was given to AWBA pursuant to s 97(1)(a). AWBA thereafter filed affidavits from ten deponents on the basis that the evidence in the affidavits could be adduced in reliance on s 97(2)(b) to contradict the evidence sought to be adduced by Bective Station in reliance on s 97(1). AWBA later indicated that it only wished to read the affidavits of five (or perhaps four) of those deponents. 76 I heard argument on the admissibility of the evidence sought to be adduced in reliance on s 97 ahead of the matter being called for hearing. My rulings were that Bective Station could adduce the affidavit evidence of three only of its deponents, namely Duncan Rowland, Troy Setter and Allan Edward Gillogly, but that AWBA could not adduce the affidavit evidence of any of its deponents. I indicated at the time of my rulings that I would give expanded reasons for the rulings in this judgment. These are those expanded reasons. There are other feedlots who are also short of grain, and they will be out of grain in the next few months. Prices will continue to rise until supplies run out. This year's harvest is going to be very small, and you need to ensure that you're covered for grain so that you can keep operating the feedlot. There is more demand for feed wheat than supply. But if you don't buy now, there will be none left until the next harvest. You may leave yourself short and you will not be able to get grain for the feedlot until next October. We could run out of grain. In that case the appellant alleged that the respondent's agent had made misrepresentations which induced the appellant to lease certain premises in a shopping centre. The appellant sought to adduce evidence that the agent had made similar representations to other prospective tenants of the shopping centre. Sackville J accepted that the admissibility of the evidence sought to be adduced was to be determined by reference to s 97 as evidence that the agent had a tendency to act in a particular way. 81 In my view the affidavit evidence of Messrs Rowland, Setter and Gillogly referred to above is not relevantly distinguishable from the kind of evidence sought to be adduced in Jacara Pty Ltd v Perpetual Trustees WA Ltd . It is therefore to be regarded as tendency evidence falling within s 97. I note incidentally that in each case the evidence may, in any event, have been admissible in reply because of the evidence of Mr Adams that, in effect, he would never have said anything to the effect that 'there will be no wheat in Australia from March 2003 until the harvest begins in October '. The application on which I was invited to rule, however, was an application to adduce the evidence pursuant to s 97(1). 82 For the evidence of Messrs Rowland, Setter and Gillogly to be admissible under s 97(1) it was necessary for the requirements of both paragraphs (a) and (b) of the subsection to be satisfied. As mentioned above, Bective Station had given the notice required by paragraph (a). Rather, I considered that in each case the probative value of the evidence substantially outweighed any danger of the kind identified in s 136 of the Evidence Act . 85 AWBA argued that evidence was admissible under s 97 if it was adduced to explain or contradict tendency evidence adduced by another party notwithstanding that neither of paragraphs (a) nor (b) of s 97(1) was satisfied. Section 97(2) plainly relieves a party who seeks to adduce evidence to explain or contradict tendency evidence called by another party from the requirement to give notice to the other party in compliance with s 97(1)(a). However, the language of s 97(2) provides no basis for an inference that s 97(1)(b) has no application in respect of tendency evidence adduced to explain or contradict tendency evidence adduced by another party. I conclude that such evidence must satisfy the requirement of s 97(1)(b). 86 The evidence which AWBA sought to adduce to contradict the evidence of Messrs Rowland, Setter and Gillogly was, in effect, evidence from other clients of Mr Adams that Mr Adams had not made statements to them anything like the statements which Mr Vickery claimed that Mr Adams had made to him and that they regarded Mr Adams as honest and a man of integrity. It is not necessary for me to express a concluded view on whether this evidence was appropriately characterised as tendency evidence. I accept that it was evidence of the character and conduct of Mr Adams. I formed the view that the probative value of this evidence, if adduced, would have been, at best, slight. The evidence sought to be adduced by Bective Station was not intended to establish, and did not tend to establish, that Mr Adams had an invariable practice of making statements to a particular effect. Having regard to Mr Adams' evidence that he would never have said words to the effect that the supply of wheat in Australia would run out, evidence that he did not say words to that effect on nominated occasions is of little, if any, probative weight. By contrast, evidence that he did say words to that effect may have, and I concluded in the circumstances to which Messrs Rowland, Setter and Gillogly deposed, did have, significant probative value. Similarly, I did not think that evidence that a number of Mr Adams' clients regarded him as honest and as a man of integrity had any significant probative value in the circumstances of this case. 87 Had I taken the view that any of the evidence which AWBA sought to adduce under s 97 of the Evidence Act was admissible, I would nonetheless have refused to admit it on the basis that its probative value was substantially outweighed by the danger that the evidence might cause or result in undue waste of time. My concern was that, notwithstanding the limited probative value of the evidence, significant time would be spent at trial cross- examining the deponents of AWBA's affidavits to elucidate details of the history and nature of all their previous dealings with Mr Adams. What Did Mr Adams Say? However, each of them was giving evidence of telephone conversations which took place approximately four years earlier. 89 I accept that the earliest complaints made by Mr Vickery about the Second Contract concerned the contract price. By February 2003 the price of wheat had dropped significantly below the price payable under the Second Contract. I also accept that Mr Vickery then believed, and may well still believe, that 'AWB' was in a position to manipulate the price of wheat in Australia and had in fact done so to his serious disadvantage. However, notwithstanding Mr Vickery's jaundiced view of 'AWB', I accept his evidence that he caused Bective Station to enter into the Second Contract because of a concern that, if he did not, Bective Station may have been unable, after March 2003, to obtain the wheat which it would require to operate its feedlot. The explanation for Mr Vickery's early complaints being complaints about price is found, I am satisfied, in the fact that Mr Vickery would not have bothered to complain about being contractually bound to take future deliveries of wheat from AWBA were the contract price reasonably competitive with the spot price for wheat at the time of delivery. 90 While I did not form the view that Mr Adams endeavoured positively to mislead the Court, I am satisfied that he has little genuine recollection of the content of his telephone conversations with Mr Vickery on 30 and 31 October and 4 November 2002. This is no more than would ordinarily be expected. Mr Adams spoke with a number of prospective purchasers of wheat every day during the relevant period and made only limited notes of the conversations. Mr Adams had no occasion to recall the details of his conversations with Mr Vickery until well after they had taken place. Moreover, it would not be unnatural for Mr Adams to have convinced himself in the intervening period that, notwithstanding the severity of the 2002 drought, he had never expressed views which in retrospect might seem alarmist about the future supply of wheat in Australia. 91 By contrast, Mr Vickery conveyed the tenor of his conversations with Mr Adams on 30 and 31 October 2002 to Mrs Vickery within a day or so of the conversations taking place. I accept Mrs Vickery's evidence that Mr Vickery was tense in a way which affected their holiday until after he confirmed an order for additional wheat. This evidence provides support for a finding that at least something was said to Mr Vickery by Mr Adams which caused him serious concern and which, additionally, precipitated the placing of an order for the future delivery of wheat to Bective Station. No basis for such a concern is readily found in Mr Adam's version of their conversations. 92 I attach significance to the fact that Mr Vickery made more extensive notes of the conversations than Mr Adams. It was not suggested to Mr Vickery that he had at any later time supplemented his notes. Nor was it suggested to him that his diary note for 30 October 2002, to the extent that it records 'no wheat in Australia 2003 March on if purchase not affected now', reflected information provided to him by a person other than Mr Adams or an inference which he had himself drawn from pricing information given to him by Mr Adams. 93 I am satisfied that Mr Adams did tell Mr Vickery on 31 October 2002 of significant contracts for the future delivery of wheat entered into by other buyers. Mr Adams conceded this possibility. Moreover, the evidence suggests that Mr Vickery's diary note of that date is substantially accurate as to the volumes of wheat contracted to be purchased by the other clients of AWBA. Mr Adams is the only logical source of that information. The information may be assumed to have been conveyed in an endeavour to persuade Mr Vickery that it would be wise for Bective Station also to commit itself to a contract to purchase wheat to be delivered in 2003. 94 Finally, I accept the evidence of Mr Rowland and Mr Setter that in conversations which occurred in late October or early November 2002 Mr Adams told them that wheat would at some time become unavailable until the harvest commencing in October 2003. AWBA accepted that Mr Rowland was an impressive witness although it sought to characterise Mr Setter as dishonest. I reject this characterisation. However, even if I did not, it is beyond dispute that Mr Rowland's evidence, if accepted, contradicts Mr Adam's evidence that he definitely did not say anything to the effect that 'there will be no wheat in Australia from March 2003 until the harvest begins in October' . 95 I accept the submission of AWBA that the degree of animosity shown by Mr Gillogly towards 'AWB' renders it dangerous to rely on his evidence. 96 I do not consider it necessary to determine whether, as AWBA submitted, any thoughtful person would realise that the supply of wheat would never run out in Australia because market forces would result in imported wheat entering the market. Quarantine restrictions would, it is accepted, impinge on the availability of imported wheat for stock feed. In the context in which the conversations between Mr Adams and Mr Vickery took place, I am satisfied that 'wheat' meant wheat that would be available for use in a feedlot. The representation pleaded in par 19(a) of the statement of claim is to be similarly understood. 97 I am satisfied on the balance of probabilities that in the telephone conversations that took place between Mr Vickery and Mr Adams on 30 and 31 October 2002, Mr Adams said to Mr Vickery words to the effect that if you (ie Bective Station) do not purchase now there will be no wheat in Australia from March 2003 until the harvest begins in October. On that basis I am satisfied that Mr Adams, as agent for AWBA, made the representation pleaded in par 19(a) of the statement of claim (see [50] above). As mentioned above, AWBA accepted that if the representation was made it is to be taken to be misleading (see s 51A of the TPA). I therefore find that AWA contravened s 52 of the TPA. 98 I am not satisfied that the representations pleaded in par 19(b) and par 20 of the statement of claim (see [50]-[51] above) were made. 99 I am also satisfied on the balance of probabilities that Mr Vickery caused Bective Station to enter into the Second Contract in reliance on the representation made to him by Mr Adams. Mrs Vickery's evidence seemed to me to be particularly compelling in this respect. Nothing in her evidence suggested that, in the early days of the holiday in Noosa which she and her husband shared, her husband was in contact with others whose views on the future supply of wheat he might have regarded as significant. Nor was it suggested to her that her husband told her of conversations that he had had with others on that topic. I accept that Mr Vickery regarded 'AWB' as the most reliable source of information available as to the future supply of wheat. I have concluded that AWBA is not entitled to recover any amount from Bective Station pursuant to the Second Contract because it did not commence proceedings to recover its damages within 12 months of the termination of the Second Contract. The cross-claim must therefore be dismissed. 101 As a consequence Bective Station's claim for relief under the TPA also fails. Bective Station is unable to show that it has suffered, or is likely to suffer, any relevant loss or damage because of conduct of AWBA. Bective Station's application must therefore also be dismissed notwithstanding my finding that AWBA contravened s 52 of the TPA. The application be dismissed. 2. The cross-claim be dismissed. 3. AWBA pay Bective Station's costs of the proceeding.

whether cross-claimant entitled to damages for breach of contract by cross-respondent for failing to take delivery of wheat whether contract was terminated by non-delivery of wheat, by effluxion of time, or by giving notice of a 'washout', or whether still on foot if contract terminated, whether cross-claimant time barred from bringing claim for damages proper construction of contract term of contract that proceedings for recovery of damages be commenced within 12 months of termination of the contract whether a notice of arbitration constituted commencing proceedings held: contract terminated following 'washout' of contract cross-claimant time barred from bringing claim for damages as notice of arbitration did not commence proceedings claim for relief under s 82 and s 87 of the trade practices act where damage suffered by applicant dependent on respondent making out its cross-claim and being able to recover damages where held that damages not recoverable by cross-claimant held: applicant unable to maintain claim for relief as has not suffered or likely to suffer any relevant loss or damage whether applicant entered contract in reliance on conduct of respondent's agent which was misleading or deceptive or likely to mislead or deceive whether respondent's agent said words to the effect that there will be no wheat available for purchase in australia from march 2003 until the october 2003 harvest held: respondent's agent did make the representation and the applicant entered into the contract in reliance on it tendency evidence evidence sought to be adduced by applicant that the respondent's agent had made similar representations to other purchasers of wheat whether significant probative value of evidence outweighed prejudice to respondent whether tendency evidence sought to be adduced by respondent to contradict tendency evidence must comply with s 97(1)(b) of the evidence act held: tendency evidence of applicant received tendency evidence to contradict must comply with s 97(1)(b) tendency evidence adduced by respondent did not have significant probative value contracts trade practices trade practices evidence

In the case of Estate Property Group Limited an extension to midnight on 1 November 2007 is sought. The corporations concerned are linked in ways I need not deal with at the moment. These applications raise the familiar tension between, on the one hand, the objective of having the first stage of administration dealt with promptly so as not to unduly interfere with the rights of those whom a moratorium affects and, on the other hand, giving worthwhile information to the creditors so that sensible decisions can be made at the meeting. 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. The power of the creditors at the meeting to adjourn the meeting for a limited period (s 439B) to some extent alleviates the problem but in complex matters the period in question (not more than 60 days) is often not sufficient to meet the exigencies of the situation. 2 These applications are of particular difficulty because the administrations involve the development of a number of properties at different stages of development making any assessment of overall value extraordinarily difficult. There will be commercial decisions to be made about, for example, completing uncompleted projects. I have no doubt that in each case there is a strong case for extending the convening period. 3 The aspect of the matter which has caused me concern is that a period of months is a substantial stretch of the statutory provisions. I know it has been done in other cases. Some of those cases --- for example, Fincorp Group Holdings Pty Limited [2007] NSWSC 363 --- bear at least some resemblance to the present case, both because of the nature of the corporations and because of the closeness in time to the present collapse. Having considered the evidence in this case, I think that it is too early to commit to such a lengthy period before the creditors have any real say in the matter. 4 A course which is taken in some of these matters and was, I notice, taken in Fincorp [2007] NSWSC 363 , is to provide for a lengthy period but also, by an order under s 447A , permit foreshortening of the period if events warrant it. Other courses which can be taken are, if a case is made out, to utilise s 447A to extend the period for which the creditors can adjourn the meeting pursuant to s 439B or to utilise s 447A to grant a further extension of the convening period under s 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. 5 I take into account, amongst other factors, the opposition of at least one secured creditor in the Estate Property Group case, albeit a creditor who has not filed evidence and is not present. I take into account the short notice of this application to creditors generally and to the Australian Securities and Investment Commission. I also have in mind the link between the two cases and the fact that the applications are also linked with an extension of the decision period pursuant to s 441A in relation to the rights of Australian Capital Reserve Limited. On the other hand, I take into account the fact that I should not be building up costs or causing too much diversion of effort by the administrators in making successive applications to the Court instead of getting on with their job. I think there is sufficient flexibility built into these matters if I commit to the use of s 447A to fix a further extension of the convening period if appropriate. I will ensure that there is an adequate extension of the convening period after the date to which the matters will be adjourned so that, even if I am not persuaded there should be a further extension, there will be a practical way of coping with the situation. 6 In each of these matters, namely, Estate Property Group Limited, NSD 1079 of 2007 and Australian Capital Reserve Limited, NSD 1085 of 2007, I make orders respectively in accordance with the short minutes of order which I have initialled and placed with the papers in each matter. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

extension of convening period for second meeting of creditors of companies in administration corporations

The respondents admit such conduct. The respondents acknowledge that upon the admissions made by each of them it is open to the Court to find that breaches of the applicable sections of the Act have occurred and that the respondents are each liable to penalties resulting from their conduct. The parties have also agreed upon the quantum of such penalties, and seek orders in relation thereto which, if accepted by the Court, determine the penalties payable. 2 The relevant conduct consists of understandings arrived at between the first and second respondents in relation to the price of chemicals used for the purpose of the preservation of wood, namely copper chrome arsenate ('CCA') and light organic solvent preservative ('LOSP'). The ACCC claims that the first respondent ('FChem') engaged in the relevant understandings in respect of the price of CCA between June 1998 and January 2001 with another corporation which is not a party to the proceedings, namely Koppers Arch Wood Protection (Aust) Pty Limited ('Koppers'). 3 In January 2001 the business of FChem relating to wood preservative chemicals was sold to the second respondent (' Osmose'). The ACCC claims that thereafter Osmose reached an understanding with Koppers in relation to the supply of CCA and also attempted to induce Koppers to enter a price understanding in respect of the sale of LOSP. The period during which it is alleged that Osmose engaged in conduct in contravention of the Act is from January 2001 to December 2001. 4 The third respondent ('Mr Greenacre') was employed by FChem as its Group General Manager. Upon the sale of the business to Osmose in January 2001 Mr Greenacre became the General Manager of Osmose. It is alleged that he engaged in the conduct of reaching the understandings between FChem and Koppers relating to the supply of CCA in breach of the Act and after his appointment as General Manager of Osmose he engaged in the conduct of reaching the understandings between Osmose and Koppers relating to the supply of CCA referred to above. 5 When the proceedings first came before the Court on 19 November 2007 a joint tender bundle was provided to the Court which incorporated the Statement of Agreed Facts, joint submissions and agreed draft declarations and orders relating to each respondent. However, it became apparent to the Court that a potential inconsistency arose between the Statement of Agreed Facts relating to Osmose and those relating to Mr Greenacre. The Statement of Agreed Facts relating to Osmose acknowledged that Osmose attempted to induce Koppers to contravene s 45(2)(a)(ii) of the Act in relation to the price of LOSP. In contrast, the Statement of Agreed Facts concerning Mr Greenacre alleged that Osmose was a party to an understanding concerning LOSP (not merely that it attempted to induce Koppers to make or arrive at an understanding). 6 For this reason the Court invited the parties to reconsider the facts and the declaratory relief sought against Osmose and Mr Greenacre. 7 On 19 December 2007 the Court granted leave to Mr Greenacre to withdraw his admissions contained in paragraphs 72A to 72C and in 130A and 130B of the Amended Statement of Claim which acknowledged that both Osmose and Mr Greenacre made or arrived at an understanding relating to the price increase of LOSP. In a further Amended Defence dated 19 December 2007 Mr Greenacre withdrew such admissions. 8 On 20 December 2007 an Amended Statement of Agreed Facts between the ACCC and Mr Greenacre dated 19 December 2007 was filed, together with Supplementary Submissions concerning LOSP. Such facts omit any reference to price fixing of LOSP involving Mr Greenacre and the agreed draft declarations seek no relief against Mr Greenacre in respect of LOSP. Accordingly, in consequence of such amendment, the potential inconsistency between the agreed facts relating to the second and third respondent has been averted. In doing so FChem contravened s 45(2)(a)(ii) of the Act as the understanding with Koppers contained a provision which had the purpose, or had or was likely to have the effect of, fixing, controlling and maintaining the price at which FChem and Koppers or either of them would supply CCA. Secondly, by increasing its prices for the supply of CCA to many of its Australian customers in late June 1998 FChem gave effect to such understanding in contravention of s 45(2)(b)(ii) of the Act. 11 In September 2000 FChem, by its employee Mr Greenacre and the Managing Director of Koppers, arrived at an understanding relating to the increase of prices for CCA supplied in Australia. FChem thereby arrived at an understanding with Koppers that contained a provision which had the same purpose and effect as stated above, in contravention of s 45(2)(a)(ii) of the Act. Secondly, FChem's implementation of such increases contravened s 45(2)(b)(ii) of the Act. Osmose, by its General Manager, Mr Greenacre, in late February 2001 agreed with the Managing Director of Koppers that Osmose would offer to supply CCA to Australian Treated Pine ('ATP') at a price of $2,700 per active tonne and that Koppers would not offer to supply CCA to ATP at a lesser price. Osmose thereby arrived at an understanding with Koppers that contained a provision which had the purpose and effect of fixing, controlling or maintaining the price at which they could each offer to supply CCA to ATP. In doing so Osmose contravened s 45(2)(a)(ii) of the Act. Further, Osmose gave effect to the ATP price control provision by supplying CCA to ATP at a price of $2,700 per active tonne between 23 February 2001 and December 2001, thereby contravening s 45(2)(b)(ii) of the Act. 13 Osmose, by Mr Greenacre, engaged in a meeting with the Managing Director of Koppers in late February 2001. Mr Greenacre, on behalf of Osmose, also had a telephone conversation with the Managing Director of Koppers in early April 2001. In these communications Osmose, by Mr Greenacre, attempted to induce the Managing Director of Koppers to arrive at an understanding with Osmose that contained a provision to the effect that Osmose and Koppers would increase the prices charged for the supply of LOSP to Australian consumers to approximately the same level. Such provision would have had the purpose of fixing, controlling and maintaining the price at which they would each supply LOSP in Australia. Such attempt, if realised into a contract, arrangement or understanding, would have constituted a breach of s 45(2)(a)(ii) of the Act. Accordingly the conduct engaged in constituted a breach of s 76(1)(b) of the Act. Under the agreement Mr Greenacre accepted the Koppers 1998 CCA price list and from July 1998 was to notify most of FChem's Australian customers of a price increase for the supply of CCA to approximately the prices contained in that price list. Such conduct contravened s 45(2)(b)(ii) of the Act. 15 Further, Mr Greenacre breached s 76(1)(e) of the Act by being directly knowingly concerned in FChem giving effect to the price control provision. Mr Greenacre continued an understanding made between FChem and Koppers in about September 2000 (as referred to above) by arranging, on behalf of FChem, that FChem would increase its price for CCA and that Koppers would also increase its price for CCA by between 7% to 10% in October or November 2000. The understanding provided that from December 2000 FChem would notify most of its Australian customers that FChem would increase its prices for the supply of CCA by about 8% to 10%. Such conduct contravened s 45(2)(b)(ii) of the Act. 16 Mr Greenacre, on behalf of Osmose, arrived at an understanding with the Managing Director of Koppers shortly prior to 23 February 2001 that Osmose would offer to supply CCA to ATP at a price of $2,700 active tonne and that Koppers would not offer to supply CCA to ATP at a lesser price. Mr Greenacre, in breach of s 76(1)(e) of the Act, was thereby directly knowingly concerned in Osmose arriving at an understanding with Koppers. The understanding contained a provision which had the purpose and effect of fixing, controlling or maintaining the price at which they would each offer to supply CCA to ATP. Such conduct contravened s 45(2)(a)(ii) of the Act. 17 Mr Greenacre, on behalf of Osmose, instructed and authorised Osmose's staff to supply CCA to ATP at a price of $2700 per active tonne between 23 February 2001 and December 2001. In doing so Mr Greenacre, in breach of s 76(1)(e) of the Act, was directly or indirectly knowingly concerned in Osmose giving effect to the ATP price control provision in contravention of s 45(2)(b)(ii) of the Act. Section 76(1A)(b) provides that the penalty imposed by the Court on a body corporate under s 76 must not exceed the greatest of the following alternative penalties: $10,000,000, three times the value of the benefit derived from the breach, or 10% of the annual turnover during the period of 12 months ending at the end of the month in which the act or omission occurred. 19 In respect of an individual, s 76(1B) of the Act relevantly provides for a penalty of $500,000 for each act or omission. 21 However, a critical matter to be borne in mind by the Court is the role it must adopt when orders are sought by consent. The consent of the respondent to those orders is only one circumstance that the Court must take into account. While the function of the Court is not to frustrate the settlement of the proceeding, or to substitute its own view of the orders sought, the Court must scrutinise the orders sought to see that they are within power and appropriate. See Australian Competition and Consumer Commission v Real Estate Institute (WA) Inc [1999] FCA 18 ; (1999) 161 ALR 79 ; [1999] FCA 18 at [1] and [17], and Australian Competition and Consumer Commission v Virgin Mobile Australia Pty Ltd (No 2) [2002] FCA 1548 at [1] . 22 When parties present the Court with agreed proposed penalties, the Court must reach its independent assessment on the basis of the agreed facts whether such penalties are appropriate. The Court would be abrogating its responsibility to determine penalties if it were to accept the agreed proposal without scrutiny. There is an important public policy in the court encouraging fair and appropriate settlement of litigation. See, for example, per French J in Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 18 ; (1999) 161 ALR 79 at 80 [1] ( REIWA ); NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134 ; (1996) 71 FCR 285 at 291; 141 ALR 640 at 644-5 per Burchett and Keifel JJ, Carr J concurring ( NW Frozen Foods ). It is a general principle of judicial restraint in the scrutiny of proposed settlements, particularly in the case of settlements between parties legally represented and able to understand and evaluate the desirability of agreeing to a settlement, that the court will not refuse to give effect to terms of settlement which may be made within the court's jurisdiction and are otherwise unobjectionable: see REIWA at 87 [20] and cases cited therein. It is in the public interest that, in considering agreements between parties requiring orders of the court, the court does not act as a mere rubber stamp. What is proposed must always be scrutinised to determine whether undertakings or consent orders are within power and are appropriate. There is sometimes a tension between these components of the public interest ... It was pointed out in Thomson that the parties cannot by consent confer power upon the court to make orders which the court otherwise lacks power to make. Uninformed of their agreement, I may have selected a different figure, but I am satisfied that it would not have been very different from theirs. 26 In Australian Competition and Consumer Commission v NW Frozen Foods Pty Ltd and Ors [1996] ATPR 41-515 the parties had agreed upon a penalty. Although in those proceedings the Court initially rejected the jointly submitted penalty and imposed a more severe penalty, on appeal the Full Court accepted that the jointly submitted penalty was appropriate: see NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134 ; (1996) 71 FCR 285. Burchett and Kiefel JJ at 291 referred to 'the important public policy' of the Court recognising jointly submitted penalties, as co-operation with the authorities and acknowledgement of contraventions frequently obviates the need for lengthy and complex litigation. However the Court was mindful of referring to the need to consider a broad range of issues when assessing the penalty. • the nature and extent... of any loss or damage suffered as a result of the act or omission. • the circumstances in which the act or omission took place. • whether the person [contravening] has previously been found by the Court in proceedings under [Part VI of the Act] to have engaged in any similar conduct. It is not done by the application of a formula, and, within a certain range, courts have always recognized that one precise figure cannot be incontestably said to be preferable to another. In Trade Practices Commission v CSR Limited [1991] ATPR 41-076 French J referred to the purpose of the Act as a factor in considering penalty. 2 ) (1980) 44 FLR 455 at 460 ( Deane J.). They are of a regulatory rather than penal character. Proceedings for their enforcement by recovery of pecuniary penalties are not classed as criminal prosecutions. 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. 31 Deterrence is another consideration in determining penalty. In Trade Practices Commission v Stihl Chain Saws (Aust. ) Pty. It should be sufficiently high to have a deterrent quality, and it should be kept in mind that the Act operates in a commercial environment where deterrence of those minded to contravene its provisions is not likely to be achieved by penalties which are not realistic. It should reflect the will of Parliament that the commercial standards laid down in the Act must be observed, but not be so high as to be oppressive. 32 A further consideration referred to by Burchett and Kiefel JJ in NW Frozen Foods [1996] FCA 1134 ; 71 FCR 285 at 295 is the objective of securing even-handedness: see also Trade Practices Commission v Axive Pty Ltd & Ors [1994] ATPR 41-368 ; Trade Practices Commission v Annand and Thompson Pty. Ltd. [1987] ATPR 40-772 ; Australian Competition and Consumer Commission v Ampol Petroleum (Victoria) Pty Ltd & Ors [1996] ATPR 41-469. At 298 Burchett and Kiefel JJ also acknowledged that the opinion of the Commission was a relevant matter, but observed that the mere fact that the Commission may have specialist knowledge and information available to it which might lead to a recommended penalty should not have any bearing upon the function of the Court, as the Court bears the ultimate responsibility for the assessment of penalty. 33 Parity in the imposition of penalties is desirable in respect of contraveners involved in the same proceedings: see Schneider Electric (Australia) Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 2 ; (2003) 127 FCR 170 at [52] to [58]. Parity of penalties against contraveners in other proceedings is also an important objective in assessing penalty: see Australian Competition and Consumer Commission v Universal Music Australia Pty Limited (No 2) (2002) ATPR 41-862. 34 Where a respondent has committed more than one breach, it has been recognised that the totality principle should apply: see Australian Competition and Consumer Commission v Australian Safeway Stores Pty Limited and other (1997) 145 ALR 36 at 52. The totality principle requires a Court to assess an overall penalty: see Mill v The Queen [1988] HCA 70 ; (1988) 166 CLR 59 at 62-63; ACCC v Rural Press Ltd [2001] FCA 1065 ; (2001) ATPR 41-833. 35 Another consideration is the role of the ACCC. As was observed by Gray J in Australian Competition and Consumer Commission v Francis [2004] FCA 487 ; (2004) 142 FCR 1 at 25, the Court has the satisfaction of knowing that the ACCC, as a public regulatory authority, would not seek to obtain orders which were beyond the jurisdiction of the Court. It is for this reason that the statement of facts, as agreed, and the joint submissions are of assistance to the Court in this respect: see French J in Australian Competition and Consumer Commission v Virgin Mobile Australia Pty Ltd (No 2) [2002] FCA 1548. 36 It should be observed that each party has, in varying degrees, provided co-operation to the ACCC in its investigations. The joint submissions refer to the allowance made in the assessment of the penalties, which is an appropriate course: see Australian Competition and Consumer Commission v Admiral Mechanical Services Pty Ltd [2007] FCA 1085 and Australian Competition and Consumer Commission v McMahon Service Pty Ltd (No 2) (2004) ATPR 42-023. The Court has also compared the quantum of the suggested penalty with the prescribed penalties. Although the proposed penalties are substantial there are demonstrable reasons arising from the Statement of Agreed Facts which leads the Court to conclude that such penalties are appropriate. 38 FChem and Koppers were two major suppliers in the CCA market. FChem's share of the CCA market was approximately 40% by revenue while Koppers' share was about 60%. As such their conduct had the potential to affect the entire CCA market. At the time of the offences, FChem was conducting two businesses and had net assets of approximately $39.6 million. Accordingly it was a company of significant size. FChem was gradually improving its market share in the supply of CCA. 39 FChem has not previously engaged in conduct of the type which constitutes the present breach. However in the early 1990s the timber protection business of FChem, which was then operated under the name of Laporte Group Australia Limited, reached an understanding with Koppers not to compete on price. Mr Greenacre was employed by that company and was concerned in the understanding. Similar conduct again occurred in 1998. 40 Osmose is a subsidiary of Osmose, Inc., a company incorporated in New York in the United States of America. Osmose is a company of significant size and its CCA business accounts for approximately 70% of its revenue and the LOSP business accounts for approximately 6% to 10% of its revenue. In the year ended 31 December 2006 it generated sales revenue of about $20 million with a net profit after tax of about $800,000. As at 31 December 2006 it had net assets of about $8.5 million. 41 Osmose had about 44% of the share of the CCA sales in Australia in 2001 which totalled approximately $396,678 net profit after tax. The market for LOSP sales in Australia was about 4.3 million dollars per annum in 2001. Osmose had a share of 30% of the LOSP market. 42 Osmose reached its understanding in relation to CCA with a single customer (ATP). The customer was a substantial one, acquiring approximately $150,000 of CCA in 2001. In relation to LOSP, the price increase proposed would have set prices for an unspecified period of time, as it would have been known by each party that the major competitor of LOSP would not be undercutting those prices. The conduct of Osmose in relation to such price increase was deliberate. 43 The Court notes that in 2006 Osmose was found to have breached Commerce Act 1986 (NZ). A fine of $A929,930 was imposed by the High Court of New Zealand for such offence. 44 As to compliance programs, FChem conducted the trade practices compliance program. However the Statement of Agreed Facts between ACCC and FChem details that such program 'did not cover Mr Greenacre' . Accordingly, such program does not justify any substantial discount of the penalty: see Australian Competition and Consumer Commission v Visy Paper Pty Ltd (No 2) (2004) ATPR 42-032 at [49]. Osmose had no trade practices training or compliance program contemporaneous with the commission of the offences. 45 It was claimed that the proposed price increases were made in an attempt to recover the cost to FChem of the increases in price in the United States of America for ingredients in CCA. However there is a history of Mr Greenacre being involved in similar conduct in the 1990s as referred to above. During the course of submissions it was claimed that he had no specific knowledge of the provisions of the Act but was generally aware that legislation existed rendering anti-competitive conduct unlawful. The Court observes that Mr Greenacre has had experience of breaches of equivalent legislation in New Zealand. On 4 October 2006 the High Court of New Zealand ordered Mr Greenacre to pay a penalty of $NZ100,000 plus costs of $NZ5,000 arising out of a breach of the Commerce Act 1986 (NZ). The Court therefore infers that the breaches before this Court were committed by him recklessly. 46 Each of the respondents have co-operated with the Commission. In recognition of this fact, the Commission has suggested that it is appropriate to discount the fines otherwise payable by 50%. The Court agrees that in recognition of the co-operation of the parties it is appropriate to allow a proportionate discount of the penalty otherwise assessed: see Australian Competition and Consumer Commission v McMahon Services Pty Ltd No. 1 (2004) ATPR 42-022 at 49,085. Where the penalty has been agreed between the parties, it is important that the calculation thereof be revealed: see Australian Competition and Consumer Commission v Ithaca Ice Works Pty Ltd (2002) ATPR 41-851 at [56]. Courts have variously applied percentages to reflect the proportion which it considers represents an appropriate discount in penalty, as will be done in these proceedings. 47 In reaching the agreed penalties the Court is satisfied that proper regard has been paid to the totality principle and the parity principle and that the fines are such as to provide adequate deterrence. In assessing for itself the level of the penalties to be imposed the Court has paid regard to the highest penalty imposed on an individual being $200,000: see Australian Competition and Consumer Commission v Leahy Petroleum (No 2) (2005) ATPR 42-051 at [20]. The Court has also considered other instances where breaches have resulted in substantial penalties to individuals and to corporations: see for example Australian Competition and Consumer Commission v Midland Brick Co Pty Ltd and Ors (2004) ATPR 42-008 ; Australian Competition and Consumer Commission v George Weston Foods Limited (2004) ATPR 42-015 ; Australian Competition and Consumer Commission v ABB Transmission and Distribution Limited [2001] FCA 383 ; (2001) ATPR 41-815. 48 Because of the prior conduct of each respondent, it is appropriate to grant injunctions pursuant to s 80(4) of the Act directed to each of the respondents. The injunctions will operate for a limited period of three years to reinforce the pecuniary penalties and to act as a reminder of the conduct in which each respondent has engaged: see Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) and Others [2005] FCA 254 ; (2005) 215 ALR 281 ; Australian Competition and Consumer Commission v Midland Brick Co Pty Ltd and Others [2004] FCA 693 ; (2004) 207 ALR 329 at [46] . I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy.

price fixing consent orders whether consent orders should be made trade practices act 1974 (cth) ss 45(2)(a)(ii) , 76 (10(e). trade practices

The Senior Member set aside a decision of Comcare (which had affirmed an earlier decision) to deny liability for the respondent's claim for compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the Act) in respect of an anxiety state condition. A new fellow employee, Ms Slattery, joined the section in which Ms Eames worked. The relationship between the two deteriorated. The respondent asked her immediate supervisor to take steps to have the differences resolved. Nothing was done. 4 On the same day, the respondent discussed this incident with the Clerk Assistant (Procedural), Mr Elliot. She told him that the affair had caused her to suffer a panic attack (to which she said she was prone). 5 On Monday 15 November the respondent told Mr Elliot that she intended to resign and apply for another position, as a result of Friday's events, and asked that Mr Elliott act as a referee. Mr Elliot told her he would not give her a reference until she apologised to Ms Slattery. The respondent protested, referring to the history of disharmony and management inaction. The respondent was outraged and upset by Mr Elliot's attitude. She said she would apologise for using the swear word. Immediately after this meeting the respondent said to Ms Slattery that she had to apologise to her, and that she was sorry for using the word "fucking" but that she, Ms Slattery, was still a pest. 6 The next day the respondent consulted her medical practitioner, Dr Wessell. According to that doctor, she "showed evidence of great emotional distress". 7 On 1 December 2004 Mr Curtis, an officer of the Department, was appointed by the Usher of the Black Rod, Ms Griffiths, to investigate possible breaches by the respondent of the Parliamentary Service Code of Conduct. The respondent was informed on that day that "[t]he possible breaches relate to two alleged incidents (12 and 15 November 2004) of abusive language and threatening behaviour toward a departmental staff member, Ms Loes Slattery". By email of 3 December, the respondent requested that Mr Curtis provide her with a copy of the allegations made against her. Mr Curtis replied, saying among other things: "Prior to having any formal discussion with you, I will make sure that you have all the relevant evidence". On 7 December Mr Curtis interviewed the respondent in relation to the allegations. She had not been provided with the evidence he had before him, which included statements of witnesses, among them Ms Slattery. The respondent claimed that she suffered from an anxiety disorder and that she had been injured or had first noticed her injury, on 12 November 2004. 9 On 15 December Mr Curtis sent a written report of his investigation to Ms Griffiths, with the various witness statements referred to annexed. Mr Curtis found that the respondent was guilty of misconduct on both 12 and 15 November, in that she had failed to abide by the Parliamentary Service Values. He suggested that the sanction must take into account a number of mitigating factors and recommended a reprimand. On the same day he also sent the report to the respondent, without the witness statements. 10 Also on the same day, 15 December, Ms Griffiths notified Ms Eames that she had accepted Mr Curtis' findings and proposed to impose a sanction of reprimand. Ms Griffiths invited her to provide a response as to why the proposed sanction should not be imposed, by 7 January 2005. 11 On 20 December, the respondent again requested Ms Griffiths provide her with copies of the witness statements. Following legal advice from the Australian Government Solicitor, Ms Griffiths responded by letter dated 18 January 2005. She informed the respondent that no further documents would be given to her, and that, after 2 February 2005, she would consider any mitigating comments the respondent may provide, before advising the respondent of any sanction to be imposed. 12 The respondent provided Ms Griffiths with a response on 31 January. Ms Griffiths indicated that no further action would be taken until Ms Eames returned to work. No further action was ever taken. Ms Griffiths gave the explanation that, as Ms Eames was on sick leave, Ms Griffiths regarded the matter as insufficiently serious to require further consideration until Ms Eames was fit to return to work. The matter thereafter seems just to have lapsed. 13 On 10 March 2005 Comcare rejected the respondent's claim in respect of an anxiety state. The respondent's solicitor then requested an internal Comcare review of this decision which was also decided adversely to the respondent on 8 April 2005. The respondent then sought further review by the Tribunal. In order to decide this issue, the Tribunal identified and determined two subsidiary issues: firstly, had the respondent suffered an ailment or an aggravation of an ailment, contributed to in a material degree by her employment? Secondly, if she had so suffered, was this as a result of reasonable disciplinary action taken against her? 17 The Senior Member issued a formal decision record as well as his "Reasons for Decision". I am satisfied on the balance of probabilities that Ms Eames suffered an ailment within the meaning of the Act. Alternatively, I am satisfied that Ms Eames suffered an aggravation of a pre-existing ailment, being an exacerbation of her anxiety. I make this finding on the basis of the evidence of Dr Wessell ... It has not been argued that if Ms Eames suffered an ailment such as I have found, that the ailment was not contributed to in a material degree by her employment by the Department of the Senate and I find accordingly. I am satisfied therefore that Ms Eames has suffered a disease within the meaning of the Act. On the basis of the evidence of Dr Wessell, I am satisfied on the balance of probabilities that Ms Eames suffered the disease on 14 November 2004 and that she continued to suffer the effects of that disease until April 2005 when she commenced her new employment. I am not satisfied that Ms Eames has suffered from the effects of the disease from April 2005 until the date of this decision. " He found that there was no disciplinary action against the respondent and, if there was, it was not reasonable disciplinary action. ... What is clear to my mind is that it is the disciplinary action itself and not the steps anterior to the decision to take such action which is covered by the definition. ... Thus, action taken to determine whether or not disciplinary action will be taken against an employee, although it may be characterised as part of a system or process to maintain discipline, is not action within the meaning of the definition of "disciplinary action" in the Act. This document provided for the Usher of the Black Rod to appoint an investigator to determine whether there had been a breach of the Code by an employee, and to report his or her findings to the Usher. The document provided that "[h]aving considered any mitigating comments from the employee, the [Usher] will determine the case and inform the employee in writing of the determination, any sanction imposed, the reasons for them, and the employee's rights of review". 22 The Tribunal held that, according to these procedures, it was "clear that the process did not go beyond an investigation and reporting of findings to the Usher of the Black Rod and the disciplinary action envisaged by the Procedures document did not take place". In these circumstances the Senior Member found that no disciplinary action was taken against the respondent. 23 The Tribunal went on to find that, even if disciplinary action had been taken, in the above circumstances it would not have been reasonable. The learned Senior Member held that it was a requirement of reasonable disciplinary action that it be fair, following Inglis and Comcare [1997] AATA 307 (27 August 1997) and relying on the provision in the Procedures that allegations are to be dealt with having due regard to procedural fairness. However the respondent pointed out that, even so, the Tribunal's decision is unassailable because the Tribunal found that the injury (in either of its alternative characterisations) occurred on 14 November 2004 whereas, on any view, the disciplinary action did not commence before 1 December. 26 As to the alleged "reasonableness" of the disciplinary action, the respondent denies any error of law by the Tribunal and in any case says that the ultimate question of whether disciplinary action is "reasonable" is a question of fact only or, at most, a mixed question of fact and law, neither of which can found a s 44 appeal. 3.2 If the answer to question 1 above is "yes", whether the disciplinary action taken constitutes "reasonable disciplinary action" within the meaning of s 4 of the Act, as long as the action taken is not absurd, ridiculous or disproportionate. 3.3 In the alternative to paragraph 3.2 above, if reasonable disciplinary action requires procedural fairness to be given, what is the content of such an obligation. 29 It appeared that Comcare's principal concern prompting the appeal was the Tribunal's treatment of the disciplinary action in question. Comcare accepts the correctness of Cooper J's exposition of the law in Chenhall [1992] FCA 535 ; 37 FCR 75 as to what constitutes "disciplinary action" and the distinction between such action and things done by way of investigation preparatory to the commencement of the actual disciplinary action. However the applicant is concerned that the Tribunal misapplied Chenhall [1992] FCA 535 ; 37 FCR 75 in a way that would unduly narrow the practical effect of the intended statutory exemption of disciplinary action --- caused injuries from liability. 31 The construction of the phrase "reasonable disciplinary action" in s 4 of the Act (as it was at the relevant time) is a question of law: Chenhall 37 FCR at 78; similarly, in Comcare v Etheridge [2006] FCAFC 27 ; (2006) 149 FCR 522 and HBF Health Funds Inc v Minister for Health and Ageing [2006] FCAFC 34 ; (2006) 149 FCR 291 , the Full Court was satisfied that questions of law were raised with respect to the definition of some concepts in the relevant Commonwealth legislation. 32 The content of a duty to accord procedural fairness in a particular case is also a question of law, relying on Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143 ; (2003) 131 FCR 28 at 31-2 per Gray ACJ and North J. 33 The action taken in the present case was clearly disciplinary action. The regulatory regime as to disciplinary action in Chenhall [1992] FCA 535 ; 37 FCR 75 differed materially from that in the present case. The Tribunal in the present case applied the cited passage from the judgment of Cooper J, without proper appreciation of the particular factual contexts and the terms of the relevant regulatory schemes in Chenhall [1992] FCA 535 ; 37 FCR 75 and in the present case. Notwithstanding that the Senior Member cited the correct and helpful explanation of the phrase "reasonable disciplinary action", from Chenhall [1992] FCA 535 ; 37 FCR 75 the conclusion he reached was not open to him if he had correctly applied that definition. In this way the Tribunal erred in law. 34 In Chenhall [1992] FCA 535 ; 37 FCR 75 , Cooper J was reviewing a decision regarding a compensation claim made by an Australian Federal Police (AFP) officer, following an interview which was conducted as part of an investigation in accordance with the AFP General Orders. General Order 6 provided for the investigation of allegations and disciplinary matters to which the Complaints (Australian Federal Police) Act 1981 (Cth) (Complaints Act) did not apply. Unless a report of a breach (or alleged breach) of the Code of Conduct is considered to be frivolous or vexatious, the person receiving the report is to inquire into the allegations and determine whether there is enough evidence to justify further investigation. 1.3 Should the police be notified? If there is sufficient evidence to warrant further investigation, the Usher will select a person who is independent and unbiased to determine whether the employee has breached the Code of Conduct. 3. The employee is informed in writing of the allegation(s), who is conducting the investigation and the sanctions that may be imposed if he/she is found to have breached the Code. 4. Having investigated the allegations with due regard for procedural fairness, the investigator will report the findings to the Usher. 5. If there is no breach found, the Usher will advise the employee in writing. If the investigator finds that a breach has occurred, he or she may also recommend an appropriate sanction. At this point the Usher must provide a copy of the findings to the employee and invite comment on any proposed sanction. 6. After considering any mitigating comments from the employee, the Usher will determine the case and inform the employee in writing of the determination, any sanction imposed, the reasons for them, and the employee's rights of review. On 1 December 2004, two broad allegations were advised by the Usher of the Black Rod to the investigator, Mr Curtis. Mr Curtis found that a breach of the Code of Conduct had occurred, and recommended an appropriate sanction. On 15 December, Ms Griffiths (the Usher) provided a copy of the Curtis report to the respondent and invited comment. 37 The fact that the process did not culminate in the imposition of a sanction is not to the point and the Tribunal erred in so thinking. 38 The Tribunal's finding of liability from 14 November 2004 to April 2005 cannot have been made regardless of its discussion about disciplinary action: there is no indication in the Tribunal's reasons that the discussion about disciplinary action was not determinative of its final orders, no introductory phraseology such as "in any event" was used; the Tribunal devoted time and energy to this issue during the hearing and in its decision, indicating that its remarks were not a mere digression. Finally, the applicant submits that Dr Wessell's evidence indicated that it was the disciplinary action which was most causative of the alleged stress to the respondent. It defies commonsense to say that the disciplinary action was of no moment to the onset of or the aggravation of the alleged injury. 39 As to the quality of the disciplinary action, the applicant submits that the disciplinary action was "reasonable" within the meaning of s 4, because it was not capricious, arbitrary or irrational. • This was done in a context where there was no material disagreement between the parties regarding the facts, with the remaining issues being (a) whether the agreed facts constituted a breach of the procedures, and, if they did, (b) the sanction if any to be imposed. • No allegation has been made throughout the hearing before this Court, or before the Tribunal, of any "practical injustice", the touchstone for determining whether procedural fairness has been given. • The Usher of the Black Rod indicated when inviting the respondent's response to Mr Curtis' report that she had an open mind on the issue of (a) whether the alleged breaches were made out, and, (b) whether any sanction would be imposed. • Even if there had been a failure to provide procedural fairness at the initial stage, any defect was subsequently cured once the respondent became aware of the substance of the allegations. The applicant's real complaint is that the Tribunal made a mistake in characterising the conduct of the agency in dealing with the respondent as merely preliminary to disciplinary action. Whether the disciplinary action was reasonable and the possibly relevant question whether the process followed in the investigation was fair are both questions of fact and neither becomes a question of law by describing the issue as "the content of the duty to give procedural fairness". 41 The respondent adopts the reasoning of the Tribunal as to why the action (conceded before me to be disciplinary action) was not reasonable. 42 The respondent submits that her disease could not have been "suffered ... as a result of reasonable disciplinary action taken against the employee", because, on the applicant's contention, disciplinary action commenced on 1 December 2004. That was a date later than the onset of the disease. 43 The respondent submits that the Senior Member's discussion of reasonable disciplinary action was undertaken in deference to the case put by Comcare and was not a reason for the actual decision reached. The alternative characterisation of the injury by the Tribunal shows that Ms Eames was suffering "an aggravation of a pre-existing ailment"; this is clearly a reference to the respondent's pre-existing condition of claustrophobia, of which the agency was apparently aware. There is nothing to suggest, according to the respondent, that the Tribunal was referring to an aggravation of disease caused by disciplinary action , as argued by the applicant. Dr Wessell's evidence did not address whether the action taken by the agency had any relevant influence on the injury suffered by the respondent. 44 Procedural fairness and "reasonable" in s 4 of the Act are different concepts, although the phrase "reasonable disciplinary action" will usually include the requirement of procedural fairness. Whether it does or it does not include procedural fairness may be a question of law. According to the respondent, a finding that procedural fairness is an element of reasonable disciplinary action in this case does not of itself lead to a conclusion that the next question --- determining the factual meaning of "reasonable disciplinary action" in a context where there has been or may have been a denial of procedural fairness --- is or involves a question of law. Whether particular conduct amounts to "reasonable disciplinary action" has previously been treated as a question of law: Chenhall [1992] FCA 535 ; 37 FCR 75 ; Schmid v Comcare [2003] FCA 1057 ; (2003) 77 ALD 782 , [84]. The question is: at what point in the regulatory regime in the present case did disciplinary action begin? This requires an analysis of that regime. 47 It appears that the learned Senior Member did misapply the definition of "reasonable disciplinary action", in that he did not consider disciplinary action within the meaning of the Act to have occurred at all in the present case. I accept that disciplinary action had begun from 1 December 2004, when the respondent was provided with the allegations made against her. What is described within the Procedures as an "investigation" is, when viewed in the context of the Parliamentary Services Commissioner's Direction 2000/1 (the basis of the Procedures, in accordance with s 15 of the Parliamentary Service Act 1999 (Cth)), actually a determination of whether there has been a breach of the Code of Conduct. This is clearly "action lawfully taken against an employee in the nature of or to promote discipline": Chenhall 37 FCR at 83. Cooper J explicitly (and in my respectful opinion, correctly) rejected the proposition that disciplinary action refers only to the actual imposition of a sanction: Chenhall 37 FCR at 85. The Tribunal appears to have misconstrued Chenhall [1992] FCA 535 ; 37 FCR 75 in this respect: at [39] it said "[t]aking into account the Senate's own procedures it is clear that the process did not go beyond an investigation and reporting of findings to the Usher of the Black Rod and the disciplinary action envisaged by the Procedures document did not take place". That is to conflate the entire process of disciplinary action and its ultimate outcome. Had the allegations not been sustained, the action of investigating them for the direct purpose of determining whether any sanction should be applied would nevertheless have been "disciplinary" action. 48 Notwithstanding this error, it needs to be shown that the actual decision may have been affected by it: the "appeal" is from the decision not from the reasons given in support of it. 49 By design or otherwise, reasons for decision given by decision-makers of all kinds frequently include expressions of opinion on material discussed in the case at hand that are unnecessary for the actual decision; in particular, appellate or reviewing decision-makers often intend, in that way, to be helpful to primary decision-makers. Tribunals giving opinions which are, logically, gratuitous do not always understand that, in terms of doing only what is necessary, an opinion expressed may have that character. Even where this is understood, a busy tribunal member may omit an explanation for undertaking the excursus. Frequently, judges (even at the highest levels) discuss unnecessary material and, often enough, without expressly flagging their understanding that they are doing so. At least an equal degree of understanding of the process of writing reasons for decision can and should properly be extended to administrative tribunals. The eye too keenly attuned to unduly strained inference needs some detuning. 50 The learned Senior Member's actual decision did not and could not have depended on whether there was disciplinary action. The Tribunal found that the respondent suffered incapacity from her injury from November 2004 to April 2005, on the basis of the evidence of the respondent's general practitioner, Dr Wessell. In respect of this evidence the Tribunal held that "Dr Wessell made the assessment that Ms Eames was unable to function properly during the period following the events of November 2004 and her ability to make decisions was affected. " (Emphasis added. ) It may well be that the Tribunal overlooked that the events of Monday 15 November appeared to have been of material and additional significance for the respondent's condition to those of Friday 12 November. But that is of no present moment --- all events in November predated the start of the disciplinary action. It is trite that the fact that another person, including this Court, may have come to a different conclusion is not to the point. It was open to the Tribunal to find that the respondent's injury was suffered entirely as a result of the circumstances surrounding the explosive interaction with Ms Slattery. I believe that is what the Tribunal did find and decide. 51 The Tribunal found that the respondent's injury was suffered from November 2004. Even if the Senior Member had considered that the events beginning 1 December 2004 were reasonable disciplinary action, the final outcome could not, in the light of that finding, have differed. 52 The misapplication of the phrase "reasonable disciplinary action" by the Tribunal thus does not authorise the upholding of this appeal. 54 The foundation of the Senior Member's view that the action, now held to be disciplinary, was not "reasonable" rested entirely upon an opinion that the inquisitor had not accorded Ms Eames procedural fairness in circumstances where there was plainly a duty to afford it. At least in such circumstances, whether procedural fairness was given is to be categorised as a question of law, even though it obviously depends on factual findings. In Clements 131 FCR at [6]-[8] the Full Court held that whether the Tribunal itself denied procedural fairness is a question of law and, with respect, this must be so. In general, questions of law are those which are inescapably for a judge to decide. In many instances, these actually involve inquiry into and assessment of factual matters by the judge. Judgments on the admissibility of evidence are often examples of this. Whether procedural fairness has been given is such a question because, if procedural fairness has not been given, the administrative action in question (and not just disciplinary action) is affected by jurisdictional error: eg Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597. Whether there has been a jurisdictional error is, ex hypothesi, a question of law. 55 I see no reason why the conclusion should be different where, as here, an overall judgment of whether the primary decision-maker (or delegate) erred in a finding that certain action was "reasonable" and the only ground for arguing that it was not was that the actor concerned denied procedural fairness. In other circumstances a decision on whether some action was "reasonable" might be entirely a question of fact. In other cases still, such a question may expose the lack, at the margins, of a clear distinction between what is a question of law and what is not. 56 This implies another consideration: Cooper J in Chenhall [1992] FCA 535 ; 37 FCR 75 indicated (rightly, in my respectful view) that, among other things, to be "disciplinary action" in terms of the statute, the action needed to be "lawfully" taken. If procedural fairness be denied, the action will not be lawful, whether or not some circumstances may exist (about which I say nothing) in which the action might nevertheless be "reasonable". Not only will the action be unlawful but unlawfulness in decision-making should have practical consequences even if it does not always lead to outright invalidity: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 29 ; (1998) 194 CLR 355 at [100] . 57 Finally, it was a view well open to the Senior Member, and one with which I agree, that Ms Eames was not afforded procedural fairness. Whether she had to any significant degree behaved improperly, despite the objective inappropriateness of her language, or should be disciplined at all for it, or how, would largely depend on an impression of the degree to which she had been provoked and the degree of emotional tension prevailing between her and Ms Slattery. Ascertainment of, or advocacy as to, the facts often depends on understanding who is saying what and on how, when and to whom they are saying it. The reasonableness of the Department's giving Ms Eames the witness statements is strongly (though not necessarily conclusively) attested by the promise to her by Mr Curtis, the Usher's trusted inquisitor, that she would have them. There was nothing to establish special circumstances existing before or after Mr Curtis so indicated to warrant any other view: there was no question of confidential policy advice at a high level the disclosure of which might jeopardise future frankness, no question of protecting any witness from a real risk of retribution, nor any other kind of circumstance which could justify a limitation on disclosure of adverse material to a party undergoing disciplinary investigation. It is true that in many cases it is enough to give the burden of the allegations without the supporting evidence. But in a disciplinary matter, it is often the nuances of surrounding circumstances that can affect the outcome. Mr Curtis' report did, indeed, name the witnesses and give, fairly fully, an account of the evidence that he found persuasive. However the likely crucial issue for the decision-maker (Ms Griffiths) was whether Ms Slattery exceeded the bounds of reasonable discourse as Ms Eames' senior colleague. Ms Eames could only deal with the relevant nuances by knowing the full detail at least of what the eyewitness of the initial confrontation, Mr Sullivan, had said. The original witness statements on which Mr Curtis relied were not before the Court, making it difficult to conclude that this material may not have assisted Ms Eames' claims. Further, the advice from the Australian Government Solicitor not to release the witness statements was given without those who prepared the advice having seen the statements in question, and relying only on Mr Curtis' report. The advice was explicitly qualified by this fact. It cannot be said that there was no practical injustice in Ms Eames not being shown the material referred to. 58 Further, A promise by an inquisitor to give material to a party affected can be highly relevant to whether procedural fairness has been denied, notwithstanding the overall merits of the case: Applicant NAFF of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] HCA 62 ; (2004) 221 CLR 1. 59 It should be noted that the Act has, since the hearing of this case, been amended so that the exception within the definition of injury extends to "reasonable administrative action". This exception is broader and more clearly defined: see s 5A of the Act. These amendments came into force on 13 April 2007, and address many of the issues of principle which were raised as primary issues of concern to the applicant during the hearing. However, these amendments have no effect on the present decision. 60 For these reasons the appeal will be dismissed with costs. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick.

administrative tribunals administrative appeals tribunal (cth) appeals to federal court questions of law whether question as to whether procedural fairness afforded is a question of law entitlement to compensation exclusions "meaning of reasonable disciplinary action" by employer administrative law workers' compensation

I will call the first plaintiffs "the Liquidators". The plaintiffs applied for an order terminating the winding up. On 29 May 2009 I ordered that the winding up be terminated on and from that date and that the Liquidators' costs of the proceeding be an expense in the winding up. The following are the reasons why I made those orders. The application may be made by, relevantly, the liquidator or the company. Section 482 occurs in Pt 5.4B of the Act, headed "Winding up in insolvency or by the Court". The present winding up, however, is a voluntary winding up. Part 5.5 of the Act is headed "Voluntary winding up". Michael Anthony Den Boer is the sole director and secretary of MCA. The sole shareholder in MCA is Reading Skills Workshop Pty Ltd (RSW). Mr Den Boer and his wife own the shares in RSW and they are its directors, while Mrs Den Boer is also its secretary. The Trust was constituted by a deed dated 23 July 2007. The unit holders were RSW, Michael McInerney Investments Pty Ltd (MMI) (whose sole director is Michael McInerney), and Studio Cain Pty Ltd (SC), a company associated with Bradley Shawn Cain. Mr Cain was also employed by MCA. Another company associated with the Den Boers is Kookaburra Productions Australia Pty Ltd (Kookaburra) which is a creditor of MCA (see [25] below). The business of MCA (that is, of the Trust) is that of an advertising agency. Its major client is Tony Ferguson Licensing Pty Ltd (Tony Ferguson Licensing). Indeed that company accounts for approximately 99% of MCA's turnover. On 17 April 2009, it was resolved at a meeting of the "members" of MCA (as noted above, there was only one member, RSW) that MCA be wound up voluntarily and that the Liquidators be appointed joint and several liquidators of the company. There were two circumstances that led to the winding up. They arose from the fact that Tony Ferguson Licensing and Mr Cain did not enjoy a cordial relationship. Mr Den Boer believed that MCA was about to lose the business of Tony Ferguson Licensing unless Mr Cain left MCA. This led to disputation between Mr Den Boer and Mr McInerney on the one hand and Mr Cain on the other, in or around December 2008, resulting in Mr Cain ceasing to be employed in MCA's business, although SC remained a unit holder of the Trust. Because Mr Den Boer and Mr McInerney believed that MCA was about to fail due to the apparent imminent loss of business from Tony Ferguson Licensing, they decided that Mr Den Boer (through MCA's sole shareholder, RSW) should cause MCA to go into voluntary liquidation. As explained below, since the commencement of the winding up on 17 April 2009, an accommodation has been reached between Mr Cain, Mr Den Boer and Mr McInerney. There are some inconsistencies in the evidence as to the amounts of their loan accounts. First, there is evidence that MMI's loan account is for only $132,394. At para 3 of the affidavit of Mr Den Boer sworn 29 May 2009, it is stated that the figure $147,703 was an estimate contained in the draft accounts and that subsequent to the Liquidators' calculation, Mr Den Boer was informed by MCA's accountant that MMI was actually owed an amount of $132,394. Mr McInerney accepted this as set out in para 3(d) of his affidavit sworn 29 May 2009. Similarly, since the Liquidators' gave the figures in their affidavit, the amounts owed by MCA to RSW and SC has been revised to $149,394 and $161,321 respectively. The total of the unit holders' loan account balances, however, remains $443,109. In the discussion that follows, I will refer to the revised figures as the amounts owed by MCA to the three unit holders. First, RSW and MMI have agreed to capitalise their loan accounts by applying them to the issue of further units in the Trust. Second, the Den Boer and McInerney interests have reached a settlement with the Cain interests under which SC will sell its units in the Trust to RSW and MMI in equal shares (2,500 units to each of them) and release the debt owed to it by MCA. There is certainly evidence that SC has agreed to release MCA from this liability. Mr Den Boer states in para 12 of his affidavit of 12 May 2009 that the effect of the settlement was that SC would release MCA from all of its claims. Also, clause 2 of a document in evidence entitled "Terms of Settlement" dated 29 April 2009 (by which SC contracts to sell its units to RSW and MMI) states that Mr McInerney, Mr Den Boer, MMI and RSW will jointly and severally "mutually release each other from all claims, liabilities and obligations in connection with Mad Canoe Advertising Unit Trust". However, the evidence is expressed in general terms and one wonders why SC would give up MCA's indebtedness to it in a sum as large as $161,321. It should be noted, however, that even without the release of MCA from its debt owed to SC, MCA would still be solvent. Accordingly, any vagueness in the evidence touching this question did not dissuade me from ordering a termination of the winding up. Third, with one exception (see [27] below), the independent trade creditors have indicated that they do not oppose a termination of the winding up. The first and second steps referred to above are subject to the winding up being terminated. That is to say, they will be implemented immediately following a termination of the winding up. The credit balance in them at the date of the Liquidators' appointment on 17 April 2009 was $60,577. Since then, there have been further receipts from trade debtors which have increased the credit balance. In addition, the Liquidators have transferred $50,000 to a liquidation bank account to meet their costs and expenses. As at 25 May 2009, the "Cash at Bank" was $272,300. As at the date of the Liquidators' appointment, MCA was owed debts totalling $506,746. Mr Den Boer advised the Liquidators that these debts were fully recoverable. The Liquidators subsequently received a payment of $261,760, leaving a balance of $244,986 owing by debtors. The Liquidators have also expressed the opinion that this amount is fully recoverable. The Liquidators accepted Mr Den Boer's value of $20,000 for the office furniture and equipment. The debt of $61,315 owed to Kookaburra is for services provided by it to MCA. The amount of approximately $20,000 owed to Westpac is owed pursuant to a hire purchase agreement which is secured by a registered fixed charge over specific items of office equipment. Harbour Radio Pty Ltd, Screen Australia, ATO and Westpac have written letters to the effect that they consent, or do not object, to the termination of the winding up of MCA. Telstra has indicated that it is not willing to provide a letter to that effect. There is absent from evidence any letter from Hutchison. However, Telstra is owed only $1,031 and Hutchison only $864, and they have not sought to play any part in the proceeding. Further, Mr Den Boer has undertaken to the Court that as a director of Kookaburra he will ensure that MCA's trade creditors are paid. As noted at [13] above, the total of the unit holders' loan account balances at the date of the Liquidators' appointment was $443,109 and the revised total remains that figure. Mr Den Boer and Mr McInerney have both given undertakings to the Court that they will cause MCA to convene a meeting of unit holders, the result of which will be that 149,394 units of $1.00 each fully paid will be issued to RSW and 132,394 units of $1.00 each fully paid will be issued to MMI. After those two loan accounts have been applied in subscription for the additional units, the only loan owing to a unit holder that will be outstanding will be $161,321 owed to SC. I have referred to the evidence in this respect at [17] above. The Liquidators state that based on the position as at 25 May 2009, there is an estimated surplus of at least $250,000. They express the opinion that MCA was solvent and continues to be solvent, and that there is no information available to the Liquidators suggesting that MCA was or is otherwise than solvent. The Liquidators estimate their costs and expenses as Liquidators at $50,000 which they have received out of MCA's St George Bank account as mentioned at [21] above. In any event, in his affidavit made on 12 May 2009 Mr Den Boer undertakes to ensure that the Liquidators' costs and expenses are paid. By the document entitled "Terms of Settlement" noted at [17] above, SC contracts to sell to RSW and MMI SC's units for $260,000 payable by instalments throughout May 2009. There were in evidence two unit transfer forms signed on behalf of SC as transferor, one being to RSW of 2,500 units for $115,000, and the other being to MMI of 2,500 units for $115,000. I was satisfied that MCA was solvent and that the Trust was also solvent. There is no relevant distinction between the two, and if MCA somehow managed to pay its debts and liabilities, all of which it incurred as trustee of the Trust, out of non-Trust assets, it would be entitled to full indemnity out of the assets of the (solvent) Trust. One potential difficulty came to light, namely, that cl 11.2.2 of the Unit Trust Deed provides that a trustee is disqualified from holding office if, being a company, it goes into liquidation. It follows that MCA became disqualified from holding office as trustee of the Trust upon its going into voluntary liquidation on 17 April 2009. Until the winding up is terminated, MCA remains disqualified. The question arises whether the termination of the winding up, without more, has the effect that MCA again assumes the role of trustee. The correct analysis seems to be that while MCA is in liquidation, it is disqualified from performing its duties and exercising its powers under the Unit Trust Deed, but continues to hold the property of the Trust upon a constructive trust by the operation of general law principles. It is an interesting question what the terms of the constructive trust are. It may be that MCA simply holds the property upon a passive constructive trust for these unit holders in equal shares. It may also be that upon termination of the winding up, MCA again assumes the role of trustee under the express terms of the Unit Trust Deed: cf O'Reilly v Alderson [1849] EngR 680 ; (1849) 8 Hare 101 (68 ER 289). I am not called upon to decide these questions. In one way or another, it is clear that MCA will resume its position as trustee under the express terms of the Unit Trust Deed. Clause 11.4.3 of that Deed provides that with the unanimous consent of the unit holders in writing or by special resolution of the unit holders in general meeting, the unit holders are entitled to appoint a trustee in place of any trustee who is disqualified. It would not be in the interests of any of the unit holders to obstruct the passing of such a resolution if it should be thought necessary. Moreover, RSW and MMI have paid SC the purchase price for its units, and could compel SC to join with them in reappointing MCA as trustee, if this should be thought necessary in order to enable the unit transfers to be registered. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

application for termination of voluntary winding up company trustee of unit trust voluntary liquidation disqualified company trustee from being trustee discussion of question whether termination of winding up would have effect that company would automatically resume office as trustee corporations

The offence took place on 22 November 2006. The company entered a plea of guilty to the offence on 22 December 2007. 2 This offence is a reflection of the conduct of Micheal Rana, sole director of the company at the time of the offence, but under the influence of Paul Rana. 3 The circumstances of Micheal Rana's wrongdoing are set out in the reasons for judgment in Australian Competition and Consumer Commission v Rana [2008] FCA 435. The wrongdoing is of a serious order and on this basis the appropriate penalty is a fine of $6000. I certify that the preceding three (3) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North.

sentencing refusing or failing to comply with a notice s 155 of trade practices act 1974 (cth) criminal law

2 The applicant appeared today in person assisted by a friend. Without opposition from counsel for the Minister for Immigration and Citizenship (the Minister) I gave leave to the friend to read a short submission on the applicant's behalf, which he did with clarity. 3 The application was dismissed by Riethmuller FM pursuant to rule 44.12(1)(a) of the Federal Magistrates Court Rules 2001 because, in the view of the Federal Magistrate, no arguable case had been raised for the relief claimed. The decision that the applicant sought to challenge before the Federal Magistrate was, as I have said, a decision of the Tribunal. Before the Tribunal the applicant had sought a review of a decision of the delegate of the Minister refusing him a student visa. The problem that the applicant faces is one of time. The Tribunal dismissed the application before it as ineligible because it was not made within 21 days of notification of the delegate's decision, that time limit being prescribed by s 347 of the Migration Act 1958 (Cth) and regulation 4.10(1)(a) of the Migration Regulations 1994 . 4 The delegate's decision was made on 24 August 2004 and a copy of the decision was posted to the applicant on that day. The applicant was deemed to have received the decision on 2 September 2004, seven working days after it was sent: Migration Act , s 494C(4)(a). The last day for him to file an application before the Tribunal was 21 days later, on 23 September 2004. In fact his application was filed on 6 October 2005, so it was out of time by more than a year. But the letter that I personally got from DIMIA was within the 28 days time frame when I applied at MRT. The Federal Magistrate concluded that, as the applicant had only given evidence that he had filed his application to the Tribunal within 28 days of personally receiving the department's letter and had not indicated date on which he received the letter, there was, in any event, no evidence that the letter was received within the 21 to 28 days previous to 6 October 2005. Essentially, the applicant's affidavit did not help him. 6 Rule 44.12(2) of the Federal Magistrates Court Rules 2001 provides that: 'To avoid doubt, dismissal under paragraph (1)(a) is interlocutory. ' Because the Federal Magistrate's decision was interlocutory in nature, the applicant needs leave to appeal to this Court: Federal Court of Australia Act 1976 , s 24(1A). The application for leave to appeal must be filed within 21 days from the date of the Federal Magistrate's decision: Federal Court Rules , Order 52 Rule 5(2)(a). As the Federal Magistrate's decision was made on 1 March 2006 the application for leave to appeal should have been filed by 22 March 2006. In fact the applicant filed a draft notice of appeal and an application for extension of time on 28 September 2006, that is to say, six months later than he should have. He therefore needs an order under Order 52, Rule 5(3) that compliance with the time limit be dispensed with. 7 The only explanation that the applicant has offered for his delay in filing his notice of appeal is that he was looking for a migration agent. That is not a convincing reason for a six month delay. In support of his notice of appeal he has also filed an affidavit stating that the Department of Immigration and Multicultural and Indigenous Affairs (as it was then known) sent the notice of his decision to 22 Wordsworth Avenue rather than to number 24 where he says he actually lives. An affidavit filed by the Minister exhibits a copy of the letter from the Department addressed to the applicant at 22 Wordsworth Avenue and a copy of his application for a student visa which clearly states, in two separate places, that that is his address. The applicant's friend, in his submissions today, was not able to take the matter any further other than to say that the applicant was near the end of his course and only had one semester to complete. He asked the Court to find in favour of the applicant for those reasons, but those are not matters that the Court may consider. The Court has to consider whether the applications have been made within the time limits that the law provides. It is plain that they have not been. 8 The principles upon which leave to appeal from an interlocutory judgment should be granted are very well established and generally leave will only be granted where there is sufficient doubt about the original decision to warrant its reconsideration, and further, where refusal of the leave would result in substantial injustice: see Décor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397; Deighton v Telstra Corp Ltd [1997] FCA 1568. I am not able to detect any legal error in the judgment of the Federal Magistrate such as would warrant leave to appeal being granted. The application for an extension of time, which is for a long extension, has not been made out and leave to extend time should be refused. 9 The order of the Court is therefore that the application for leave to file and serve an application for leave to appeal out of time is dismissed. The applicant must pay the first respondent's costs. In accordance with a request from the first respondent, I further order that the name of the first respondent be changed from 'Department of Immigration and Multicultural Affairs' to 'Minister for Immigration and Citizenship.

application to file and serve a notice of appeal out of time claim of non-receipt of decision of delegate of the minister for immigration and citizenship. migration